What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-09-14 compared with 2021-08-25 · 159 added, 230 removed, 978 unchanged (28% of the section changed)

1 unchanged sentence

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Statements of Operations

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Note 13 Subsequent Event

Quarterly Financial Data (Unaudited)

Report of Independent Registered Public Accounting Firm

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In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at July 1, 2022 and July 2, 2021, and the results of its operations and its cash flows for each of the three fiscal years in the period ended July 1, 2022, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of July 2, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated August 25, 2021 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of July 1, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated September 14, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

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(i) evaluating the reasonableness of project budgets and the nature of costs required to complete open projects, (ii) assessing the status of completion of respective projects through testing of a sample of project costs incurred to date, (iii) evaluating the reasonableness of project status by performing inquiries of project managers and assessing the nature of activities required to complete open projects, and (iv) performing retrospective review on closed projects and investigating budget to actual variances (if any).

Assessing the reasonableness of changes in estimated costs to complete and investigating reasons for changes in expected costs and project margins.

Assessing the reasonableness of project margins and changes in estimated costs to complete and investigating reasons for changes.

/s/ BDO USA, LLP

1 unchanged sentence

San Jose, California

August 25, 2021

September 14, 2022

Report of Independent Registered Public Accounting Firm

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We have audited Aviat Networks, Inc.’s (the “Company’s”) internal control over financial reporting as of July 1, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of August 25, 2021, based on the COSO criteria .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of July 2, 2021 and July 3, 2020, the related consolidated statements of operations, comprehensive (loss) income, equity, and cash flows for each of the three fiscal years in the period ended July 2, 2021, the related notes and the financial statement schedule - Valuation and Qualifying Accounts and our report dated August 25, 2021 expressed an unqualified opinion thereon.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 14, 2022, based on the COSO criteria .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of July 1, 2022 and July 2, 2021, the related consolidated statements of operations, comprehensive (loss) income, equity, and cash flows for each of the three fiscal years in the period ended July 1, 2022, the related notes and the financial statement schedule - Valuation and Qualifying Accounts and our report dated September 14, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

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San Jose, California

August 25, 2021

September 14, 2022

AVIAT NETWORKS, INC.

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(In thousands, except per share amounts) July 1,

2020 June 28,

Revenue from product sales $ 208,100 $ 185,787 $ 153,793

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Operating income 28,745 22,210 3,378

Interest income 230 385 267

Interest expense — ( 54 ) ( 102 )

Other income (expense), net — — 17

Other income, net 1,690 230 331

Income before income taxes 30,435 22,440 3,709

(Benefit from) provision for income taxes ( 87,699 ) 3,452 ( 8,188 )

Provision for (benefit from) income taxes 9,275 ( 87,699 ) 3,452

Net income $ 21,160 $ 110,139 $ 257

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(In thousands) July 1,

2020 June 28,

Net income $ 21,160 $ 110,139 $ 257

Other comprehensive income (loss):

Other comprehensive (loss) income:

Net change in cumulative translation adjustment, net of tax ( 1,702 ) 642 ( 2,233 )

Other comprehensive income (loss) 642 ( 2,233 ) ( 131 )

Other comprehensive (loss) income ( 1,702 ) 642 ( 2,233 )

Comprehensive income (loss) $ 19,458 $ 110,781 $ ( 1,976 )

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Cash and cash equivalents $ 36,877 $ 47,942

Marketable securities 10,893 —

Accounts receivable, net 73,168 48,135

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Current Liabilities:

Short-term debt $ — $ 9,000

Accounts payable $ 42,394 $ 32,405

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Treasury stock 194,943 and 19,587 shares as of July 1, 2022 and July 2, 2021, respectively

( 6,147 ) ( 787 )

Additional paid-in-capital 823,259 818,939

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(In thousands) July 1,

2020 June 28,

Operating Activities

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Noncash lease expense 1,057 ( 342 ) 4,416

Net gain on marketable securities ( 2,614 ) — —

Gains on sale of assets held for sale ( 66 ) — —

Changes in operating assets and liabilities:

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Other assets and liabilities ( 6,832 ) ( 997 ) ( 3,615 )

Change in lease liabilities ( 1,067 ) — —

Net cash provided by operating activities 2,789 17,298 17,493

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Payments for acquisition of property, plant and equipment ( 1,792 ) ( 2,847 ) ( 4,608 )

Purchase of marketable securities ( 8,279 ) — —

Proceeds from sale of asset held for sale 2,284 — —

Net cash used in investing activities ( 7,787 ) ( 2,847 ) ( 4,608 )

8 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 1,222 ) ( 77 ) ( 669 )

Net increase (decrease) in cash, cash equivalents, and restricted cash 6,326 9,671 ( 5,563 )

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 11,094 ) 6,326 9,671

Cash, cash equivalents, and restricted cash, beginning of year 48,198 41,872 32,201

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(In thousands) July 1,

2020 June 28,

Non-cash investing activities:

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Balance as of June 28, 2019 10,719,390 $ 108 — $ — $ 815,142 $ ( 730,998 ) $ ( 12,736 ) $ 71,516

Cumulative-effect adjustment for ASC Topic 606 — — — — — 5,623 — 5,623

Net income — — — — — 257 — 257

Other comprehensive (loss) income, net of tax — — — — — — ( 131 ) ( 131 )

Other comprehensive (loss), net of tax — — — — — — ( 2,233 ) ( 2,233 )

Issuance of common stock under employee stock plans 450,112 4 — — 25 — — 29

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Share-based compensation — — — — 1,686 — — 1,686

Balance as of June 28, 2019 10,719,390 108 — — 815,142 ( 730,998 ) ( 12,736 ) 71,516

Balance as of July 3, 2020 10,800,974 108 — — 814,283 ( 730,741 ) ( 14,969 ) 68,681

Net income — — — — — 110,139 — 110,139

Other comprehensive (loss) income, net of tax — — — — — — ( 2,233 ) ( 2,233 )

Other comprehensive income, net of tax — — — — — — 642 642

Issuance of common stock under employee stock plans 393,724 4 — — 1,902 — — 1,906

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Net income — — — — — 21,160 — 21,160

Other comprehensive income (loss), net of tax — — — — — — 642 642

Other comprehensive (loss), net of tax — — — — — — ( 1,702 ) ( 1,702 )

Issuance of common stock under employee stock plans 198,143 2 — — 1,029 — — 1,031

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Our fiscal year ends on the Friday nearest June 30.

This was July 2, for fiscal 2021, July 3, for fiscal 2020 and June 28, for fiscal 2019.

Fiscal 2021 presented 52 weeks while fiscal 2020 included 53 weeks and fiscal 2019 included 52 weeks.

This was July 1, for fiscal 2022, July 2, for fiscal 2021 and July 3, for fiscal 2020.

Fiscal 2022 and 2021 presented 52 weeks while fiscal 2020 included 53 weeks .

In these notes to consolidated financial statements, we refer to our fiscal years as “fiscal 2022”, “fiscal 2021” and “fiscal 2020.”

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We typically invoice our customers for the sales order (or contract) value of the related products delivered at various milestones, including order receipt, shipment, installation and acceptance and for services when rendered.

Our trade receivables are derived from sales to customers located in North America, Africa, Europe, the Middle East, Russia, Asia-Pacific and Latin America.

Our trade receivables are derived from sales to customers located in North America, Africa, Europe, the Middle East, Asia-Pacific and Latin America.

Accounts receivable is presented net of allowance for estimated uncollectible accounts to reflect any loss anticipated on the collection of accounts receivable balances.

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We record the financing charges on discounting these letters of credit as interest expense.

During fiscal 2022, Motorola accounted for 13 % of our total revenue.

During fiscal 2021 and 2020 there were no customers that accounted for more than 10% of our total revenue.

During fiscal 2019, Mobile Telephone Networks Group (“MTN Group”) in Africa accounted for 11 % of our total revenue.

As of July 1, 2022 and July 2, 2021, MTN Group accounted for approximately 17 % and 14 %, respectively, of our accounts receivable.

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Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.

Cost is determined using standard cost, which approximates actual cost on a weighted-average first-in-first-out basis.

Cost is determined using standard cost, which approximates actual cost on a weighted-average first-in-

first-out basis.

We regularly review inventory quantities on hand and record adjustments to reduce the cost of inventory for excess and obsolete inventory based primarily on our estimated forecast of product demand and production requirements.

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The specific terms and conditions of those warranties vary depending upon the product sold and the country in which we do business.

In the case of products sold by us, our warranties generally start from the delivery date and continue for one to three years , depending on the terms.

In the case of

products sold by us, our warranties generally start from the delivery date and continue for one to three years , depending on the terms.

Many of our products are manufactured to customer specifications and their acceptance is based on meeting those specifications.

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We assess the adequacy of our recorded warranty liabilities every quarter and make adjustments to the liabilities as necessary.

On June 29, 2019, the first day of our fiscal 2020, we adopted ASC 842 using the modified retrospective transition method, which requires a cumulative-effect adjustment, if any, to the opening balance of accumulated deficit to be recognized on the date of adoption with prior periods not restated.

We lease facilities under non-cancelable operating lease agreements.

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The resulting translation adjustments are included in accumulated other comprehensive loss.

Gains and losses resulting from foreign exchange transactions and revaluation of monetary assets and liabilities in non-functional currencies are included in cost of product sales and services in the accompanying consolidated statements

of operations, based on the nature of the transactions.

Net foreign exchange gain (loss) recorded in our consolidated statements of operations during fiscal 2021, 2020 and 2019 was as follows:

(In thousands) 2021 2020 2019

Amount included in costs of revenues $ 1,015 $ 419 $ ( 664 )

Total foreign exchange gain (loss), net $ 1,015 $ 419 $ ( 664 )

Gains and losses resulting from foreign exchange transactions and revaluation of monetary assets and liabilities in non-functional currencies are included in other income, net in the accompanying consolidated statements of operations, based on the nature of the transactions.

Net foreign exchange (loss) gains recorded in our consolidated statements of operations during fiscal 2022, 2021 and 2020 were $( 1.1 ) million, $( 1.0 ) million, and $ 0.4 million, respectively.

Retirement Benefits

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A valuation allowance is established to offset any deferred tax assets if, based upon the available information, it is more likely than not that some or all of the deferred tax assets will not be realized.

We are required to compute our income taxes in each federal, state, and international jurisdiction in which we operate.

We are required to compute our income taxes in each federal, state, and foreign jurisdiction in which we operate.

This process requires that we estimate the current tax exposure as well as assess temporary differences between the accounting and tax treatment of assets and liabilities, including items such as accruals and allowances not currently deductible for tax purposes as well as operating loss and tax credit carry forwards.

The income tax effects of the differences we identify are classified as current or long-term deferred tax assets and liabilities in our consolidated balance sheets.

Our judgments, assumptions, and estimates relative to the current provision for income taxes take into account current tax laws, our interpretation of current tax laws, and possible outcomes of current and future audits

conducted by foreign and domestic tax authorities.

Changes in tax laws or our interpretation of tax laws and the resolution of current and future tax audits could significantly impact the amounts provided for income taxes in our consolidated balance sheets and consolidated statements of operations.

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The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

It is inherently difficult and subjective to estimate such amounts, as this requires us to determine the probability of various possible outcomes.

It is inherently difficult and subjective to estimate such

amounts, as this requires us to determine the probability of various possible outcomes.

We reevaluate these uncertain tax positions on a quarterly basis.

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Accounting Standards Adopted

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.

This guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

ASU 2018-15 will be effective for us in our first quarter of fiscal 2021, with early adoption permitted.

The standard can be adopted either using the prospective or retrospective transition approach.

We adopted this amendment on July 4, 2020.

We have assessed the amendments of ASU 2018-15 and determined the amendments to have an immaterial impact on our consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13).

The update eliminates, adds, and modifies certain disclosure requirements for fair value measurements.

ASU 2018-13 will be effective for us in our first quarter of fiscal 2021 and early adoption is permitted of the entire standard or only the provisions that eliminate or modify disclosure requirements.

We adopted this amendment on July 4, 2020.

We have assessed the amendments of ASU 2018-13 and determined the amendments to have an immaterial impact on our consolidated financial statements and related disclosures.

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740).

This guidance simplifies the accounting for income taxes by removing certain exceptions to the general principles and also simplifies areas such as franchise taxes, step-up in tax basis of goodwill, separate entity financial statements and interim recognition of enactment of tax laws and rate changes.

ASU 2019-12 became effective for us in our first quarter of fiscal 2022.

The adoption had no material impact on our unaudited condensed consolidated financial statements.

Accounting Standards Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740).

This guidance simplifies the accounting for income taxes by removing certain exceptions to the general principles and also simplifies areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws and rate changes.

ASU 2019-12 will be effective for us in our first quarter of fiscal 2022.

We are currently evaluating the potential impact of ASU 2019-12 will have on our consolidated financial statements..

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848).

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Topic 326 requires measurement and recognition of expected credit losses for financial assets held.

Topic 326 will be effective for us in our first quarter of

fiscal 2024, and earlier adoption is permitted.

Topic 326 will be effective for us in our first quarter of fiscal 2023, and earlier adoption is permitted.

We are evaluating the impact adopting Topic 326 will have on our consolidated financial statements.

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Net income per share is computed using the two-class method, by dividing net income attributable to us by the weighted average number of shares of our outstanding common stock and participating securities outstanding.

Our restricted shares contain rights to receive non-forfeitable dividends and therefore are considered to be participating securities and included in the calculations of net income per basic and diluted common share.

Undistributed losses are not allocated to unvested restricted shares because the unvested restricted shares are not contractually obligated to share our losses.

The impact on earnings per share of the participating securities under the two-class method was immaterial.

The following table presents the computation of basic and diluted net income per share attributable to our common stockholders:

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The Company evaluates each promised good and service in a contract to determine whether it represents a distinct performance obligation or should be accounted for as a combined performance obligation.

For goods and services determined to be distinct we have concluded that they provide a benefit

to the customer either on their own or together with other resources that are readily available to the customer, without having the need for significant integration or customization.

For goods and services determined to be distinct we have concluded that they provide a benefit to the customer either on their own or together with other resources that are readily available to the customer, without having the need for significant integration or customization.

Revenue from product sales, recognized at a point-in-time, is generated predominately from the sales of products manufactured by third-party manufacturers to whom we have outsourced our manufacturing processes.

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Certain judgment is required when estimating total contract costs and progress to completion on the over-time arrangements, as well as whether a loss is expected to be incurred on the contract.

The cost estimation process for these contracts is based on the knowledge and experience of the Company’s project managers, engineers, and financial professionals.

The cost estimation process for these

contracts is based on the knowledge and experience of the Company’s project managers, engineers, and financial professionals.

Changes in job performance and job conditions are factors that influence estimates of the total costs to complete those contracts and the Company’s revenue recognition.

1 unchanged sentence

These revisions may result in increases or decreases in estimated revenues or costs, and such revisions are reflected in income in the period in which the circumstances that gave rise to the revision become known to us.

We perform ongoing profitability analysis of our service contracts accounted for under this method in order to determine whether the latest estimates of revenues, costs, and profits require updating.

We perform ongoing profitability analysis of our service contracts accounted for under this method to determine whether the latest estimates of revenues, costs, and profits require updating.

In rare circumstances if these estimates indicate that the contract will be unprofitable, the entire estimated loss for the remainder of the contract is recorded immediately.

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These costs are recorded as sales and marketing expense and included in our consolidated balance sheet as accrued expenses until paid.

Our amortization expense was not material for the fiscal years ended July 2, 2021, July 3, 2020 and June 28, 2019.

Our amortization expense was not material for the fiscal years ended July 1, 2022, July 2, 2021 and July 3, 2020.

Contract Balances, Performance Obligations, and Backlog

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Significant changes in contract balances may arise as a result of recognition over time for services, transfer of control for equipment, and periodic payments (both in arrears and in advance).

The Contract Asset balance has continued to grow as we continue to execute on large North American over time projects and International projects that carry notably longer payment terms.

From time to time, we may experience unforeseen events that could result in a change to the scope or price associated with an arrangement.

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We lease facilities under non-cancelable operating lease agreements.

These leases have varying terms that range from one to 20 years and contain leasehold improvement incentives, rent holidays and escalation clauses.

These leases have original terms that range from one to 20 years and may contain leasehold improvement incentives, rent holidays and escalation clauses.

In addition, some of these leases have renewal options for up to 3 years.

We lease approximately 18,000 square feet of office space in Austin, Texas as our corporate headquarters with an original term of 36 months.

We lease office space in Austin, Texas as our corporate headquarters with an original term of 36 months.

We determine if an arrangement contains a lease at inception.

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The operating lease ROU assets also include any lease payments made and exclude lease incentives and initial direct costs incurred.

Variable lease payments are expensed as incurred and are not included within

the ROU asset and lease liability calculation.

Variable lease payments are expensed as incurred and are not included within the ROU asset and lease liability calculation.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

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The following table provides a summary of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that reconciles to the corresponding amount in the Consolidated Statements of Cash Flows:

(In thousands) July 2,

(In thousands) July 1, 2022 July 2, 2021

Cash and cash equivalents $ 36,877 $ 47,942

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Our net accounts receivable are summarized below:

(In thousands) July 2,

(In thousands) July 1, 2022 July 2, 2021

Accounts receivable $ 74,102 $ 50,276

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Our inventories are summarized below:

(In thousands) July 2,

(In thousands) July 1, 2022 July 2, 2021

Finished products $ 14,916 $ 15,409

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We consider properties to be Assets held for sale when management approves and commits to a plan to dispose of a property or group of properties.

The property held for sale prior to the sale date is separately presented on the consolidated balance sheets as Assets held for sale.

During the second quarter of fiscal 2021 management initiated the sale of our facility located in Lanarkshire, Scotland.

We expect to complete the sale within twelve months .

The carrying value of this asset held for sale as of April 2, 2021 of $ 2.2 million which represents the lower of 1) the carrying value or 2) fair value of the assets, less estimated

costs to sell the assets.

We performed an analysis and determined the estimated fair value of the assets, less estimated selling costs, is higher than the carrying value of the assets.

As a result, no impairment charge was recorded in our consolidated statements of operations.

The property held for sale prior to the sale date is separately presented on the balance sheet as Assets held for sale.

During the second quarter of fiscal 2021 management initiated the sale of our facility located in the United Kingdom.

We completed the sale during the third quarter of fiscal 2022 with proceeds of $ 2.3 million, reflecting a gain of $ 0.1 million.

We have no additional assets held for sale.

Property, Plant and Equipment, net

Our property, plant and equipment, net is summarized below:

(In thousands) July 2,

(In thousands) July 1, 2022 July 2, 2021

Land $ 210 $ 210

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Our accrued expenses are summarized below:

(In thousands) July 2,

(In thousands) July 1, 2022 July 2, 2021

Accrued compensation and benefits $ 11,625 $ 13,455

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Balance as of the end of the period $ 2,913 $ 3,228 $ 3,196

Advance payments and Unearned Income

Our advance payments and unearned income are summarized below:

(In thousands) July 2,

Advance payments and Unearned Revenue

Our advance payments and unearned revenue are summarized below:

(In thousands) July 1, 2022 July 2, 2021

Advance payments $ 1,870 $ 2,445

Unearned income 29,859 19,343

Unearned revenue 31,870 29,859

$ 33,740 $ 32,304

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Bank certificates of deposit $ 3,682 $ 3,682 $ 3,288 $ 3,288 Level 2

Marketable securities $ 10,893 $ 10,893 $ — $ — Level 1

Other accrued expenses:

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We classify items within Level 1 if quoted prices are available in active markets.

Our Level 1 items mainly are money market funds purchased from major financial institutions.

Our Level 1 items mainly are marketable securities and money market funds purchased from major financial institutions.

Our marketable securities are included in current assets on our balance sheet as they are available to be converted into cash to fund current operations.

These marketable securities are publicly traded stock measured at fair value and classified within Level 1.

As of July 1, 2022, these money market funds were valued at $1.00 net asset value per share by these financial institutions.

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As of July 1, 2022, available credit under the SVB Credit Facility was $ 21.7 million reflecting the calculated borrowing base of $ 25.0 million less outstanding letters of credit of $ 3.3 million.

We did not borrow against the SVB Credit Facility during fiscal 2021 and there was no borrowing outstanding as of July 2, 2021.

We did not borrow against the SVB Credit Facility during fiscal 2022 or 2021 and there was no borrowing outstanding as of July 1, 2022.

The SVB Credit Facility carries an interest rate, at our option, computed (i) at the prime rate reported in the Wall Street Journal plus a spread of 0.50 % to 1.50 %, with such spread determined based on our adjusted quick ratio;

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As of July 1, 2022, we were in compliance with the quarterly financial covenants, as amended, contained in the SVB Credit Facility.

Due to the current economic uncertainty stemming from the impact of the COVID-19 pandemic, on April 21, 2020, we entered into a Paycheck Protection Program Note (the “Note”) with Silicon Valley Bank as the lender (“Lender”) in an aggregate principal amount of $ 5.9 million pursuant to the Paycheck Protection Program under the CARES Act (the “PPP Loan”).

On April 22, 2020, we received proceeds of $ 5.9 million from the PPP Loan.

At the time when we applied for the PPP Loan, we had qualified to receive the funds pursuant to the then published qualification requirements.

On April 23, 2020, the SBA, in consultation with the Department of Treasury, issued new guidance regarding qualification requirements for public companies.

Based on our assessment of the new guidance, on May 5, 2020, we repaid the principal and interest on the PPP Loan.

We also obtained an uncommitted short-term line of credit of $ 0.4 million from a bank in New Zealand to support the operations of our subsidiary located there in fiscal 2015.

This line of credit provides for $ 0.3 million in short-term advances at various interest rates, all of which was available as of July 2, 2021.

The line of credit also provides for the issuance of standby letters of credit and company credit cards, of which $ 0.1 million was outstanding as of July 2, 2021.

This facility may be terminated upon notice, is reviewed annually for renewal or modification, and is supported by a corporate guarantee.

During fiscal 2022, we terminated an uncommitted short-term line of credit from a bank in New Zealand to support the operations of our subsidiary located there.

Restructuring Activities

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(In thousands) Severance and Benefits Facilities and Other

Fiscal 2021 Plan Q4 2020 Plan Prior Years' Plan Prior Years' Plans Total

Restructuring liability June 29, 2018 $ — $ — $ 1,646 $ 266 $ 1,912

Q4 2022 Plan Fiscal 2021 Plan Prior Years Plans Prior Years Plans Total

Balance as of June 28, 2019 $ — $ — $ 1,089 $ 238 $ 1,327

Charges, net — — 4,049 — 4,049

1 unchanged sentence

Foreign currency translation (gain) loss — — — ( 2 ) ( 2 )

Balance as of June 28, 2019 — — 1,089 238 1,327

Balance as of July 3, 2020 — — 2,502 236 2,738

Charges, net — 2,414 ( 143 ) — 2,271

7 unchanged sentences

As of July 1, 2022, the sum of the accrual balance of $ 1.4 million was in short-term restructuring liabilities on the consolidated balance sheets.

Included in the above plans for which we were carrying a provision were positions identified for termination that have not been executed from a restructuring perspective.

During the fourth quarter of Q4 2022, our Board of Directors approved a restructuring plan (the “Q4 2022 Plan”) to restructure specific groups to optimize skill sets and align structure to execute on strategic deliverables.

The Q4 2022 Plan was anticipated to entail a reduction in force of approximately 11 employees to be implemented through early fiscal year 2023, with a certain number of positions being consolidated.

Fiscal 2021 Plan

During the third and fourth quarters of fiscal 2021, our Board of Directors approved restructuring plans (the “Fiscal 2021 Plan”) to continue to reduce our operating costs and improve profitability.

During the third quarter of fiscal 2021, our Board of Directors approved restructuring plans (the “Fiscal 2021 Plan”) to continue to reduce our operating costs and improve profitability as part of our transformational initiative to optimize our business model and increase efficiencies.

We recorded restructuring charges of $ 2.4 million related to the Fiscal 2021 Plan in fiscal 2021.

Payments related to the accrued restructuring balances for this plan are expected to be fully paid in fiscal 2022.

During the fourth quarter of fiscal 2020, our Board of Directors approved a restructuring plan (the “Q4 2020 Plan”) in order to continue to reduce our operating costs and improve profitability to optimize our business model and increase efficiencies.

Payments related to the accrued restructuring liability balance for this plan are expected to be fully paid in fiscal 2022.

During the third quarter of fiscal 2020, our Board of Directors approved a restructuring plan (the “Q3 2020 Plan”) in order to reduce our operating costs and improve profitability to optimize our business model and increase efficiencies.

Payments related to the accrued restructuring liability balance for this plan were fully paid in fiscal 2021.

Fiscal 2020 Plan

During the fourth quarter of fiscal 2019, our Board of Directors approved a restructuring plan (the “Fiscal 2020 Plan”) to primarily consolidate product development, right size our resources to support our international business and other support functions.

Payments related to the accrued restructuring liability balance for this plan were fully paid in fiscal 2021.

Fiscal 2018-2019 Plan

During the fourth quarter of fiscal 2018, our Board of Directors approved a restructuring plan (the “Fiscal 2018-2019 Plan”) to consolidate back-office support functions and align resources by geography to lower our expense structure.

We completed the restructuring activities under the Fiscal 2018-2019 Plan at the end of fiscal 2019.

Payments related to the accrued restructuring liability balance for this plan were fully paid in fiscal 2021.

The Fiscal 2021 Plan was anticipated to entail a reduction in force of approximately 30 employees to be implemented through the end of fiscal year 2022, with a certain number of positions being consolidated and/or relocated.

During the fourth quarter of fiscal 2020, our Board of Directors approved a restructuring plan (the “Q4 2020 Plan”) to continue to reduce our operating costs and improve profitability to optimize our business model and increase efficiencies.

Payments related to the accrued restructuring liability balance for this plan was completed in the second quarter of fiscal 2022.

Prior Years’ Plan

Activities under the Fiscal 2015-2016 Plan primarily included reductions in workforce across the Company, but primarily in operations outside the United States.

Payments related to the accrued restructuring liability balance for this plan are complete.

Stockholders’ Equity

Stock Repurchase Program

In May 2018, our board of directors approved a repurchase program pursuant to which authorized repurchase of up to $ 7.5 million of our common stock.

During the second quarter of fiscal 2022 we completed the $ 7.5 million stock repurchase program approved by our board of directors in May 2018.

This repurchase program was temporarily suspended from February 2020 to February 2021.

In November 2021 our board of directors approved a stock repurchase program to purchase up to $ 10.0 million of our common stock.

During fiscal 2022, 2021 and 2020 we repurchased $ 5.4 million, $ 0.8 million and $ 1.8 million of our common stock in the open market respectively.

As of July 1, 2022, $ 7.3 million remained available for repurchase under our November 2021 stock repurchase program.

The following table summarizes the repurchase of our common stock:

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Fiscal 2022 Treasury Shares 175,356 $ 30.57 $ 5,361

Fiscal 2020 256,046 $ 6.91 $ 1,769

Fiscal 2021 Treasury Shares 19,587 $ 40.16 $ 787

Fiscal 2020 256,046 $ 6.91 $ 1,769

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All repurchased shares prior to February 2021 were retired and reflected the two -for-one stock split.

As of July 2, 2021, $ 2.6 million remained available for repurchase under our stock repurchase program.

As of July 1, 2022, $ 7.3 million remained available for repurchase under our November 2021 stock repurchase program.

Stock Incentive Programs

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The Rights have a de minimis fair value.

The complete terms of the Rights are set forth in a Tax Benefit Preservation Plan (the “Plan”), dated as of March 3, 2020, and amended as of August 27, 2020, between the Company and Computershare Inc., as rights agent.

The complete terms of the Rights are set forth in The Plan, dated as of March 3, 2020, and amended as of August 27, 2020, between the Company and Computershare Inc., as rights agent.

By adopting the Plan, we are helping to preserve the value of certain deferred tax benefits, including those generated by net operating losses (collectively, the “Tax Benefits”), which could be lost in the event of an “ownership change” as defined under Section 382 Code.

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The aggregate intrinsic value represents the total pre-tax intrinsic value or the aggregate difference between the closing price of our common stock on July 1, 2022 of $ 25.09 , and the exercise price for in-the-money options that would have been received by the optionees if all options had been exercised on July 1, 2022.

Additional information related to our stock options is summarized below:

(In thousands) 2022 2021 2020

Intrinsic value of options exercised $ 1,624 $ 2,208 $ 3

Fair value of options vested $ 608 $ 484 $ 499

The fair value of each option grant under our 2018 Stock Plan was estimated using the Black-Scholes option pricing model on the date of grant.

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$ 11.00 — $ 11.00 150,956 5.06 $ 11.00 40,708 $ 11.00

Additional information related to our stock options is summarized below:

(In thousands) 2021 2020 2019

Intrinsic value of options exercised $ 2,208 $ 3 $ 2

Fair value of options vested $ 484 $ 499 $ 23

$ 17.25 — $ 35.97 123,176 6.01 $ 32.32 5,373 $ 24.00

469,716 4.68 $ 15.15 111,505 $ 9.97

Restricted Stock Awards and Units

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The fair value of each restricted stock grant is based on the closing price of our common stock on the date of grant.

The total fair value of restricted stock that vested during fiscal 2021, 2020 and 2019 was $ 2.1 million, $ 1.7 million and $ 2.2 million, respectively.

The total grant date fair value of restricted stock that vested during fiscal 2022, 2021 and 2020 was $ 0.5 million, $ 0.5 million and $ 1.7 million, respectively.

Market-Based Stock Units

A summary of the status of our market-based stock units granted during fiscal 2020 as of July 2, 2021 is as follows:

A summary of the status of our market-based stock units as of July 1, 2022 and changes during fiscal 2022 is as follows:

Shares Weighted-Average

Restricted stock outstanding as of July 3, 2020 93,000 $ 9.53

Market-based stock units outstanding as of July 2, 2021 165,000 $ 11.51

Granted 46,533 38.91

Restricted stock outstanding as of July 2, 2021 165,000 $ 11.51

Vested and released — —

Forfeited ( 3,474 ) 35.97

Market-based stock units outstanding as of July 1, 2022 208,059 $ 14.54

The fair value for each market-based stock units with market condition was estimated using the Monte-Carlo simulation model.

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Performance share awards and units outstanding as of July 1, 2022 17,044 $ 42.85

The total grant date fair value of performance share units that vested during fiscal 2022, 2021 and 2020 was $ 0.4 million, $ 0.4 million and $ 0.5 million, respectively.

Segment and Geographic Information

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47,527 44,023 37,595

Europe and Russia

8,826 11,157 16,933

Europe 12,973 8,826 11,157

Latin America and Asia Pacific

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United States $ 198,824 65.6 %

United States $ 147,795 61.9 %

Philippines 16,327 5.4 %

United States $ 181,842 66.1 %

United States $ 147,795 61.9 %

Philippines $ 12,550 5.3 %

Our long-lived assets, consisting primarily of net property, plant and equipment, by geographic areas based on the physical location of the assets as of July 1, 2022 and July 2, 2021 were as follows:

(In thousands) July 2,

(In thousands) July 1, 2022 July 2, 2021

New Zealand $ 5,149 $ 6,840

United States 2,972 3,434

United Kingdom 115 2,420

Slovenia 433 1,122

Other countries 333 305

Total $ 8,887 $ 11,701

During fiscal 2021 management initiated the sale of our facility located in Lanarkshire, Scotland.

Therefore, the carrying value of $ 2.2 million relating to the real property was reclassified to assets held for sale in the consolidated balance sheet.

Income before provision for income taxes during fiscal year 2022, 2021 and 2020 consisted of the following:

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Total income before income taxes $ 30,435 $ 22,440 $ 3,709

(Benefit from) provision for income taxes for fiscal year 2021, 2020 and 2019 were summarized as follows:

Provision for (benefit from) income taxes for fiscal year 2022, 2021 and 2020 were summarized as follows:

(In thousands) 2022 2021 2020

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7,693 ( 89,988 ) ( 172 )

Total (benefit from) provision for income taxes $ ( 87,699 ) $ 3,452 $ ( 8,188 )

The (benefit from) provision for income taxes differed from the amount computed by applying the federal statutory rate of 21.0%, to our income before (benefit from) provision for income taxes as follows:

Total provision for (benefit from) income taxes $ 9,275 $ ( 87,699 ) $ 3,452

The provision for (benefit from) income taxes differed from the amount computed by applying the federal statutory rate of 21.0%, to our income before provision for (benefit from) income taxes as follows:

(In thousands) 2022 2021 2020

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statutory rate 439 209 764

Executive compensation limitation 439 — —

Stock-based compensation excess tax benefits

( 580 ) ( 482 ) —

Tax credit/deductions - generated and expired 113 108 99

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$ 9,275 $ ( 87,699 ) $ 3,452

Our (benefit from) provision for income taxes was $ 87.7 million of benefit for fiscal 2021, $ 3.5 million of expense for fiscal 2020 and $ 8.2 million of benefit for fiscal 2019.

Our tax benefit for fiscal 2021 was primarily due to the release of valuation allowance on our U.S.

federal and state deferred tax assets.

Our tax expense for fiscal 2020 was primarily due to tax expense related to profitable foreign subsidiaries and increase in our reserve for uncertain tax positions.

Our provision for (benefit from) income taxes was $ 9.3 million of expense for fiscal 2022, $ 87.7 million of benefit for fiscal 2021 and $ 3.5 million of expense for fiscal 2020.

Our tax expense for fiscal 2022 was primarily due to tax expense related to U.S.

and profitable foreign subsidiaries.

Our tax benefit for fiscal 2021 was primarily due to the release of $ 92.2 million in valuation allowance on our U.S.

federal and state deferred tax assets, offset by tax expenses related to profitable foreign subsidiaries and an increase in our reserve for uncertain tax positions.

The components of deferred tax assets and liabilities were as follows:

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Our valuation allowance related to deferred income taxes, as reflected in our consolidated balance sheets, was $ 37.5 million as of July 1, 2022 and $ 37.4 million as of July 2, 2021.

The change in valuation allowance for the fiscal years ended July 2, 2021 and July 3, 2020 was a decrease of $ 98.7 million and $ 6.8 million.

The change in valuation allowance for the fiscal years ended July 1, 2022 and July 2, 2021 was an increase of $ 0.1 million and a decrease of $ 98.7 million, respectively.

The increase in the valuation allowance in fiscal 2022 was primarily due to losses in tax jurisdictions in which we cannot recognize tax benefits, partially offset by the release of certain U.S.

federal, state, and foreign valuation allowances.

The decrease in the valuation allowance in fiscal 2021 was primarily due to the release of certain U.S.

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In performing our analysis, we used the most updated plans and estimates that we currently use to manage the underlying business and calculated the utilization of our deferred tax assets.

We continue to maintain a valuation allowance of $ 1.4 million on certain U.S.

As of July 1, 2022, we continue to maintain a valuation allowance of $ 1.1 million on certain U.S.

federal and state deferred tax assets that we believe is not more likely than not to be realized in future periods.

We entered into a tax sharing agreement with Harris effective on January 26, 2007, the date of the acquisition of Stratex.

The tax sharing agreement addresses, among other things, the settlement process associated with pre-merger tax liabilities and tax attributes, including tax loss carryforwards that are attributable to the Microwave Communication Division when it was a division of Harris.

There have been no settlement payments recorded since the acquisition date.

Tax loss and credit carryforwards as of July 1, 2022 have expiration dates ranging between one year and no expiration in certain instances.

The amounts of U.S.

federal tax loss carryforwards as of July 2, 2021 and July 3, 2020 were $ 382.3 million ($ 303.8 million and $ 78.5 million to Harris tax attributes) and $ 404.1 million ($ 325.6 million and $ 78.5 million related to Harris tax attributes), respectively, and begin to expire in fiscal 2023.

federal tax loss carryforwards as of July 1, 2022 was $ 358.9 million and begin to expire in fiscal 2023.

The amount of U.S.

federal and state tax credit carryforwards as of July 2, 2021 was $ 6.3 million, and certain credits will begin to expire in fiscal

The amount of foreign tax loss carryforwards as of July 2, 2021 was $ 182.8 million and certain losses begin to expire in fiscal 2022.

federal and state tax credit carryforwards as of July 1, 2022 was $ 7.0 million, and certain credits began to expire in fiscal 2023.

The amount of foreign tax loss carryforwards as of July 1, 2022 was $ 188.0 million and certain losses began to expire in fiscal 2023.

The amount of foreign tax credit carryforwards as of July 1, 2022 was $ 2.8 million, and certain credits will begin to expire in fiscal 2026.

United States income taxes have not been provided on basis differences in foreign subsidiaries of $ 2.8 million and $ 1.6 million as of July 2, 2021 and July 3, 2020, respectively, because of our intention to reinvest these earnings indefinitely.

We use the flow-through method to account for investment tax credits generated on eligible scientific research and development expenditures.

Under this method, the investment tax credits are recognized as a benefit to income tax in the year they are generated.

United States income taxes have not been provided on basis differences in foreign subsidiaries of $ 3.2 million as of July 1, 2022 because of our intention to reinvest these earnings indefinitely.

Additionally, no foreign withholding taxes, federal or state taxes have been provided if these unremitted earnings of the Company’s foreign subsidiaries were distributed, as such amounts are considered permanently reinvested.

It is not practicable to estimate the additional income taxes, including applicable foreign withholding taxes, that would be due upon the repatriation of these earnings.

As of July 2, 2021 and July 3, 2020, we had unrecognized tax benefits of $ 17.3 million and $ 18.0 million, respectively, as revised for correction to unrecognized tax benefits in the table below, for various federal, foreign, and state income tax matters.

Unrecognized tax benefits decreased by $ 0.8 million.

Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $ 5.2 million and $ 5.8 million, respectively, as of July 2, 2021 and July 3, 2020.

As of July 1, 2022, we had unrecognized tax benefits of $ 17.7 million for various federal, foreign, and state income tax matters.

Unrecognized tax benefits increased by $ 0.4 million during fiscal 2022.

Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate was $ 9.7 million as of July 1, 2022.

These unrecognized tax benefits are presented on the accompanying consolidated balance sheets net of the tax effects of net operating loss carryforwards.

We account for interest and penalties related to unrecognized tax benefits as part of our provision for income taxes.

The interest accrued was $ 0.6 million as of July 2, 2021 and $ 0.7 million as of July 3, 2020.

An immaterial amount of penalties have been accrued.

The interest accrued was $ 0.7 million as of July 1, 2022.

As of July 2, 2021, an immaterial amount of penalties have been accrued.

Our unrecognized tax benefit activity for fiscal 2022, 2021 and 2020 was as follows:

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Decreases related to change of foreign exchange rate ( 365 )

Unrecognized tax benefit as of June 28, 2019 12,987

Unrecognized tax benefit as of July 3, 2020 18,047

Additions for tax positions in prior periods 184

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Unrecognized tax benefit as of July 1, 2022 $ 17,707

Our unrecognized tax benefit decreased for tax positions in prior periods by $ 0.9 million, $ 3.8 million and $ 0.0 million for fiscal year 2021, 2020 and 2019, respectively, related to settlements with tax authorities in the table above.

Our unrecognized tax benefit decreased for tax positions in prior periods by $ 0.6 million, $ 0.9 million and $ 0.2 million for fiscal year 2021, 2020 and 2019, respectively, related to lapses of the applicable statute of limitations in the table above.

There was no change in our unrecognized tax benefit for tax positions in prior periods for fiscal year 2022 related to settlements with tax authorities in the table above.

Our unrecognized tax benefit decreased for tax positions in prior periods by $ 0.9 million and $ 3.8 million for fiscal year 2021 and 2020, respectively, related to settlements with tax authorities in the table above.

We have a number of years with open tax audits which vary from jurisdiction to jurisdiction.

Our major tax jurisdictions that are open and subject to potential audits include the U.S., Singapore, Nigeria, Saudi Arabia and the Ivory Coast.

Our major tax jurisdictions that are open and subject to potential audits include the U.S., Singapore, Nigeria, and Saudi Arabia.

The earliest years for these jurisdictions are as follows:

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Nigeria – 2006;

Saudi Arabia - 2019, and Ivory Coast - 2017.

During the first quarter of 2021, we received a tax refund of $ 1.2 million from the Federal Revenue of Brazil related to our withholding tax refund claim and recorded minimal tax expense related to interest as a discrete item.

During the second quarter of 2021, we effectively settled a tax audit with the Financial Administration of the Republic of Slovenia for fiscal years 2016 to 2018 and recorded $ 0.4 million of tax expense related to the denial of research and development tax relief as a discrete item.

During the second quarter of 2021, we effectively settled a tax audit with the General Authority of Zakat and Tax in Saudi Arabia for fiscal years 2016 to 2018 and recorded minimal tax benefit related to the release of previously recorded ASC 740-10 reserve as a discrete item.

During the first and third quarter of 2021, we settled tax litigation cases with the Income Tax Department of Ministry of Finance for fiscal years 2005 to 2011 and recorded minimal tax benefit related to the release of previously recorded ASC740-10 reserve as a discrete item.

On March 27, 2020, the US enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act which provided certain tax relief measures including, but not limited to, (1) a five-year net operating loss carryback, (2) changes in the deduction of interest, (3) acceleration of alternative minimum tax credit (AMT) refunds, and (4) a technical correction to allow accelerated deductions for qualified improvement property.

The Tax Cuts and Jobs Act repealed the corporate AMT credit and allowed taxpayers to claim any unused AMT credit over four tax years beginning in tax year 2018.

The CARES Act allows for acceleration of the refundable AMT credit up to 100% of the AMT credit to be refunded in tax year 2018.

During the third quarter of 2021, we received a tax refund of $ 3.5 million from the U.S.

Internal Revenue Service primarily related to our refundable AMT credit claim under the CARES Act and recorded minimal tax benefit related to interest as a discrete item.

and Saudi Arabia - 2019.

On December 27, 2020, the US enacted the Consolidated Appropriations Act of 2021 (CAA) which extended and expanded certain tax relief measures created by the CARES Act, including, but not limited to, (1) second round of Payroll Protection Program loans, and (2) the Employer Retention Credit for 2021.

On March 11, 2021, the US enacted the American Rescue Plan Act of 2021 (ARPA) which expands Section 162(m) to cover the next five most highly compensated employees for the taxable year, in addition to the “covered employees” effective for taxable years beginning after December 31, 2026.

We continue to examine the elements of CARES Act, CAA, and ARPA and the impact they may have on our future business.

We continue to examine the elements of CAA and ARPA and the impact they may have on our future business.

Commitments and Contingencies

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Because these agreements do not specify fixed or minimum quantities, do not specify minimum or variable price provisions, and do not specify the approximate timing of the transaction, and we have no present intention to cancel or terminate any of these agreements, we currently do not believe that we have any future liability under these agreements.

As of July 2, 2021, we had outstanding purchase obligations with our suppliers or contract manufacturers of $ 31.4 million.

In addition, we had contractual obligations of approximately $ 2.5 million associated with software as a service and software maintenance support as of July 2, 2021.

As of July 1, 2022, we had outstanding purchase obligations and other commitments as follows:

Payments due by period

2023 2024 2025 2026 2027 Total

Purchase obligations with suppliers of contract manufacturers $ 45,378 $ 4,530 $ 2,909 $ — $ — $ 52,817

Contractual obligations associated with software as a service and software maintenance support 2,895 922 124 — — 3,941

Total obligations $ 48,273 $ 5,452 $ 3,033 $ — $ — $ 56,758

Financial Guarantees and Commercial Commitments

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As of July 1, 2022, we had commercial commitments of $ 65.4 million outstanding that were not recorded on our consolidated balance sheets.

During the second quarter of fiscal 2017, we recorded a payout in cost of revenues of $ 0.4 million on the performance guarantees to a contractor in the Middle East region.

We believe the customer improperly drew down on the performance bond and

intend to pursue all remedies available to recover the payment.

We do not believe, based on historical experience and information currently available, that it is probable that any significant amounts will be required to be paid on the performance guarantees in the future.

Indemnifications

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In May 2016, we received notification of a claim for damages from a customer alleging that certain of our products were defective which we settled for an immaterial amount during the third quarter of 2021.

In March 2016, an enforcement action by the Indian Department of Revenue, Ministry of Finance was brought against our subsidiary Aviat Networks (India) Private Limited (“Aviat India”) relating to the non-realization of intercompany receivables and non-payment of intercompany payables, which originated from 1999 to 2012, within the time frames dictated by the Indian regulations under the Foreign Exchange Management Act.

In November 2017, the Indian Department of Revenue, Ministry of Finance also initiated a similar action against Telsima Communications Private Limited (“Telsima India”), a subsidiary of the Company, relating to the non-realization of intercompany receivables and non-payment of intercompany payables which originated from the period prior to our acquisition of Telsima India in February 2009.

In September 2019, our directors of Aviat India appeared before the Ministry of Finance Enforcement Directorate.

No settlement offers were discussed at the meeting and the matter is still ongoing with no subsequent hearing date currently scheduled.

We have accrued an immaterial amount representing the estimated probable loss for which we would settle the matter.

We currently cannot form an estimate of the range of loss in excess of our amounts already accrued.

If the outcome of this matter is greater than the current immaterial amount accrued, we intend to dispute it vigorously.

From time to time, we may be involved in various other legal claims and litigation that arise in the normal course of our operations.

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We expense all legal costs incurred to resolve regulatory, legal and tax matters as incurred.

In September 2019, our directors of Aviat India appeared before the Ministry of Finance Enforcement Directorate.

No settlement offers were discussed at the meeting and the matter is still ongoing with no subsequent hearing date currently scheduled.

We have accrued an immaterial amount representing the estimated probable loss for which we would settle the matter.

We currently cannot form an estimate of the range of loss in excess of our amounts already accrued.

If the outcome of this matter is greater than the current immaterial amount accrued, we intend to dispute it vigorously.

Periodically, we review the status of each significant matter to assess the potential financial exposure.

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Such revisions in the estimates of the potential liabilities could have a material impact on our results of operations and financial position.

In March 2020, the World Health Organization characterized a recent pandemic of respiratory illness caused by novel coronavirus disease, known as COVID-19, as a pandemic.

The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place or stay-at-home orders, and business shutdowns.

Our global operations expose us to risks associated with public health crises and epidemics/pandemics, such as the COVID-19 virus.

The COVID-19 virus may have an impact on our operations, supply chains and distribution systems and increase our expenses, including as a result of impacts associated with preventive and precautionary measures that we, other businesses and governments are taking or requiring.

The extent to which the COVID-19 pandemic impacts our business, prospects and results of operations will depend on future developments, which are highly uncertain, including, but not limited to, the duration and spread of the pandemic, its severity, the actions to contain the virus or treat its impact, including ongoing vaccination efforts, any new variant strains of the underlying virus and how quickly and to what extent normal economic and operating activities can resume.

Management is actively monitoring the impact of COVID-19 on our financial condition, liquidity, operations, suppliers, industry, and workforce.

Our first priority remains the health and safety of our employees and their families.

Employees whose tasks can be done off-site have been instructed to work from home.

Our manufacturing sites support essential businesses and remain operational.

We are maintaining social distancing for workers on-site and have enhanced cleaning protocols and usage of personal protective equipment, where appropriate.

The impact to our supply chain lead times and ability to fulfill orders was minimal for fiscal 2021.

However, depending on pandemic-related factors like the uncertain duration of temporary manufacturing restrictions as well as our ability to perform field services during shelter in place orders, we could experience constraints and delays in fulfilling customer orders in future periods.

We continue to monitor, assess and adapt to the situation and prepare for implications to our business, supply chain and customer demand.

We expect these challenges to continue until business and economic activities return to more normal levels.

The financial results for fiscal 2021 reflect some of the reduced activity experienced during the period in various locations around the world and are not necessary indicative of the results for the next fiscal period or fiscal year.

Subsequent Event

On August 25, 2021, our Board of Directors approved a restructuring plan to further reduce operating costs and improve profitability.

We estimate the restructuring charges, consist of one-time severance charges, will be approximately $ 0.8 million to be recorded in the first quarter of fiscal 2022.

We anticipate it will generate approximately $ 0.6 million in annual net savings, the majority of which will be allocated to support growth-related initiatives to be in a stronger position to drive both top- and bottom- line performance.

Quarterly Financial Data (Unaudited)

The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods.

Our fiscal quarters end on the Friday nearest the end of the calendar quarter.

Summarized quarterly data for fiscal 2021 and 2020 were as follows:

(In thousands, except per share amounts) Q1

Revenue $ 66,290 $ 70,531 $ 66,404 $ 71,686

Gross margin 24,249 26,909 25,578 25,879

Operating income 6,565 7,878 4,035 3,732

Net income 5,936 6,641 94,731 2,831

Per share data:

Basic net income per common share $ 0.55 $ 0.60 $ 8.49 $ 0.25

Diluted net income per common share $ 0.54 $ 0.58 $ 8.00 $ 0.24

(In thousands, except per share amounts) Q1

12/27/2019 Q3

Revenue $ 58,614 $ 55,997 $ 61,379 $ 62,652

Gross margin 22,556 18,319 21,961 21,860

Operating income (loss) 1,519 ( 1,497 ) 1,236 2,120

Net income (loss) 54 ( 1,671 ) 731 1,143

Per share data:

Basic net income (loss) per common share $ 0.01 $ ( 0.15 ) $ 0.07 $ 0.11

Diluted net income (loss) per common share $ — $ ( 0.15 ) $ 0.07 $ 0.10

The following tables summarize charges included in our results of operations for each of the fiscal quarters presented:

(In thousands) Q1

Restructuring charges $ — $ — $ 1,162 $ 1,109

Release of valuation allowance $ — $ — $ ( 92,200 ) $ —

(In thousands) Q1

12/27/2019 Q3

Restructuring charges $ 1,177 $ 381 $ 617 $ 1,874

On April 13, 2022, Aviat and Redline Communications, Inc.

(“Redline”), a leading provider of mission-critical data infrastructure, signed a definitive agreement for Aviat to acquire all outstanding common stock of Redline.

The transaction closed on July 5, 2022, subsequent to the balance sheet date.

Redline allows Aviat to expand its Private Networks Offering with Private LTE/5G, Unlicensed Wireless Access Solutions, by creating an integrated end-to-end offering for wireless access and transport in the Private Networks segment, leveraging Aviat's sales channel to address a large dollar Private LTE/5G addressable market and increasing Aviat’s reach in mission-critical industrial Private

Redline shareholders received $ 0.69 ($ 0.90 CAD) per share in cash.

The total transaction value was approximately $ 12.9 million USD and the implied enterprise value was approximately $ 15.0 million after adding back Redline’s net debt as of July 5, 2022.

Aviat is continuing to integrate Redline and additional disclosures are not available as of the time of this filing as we are in the process of determining the fair value of the assets and liabilities assumed.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data