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Delaware
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47-3108385
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Title of each class
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Name of exchange on which registered
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Common Stock, par value of $0.001 per share
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Nasdaq Global Select Market
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
(Do not check if a smaller reporting company)
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o
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Smaller reporting company
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o
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Emerging Growth company
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o
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TABLE OF CONTENTS
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Years Ended
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June 30, 2018
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July 1, 2017
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July 2, 2016
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Optical Communications:
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84.9
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%
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85.6
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%
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84.3
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%
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Telecom
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38.1
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%
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61.0
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%
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61.5
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%
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Datacom
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12.1
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%
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20.1
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%
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18.1
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%
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Consumer and Industrial
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34.7
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%
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4.5
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%
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4.7
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%
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Lasers
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15.1
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%
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14.4
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%
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15.7
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%
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•
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changes in general IT spending;
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•
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the imposition of government controls, inclusive of critical infrastructure protection;
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•
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changes in or limitations imposed by trade protection laws or other regulatory orders or requirements in the United States or in other countries, including tariffs, sanctions, or other costs or requirements which may affect our ability to import or export our products from various countries;
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•
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varying and potentially conflicting laws and regulations;
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•
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fluctuations in local economies;
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•
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wage inflation or a tightening of the labor market;
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•
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political developments of foreign nations; and
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•
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the impact of the following on service provider and government spending patterns as well as our contract and internal manufacturing: political considerations, unfavorable changes in tax treaties or laws, unfavorable events that affect foreign currencies, natural disasters, epidemic disease, labor unrest, earnings expatriation restrictions, misappropriation of intellectual property, military actions, acts of terrorism, political and social unrest and difficulties in staffing and managing international operations.
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•
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diversion of management’s attention from normal daily operations of the business;
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•
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unforeseen expenses, delays or conditions imposed upon the acquisition or transaction, including due to required regulatory approvals or consents;
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•
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unanticipated changes in the combined business due to potential divestitures or other requirements imposed by antitrust regulators;
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•
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unanticipated changes in the acquired business, including due to regulatory action or changes in the operating results or financial condition of the business;
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•
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the ability to retain and obtain required regulatory approvals, licenses and permits;
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•
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difficulties and costs in integrating the operations, technologies, products, IT and other systems, facilities and personnel of the purchased businesses;
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•
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loss of customers, suppliers or partners;
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•
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potential difficulties in completing projects associated with in-process R&D;
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•
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an acquisition or strategic transaction may not further our business strategy as we expected or we may overpay for, or otherwise not realize the expected return on, our investments;
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•
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we may face unanticipated liabilities or our exposure for known contingencies and liabilities may exceed our estimates;
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•
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insufficient net revenue to offset increased expenses associated with acquisitions;
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•
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potential loss of key employees of the acquired companies or difficulty maintaining our company culture;
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•
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difficulty forecasting revenues and margins;
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•
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dilution of our current stockholders as a result of any issuance of equity securities as acquisition consideration;
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•
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expenditure of cash that would otherwise be available to operate our business;
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•
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incurrence of indebtedness on terms that are unfavorable to us, limit our operational flexibility or that we are unable to repay;
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•
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incurrence or assumption of contingent liabilities, known or unknown, including potential lawsuits, infringement actions or similar liabilities; and
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•
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incurrence of impairment charges related to goodwill or other intangibles.
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unexpected losses of key employees of the acquired company;
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conforming the acquired company’s standards, processes, procedures and controls with our operations, including integrating Enterprise Resource Planning (“ERP”) systems and other key business applications;
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coordinating new product and process development;
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increasing complexity from combining operations;
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increasing the scope, geographic diversity and complexity of our operations;
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difficulties in consolidating facilities and transferring processes and know-how; and
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diversion of management’s attention from other business concerns.
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•
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use a signification portion of our available cash;
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issue equity securities, which would dilute current stockholders’ percentage ownership;
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incur significant debt;
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incur or assume contingent liabilities, known or unknown, including potential lawsuits, infringement actions or similar liabilities;
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incur impairment charges related to goodwill or other intangibles; and
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face antitrust or other regulatory inquiries or actions.
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•
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actual or anticipated fluctuations in our quarterly or annual operating results;
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•
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changes in earnings estimates by securities analysts or our ability to meet those estimates;
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•
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the operating and stock price performance of other comparable companies;
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•
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a shift in our investor base;
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•
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the financial performance of other companies in our industry;
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success or failure of our business strategy;
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credit market fluctuations which could negatively impact our ability to obtain financing as needed;
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•
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changes to the regulatory and legal environment in which we operate;
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•
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announcements by us, competitors, customers, or our contract manufacturers of significant acquisitions or dispositions, including our recently announced merger with Oclaro;
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investor perception of us and our industry;
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changes in accounting standards, policies, guidance, interpretations or principles;
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litigation or disputes in which we may become involved;
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overall market fluctuations; sales of our shares by our officers, directors, or significant stockholders;
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the timing and amount of dividends and share repurchases, if any; and
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general economic and market conditions and other external factors.
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we could be required to pay a termination fee of up to $80.0 million under specified circumstances relating to failure to obtain regulatory approvals;
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we will have incurred and may continue to incur costs relating to the Merger, many of which are payable by us whether or not the Merger is completed;
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matters related to the Merger (including integration planning) require substantial commitments of time and resources by our management team and numerous others throughout our organization, which could otherwise have been devoted to other opportunities;
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we are, and may continue to be, subject to legal proceedings related to the Merger or the failure to complete the Merger, which could be time consuming and expensive, could divert our management’s attention away from our regular business and, if any lawsuit is adversely resolved against us, could have a material adverse effect on our financial condition;
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the failure to complete the Merger may result in negative publicity and a negative perception of us in the investment community, which could negative impact on our stock price; and
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any disruptions to our business resulting from the announcement and pendency of the Merger, including any adverse changes in our relationships with our customers, suppliers, partners or employees, may continue to intensify in the event the Merger is not consummated.
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make it more difficult for us to satisfy our debt obligations, including the 2024 Notes and the Term Loan Facilities;
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increase our vulnerability to general adverse economic and industry conditions;
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require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital and other general corporate purposes;
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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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restrict us from exploiting business opportunities;
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place us at a competitive disadvantage compared to our competitors that have less indebtedness; and
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limit our availability to borrow additional funds for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy or other general purposes.
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High
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Low
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||||
Fiscal 2018 Quarter Ended:
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June 30, 2018
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$
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64.50
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$
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50.20
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March 31, 2018
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$
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73.20
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$
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42.60
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December 30, 2017
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$
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64.75
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$
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46.40
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September 30, 2017
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$
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67.95
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$
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50.80
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Fiscal 2017 Quarter Ended:
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July 1, 2017
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$
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65.10
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$
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42.75
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April 1, 2017
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$
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54.70
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$
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34.40
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December 31, 2016
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$
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44.50
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$
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33.60
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October 1, 2016
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$
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41.99
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$
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23.30
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Years Ended
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June 30, 2018
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July 1, 2017
(4)
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July 2, 2016
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June 27, 2015
(1)
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June 28, 2014
(2)
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Consolidated Statements of Operations Data:
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Net revenue
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$
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1,247.7
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$
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1,001.6
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$
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903.0
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$
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837.1
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$
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817.9
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Gross profit
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432.1
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318.1
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277.3
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257.9
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256.6
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|||||
Income (loss) from operations
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139.9
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47.6
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11.5
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(23.4
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)
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8.7
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|||||
Net (loss) income
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248.1
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(102.5
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)
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9.3
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(3.4
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)
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10.7
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|||||
Cumulative dividends on Series A Preferred Stock
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(0.9
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)
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(0.9
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(0.8
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)
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—
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—
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|||||
Accretion of Series A Preferred Stock
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—
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—
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(11.7
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)
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—
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—
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|||||
Earnings allocated to Series A Preferred Stock
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(5.7
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)
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—
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—
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—
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—
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Net income (loss) attributable to common stockholders
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$
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241.5
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$
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(103.4
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)
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$
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(3.2
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)
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$
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(3.4
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)
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$
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10.7
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||||||||||
Net income (loss) per share attributable to common stockholders
(3):
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||||||||||
Basic
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$
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3.88
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$
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(1.71
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)
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$
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(0.05
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)
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$
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(0.06
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)
|
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$
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0.18
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Diluted
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$
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3.82
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$
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(1.71
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)
|
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$
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(0.05
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)
|
|
$
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(0.06
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)
|
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$
|
0.18
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|
Shares used to compute net income (loss) per share attributable to common stockholders
(3)
:
|
|
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||||||||||
Basic
|
62.3
|
|
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60.6
|
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59.1
|
|
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58.8
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|
|
58.8
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|
|||||
Diluted
|
63.3
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|
60.6
|
|
|
59.1
|
|
|
58.8
|
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|
58.8
|
|
|
Balance as of
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||||||||||||||||||
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June 30, 2018
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|
July 1, 2017
(4)
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|
July 2, 2016
|
|
June 27, 2015
(1)
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|
June 28, 2014
(2)
|
||||||||||
Consolidated Balance Sheet Data:
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|
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|
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|
||||||||||
Cash and cash equivalents
|
$
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397.3
|
|
|
$
|
272.9
|
|
|
$
|
157.1
|
|
|
$
|
14.5
|
|
|
$
|
19.9
|
|
Total assets
|
1,581.5
|
|
|
1,232.9
|
|
|
726.3
|
|
|
512.6
|
|
|
492.1
|
|
|||||
Convertible notes
|
334.2
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|
|
317.5
|
|
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—
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—
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—
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|||||
Derivative liability
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52.4
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|
51.6
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|
|
10.3
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—
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|
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—
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|
|||||
Other non-current liabilities
|
19.0
|
|
|
25.0
|
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|
9.1
|
|
|
9.8
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|
|
19.6
|
|
|||||
Total redeemable convertible preferred stock
|
35.8
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|
|
35.8
|
|
|
35.8
|
|
|
—
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—
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|
|||||
Total stockholders’ equity
|
926.1
|
|
|
618.8
|
|
|
497.4
|
|
|
380.6
|
|
|
335.6
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(1)
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During the third quarter of fiscal 2015, we settled an audit in a non-U.S. jurisdiction which resulted in the recognition of a $
21.8
million tax benefit. In addition, we recognized $
14.1
million of additional deferred tax assets which were fully offset by a corresponding increase in the deferred tax valuation allowance.
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(2)
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During the third quarter of fiscal 2014, we acquired Time-Bandwidth in a transaction accounted for in accordance with the authoritative guidance on business combinations. The Consolidated Statement of Operations for fiscal 2014 included the results of operations from Time-Bandwidth subsequent to the date of acquisition, and the Consolidated Balance Sheets as of June 28, 2014 included Time-Bandwidth’s financial position.
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(3)
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On August 1, 2015, JDSU distributed
47.1
million shares, or
80.1%
of the outstanding shares of Lumentum common stock to existing holders of JDSU common stock. JDSU was renamed Viavi and at the time of distribution, retained
11.7
million shares, or
19.9%
of Lumentum’s outstanding shares. Basic and diluted net income (loss) per share for all periods through June 27, 2015 is calculated using the shares of Lumentum common stock outstanding on August 1, 2015. Refer to “
Note 4. Earnings Per Share
” in the Notes to Consolidated Financial Statements.
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(4)
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During the third quarter of fiscal 2017, we completed the acquisition of a privately held company in accordance with the authoritative guidance on business combinations. Results of operations and financial position of the business acquired have been included in our consolidated financial statements subsequent to the date of acquisition.
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•
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Inventory Valuation
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•
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Revenue Recognition
|
•
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Income Taxes
|
•
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Long-lived Asset Valuation
|
•
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Warranty
|
•
|
Derivative Liability
|
•
|
Business Combinations
|
•
|
Goodwill
|
|
Years Ended
|
|||||||
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June 30, 2018
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|
July 1, 2017
|
|
July 2, 2016
|
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Segment net revenue:
|
|
|
|
|
|
|||
OpComms
|
84.9
|
%
|
|
85.6
|
%
|
|
84.3
|
%
|
Lasers
|
15.1
|
|
|
14.4
|
|
|
15.7
|
|
Net revenue
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
Cost of sales
|
65.1
|
|
|
67.6
|
|
|
68.5
|
|
Amortization of acquired developed technologies
|
0.3
|
|
|
0.6
|
|
|
0.8
|
|
Gross profit
|
34.6
|
|
|
31.8
|
|
|
30.7
|
|
Operating expenses:
|
|
|
|
|
|
|||
Research and development
|
12.6
|
|
|
14.8
|
|
|
15.6
|
|
Selling, general and administrative
|
10.3
|
|
|
11.0
|
|
|
13.0
|
|
Restructuring and related charges
|
0.6
|
|
|
1.2
|
|
|
0.8
|
|
Total operating expenses
|
23.4
|
|
|
27.0
|
|
|
29.4
|
|
Income from operations
|
11.2
|
|
|
4.8
|
|
|
1.3
|
|
Unrealized loss on derivative liabilities
|
(0.1
|
)
|
|
(10.4
|
)
|
|
(0.1
|
)
|
Interest and other income (expense), net
|
(0.8
|
)
|
|
(0.3
|
)
|
|
(0.1
|
)
|
Income (loss) before income taxes
|
10.4
|
|
|
(6.0
|
)
|
|
1.1
|
|
Provision for (benefit from) income taxes
|
(9.5
|
)
|
|
4.3
|
|
|
0.1
|
|
Net income (loss)
|
19.9
|
%
|
|
(10.2
|
)%
|
|
1.0
|
%
|
|
2018
|
|
2017
|
|
Change
|
|
Percentage Change
|
|
2017
|
|
2016
|
|
Change
|
|
Percentage Change
|
||||||||||||||
Segment net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OpComms
|
$
|
1,059.2
|
|
|
$
|
857.8
|
|
|
$
|
201.4
|
|
|
23.5
|
%
|
|
$
|
857.8
|
|
|
$
|
761.3
|
|
|
$
|
96.5
|
|
|
12.7
|
%
|
Lasers
|
188.5
|
|
|
143.8
|
|
|
44.7
|
|
|
31.1
|
|
|
143.8
|
|
|
141.7
|
|
|
2.1
|
|
|
1.5
|
|
||||||
Net revenue
|
$
|
1,247.7
|
|
|
$
|
1,001.6
|
|
|
$
|
246.1
|
|
|
24.6
|
%
|
|
$
|
1,001.6
|
|
|
$
|
903.0
|
|
|
$
|
98.6
|
|
|
10.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross profit
|
$
|
432.1
|
|
|
$
|
318.1
|
|
|
$
|
114.0
|
|
|
35.8
|
%
|
|
$
|
318.1
|
|
|
$
|
277.3
|
|
|
$
|
40.8
|
|
|
14.7
|
%
|
Gross margin
|
34.6
|
%
|
|
31.8
|
%
|
|
|
|
|
|
31.8
|
%
|
|
30.7
|
%
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Research and development
|
$
|
156.8
|
|
|
$
|
148.3
|
|
|
$
|
8.5
|
|
|
5.7
|
%
|
|
$
|
148.3
|
|
|
$
|
141.1
|
|
|
$
|
7.2
|
|
|
5.1
|
%
|
Percentage of net revenue
|
12.6
|
%
|
|
14.8
|
%
|
|
|
|
|
|
14.8
|
%
|
|
15.6
|
%
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Selling, general and administrative
|
$
|
128.2
|
|
|
$
|
110.2
|
|
|
$
|
18.0
|
|
|
16.3
|
%
|
|
$
|
110.2
|
|
|
$
|
117.3
|
|
|
$
|
(7.1
|
)
|
|
(6.1
|
)%
|
Percentage of net revenue
|
10.3
|
%
|
|
11.0
|
%
|
|
|
|
|
|
11.0
|
%
|
|
13.0
|
%
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Restructuring and related charges
|
$
|
7.2
|
|
|
$
|
12.0
|
|
|
$
|
(4.8
|
)
|
|
(40.0
|
)%
|
|
$
|
12.0
|
|
|
$
|
7.4
|
|
|
$
|
4.6
|
|
|
62.2
|
%
|
Percentage of net revenue
|
0.6
|
%
|
|
1.2
|
%
|
|
|
|
|
|
1.2
|
%
|
|
0.8
|
%
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended
|
|||||||||||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
|||||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Americas:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
United States
|
$
|
115.1
|
|
|
9.2
|
%
|
|
$
|
147.9
|
|
|
14.8
|
%
|
|
$
|
162.3
|
|
|
18.0
|
%
|
Mexico
|
145.8
|
|
|
11.7
|
|
|
185.1
|
|
|
18.5
|
|
|
112.9
|
|
|
12.5
|
|
|||
Other Americas
|
7.0
|
|
|
0.6
|
|
|
9.2
|
|
|
0.9
|
|
|
19.6
|
|
|
2.2
|
|
|||
Total Americas
|
$
|
267.9
|
|
|
21.5
|
%
|
|
$
|
342.2
|
|
|
34.2
|
%
|
|
$
|
294.8
|
|
|
32.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Asia-Pacific:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Hong Kong
|
$
|
183.0
|
|
|
14.7
|
%
|
|
$
|
226.7
|
|
|
22.6
|
%
|
|
$
|
214.0
|
|
|
23.7
|
%
|
Japan
|
194.7
|
|
|
15.6
|
|
|
99.2
|
|
|
9.9
|
|
|
92.9
|
|
|
10.3
|
|
|||
South Korea
|
146.1
|
|
|
11.7
|
|
|
4.9
|
|
|
0.5
|
|
|
3.8
|
|
|
0.4
|
|
|||
Other Asia-Pacific
|
354.2
|
|
|
28.3
|
|
|
220.5
|
|
|
22.0
|
|
|
174.0
|
|
|
19.2
|
|
|||
Total Asia-Pacific
|
$
|
878.0
|
|
|
70.3
|
%
|
|
$
|
551.3
|
|
|
55.0
|
%
|
|
$
|
484.7
|
|
|
53.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EMEA
|
$
|
101.8
|
|
|
8.2
|
%
|
|
$
|
108.1
|
|
|
10.8
|
%
|
|
$
|
123.5
|
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total net revenue
|
$
|
1,247.7
|
|
|
|
|
$
|
1,001.6
|
|
|
|
|
$
|
903.0
|
|
|
|
|
Gross Profit
|
|
Gross Margin
|
|||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
|||||||||
OpComms
|
$
|
402.3
|
|
|
$
|
287.3
|
|
|
$
|
236.3
|
|
|
38.0
|
%
|
|
33.5
|
%
|
|
31.0
|
%
|
Lasers
|
82.8
|
|
|
59.9
|
|
|
61.4
|
|
|
43.9
|
%
|
|
41.7
|
%
|
|
43.3
|
%
|
|||
Segment total
|
$
|
485.1
|
|
|
$
|
347.2
|
|
|
$
|
297.7
|
|
|
38.9
|
%
|
|
34.7
|
%
|
|
33.0
|
%
|
Unallocated corporate items
(1)
|
(53.0
|
)
|
|
(29.1
|
)
|
|
(20.4
|
)
|
|
|
|
|
|
|
||||||
Total
|
$
|
432.1
|
|
|
$
|
318.1
|
|
|
$
|
277.3
|
|
|
34.6
|
%
|
|
31.8
|
%
|
|
30.7
|
%
|
•
|
During the fourth quarter of fiscal 2018, we initiated a new restructuring plan in order to realign the organization and enable further investment in key priority areas. As a result, a restructuring charge of $3.4 million was recorded for severance costs and employee benefits. In total, 52 employees in manufacturing, R&D and SG&A functions were terminated in connection with this new restructuring plan.
|
•
|
We also incurred restructuring and related charges of $3.8 million from restructuring plans approved prior to fiscal 2016 primarily related to the shut down of our manufacturing facility in Bloomfield, Connecticut as a result of the transfer of certain production processes into existing sites in the United States or to contract manufacturers.
|
•
|
During the fourth quarter of fiscal 2016, management approved a plan to optimize operations and gain efficiencies throughout the organization. As a result, a restructuring charge of $0.7 million was recorded for severance and employee benefits during fiscal 2016. In total, 18 employees in manufacturing, R&D and SG&A functions were terminated in connection with this restructuring plan. Payments related to the remaining severance and benefits accrual have been paid in full.
|
•
|
We also incurred restructuring and related charges of $7.0 million from restructuring plans approved prior to fiscal 2016 primarily related to manufacturing transfer costs for transfer of certain production processes into existing sites in the United States or to contract manufacturers.
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
Interest expense
|
$
|
(18.2
|
)
|
|
$
|
(5.5
|
)
|
|
$
|
(0.1
|
)
|
Foreign exchange gains (losses), net
|
(0.3
|
)
|
|
0.6
|
|
|
(0.9
|
)
|
|||
Interest income
|
8.5
|
|
|
1.1
|
|
|
—
|
|
|||
Other income (expense), net
|
0.3
|
|
|
0.6
|
|
|
(0.2
|
)
|
|||
Interest and other income (expense), net
|
$
|
(9.7
|
)
|
|
$
|
(3.2
|
)
|
|
$
|
(1.2
|
)
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
Provision for (benefit from) income taxes
|
$
|
(118.7
|
)
|
|
$
|
42.7
|
|
|
$
|
0.4
|
|
|
Payments due by period
|
||||||||||||||||||
|
Total
|
|
Less than 1 year
|
|
1 - 3 years
|
|
3 - 5 years
|
|
More than 5 years
|
||||||||||
Contractual Obligations
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset retirement obligations
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
0.4
|
|
|
$
|
1.3
|
|
Purchase obligations
(1)
|
173.5
|
|
|
165.5
|
|
|
7.9
|
|
|
—
|
|
|
0.1
|
|
|||||
Operating lease obligations
(1)
|
30.8
|
|
|
11.6
|
|
|
11.6
|
|
|
5.8
|
|
|
1.8
|
|
|||||
Capital lease obligation
(1)
|
9.4
|
|
|
9.0
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|||||
Pension plan contributions
(2)
|
0.5
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
0.25% Convertible Senior Notes due 2024
|
450.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
450.0
|
|
|||||
Interest on 2024 Notes
(3)
|
6.7
|
|
|
1.1
|
|
|
2.2
|
|
|
2.2
|
|
|
1.2
|
|
|||||
Acquisition contingencies
(4)
|
3.0
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
676.6
|
|
|
$
|
187.7
|
|
|
$
|
26.1
|
|
|
$
|
8.4
|
|
|
$
|
454.4
|
|
•
|
global economic conditions which affect demand for our products and services and impact the financial stability of our suppliers and customers;
|
•
|
changes in accounts receivable, inventory or other operating assets and liabilities, which affect our working capital;
|
•
|
increase in capital expenditures to support our business and growth;
|
•
|
the tendency of customers to delay payments or to negotiate favorable payment terms to manage their own liquidity positions;
|
•
|
timing of payments to our suppliers;
|
•
|
factoring or sale of accounts receivable;
|
•
|
volatility in fixed income and credit, which impact the liquidity and valuation of our investment portfolios;
|
•
|
volatility in foreign exchange markets, which impacts our financial results;
|
•
|
possible investments or acquisitions of complementary businesses, products or technologies, or other strategic transactions or partnerships;
|
•
|
issuance of debt or equity securities, or other financing transactions, including bank debt;
|
•
|
potential funding of pension liabilities either voluntarily or as required by law or regulation; and
|
•
|
settlement of any conversion or redemption of the 2024 Notes in cash.
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
Net revenue
|
$
|
1,247.7
|
|
|
$
|
1,001.6
|
|
|
$
|
903.0
|
|
Cost of sales
|
812.4
|
|
|
677.0
|
|
|
618.9
|
|
|||
Amortization of acquired developed technologies
|
3.2
|
|
|
6.5
|
|
|
6.8
|
|
|||
Gross profit
|
432.1
|
|
|
318.1
|
|
|
277.3
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
156.8
|
|
|
148.3
|
|
|
141.1
|
|
|||
Selling, general and administrative
|
128.2
|
|
|
110.2
|
|
|
117.3
|
|
|||
Restructuring and related charges
|
7.2
|
|
|
12.0
|
|
|
7.4
|
|
|||
Total operating expenses
|
292.2
|
|
|
270.5
|
|
|
265.8
|
|
|||
Income from operations
|
139.9
|
|
|
47.6
|
|
|
11.5
|
|
|||
Unrealized loss on derivative liabilities
|
(0.8
|
)
|
|
(104.2
|
)
|
|
(0.6
|
)
|
|||
Interest and other income (expense), net
|
(9.7
|
)
|
|
(3.2
|
)
|
|
(1.2
|
)
|
|||
Income (loss) before income taxes
|
129.4
|
|
|
(59.8
|
)
|
|
9.7
|
|
|||
Provision for (benefit from) income taxes
|
(118.7
|
)
|
|
42.7
|
|
|
0.4
|
|
|||
Net income (loss)
|
248.1
|
|
|
(102.5
|
)
|
|
9.3
|
|
|||
|
|
|
|
|
|
||||||
Items reconciling net income (loss) to net income (loss) attributable to common stockholders:
|
|
|
|
|
|
||||||
Cumulative dividends on Series A Preferred Stock
|
(0.9
|
)
|
|
(0.9
|
)
|
|
(0.8
|
)
|
|||
Accretion of Series A Preferred Stock
|
—
|
|
|
—
|
|
|
(11.7
|
)
|
|||
Earnings allocated to Series A Preferred Stock
|
(5.7
|
)
|
|
—
|
|
|
—
|
|
|||
Net income (loss) attributable to common stockholders - Basic
|
$
|
241.5
|
|
|
$
|
(103.4
|
)
|
|
$
|
(3.2
|
)
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to common stockholders - Diluted
|
$
|
241.5
|
|
|
$
|
(103.4
|
)
|
|
$
|
(3.2
|
)
|
|
|
|
|
|
|
||||||
Net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
3.88
|
|
|
$
|
(1.71
|
)
|
|
$
|
(0.05
|
)
|
Diluted
|
$
|
3.82
|
|
|
$
|
(1.71
|
)
|
|
$
|
(0.05
|
)
|
Shares used to compute net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
62.3
|
|
|
60.6
|
|
|
59.1
|
|
|||
Diluted
|
63.3
|
|
|
60.6
|
|
|
59.1
|
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
Net income (loss)
|
$
|
248.1
|
|
|
$
|
(102.5
|
)
|
|
$
|
9.3
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Net change in cumulative translation adjustment
|
(0.2
|
)
|
|
(1.2
|
)
|
|
(2.0
|
)
|
|||
Net change in unrealized loss on available-for-sale securities
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|||
Net change in defined benefit obligation
|
0.8
|
|
|
(0.8
|
)
|
|
(1.1
|
)
|
|||
Other comprehensive income (loss), net of tax
|
(1.0
|
)
|
|
(2.0
|
)
|
|
(3.1
|
)
|
|||
Comprehensive income (loss), net of tax
|
$
|
247.1
|
|
|
$
|
(104.5
|
)
|
|
$
|
6.2
|
|
|
June 30, 2018
|
|
July 1, 2017
|
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
397.3
|
|
|
$
|
272.9
|
|
Short-term investments
|
314.2
|
|
|
282.4
|
|
||
Accounts receivable, net
|
197.1
|
|
|
166.3
|
|
||
Inventories
|
153.6
|
|
|
145.2
|
|
||
Prepayments and other current assets
|
65.0
|
|
|
63.5
|
|
||
Total current assets
|
1,127.2
|
|
|
930.3
|
|
||
Property, plant and equipment, net
|
306.9
|
|
|
273.5
|
|
||
Goodwill and intangibles, net
|
18.3
|
|
|
21.5
|
|
||
Deferred income taxes
|
125.6
|
|
|
3.9
|
|
||
Other non-current assets
|
3.5
|
|
|
3.7
|
|
||
Total assets
|
$
|
1,581.5
|
|
|
$
|
1,232.9
|
|
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
126.5
|
|
|
$
|
114.8
|
|
Accrued payroll and related expenses
|
31.5
|
|
|
27.5
|
|
||
Accrued expenses
|
33.9
|
|
|
19.3
|
|
||
Other current liabilities
|
22.1
|
|
|
22.6
|
|
||
Total current liabilities
|
214.0
|
|
|
184.2
|
|
||
Convertible notes
|
334.2
|
|
|
317.5
|
|
||
Derivative liability
|
52.4
|
|
|
51.6
|
|
||
Other non-current liabilities
|
19.0
|
|
|
25.0
|
|
||
Total liabilities
|
619.6
|
|
|
578.3
|
|
||
Commitments and contingencies (Note 18)
|
|
|
|
||||
Redeemable convertible preferred stock:
|
|
|
|
||||
Non-controlling interest redeemable convertible Series A Preferred Stock, $0.001 par value, 10,000,000 authorized shares; 35,805 shares issued and outstanding as of June 30, 2018 and July 1, 2017
|
35.8
|
|
|
35.8
|
|
||
Total redeemable convertible preferred stock
|
35.8
|
|
|
35.8
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.001 par value, 990,000,000 authorized shares, 62,790,087 and 61,476,103 shares issued and outstanding as of June 30, 2018 and July 1, 2017, respectively
|
0.1
|
|
|
0.1
|
|
||
Additional paid-in capital
|
753.2
|
|
|
694.5
|
|
||
Retained earnings (accumulated deficit)
|
166.4
|
|
|
(83.2
|
)
|
||
Accumulated other comprehensive income
|
6.4
|
|
|
7.4
|
|
||
Total stockholders’ equity
|
926.1
|
|
|
618.8
|
|
||
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity
|
$
|
1,581.5
|
|
|
$
|
1,232.9
|
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
248.1
|
|
|
$
|
(102.5
|
)
|
|
$
|
9.3
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation expense
|
74.0
|
|
|
54.2
|
|
|
47.4
|
|
|||
Stock-based compensation
|
46.8
|
|
|
32.7
|
|
|
24.9
|
|
|||
Unrealized loss on derivative liabilities
|
0.8
|
|
|
104.2
|
|
|
0.6
|
|
|||
Amortization of acquired developed technologies and other intangibles
|
3.2
|
|
|
6.8
|
|
|
7.2
|
|
|||
Loss on disposal of property, plant and equipment
|
0.6
|
|
|
0.2
|
|
|
0.6
|
|
|||
Excess tax benefit associated with stock-based compensation
|
—
|
|
|
(3.8
|
)
|
|
—
|
|
|||
Amortization of discount on 0.25% Convertible Senior Notes due 2024
|
16.7
|
|
|
5.1
|
|
|
—
|
|
|||
Release of valuation allowance, net
|
(124.0
|
)
|
|
—
|
|
|
—
|
|
|||
Other non-cash (income) expenses
|
0.4
|
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(30.8
|
)
|
|
4.2
|
|
|
(21.8
|
)
|
|||
Inventories
|
(7.7
|
)
|
|
(41.7
|
)
|
|
(3.1
|
)
|
|||
Prepayments and other current and non-currents assets
|
6.1
|
|
|
(7.4
|
)
|
|
(12.7
|
)
|
|||
Income taxes, net
|
(7.3
|
)
|
|
42.7
|
|
|
(3.4
|
)
|
|||
Accounts payable
|
4.8
|
|
|
(16.9
|
)
|
|
28.9
|
|
|||
Accrued payroll and related expenses
|
3.9
|
|
|
1.0
|
|
|
9.2
|
|
|||
Accrued expenses and other current and non-current liabilities
|
11.9
|
|
|
6.2
|
|
|
(0.5
|
)
|
|||
Net cash provided by operating activities
|
247.5
|
|
|
85.0
|
|
|
86.6
|
|
|||
INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Payments for acquisition of property, plant and equipment
|
(93.2
|
)
|
|
(138.1
|
)
|
|
(82.0
|
)
|
|||
Acquisition of business, net of cash acquired
|
—
|
|
|
(5.1
|
)
|
|
—
|
|
|||
Purchases of short-term investments
|
(634.3
|
)
|
|
(290.7
|
)
|
|
—
|
|
|||
Proceeds from maturities and sales of short-term investments
|
600.5
|
|
|
8.2
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(127.0
|
)
|
|
(425.7
|
)
|
|
(82.0
|
)
|
|||
FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Net transfers from Viavi
|
—
|
|
|
—
|
|
|
134.2
|
|
|||
Proceeds from the issuance of 0.25% Convertible Senior Notes due 2024, net of issuance costs
|
—
|
|
|
442.3
|
|
|
—
|
|
|||
Excess tax benefit associated with stock-based compensation
|
—
|
|
|
3.8
|
|
|
—
|
|
|||
Payment of dividends - Series A Preferred Stock
|
(0.7
|
)
|
|
(0.9
|
)
|
|
(0.5
|
)
|
|||
Payment of financing obligation related to acquisition
|
—
|
|
|
—
|
|
|
(2.3
|
)
|
|||
Proceeds from employee stock plans
|
9.2
|
|
|
8.1
|
|
|
3.1
|
|
|||
Repayment of capital lease obligation
|
(6.4
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from the exercise of stock options
|
1.7
|
|
|
3.4
|
|
|
1.9
|
|
|||
Net cash provided by financing activities
|
3.8
|
|
|
456.7
|
|
|
136.4
|
|
|||
Effect of exchange rates on cash and cash equivalents
|
0.1
|
|
|
(0.2
|
)
|
|
1.6
|
|
|||
Increase in cash and cash equivalents
|
124.4
|
|
|
115.8
|
|
|
142.6
|
|
|||
Cash and cash equivalents at beginning of period
|
272.9
|
|
|
157.1
|
|
|
14.5
|
|
|||
Cash and cash equivalents at end of period
|
$
|
397.3
|
|
|
$
|
272.9
|
|
|
$
|
157.1
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for taxes
|
$
|
12.7
|
|
|
$
|
9.5
|
|
|
$
|
2.7
|
|
Cash paid for interest
|
1.3
|
|
|
—
|
|
|
—
|
|
|||
Unpaid property, plant and equipment in accounts payable and accrued expenses
|
17.2
|
|
|
18.4
|
|
|
13.1
|
|
|||
Equipment acquired under capital lease
|
15.6
|
|
|
—
|
|
|
—
|
|
|||
Accretion of Series A Preferred Stock
|
—
|
|
|
—
|
|
|
11.7
|
|
|
(in millions)
|
||||||||||||||||||||||||||||||||
|
Non-Controlling Interest Redeemable Convertible
Series A Preferred Stock |
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Retained Earnings (Accumulated Deficit)
|
|
Accumulated
Other Comprehensive Income/(Loss) |
|
Viavi Net Investment
|
|
Total Invested Equity /
Total Stockholders’ Equity |
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||||
Balance as of June 27, 2015
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12.5
|
|
|
$
|
368.1
|
|
|
$
|
380.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Pre-Separation activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.7
|
)
|
|
(11.7
|
)
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.7
|
)
|
|
—
|
|
|
(4.7
|
)
|
|||||||
Transfers from Viavi
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
136.5
|
|
|
136.5
|
|
|||||||
Total pre-Separation activity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.7
|
)
|
|
124.8
|
|
|
120.1
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Post-Separation activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Issuance of common stock and reclassification of parent company investment in connection with the Separation
|
—
|
|
|
—
|
|
|
58.8
|
|
|
0.1
|
|
|
457.0
|
|
|
—
|
|
|
—
|
|
|
(457.1
|
)
|
|
—
|
|
|||||||
Issuance of redeemable convertible preferred stock, net of issuance costs of $2.0
|
—
|
|
|
33.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35.8
|
)
|
|
(35.8
|
)
|
|||||||
Accretion of equity issuance costs
|
—
|
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
|||||||
Recognition of the bifurcation of the preferred stock’s derivative liability component
|
—
|
|
|
(9.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Recognition of the redemption value of the convertible preferred stock
|
—
|
|
|
9.7
|
|
|
—
|
|
|
—
|
|
|
(9.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.7
|
)
|
|||||||
Declared dividend for preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|||||||
Release of common stock shares upon vesting of restricted stock units
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for the withholding on vesting of restricted stock units
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(6.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.8
|
)
|
|||||||
Exercise of stock options
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|||||||
ESPP shares issued
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
3.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.2
|
|
|||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.0
|
|
|
—
|
|
|
—
|
|
|
21.0
|
|
|||||||
Total post-Separation activity
|
—
|
|
|
35.8
|
|
|
59.6
|
|
|
0.1
|
|
|
467.7
|
|
|
20.2
|
|
|
1.6
|
|
|
(492.9
|
)
|
|
(3.3
|
)
|
|||||||
Balance as of July 2, 2016
|
—
|
|
|
35.8
|
|
|
59.6
|
|
|
0.1
|
|
|
467.7
|
|
|
20.2
|
|
|
9.4
|
|
|
—
|
|
|
497.4
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
||||||||||||||||||||||||||||||||
|
Non-Controlling Interest Redeemable Convertible
Series A Preferred Stock |
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Retained Earnings (Accumulated Deficit)
|
|
Accumulated
Other Comprehensive Income/(Loss) |
|
Viavi Net Investment
|
|
Total Invested Equity /
Total Stockholders’ Equity |
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102.5
|
)
|
|
—
|
|
|
—
|
|
|
(102.5
|
)
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
|
(2.0
|
)
|
|||||||
Declared dividend for preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|||||||
Reclassification of 2024 Notes derivative liability in connection with cash settlement condition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
192.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
192.8
|
|
|||||||
Issuance of shares pursuant to equity plans, net of tax withholdings
|
—
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
(12.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.2
|
)
|
|||||||
ESPP shares issued
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
8.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.1
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34.3
|
|
|||||||
Excess tax benefit associated with stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
|||||||
Balance as of July 1, 2017
|
—
|
|
|
35.8
|
|
|
61.5
|
|
|
0.1
|
|
|
694.5
|
|
|
(83.2
|
)
|
|
7.4
|
|
|
—
|
|
|
618.8
|
|
|||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
248.1
|
|
|
—
|
|
|
—
|
|
|
248.1
|
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
|||||||
Declared dividend for preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|||||||
Issuance of shares pursuant to equity plans, net of tax withholdings
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|||||||
ESPP shares issued
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
9.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.2
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47.6
|
|
|||||||
Cumulative effect of stock compensation accounting change (Note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|||||||
Balance as of June 30, 2018
|
—
|
|
|
$
|
35.8
|
|
|
62.8
|
|
|
$
|
0.1
|
|
|
$
|
753.2
|
|
|
$
|
166.4
|
|
|
$
|
6.4
|
|
|
$
|
—
|
|
|
$
|
926.1
|
|
|
July 2, 2016
|
||
Selling, general and administrative
|
$
|
11.7
|
|
Interest and other (income) expenses, net
|
(0.1
|
)
|
|
Interest expense
|
0.1
|
|
|
Total allocated costs
|
$
|
11.7
|
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
Basic Earnings per Common Share
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
$
|
248.1
|
|
|
$
|
(102.5
|
)
|
|
$
|
9.3
|
|
Less: Cumulative dividends on Series A Preferred Stock
|
(0.9
|
)
|
|
(0.9
|
)
|
|
(0.8
|
)
|
|||
Less: Earnings allocated to Series A Preferred Stock
|
(5.7
|
)
|
|
—
|
|
|
—
|
|
|||
Less: Accretion of Series A Preferred Stock
|
—
|
|
|
—
|
|
|
(11.7
|
)
|
|||
Net income (loss) attributable to common stockholders - Basic
|
$
|
241.5
|
|
|
$
|
(103.4
|
)
|
|
$
|
(3.2
|
)
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding including Series A Preferred Stock
|
63.8
|
|
|
62.1
|
|
|
60.4
|
|
|||
Less: Weighted average Series A Preferred Stock
|
(1.5
|
)
|
|
(1.5
|
)
|
|
(1.3
|
)
|
|||
Basic weighted average common shares outstanding
|
62.3
|
|
|
60.6
|
|
|
59.1
|
|
|||
Net income (loss) per share attributable to common stockholders - Basic
|
$
|
3.88
|
|
|
$
|
(1.71
|
)
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
||||||
Diluted Earnings per Common Share
|
|
|
|
|
|
||||||
Net income (loss) attributable to common stockholders - Diluted
|
$
|
241.5
|
|
|
$
|
(103.4
|
)
|
|
$
|
(3.2
|
)
|
Weighted average common shares outstanding for basic earnings per common share
|
62.3
|
|
|
60.6
|
|
|
59.1
|
|
|||
Effect of dilutive securities from 2015 Equity Incentive Plan
|
1.0
|
|
|
—
|
|
|
—
|
|
|||
Effect of diluted securities from Series A Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted weighted average common shares outstanding
|
63.3
|
|
|
60.6
|
|
|
59.1
|
|
|||
Net income (loss) per share attributable to common stockholders - Diluted
|
$
|
3.82
|
|
|
$
|
(1.71
|
)
|
|
$
|
(0.05
|
)
|
|
Foreign currency translation adjustments, net of tax
|
|
Defined benefit obligation, net of tax
(1)
|
|
Unrealized gain (loss) on available-for-sale securities, net of tax
|
|
Total
|
||||||||
Beginning balance as of June 27, 2015
|
$
|
13.7
|
|
|
$
|
(1.2
|
)
|
|
$
|
—
|
|
|
$
|
12.5
|
|
Other comprehensive income (loss)
|
(2.0
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
(3.1
|
)
|
||||
Beginning balance as of July 2, 2016
|
11.7
|
|
|
(2.3
|
)
|
|
—
|
|
|
9.4
|
|
||||
Other comprehensive income (loss)
|
(1.2
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(2.0
|
)
|
||||
Beginning balance as of July 1, 2017
|
10.5
|
|
|
(3.1
|
)
|
|
—
|
|
|
7.4
|
|
||||
Other comprehensive income (loss)
|
(0.2
|
)
|
|
0.8
|
|
|
(1.6
|
)
|
|
(1.0
|
)
|
||||
Ending balance as of June 30, 2018
|
$
|
10.3
|
|
|
$
|
(2.3
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
6.4
|
|
|
June 30, 2018
|
|
July 1, 2017
|
||||
Finished goods
|
$
|
98.2
|
|
|
$
|
71.7
|
|
Work in process
|
34.5
|
|
|
49.4
|
|
||
Raw materials and purchased parts
|
20.9
|
|
|
24.1
|
|
||
Inventories
|
$
|
153.6
|
|
|
$
|
145.2
|
|
|
June 30, 2018
|
|
July 1, 2017
|
||||
Capitalized manufacturing overhead
|
$
|
20.5
|
|
|
$
|
30.1
|
|
Prepayments
|
19.5
|
|
|
12.3
|
|
||
Advances to contract manufacturers
|
14.0
|
|
|
10.5
|
|
||
Other current assets
|
11.0
|
|
|
10.6
|
|
||
Prepayments and other current assets
|
$
|
65.0
|
|
|
$
|
63.5
|
|
|
June 30, 2018
|
|
July 1, 2017
(1)
|
||||
Land
|
$
|
10.6
|
|
|
$
|
10.6
|
|
Buildings and improvement
|
55.1
|
|
|
37.3
|
|
||
Machinery and equipment
(2)
|
463.6
|
|
|
378.4
|
|
||
Computer equipment and software
|
26.3
|
|
|
26.2
|
|
||
Furniture and fixtures
|
2.2
|
|
|
3.6
|
|
||
Leasehold improvements
|
25.8
|
|
|
30.5
|
|
||
Construction in progress
|
52.6
|
|
|
84.6
|
|
||
|
636.2
|
|
|
571.2
|
|
||
Less: Accumulated depreciation
|
(329.3
|
)
|
|
(297.7
|
)
|
||
Property, plant and equipment, net
|
$
|
306.9
|
|
|
$
|
273.5
|
|
|
June 30, 2018
|
|
July 1, 2017
|
||||
Warranty accrual
(1)
|
$
|
6.6
|
|
|
$
|
9.7
|
|
Restructuring accrual and related charges
(2)
|
1.9
|
|
|
3.8
|
|
||
Deferred revenue and customer deposits
|
2.8
|
|
|
6.9
|
|
||
Capital lease obligation
(3)
|
7.3
|
|
|
—
|
|
||
Other current liabilities
|
3.5
|
|
|
2.2
|
|
||
Other current liabilities
|
$
|
22.1
|
|
|
$
|
22.6
|
|
|
June 30, 2018
|
|
July 1, 2017
|
||||
Asset retirement obligations
|
$
|
2.7
|
|
|
$
|
2.5
|
|
Pension and related accrual
|
3.5
|
|
|
3.9
|
|
||
Deferred rent
|
2.6
|
|
|
3.3
|
|
||
Unrecognized tax benefit
|
6.1
|
|
|
10.5
|
|
||
Capital lease obligation
(1)
|
0.4
|
|
|
—
|
|
||
Other non-current liabilities
|
3.7
|
|
|
4.8
|
|
||
Other non-current liabilities
|
$
|
19.0
|
|
|
$
|
25.0
|
|
|
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair Value
|
||||||||
June 30, 2018
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
103.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
103.6
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
3.0
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
||||
Commercial paper
|
112.1
|
|
|
—
|
|
|
—
|
|
|
112.1
|
|
||||
Money market funds
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||
U.S. Treasury securities
|
143.6
|
|
|
—
|
|
|
—
|
|
|
143.6
|
|
||||
U.S. Agency securities
|
34.2
|
|
|
—
|
|
|
—
|
|
|
34.2
|
|
||||
Total cash and cash equivalents
|
$
|
397.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
397.3
|
|
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
$
|
7.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7.5
|
|
Commercial paper
|
10.5
|
|
|
—
|
|
|
—
|
|
|
10.5
|
|
||||
Asset-backed securities
|
68.0
|
|
|
—
|
|
|
(0.2
|
)
|
|
67.8
|
|
||||
Corporate debt securities
|
220.6
|
|
|
0.1
|
|
|
(1.5
|
)
|
|
219.2
|
|
||||
Municipal bonds
|
1.6
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
||||
Mortgage-backed securities
|
4.2
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
||||
Foreign government bonds
|
3.4
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
||||
Total short-term investments
|
$
|
315.8
|
|
|
$
|
0.1
|
|
|
$
|
(1.7
|
)
|
|
$
|
314.2
|
|
|
|
|
|
|
|
|
|
||||||||
July 1, 2017
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
201.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
201.3
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
52.1
|
|
|
—
|
|
|
—
|
|
|
52.1
|
|
||||
Commercial paper
|
14.7
|
|
|
—
|
|
|
—
|
|
|
14.7
|
|
||||
Money market funds
|
4.8
|
|
|
—
|
|
|
—
|
|
|
4.8
|
|
||||
Total cash and cash equivalents
|
$
|
272.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
272.9
|
|
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
$
|
202.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
202.1
|
|
Asset-backed securities
|
26.1
|
|
|
—
|
|
|
—
|
|
|
26.1
|
|
||||
Corporate debt securities
|
46.4
|
|
|
—
|
|
|
—
|
|
|
46.4
|
|
||||
Municipal bonds
|
4.9
|
|
|
—
|
|
|
—
|
|
|
4.9
|
|
||||
Foreign government bonds
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
||||
U.S. Treasury securities
|
1.9
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
||||
Total short-term investments
|
$
|
282.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
282.4
|
|
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
||||||||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Certificates of deposit
|
$
|
5.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.4
|
|
|
$
|
—
|
|
Commercial paper
|
8.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.5
|
|
|
—
|
|
||||||
Asset-backed securities
|
66.6
|
|
|
(0.2
|
)
|
|
0.3
|
|
|
—
|
|
|
66.9
|
|
|
(0.2
|
)
|
||||||
Corporate debt securities
|
188.6
|
|
|
(1.5
|
)
|
|
2.0
|
|
|
—
|
|
|
190.6
|
|
|
(1.5
|
)
|
||||||
Municipal bonds
|
0.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
||||||
U.S. Agency securities
|
4.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
||||||
Foreign government bonds
|
3.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
||||||
Total
|
$
|
277.1
|
|
|
$
|
(1.7
|
)
|
|
$
|
2.3
|
|
|
$
|
—
|
|
|
$
|
279.4
|
|
|
$
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
July 1, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset-backed securities
|
$
|
21.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21.5
|
|
|
$
|
—
|
|
Corporate debt securities
|
29.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29.8
|
|
|
—
|
|
||||||
Municipal bonds
|
2.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|
—
|
|
||||||
Foreign government bonds
|
1.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
||||||
U.S. Treasury securities
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
||||||
Total
|
$
|
57.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57.1
|
|
|
$
|
—
|
|
|
June 30, 2018
|
|
July 1, 2017
|
||||||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||
Due in 1 year
|
$
|
150.1
|
|
|
$
|
149.6
|
|
|
$
|
231.6
|
|
|
$
|
231.6
|
|
Due in 1 year through 5 years
|
157.2
|
|
|
156.1
|
|
|
48.4
|
|
|
48.4
|
|
||||
Due in 5 years through 10 years
|
6.1
|
|
|
6.1
|
|
|
1.8
|
|
|
1.8
|
|
||||
Due after 10 years
|
2.4
|
|
|
2.4
|
|
|
0.6
|
|
|
0.6
|
|
||||
|
$
|
315.8
|
|
|
$
|
314.2
|
|
|
$
|
282.4
|
|
|
$
|
282.4
|
|
Level 1:
|
Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
|
Level 2:
|
Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
|
Level 3:
|
Inputs are unobservable inputs based on our assumptions.
|
June 30, 2018
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
$
|
—
|
|
|
$
|
3.0
|
|
|
$
|
—
|
|
|
$
|
3.0
|
|
Commercial paper
|
—
|
|
|
112.1
|
|
|
—
|
|
|
112.1
|
|
||||
Money market funds
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||
U.S. Treasury securities
|
143.6
|
|
|
—
|
|
|
—
|
|
|
143.6
|
|
||||
U.S. Agency securities
|
—
|
|
|
34.2
|
|
|
—
|
|
|
34.2
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
—
|
|
|
7.5
|
|
|
—
|
|
|
7.5
|
|
||||
Commercial paper
|
—
|
|
|
10.5
|
|
|
—
|
|
|
10.5
|
|
||||
Asset-backed securities
|
—
|
|
|
67.8
|
|
|
—
|
|
|
67.8
|
|
||||
Corporate debt securities
|
—
|
|
|
219.2
|
|
|
—
|
|
|
219.2
|
|
||||
Municipal bonds
|
—
|
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
||||
Mortgage-backed securities
|
—
|
|
|
4.2
|
|
|
—
|
|
|
4.2
|
|
||||
Foreign government bonds
|
—
|
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
||||
Total assets
|
$
|
144.4
|
|
|
$
|
463.5
|
|
|
$
|
—
|
|
|
$
|
607.9
|
|
Other accrued liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52.4
|
|
|
$
|
52.4
|
|
Acquisition contingencies
|
—
|
|
|
—
|
|
|
2.7
|
|
|
2.7
|
|
||||
Total other accrued liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
55.1
|
|
|
$
|
55.1
|
|
July 1, 2017
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
$
|
—
|
|
|
$
|
52.1
|
|
|
$
|
—
|
|
|
$
|
52.1
|
|
Commercial paper
|
—
|
|
|
14.7
|
|
|
—
|
|
|
14.7
|
|
||||
Money market funds
|
4.8
|
|
|
—
|
|
|
—
|
|
|
4.8
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
—
|
|
|
202.1
|
|
|
—
|
|
|
202.1
|
|
||||
Asset-backed securities
|
—
|
|
|
26.1
|
|
|
—
|
|
|
26.1
|
|
||||
Corporate debt securities
|
—
|
|
|
46.4
|
|
|
—
|
|
|
46.4
|
|
||||
Municipal bonds
|
—
|
|
|
4.9
|
|
|
—
|
|
|
4.9
|
|
||||
Foreign government bonds
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
||||
U.S. Treasury
|
1.9
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
||||
Total assets
|
$
|
6.7
|
|
|
$
|
347.3
|
|
|
$
|
—
|
|
|
$
|
354.0
|
|
Other accrued liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51.6
|
|
|
$
|
51.6
|
|
Acquisition contingencies
|
—
|
|
|
—
|
|
|
2.7
|
|
|
2.7
|
|
||||
Total other accrued liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54.3
|
|
|
$
|
54.3
|
|
•
|
Authorize, approve, or make any change to the powers, preferences, privileges or rights of the Series A Preferred Stock;
|
•
|
Authorize or issue any additional shares of Series A Preferred Stock or reduce the number of shares of Series A Preferred Stock; or
|
•
|
Create, or hold capital stock in, any subsidiary that is not wholly-owned by the Company.
|
Liability component:
|
June 30, 2018
|
|
July 1, 2017
|
||||
Principal
|
$
|
450.0
|
|
|
$
|
450.0
|
|
Unamortized debt discount
|
(115.8
|
)
|
|
(132.5
|
)
|
||
Net carrying amount of the liability component
|
$
|
334.2
|
|
|
$
|
317.5
|
|
|
June 30, 2018
|
|
July 1, 2017
|
||||
Contractual interest expense
|
$
|
1.2
|
|
|
$
|
0.4
|
|
Amortization of the debt discount
|
16.7
|
|
|
5.1
|
|
||
Total interest expense
|
$
|
17.9
|
|
|
$
|
5.5
|
|
Effective interest rate on the liability component
|
5.4
|
%
|
|
5.4
|
%
|
|
June 30, 2018
|
|
July 1, 2017
|
||||
Balance as of beginning of period
|
$
|
51.6
|
|
|
$
|
10.3
|
|
Unrealized loss on the Series A Preferred Stock derivative liability
|
0.8
|
|
|
41.3
|
|
||
Balance as of end of period
|
$
|
52.4
|
|
|
$
|
51.6
|
|
|
June 30, 2018
|
|
July 1, 2017
|
||||
Stock price
|
$
|
57.90
|
|
|
$
|
57.05
|
|
Conversion price
|
$
|
24.63
|
|
|
$
|
24.63
|
|
Expected term (years)
|
2.11
|
|
|
3.11
|
|
||
Expected annual volatility
|
50.0
|
%
|
|
47.5
|
%
|
||
Risk-free rate
|
2.53
|
%
|
|
1.57
|
%
|
||
Preferred yield
|
8.58
|
%
|
|
7.56
|
%
|
|
July 1, 2017
|
||
Balance as of beginning of period
|
$
|
—
|
|
Fair value of the embedded derivative for the 2024 Notes at issuance
|
129.9
|
|
|
Unrealized loss on the 2024 Notes derivative liability
|
62.9
|
|
|
Reclassification of the 2024 Notes derivative liability in connection with TMA settlement condition
|
(192.8
|
)
|
|
Balance as of end of period
|
$
|
—
|
|
|
June 29, 2017
|
|
March 8, 2017
|
||||
Stock price
|
$
|
57.30
|
|
|
$
|
45.50
|
|
Conversion price
|
$
|
60.62
|
|
|
$
|
60.62
|
|
Expected term (years)
|
6.7
|
|
|
7.0
|
|
||
Expected annual volatility
|
47.5
|
%
|
|
45.0
|
%
|
||
Risk-free rate
|
2.10
|
%
|
|
2.40
|
%
|
|
|
Optical Communications
|
|
Commercial Lasers
|
|
Total
|
||||||
Balance as of July 2, 2016
|
$
|
—
|
|
|
$
|
5.4
|
|
|
$
|
5.4
|
|
|
|
Acquisition of a business
|
5.6
|
|
|
—
|
|
|
5.6
|
|
|||
|
Foreign currency translation adjustment
|
0.3
|
|
|
0.1
|
|
|
0.4
|
|
|||
Balance as of July 1, 2017
|
$
|
5.9
|
|
|
$
|
5.5
|
|
|
$
|
11.4
|
|
|
|
Foreign currency translation adjustment
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Balance as of June 30, 2018
|
$
|
5.9
|
|
|
$
|
5.4
|
|
|
$
|
11.3
|
|
June 30, 2018
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
||||||
Acquired developed technologies
|
$
|
105.5
|
|
|
$
|
(98.5
|
)
|
|
$
|
7.0
|
|
Other intangibles
|
7.0
|
|
|
(7.0
|
)
|
|
—
|
|
|||
Total intangible assets
|
$
|
112.5
|
|
|
$
|
(105.5
|
)
|
|
$
|
7.0
|
|
July 1, 2017
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
||||||
Acquired developed technologies
|
$
|
105.5
|
|
|
$
|
(95.4
|
)
|
|
$
|
10.1
|
|
Other intangibles
(1)
|
7.0
|
|
|
(7.0
|
)
|
|
—
|
|
|||
Total intangible assets
|
$
|
112.5
|
|
|
$
|
(102.4
|
)
|
|
$
|
10.1
|
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
Cost of sales
|
$
|
3.2
|
|
|
$
|
6.5
|
|
|
$
|
6.8
|
|
Operating expense
|
—
|
|
|
0.3
|
|
|
0.4
|
|
|||
Total
|
$
|
3.2
|
|
|
$
|
6.8
|
|
|
$
|
7.2
|
|
Fiscal Years
|
|
||
2019
|
$
|
3.0
|
|
2020
|
2.8
|
|
|
2021
|
0.5
|
|
|
2022
|
0.5
|
|
|
Thereafter
|
0.2
|
|
|
Total amortization
|
$
|
7.0
|
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
Balance as of beginning of period
|
$
|
3.8
|
|
|
$
|
5.7
|
|
|
$
|
6.0
|
|
Charges
|
7.2
|
|
|
12.0
|
|
|
7.7
|
|
|||
Payments
|
(9.1
|
)
|
|
(13.9
|
)
|
|
(8.0
|
)
|
|||
Balance as of end of period
|
$
|
1.9
|
|
|
$
|
3.8
|
|
|
$
|
5.7
|
|
•
|
During the fourth quarter of fiscal 2018, we initiated a new restructuring plan in order to realign the organization and enable further investment in key priority areas. As a result, a restructuring charge of
$3.4 million
was recorded for severance costs and employee benefits. In total, there were
52
employees in manufacturing, R&D and SG&A functions that were terminated.
|
•
|
We also incurred restructuring and related charges of
$3.8 million
from restructuring plans approved prior to fiscal 2016 primarily related to manufacturing facility in Bloomfield, Connecticut to transfer certain production processes into existing sites in the United States or to contract manufacturers.
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
Domestic
|
$
|
37.8
|
|
|
$
|
(78.4
|
)
|
|
$
|
60.7
|
|
Foreign
|
91.6
|
|
|
18.6
|
|
|
(51.0
|
)
|
|||
Income (loss) before income taxes
|
$
|
129.4
|
|
|
$
|
(59.8
|
)
|
|
$
|
9.7
|
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
Federal:
|
|
|
|
|
|
||||||
Current
|
$
|
1.2
|
|
|
$
|
13.7
|
|
|
$
|
1.6
|
|
Deferred
|
(120.4
|
)
|
|
—
|
|
|
—
|
|
|||
|
(119.2
|
)
|
|
13.7
|
|
|
1.6
|
|
|||
State:
|
|
|
|
|
|
||||||
Current
|
1.0
|
|
|
0.1
|
|
|
0.2
|
|
|||
Deferred
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|||
|
(0.3
|
)
|
|
0.1
|
|
|
0.2
|
|
|||
Foreign:
|
|
|
|
|
|
||||||
Current
|
1.2
|
|
|
2.1
|
|
|
1.2
|
|
|||
Deferred
|
(0.4
|
)
|
|
26.8
|
|
|
(2.6
|
)
|
|||
|
0.8
|
|
|
28.9
|
|
|
(1.4
|
)
|
|||
Total income tax (benefit) expense
|
$
|
(118.7
|
)
|
|
$
|
42.7
|
|
|
$
|
0.4
|
|
•
|
The Tax Act reduces the corporate tax rate to
21 percent
, effective January 1, 2018. For certain of our deferred tax assets and deferred tax liabilities, we have recorded a provisional net decrease of deferred tax assets by
$80.5 million
(which we refined by
$2.5 million
decrease as of June 30, 2018 from our initial estimate in our second quarter of fiscal 2018 in accordance with SAB 118), with a corresponding net adjustment to deferred income tax expense of
$80.5 million
. While we are able to make a reasonable estimate of the impact of the reduction in corporate rate, it may be affected by other analyses related to the Tax Act, including, but not limited to, our calculation of deemed repatriation of deferred foreign income and the state tax effect of adjustments made to federal temporary differences.
|
•
|
The Deemed Repatriation Transition Tax (“Transition Tax”) is a tax on previously untaxed accumulated and current earnings and profits (“E&P”) of certain of our foreign subsidiaries. To determine the amount of the Transition Tax, we must determine, in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. Our initial estimate of the Transition Tax is
zero
. We are continuing to gather additional information to more precisely compute the amount of the Transition Tax.
|
•
|
Due to complexity of the new GILTI tax rules, we are continuing to evaluate this provision of the Tax Act and the application of ASC 740. We are allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). Our selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing our global income to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Whether we expect to have future U.S. inclusions in taxable income related to GILTI depends not only on our current structure and estimated future results of global operations but also on our intent and ability to modify our structure and/or our business; as such, we are not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, we have not made any adjustments related to potential GILTI tax in our financial statements and have not made a policy decision regarding whether to record deferred taxes on GILTI.
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
Income tax (benefit) expense computed at federal statutory rate
|
$
|
36.3
|
|
|
$
|
(20.9
|
)
|
|
$
|
3.4
|
|
State taxes, net of federal benefit
|
(0.5
|
)
|
|
0.1
|
|
|
0.1
|
|
|||
Foreign rate differential
|
(26.4
|
)
|
|
(4.8
|
)
|
|
21.3
|
|
|||
Change in valuation allowance
|
(206.0
|
)
|
|
21.5
|
|
|
(29.4
|
)
|
|||
U.S. Tax reform
|
80.5
|
|
|
—
|
|
|
—
|
|
|||
Research and experimentation benefits and other tax credits
|
(11.0
|
)
|
|
(2.9
|
)
|
|
(4.4
|
)
|
|||
Permanent items
|
(0.8
|
)
|
|
0.3
|
|
|
0.7
|
|
|||
Stock-based compensation
|
(1.0
|
)
|
|
4.9
|
|
|
4.3
|
|
|||
Fair value adjustment
|
0.2
|
|
|
36.5
|
|
|
—
|
|
|||
Subpart F
|
2.0
|
|
|
—
|
|
|
4.0
|
|
|||
Unrecognized tax benefits
|
7.9
|
|
|
8.4
|
|
|
—
|
|
|||
Tax holiday
|
2.1
|
|
|
0.1
|
|
|
—
|
|
|||
Return to provision
|
(1.8
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Other
|
(0.2
|
)
|
|
(0.4
|
)
|
|
0.5
|
|
|||
Total income tax (benefit) expense
|
$
|
(118.7
|
)
|
|
$
|
42.7
|
|
|
$
|
0.4
|
|
|
Years Ended
|
||||||
|
June 30, 2018
|
|
July 1, 2017
|
||||
Gross deferred tax assets:
|
|
|
|
||||
Intangibles
|
$
|
123.3
|
|
|
$
|
217.4
|
|
Tax credit carryforwards
|
47.1
|
|
|
34.9
|
|
||
Net operating loss carryforwards
|
7.1
|
|
|
11.5
|
|
||
Inventories
|
12.4
|
|
|
11.7
|
|
||
Accruals and reserves
|
7.2
|
|
|
19.7
|
|
||
Fixed assets
|
10.1
|
|
|
11.4
|
|
||
Capital loss carryforwards
|
12.3
|
|
|
12.4
|
|
||
Unclaimed research and experimental development expenditure
|
25.6
|
|
|
23.0
|
|
||
Other
|
0.5
|
|
|
0.4
|
|
||
Stock-based compensation
|
3.5
|
|
|
3.1
|
|
||
Gross deferred tax assets
|
249.1
|
|
|
345.5
|
|
||
Valuation allowance
|
(99.4
|
)
|
|
(296.4
|
)
|
||
Deferred tax assets
|
149.7
|
|
|
49.1
|
|
||
Gross deferred tax liabilities:
|
|
|
|
||||
Intangible amortization
|
(0.8
|
)
|
|
(1.1
|
)
|
||
Convertible notes
|
(23.6
|
)
|
|
(44.4
|
)
|
||
Deferred tax liabilities
|
(24.4
|
)
|
|
(45.5
|
)
|
||
Total net deferred tax assets
|
$
|
125.3
|
|
|
$
|
3.6
|
|
Balance at July 2, 2016
|
$
|
2.2
|
|
Additions based on the tax positions related to the prior year
|
1.6
|
|
|
Additions based on tax positions related to current year
|
9.5
|
|
|
Balance at July 1, 2017
|
$
|
13.3
|
|
Additions based on the tax positions related to the prior year
|
1.2
|
|
|
Additions based on tax positions related to current year
|
11.3
|
|
|
Balance at June 30, 2018
|
$
|
25.8
|
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
Cost of sales
|
$
|
12.6
|
|
|
$
|
7.5
|
|
|
$
|
6.1
|
|
Research and development
|
14.2
|
|
|
11.6
|
|
|
9.0
|
|
|||
Selling, general and administrative
|
20.0
|
|
|
13.6
|
|
|
11.8
|
|
|||
|
$
|
46.8
|
|
|
$
|
32.7
|
|
|
$
|
26.9
|
|
|
Options
|
|
Restricted Stock Units
|
|
Restricted Stock Awards
|
|
Performance Stock Units
|
||||||||||||||||||||
|
Number of Shares
|
|
Weighted-Average Grant Date Fair Value per Share
|
|
Number of Shares
|
|
Weighted-Average Grant Date Fair Value per Share
|
|
Number of Shares
|
|
Weighted-Average Grant Date Fair Value per Share
|
|
Number of Shares
|
|
Weighted-Average Grant Date Fair Value per Share
|
||||||||||||
Unvested balance as of June 27, 2015
|
0.5
|
|
|
$
|
19.01
|
|
|
1.5
|
|
|
$
|
23.81
|
|
|
—
|
|
|
$
|
—
|
|
|
0.2
|
|
|
$
|
14.40
|
|
Granted
|
—
|
|
|
—
|
|
|
1.9
|
|
|
20.39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Exercised / Vested
|
(0.2
|
)
|
|
15.21
|
|
|
(0.7
|
)
|
|
23.77
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
14.40
|
|
||||
Canceled
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
21.85
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Unvested balance as of July 2, 2016
|
0.3
|
|
|
$
|
17.83
|
|
|
2.5
|
|
|
$
|
21.31
|
|
|
—
|
|
|
$
|
—
|
|
|
0.1
|
|
|
$
|
14.40
|
|
Granted
|
—
|
|
|
—
|
|
|
1.0
|
|
|
35.57
|
|
|
0.3
|
|
|
32.51
|
|
|
—
|
|
|
—
|
|
||||
Exercised / Vested
|
(0.3
|
)
|
|
14.29
|
|
|
(1.4
|
)
|
|
22.26
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
14.40
|
|
||||
Canceled
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
23.78
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Unvested balance as of July 1, 2017
|
—
|
|
|
$
|
—
|
|
|
1.9
|
|
|
$
|
27.88
|
|
|
0.3
|
|
|
$
|
32.51
|
|
|
—
|
|
|
$
|
—
|
|
Granted
(1)
|
—
|
|
|
—
|
|
|
1.1
|
|
|
54.52
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
52.00
|
|
||||
Vested
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
26.62
|
|
|
(0.2
|
)
|
|
32.51
|
|
|
—
|
|
|
—
|
|
||||
Canceled
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
38.82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Unvested balance as of June 30, 2018
|
—
|
|
|
$
|
—
|
|
|
1.7
|
|
|
$
|
43.08
|
|
|
0.1
|
|
|
$
|
32.51
|
|
|
0.1
|
|
|
$
|
52.00
|
|
|
Awards Available for Grant
|
|
Balance as of June 27, 2015
|
—
|
|
Authorized
|
8.5
|
|
Granted
|
(4.0
|
)
|
Canceled
|
0.2
|
|
Balance as of July 2, 2016
|
4.7
|
|
Authorized
|
3.0
|
|
Granted
|
(1.3
|
)
|
Canceled
|
0.2
|
|
Balance as of July 1, 2017
|
6.6
|
|
Granted
|
(1.2
|
)
|
Canceled
|
0.2
|
|
Balance as of June 30, 2018
|
5.6
|
|
|
June 30, 2018
|
|
July 1, 2017
|
||
Expected term (years)
|
0.5
|
|
|
0.5
|
|
Expected volatility
|
58.8
|
%
|
|
46.0
|
%
|
Risk-free interest rate
|
2.02
|
%
|
|
0.62
|
%
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
|
|
Pension Benefit Plan
|
||||||
|
2018
|
|
2017
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
11.0
|
|
|
$
|
8.2
|
|
Service cost
|
0.9
|
|
|
0.6
|
|
||
Interest cost
|
0.1
|
|
|
—
|
|
||
Plan participants’ contribution
|
0.5
|
|
|
0.5
|
|
||
Actuarial (gains)/losses
|
(0.3
|
)
|
|
0.5
|
|
||
Benefits paid
|
0.4
|
|
|
0.9
|
|
||
Foreign exchange impact
|
(0.5
|
)
|
|
0.3
|
|
||
Benefit obligation at end of year
|
$
|
12.1
|
|
|
$
|
11.0
|
|
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
7.1
|
|
|
$
|
4.7
|
|
Actual return on plan assets
|
0.3
|
|
|
0.1
|
|
||
Employer contribution
|
0.5
|
|
|
0.8
|
|
||
Plan participants’ contribution
|
0.5
|
|
|
0.5
|
|
||
Benefits paid
|
0.4
|
|
|
0.9
|
|
||
Foreign exchange impact
|
(0.2
|
)
|
|
0.1
|
|
||
Fair value of plan assets at end of year
|
$
|
8.6
|
|
|
$
|
7.1
|
|
Funded status
(1)
|
$
|
(3.5
|
)
|
|
$
|
(3.9
|
)
|
Accumulated benefit obligation
|
$
|
11.0
|
|
|
$
|
8.2
|
|
|
Pension Benefit Plans
|
||||
|
2018
|
|
2017
|
||
Assumptions used to determine net periodic cost:
|
|
|
|
||
Discount rate
|
0.7
|
%
|
|
0.2
|
%
|
Expected long-term return on plan assets
|
2.8
|
%
|
|
3.2
|
%
|
Rate of pension increase
|
2.3
|
%
|
|
2.3
|
%
|
Assumptions used to determine benefit obligation at end of year:
|
|
|
|
||
Discount rate
|
1.0
|
%
|
|
0.7
|
%
|
Rate of pension increase
|
2.3
|
%
|
|
2.3
|
%
|
|
|
|
|
|
|
Fair value measurement as of
June 30, 2018
|
|||||||||||
|
Target Allocation
|
Total
|
|
Percentage of Plan Asset
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
Significant Other Observable Inputs (Level 2)
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Global equity
|
28
|
%
|
|
$
|
2.4
|
|
|
28
|
%
|
|
$
|
—
|
|
|
$
|
2.4
|
|
Fixed income
|
30
|
%
|
|
2.8
|
|
|
33
|
%
|
|
—
|
|
|
2.8
|
|
|||
Alternative investment
|
18
|
%
|
|
1.5
|
|
|
17
|
%
|
|
—
|
|
|
1.5
|
|
|||
Cash
|
1
|
%
|
|
0.2
|
|
|
1
|
%
|
|
0.2
|
|
|
—
|
|
|||
Other
|
23
|
%
|
|
1.7
|
|
|
21
|
%
|
|
—
|
|
|
1.7
|
|
|||
Total Assets
|
|
|
$
|
8.6
|
|
|
100
|
%
|
|
$
|
0.2
|
|
|
$
|
8.4
|
|
|
|
|
|
|
|
Fair value measurement as of
July 1, 2017
|
|||||||||||
|
Target Allocation
|
Total
|
|
Percentage of Plan Asset
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
Significant Other Observable Inputs (Level 2)
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Global equity
|
24
|
%
|
|
$
|
1.7
|
|
|
24
|
%
|
|
$
|
—
|
|
|
$
|
1.7
|
|
Fixed income
|
35
|
%
|
|
2.5
|
|
|
35
|
%
|
|
—
|
|
|
2.5
|
|
|||
Alternative investment
|
15
|
%
|
|
1.6
|
|
|
23
|
%
|
|
—
|
|
|
1.6
|
|
|||
Cash
|
1
|
%
|
|
0.1
|
|
|
1
|
%
|
|
0.1
|
|
|
—
|
|
|||
Other
|
25
|
%
|
|
1.2
|
|
|
17
|
%
|
|
—
|
|
|
1.2
|
|
|||
Total Assets
|
|
|
$
|
7.1
|
|
|
100
|
%
|
|
$
|
0.1
|
|
|
$
|
7.0
|
|
Fiscal Years
|
|
||
2019
|
$
|
11.6
|
|
2020
|
6.5
|
|
|
2021
|
5.1
|
|
|
2022
|
3.4
|
|
|
2023
|
2.4
|
|
|
Thereafter
|
1.8
|
|
|
Total minimum operating lease payments
|
$
|
30.8
|
|
Fiscal Years
|
|
||
2019
|
$
|
9.0
|
|
2020
|
0.4
|
|
|
Total minimum capital lease payments
|
$
|
9.4
|
|
Less: amount representing interest
|
$
|
(0.1
|
)
|
Present value of capital lease obligation
|
$
|
9.3
|
|
Fiscal Years
|
|
||
2019
|
$
|
1.1
|
|
2020
|
1.1
|
|
|
2021
|
1.1
|
|
|
2022
|
1.1
|
|
|
2023
|
1.1
|
|
|
Thereafter
|
451.2
|
|
|
Total 2024 Notes payments
|
$
|
456.7
|
|
|
Years Ended
|
||||||
|
June 30, 2018
|
|
July 1, 2017
|
||||
Balance as of beginning of year
|
$
|
9.7
|
|
|
$
|
2.8
|
|
Provision for warranty
(1)
|
5.0
|
|
|
14.9
|
|
||
Utilization of reserve
|
(8.1
|
)
|
|
(8.0
|
)
|
||
Balance as of year end
|
$
|
6.6
|
|
|
$
|
9.7
|
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
Net revenue:
|
|
|
|
|
|
||||||
OpComms
|
$
|
1,059.2
|
|
|
$
|
857.8
|
|
|
$
|
761.3
|
|
Lasers
|
188.5
|
|
|
143.8
|
|
|
141.7
|
|
|||
Net revenue
|
$
|
1,247.7
|
|
|
$
|
1,001.6
|
|
|
$
|
903.0
|
|
Gross profit:
|
|
|
|
|
|
||||||
OpComms
|
402.3
|
|
|
287.3
|
|
|
236.3
|
|
|||
Lasers
|
82.8
|
|
|
59.9
|
|
|
61.4
|
|
|||
Total segment gross profit
|
485.1
|
|
|
347.2
|
|
|
297.7
|
|
|||
Unallocated corporate items:
|
|
|
|
|
|
||||||
Stock-based compensation
|
(12.6
|
)
|
|
(7.5
|
)
|
|
(6.1
|
)
|
|||
Amortization of intangibles
|
(3.2
|
)
|
|
(6.5
|
)
|
|
(6.8
|
)
|
|||
Other charges
(1)
|
(37.2
|
)
|
|
(15.1
|
)
|
|
(7.5
|
)
|
|||
Gross profit
|
$
|
432.1
|
|
|
$
|
318.1
|
|
|
$
|
277.3
|
|
|
Years Ended
|
||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
||||||
OpComms:
|
|
84.9
|
%
|
|
|
85.6
|
%
|
|
|
84.3
|
%
|
Telecom
|
|
38.1
|
%
|
|
|
61.0
|
%
|
|
|
61.5
|
%
|
Datacom
|
|
12.1
|
%
|
|
|
20.1
|
%
|
|
|
18.1
|
%
|
Consumer and Industrial
|
|
34.7
|
%
|
|
|
4.5
|
%
|
|
|
4.7
|
%
|
Lasers
|
|
15.1
|
%
|
|
|
14.4
|
%
|
|
|
15.7
|
%
|
|
Years Ended
|
|||||||||||||||||||
|
June 30, 2018
|
|
July 1, 2017
|
|
July 2, 2016
|
|||||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Americas:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
United States
|
$
|
115.1
|
|
|
9.2
|
%
|
|
$
|
147.9
|
|
|
14.8
|
%
|
|
$
|
162.3
|
|
|
18.0
|
%
|
Mexico
|
145.8
|
|
|
11.7
|
|
|
185.1
|
|
|
18.5
|
|
|
112.9
|
|
|
12.5
|
|
|||
Other Americas
|
7.0
|
|
|
0.6
|
|
|
9.2
|
|
|
0.9
|
|
|
19.6
|
|
|
2.2
|
|
|||
Total Americas
|
$
|
267.9
|
|
|
21.5
|
%
|
|
$
|
342.2
|
|
|
34.2
|
%
|
|
$
|
294.8
|
|
|
32.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Asia-Pacific:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Hong Kong
|
$
|
183.0
|
|
|
14.7
|
%
|
|
$
|
226.7
|
|
|
22.6
|
%
|
|
$
|
214.0
|
|
|
23.7
|
%
|
Japan
|
194.7
|
|
|
15.6
|
|
|
99.2
|
|
|
9.9
|
|
|
92.9
|
|
|
10.3
|
|
|||
South Korea
|
146.1
|
|
|
11.7
|
|
|
4.9
|
|
|
0.5
|
|
|
3.8
|
|
|
0.4
|
|
|||
Other Asia-Pacific
|
354.2
|
|
|
28.3
|
|
|
220.5
|
|
|
22.0
|
|
|
174.0
|
|
|
19.2
|
|
|||
Total Asia-Pacific
|
$
|
878.0
|
|
|
70.3
|
%
|
|
$
|
551.3
|
|
|
55.0
|
%
|
|
$
|
484.7
|
|
|
53.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EMEA
|
$
|
101.8
|
|
|
8.2
|
%
|
|
$
|
108.1
|
|
|
10.8
|
%
|
|
$
|
123.5
|
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total net revenue
|
$
|
1,247.7
|
|
|
|
|
$
|
1,001.6
|
|
|
|
|
$
|
903.0
|
|
|
|
|
As of
|
||||||
|
June 30, 2018
|
|
July 1, 2017
|
||||
Property, Plant and Equipment, net
|
|
|
|
||||
United States
|
$
|
97.6
|
|
|
$
|
88.2
|
|
China
|
70.0
|
|
|
82.5
|
|
||
Thailand
|
107.4
|
|
|
85.3
|
|
||
Other countries
|
31.9
|
|
|
17.5
|
|
||
Total long-lived assets
|
$
|
306.9
|
|
|
$
|
273.5
|
|
|
June 30, 2018
|
|
March 31, 2018
|
|
December 30, 2017
|
|
September 30, 2017
|
|
July 1, 2017
|
|
April 1, 2017
|
|
December 31, 2016
|
|
October 1, 2016
|
||||||||||||||||
Net revenue
|
$
|
301.1
|
|
|
$
|
298.8
|
|
|
$
|
404.6
|
|
|
$
|
243.2
|
|
|
$
|
222.7
|
|
|
$
|
255.8
|
|
|
$
|
265.0
|
|
|
$
|
258.1
|
|
Cost of sales
|
204.8
|
|
|
201.0
|
|
|
232.7
|
|
|
173.9
|
|
|
154.0
|
|
|
172.0
|
|
|
176.3
|
|
|
174.7
|
|
||||||||
Amortization of acquired developed technologies
|
0.8
|
|
|
0.8
|
|
|
0.8
|
|
|
0.8
|
|
|
1.4
|
|
|
1.7
|
|
|
1.7
|
|
|
1.7
|
|
||||||||
Gross profit
|
95.5
|
|
|
97.0
|
|
|
171.1
|
|
|
68.5
|
|
|
67.3
|
|
|
82.1
|
|
|
87.0
|
|
|
81.7
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Research and development
|
38.5
|
|
|
38.2
|
|
|
43.8
|
|
|
36.3
|
|
|
35.4
|
|
|
37.3
|
|
|
38.7
|
|
|
36.9
|
|
||||||||
Selling, general and administrative
|
32.7
|
|
|
33.2
|
|
|
35.7
|
|
|
26.6
|
|
|
26.0
|
|
|
28.1
|
|
|
31.0
|
|
|
25.1
|
|
||||||||
Restructuring and related charges
|
3.4
|
|
|
0.1
|
|
|
0.8
|
|
|
2.9
|
|
|
2.0
|
|
|
3.1
|
|
|
4.0
|
|
|
2.9
|
|
||||||||
Total operating expenses
|
74.6
|
|
|
71.5
|
|
|
80.3
|
|
|
65.8
|
|
|
63.4
|
|
|
68.5
|
|
|
73.7
|
|
|
64.9
|
|
||||||||
Income from operations
|
20.9
|
|
|
25.5
|
|
|
90.8
|
|
|
2.7
|
|
|
3.9
|
|
|
13.6
|
|
|
13.3
|
|
|
16.8
|
|
||||||||
Unrealized gain (loss) on derivative liabilities
|
7.8
|
|
|
(20.7
|
)
|
|
7.9
|
|
|
4.2
|
|
|
(29.7
|
)
|
|
(56.6
|
)
|
|
4.8
|
|
|
(22.7
|
)
|
||||||||
Interest and other income (expense), net
|
(1.0
|
)
|
|
(2.1
|
)
|
|
(3.2
|
)
|
|
(3.4
|
)
|
|
(1.8
|
)
|
|
(1.4
|
)
|
|
(0.2
|
)
|
|
0.2
|
|
||||||||
Income (loss) before income taxes
|
27.7
|
|
|
2.7
|
|
|
95.5
|
|
|
3.5
|
|
|
(27.6
|
)
|
|
(44.4
|
)
|
|
17.9
|
|
|
(5.7
|
)
|
||||||||
Provision for (benefit from) income taxes
|
(5.8
|
)
|
|
—
|
|
|
(109.3
|
)
|
|
(3.6
|
)
|
|
27.3
|
|
|
11.6
|
|
|
6.1
|
|
|
(2.3
|
)
|
||||||||
Net income (loss)
|
$
|
33.5
|
|
|
$
|
2.7
|
|
|
$
|
204.8
|
|
|
$
|
7.1
|
|
|
$
|
(54.9
|
)
|
|
$
|
(56.0
|
)
|
|
$
|
11.8
|
|
|
$
|
(3.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss) attributable to common stockholders - Basic
|
32.5
|
|
|
2.4
|
|
|
199.8
|
|
|
6.7
|
|
|
(55.2
|
)
|
|
(56.2
|
)
|
|
11.3
|
|
|
(3.6
|
)
|
||||||||
Net income (loss) attributable to common stockholders - Diluted
|
25.7
|
|
|
2.4
|
|
|
196.9
|
|
|
2.9
|
|
|
(55.2
|
)
|
|
(56.2
|
)
|
|
7.0
|
|
|
(3.6
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss) per share attributable to common stockholders
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
0.52
|
|
|
$
|
0.04
|
|
|
$
|
3.21
|
|
|
$
|
0.11
|
|
|
$
|
(0.90
|
)
|
|
$
|
(0.92
|
)
|
|
$
|
0.19
|
|
|
$
|
(0.06
|
)
|
Diluted
|
$
|
0.40
|
|
|
$
|
0.04
|
|
|
$
|
3.05
|
|
|
$
|
0.04
|
|
|
$
|
(0.90
|
)
|
|
$
|
(0.92
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.06
|
)
|
Shares used to compute net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
62.7
|
|
|
62.4
|
|
|
62.2
|
|
|
61.7
|
|
|
61.3
|
|
|
61.0
|
|
|
60.3
|
|
|
59.9
|
|
||||||||
Diluted
|
65.0
|
|
|
63.3
|
|
|
64.6
|
|
|
64.5
|
|
|
61.3
|
|
|
61.0
|
|
|
62.7
|
|
|
59.9
|
|
|
Page
|
|
(in millions)
|
||||||||||||||
|
Balance at
Beginning of Period |
|
Increase (decrease) to
Income Statement |
|
Write
Offs |
|
Balance
at End of Period |
||||||||
Accounts receivable allowance:
|
|
|
|
|
|
|
|
||||||||
Fiscal year ended June 30, 2018
|
$
|
1.8
|
|
|
$
|
0.9
|
|
|
$
|
(0.1
|
)
|
|
$
|
2.6
|
|
Fiscal year ended July 1, 2017
|
$
|
0.9
|
|
|
$
|
1.0
|
|
|
$
|
(0.1
|
)
|
|
$
|
1.8
|
|
Fiscal year ended July 2, 2016
|
$
|
1.2
|
|
|
$
|
0.6
|
|
|
$
|
(0.9
|
)
|
|
$
|
0.9
|
|
|
|
(in millions)
|
||||||||||||||
Description
|
|
Balance at Beginning of Period
|
|
Additions Charged to Expenses or Other Accounts*
|
|
Deductions Credited to Expenses or Other Accounts**
|
|
Balance at End of Period
|
||||||||
Deferred tax valuation allowance:
|
|
|
|
|
|
|
|
|
||||||||
Fiscal year ended June 30, 2018
|
|
$
|
296.4
|
|
|
$
|
234.1
|
|
|
$
|
(431.1
|
)
|
|
$
|
99.4
|
|
Fiscal year ended July 1, 2017
|
|
$
|
321.4
|
|
|
$
|
16.7
|
|
|
$
|
(41.7
|
)
|
|
$
|
296.4
|
|
Fiscal year ended July 2, 2016
|
|
$
|
160.0
|
|
|
$
|
214.3
|
|
|
$
|
(52.9
|
)
|
|
$
|
321.4
|
|
|
|
|
|
Incorporated by Reference
|
|
|
|
|
|
Filed
|
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
Herewith
|
2.1
|
|
|
8-K
|
|
2.1
|
|
8/6/2015
|
|
|
|
2.1
|
|
|
8-K
|
|
2.1
|
|
3/12/2018
|
|
|
|
2.2
|
|
|
8-K
|
|
2.2
|
|
8/6/2015
|
|
|
|
3.1
|
|
|
8-K
|
|
3.1
|
|
8/6/2015
|
|
|
|
3.2
|
|
|
8-K
|
|
3.2
|
|
8/6/2015
|
|
|
|
4.1
|
|
|
8-K
|
|
4.1
|
|
8/6/2015
|
|
|
|
4.2
|
|
|
8-K
|
|
4.1
|
|
3/9/2017
|
|
|
|
4.3
|
|
|
8-K
|
|
4.2
|
|
3/9/2017
|
|
|
|
10.1
|
|
|
8-K
|
|
10.1
|
|
8/6/2015
|
|
|
10.2*
|
|
|
8-K
|
|
10.2
|
|
8/6/2015
|
|
|
|
10.3
|
|
|
8-K
|
|
10.3
|
|
8/6/2015
|
|
|
|
10.4
|
|
|
8-K
|
|
10.2
|
|
11/9/2016
|
|
|
|
10.5
|
|
|
S-8
|
|
99.2
|
|
7/29/2015
|
|
|
|
10.6*
|
|
|
8-K
|
|
10.3
|
|
11/9/2016
|
|
|
|
10.6
|
|
|
|
|
|
|
|
|
X
|
|
10.7*
|
|
|
8-K
|
|
10.4
|
|
8/6/2015
|
|
|
|
10.8*
|
|
|
10-K
|
|
10.8
|
|
9/25/2015
|
|
|
|
10.9
|
|
|
8-K
|
|
10.1
|
|
3/9/2017
|
|
|
|
10.10
|
|
|
8-K
|
|
10.1
|
|
3/12/2018
|
|
|
|
10.11*
|
|
|
|
|
|
|
|
|
X
|
|
21.1
|
|
|
|
|
|
|
|
|
X
|
|
23.1
|
|
|
|
|
|
|
|
|
X
|
|
23.2
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
X
|
|
32.1†
|
|
|
|
|
|
|
|
|
X
|
|
32.2†
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
XBRL Instance
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation
|
|
|
|
|
|
|
|
X
|
Date:
|
August 28, 2018
|
LUMENTUM HOLDINGS INC.
|
|
|
|
|
|
|
/s/ Christopher W. Coldren
|
|
|
By:
|
Christopher W. Coldren
|
|
|
|
Senior Vice President, Interim Chief Financial Officer
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ ALAN LOWE
|
|
President, Chief Executive Officer and Director (principal executive officer)
|
|
August 28, 2018
|
Alan Lowe
|
|
|
|
|
|
|
|
|
|
/s/ CHRISTOPHER W. COLDREN
|
|
Senior Vice President, Interim Chief Financial Officer (principal financial officer)
|
|
August 28, 2018
|
Christopher W. Coldren
|
|
|
|
|
|
|
|
|
|
/s/ MATTHEW SEPE
|
|
Chief Accounting Officer (principal accounting officer)
|
|
August 28, 2018
|
Matthew Sepe
|
|
|
|
|
|
|
|
|
|
/s/ HAROLD COVERT
|
|
Director
|
|
August 28, 2018
|
Harold Covert
|
|
|
|
|
|
|
|
|
|
/s/ JULIE JOHNSON
|
|
Director
|
|
August 28, 2018
|
Julie Johnson
|
|
|
|
|
|
|
|
|
|
/s/ PENELOPE HERSCHER
|
|
Director
|
|
August 28, 2018
|
Penelope Herscher
|
|
|
|
|
|
|
|
|
|
/s/ MARTIN KAPLAN
|
|
Chairman
|
|
August 28, 2018
|
Martin Kaplan
|
|
|
|
|
|
|
|
|
|
/s/ BRIAN LILLIE
|
|
Director
|
|
August 28, 2018
|
Brian Lillie
|
|
|
|
|
|
|
|
|
|
/s/ SAMUEL THOMAS
|
|
Director
|
|
August 28, 2018
|
Samuel Thomas
|
|
|
|
|
Re:
|
Separation from Lumentum on September 30, 2018
|
•
|
Time-Based Equity Awards
: Any and all unvested Parent equity-based awards that are subject to time-based vesting conditions granted to you prior to the date hereof (the “Time-Based Equity Awards”) will automatically be accelerated so that the number of shares subject to the Time-Based Equity Awards that would have vested over the nine-month period following the Actual Termination Date will vest on the thirtieth (30th) day following the Actual Termination Date (or if such thirtieth (30th) day following the Actual Termination Date falls on a weekend or holiday, then the first business day after such thirtieth (30th) day) (the “Trigger Date”). Except as described herein, each Time-Based Equity Award will remain subject to the terms and conditions of the award agreement and plan under which the Time-Based Equity Award was granted.
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Cash Severance
: Within ten days following the Trigger Date, you will receive a lump sum cash payment in the amount of $322,500, less applicable withholdings, which is equal to nine (9) months of your base salary rate as of the Actual Termination Date.
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COBRA Continuation
. Upon the termination of your employment for any reason you will be eligible for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”). A package containing appropriate COBRA information will be mailed to you shortly after your Actual Termination Date by the third-party administrator that manages this program for the Company. If you elect continuation coverage under COBRA following the Actual Termination Date, the Company will pay for the full monthly premium costs of such benefits for a period of nine (9) months or until you are no longer eligible for COBRA benefits, whichever is sooner.
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PSU Awards
: Any and all Parent equity awards that are subject to performance-based vesting conditions (the “PSU Awards”) for which the performance-based conditions have not been satisfied as of the Effective Date will be achieved based on actual achievement of the applicable performance metrics as determined by the compensation committee of Parent’s board of directors following the Actual Termination Date (the “Achieved PSU Awards”) and such Achieved PSU Awards will automatically be accelerated so that the number of shares subject to the Achieved PSU Awards that would have vested over the nine-month period following the Actual
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Cash Incentive Plan
: If unpaid as of your Actual Termination Date, you will receive a lump sum cash payment in an amount, less applicable withholdings, which is equal to your target incentive opportunity under the Cash Incentive Plan (“CIP”) for the 2018 fiscal year, calculated at the achievement level based on actual achievement of the applicable performance metrics for the 2018 fiscal year, which will be paid to you at the same time as bonuses under the CIP are paid to the Company’s other senior executive officers participating in the CIP, but in no event later than December 31, 2018.
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Legal Fees: Within sixty (60) days after the Effective Date, the Company will reimburse you for your reasonable legal fees, not to exceed $10,000, for advice in connection with preparing and finalizing this Agreement and related documents.
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Name of Entity
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State or Other
Jurisdiction of Incorporation or Organization |
DOMESTIC
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CCOP International Holdings Inc.
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Delaware
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E20 Communications Inc.
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Delaware
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Lightwave Electronics Corporation
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California
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Lumentum Inc.
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Delaware
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Lumentum Operations LLC
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Delaware
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Lumentum Optical Corporation
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Massachusetts
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Lumentum Research LLC
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Delaware
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Prota Merger Sub, Inc.
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Delaware
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Prota Merger, LLC
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Delaware
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SDL PIRI, Inc.
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Delaware
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INTERNATIONAL
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Lumentum Asia Limited
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Hong Kong
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Lumentum (BVI) Ltd
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British Virgin Islands
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Lumentum Canada Ltd
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Canada
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Lumentum BC Research ULC
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Canada
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Lumentum Communication Technology (Shenzhen) Co., Ltd.
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China
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Lumentum International Tech Co.
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Cayman Islands
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Lumentum HoldCo Limited
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Hong Kong
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Lumentum HoldCo Limited - Taiwan Branch
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Taiwan
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Lumentum International (Thailand) Co., Ltd.
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Thailand
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Lumentum International (Thailand) Co., Ltd. - Branch
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Thailand
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Lumentum Israel Ltd
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Israel
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Lumentum K.K.
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Japan
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Lumentum Netherlands B.V.
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Netherlands
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Lumentum Netherlands B.V. - France Branch
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France
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Lumentum Netherlands B.V. - Germany Branch
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Germany
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Lumentum Netherlands B.V. - Italy Branch
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Italy
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Lumentum Netherlands B.V. - UK Branch
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United Kingdom
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Lumentum Ottawa Inc.
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Canada
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Lumentum SK Limited
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South Korea
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Lumentum Switzerland AG
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Switzerland
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Lumentum Taiwan Co., Ltd.
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Taiwan
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Lumentum Tech LLC
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Cayman Islands
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Lumentum Technologies Limited
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Canada
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Lumentum d.o.o.
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Slovenia
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/s/ ALAN LOWE
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Alan Lowe
President and Chief Executive Officer
(Principal Executive Officer)
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/s/ CHRISTOPHER W. COLDREN
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Christopher W. Coldren
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Senior Vice President, Interim Chief Financial Officer
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(Principal Financial Officer)
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/s/ ALAN LOWE
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Alan Lowe
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President and Chief Executive Officer
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(Principal Executive Officer)
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/s/ CHRISTOPHER W. COLDREN
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Christopher W. Coldren
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Senior Vice President, Interim Chief Financial Officer
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(Principal Financial Officer)
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