Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2016 | Jan. 27, 2017 | |
Document Documentand Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ktcc | |
Entity Registrant Name | KEY TRONIC CORP | |
Entity Central Index Key | 719,733 | |
Current Fiscal Year End Date | --07-01 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 10,759,680 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Jul. 02, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 1,280 | $ 1,018 |
Trade receivables, net of allowance for doubtful accounts of $134 and $135 | 66,444 | 61,678 |
Inventories | 98,106 | 107,006 |
Other | 10,892 | 11,757 |
Total current assets | 176,722 | 181,459 |
Property, plant and equipment, net | 29,938 | 27,925 |
Other assets: | ||
Deferred income tax asset | 11,050 | 8,982 |
Goodwill | 9,957 | 9,957 |
Other intangible assets, net | 5,364 | 5,928 |
Other | 1,471 | 1,673 |
Total other assets | 27,842 | 26,540 |
Total assets | 234,502 | 235,924 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Accounts payable | 51,178 | 58,967 |
Accrued compensation and vacation | 7,695 | 9,571 |
Current portion of debt | 5,841 | 5,000 |
Other | 14,292 | 10,572 |
Total current liabilities | 79,006 | 84,110 |
Long-term liabilities: | ||
Term loans | 21,693 | 21,250 |
Revolving loan | 18,930 | 18,073 |
Other long-term obligations | 7,998 | 6,909 |
Total long-term liabilities | 48,621 | 46,232 |
Total liabilities | 127,627 | 130,342 |
Commitments and contingencies (Note 9) | ||
Shareholders’ equity: | ||
Common stock, no par value—shares authorized 25,000; issued and outstanding 10,758 and 10,725 shares, respectively | 45,466 | 45,227 |
Retained earnings | 71,248 | 67,928 |
Accumulated other comprehensive loss | (9,839) | (7,573) |
Total shareholders’ equity | 106,875 | 105,582 |
Total liabilities and shareholders’ equity | $ 234,502 | $ 235,924 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2016 | Jul. 02, 2016 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ 134 | $ 135 |
Common stock - par value | $ 0 | $ 0 |
Common stock - shares authorized | 25,000 | 25,000 |
Common stock - shares issued | 10,758 | 10,725 |
Common stock - shares outstanding | 10,758 | 10,725 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 31, 2016 | Dec. 26, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 118,517 | $ 116,403 | $ 235,652 | $ 242,612 |
Cost of sales | 108,905 | 107,293 | 216,331 | 224,583 |
Gross profit | 9,612 | 9,110 | 19,321 | 18,029 |
Operating expenses | ||||
Research, development and engineering expenses | 1,603 | 1,506 | 3,187 | 3,062 |
Selling, general and administrative expenses | 5,462 | 5,201 | 10,797 | 10,784 |
Total operating expenses | 7,065 | 6,707 | 13,984 | 13,846 |
Operating income | 2,547 | 2,403 | 5,337 | 4,183 |
Interest expense, net | 552 | 521 | 1,141 | 1,054 |
Income before income taxes | 1,995 | 1,882 | 4,196 | 3,129 |
Income tax provision | 467 | 95 | 876 | 525 |
Net income | $ 1,528 | $ 1,787 | $ 3,320 | $ 2,604 |
Earnings per share: | ||||
Net income per share — Basic | $ 0.14 | $ 0.17 | $ 0.31 | $ 0.24 |
Weighted average shares outstanding — Basic | 10,758 | 10,710 | 10,753 | 10,708 |
Net income per share — Diluted | $ 0.14 | $ 0.16 | $ 0.30 | $ 0.23 |
Weighted average shares outstanding — Diluted | 10,968 | 11,418 | 10,919 | 11,279 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 31, 2016 | Dec. 26, 2015 | |
Comprehensive income: | ||||
Net income | $ 1,528 | $ 1,787 | $ 3,320 | $ 2,604 |
Other comprehensive income: | ||||
Unrealized (loss) gain on hedging instruments, net of tax | (1,266) | 687 | (2,266) | (2,293) |
Comprehensive income | $ 262 | $ 2,474 | $ 1,054 | $ 311 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 31, 2016 | Dec. 26, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized gain (loss) on foreign exchange contracts, tax | $ (0.7) | $ 0.4 | $ (1.2) | $ (1.2) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2016 | Dec. 26, 2015 | |
Operating activities: | ||
Net income | $ 3,320 | $ 2,604 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 3,430 | 3,034 |
Excess tax benefit from share-based compensation | 0 | 402 |
Provision for obsolete inventory | 306 | 515 |
Provision for warranty | 63 | 40 |
Recovery of doubtful accounts | (1) | (19) |
Loss on disposal of assets | 109 | 0 |
Share-based compensation expense | 355 | 426 |
Deferred income taxes | (900) | (2,227) |
Changes in operating assets and liabilities: | ||
Trade receivables | (4,765) | 12,031 |
Inventories | 8,594 | (6,830) |
Other assets | 836 | (756) |
Accounts payable | (7,789) | (4,689) |
Accrued compensation and vacation | (1,876) | (2,085) |
Other liabilities | 1,448 | 1,665 |
Cash provided by operating activities | 3,130 | 3,307 |
Investing activities: | ||
Purchase of property and equipment | (4,936) | (7,544) |
Proceeds from sale of fixed assets | 101 | 6,183 |
Cash used in investing activities | (4,835) | (1,361) |
Financing activities: | ||
Payment of financing costs | (193) | (56) |
Proceeds from Issuance of Long-term Debt | (3,919) | 0 |
Repayments of long term debt | (2,500) | (2,500) |
Borrowings under revolving credit agreement | 79,260 | 101,397 |
Repayments of revolving credit agreement | (78,403) | (100,368) |
Excess tax benefit from share-based compensation | 0 | 402 |
Shares withheld for taxes | (116) | 0 |
Cash provided by (used in) financing activities | 1,967 | (1,125) |
Net increase cash and cash equivalents | 262 | 821 |
Cash and cash equivalents, beginning of period | 1,018 | 372 |
Cash and cash equivalents, end of period | 1,280 | 1,193 |
Supplemental cash flow information: | ||
Interest payments | 1,127 | 1,032 |
Income tax payments, net of refunds | $ 418 | $ 836 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY - 6 months ended Dec. 31, 2016 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive (Loss) Income |
Balances (Shares) at Jul. 02, 2016 | 10,725 | |||
Balances, Period Start at Jul. 02, 2016 | $ 105,582 | $ 45,227 | $ 67,928 | $ (7,573) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 3,320 | 3,320 | ||
Unrealized loss on hedging instruments, net | (2,266) | (2,266) | ||
Exercise of stock appreciation rights (Shares) | 46 | |||
Shares withheld for taxes, (Shares) | (13) | |||
Shares withheld for taxes | (116) | $ (116) | ||
Share-based compensation expense | 355 | $ 355 | ||
Balances (Shares) at Dec. 31, 2016 | 10,758 | |||
Balances, Period End at Dec. 31, 2016 | $ 106,875 | $ 45,466 | $ 71,248 | $ (9,839) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | Basis of Presentation The consolidated financial statements included herein have been prepared by Key Tronic Corporation and subsidiaries (the Company) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. The year-end condensed consolidated balance sheet information was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The financial statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 2, 2016 . |
FISCAL YEAR | The Company’s reporting period is a 52/53 week fiscal year ending on the Saturday closest to June 30. The three and six month periods ended December 31, 2016 and December 26, 2015 were 13 and 26 week periods, respectively. Fiscal year 2017 will end on July 1, 2017 , which is a 52 week year. Fiscal year 2016 which ended on July 2, 2016 , was a 53 week year. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | Significant Accounting Policies Earnings Per Common Share Basic earnings per common share (EPS) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the combination of other potentially dilutive weighted average common shares and the weighted average number of common shares outstanding during the period using the treasury stock method. The computation assumes the proceeds from the exercise of equity awards were used to repurchase common shares at the average market price during the period. The computation of diluted EPS does not assume conversion, exercise, or contingent issuance of common stock equivalent shares that would have an anti-dilutive effect on EPS. Derivative Instruments and Hedging Activities The Company has entered into foreign currency forward contracts, foreign currency swaps and an interest rate swap which are accounted for as cash flow hedges in accordance with ASC 815, Derivatives and Hedging . The effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (AOCI) and is reclassified into earnings in the same period in which the underlying hedged transaction affects earnings. The derivative’s effectiveness represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. The Company uses derivatives to manage the variability of foreign currency fluctuations of expenses in our Mexico facilities and interest rate risk associated with certain borrowings under the Company’s term loan arrangement. The foreign currency forward contracts, foreign currency swaps and interest rate swap have terms that are matched to the underlying transactions being hedged. As a result, these transactions fully offset the hedged risk and no ineffectiveness has been recorded. The Company’s foreign currency forward contracts, foreign currency swaps and interest rate swap potentially expose the Company to credit risk to the extent the counterparty may be unable to meet the terms of the agreement. The Company minimizes such risk by seeking high quality counterparty. The Company’s counterparty to the foreign currency forward contracts, foreign currency swaps and interest rate swap are major banking institutions. These institutions do not require collateral for the contracts, and the Company believes that the risk of the counterparty failing to meet their contractual obligations is remote. The Company does not enter into derivative instruments for trading or speculative purposes. Income Taxes We compute our interim income tax provision through the use of an estimated annual effective tax rate (ETR) applied to year-to-date operating results and specific events that are discretely recognized as they occur. In determining the estimated annual ETR, we analyze various factors, including projections of our annual earnings, taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, our ability to use tax credits and available tax planning alternatives. Discrete items, including the effect of changes in tax laws, tax rates, and certain circumstances with respect to valuation allowances or other unusual or non-recurring tax adjustments, are reflected in the period in which they occur as an addition to, or reduction from, the income tax provision, rather than included in the estimated annual ETR. Refer to Note 6 for further discussions. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences and benefits attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities for a change in tax rates is recognized in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that is more likely than not to be realized. We utilize a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments based on new assessments and changes in estimates and which may not accurately forecast actual outcomes. Our policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. The tax years 1998 through the present remain open to examination by the major U.S. taxing jurisdictions to which we are subject. Impairment of Goodwill and Other Intangible Assets The Company records intangible assets that are acquired individually or with a group of other assets in the financial statements at acquisition. In accordance with ASC 350, Goodwill and Other Intangible Assets , goodwill and intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized but are required to be reviewed for impairment at least annually or when events or circumstances indicate that carrying value may exceed fair value. The Company’s annual goodwill impairment analysis is performed as of the first day of the fourth quarter. The Company’s acquired intangible assets are subject to amortization over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09 (ASU 2014-09), Revenue from Contracts with Customers . The guidance in this Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. This may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In August 2015, the FASB issued an amendment to defer the effective date of ASU 2014-09 for all entities by one year. This Update is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. Companies have the option of using either a full or modified retrospective approach in applying this standard. The Company is in the process of assessing the impact of ASU 2014-09 on its consolidated financial statements. In July 2015, the FASB issued final guidance that simplifies the subsequent measurement of inventory for which cost is determined by methods other than last-in first-out (“LIFO”) and the retail inventory method. For inventory within the scope of the new guidance, entities will be required to compare the cost of inventory to only one measure, its net realizable value, and not the three measures required by the existing guidance. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The new guidance should not change how entities initially measure the cost of inventory. The guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted this guidance during the current quarter and it had no impact on our financial statements. In February 2016, the FASB issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases which supersedes ASC 840 Leases and creates a new topic, ASC 842 Leases . This update requires lessees to recognize a lease asset and a lease liability for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with earlier adoption permitted. This update will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the effect of this update on its consolidated financial statements. In March 2016, the FASB issued Accounting Standards Update 2016-09 (ASU 2016-09), Improvements to Employee Share-Based Payment Accounting . This update simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with earlier adoption permitted. The Company prospectively adopted this ASU during the first quarter of fiscal year 2017. As a result, excess tax benefits are recorded in income tax expense instead of a component of shareholders’ equity and excess tax benefits are no longer broken out on the consolidated statement of cash flows beginning in fiscal year 2017. In August 2016, the FASB issued Accounting Standards Update 2016-15 (ASU 2016-15), Classification of Certain Cash Receipts and Cash Payments . This update provides guidance on how to record eight specific cash flow issues. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted and a retrospective transition method to each period should be presented. The Company early adopted this guidance during the current quarter and it had no impact on our condensed consolidated financial statements. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | Inventories The components of inventories consist of the following (in thousands): December 31, 2016 July 2, 2016 Finished goods $ 13,005 $ 13,384 Work-in-process 17,609 18,988 Raw materials and supplies 67,492 74,634 $ 98,106 $ 107,006 |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | Long-Term Debt On September 3, 2014, the Company entered into a five-year term loan in the amount of $35.0 million used to acquire all of the outstanding shares of CDR Manufacturing, Inc. (dba Ayrshire Electronics). The term loan requires quarterly payments of $1.25 million through June 15, 2019 with a final payment of the remaining outstanding balance on August 31, 2019. The Company had an outstanding balance of $23.8 million and $26.3 million under the term loan as of December 31, 2016 and July 2, 2016 , respectively. On August 6, 2015, the Company entered into a First Amendment to the amended and restated credit agreement extending the limit on our line of credit facility to $45.0 million as evidenced by the Second Replacement Revolving Note. The agreement specifies that the proceeds of the revolving line of credit be used primarily for working capital and general corporate purposes. The line of credit is secured by substantially all of the assets of the Company and matures on August 31, 2019 at which time all outstanding balances are payable. As of December 31, 2016 , the Company had an outstanding balance under the credit facility of $18.9 million , $0.4 million in outstanding letters of credit and $25.7 million available for future borrowings. As of July 2, 2016 , the Company had an outstanding balance under the credit facility of $18.1 million , $0.4 million in outstanding letters of credit and $26.5 million available for future borrowings. On December 28, 2016, the Company entered into an equipment term loan agreement in the amount of $3.9 million in order to further invest in production equipment. The equipment term loan is collateralized by production equipment. Under this loan agreement, equal quarterly payments of approximately $0.2 million will commence on March 31, 2017 and will continue through the maturity of the equipment term loan on June 30, 2021. The Company has available an additional $2.1 million which can be borrowed in the future under this agreement. Borrowings under the revolving line of credit, term loan and equipment term loan bear interest at either a “Base Rate” or a “Fixed Rate,” as elected by the Company. The base rate is the higher of the Wells Fargo Bank prime rate, daily one month London Interbank Offered Rate (LIBOR) plus 1.5% , or the Federal Funds rate plus 1.5% . The fixed rate is LIBOR plus 1.75% , LIBOR plus 2.00% , or LIBOR plus 2.25% depending on the level of the Company’s trailing four quarters Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). The interest rates on outstanding debt as of December 31, 2016 range from 2.66% - 3.75% compared to 2.45% - 3.50% as of July 2, 2016 . Debt maturities as of December 31, 2016 for the next five years and thereafter are as follows (in thousands): Fiscal Years Ending Amount 2017 (1) $ 2,935 2018 5,871 2019 5,871 2020 31,051 2021 871 Total debt $ 46,599 Unamortized debt issuance costs $ (135 ) Long-term debt, net of debt issuance costs $ 46,464 (1) Represents scheduled payments for the remaining six-month period ending July 1, 2017. The Company must comply with certain financial covenants, including a cash flow leverage ratio, an asset coverage ratio, and a fixed charge coverage ratio. The credit agreement requires the Company to maintain a minimum profit threshold, limits the maximum capital lease expenditures and restricts the Company from declaring or paying dividends in cash or stock without prior bank approval. The Company is in compliance with all financial covenants for all periods presented. |
TRADE ACCOUNTS RECEIVABLE PURCH
TRADE ACCOUNTS RECEIVABLE PURCHASE PROGRAMS | 6 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
TRADE ACCOUNTS RECEIVABLE PURCHASE PROGRAMS | Trade Accounts Receivable Purchase Programs Sale Programs The Company utilizes an Account Purchase Agreement with Wells Fargo Bank, N.A. (“WFB”) which allows the Company to sell and assign to WFB and WFB may purchase from the Company the accounts receivable of certain Company customers in a maximum aggregate amount outstanding of $20.0 million . The initial term of the agreement is set to mature in June 2017 and there are successive 12 month renewal periods available. The Company also has an Account Purchase Agreement with Orbian Financial Services (“Orbian”). This agreement allows the Company to sell accounts receivable of certain customers to Orbian and the agreement may be cancelled at any time by either party. Total accounts receivables sold during the six months ended December 31, 2016 and December 26, 2015 was approximately $38.9 million and $34.8 million , respectively. Accounts receivables sold and not yet collected were $2.0 million and $1.7 million as of December 31, 2016 and July 2, 2016 , respectively. The receivables that were sold were removed from the condensed consolidated balance sheets and the cash received is reflected as cash provided by operating activities in the condensed consolidated statements of cash flows. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Income Taxes The Company expects to repatriate a portion of its foreign earnings based on increased net sales growth driving additional capital requirements domestically, cash requirements for potential acquisitions and to implement certain tax strategies. The Company currently expects to repatriate approximately $14.2 million of foreign earnings in the future. As such, these earnings would be recognized in the United States, and the Company would be subject to U.S. federal income taxes and potential withholding taxes in foreign jurisdictions. Both the domestic tax and estimated withholding tax of expected repatriation of foreign earnings have been recorded as part of deferred taxes as of December 31, 2016 . All other unremitted foreign earnings are expected to remain permanently reinvested for planned fixed assets purchases and improvements in foreign locations. During the second quarter of fiscal year 2017, the Company signed a unilateral advance pricing agreement (APA) with the Large Taxpayer Division of Mexico’s Servicio de Administración Tributaria (SAT) under an elective framework that has been agreed to by the U.S. and Mexican authorities. The APA is part of a larger program affecting hundreds of U.S. companies with maquiladora operations in Mexico. The general impact of the APA is to increase margins between the maquiladora and U.S. parent company, shifting profits to Mexico from the U.S. As a result of the APA, the Company anticipates that it will have an increased tax liability in Mexico of approximately $0.4 million related to the calendar years 2014-2016. However, the increased costs to the U.S. will result in a reduced tax liability of approximately $0.4 million in the U.S. during fiscal year 2017. The overall net impact of the APA is therefore estimated to not be material to the Company’s consolidated financial results. The estimated increased liabilities in Mexico and related offsetting tax benefit in the U.S. have been recorded during the second quarter of fiscal year 2017. Currently, the Company anticipates that the APA will be finalized late in the third quarter of fiscal year 2017. Further, the resulting impact of the APA resulted in approximately $1.8 million of additional earnings being recognized in Mexico. The Company is currently reevaluating its repatriation assumptions but at this time, it is assumed that the amounts previously deemed permanently reinvested in Mexico may be sufficient to sustain future capital needs and growth in Mexico. As such, the entire $1.8 million is expected to be repatriated in the future. The Company has available approximately $7.1 million of gross federal research and development tax credits as of December 31, 2016 . ASC 740 requires the Company to recognize in its financial statements uncertainties in tax positions taken that may not be sustained upon examination by the taxing authorities. Accordingly, as of December 31, 2016 , the Company has recorded $3.8 million of unrecognized tax benefits associated with these federal tax credits, resulting in a net deferred tax benefit of approximately $3.3 million . |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | Earnings Per Share The following tables present a reconciliation of the denominator in the basic and diluted EPS calculation and the number of antidilutive common share awards that were not included in the diluted earnings per share calculation. These antidilutive securities occur when equity awards outstanding have an option price greater than the average market price for the period. Three Months Ended (in thousands, except per share information) December 31, 2016 December 26, 2015 Net income $ 1,528 $ 1,787 Weighted average shares outstanding—basic 10,758 10,710 Effect of dilutive common stock awards 210 708 Weighted average shares outstanding—diluted 10,968 11,418 Net income per share—basic $ 0.14 $ 0.17 Net income per share—diluted $ 0.14 $ 0.16 Antidilutive SARs not included in diluted earnings per share 892 456 Six Months Ended (in thousands, except per share information) December 31, 2016 December 26, 2015 Net income $ 3,320 $ 2,604 Weighted average shares outstanding—basic 10,753 10,708 Effect of dilutive common stock awards 166 571 Weighted average shares outstanding—diluted 10,919 11,279 Earnings per share—basic $ 0.31 $ 0.24 Earnings per share—diluted $ 0.30 $ 0.23 Antidilutive SARs not included in diluted earnings per share 892 456 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE BASED COMPENSATION | Share-based Compensation The Company’s incentive plan provides for equity and liability awards to employees and non-employee directors in the form of stock options, stock appreciation rights (SARs), restricted stock, restricted stock units, stock awards, stock units, performance shares, performance units, and other stock-based or cash-based awards. Compensation cost is recognized on a straight-line basis over the requisite employee service period, which is generally the vesting period, and is recorded as employee compensation expense in cost of goods sold, research, development and engineering, and selling, general and administrative expenses. Share-based compensation is recognized only for those awards that are expected to vest, with forfeitures estimated at the date of grant based on historical experience and future expectations. In addition to service conditions, SARs contain a performance condition. The additional performance condition is based upon the achievement of Return on Invested Capital (ROIC) goals relative to a peer group. All awards with performance conditions are evaluated quarterly to determine the likelihood that performance metrics will be achieved during the performance period. These awards are charged to compensation expense over the requisite service period based on the number of shares expected to vest. The SARs cliff vest after a three-year period from date of grant and expire five years from date of grant. The grant date fair value for the awards granted below were estimated using the Black Scholes option valuation method: October 28, 2016 July 26, 2016 July 29, 2015 SARs Granted 10,000 242,500 248,166 Strike Price $ 8.04 $ 8.18 $ 10.26 Fair Value $ 2.30 $ 2.42 $ 3.65 Total share-based compensation expense recognized during the three months ended December 31, 2016 and December 26, 2015 was approximately $158,000 and $237,000 , respectively. Total share-based compensation expense recognized during the six months ended December 31, 2016 and December 26, 2015 was approximately $355,000 and $426,000 , respectively. As of December 31, 2016 , total unrecognized compensation expense related to unvested share-based compensation arrangements was approximately $1.1 million . This expense is expected to be recognized over a weighted average period of 1.92 years. SARs exercised during the three months ended December 31, 2016 and December 26, 2015 were 15,000 and 10,000 , respectively, with an immaterial amount of intrinsic value. SARs exercised during the six months ended December 31, 2016 and December 26, 2015 were 117,000 and 13,333 , respectively. There was approximately $367,000 of intrinsic value for SARs exercised during the six months ended December 31, 2016 , compared to an immaterial amount during the six months ended December 26, 2015 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Commitments and Contingencies Litigation and Other Matters The Company is party to certain lawsuits or claims in the ordinary course of business. During the second quarter of fiscal year 2017, the Company commenced the arbitration process with a former customer and certain vendors related to amounts we believe should be reimbursed by this former customer based on the terms of the manufacturing agreement. A range for possible outcomes cannot be determined at this time. The Company has not accrued for any potential loss related to this claim and legal costs are being expensed as incurred. The ultimate disposition of these matters could have a material adverse effect on our consolidated financial position, results of operations or cash flows. Warranties The Company provides warranties on certain product sales. Allowances for estimated warranty costs are recorded during the period of sale. The determination of such allowances requires the Company to make estimates of product return rates and expected costs to repair or to replace the products under warranty. If actual return rates and/or repair and replacement costs differ significantly from management’s estimates, adjustments to recognize additional cost of sales may be required in future periods. The Company’s warranty reserve was approximately $50,000 and $30,000 as of December 31, 2016 and July 2, 2016 , respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | Fair Value Measurements The Company has adopted ASC 820, Fair Value Measurements , which defines fair value, establishes a framework for assets and liabilities being measured and reported at fair value and expands disclosures about fair value measurements. There are three levels of fair value hierarchy inputs used to value assets and liabilities which include: Level 1 – inputs are quoted market prices for identical assets or liabilities; Level 2 – inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 – inputs are unobservable inputs for the asset or liability. The following table summarizes the fair value of assets (liabilities) of the Company’s derivatives that are required to be measured on a recurring basis as of December 31, 2016 and July 2, 2016 (in thousands): December 31, 2016 Level 1 Level 2 Level 3 Total Fair Value Financial Liabilities: Interest rate swap $ — $ (208 ) $ — $ (208 ) Foreign currency forward contracts & swaps $ — $ (14,699 ) $ — $ (14,699 ) July 2, 2016 Level 1 Level 2 Level 3 Total Fair Value Financial Assets: Foreign currency forward contracts & swaps $ — $ 136 $ — $ 136 Financial Liabilities: Interest rate swap $ — $ (498 ) $ — $ (498 ) Foreign currency forward contracts & swaps $ — $ (11,112 ) $ — $ (11,112 ) The Company currently has forward contracts and swaps to hedge known future cash outflows for expenses denominated in the Mexican peso and an interest rate swap to mitigate risk associated with certain borrowings under the Company’s debt arrangement. These contracts are measured on a recurring basis based on the foreign currency spot rates and forward rates quoted by banks or foreign currency dealers. These contracts are marked to market using level 2 input criteria every period with the unrealized gain or loss, net of tax, reported as a component of shareholders’ equity in accumulated other comprehensive loss, as they qualify for hedge accounting. The carrying values of cash and cash equivalents, accounts receivable and current liabilities reflected on the balance sheets at December 31, 2016 and July 2, 2016 , reasonably approximate their fair value. The Company’s long-term debt primarily consists of a revolving line of credit, a term loan and an equipment term loan. Borrowings under the revolving line of credit bear interest at either a “Base Rate” or a “Fixed Rate,” as elected by the Company. Each of these rates is a variable floating rate dependent upon current market conditions and the Company’s current credit risk as discussed in footnote 4. As a result of the determinable market rate for our revolving line of credit, term loan and equipment term loan, they are classified within Level 2 of the fair value hierarchy. The discounted cash flow of the revolving line of credit is estimated to be $18.9 million and $18.1 million as of December 31, 2016 and July 2, 2016 , respectively, with a carrying value that reasonably approximates the fair value. The discounted cash flow of the term loan is estimated to be $23.8 million as of December 31, 2016 and $26.3 million as of July 2, 2016 , respectively, with a carrying value that reasonably approximates the fair value. The discounted cash flow of the equipment term loan is estimated to be $3.9 million as of December 31, 2016 , with a carrying value that reasonably approximates the fair value. As of July 2, 2016 , the Company did not have a balance under the equipment term loan. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | Derivative Financial Instruments As of December 31, 2016 , the Company had outstanding foreign currency forward contracts and swaps with a total notional amount of $65.9 million . The maturity dates for these contracts and swaps extend through September 2019 . For the three months ended December 31, 2016 , the Company entered into foreign currency forward contracts of $6.7 million and settled $5.0 million of such contracts. During the same period of the previous year, the Company did not enter into any foreign currency forward contracts and settled $5.2 million of such contracts. For the six months ended December 31, 2016 , the Company entered into foreign currency forward contracts of $6.7 million and settled $10.2 million of such contracts. During the same period of the previous year, the Company entered into foreign currency forward contracts of $12.0 million and settled $10.6 million of such contracts. On October 1, 2014, the Company entered into an interest rate swap contract with an effective date of September 1, 2015 and a termination date of September 3, 2019, with a notional amount of $25.0 million related to the borrowings outstanding under the term loan. This interest rate swap pays the Company variable interest at the one month LIBOR rate, and the Company pays the counter party a fixed interest rate. The fixed interest rate for the contract is 1.97% that replaces the one month LIBOR rate component of our contractual interest to be paid to WFB as part of our term loan. Based on the terms of the interest rate swap contract and the underlying borrowings outstanding under the term loan, the interest rate contract was determined to be effective, and thus qualifies as a cash flow hedge. The following table summarizes the fair value of derivative instruments in the Consolidated Balance Sheet as of December 31, 2016 and July 2, 2016 (in thousands): December 31, 2016 July 2, 2016 Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value Fair Value Foreign currency forward contracts & swaps Other long-term assets $ — $ 136 Foreign currency forward contracts & swaps Other current liabilities $ (7,045 ) $ (4,670 ) Foreign currency forward contracts & swaps Other long-term liabilities $ (7,654 ) $ (6,442 ) Interest rate swap Other current liabilities $ (161 ) $ (264 ) Interest rate swap Other long-term liabilities $ (47 ) $ (234 ) The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the three months ended December 31, 2016 and December 26, 2015 , respectively (in thousands): Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (8,325 ) $ (2,717 ) $ 1,341 $ (9,701 ) Interest rate swap Interest expense (248 ) 42 68 (138 ) Total $ (8,573 ) $ (2,675 ) $ 1,409 $ (9,839 ) Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (7,336 ) $ (357 ) $ 924 $ (6,769 ) Interest rate swap Interest expense (407 ) 5 115 (287 ) Total $ (7,743 ) $ (352 ) $ 1,039 $ (7,056 ) The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the six months ended December 31, 2016 and December 26, 2015 , respectively (in thousands): Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (7,245 ) $ (4,906 ) $ 2,450 $ (9,701 ) Interest rate swap Interest expense (328 ) 41 149 (138 ) Total $ (7,573 ) $ (4,865 ) $ 2,599 $ (9,839 ) Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (4,487 ) $ (3,890 ) $ 1,608 $ (6,769 ) Interest rate swap Interest expense (276 ) (126 ) 115 (287 ) Total $ (4,763 ) $ (4,016 ) $ 1,723 $ (7,056 ) As of December 31, 2016 , the net amount of unrealized loss expected to be reclassified into earnings within the next 12 months is approximately $4.8 million . As of December 31, 2016 , the Company does not have any foreign exchange contracts with credit-risk-related contingent features. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | Goodwill and Other Intangible Assets The Company recorded goodwill in connection with the Ayrshire and Sabre acquisitions resulting primarily from the synergies that resulted from the Company’s acquisitions and the assembled workforce. The goodwill from the acquisitions is not deductible for tax purposes. During the six months ended December 31, 2016 and December 26, 2015 , no impairment was recognized. Goodwill was recorded at $10.0 million as of December 31, 2016 and July 2, 2016 . The components of acquired intangible assets are as follows (in thousands): December 31, 2016 Amortization Period in Years Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: Non-Compete Agreements 3 - 5 $ 568 $ (413 ) $ 155 Customer Relationships 10 4,803 (1,350 ) 3,453 Favorable Lease Agreements 4 - 7 2,941 (1,185 ) 1,756 Total $ 8,312 $ (2,948 ) $ 5,364 July 2, 2016 Amortization Period in Years Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: Non-Compete Agreements 3 - 5 $ 568 $ (343 ) $ 225 Customer Relationships 10 4,803 (1,110 ) 3,693 Favorable Lease Agreements 4 - 7 2,941 (931 ) 2,010 Total $ 8,312 $ (2,384 ) $ 5,928 Amortization expense was approximately $282,000 for both the three months ended December 31, 2016 and December 26, 2015 . Amortization expense was approximately $564,000 for both the six months ended December 31, 2016 and December 26, 2015 . Aggregate amortization expense relative to existing intangible assets by fiscal year is currently estimated to be as follows (in thousands): Fiscal Years Ending Amount 2017 (1) $ 564 2018 1,073 2019 818 2020 783 2021 784 Thereafter 1,342 Total amortization expense $ 5,364 (1) Represents estimated amortization for the remaining six-month period ending July 1, 2017. |
SIGNIFICANT ACCOUNTING POLICI21
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share Basic earnings per common share (EPS) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the combination of other potentially dilutive weighted average common shares and the weighted average number of common shares outstanding during the period using the treasury stock method. The computation assumes the proceeds from the exercise of equity awards were used to repurchase common shares at the average market price during the period. The computation of diluted EPS does not assume conversion, exercise, or contingent issuance of common stock equivalent shares that would have an anti-dilutive effect on EPS. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company has entered into foreign currency forward contracts, foreign currency swaps and an interest rate swap which are accounted for as cash flow hedges in accordance with ASC 815, Derivatives and Hedging . The effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (AOCI) and is reclassified into earnings in the same period in which the underlying hedged transaction affects earnings. The derivative’s effectiveness represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. The Company uses derivatives to manage the variability of foreign currency fluctuations of expenses in our Mexico facilities and interest rate risk associated with certain borrowings under the Company’s term loan arrangement. The foreign currency forward contracts, foreign currency swaps and interest rate swap have terms that are matched to the underlying transactions being hedged. As a result, these transactions fully offset the hedged risk and no ineffectiveness has been recorded. The Company’s foreign currency forward contracts, foreign currency swaps and interest rate swap potentially expose the Company to credit risk to the extent the counterparty may be unable to meet the terms of the agreement. The Company minimizes such risk by seeking high quality counterparty. The Company’s counterparty to the foreign currency forward contracts, foreign currency swaps and interest rate swap are major banking institutions. These institutions do not require collateral for the contracts, and the Company believes that the risk of the counterparty failing to meet their contractual obligations is remote. The Company does not enter into derivative instruments for trading or speculative purposes. |
Income Taxes | Income Taxes We compute our interim income tax provision through the use of an estimated annual effective tax rate (ETR) applied to year-to-date operating results and specific events that are discretely recognized as they occur. In determining the estimated annual ETR, we analyze various factors, including projections of our annual earnings, taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, our ability to use tax credits and available tax planning alternatives. Discrete items, including the effect of changes in tax laws, tax rates, and certain circumstances with respect to valuation allowances or other unusual or non-recurring tax adjustments, are reflected in the period in which they occur as an addition to, or reduction from, the income tax provision, rather than included in the estimated annual ETR. Refer to Note 6 for further discussions. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences and benefits attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities for a change in tax rates is recognized in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that is more likely than not to be realized. We utilize a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments based on new assessments and changes in estimates and which may not accurately forecast actual outcomes. Our policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. The tax years 1998 through the present remain open to examination by the major U.S. taxing jurisdictions to which we are subject. |
Impairment of Goodwill | Impairment of Goodwill and Other Intangible Assets The Company records intangible assets that are acquired individually or with a group of other assets in the financial statements at acquisition. In accordance with ASC 350, Goodwill and Other Intangible Assets , goodwill and intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized but are required to be reviewed for impairment at least annually or when events or circumstances indicate that carrying value may exceed fair value. The Company’s annual goodwill impairment analysis is performed as of the first day of the fourth quarter. The Company’s acquired intangible assets are subject to amortization over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09 (ASU 2014-09), Revenue from Contracts with Customers . The guidance in this Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. This may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In August 2015, the FASB issued an amendment to defer the effective date of ASU 2014-09 for all entities by one year. This Update is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. Companies have the option of using either a full or modified retrospective approach in applying this standard. The Company is in the process of assessing the impact of ASU 2014-09 on its consolidated financial statements. In July 2015, the FASB issued final guidance that simplifies the subsequent measurement of inventory for which cost is determined by methods other than last-in first-out (“LIFO”) and the retail inventory method. For inventory within the scope of the new guidance, entities will be required to compare the cost of inventory to only one measure, its net realizable value, and not the three measures required by the existing guidance. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The new guidance should not change how entities initially measure the cost of inventory. The guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted this guidance during the current quarter and it had no impact on our financial statements. In February 2016, the FASB issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases which supersedes ASC 840 Leases and creates a new topic, ASC 842 Leases . This update requires lessees to recognize a lease asset and a lease liability for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with earlier adoption permitted. This update will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the effect of this update on its consolidated financial statements. In March 2016, the FASB issued Accounting Standards Update 2016-09 (ASU 2016-09), Improvements to Employee Share-Based Payment Accounting . This update simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with earlier adoption permitted. The Company prospectively adopted this ASU during the first quarter of fiscal year 2017. As a result, excess tax benefits are recorded in income tax expense instead of a component of shareholders’ equity and excess tax benefits are no longer broken out on the consolidated statement of cash flows beginning in fiscal year 2017. In August 2016, the FASB issued Accounting Standards Update 2016-15 (ASU 2016-15), Classification of Certain Cash Receipts and Cash Payments . This update provides guidance on how to record eight specific cash flow issues. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted and a retrospective transition method to each period should be presented. The Company early adopted this guidance during the current quarter and it had no impact on our condensed consolidated financial statements. |
Maximum Amount Of Income Tax Benefits Percentage Realized Upon Ultimate Settlement | 50.00% |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of inventories consist of the following (in thousands): December 31, 2016 July 2, 2016 Finished goods $ 13,005 $ 13,384 Work-in-process 17,609 18,988 Raw materials and supplies 67,492 74,634 $ 98,106 $ 107,006 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | Debt maturities as of December 31, 2016 for the next five years and thereafter are as follows (in thousands): Fiscal Years Ending Amount 2017 (1) $ 2,935 2018 5,871 2019 5,871 2020 31,051 2021 871 Total debt $ 46,599 Unamortized debt issuance costs $ (135 ) Long-term debt, net of debt issuance costs $ 46,464 (1) Represents scheduled payments for the remaining six-month period ending July 1, 2017. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation of Denominator and Number of Antidilutive Common Share Awards not Included in Diluted Earnings Per Share Calculation | These antidilutive securities occur when equity awards outstanding have an option price greater than the average market price for the period. Three Months Ended (in thousands, except per share information) December 31, 2016 December 26, 2015 Net income $ 1,528 $ 1,787 Weighted average shares outstanding—basic 10,758 10,710 Effect of dilutive common stock awards 210 708 Weighted average shares outstanding—diluted 10,968 11,418 Net income per share—basic $ 0.14 $ 0.17 Net income per share—diluted $ 0.14 $ 0.16 Antidilutive SARs not included in diluted earnings per share 892 456 Six Months Ended (in thousands, except per share information) December 31, 2016 December 26, 2015 Net income $ 3,320 $ 2,604 Weighted average shares outstanding—basic 10,753 10,708 Effect of dilutive common stock awards 166 571 Weighted average shares outstanding—diluted 10,919 11,279 Earnings per share—basic $ 0.31 $ 0.24 Earnings per share—diluted $ 0.30 $ 0.23 Antidilutive SARs not included in diluted earnings per share 892 456 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The grant date fair value for the awards granted below were estimated using the Black Scholes option valuation method: October 28, 2016 July 26, 2016 July 29, 2015 SARs Granted 10,000 242,500 248,166 Strike Price $ 8.04 $ 8.18 $ 10.26 Fair Value $ 2.30 $ 2.42 $ 3.65 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes the fair value of assets (liabilities) of the Company’s derivatives that are required to be measured on a recurring basis as of December 31, 2016 and July 2, 2016 (in thousands): December 31, 2016 Level 1 Level 2 Level 3 Total Fair Value Financial Liabilities: Interest rate swap $ — $ (208 ) $ — $ (208 ) Foreign currency forward contracts & swaps $ — $ (14,699 ) $ — $ (14,699 ) July 2, 2016 Level 1 Level 2 Level 3 Total Fair Value Financial Assets: Foreign currency forward contracts & swaps $ — $ 136 $ — $ 136 Financial Liabilities: Interest rate swap $ — $ (498 ) $ — $ (498 ) Foreign currency forward contracts & swaps $ — $ (11,112 ) $ — $ (11,112 ) |
DERIVATIVE FINANCIAL INSTRUME27
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summerized Fair Value of Derivative Instruments in Consolidated Balance Sheets | The following table summarizes the fair value of derivative instruments in the Consolidated Balance Sheet as of December 31, 2016 and July 2, 2016 (in thousands): December 31, 2016 July 2, 2016 Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value Fair Value Foreign currency forward contracts & swaps Other long-term assets $ — $ 136 Foreign currency forward contracts & swaps Other current liabilities $ (7,045 ) $ (4,670 ) Foreign currency forward contracts & swaps Other long-term liabilities $ (7,654 ) $ (6,442 ) Interest rate swap Other current liabilities $ (161 ) $ (264 ) Interest rate swap Other long-term liabilities $ (47 ) $ (234 ) |
Gain (Loss) of Derivative Instruments in Statement of Operations | The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the three months ended December 31, 2016 and December 26, 2015 , respectively (in thousands): Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (8,325 ) $ (2,717 ) $ 1,341 $ (9,701 ) Interest rate swap Interest expense (248 ) 42 68 (138 ) Total $ (8,573 ) $ (2,675 ) $ 1,409 $ (9,839 ) Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (7,336 ) $ (357 ) $ 924 $ (6,769 ) Interest rate swap Interest expense (407 ) 5 115 (287 ) Total $ (7,743 ) $ (352 ) $ 1,039 $ (7,056 ) The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the six months ended December 31, 2016 and December 26, 2015 , respectively (in thousands): Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (7,245 ) $ (4,906 ) $ 2,450 $ (9,701 ) Interest rate swap Interest expense (328 ) 41 149 (138 ) Total $ (7,573 ) $ (4,865 ) $ 2,599 $ (9,839 ) Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (4,487 ) $ (3,890 ) $ 1,608 $ (6,769 ) Interest rate swap Interest expense (276 ) (126 ) 115 (287 ) Total $ (4,763 ) $ (4,016 ) $ 1,723 $ (7,056 ) |
GOODWILL AND OTHER INTANGIBLE28
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The components of acquired intangible assets are as follows (in thousands): December 31, 2016 Amortization Period in Years Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: Non-Compete Agreements 3 - 5 $ 568 $ (413 ) $ 155 Customer Relationships 10 4,803 (1,350 ) 3,453 Favorable Lease Agreements 4 - 7 2,941 (1,185 ) 1,756 Total $ 8,312 $ (2,948 ) $ 5,364 July 2, 2016 Amortization Period in Years Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: Non-Compete Agreements 3 - 5 $ 568 $ (343 ) $ 225 Customer Relationships 10 4,803 (1,110 ) 3,693 Favorable Lease Agreements 4 - 7 2,941 (931 ) 2,010 Total $ 8,312 $ (2,384 ) $ 5,928 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Aggregate amortization expense relative to existing intangible assets by fiscal year is currently estimated to be as follows (in thousands): Fiscal Years Ending Amount 2017 (1) $ 564 2018 1,073 2019 818 2020 783 2021 784 Thereafter 1,342 Total amortization expense $ 5,364 (1) Represents estimated amortization for the remaining six-month period ending July 1, 2017. |
Inventories (Components Of Inve
Inventories (Components Of Inventories) (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Jul. 02, 2016 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 13,005 | $ 13,384 |
Work-in-process | 17,609 | 18,988 |
Raw materials and supplies | 67,492 | 74,634 |
Inventories | $ 98,106 | $ 107,006 |
Long-Term Debt (Detail)
Long-Term Debt (Detail) - USD ($) | 6 Months Ended | |||
Dec. 31, 2016 | Jul. 02, 2016 | Aug. 06, 2015 | Sep. 03, 2014 | |
Debt Disclosure [Line Items] | ||||
Line of Credit Facility, Amount Outstanding | $ 18,900,000 | $ 18,100,000 | ||
Letters of Credit Outstanding, Amount | 400,000 | 400,000 | ||
Additional availability of line of credit | 25,700,000 | 26,500,000 | ||
Debt Instrument, Periodic Payment, Principal | 1,250,000 | |||
Debt Instrument, Unused Borrowing Capacity, Amount | 2,100,000 | |||
2017 (1) | 2,935,000 | |||
2,018 | 5,871,000 | |||
2,019 | 5,871,000 | |||
2,020 | 31,051,000 | |||
2,021 | 871,000 | |||
Total debt | 46,599,000 | |||
Unamortized debt issuance costs | (135,000) | |||
Long-term debt, net of debt issuance costs | $ 46,464,000 | $ 35,000,000 | ||
Line of Credit | One-Month London Interbank Offered Rate | ||||
Debt Disclosure [Line Items] | ||||
Variable rate on line of credit facility (percent) | 1.50% | |||
Line of Credit | Federal Funds Rate | ||||
Debt Disclosure [Line Items] | ||||
Variable rate on line of credit facility (percent) | 1.50% | |||
Term Loan | ||||
Debt Disclosure [Line Items] | ||||
Long-term debt, net of debt issuance costs | $ 23,800,000 | $ 26,300,000 | ||
Equipment Term Loan | ||||
Debt Disclosure [Line Items] | ||||
Debt Instrument, Periodic Payment, Principal | 200,000 | |||
Long-term debt, net of debt issuance costs | $ 3,900,000 | |||
Wells Fargo Bank | ||||
Debt Disclosure [Line Items] | ||||
Increase in revolving line of credit | $ 45,000,000 | |||
Debt Instrument, Basis Spread on Variable Rate, 1.75% | Line of Credit | Fixed Rate | ||||
Debt Disclosure [Line Items] | ||||
Variable rate on line of credit facility (percent) | 1.75% | |||
Debt Instrument, Basis Spread on Variable Rate, 2.00% | Line of Credit | Fixed Rate | ||||
Debt Disclosure [Line Items] | ||||
Variable rate on line of credit facility (percent) | 2.00% | |||
Debt Instrument, Basis Spread on Variable Rate, 2.25% | Line of Credit | Fixed Rate | ||||
Debt Disclosure [Line Items] | ||||
Variable rate on line of credit facility (percent) | 2.25% | |||
Minimum | ||||
Debt Disclosure [Line Items] | ||||
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 2.66% | 2.45% | ||
Maximum | ||||
Debt Disclosure [Line Items] | ||||
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 3.75% | 3.50% |
Trade Accounts Receivable Pur31
Trade Accounts Receivable Purchase Programs (Detail) - USD ($) $ in Millions | 6 Months Ended | |||
Dec. 31, 2016 | Dec. 26, 2015 | Jul. 02, 2016 | Jul. 16, 2015 | |
Receivables [Abstract] | ||||
Account Purchase Agreement Maximum Aggregate Amount | $ 20 | |||
Trade Accounts Receivable Sold To Third Party | $ 38.9 | $ 34.8 | ||
Accounts Receivable Factored To Banking Institutions | $ 2 | $ 1.7 |
Income Taxes (Detail)
Income Taxes (Detail) $ in Millions | 6 Months Ended |
Dec. 31, 2016USD ($) | |
Income Tax Disclosure [Abstract] | |
Foreign tax credits related to future repatriations of earnings | $ 14.2 |
Advance Pricing Agreement Settlement | 0.4 |
Advance Pricing Agreement Revenue Transfer | 1.8 |
Gross potential research and development (R&D) tax credit | 7.1 |
Unrecognized tax benefits associated with federal tax credits | 3.8 |
Deferred Income Tax Expense (Benefit) | $ 3.3 |
Earnings Per Share (Reconciliat
Earnings Per Share (Reconciliation Of Denominator And Number Of Antidilutive Common Share Awards Not Included In Diluted Earnings Per Share Calculation) (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 31, 2016 | Dec. 26, 2015 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 1,528 | $ 1,787 | $ 3,320 | $ 2,604 |
Weighted average shares outstanding - basic | 10,758 | 10,710 | 10,753 | 10,708 |
Effect of dilutive common stock options (Shares) | 210 | 708 | 166 | 571 |
Weighted average shares outstanding - Diluted | 10,968 | 11,418 | 10,919 | 11,279 |
Net income per share—diluted | $ 0.14 | $ 0.17 | $ 0.31 | $ 0.24 |
Net income per share—diluted | $ 0.14 | $ 0.16 | $ 0.30 | $ 0.23 |
Antidilutive options not included in diluted earnings per share (Shares) | 892 | 456 | 892 | 456 |
Share-Based Compensation (Detai
Share-Based Compensation (Detail) - USD ($) | Oct. 28, 2016 | Jul. 27, 2016 | Jul. 29, 2015 | Dec. 31, 2016 | Dec. 26, 2015 | Dec. 31, 2016 | Dec. 26, 2015 | Jul. 26, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unrecognized Share-based Compensation Expense | $ 1,100,000 | $ 1,100,000 | ||||||
Unrecognized Share-based Compensation, Period for Recognition | 1 year 11 months 1 day | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 367,000 | |||||||
Stock Appreciation Rights (SARs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
SARs Granted | 10,000 | 242,500 | 248,166 | |||||
Strike Price | $ 8.04 | $ 10.26 | $ 8.18 | |||||
Fair Value | $ 2.30 | $ 2.42 | $ 3.65 | |||||
Share-based Compensation Expense | $ 158,000 | $ 237,000 | $ 355,000 | $ 426,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised | 15,000 | 10,000 | 117,000 | 13,333 |
Commitments And Contingencies (
Commitments And Contingencies (Detail) - USD ($) | Dec. 31, 2016 | Jul. 02, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Warranty reserve | $ 50,000 | $ 30,000 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets And Liabilities Measured At Fair Value On Recurring Basis) (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Jul. 02, 2016 | Sep. 03, 2014 |
Fair Value Disclosures [Line Items] | |||
Line of Credit Facility, Amount Outstanding | $ 18,900 | $ 18,100 | |
Long-term Debt | 46,464 | $ 35,000 | |
Term Loan | |||
Fair Value Disclosures [Line Items] | |||
Long-term Debt | 23,800 | 26,300 | |
Forward Contracts and swaps | |||
Fair Value Disclosures [Line Items] | |||
Foreign currency forward contracts, Financial Assets | 136 | ||
Foreign currency forward contracts, Financial Liabilities | (14,699) | (11,112) | |
Interest Rate Swap | |||
Fair Value Disclosures [Line Items] | |||
Foreign currency forward contracts, Financial Liabilities | (208) | (498) | |
Level 1 | Forward Contracts and swaps | |||
Fair Value Disclosures [Line Items] | |||
Foreign currency forward contracts, Financial Assets | 0 | ||
Foreign currency forward contracts, Financial Liabilities | 0 | 0 | |
Level 1 | Interest Rate Swap | |||
Fair Value Disclosures [Line Items] | |||
Foreign currency forward contracts, Financial Liabilities | 0 | 0 | |
Level 2 | Forward Contracts and swaps | |||
Fair Value Disclosures [Line Items] | |||
Foreign currency forward contracts, Financial Assets | 136 | ||
Foreign currency forward contracts, Financial Liabilities | (14,699) | (11,112) | |
Level 2 | Interest Rate Swap | |||
Fair Value Disclosures [Line Items] | |||
Foreign currency forward contracts, Financial Liabilities | (208) | (498) | |
Level 3 | Forward Contracts and swaps | |||
Fair Value Disclosures [Line Items] | |||
Foreign currency forward contracts, Financial Assets | 0 | ||
Foreign currency forward contracts, Financial Liabilities | 0 | 0 | |
Level 3 | Interest Rate Swap | |||
Fair Value Disclosures [Line Items] | |||
Foreign currency forward contracts, Financial Liabilities | $ 0 | $ 0 |
Derivative Financial Instrume37
Derivative Financial Instruments (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 31, 2016 | Dec. 26, 2015 | Oct. 01, 2016 | Sep. 01, 2015 | |
Derivative [Line Items] | ||||||
Outstanding foreign currency forward contracts and swaps | $ 65.9 | $ 65.9 | ||||
Contract maturity date | Sep. 25, 2019 | |||||
Foreign currency forward contracts entered | 6.7 | $ 6.7 | $ 12 | |||
Foreign currency forward contracts settled | 5 | $ 5.2 | 10.2 | $ 10.6 | ||
Derivative, Fixed Interest Rate | 1.97% | |||||
Net amount of existing losses expected to be reclassified into earnings within the next 12 months | $ 4.8 | $ 4.8 | ||||
Interest Rate Swap | ||||||
Derivative [Line Items] | ||||||
Outstanding foreign currency forward contracts and swaps | $ 25 |
Derivative Financial Instrume38
Derivative Financial Instruments (Summarized Fair Value Of Derivative Instruments In Consolidated Balance Sheets) (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Jul. 02, 2016 |
Forward Contracts and swaps | Other Long Term Assets | ||
Derivative Instruments [Line Items] | ||
Foreign currency forward contracts, Asset Fair Value | $ 0 | $ 136 |
Forward Contracts and swaps | Other Current Liabilities | ||
Derivative Instruments [Line Items] | ||
Foreign currency forward contracts, Liability Fair Value | (7,045) | (4,670) |
Forward Contracts and swaps | Other Long Term Liabilities | ||
Derivative Instruments [Line Items] | ||
Foreign currency forward contracts, Liability Fair Value | (7,654) | (6,442) |
Interest Rate Swap | Other Current Liabilities | ||
Derivative Instruments [Line Items] | ||
Foreign currency forward contracts, Liability Fair Value | (161) | (264) |
Interest Rate Swap | Other Long Term Liabilities | ||
Derivative Instruments [Line Items] | ||
Foreign currency forward contracts, Liability Fair Value | $ (47) | $ (234) |
Derivative Financial Instrume39
Derivative Financial Instruments (Gain (Loss) Of Derivative Instruments In Statement Of Operations) (Detail) - Designated As Hedging Instrument - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 31, 2016 | Dec. 26, 2015 | |
Derivatives used in Net Investment Hedge, Net of Tax [Roll Forward] | ||||
AOCI Balance, Period Start | $ (8,573) | $ (7,743) | $ (7,573) | $ (4,763) |
Effective Portion Recorded In AOCI | (2,675) | (352) | (4,865) | (4,016) |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 1,409 | 1,039 | 2,599 | 1,723 |
AOCI Balance, Period End | (9,839) | (7,056) | (9,839) | (7,056) |
Forward Contracts and swaps | ||||
Derivatives used in Net Investment Hedge, Net of Tax [Roll Forward] | ||||
AOCI Balance, Period Start | (8,325) | (7,336) | (7,245) | (4,487) |
Effective Portion Recorded In AOCI | (2,717) | (357) | (4,906) | (3,890) |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 1,341 | 924 | 2,450 | 1,608 |
AOCI Balance, Period End | (9,701) | (6,769) | (9,701) | (6,769) |
Interest Rate Swap | ||||
Derivatives used in Net Investment Hedge, Net of Tax [Roll Forward] | ||||
AOCI Balance, Period Start | (248) | (407) | (328) | (276) |
Effective Portion Recorded In AOCI | 42 | 5 | 41 | (126) |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 68 | 115 | 149 | 115 |
AOCI Balance, Period End | $ (138) | $ (287) | $ (138) | $ (287) |
Goodwill and Other Intangible40
Goodwill and Other Intangible Assets (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 26, 2015 | Dec. 31, 2016 | Dec. 26, 2015 | Jul. 02, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 9,957,000 | $ 9,957,000 | $ 9,957,000 | ||
Amortization of Intangible Assets | 282,000 | $ 282,000 | 564,000 | $ 564,000 | |
Finite-lived Intangible Assets [Roll Forward] | |||||
Gross Carrying Amount | 8,312,000 | 8,312,000 | 8,312,000 | ||
Accumulated Amortization | (2,948,000) | (2,948,000) | (2,384,000) | ||
Net Carrying Amount | 5,364,000 | 5,364,000 | 5,928,000 | ||
Non-Compete Agreements | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Gross Carrying Amount | 568,000 | 568,000 | 568,000 | ||
Accumulated Amortization | (413,000) | (413,000) | (343,000) | ||
Net Carrying Amount | 155,000 | $ 155,000 | $ 225,000 | ||
Customer Relationships | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Amortization Period in Years | 10 years | 10 years | |||
Gross Carrying Amount | 4,803,000 | $ 4,803,000 | $ 4,803,000 | ||
Accumulated Amortization | (1,350,000) | (1,350,000) | (1,110,000) | ||
Net Carrying Amount | 3,453,000 | 3,453,000 | 3,693,000 | ||
Favorable Lease Agreements | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Gross Carrying Amount | 2,941,000 | 2,941,000 | 2,941,000 | ||
Accumulated Amortization | (1,185,000) | (1,185,000) | (931,000) | ||
Net Carrying Amount | $ 1,756,000 | $ 1,756,000 | $ 2,010,000 | ||
Minimum | Non-Compete Agreements | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Amortization Period in Years | 3 years | ||||
Minimum | Favorable Lease Agreements | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Amortization Period in Years | 4 years | ||||
Maximum | Non-Compete Agreements | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Amortization Period in Years | 5 years | ||||
Maximum | Favorable Lease Agreements | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Amortization Period in Years | 7 years |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Aggregate Amortization Expense by Fiscal Year) (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Jul. 02, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
2017 (1) | $ 564 | |
2,018 | 1,073 | |
2,019 | 818 | |
2,020 | 783 | |
2,021 | 784 | |
Thereafter | 1,342 | |
Total amortization expense | $ 5,364 | $ 5,928 |