Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 30, 2016 | Feb. 02, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | AVIAT NETWORKS, INC. | |
Entity Central Index Key | 1,377,789 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Dec. 30, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 5,306,298 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Dec. 30, 2016 | Jul. 01, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 34,978 | $ 30,479 |
Short-term investments | 229 | 222 |
Accounts receivable, net | 56,201 | 63,449 |
Unbilled costs | 7,535 | 5,117 |
Inventories | 20,433 | 27,293 |
Customer service inventories | 2,623 | 3,064 |
Other current assets | 11,120 | 10,790 |
Total current assets | 133,119 | 140,414 |
Property, plant and equipment, net | 16,836 | 18,162 |
Deferred income taxes | 5,727 | 6,068 |
Other assets | 1,236 | 1,467 |
TOTAL ASSETS | 156,918 | 166,111 |
Current Liabilities: | ||
Short-term debt | 8,000 | 9,000 |
Accounts payable | 31,962 | 33,217 |
Accrued expenses | 23,044 | 23,205 |
Advance payments and unearned income | 25,451 | 30,615 |
Restructuring liabilities | 2,405 | 3,910 |
Total current liabilities | 90,862 | 99,947 |
Unearned income | 7,700 | 8,387 |
Other long-term liabilities | 1,119 | 1,409 |
Reserve for uncertain tax positions | 1,364 | 1,414 |
Deferred income taxes | 1,492 | 1,497 |
Total liabilities | 102,537 | 112,654 |
Commitments and contingencies (Note 11) | ||
Equity: | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized, 5,306,298 shares issued and outstanding at December 30, 2016; 5,261,041 shares issued and outstanding at July 1, 2016 | 53 | 53 |
Additional paid-in-capital | 812,552 | 811,601 |
Accumulated deficit | (746,332) | (747,381) |
Accumulated other comprehensive loss | (12,305) | (11,157) |
Noncontrolling interests | 413 | 341 |
Total equity | 54,381 | 53,457 |
TOTAL LIABILITIES AND EQUITY | $ 156,918 | $ 166,111 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) - Parenthetical - $ / shares | Dec. 30, 2016 | Jul. 01, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 50,000,000 | 50,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par value | $ 0.01 | $ 0.01 |
Common stock shares authorized | 300,000,000 | 300,000,000 |
Common stock shares issued | 5,306,298 | 5,261,041 |
Common stock shares outstanding | 5,306,298 | 5,261,041 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | Dec. 30, 2016 | Jan. 01, 2016 | |
Revenues: | ||||
Revenue from product sales | $ 45,958 | $ 44,675 | $ 80,682 | $ 98,361 |
Revenue from services | 22,578 | 25,741 | 46,061 | 51,610 |
Total revenues | 68,536 | 70,416 | 126,743 | 149,971 |
Cost of revenues: | ||||
Cost of product sales | 31,003 | 33,330 | 55,863 | 70,508 |
Cost of services | 16,417 | 20,662 | 32,399 | 42,028 |
Total cost of revenues | 47,420 | 53,992 | 88,262 | 112,536 |
Gross margin | 21,116 | 16,424 | 38,481 | 37,435 |
Operating expenses: | ||||
Research and development expenses | 4,475 | 5,210 | 9,418 | 10,686 |
Selling and administrative expenses | 14,056 | 16,178 | 29,243 | 33,290 |
Restructuring charges | 72 | 34 | 232 | 55 |
Total operating expenses | 18,603 | 21,422 | 38,893 | 44,031 |
Operating income (loss) | 2,513 | (4,998) | (412) | (6,596) |
Interest income | 72 | 55 | 126 | 137 |
Interest expense | (3) | (84) | (21) | (93) |
Other income (expense) | 5 | 0 | (177) | 0 |
Income (loss) from continuing operations before income taxes | 2,587 | (5,027) | (484) | (6,552) |
Provision for (benefit from) income taxes | 865 | 507 | (1,605) | 495 |
Income (loss) from continuing operations | 1,722 | (5,534) | 1,121 | (7,047) |
Income from discontinued operations, net of tax | 0 | 0 | 0 | 359 |
Net income (loss) | 1,722 | (5,534) | 1,121 | (6,688) |
Net income attributable to noncontrolling interests, net of tax | 44 | 145 | 72 | 194 |
Net income (loss) attributable to Aviat Networks | 1,678 | (5,679) | 1,049 | (6,882) |
Amount attributable to Aviat Networks: | ||||
Net income (loss) from continuing operations, net of tax | 1,678 | (5,679) | 1,049 | (7,241) |
Net income from discontinued operations, net of tax | $ 0 | $ 0 | $ 0 | $ 359 |
Basic income (loss) per share attributable to Aviat Networks’ common stockholders: | ||||
Continuing operations (usd per share) | $ 0.32 | $ (1.09) | $ 0.20 | $ (1.39) |
Discontinued operations (usd per share) | 0 | 0 | 0 | 0.07 |
Net income (loss) (usd per share) | $ 0.32 | $ (1.09) | $ 0.20 | $ (1.32) |
Weighted average shares outstanding, basic share) | 5,284 | 5,230 | 5,273 | 5,218 |
Diluted income (loss) per share attributable to Aviat Networks’ common stockholders: | ||||
Continuing operations (usd per share) | $ 0.31 | $ (1.09) | $ 0.20 | $ (1.39) |
Discontinued operations (usd per share) | 0 | 0 | 0 | 0.07 |
Net income (loss) (usd per share) | $ 0.31 | $ (1.09) | $ 0.20 | $ (1.32) |
Weighted average shares outstanding, diluted (share) | 5,400 | 5,230 | 5,328 | 5,218 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | Dec. 30, 2016 | Jan. 01, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 1,722 | $ (5,534) | $ 1,121 | $ (6,688) |
Other comprehensive loss: | ||||
Net change in unrealized loss on hedging activities | 0 | 0 | 0 | (41) |
Net change in cumulative translation adjustments | (778) | (293) | (1,148) | (990) |
Other comprehensive loss | (778) | (293) | (1,148) | (1,031) |
Comprehensive income (loss) | 944 | (5,827) | (27) | (7,719) |
Comprehensive income attributable to noncontrolling interests, net of tax | 44 | 145 | 72 | 194 |
Comprehensive income (loss) attributable to Aviat Networks | $ 900 | $ (5,972) | $ (99) | $ (7,913) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Operating Activities | ||
Net income (loss) | $ 1,121 | $ (6,688) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization of property, plant and equipment | 3,136 | 3,376 |
(Recovery) provision for uncollectible receivables | (643) | 179 |
Share-based compensation | 946 | 922 |
Deferred tax assets, net | 336 | 475 |
Charges for inventory and customer service inventory write-downs | 1,097 | 2,305 |
Loss on disposition of property, plant and equipment | 137 | 204 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 7,891 | 6,435 |
Unbilled costs | (2,419) | 3,948 |
Inventories | 6,602 | (3,140) |
Customer service inventories | (92) | 1,633 |
Accounts payable | (120) | (6,010) |
Accrued expenses | (1,090) | (478) |
Advance payments and unearned income | (6,394) | 2,805 |
Income taxes payable or receivable | 968 | (728) |
Other assets and liabilities | (2,636) | 1,142 |
Net cash provided by operating activities | 8,840 | 6,380 |
Investing Activities | ||
Payments for acquisition of property, plant and equipment | (2,853) | (759) |
Net cash used in investing activities | (2,853) | (759) |
Financing Activities | ||
Proceeds from borrowings | 16,000 | 18,000 |
Repayments of borrowings | (17,000) | (18,000) |
Proceeds from issuance of common stock under employee stock plans | 5 | 9 |
Net cash (used in) provided by financing activities | (995) | 9 |
Effect of exchange rate changes on cash and cash equivalents | (493) | (843) |
Net Increase in Cash and Cash Equivalents | 4,499 | 4,787 |
Cash and Cash Equivalents, Beginning of Period | 30,479 | 34,735 |
Cash and Cash Equivalents, End of Period | $ 34,978 | $ 39,522 |
The Company and Basis of Presen
The Company and Basis of Presentation | 6 Months Ended |
Dec. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Basis of Presentation | The Company and Basis of Presentation The Company Aviat Networks, Inc. (the “Company,” “we,” “us,” and “our”) designs, manufactures and sells a range of wireless networking solutions and services to mobile and fixed telephone service providers, private network operators, government agencies, transportation and utility companies, public safety agencies and broadcast system operators across the globe. Our products include broadband wireless access base stations and customer premises equipment for fixed and mobile, point-to-point digital microwave radio systems for access, backhaul, trunking and license-exempt applications, supporting new network deployments, network expansion, and capacity upgrades. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, the statements do not include all information and footnotes required by U.S. GAAP for annual consolidated financial statements. In the opinion of our management, such interim financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows for such periods. The results for the three and six months ended December 30, 2016 are not necessarily indicative of the results that may be expected for the full fiscal year or future operating periods. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended July 1, 2016 . The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All intercompany transactions and accounts have been eliminated. We operate on a 52 -week or 53 -week year ending on the Friday closest to June 30. The first two quarters of fiscal 2017 and fiscal 2016 included 13 weeks in each quarter. Fiscal year 2017 will be comprised of 52 weeks and will end on June 30, 2017 . Use of Estimates The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires us to make estimates, assumptions and judgments affecting the amounts reported and related disclosures. Estimates are based upon historical factors, current circumstances and the experience and judgment of our management. We evaluate our estimates and assumptions on an ongoing basis and may employ outside experts to assist us in making these evaluations. Changes in such estimates, based on more accurate information, or different assumptions or conditions, may affect amounts reported in future periods. Such estimates affect significant items, including revenue recognition, provision for uncollectible receivables, inventory valuation, valuation allowances for deferred tax assets, uncertainties in income taxes, restructuring obligations, product warranty obligations, share-based awards, contingencies, recoverability of long-lived assets and useful lives of property, plant and equipment. Reverse Stock Split In June 2016, we effected a reverse stock split of all of the outstanding shares of our common stock at a ratio of 1-for-12 (“Reverse Stock Split”). The authorized shares of 300 million and par value per share of the common stock at $0.01 per share remain unchanged after the reverse stock split. All share and per-share data in our unaudited condensed consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect this reverse stock split. Summary of Significant Accounting Policies There have been no material changes in our significant accounting policies as of and for the six months ended December 30, 2016 , as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended July 1, 2016 . Accounting Standards Adopted In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest - Imputation of Interest (Topic 835-30), Simplifying the Presentation of Debt Issuance Costs . To simplify the presentation of debt issuance costs, the standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for us beginning in our fiscal year 2017. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . This ASU includes an SEC staff announcement that the SEC staff would not object to an entity deferring and presenting the costs of securing a revolving line of credit as an asset, and amortizing the costs over the term of the line-of-credit arrangement, regardless of there are any outstanding borrowings on the line-of-credit arrangement. The subject of this ASU was not previously addressed by ASU No. 2015-03. We have adopted both accounting guidance during the first quarter of fiscal 2017 and applied its provisions retrospectively. The adoption of this standard had no material impact on our condensed consolidated financial statements and related disclosures. Accounting Standards Not Yet Adopted In November 2016, the FASB issued ASU 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash . The guidance addresses diversity in practice that exists in the classification and presentation of changes in restricted cash and require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The guidance will be effective retrospectively for our fiscal year 2019. E arly adoption is permitted. We are evaluating the effect the adoption of the standard will have on our condensed financial statements and related disclosures. In October 2016, the FASB issued ASU 2016-16 (Topic 740), Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory , which requires that an entity recognizes the tax expense from the sale of intra-entity sales of assets, other than inventory, in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminate in consolidation. The guidance will be effective for our fiscal year 2019. E arly adoption is permitted. The ASU must be adopted using a modified retrospective method. We are evaluating the effect the adoption of the standard will have on our condensed financial statements and related disclosures. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230) , Clarification of Certain Cash Receipts and Cash Payments , which provides guidance on the presentation and classification of eight specific cash flow issues. Those issues are cash payment for debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instrument or other debt instrument with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; cash received from settlement of corporate-owned life insurance policies; distribution received from equity method investees; beneficial interest in securitization transactions; and classification of cash receipts and payments that have aspect of more than one class of cash flows. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017 with early adoption permitted. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09 (ASC Topic 606) Revenue from Contracts with Customers , which will supersede nearly all existing revenue recognition guidance under GAAP. Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additional disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, and assets recognized from costs incurred to obtain or fulfill a contract will also be required. The FASB subsequently issued an update to this standard in August 2015, ASU 2015-14 (ASC Topic 606) Revenue from Contracts with Customers, Deferral of the Effective Date , which provides deferral of the effective date by one year. The standard will be effective for us beginning in our fiscal 2019 and allows for either full retrospective or modified retrospective adoption. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016 and including interim reporting periods within such reporting period. The FASB has since issued additional updates of its new standard on revenue recognition issued in May 2014. In March 2016, an amendment was issued to clarify the implementation guidance on principal versus agent consideration. ASU 2016-08 (ASC Topic 606) Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net) requires entities to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. In April 2016, ASU 2016-10 (ASC Topic 606) Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing was issued to clarify the identification of performance obligations and the licensing implementation guidance in the initial standard. ASU 2016-12 (ASC Topic 606) Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients was issued in May 2016 related to its guidance on assessing collectability, presentation of sales tax, noncash consideration, and completed contracts and contract modification at transition, which reduce the potential for diversity in practice, and the cost and complexity of application at transition and on an ongoing basis. ASU 2016-20 (ASC Topic 606) Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers was issued in December 2016 provides clarity related to loan guarantees, contract costs -impairment testing, contract costs - interaction of impairment testing with other guidance, provisions for losses on construction-type and production-type contracts, scope exception for this topic and disclosure of remaining performance obligations. We are evaluating the effects of the new guidance and have not yet selected a transition method nor have we determined the potential effects of adoption on our condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, (Topic 718) Improvements to Employee Share-Based Payment Accounting , which requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016 with early adoption permitted. We are evaluating the effect of the adoption the standard will have on our condensed consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. This standard will become effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be adopted at the earliest period presented using a modified retrospective approach. We are evaluating the effect the adoption of the standard will have on our condensed consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . This guidance retains the current accounting for classifying and measuring investments in debt securities and loans, but requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consolidation. The guidance also changes the accounting for investments without a readily determinable fair value and do not qualify for the practical expedient to estimate fair value. A policy election can be made for these investments whereby estimated fair value may be measured at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments. This ASU is effective for fiscal years beginning after December 15, 2017. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11 (Topic 330), Simplifying the Measurement of Inventory , which provides guidance to companies who account for inventory using either the first-in, first-out or average cost methods. The guidance states that companies should measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted. We are evaluating the effect the adoption of the standard will have on our condensed consolidated financial statements and related disclosures. |
Net Income (Loss) Per Share of
Net Income (Loss) Per Share of Common Stock | 6 Months Ended |
Dec. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share of Common Stock | Net Income (Loss) Per Share of Common Stock Net income (loss) per share is computed using the two-class method, by dividing net income (loss) attributable to the Company by the weighted-average number of shares of the Company’s outstanding common stock. Our restricted shares contain rights to receive non-forfeitable dividends and therefore are considered to be participating securities and included in the calculations of net income per basic and diluted common share. Undistributed losses are not allocated to unvested restricted shares due to the fact that the unvested restricted shares are not contractually obligated to share the losses of the Company. The impact on earnings per share of the participating securities under the two-class method is immaterial. The following table presents the computation of basic and diluted net income (loss) per share attributable to the common stockholders: Three Months Ended Six Months Ended (In thousands, except per share amounts) December 30, January 1, December 30, January 1, Numerator: Net income (loss) from continuing operations, net of tax $ 1,678 $ (5,679 ) $ 1,049 $ (7,241 ) Net income from discontinued operations, net of tax — — — 359 Net income (loss) attributable to Aviat Networks $ 1,678 $ (5,679 ) $ 1,049 $ (6,882 ) Denominator: Weighted average shares outstanding, basic 5,284 5,230 5,273 5,218 Effect of potentially dilutive equivalent shares 116 — 55 — Weighted average shares outstanding, diluted 5,400 5,230 5,328 5,218 Basic income (loss) per share attributable to Aviat Networks’ common stockholders: Continuing operations $ 0.32 $ (1.09 ) $ 0.20 $ (1.39 ) Discontinued operations — — — 0.07 Net income (loss) $ 0.32 $ (1.09 ) $ 0.20 $ (1.32 ) Diluted income (loss) per share attributable to Aviat Networks’ common stockholders: Continuing operations $ 0.31 $ (1.09 ) $ 0.20 $ (1.39 ) Discontinued operations — — — 0.07 Net income (loss) $ 0.31 $ (1.09 ) $ 0.20 $ (1.32 ) The following table summarizes the weighted-average equity awards that were excluded from the diluted net income (loss) per share calculations: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, Stock options 427 589 435 600 Restricted stocks units and performance stock units 6 234 8 156 Total potential shares of common stock excluded 433 823 443 756 |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Dec. 30, 2016 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Balance Sheet Components Accounts Receivable, net Our net accounts receivable as of December 30, 2016 and July 1, 2016 were as follows: (In thousands) December 30, July 1, Accounts receivable $ 63,864 $ 71,416 Less allowances for collection losses (7,663 ) (7,967 ) $ 56,201 $ 63,449 Inventories Our inventories as of December 30, 2016 and July 1, 2016 were as follows: (In thousands) December 30, July 1, Finished products $ 14,706 $ 20,044 Work in process 3,024 5,104 Raw materials and supplies 2,703 2,145 Total inventories $ 20,433 $ 27,293 Deferred cost of revenue included within finished goods $ 4,947 $ 5,984 Consigned inventories included within raw materials and supplies $ 1,887 $ 2,035 We recorded charges to adjust our inventory and customer service inventory to the lower of cost or market. These charges were primarily due to excess and obsolete inventory resulting from product transitioning or discontinuance. During the three and six months ended December 30, 2016 and January 1, 2016 , such charges incurred were classified in cost of product sales as follows: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, Excess and obsolete inventory charges $ 94 $ 979 $ 568 $ 1,957 Customer service inventory write-downs 242 219 529 348 $ 336 $ 1,198 $ 1,097 $ 2,305 Property, Plant and Equipment, net Our property, plant and equipment, net as of December 30, 2016 and July 1, 2016 were as follows: (In thousands) December 30, July 1, Land $ 710 $ 710 Buildings and leasehold improvements 11,346 11,714 Software 14,370 14,620 Machinery and equipment 41,259 42,960 67,685 70,004 Less accumulated depreciation and amortization (50,849 ) (51,842 ) $ 16,836 $ 18,162 Depreciation and amortization expense related to property, plant and equipment, including amortization of software developed for internal use, was as follows: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, Depreciation and amortization $ 1,467 $ 1,672 $ 3,136 $ 3,376 Accrued Expenses Our accrued expenses are summarized below: (In thousands) December 30, July 1, Accrued compensation and benefits $ 7,663 $ 7,161 Accrued commissions 1,823 3,551 Accrued warranties 3,559 3,944 Other 9,999 8,549 $ 23,044 $ 23,205 Accrued Warranties We accrue for the estimated cost to repair or replace products under warranty at the time of sale. Changes in our warranty liability, which is included as a component of accrued expenses in the condensed consolidated balance sheets were as follows: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, Balance as of the beginning of the period $ 3,704 $ 4,722 $ 3,944 $ 4,221 Warranty provision recorded during the period 480 934 817 2,413 Consumption during the period (625 ) (859 ) (1,202 ) (1,837 ) Balance as of the end of the period $ 3,559 $ 4,797 $ 3,559 $ 4,797 Advanced payments and Unearned Income Our advanced payments and unearned income are summarized below: (In thousands) December 30, July 1, Advanced payments $ 10,407 $ 12,124 Unearned income 15,044 18,491 $ 25,451 $ 30,615 |
Fair Value Measurements Of Asse
Fair Value Measurements Of Assets And Liabilities | 6 Months Ended |
Dec. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements Of Assets And Liabilities | Fair Value Measurements of Assets and Liabilities Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal market (or most advantageous market, in the absence of a principal market) for the asset or liability in an orderly transaction between market participants as of the measurement date. We maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value and establish a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows: • Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities; • Level 2 — Observable market-based inputs or observable inputs that are corroborated by market data; and • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts, estimated fair values and valuation input levels of our assets and liabilities that are measured at fair value on a recurring basis as of December 30, 2016 and July 1, 2016 were as follows: December 30, 2016 July 1, 2016 Valuation Inputs (In thousands) Cost Fair Value Cost Fair Value Assets: Cash equivalents: Money market funds $ 18,129 $ 18,129 $ 18,800 $ 18,800 Level 1 Bank certificates of deposit $ 11 $ 11 $ 11 $ 11 Level 2 Short term investments: Bank certificates of deposit $ 228 $ 228 $ 222 $ 222 Level 2 Other current assets: Foreign exchange forward contracts $ 193 $ 193 $ 5 $ 5 Level 2 Liabilities: Other accrued expenses: Foreign exchange forward contracts $ 309 $ 309 $ 9 $ 9 Level 2 We classify items within Level 1 if quoted prices are available in active markets. Our Level 1 items mainly are money market funds. As of December 30, 2016 and July 1, 2016 , these money market funds were valued at $ 1.00 net asset value per share. We classify items in Level 2 if the observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources are available with reasonable levels of price transparency. Our bank certificates of deposit and foreign exchange forward contracts are classified within Level 2. Foreign currency forward contracts are measured at fair value using observable foreign currency exchange rates. The changes in fair value related to our foreign currency forward contracts were recorded in cost of revenues on our condensed consolidated statements of operations. As of December 30, 2016 and July 1, 2016 , we did not have any recurring assets or liabilities that were valued using significant unobservable inputs. Our policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During the first six months of fiscal 2017 and 2016 , we had no transfers between levels of the fair value hierarchy of our assets or liabilities measured at fair value. |
Credit Facility And Debt
Credit Facility And Debt | 6 Months Ended |
Dec. 30, 2016 | |
Debt Disclosure [Abstract] | |
Credit Facility And Debt | Credit Facility and Debt On March 28, 2014, we entered into a Second Amended and Restated Loan Agreement with Silicon Valley Bank (the “SVB Credit Facility”). The SVB Credit Facility expires on June 30, 2018. The SVB Credit Facility provides for a committed amount of up to $30.0 million , with a $30.0 million sublimit that can be borrowed by our Singapore subsidiary. Borrowings may be advanced under the SVB Credit Facility at the lesser of $30.0 million or a borrowing base equal to a specified percentage of the value of eligible accounts receivable and U.S. unbilled accounts of the Company, subject to certain reserves and eligibility criteria. The SVB Credit Facility can also be utilized to issue letters of credit with a $12.0 million sublimit. If the SVB Credit Facility is terminated by us in certain circumstances prior to its expiration, we are subject to an early termination fee equal to 1% of the revolving line. Our outstanding debt under the SVB Credit Facility was $8.0 million and $9.0 million as of December 30, 2016 and July 1, 2016 , respectively. The SVB Credit Facility carries an interest rate computed at the daily prime rate as published in the Wall Street Journal plus a spread of 0.50% to 1.50% , with such spread determined based on our adjusted quick ratio. During the first six months of fiscal year 2017, the weighted average interest rate on our outstanding loan was 4.03% . As of December 30, 2016 , available credit under the SVB Credit Facility was $5.1 million reflecting the calculated borrowing base of $20.0 million less existing borrowings of $8.0 million and outstanding letters of credit of $6.9 million . The SVB Credit Facility contains quarterly financial covenants including minimum adjusted quick ratio and minimum profitability (EBITDA) requirements. In the event our adjusted quick ratio falls below a certain level, cash received in our accounts with SVB may be directly applied to reduce outstanding obligations under the SVB Credit Facility. The SVB Credit Facility also imposes certain restrictions on our ability to dispose of assets, permit a change in control, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments, make certain restricted payments and enter into transactions with affiliates under certain circumstances. Certain of our assets, including accounts receivable, inventory, and equipment, are pledged as collateral for the SVB Credit Facility. Upon an event of default, outstanding obligations would be immediately due and payable. Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default at a per annum rate of interest equal to 2% above the applicable interest rate. As of December 30, 2016 , we were in compliance with the quarterly financial covenants, as amended, contained in the SVB Credit Facility. However, as we have historically amended the agreement to revise financial covenants and the fact that the SVB Credit Facility contains subjective acceleration clauses that could be triggered by the lender, the $8.0 million and $9.0 million borrowing was classified as a current liability as of December 30, 2016 and July 1, 2016 . In addition, we have an uncommitted short-term line of credit of $0.4 million from a bank in New Zealand to support the operations of our subsidiary located there. This line of credit provides for $0.3 million in short-term advances at various interest rates, all of which was available as of December 30, 2016 and July 1, 2016 . The line of credit also provides for the issuance of standby letters of credit and company credit cards, of which $0.1 million was outstanding as of December 30, 2016 . This facility may be terminated upon notice, is reviewed annually for renewal or modification, and is supported by a corporate guarantee. |
Restructuring Activities
Restructuring Activities | 6 Months Ended |
Dec. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | Restructuring Activities The following table summarizes our restructuring related activities during the three and six months ended December 30, 2016 : Severance and Benefits Facilities and Other Total (In thousands) Fiscal Fiscal Fiscal Fiscal 2015-2016 Plan Fiscal 2014-2015 Plan Fiscal 2013-2014 Plan Accrual balance, July 1, 2016 $ 1,512 $ 357 $ 68 $ 550 $ 582 $ 1,746 $ 4,815 Charges, net 4 30 — — 110 16 160 Cash payments (811 ) (313 ) (4 ) 3 (228 ) (369 ) (1,722 ) Accrual balance, September 30, 2016 705 74 64 553 464 1,393 3,253 Charges, net 37 (25 ) — — 47 13 72 Cash payments (235 ) 23 — (38 ) (145 ) (306 ) (701 ) Accrual balance as of December 30, 2016 $ 507 $ 72 $ 64 $ 515 $ 366 $ 1,100 $ 2,624 In June 2016, we entered into a lease termination agreement to end our headquarters lease in Santa Clara, California and in September 2016 we vacated the building. Under the lease termination agreement, we agreed to pay a termination fee of $1.9 million payable over 14 months . The termination fee was included in the restructuring liabilities as of December 30, 2016 under the Fiscal 2014-2015 Plan and the Fiscal 2013-2014 Plan. As of December 30, 2016 , $2.4 million of the accrual balance was in short-term restructuring liabilities while $0.2 million was included in other long-term liabilities on the condensed consolidated balance sheets. Fiscal 2016-2017 Plan During the fourth quarter of fiscal 2016, we initiated a restructuring plan (the “Fiscal 2016-2017 Plan”) to streamline our operations and align expenses with current revenue levels. Activities under the Fiscal 2016-2017 Plan primarily include reductions in workforce in marketing, selling and general and administrative functions. We intend to substantially complete the remaining restructuring activities under the Fiscal 2016-2017 Plan by the third quarter of fiscal 2017. Fiscal 2015-2016 Plan During the third quarter of fiscal 2015, with the intent to bring our operational cost structure in line with the changing dynamics of the microwave radio and telecommunications markets, we initiated a restructuring plan (the “Fiscal 2015-2016 Plan”) to lower fixed overhead costs and operating expenses and to preserve cash flow. Activities under the Fiscal 2015-2016 Plan primarily include reductions in workforce across the Company, but primarily in operations outside the United States. We substantially completed the restructuring activities under the Fiscal 2015-2016 Plan as of July 1, 2016. Payment related to the accrued restructuring liability balance for this plan will be paid through fiscal 2020. Fiscal 2014-2015 Plan During the third quarter of fiscal 2014, in line with the decrease in revenue that we experienced and our reduced forecast for the immediate future, we initiated a restructuring plan (the “Fiscal 2014-2015 Plan”) to reduce our operating costs, primarily in North America, Europe and Asia. Activities under the Fiscal 2014-2015 Plan primarily include reductions in workforce and additional facility downsizing of our Santa Clara, California headquarters. We substantially completed the restructuring activities under the Fiscal 2014-2015 Plan as of July 1, 2016. Payment related to the accrued restructuring liability balance for this plan will be paid through fiscal 2018. Fiscal 2013-2014 Plan During the fourth quarter of fiscal 2013, we initiated a restructuring plan (the “Fiscal 2013-2014 Plan”) that was intended to reduce our operating expenses primarily in North America, Europe and Asia. Activities under the Fiscal 2013-2014 Plan included reductions in workforce and facility downsizing of our Santa Clara, California headquarters and certain international field offices. We substantially completed the restructuring activities under the Fiscal 2013-2014 Plan as of June 27, 2014. Payment related to the accrued restructuring liability balance for this plan will be paid through fiscal 2018. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Dec. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity | Stockholders’ Equity 2007 Stock Equity Plan and Activities We have one stock incentive plan for our employees and nonemployee directors, the 2007 Stock Equity Plan, as amended and restated effective November 13, 2015 (the “2007 Stock Plan”). During the six months ended December 30, 2016 , we awarded 72,941 performance stock units, 50,000 market-based stock units and 213,467 restricted stock units associated with our fiscal 2017 Long-Term Incentive Plan under the 2007 Stock Plan. For the performance share units, the performance criteria is ending the fiscal year 2017 with positive adjusted earnings before interest, taxes, depreciation and amortization . Once the performance share units are earned, they will be vested three years after the grant date. For the market-based stock units , the performance goal is based on the Company’s common stock price at the end of calendar year 2018. The award units will be vested on the date that the Compensation Committee certifies achievement of the performance measure. The restricted stock units granted will be vested in full three years after the grant date. During the six months ended December 30, 2016 , we cancelled 6,253 market-based stock units, 10,370 restricted stock units, 983 shares of stock appreciation rights, and options to purchase 15,430 shares of our common stock due to employee terminations. In the same period, we cancelled 48,626 market-based stock units due to the non-achievement of specified market conditions and options to purchase 16,416 shares of our common stock expired. We issue new shares of our common stock to our employees upon the exercise of stock options, vesting of restricted stock awards and units or vesting of performance share awards and units. All awards that are cancelled prior to vesting or expire unexercised are returned to the approved pool of reserved shares under the 2007 Stock Plan and made available for future grants. Shares of our common stock remaining available for future issuance under the 2007 Stock Plan totaled 262,191 as of December 30, 2016 . On September 6, 2016, our Board of Directors (the “Board”) authorized and declared a dividend distribution of one right (a “Right”) for each outstanding share of our common stock, par value $0.01 per share (the “Common Shares”), to our stockholders of record as of the close of business on September 16, 2016. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Participating Preferred Stock, par value $0.01 per share (the “Preferred Shares”), of the Company at an exercise price of $35.00 (the “Exercise Price”) per one one-thousandth of a Preferred Share, subject to adjustment. Until the rights become exercisable, they will not be evidenced by separate certificates and will trade automatically with shares of the Company’s common stock. The Rights have a de minimus fair value. The complete terms of the Rights are set forth in a Tax Benefit Preservation Plan (the “Plan”), effective as of September 6, 2016, between the Company and Computershare Inc., as rights agent. By adopting the Plan, we are helping to preserve the value of certain deferred tax benefits, including those generated by net operating losses (collectively, the “Tax Benefits”), which could be lost in the event of an “ownership change” as defined under Section 382 of the Internal Revenue Code of 1986, as amended. The Plan reduces the likelihood that changes in our investor base have the unintended effect of limiting our use of the Tax Benefits. Also, on September 6, 2016, our Board of Directors adopted certain amendments to our Amended and Restated Certificate of Incorporation, as amended (the “Charter Amendments”). The Charter Amendments are designed to preserve the Tax Benefits by restricting certain transfers of our common stock. Both the Plan and the Charter Amendments were approved at our 2016 annual meeting of stockholders on November 16, 2016. No actions were taken under the Plan as of December 30, 2016. Share-Based Compensation Total compensation expense for share-based awards included in our condensed consolidated statements of operations for the three and six months ended December 30, 2016 and January 1, 2016 was as follows: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, By Expense Category: Cost of revenues $ 62 $ 46 $ 102 $ 82 Research and development 38 34 62 63 Selling and administrative 388 349 782 777 Total share-based compensation expense $ 488 $ 429 $ 946 $ 922 By Types of Award: Options $ 43 $ 213 $ 189 $ 482 Restricted and performance stock awards and units 445 216 757 440 Total share-based compensation expense $ 488 $ 429 $ 946 $ 922 As of December 30, 2016 , there was $0.2 million of total unrecognized compensation expense related to nonvested stock options granted under our 2007 Stock Plan. This expense is expected to be recognized over a weighted average period of 1.6 years. As of December 30, 2016 , there was $4.3 million of total unrecognized compensation expense related to nonvested stock awards and units granted under our 2007 Stock Plan. This expense is expected to be recognized over a weighted average period of 2.2 years. |
Segment and Geographic Informat
Segment and Geographic Information | 6 Months Ended |
Dec. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information We operate in one reportable business segment: the design, manufacturing and sale of a range of wireless networking products, solutions and services. We conduct business globally and our sales and support activities are managed on a geographic basis. Our Chief Executive Officer is our Chief Operating Decision Maker. We report revenue by region and country based on the location where our customers accept delivery of our products and services. Revenue by region for the three and six months ended December 30, 2016 and January 1, 2016 were as follows: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, North America $ 39,353 $ 31,844 $ 67,937 $ 67,064 Africa and Middle East 16,770 23,703 31,119 50,991 Europe and Russia 2,810 5,617 7,317 12,059 Latin America and Asia Pacific 9,603 9,252 20,370 19,857 Total Revenue $ 68,536 $ 70,416 $ 126,743 $ 149,971 Mobile Telephone Networks Group (MTN Group) accounted for 13% and 22% of our accounts receivable as of December 30, 2016 and July 1, 2016 , respectively. Motorola Solutions, Inc. (Motorola) accounted for 12% and 11% of our accounts receivable as of December 30, 2016 and July 1, 2016 , respectively. During the three and six months ended December 30, 2016 , MTN Group accounted for 12% and 11% , respectively, of our total revenue. During the three and six months ended January 1, 2016 , MTN Group accounted for 20% and 18% , respectively, of our total revenue. Motorola accounted for 10% of our total revenue during the three months ended January 1, 2016; however, Motorola did not account for 10% of our total revenue during the six months ended January 1, 2016. We have entered into separate and distinct contracts with MTN Group and Motorola, as well as separate arrangements with various their various subsidiaries. The loss of all business from MTN Group or Motorola, or any other significant customers, could adversely affect our results of operations, cash flows and financial position. |
Divestiture
Divestiture | 6 Months Ended |
Dec. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture | Divestiture We sold our WiMAX business on September 2, 2011 and began accounting for the WiMAX business as a discontinued operation. The operating results of our WiMAX business were included in discontinued operations in our condensed consolidated financial statements for all periods presented. The income recognized in the first six months of fiscal 2016 of $0.4 million , net of income taxes, was primarily due to recovery of certain WiMAX customer receivables that were previously written down. No income was recognized in respect of the WiMAX business in the first six months of fiscal 2017. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate varies from the U.S. federal statutory rate of 35% due to results of foreign operations that are subject to income taxes at different statutory rates, certain jurisdictions where we cannot recognize tax benefits on current losses and tax benefit from a foreign tax refund. During interim periods, we accrue tax expenses for jurisdictions that are anticipated to be profitable for fiscal 2017. The determination of our provision for the first six months of fiscal 2017 and 2016 was based on our estimated annual effective tax rate adjusted for losses in certain jurisdictions for which no tax benefit can be recognized. The tax expense for the first six months of fiscal 2017 and 2016 were primarily attributable to tax expense related to profitable subsidiaries. During the fiscal year 2014, we received an assessment letter from the Inland Revenue Authority of Singapore (“IRAS”) related to deductions claimed in prior years and made a payment of $13.2 million related to tax years 2007 through 2010, reflecting all the taxes incrementally assessed by IRAS. Since the initial assessment, we continue to pursue remedies to challenge this assessment. During the first quarter of fiscal 2017, we received an initial refund of $3.7 million from IRAS which was recorded as a discrete tax benefit during the quarter. We will continue our discussion with IRAS to resolve the remaining tax positions. We believe that we have adequately provided for any reasonably foreseeable outcomes related to our tax audits. We have a number of years with open tax audits which vary from jurisdiction to jurisdiction. Our major tax jurisdictions include the U.S., Singapore and Nigeria. The earliest years that are open and subject to potential audits for these jurisdictions are as follows: U.S. — 2003; Singapore — 2006; and Nigeria — 2011. We account for interest and penalties related to unrecognized tax benefits as part of our provision for federal, foreign and state income taxes. Such interest expense was not material for the three and six months ended December 30, 2016 and January 1, 2016 . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Lease Commitments We lease office and manufacturing facilities under non-cancelable operating leases expiring at various dates through 2024. We lease approximately 19,000 square feet of office space in Milpitas, California with a term of 60 months as our corporate headquarters. In June 2016, we entered into a lease termination agreement for our previous headquarters lease in Santa Clara, California and the termination fees are included in the restructuring liabilities in the condensed consolidated balance sheets. As of December 30, 2016 , our future minimum lease payments under all non-cancelable operating leases with an initial lease term in excess of one year were as follows: Fiscal Years Ending in June Amounts (In thousands) 2017 (two quarters remaining) $ 1,169 2018 1,736 2019 1,313 2020 852 2020 874 Thereafter 2,231 Total $ 8,175 These commitments do not contain any material rent escalations, rent holidays, contingent rent, rent concessions, leasehold improvement incentives or unusual provisions or conditions. We sublease a portion of our facilities to third parties and the total minimum rents to be received in the future under our non-cancelable subleases were $0.1 million as of December 30, 2016 . The future minimum lease payments are not reduced by the minimum sublease rents. Rental expense for operating leases, including rentals on a month-to-month basis, was as follows: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, Rent expense $ 987 $ 1,050 $ 2,134 $ 2,621 Purchase Orders and Other Commitments From time to time in the normal course of business we may enter into purchasing agreements with our suppliers that require us to accept delivery of, and remit full payment for, finished products that we have ordered, finished products that we requested be held as safety stock, and work in process started on our behalf, in the event we cancel or terminate the purchasing agreement. Because these agreements do not specify fixed or minimum quantities, do not specify minimum or variable price provisions, and do not specify the approximate timing of the transaction, and we have no present intention to cancel or terminate any of these agreements, we currently do not believe that we have any future liability under these agreements. As of December 30, 2016 , we had outstanding purchase obligations with our suppliers or contract manufacturers of $22.6 million . In addition, we had contractual obligations of approximately $1.7 million associated with software licenses as of December 30, 2016 . Financial Guarantees and Commercial Commitments Guarantees issued by banks, insurance companies or other financial institutions are contingent commitments issued to guarantee our performance under borrowing arrangements, such as bank overdraft facilities, tax and customs obligations and similar transactions or to ensure our performance under customer or vendor contracts. The terms of the guarantees are generally equal to the remaining term of the related debt or other obligations and are generally limited to two years or less. As of December 30, 2016 , we had no guarantees applicable to our debt arrangements. We have entered into commercial commitments in the normal course of business including surety bonds, standby letters of credit agreements and other arrangements with financial institutions primarily relating to the guarantee of future performance on certain contracts to provide products and services to customers. As of December 30, 2016 , we had commercial commitments of $40.4 million outstanding that were not recorded in our condensed consolidated balance sheets. During the second fiscal quarter, we recorded a payout of $0.4 million on the performance guarantees to a contractor in the Middle East region. We believe the customer improperly drew on the performance bond and intend to pursue all remedies available to recover the payment. We do not believe, based on historical experience and information currently available, that it is probable that any significant amounts will be required to be paid on the performance guarantees in the future. Indemnifications Under the terms of substantially all of our license agreements, we have agreed to defend and pay any final judgment against our customers arising from claims against such customers that our software products infringe the intellectual property rights of a third party. As of December 30, 2016 , we have not received any notice that any customer is subject to an infringement claim arising from the use of our software products; we have not received any request to defend any customers from infringement claims arising from the use of our software products; and we have not paid any final judgment on behalf of any customer related to an infringement claim arising from the use of our software products. Because the outcome of infringement disputes is related to the specific facts of each case, and given the lack of previous or current indemnification claims, we cannot estimate the maximum amount of potential future payments, if any, related to our indemnification provisions. As of December 30, 2016 , we had not recorded any liabilities related to these indemnifications. Legal Proceedings We are subject from time to time to disputes with customers concerning our products and services. In May 2016, we received notification of a claim for $1.0 million in damages from a customer in Austria alleging that certain of our products were defective. We are continuing to investigate this claim, and at this time an estimate of the reasonably possible loss or range of loss cannot be made. In August 2016, we received correspondence from a customer in Africa demanding that certain inventory to be repurchased under the terms of an inventory management agreement that we believe has expired. We are continuing to investigate this demand, however, during the second fiscal quarter of 2017, we recorded $0.3 million charge based on an estimate of the probable loss. We believe that we have numerous contractual and legal defenses to these disputes, which are in their early stages, and we intend to dispute them vigorously. From time to time, we may be involved in various other legal claims and litigation that arise in the normal course of our operations. We are aggressively defending all current litigation matters. Although there can be no assurances and the outcome of these matters is currently not determinable, we currently believe that none of these claims or proceedings are likely to have a material adverse effect on our financial position. We expect to defend each of these disputes vigorously. There are many uncertainties associated with any litigations and these actions or other third-party claims against us may cause us to incur costly litigation and/or substantial settlement charges. As a result, our business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from our estimates, if any. We record accruals for our outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. We evaluate, at least on a quarterly basis, developments in legal proceedings, investigations or claims that could affect the amount of any accrual, as well as any developments that would result in a loss contingency to become both probable and reasonably estimable. We have not recorded any accrual for loss contingencies associated with such legal claims or litigation discussed above. Contingent Liabilities We record a loss contingency as a charge to operations when (i) it is probable that an asset has been impaired or a liability has been incurred at the date of the condensed consolidated financial statements; and (ii) the amount of the loss can be reasonably estimated. Disclosure in the notes to the condensed consolidated financial statements is required for loss contingencies that do not meet both those conditions if there is a reasonable possibility that a loss may have been incurred. Gain contingencies are not recorded until realized. We expense all legal costs incurred to resolve regulatory, legal and tax matters as incurred. Periodically, we review the status of each significant matter to assess the potential financial exposure. If a potential loss is considered probable and the amount can be reasonably estimated, we reflect the estimated loss in our results of operations. Significant judgment is required to determine the probability that a liability has been incurred or an asset impaired and whether such loss is reasonably estimable. Further, estimates of this nature are highly subjective, and the final outcome of these matters could vary significantly from the amounts that have been included in our condensed consolidated financial statements. As additional information becomes available, we reassess the potential liability related to our pending claims and litigation and may revise estimates accordingly. Such revisions in the estimates of the potential liabilities could have a material impact on our results of operations and financial position. |
The Company and Basis of Pres18
The Company and Basis of Presentation (Policies) | 6 Months Ended |
Dec. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, the statements do not include all information and footnotes required by U.S. GAAP for annual consolidated financial statements. In the opinion of our management, such interim financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows for such periods. The results for the three and six months ended December 30, 2016 are not necessarily indicative of the results that may be expected for the full fiscal year or future operating periods. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended July 1, 2016 . The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All intercompany transactions and accounts have been eliminated. We operate on a 52 -week or 53 -week year ending on the Friday closest to June 30. The first two quarters of fiscal 2017 and fiscal 2016 included 13 weeks in each quarter. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires us to make estimates, assumptions and judgments affecting the amounts reported and related disclosures. Estimates are based upon historical factors, current circumstances and the experience and judgment of our management. We evaluate our estimates and assumptions on an ongoing basis and may employ outside experts to assist us in making these evaluations. Changes in such estimates, based on more accurate information, or different assumptions or conditions, may affect amounts reported in future periods. Such estimates affect significant items, including revenue recognition, provision for uncollectible receivables, inventory valuation, valuation allowances for deferred tax assets, uncertainties in income taxes, restructuring obligations, product warranty obligations, share-based awards, contingencies, recoverability of long-lived assets and useful lives of property, plant and equipment. |
Recently Issued Accounting Standards | Accounting Standards Adopted In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest - Imputation of Interest (Topic 835-30), Simplifying the Presentation of Debt Issuance Costs . To simplify the presentation of debt issuance costs, the standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for us beginning in our fiscal year 2017. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . This ASU includes an SEC staff announcement that the SEC staff would not object to an entity deferring and presenting the costs of securing a revolving line of credit as an asset, and amortizing the costs over the term of the line-of-credit arrangement, regardless of there are any outstanding borrowings on the line-of-credit arrangement. The subject of this ASU was not previously addressed by ASU No. 2015-03. We have adopted both accounting guidance during the first quarter of fiscal 2017 and applied its provisions retrospectively. The adoption of this standard had no material impact on our condensed consolidated financial statements and related disclosures. Accounting Standards Not Yet Adopted In November 2016, the FASB issued ASU 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash . The guidance addresses diversity in practice that exists in the classification and presentation of changes in restricted cash and require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The guidance will be effective retrospectively for our fiscal year 2019. E arly adoption is permitted. We are evaluating the effect the adoption of the standard will have on our condensed financial statements and related disclosures. In October 2016, the FASB issued ASU 2016-16 (Topic 740), Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory , which requires that an entity recognizes the tax expense from the sale of intra-entity sales of assets, other than inventory, in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminate in consolidation. The guidance will be effective for our fiscal year 2019. E arly adoption is permitted. The ASU must be adopted using a modified retrospective method. We are evaluating the effect the adoption of the standard will have on our condensed financial statements and related disclosures. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230) , Clarification of Certain Cash Receipts and Cash Payments , which provides guidance on the presentation and classification of eight specific cash flow issues. Those issues are cash payment for debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instrument or other debt instrument with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; cash received from settlement of corporate-owned life insurance policies; distribution received from equity method investees; beneficial interest in securitization transactions; and classification of cash receipts and payments that have aspect of more than one class of cash flows. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017 with early adoption permitted. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09 (ASC Topic 606) Revenue from Contracts with Customers , which will supersede nearly all existing revenue recognition guidance under GAAP. Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additional disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, and assets recognized from costs incurred to obtain or fulfill a contract will also be required. The FASB subsequently issued an update to this standard in August 2015, ASU 2015-14 (ASC Topic 606) Revenue from Contracts with Customers, Deferral of the Effective Date , which provides deferral of the effective date by one year. The standard will be effective for us beginning in our fiscal 2019 and allows for either full retrospective or modified retrospective adoption. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016 and including interim reporting periods within such reporting period. The FASB has since issued additional updates of its new standard on revenue recognition issued in May 2014. In March 2016, an amendment was issued to clarify the implementation guidance on principal versus agent consideration. ASU 2016-08 (ASC Topic 606) Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net) requires entities to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. In April 2016, ASU 2016-10 (ASC Topic 606) Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing was issued to clarify the identification of performance obligations and the licensing implementation guidance in the initial standard. ASU 2016-12 (ASC Topic 606) Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients was issued in May 2016 related to its guidance on assessing collectability, presentation of sales tax, noncash consideration, and completed contracts and contract modification at transition, which reduce the potential for diversity in practice, and the cost and complexity of application at transition and on an ongoing basis. ASU 2016-20 (ASC Topic 606) Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers was issued in December 2016 provides clarity related to loan guarantees, contract costs -impairment testing, contract costs - interaction of impairment testing with other guidance, provisions for losses on construction-type and production-type contracts, scope exception for this topic and disclosure of remaining performance obligations. We are evaluating the effects of the new guidance and have not yet selected a transition method nor have we determined the potential effects of adoption on our condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, (Topic 718) Improvements to Employee Share-Based Payment Accounting , which requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016 with early adoption permitted. We are evaluating the effect of the adoption the standard will have on our condensed consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. This standard will become effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be adopted at the earliest period presented using a modified retrospective approach. We are evaluating the effect the adoption of the standard will have on our condensed consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . This guidance retains the current accounting for classifying and measuring investments in debt securities and loans, but requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consolidation. The guidance also changes the accounting for investments without a readily determinable fair value and do not qualify for the practical expedient to estimate fair value. A policy election can be made for these investments whereby estimated fair value may be measured at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments. This ASU is effective for fiscal years beginning after December 15, 2017. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11 (Topic 330), Simplifying the Measurement of Inventory , which provides guidance to companies who account for inventory using either the first-in, first-out or average cost methods. The guidance states that companies should measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted. We are evaluating the effect the adoption of the standard will have on our condensed consolidated financial statements and related disclosures. |
Net Income (Loss) Per Share o19
Net Income (Loss) Per Share of Common Stock (Tables) | 6 Months Ended |
Dec. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the computation of basic and diluted net income (loss) per share attributable to the common stockholders: Three Months Ended Six Months Ended (In thousands, except per share amounts) December 30, January 1, December 30, January 1, Numerator: Net income (loss) from continuing operations, net of tax $ 1,678 $ (5,679 ) $ 1,049 $ (7,241 ) Net income from discontinued operations, net of tax — — — 359 Net income (loss) attributable to Aviat Networks $ 1,678 $ (5,679 ) $ 1,049 $ (6,882 ) Denominator: Weighted average shares outstanding, basic 5,284 5,230 5,273 5,218 Effect of potentially dilutive equivalent shares 116 — 55 — Weighted average shares outstanding, diluted 5,400 5,230 5,328 5,218 Basic income (loss) per share attributable to Aviat Networks’ common stockholders: Continuing operations $ 0.32 $ (1.09 ) $ 0.20 $ (1.39 ) Discontinued operations — — — 0.07 Net income (loss) $ 0.32 $ (1.09 ) $ 0.20 $ (1.32 ) Diluted income (loss) per share attributable to Aviat Networks’ common stockholders: Continuing operations $ 0.31 $ (1.09 ) $ 0.20 $ (1.39 ) Discontinued operations — — — 0.07 Net income (loss) $ 0.31 $ (1.09 ) $ 0.20 $ (1.32 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the weighted-average equity awards that were excluded from the diluted net income (loss) per share calculations: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, Stock options 427 589 435 600 Restricted stocks units and performance stock units 6 234 8 156 Total potential shares of common stock excluded 433 823 443 756 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Dec. 30, 2016 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Accounts Receivable | Our net accounts receivable as of December 30, 2016 and July 1, 2016 were as follows: (In thousands) December 30, July 1, Accounts receivable $ 63,864 $ 71,416 Less allowances for collection losses (7,663 ) (7,967 ) $ 56,201 $ 63,449 |
Schedule of Inventory | Our inventories as of December 30, 2016 and July 1, 2016 were as follows: (In thousands) December 30, July 1, Finished products $ 14,706 $ 20,044 Work in process 3,024 5,104 Raw materials and supplies 2,703 2,145 Total inventories $ 20,433 $ 27,293 Deferred cost of revenue included within finished goods $ 4,947 $ 5,984 Consigned inventories included within raw materials and supplies $ 1,887 $ 2,035 |
Schedule of Adjustments to Inventory | During the three and six months ended December 30, 2016 and January 1, 2016 , such charges incurred were classified in cost of product sales as follows: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, Excess and obsolete inventory charges $ 94 $ 979 $ 568 $ 1,957 Customer service inventory write-downs 242 219 529 348 $ 336 $ 1,198 $ 1,097 $ 2,305 |
Property, Plant and Equipment | Our property, plant and equipment, net as of December 30, 2016 and July 1, 2016 were as follows: (In thousands) December 30, July 1, Land $ 710 $ 710 Buildings and leasehold improvements 11,346 11,714 Software 14,370 14,620 Machinery and equipment 41,259 42,960 67,685 70,004 Less accumulated depreciation and amortization (50,849 ) (51,842 ) $ 16,836 $ 18,162 Depreciation and amortization expense related to property, plant and equipment, including amortization of software developed for internal use, was as follows: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, Depreciation and amortization $ 1,467 $ 1,672 $ 3,136 $ 3,376 |
Schedule of Accrued Expenses | Our accrued expenses are summarized below: (In thousands) December 30, July 1, Accrued compensation and benefits $ 7,663 $ 7,161 Accrued commissions 1,823 3,551 Accrued warranties 3,559 3,944 Other 9,999 8,549 $ 23,044 $ 23,205 |
Changes in Warranty Liability | Changes in our warranty liability, which is included as a component of accrued expenses in the condensed consolidated balance sheets were as follows: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, Balance as of the beginning of the period $ 3,704 $ 4,722 $ 3,944 $ 4,221 Warranty provision recorded during the period 480 934 817 2,413 Consumption during the period (625 ) (859 ) (1,202 ) (1,837 ) Balance as of the end of the period $ 3,559 $ 4,797 $ 3,559 $ 4,797 |
Schedule of Advanced Payments and Unearned Income | Our advanced payments and unearned income are summarized below: (In thousands) December 30, July 1, Advanced payments $ 10,407 $ 12,124 Unearned income 15,044 18,491 $ 25,451 $ 30,615 |
Fair Value Measurements Of As21
Fair Value Measurements Of Assets And Liabilities (Tables) | 6 Months Ended |
Dec. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The carrying amounts, estimated fair values and valuation input levels of our assets and liabilities that are measured at fair value on a recurring basis as of December 30, 2016 and July 1, 2016 were as follows: December 30, 2016 July 1, 2016 Valuation Inputs (In thousands) Cost Fair Value Cost Fair Value Assets: Cash equivalents: Money market funds $ 18,129 $ 18,129 $ 18,800 $ 18,800 Level 1 Bank certificates of deposit $ 11 $ 11 $ 11 $ 11 Level 2 Short term investments: Bank certificates of deposit $ 228 $ 228 $ 222 $ 222 Level 2 Other current assets: Foreign exchange forward contracts $ 193 $ 193 $ 5 $ 5 Level 2 Liabilities: Other accrued expenses: Foreign exchange forward contracts $ 309 $ 309 $ 9 $ 9 Level 2 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 6 Months Ended |
Dec. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Liabilities | The following table summarizes our restructuring related activities during the three and six months ended December 30, 2016 : Severance and Benefits Facilities and Other Total (In thousands) Fiscal Fiscal Fiscal Fiscal 2015-2016 Plan Fiscal 2014-2015 Plan Fiscal 2013-2014 Plan Accrual balance, July 1, 2016 $ 1,512 $ 357 $ 68 $ 550 $ 582 $ 1,746 $ 4,815 Charges, net 4 30 — — 110 16 160 Cash payments (811 ) (313 ) (4 ) 3 (228 ) (369 ) (1,722 ) Accrual balance, September 30, 2016 705 74 64 553 464 1,393 3,253 Charges, net 37 (25 ) — — 47 13 72 Cash payments (235 ) 23 — (38 ) (145 ) (306 ) (701 ) Accrual balance as of December 30, 2016 $ 507 $ 72 $ 64 $ 515 $ 366 $ 1,100 $ 2,624 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Dec. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Compensation Expense for Share-based Compensation Awards | Total compensation expense for share-based awards included in our condensed consolidated statements of operations for the three and six months ended December 30, 2016 and January 1, 2016 was as follows: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, By Expense Category: Cost of revenues $ 62 $ 46 $ 102 $ 82 Research and development 38 34 62 63 Selling and administrative 388 349 782 777 Total share-based compensation expense $ 488 $ 429 $ 946 $ 922 By Types of Award: Options $ 43 $ 213 $ 189 $ 482 Restricted and performance stock awards and units 445 216 757 440 Total share-based compensation expense $ 488 $ 429 $ 946 $ 922 |
Segment and Geographic Inform24
Segment and Geographic Information (Tables) | 6 Months Ended |
Dec. 30, 2016 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | Revenue by region for the three and six months ended December 30, 2016 and January 1, 2016 were as follows: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, North America $ 39,353 $ 31,844 $ 67,937 $ 67,064 Africa and Middle East 16,770 23,703 31,119 50,991 Europe and Russia 2,810 5,617 7,317 12,059 Latin America and Asia Pacific 9,603 9,252 20,370 19,857 Total Revenue $ 68,536 $ 70,416 $ 126,743 $ 149,971 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Dec. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 30, 2016 , our future minimum lease payments under all non-cancelable operating leases with an initial lease term in excess of one year were as follows: Fiscal Years Ending in June Amounts (In thousands) 2017 (two quarters remaining) $ 1,169 2018 1,736 2019 1,313 2020 852 2020 874 Thereafter 2,231 Total $ 8,175 |
Schedule of Rent Expense | Rental expense for operating leases, including rentals on a month-to-month basis, was as follows: Three Months Ended Six Months Ended (In thousands) December 30, January 1, December 30, January 1, Rent expense $ 987 $ 1,050 $ 2,134 $ 2,621 |
The Company and Basis of Pres26
The Company and Basis of Presentation (Details) | 1 Months Ended | 3 Months Ended | |||||
Jun. 30, 2016 | Dec. 30, 2016$ / sharesshares | Sep. 30, 2016 | Jan. 01, 2016 | Oct. 02, 2015 | Sep. 06, 2016$ / shares | Jul. 01, 2016$ / sharesshares | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Fiscal period duration | 91 days | 91 days | 91 days | 91 days | |||
Reverse stock split ratio | 0.0833 | ||||||
Common stock shares authorized | shares | 300,000,000 | 300,000,000 | |||||
Common stock par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Net Income (Loss) Per Share o27
Net Income (Loss) Per Share of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | Dec. 30, 2016 | Jan. 01, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) from continuing operations, net of tax | $ 1,678 | $ (5,679) | $ 1,049 | $ (7,241) |
Net income from discontinued operations, net of tax | 0 | 0 | 0 | 359 |
Net income (loss) attributable to Aviat Networks | $ 1,678 | $ (5,679) | $ 1,049 | $ (6,882) |
Denominator: | ||||
Weighted average shares outstanding, basic | 5,284 | 5,230 | 5,273 | 5,218 |
Effect of potentially dilutive equivalent shares | 116 | 0 | 55 | 0 |
Weighted average shares outstanding, diluted | 5,400 | 5,230 | 5,328 | 5,218 |
Basic income (loss) per share attributable to Aviat Networks’ common stockholders: | ||||
Continuing operations | $ 0.32 | $ (1.09) | $ 0.20 | $ (1.39) |
Discontinued operations | 0 | 0 | 0 | 0.07 |
Net income (loss) | 0.32 | (1.09) | 0.20 | (1.32) |
Diluted income (loss) per share attributable to Aviat Networks’ common stockholders: | ||||
Continuing operations | 0.31 | (1.09) | 0.20 | (1.39) |
Discontinued operations | 0 | 0 | 0 | 0.07 |
Net income (loss) | $ 0.31 | $ (1.09) | $ 0.20 | $ (1.32) |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potential shares of common stock excluded | 433 | 823 | 443 | 756 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potential shares of common stock excluded | 427 | 589 | 435 | 600 |
Restricted stocks units and performance stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potential shares of common stock excluded | 6 | 234 | 8 | 156 |
Balance Sheet Components (Recei
Balance Sheet Components (Receivables) (Details) - USD ($) $ in Thousands | Dec. 30, 2016 | Jul. 01, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Accounts receivable | $ 63,864 | $ 71,416 |
Less allowances for collection losses | (7,663) | (7,967) |
Accounts receivable, net | $ 56,201 | $ 63,449 |
Balance Sheet Components (Inven
Balance Sheet Components (Inventories) (Details) - USD ($) $ in Thousands | Dec. 30, 2016 | Jul. 01, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Finished products | $ 14,706 | $ 20,044 |
Work in process | 3,024 | 5,104 |
Raw materials and supplies | 2,703 | 2,145 |
Inventories | 20,433 | 27,293 |
Deferred cost of revenue included within finished goods | 4,947 | 5,984 |
Consigned inventories included within raw materials and supplies | $ 1,887 | $ 2,035 |
Balance Sheet Components (Inv30
Balance Sheet Components (Inventory Adjustments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | Dec. 30, 2016 | Jan. 01, 2016 | |
Balance Sheet Related Disclosures [Abstract] | ||||
Excess and obsolete inventory charges | $ 94 | $ 979 | $ 568 | $ 1,957 |
Customer service inventory write-down | 242 | 219 | 529 | 348 |
Charges for inventory and customer service inventory write-downs | $ 336 | $ 1,198 | $ 1,097 | $ 2,305 |
Balance Sheet Components (Prope
Balance Sheet Components (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | Dec. 30, 2016 | Jul. 01, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 67,685 | $ 70,004 |
Less accumulated depreciation and amortization | (50,849) | (51,842) |
Property, plant and equipment, net | 16,836 | 18,162 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 710 | 710 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11,346 | 11,714 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 14,370 | 14,620 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 41,259 | $ 42,960 |
Balance Sheet Components (Pro32
Balance Sheet Components (Property, Plant and Equipment Depreciation and Amortization) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | Dec. 30, 2016 | Jan. 01, 2016 | |
Balance Sheet Related Disclosures [Abstract] | ||||
Depreciation and amortization | $ 1,467 | $ 1,672 | $ 3,136 | $ 3,376 |
Balance Sheet Components (Accru
Balance Sheet Components (Accrued Expenses) (Details) - USD ($) $ in Thousands | Dec. 30, 2016 | Jul. 01, 2016 |
Payables and Accruals [Abstract] | ||
Accrued compensation and benefits | $ 7,663 | $ 7,161 |
Accrued commissions | 1,823 | 3,551 |
Accrued warranties | 3,559 | 3,944 |
Other | 9,999 | 8,549 |
Accrued expenses | $ 23,044 | $ 23,205 |
Balance Sheet Components (Acc34
Balance Sheet Components (Accrued Warranties) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | Dec. 30, 2016 | Jan. 01, 2016 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||||
Balance as of the beginning of the period | $ 3,704 | $ 4,722 | $ 3,944 | $ 4,221 |
Warranty provision recorded during the period | 480 | 934 | 817 | 2,413 |
Consumption during the period | (625) | (859) | (1,202) | (1,837) |
Balance as of the end of the period | $ 3,559 | $ 4,797 | $ 3,559 | $ 4,797 |
Balance Sheet Components (Advan
Balance Sheet Components (Advanced Payments and Unearned Income) (Details) - USD ($) $ in Thousands | Dec. 30, 2016 | Jul. 01, 2016 |
Deferred Revenue Disclosure [Abstract] | ||
Advanced payments | $ 10,407 | $ 12,124 |
Unearned income | 15,044 | 18,491 |
Advance payments and unearned income | $ 25,451 | $ 30,615 |
Fair Value Measurements Of As36
Fair Value Measurements Of Assets And Liabilities (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 30, 2016 | Jul. 01, 2016 |
Level 1 | Money market funds | ||
Cash equivalents: | ||
Money market, net asset value (usd per share) | $ 1 | $ 1 |
Recurring | Level 1 | Cost | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | $ 18,129 | $ 18,800 |
Recurring | Level 1 | Fair Value | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 18,129 | 18,800 |
Recurring | Level 2 | Cost | ||
Cash equivalents: | ||
Short term investments | 228 | 222 |
Other current assets | 193 | 5 |
Other accrued expenses | 309 | 9 |
Recurring | Level 2 | Cost | Bank certificates of deposit | ||
Cash equivalents: | ||
Cash equivalents | 11 | 11 |
Recurring | Level 2 | Fair Value | ||
Cash equivalents: | ||
Short term investments | 228 | 222 |
Other current assets | 193 | 5 |
Other accrued expenses | 309 | 9 |
Recurring | Level 2 | Fair Value | Bank certificates of deposit | ||
Cash equivalents: | ||
Cash equivalents | $ 11 | $ 11 |
Credit Facility And Debt (Detai
Credit Facility And Debt (Details) - USD ($) | 6 Months Ended | |
Dec. 30, 2016 | Jul. 01, 2016 | |
Line of Credit Facility [Line Items] | ||
Outstanding borrowing | $ 8,000,000 | $ 9,000,000 |
Silicon Valley Bank | ||
Line of Credit Facility [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 30,000,000 | |
Early termination fee percentage | 1.00% | |
Available credit under credit facility | $ 5,100,000 | |
Line of credit facility, current borrowing capacity | $ 20,000,000 | |
Weight average interest rate | 4.03% | |
Additional spread on applicable rate in event of default | 2.00% | |
Silicon Valley Bank | Prime Rate | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, description of variable rate basis | prime rate | |
Silicon Valley Bank | Prime Rate | Minimum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 0.50% | |
Silicon Valley Bank | Prime Rate | Maximum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.50% | |
Line of Credit | Silicon Valley Bank | ||
Line of Credit Facility [Line Items] | ||
Outstanding borrowing | $ 8,000,000 | $ 9,000,000 |
Letter of Credit | Silicon Valley Bank | ||
Line of Credit Facility [Line Items] | ||
Credit facility, maximum borrowing capacity | 12,000,000 | |
Letters of credit | 6,900,000 | |
Singapore Line of Credit | Silicon Valley Bank | ||
Line of Credit Facility [Line Items] | ||
Credit facility sublimit available for Singapore | 30,000,000 | |
New Zealand | ||
Line of Credit Facility [Line Items] | ||
Credit facility, maximum borrowing capacity | 400,000 | |
New Zealand | Short-term Advances | ||
Line of Credit Facility [Line Items] | ||
Credit facility, maximum borrowing capacity | 300,000 | |
Available credit under credit facility | 300,000 | |
New Zealand | Standby Letters of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of credit | $ 100,000 |
Restructuring Activities (Restr
Restructuring Activities (Restructuring Liability) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 30, 2016 | Sep. 30, 2016 | Jan. 01, 2016 | Dec. 30, 2016 | Jan. 01, 2016 | Jul. 01, 2016 | |
Restructuring Reserve [Roll Forward] | ||||||
Accrual balance, beginning of period | $ 3,253 | $ 4,815 | $ 4,815 | |||
Charges, net | 72 | 160 | $ 34 | 232 | $ 55 | |
Cash payments | (701) | (1,722) | ||||
Accrued balance, end of period | 2,624 | 3,253 | 2,624 | $ 4,815 | ||
Current portion of restructuring liabilities | 2,405 | 2,405 | 3,910 | |||
Long-term portion of restructuring liabilities included in other long-term liabilities | 200 | 200 | ||||
Severance and Benefits | Fiscal 2016-2017 Plan | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Accrual balance, beginning of period | 705 | 1,512 | 1,512 | |||
Charges, net | 37 | 4 | ||||
Cash payments | (235) | (811) | ||||
Accrued balance, end of period | 507 | 705 | 507 | 1,512 | ||
Severance and Benefits | Fiscal 2015-2016 Plan | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Accrual balance, beginning of period | 74 | 357 | 357 | |||
Charges, net | (25) | 30 | ||||
Cash payments | 23 | (313) | ||||
Accrued balance, end of period | 72 | 74 | 72 | 357 | ||
Severance and Benefits | Fiscal 2013-2014 Plan | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Accrual balance, beginning of period | 64 | 68 | 68 | |||
Charges, net | 0 | 0 | ||||
Cash payments | 0 | (4) | ||||
Accrued balance, end of period | 64 | 64 | 64 | 68 | ||
Facilities and Other | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Operating lease contract termination fees | $ 1,900 | |||||
Operating lease contract termination fees payment period | 14 months | |||||
Facilities and Other | Fiscal 2015-2016 Plan | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Accrual balance, beginning of period | 553 | 550 | 550 | |||
Charges, net | 0 | 0 | ||||
Cash payments | (38) | 3 | ||||
Accrued balance, end of period | 515 | 553 | 515 | $ 550 | ||
Facilities and Other | Fiscal 2014-2015 Plan | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Accrual balance, beginning of period | 464 | 582 | 582 | |||
Charges, net | 47 | 110 | ||||
Cash payments | (145) | (228) | ||||
Accrued balance, end of period | 366 | 464 | 366 | 582 | ||
Facilities and Other | Fiscal 2013-2014 Plan | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Accrual balance, beginning of period | 1,393 | 1,746 | 1,746 | |||
Charges, net | 13 | 16 | ||||
Cash payments | (306) | (369) | ||||
Accrued balance, end of period | $ 1,100 | $ 1,393 | $ 1,100 | $ 1,746 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) $ / shares in Units, $ in Millions | 6 Months Ended | ||
Dec. 30, 2016USD ($)StockIncentivePlan$ / sharesshares | Sep. 06, 2016$ / sharesshares | Jul. 01, 2016$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of rights declared as dividend for each share of outstanding common stock | 1 | ||
Common stock par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, par value | $ / shares | $ 0.01 | 0.01 | $ 0.01 |
Exercise price of right | $ / shares | $ 35 | ||
Performance stock unit (PSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
2007 Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of stock incentive plans | StockIncentivePlan | 1 | ||
Options expired | (16,416) | ||
Number of shares available for grant | 262,191 | ||
2007 Stock Plan | Performance stock unit (PSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards granted | 72,941 | ||
2007 Stock Plan | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards granted | 213,467 | ||
Awards canceled | 10,370 | ||
2007 Stock Plan | Market-Based Stock Units (MSU) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards granted | 50,000 | ||
Awards canceled | 6,253 | ||
Options canceled | 15,430 | ||
Award cancelled due to performance target not achieved | 48,626 | ||
2007 Stock Plan | Stock Appreciation Rights (SARs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards canceled | 983 | ||
2007 Stock Plan | Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Nonvested awards, unrecognized compensation expense | $ | $ 0.2 | ||
Nonvested awards, expense expected to be recognized, weighted average period | 1 year 7 months 3 days | ||
2007 Stock Plan | Restricted stocks units and performance stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Nonvested awards, unrecognized compensation expense | $ | $ 4.3 | ||
Nonvested awards, expense expected to be recognized, weighted average period | 2 years 2 months 12 days | ||
Preferred Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of preferred stocks to be purchased with each right | 0.001 |
Stockholders' Equity (Stock Bas
Stockholders' Equity (Stock Based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | Dec. 30, 2016 | Jan. 01, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 488 | $ 429 | $ 946 | $ 922 |
Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 43 | 213 | 189 | 482 |
Restricted stocks units and performance stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 445 | 216 | 757 | 440 |
Cost of revenues | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 62 | 46 | 102 | 82 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 38 | 34 | 62 | 63 |
Selling and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 388 | $ 349 | $ 782 | $ 777 |
Segment and Geographic Inform41
Segment and Geographic Information (Schedule of Revenues by Geographic Region) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 30, 2016USD ($) | Jan. 01, 2016USD ($) | Dec. 30, 2016USD ($)segments | Jan. 01, 2016USD ($) | Jul. 01, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Number of reportable segments | segments | 1 | ||||
Revenue | $ 68,536 | $ 70,416 | $ 126,743 | $ 149,971 | |
North America | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 39,353 | 31,844 | 67,937 | 67,064 | |
Africa and Middle East | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 16,770 | 23,703 | 31,119 | 50,991 | |
Europe and Russia | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 2,810 | 5,617 | 7,317 | 12,059 | |
Latin America and Asia Pacific | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | $ 9,603 | $ 9,252 | $ 20,370 | $ 19,857 | |
Accounts Receivable | Customer Concentration Risk | MTN | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Concentration risk percentage | 13.00% | 22.00% | |||
Accounts Receivable | Customer Concentration Risk | Motorola | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Concentration risk percentage | 12.00% | 11.00% | |||
Revenue | Customer Concentration Risk | MTN | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Concentration risk percentage | 12.00% | 20.00% | 11.00% | 18.00% | |
Revenue | Customer Concentration Risk | Motorola | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Concentration risk percentage | 10.00% |
Divestiture (Details)
Divestiture (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | Dec. 30, 2016 | Jan. 01, 2016 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Income from discontinued operations, net of tax | $ 0 | $ 0 | $ 0 | $ 359 |
WiMAX | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Income from discontinued operations, net of tax | $ 400 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 30, 2016 | Jun. 27, 2014 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal tax rate | 35.00% | ||
Foreign Tax Authority | Inland Revenue, Singapore (IRAS) | |||
Income Tax Contingency [Line Items] | |||
Income taxes paid | $ 13.2 | ||
Tax refunds | $ 3.7 |
Commitments and Contingencies44
Commitments and Contingencies (Narrative) (Details) ft² in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended |
May 31, 2016USD ($) | Dec. 30, 2016USD ($)ft² | Dec. 30, 2016USD ($)ft² | |
Property Subject to or Available for Operating Lease [Line Items] | |||
Operating leases, future minimum sublease receivable | $ 0.1 | $ 0.1 | |
Other commitment | $ 40.4 | $ 40.4 | |
Maximum | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Guarantee term | 2 years | ||
Office building at Milpitas, California | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Office Space (in sq ft) | ft² | 19 | 19 | |
Term of operating lease contract | 60 months | ||
Australia | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Damages sought by plaintiff | $ 1 | ||
Africa | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Loss contingency accrued | $ 0.3 | ||
Performance Guarantee | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Payment for performance guarantee | $ 0.4 | ||
Inventories | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Purchase obligations with suppliers outstanding | $ 22.6 | ||
Software License | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Purchase obligations with suppliers outstanding | $ 1.7 |
Commitments and Contingencies45
Commitments and Contingencies (Future Minimum Lease Payments) (Details) $ in Thousands | Dec. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2017 (two quarters remaining) | $ 1,169 |
2,018 | 1,736 |
2,019 | 1,313 |
2,020 | 852 |
2,021 | 874 |
Thereafter | 2,231 |
Total | $ 8,175 |
Commitments and Contingencies46
Commitments and Contingencies (Rental Expense for Operating Leases) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | Dec. 30, 2016 | Jan. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 987 | $ 1,050 | $ 2,134 | $ 2,621 |