|
|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
AVIAT NETWORKS, INC.
(Exact name of registrant as specified in its charter)
|
||
|
|
|
Delaware
|
|
20-5961564
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
860 N. McCarthy Blvd., Suite 200, Milpitas, California
|
|
95035
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
o
|
|
Accelerated filer
|
o
|
Non-accelerated filer
|
x
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
o
|
|
|
|
|
Page
|
Item 1.
|
Financial Statements
|
(In thousands)
|
December 30,
2016 |
|
July 1,
2016 |
||||
ASSETS
|
|
|
|
||||
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
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
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
|
—
|
|
|
—
|
|
||
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
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands, except per share amounts)
|
December 30,
2016 |
|
January 1,
2016 |
|
December 30,
2016 |
|
January 1,
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
|
|
|
—
|
|
|
(177
|
)
|
|
—
|
|
||||
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
|
—
|
|
|
—
|
|
|
—
|
|
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
359
|
|
|
|
|
|
|
|
|
|
||||||||
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
|
)
|
Weighted average shares outstanding, basic
|
5,284
|
|
|
5,230
|
|
|
5,273
|
|
|
5,218
|
|
||||
|
|
|
|
|
|
|
|
||||||||
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
|
)
|
Weighted average shares outstanding, diluted
|
5,400
|
|
|
5,230
|
|
|
5,328
|
|
|
5,218
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
December 30,
2016 |
|
January 1,
2016 |
|
December 30,
2016 |
|
January 1,
2016 |
||||||||
Net income (loss)
|
$
|
1,722
|
|
|
$
|
(5,534
|
)
|
|
$
|
1,121
|
|
|
$
|
(6,688
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Net change in unrealized loss on hedging activities
|
—
|
|
|
—
|
|
|
—
|
|
|
(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
|
)
|
|
Six Months Ended
|
||||||
(In thousands)
|
December 30,
2016 |
|
January 1,
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
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands, except per share amounts)
|
December 30,
2016 |
|
January 1,
2016 |
|
December 30,
2016 |
|
January 1,
2016 |
||||||||
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
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
(In thousands)
|
December 30,
2016 |
|
January 1,
2016 |
|
December 30,
2016 |
|
January 1,
2016 |
||||
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
|
|
(In thousands)
|
December 30,
2016 |
|
July 1,
2016 |
||||
Accounts receivable
|
$
|
63,864
|
|
|
$
|
71,416
|
|
Less allowances for collection losses
|
(7,663
|
)
|
|
(7,967
|
)
|
||
|
$
|
56,201
|
|
|
$
|
63,449
|
|
(In thousands)
|
December 30,
2016 |
|
July 1,
2016 |
||||
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
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
December 30,
2016 |
|
January 1,
2016 |
|
December 30,
2016 |
|
January 1,
2016 |
||||||||
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
|
|
(In thousands)
|
December 30,
2016 |
|
July 1,
2016 |
||||
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
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
December 30,
2016 |
|
January 1,
2016 |
|
December 30,
2016 |
|
January 1,
2016 |
||||||||
Depreciation and amortization
|
$
|
1,467
|
|
|
$
|
1,672
|
|
|
$
|
3,136
|
|
|
$
|
3,376
|
|
(In thousands)
|
December 30,
2016 |
|
July 1,
2016 |
||||
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
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
December 30,
2016 |
|
January 1,
2016 |
|
December 30,
2016 |
|
January 1,
2016 |
||||||||
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
|
|
(In thousands)
|
December 30,
2016 |
|
July 1,
2016 |
||||
Advanced payments
|
$
|
10,407
|
|
|
$
|
12,124
|
|
Unearned income
|
15,044
|
|
|
18,491
|
|
||
|
$
|
25,451
|
|
|
$
|
30,615
|
|
•
|
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.
|
|
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
|
|
Severance and Benefits
|
Facilities and Other
|
|
Total
|
|||||||||||||||||||||||
(In thousands)
|
Fiscal
2016-2017 Plan |
|
Fiscal
2015-2016 Plan |
|
Fiscal
2013-2014 Plan |
|
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
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
December 30,
2016 |
|
January 1,
2016 |
|
December 30,
2016 |
|
January 1,
2016 |
||||||||
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
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
December 30,
2016 |
|
January 1,
2016 |
|
December 30,
2016 |
|
January 1,
2016 |
||||||||
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
|
|
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
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
December 30,
2016 |
|
January 1,
2016 |
|
December 30,
2016 |
|
January 1,
2016 |
||||||||
Rent expense
|
$
|
987
|
|
|
$
|
1,050
|
|
|
$
|
2,134
|
|
|
$
|
2,621
|
|
•
|
continued price and margin erosion as a result of increased competition in the microwave transmission industry;
|
•
|
the impact of the volume, timing and customer, product and geographic mix of our product orders;
|
•
|
our ability to meet financial covenant requirements which could impact, among other things, our liquidity;
|
•
|
the timing of our receipt of payment for products or services from our customers;
|
•
|
our ability to meet projected new product development dates or anticipated cost reductions of new products;
|
•
|
our suppliers’ inability to perform and deliver on time as a result of their financial condition, component shortages or other supply chain constraints;
|
•
|
customer acceptance of new products;
|
•
|
the ability of our subcontractors to timely perform;
|
•
|
continued weakness in the global economy affecting customer spending;
|
•
|
retention of our key personnel;
|
•
|
our ability to manage and maintain key customer relationships;
|
•
|
uncertain economic conditions in the telecommunications sector combined with operator and supplier consolidation;
|
•
|
our failure to protect our intellectual property rights or defend against intellectual property infringement claims by others;
|
•
|
the results of our restructuring efforts;
|
•
|
the ability to preserve and use our net operating loss carryforwards;
|
•
|
the effects of currency and interest rate risks; and
|
•
|
the impact of political turmoil in countries where we have significant business.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
(In thousands, except percentages)
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
North America
|
$
|
39,353
|
|
|
$
|
31,844
|
|
|
$
|
7,509
|
|
|
23.6
|
%
|
|
$
|
67,937
|
|
|
$
|
67,064
|
|
|
$
|
873
|
|
|
1.3
|
%
|
Africa and Middle East
|
16,770
|
|
|
23,703
|
|
|
(6,933
|
)
|
|
(29.2
|
)%
|
|
31,119
|
|
|
50,991
|
|
|
(19,872
|
)
|
|
(39.0
|
)%
|
||||||
Europe and Russia
|
2,810
|
|
|
5,617
|
|
|
(2,807
|
)
|
|
(50.0
|
)%
|
|
7,317
|
|
|
12,059
|
|
|
(4,742
|
)
|
|
(39.3
|
)%
|
||||||
Latin America and Asia Pacific
|
9,603
|
|
|
9,252
|
|
|
351
|
|
|
3.8
|
%
|
|
20,370
|
|
|
19,857
|
|
|
513
|
|
|
2.6
|
%
|
||||||
Total Revenue
|
$
|
68,536
|
|
|
$
|
70,416
|
|
|
$
|
(1,880
|
)
|
|
(2.7
|
)%
|
|
$
|
126,743
|
|
|
$
|
149,971
|
|
|
$
|
(23,228
|
)
|
|
(15.5
|
)%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
(In thousands, except percentages)
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Revenue
|
$
|
68,536
|
|
|
$
|
70,416
|
|
|
$
|
(1,880
|
)
|
|
(2.7
|
)%
|
|
$
|
126,743
|
|
|
$
|
149,971
|
|
|
$
|
(23,228
|
)
|
|
(15.5
|
)%
|
Cost of revenue
|
47,420
|
|
|
53,992
|
|
|
(6,572
|
)
|
|
(12.2
|
)%
|
|
88,262
|
|
|
112,536
|
|
|
(24,274
|
)
|
|
(21.6
|
)%
|
||||||
Gross margin
|
$
|
21,116
|
|
|
$
|
16,424
|
|
|
$
|
4,692
|
|
|
28.6
|
%
|
|
$
|
38,481
|
|
|
$
|
37,435
|
|
|
$
|
1,046
|
|
|
2.8
|
%
|
% of revenue
|
30.8
|
%
|
|
23.3
|
%
|
|
|
|
|
|
30.4
|
%
|
|
25.0
|
%
|
|
|
|
|
||||||||||
Product margin %
|
32.5
|
%
|
|
25.4
|
%
|
|
|
|
|
|
30.8
|
%
|
|
28.3
|
%
|
|
|
|
|
||||||||||
Service margin %
|
27.3
|
%
|
|
19.7
|
%
|
|
|
|
|
|
29.7
|
%
|
|
18.6
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
(In thousands, except percentages)
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Research and development
|
$
|
4,475
|
|
|
$
|
5,210
|
|
|
$
|
(735
|
)
|
|
(14.1
|
)%
|
|
$
|
9,418
|
|
|
$
|
10,686
|
|
|
$
|
(1,268
|
)
|
|
(11.9
|
)%
|
% of revenue
|
6.5
|
%
|
|
7.4
|
%
|
|
|
|
|
|
7.4
|
%
|
|
7.1
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
(In thousands, except percentages)
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Selling and administrative
|
$
|
14,056
|
|
|
$
|
16,178
|
|
|
$
|
(2,122
|
)
|
|
(13.1
|
)%
|
|
$
|
29,243
|
|
|
$
|
33,290
|
|
|
$
|
(4,047
|
)
|
|
(12.2
|
)%
|
% of revenue
|
20.5
|
%
|
|
23.0
|
%
|
|
|
|
|
|
23.1
|
%
|
|
22.2
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
(In thousands, except percentages)
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Restructuring Charges
|
$
|
72
|
|
|
$
|
34
|
|
|
$
|
38
|
|
|
111.8
|
%
|
|
$
|
232
|
|
|
$
|
55
|
|
|
$
|
177
|
|
|
321.8
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
(In thousands, except percentages)
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Interest income
|
$
|
72
|
|
|
$
|
55
|
|
|
$
|
17
|
|
|
30.9
|
%
|
|
$
|
126
|
|
|
$
|
137
|
|
|
$
|
(11
|
)
|
|
(8.0
|
)%
|
Interest expense
|
$
|
(3
|
)
|
|
$
|
(84
|
)
|
|
$
|
81
|
|
|
(96.4
|
)%
|
|
$
|
(21
|
)
|
|
$
|
(93
|
)
|
|
$
|
72
|
|
|
(77.4
|
)%
|
Other income (expense)
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
N/A
|
|
|
$
|
(177
|
)
|
|
$
|
—
|
|
|
$
|
(177
|
)
|
|
N/A
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
(In thousands, except percentages)
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
|
December 30, 2016
|
|
January 1, 2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Income (loss) from continuing operations before income taxes
|
$
|
2,587
|
|
|
$
|
(5,027
|
)
|
|
$
|
7,614
|
|
|
(151.5
|
)%
|
|
$
|
(484
|
)
|
|
$
|
(6,552
|
)
|
|
$
|
6,068
|
|
|
(92.6
|
)%
|
Provision for (benefit from) income taxes
|
$
|
865
|
|
|
$
|
507
|
|
|
$
|
358
|
|
|
70.6
|
%
|
|
$
|
(1,605
|
)
|
|
$
|
495
|
|
|
$
|
(2,100
|
)
|
|
(424.2
|
)%
|
Currency
|
|
Notional Contract
Amount
(Local Currency)
|
|
Notional
Contract
Amount
(USD)
|
|||
|
|
(In thousands)
|
|||||
Japanese yen
|
|
447,034
|
|
|
$
|
4,274
|
|
British pound
|
|
250
|
|
|
308
|
|
|
Australian dollar
|
|
1,377
|
|
|
1,466
|
|
|
Total of all currency forward contracts
|
|
|
|
$
|
6,048
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
December 30,
2016 |
|
January 1,
2016 |
|
December 30,
2016 |
|
January 1,
2016 |
||||||||
Amount included in costs of revenues
|
$
|
(64
|
)
|
|
$
|
(361
|
)
|
|
$
|
(280
|
)
|
|
$
|
(173
|
)
|
Amount included in other expense
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(208
|
)
|
|
$
|
—
|
|
|
AVIAT NETWORKS, INC.
(Registrant)
|
|
|
By:
|
/s/ Eric Chang
|
|
Eric Chang
Vice President, Corporate Controller and Principal Accounting Officer
(Principal accounting officer and duly authorized officer)
|
Exhibit Number
|
|
Descriptions
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Aviat Networks, Inc., as amended
|
3.2
|
|
Amended and Restated Bylaws of Aviat Networks, Inc. (incorporate by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on October 2, 2015, File No. 001-33278)
|
4.1
|
|
Tax Benefit Preservation Plan, dated as of September 6, 2016, by and between Aviat Networks, Inc. and Computershare Inc., as Rights Agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on September 7, 2016, File No. 011-33278)
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
32.1
|
|
Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
HARRIS STRATEX NETWORKS, INC.
|
||
|
|
||
|
By:
|
/s/ Harald J. Braun
|
|
|
|
Name:
|
Harald J. Braun
|
|
|
Title:
|
Chief Executive Officer and President
|
|
|
|
HARRIS STRATEX NETWORKS, INC.
|
|
|
|
|
|
/s/ Harald J. Braun
|
|
|
Harald J. Braun
|
|
|
Chief Executive Officer and President
|
|
|
|
HARRIS STRATEX NETWORKS, INC.
|
||
|
|
||
|
By:
|
/s/ Harald J. Braun
|
|
|
|
Name:
|
Harald J. Braun
|
|
|
Title:
|
President and Chief Executive Officer
|
•
|
Harris Stratex Networks, Inc. 2007 Stock Equity Plan, as amended and restated
|
•
|
Harris Stratex Networks, Inc., 2010 Employee Stock Purchase Plan
|
|
|
***
|
|
|
|
AVIAT NETWORKS, INC
|
|
|
|
By: /s/ Michael A Pangia
|
|
Name: Michael A. Pangia
|
|
Title: President & Chief Executive Officer
|
Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware
|
|
AVIAT NETWORKS, INC.
|
||
|
|
||
|
|
||
|
By:
|
/s/ Ralph S. Marimon
|
|
|
|
Name:
|
Ralph S. Marimon
|
|
|
Title:
|
Senior Vice President and Chief Financial Officer
|
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
|
|
|
||
|
|
||
|
By:
|
/s/ Ralph S. Marimon
|
|
|
|
Name:
|
Ralph S. Marimon
|
|
|
Title:
|
Senior Vice President and Chief Financial Officer
|
|
Aviat Networks, Inc.
|
||
|
|
||
|
|
||
|
By:
|
/s/ Michael Pangia
|
|
|
|
Name:
|
Michael Pangia
|
|
|
Title:
|
Chief Executive Officer and President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended
December 30, 2016
, of Aviat Networks, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 10, 2017
|
/s/ Michael A. Pangia
|
||
|
|
Name:
|
|
Michael A. Pangia
|
|
|
Title:
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended
December 30, 2016
, of Aviat Networks, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 10, 2017
|
/s/ Ralph S. Marimon
|
||
|
|
Name:
|
|
Ralph S. Marimon
|
|
|
Title:
|
|
Senior Vice President and Chief Financial Officer, Principal Financial Officer
|
Date:
|
February 10, 2017
|
/s/ Michael A. Pangia
|
|
|
Name: Michael A. Pangia
|
|
|
Title: President and Chief Executive Officer
|
Date:
|
February 10, 2017
|
/s/ Ralph S. Marimon
|
|
|
Name: Ralph S. Marimon
|
|
|
Title: Senior Vice President and Chief Financial Officer, Principal Financial Officer
|