What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-03 compared with 2023-02-01 · 159 added, 143 removed, 488 unchanged (38% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value amounts) December 30,

(In thousands, except share and par value amounts) March 31,

Current Assets:

16 unchanged sentences

Current Liabilities:

Short-term debt $ 6,200 $ —

Accounts payable 61,670 42,394

12 unchanged sentences

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized, none issued

Common stock, $ 0.01 par value, 300,000,000 shares authorized, 11,377,066 shares issued and outstanding at December 30, 2022;

Common stock, $ 0.01 par value, 300,000,000 shares authorized, 11,436,542 shares issued and outstanding at March 31, 2023;

11,160,160 shares issued and outstanding at July 1, 2022

9 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Six Months Ended

(In thousands, except per share amounts) December 30,

2022 December 31,

2021 December 30,

2022 December 31,

Three Months Ended Nine Months Ended

(In thousands, except per share amounts) March 31,

2023 April 1,

2022 March 31,

2023 April 1,

Revenue from product sales $ 54,811 $ 52,047 $ 175,473 $ 156,361

9 unchanged sentences

Selling and administrative expenses 15,842 14,867 49,913 41,304

Restructuring charges (recovery) 928 ( 960 ) 2,878 ( 301 )

Restructuring (recovery) charges ( 23 ) ( 72 ) 2,855 ( 373 )

Total operating expenses 22,337 20,054 71,420 58,269

13 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Six Months Ended

(In thousands) December 30,

2022 December 31,

2021 December 30,

2022 December 31,

Three Months Ended Nine Months Ended

(In thousands) March 31,

2023 April 1,

2022 March 31,

2023 April 1,

Net income $ 4,889 $ 6,029 $ 8,189 $ 16,627

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

(In thousands) December 30,

2022 December 31,

Nine Months Ended

(In thousands) March 31,

2023 April 1,

Operating Activities

3 unchanged sentences

Amortization of intangible assets acquired 372 —

Provision (recoveries) for uncollectible receivables 474 ( 3 )

Provision for/(recovery from) uncollectible receivables 476 ( 56 )

Share-based compensation 5,135 2,464

1 unchanged sentence

Charges for inventory and customer service inventory write-downs 1,715 1,140

Loss (gain) on disposition of property, plant and equipment, net 34 ( 66 )

Noncash lease expense 524 620

Net loss on marketable securities 1,740 —

Restructuring recoveries — ( 301 )

Net loss (gain) on marketable securities 1,730 ( 23 )

Restructuring charges (recoveries) — ( 373 )

Changes in operating assets and liabilities:

13 unchanged sentences

Proceeds from sale of marketable securities 9,163 —

Purchase of marketable securities — ( 2,492 )

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

Acquisition, net of cash acquired and purchases of intangible assets ( 15,769 ) —

14 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Three Months Ended December 30, 2022

Three Months Ended March 31, 2023

Common Stock Treasury Stock Additional

1 unchanged sentence

(In thousands, except share amounts) Shares $

Balance as of September 30, 2022 11,312,974 $ 113 $ ( 6,147 ) $ 824,786 $ ( 602,188 ) $ ( 17,142 ) $ 199,422

Balance as of December 30, 2022 11,377,066 $ 114 $ ( 6,147 ) $ 826,812 $ ( 596,142 ) $ ( 16,141 ) $ 208,496

Net income — — — — 4,889 — 4,889

3 unchanged sentences

Share-based compensation — — — 1,638 — — 1,638

Balance as of December 30, 2022 11,377,066 $ 114 $ ( 6,147 ) $ 826,812 $ ( 596,142 ) $ ( 16,141 ) $ 208,496

Three Months Ended December 31, 2021

Balance as of March 31, 2023 11,436,542 $ 114 $ ( 6,147 ) $ 828,411 $ ( 591,253 ) $ ( 15,771 ) $ 215,354

Three Months Ended April 1, 2022

Common Stock Treasury Stock Additional

1 unchanged sentence

(In thousands, except share amounts) Shares $

Balance as of October 1, 2021 11,187,003 $ 112 $ ( 1,500 ) $ 819,711 $ ( 615,920 ) $ ( 14,491 ) $ 187,912

Balance as of December 31, 2021 11,195,542 $ 112 $ ( 3,408 ) $ 820,791 $ ( 610,004 ) $ ( 14,599 ) $ 192,892

Net income — — — — 6,029 — 6,029

4 unchanged sentences

Share-based compensation — — — 840 — — 840

Balance as of December 31, 2021 11,195,542 $ 112 $ ( 3,408 ) $ 820,791 $ ( 610,004 ) $ ( 14,599 ) $ 192,892

Six Months Ended December 30, 2022

Balance as of April 1, 2022 11,166,918 $ 112 $ ( 5,398 ) $ 821,976 $ ( 603,975 ) $ ( 15,385 ) $ 197,330

Nine Months Ended March 31, 2023

Common Stock Treasury Stock Additional

8 unchanged sentences

Share-based compensation — — — 5,135 — — 5,135

Balance as of December 30, 2022 11,377,066 $ 114 $ ( 6,147 ) $ 826,812 $ ( 596,142 ) $ ( 16,141 ) $ 208,496

Six Months Ended December 31, 2021

Balance as of March 31, 2023 11,436,542 $ 114 $ ( 6,147 ) $ 828,411 $ ( 591,253 ) $ ( 15,771 ) $ 215,354

Nine Months Ended April 1, 2022

Common Stock Treasury Stock Additional

8 unchanged sentences

Share-based compensation — — — 2,464 — — 2,464

Balance as of December 31, 2021 11,195,542 $ 112 $ ( 3,408 ) $ 820,791 $ ( 610,004 ) $ ( 14,599 ) $ 192,892

Balance as of April 1, 2022 11,166,918 $ 112 $ ( 5,398 ) $ 821,976 $ ( 603,975 ) $ ( 15,385 ) $ 197,330

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

3 unchanged sentences

Aviat Networks, Inc.

(the “Company,” “we,” “us,” and “our”) designs, manufactures, and sells a range of wireless networking solutions and services to mobile and fixed telephone service providers, private network operators, government agencies, transportation and utility companies, public safety agencies, and broadcast system operators across the globe.

(“Aviat,” the “Company,” “we,” “us,” and “our”) designs, manufactures, and sells a range of wireless networking solutions and services to mobile and fixed telephone service providers, private network operators, government agencies, transportation and utility companies, public safety agencies, and broadcast system operators across the globe.

Our products include broadband wireless access base stations and customer premises equipment for fixed and mobile, point-to-point digital microwave radio systems for access, backhaul, trunking, license-exempt applications, supporting new network deployments, network expansion, and capacity upgrades.

5 unchanged sentences

In the opinion of our management, such interim financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows for such periods.

The results for the three and six months ended December 30, 2022 are not necessarily indicative of the results that may be expected for the full fiscal year or future operating periods.

The results for the three and nine months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the full fiscal year or future operating periods.

The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended July 1, 2022.

2 unchanged sentences

We operate on a 52-week or 53-week year ending on the Friday closest to June 30.

The three months ended December 30, 2022 and the three months ended December 31, 2021 both consisted of 13 weeks.

The three months ended March 31, 2023 and the three months ended April 1, 2022 both consisted of 13 weeks.

Fiscal year 2023 will be comprised of 52 weeks and will end on June 30, 2023.

9 unchanged sentences

Summary of Significant Accounting Policies

There have been no material changes in our significant accounting policies as of December 30, 2022 and for the six months ended December 30, 2022, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended July 1, 2022.

There have been no material changes in our significant accounting policies as of March 31, 2023 and for the nine months ended March 31, 2023, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended July 1, 2022.

Accounting Standards Adopted

8 unchanged sentences

The following table provides a summary of the cash, cash equivalents, and restricted cash reported within our unaudited condensed consolidated balance sheets that reconciles to the corresponding amount in our unaudited condensed consolidated statement of cash flows:

(In thousands) December 30,

(In thousands) March 31,

Cash and cash equivalents $ 22,456 $ 36,877

3 unchanged sentences

Our net accounts receivable are summarized below:

(In thousands) December 30,

(In thousands) March 31,

Accounts receivable $ 89,174 $ 74,102

2 unchanged sentences

Our inventories are summarized below:

(In thousands) December 30,

(In thousands) March 31,

Finished products $ 24,916 $ 14,916

5 unchanged sentences

We record charges to adjust our inventory and customer service inventory due to excess and obsolete inventory resulting from lower sales forecasts, product transitioning, or discontinuance.

The charges during the three and six months ended December 30, 2022 and December 31, 2021 consisted of the following which were recorded in cost of product sales:

Three Months Ended Six Months Ended

(In thousands) December 30,

2022 December 31,

2021 December 30,

2022 December 31,

The charges during the three and nine months ended March 31, 2023 and April 1, 2022, respectively, consisted of the following which were recorded in cost of product sales:

Three Months Ended Nine Months Ended

(In thousands) March 31,

2023 April 1,

2022 March 31,

2023 April 1,

Excess and obsolete inventory $ 275 $ 196 $ 856 $ 436

4 unchanged sentences

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 balance sheet as Assets held for sale.

The property held for sale prior to the sale date is separately presented on our unaudited condensed consolidated 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 assets held for sale as of December 30, 2022.

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 assets held for sale as of March 31, 2023 and July 1, 2022.

Property, Plant and Equipment, net

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

(In thousands) December 30,

(In thousands) March 31,

Land $ 210 $ 210

5 unchanged sentences

Total property, plant and equipment, net $ 10,570 $ 8,887

Included in the total plant, property and equipment above there was $ 0.7 million of assets in progress which have not been placed in service as of December 30, 2022 and $ 1.2 million as of July 1, 2022.

Included in the total plant, property and equipment above there were $ 0.8 million of assets in progress which have not been placed in service as of March 31, 2023 and $ 1.2 million as of July 1, 2022.

Depreciation and amortization expense related to property, plant and equipment, including amortization of software developed for internal use, was as follows:

Three Months Ended Six Months Ended

(In thousands) December 30,

2022 December 31,

2021 December 30,

2022 December 31,

Three Months Ended Nine Months Ended

(In thousands) March 31,

2023 April 1,

2022 March 31,

2023 April 1,

Depreciation and amortization $ 1,428 $ 1,051 $ 4,193 $ 3,444

1 unchanged sentence

Our accrued expenses are summarized below:

(In thousands) December 30,

(In thousands) March 31,

Accrued compensation and benefits $ 8,119 $ 11,625

6 unchanged sentences

Changes in our warranty liability, which are included as a component of accrued expenses in our unaudited condensed consolidated balance sheets were as follows:

Three Months Ended Six Months Ended

(In thousands) December 30,

2022 December 31,

2021 December 30,

2022 December 31,

Three Months Ended Nine Months Ended

(In thousands) March 31,

2023 April 1,

2022 March 31,

2023 April 1,

Balance as of the beginning of the period $ 2,549 $ 3,198 $ 2,913 $ 3,228

5 unchanged sentences

Our advance payments and unearned revenue are summarized below:

(In thousands) December 30,

(In thousands) March 31,

Advance payments $ 1,425 $ 1,870

1 unchanged sentence

Total advance payments and unearned revenue $ 40,348 $ 33,740

Excluded from the balances above are $ 7.8 million and $ 8.9 million in long-term unearned revenue as of December 30, 2022 and July 1, 2022, respectively.

Excluded from the balances above are $ 7.6 million and $ 8.9 million in long-term unearned revenue as of March 31, 2023 and July 1, 2022, respectively.

Fair Value Measurements of Assets and Liabilities

5 unchanged sentences

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The fair values, and valuation input levels of our assets and liabilities that are measured at fair value on a recurring basis as of December 30, 2022 and July 1, 2022 were as follows:

December 30, 2022 July 1, 2022 Valuation Inputs

The fair values, and valuation input levels of our assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2023 and July 1, 2022 were as follows:

March 31, 2023 July 1, 2022 Valuation Inputs

(In thousands) Fair Value Fair Value

6 unchanged sentences

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

Our Level 1 items mainly are money market funds.

As of December 30, 2022 and July 1, 2022, these money market funds were valued at $ 1.00 net asset value per share.

Historically our Level 1 items mainly are money market funds.

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

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.

For the six months ended December 30, 2022 we recognized a loss of $ 1.7 million associated with the sales of our marketable securities.

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

For the nine months ended March 31, 2023 we recognized a loss of $ 1.7 million associated with the sales of our marketable securities recorded in Other (income)/expense, net.

We classify items in Level 2 if the observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes, or alternative pricing sources are available with reasonable levels of price transparency.

Our bank certificates of deposit are classified within Level 2.

As of December 30, 2022 and July 1, 2022, we did not have any recurring assets or liabilities that were valued using significant unobservable inputs.

As of March 31, 2023 and July 1, 2022, we did not have any recurring assets or liabilities that were valued using significant unobservable inputs.

Our policy is to recognize asset or liability transfers among Level 1, Level 2, and Level 3 as of the actual date of the events or change in circumstances that caused the transfer.

During the first six months of fiscal 2023 and 2022, we had no transfers between levels of the fair value hierarchy of our assets or liabilities measured at fair value.

During the first nine months of fiscal 2023 and 2022, we had no transfers between levels of the fair value hierarchy of our assets or liabilities measured at fair value.

The Company has facilities under non-cancelable operating lease agreements.

3 unchanged sentences

Our obligations to make lease payments are included in "Short-term lease liabilities" and "Long-term lease liabilities" on our unaudited condensed consolidated balance sheets.

We did not enter into any finance leases during the six months ended December 30, 2022.

The following summarizes our lease costs (in thousands):

Three Months Ended Six Months Ended

2022 December 31, 2021 December 30,

2022 December 31, 2021

(In thousands) (In thousands)

We did not enter into any finance leases during the nine months ended March 31, 2023.

The following summarizes our lease costs:

Three Months Ended Nine Months Ended

2023 April 1, 2022 March 31,

2023 April 1, 2022

(In thousands)

Operating lease costs $ 270 $ 251 $ 817 $ 813

3 unchanged sentences

$ 772 $ 938 $ 2,416 $ 2,774

The following summarizes our lease term and discount rate for the six months ended December 30, 2022:

The following summarizes our lease term and discount rate for the nine months ended March 31, 2023:

Weighted average remaining lease term 6.8 years

Weighted average discount rate 5.7 %

As of December 30, 2022, our future minimum lease payments under all non-cancelable operating leases with an initial term in excess of one year were as follows (in thousands):

As of March 31, 2023, our future minimum lease payments under all non-cancelable operating leases with an initial term in excess of one year were as follows (in thousands):

(In thousands)

7 unchanged sentences

4 to Third Amended and Restated Loan and Security Agreement with Silicon Valley Bank (the “SVB Credit Facility”) which extended the expiration date to June 28, 2024.

Under Federal Deposit Insurance Corporation (“FDIC”) receivership, SVB became SVB Bridge Bank as of March 13, 2023, but the Credit Facility remained in full force and effect.

The SVB Credit Facility provides for a $ 25.0 million accounts receivable formula-based revolving credit facility that can be borrowed by our U.S.

5 unchanged sentences

We may prepay loans under the SVB Credit Facility in whole or in part at any time without premium or penalty.

As of December 30, 2022, available credit under the SVB Credit Facility was $ 22.0 million, reflecting the available limit of $ 25.0 million less outstanding letters of credit of $ 3.0 million.

We borrowed and repaid $ 24.0 million against the SVB Credit Facility during the six months ended December 30, 2022 and the interest rate was 6.07 %.

As of December 30, 2022 there was no borrowing outstanding.

As of March 31, 2023, available credit under the SVB Credit Facility was $ 15.8 million , reflecting the available limit of $ 25.0 million less outstanding letters of credit of $ 3.0 million.

We borrowed $ 50.2 million and repaid $ 44.0 million against the SVB Credit Facility during the nine months ended March 31, 2023 at the weighted average interest rate was 6.96 %.

As of March 31, 2023 there was $ 6.2 million of borrowing outstanding.

The SVB Credit Facility carries an interest rate computed, at our option, based on either (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;

7 unchanged sentences

Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default at a per annum rate of interest equal to 5.00 % above the applicable interest rate.

As of December 30, 2022, we were in compliance with the quarterly financial covenants contained in the SVB Credit Facility, as amended.

As of March 31, 2023, we were not in compliance with the affirmative covenant in Section 6.8 of the SVB Credit Facility, as amended, which restricts Aviat from having domestic operating or depository accounts with banks other than SVB.

We opened a non-SVB deposit account with Wells Fargo Bank, N.A.

in the immediate aftermath of the SVB closure by regulatory authorities on March 10, 2023 so that we could continue receiving customer remittances.

We subsequently

requested and received a waiver from the lender for this noncompliance.

We were in compliance with all other aspects of the credit agreement as of March 31, 2023.

At March 31, 2023, the Company held cash and cash equivalents at Silicon Valley Bridge Bank, N.A.

(“SVB Bridge Bank”) in excess of government insured limits.

On March 10, 2023, Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation, and the FDIC was appointed as receiver and Silicon Valley Bank was subsequently transferred into a new entity, SVB Bridge Bank.

On March 12, 2023, the U.S.

Treasury Department, the Federal Reserve and the FDIC jointly announced enabling actions that fully protect all Silicon Valley Bank depositors’ insured and uninsured deposits, and that such depositors would have access to all of their funds starting March 13, 2023.

On March 14, 2023, the Company was able to access its full deposits with SVB Bridge Bank.

Revenue Recognition

1 unchanged sentence

The following table provides information about receivables and liabilities from contracts with customers (in thousands):

December 30, 2022 July 1, 2022

March 31, 2023 July 1, 2022

Contract Balances

5 unchanged sentences

Unearned revenue, long-term $ 7,628 $ 8,920

Capitalized commissions are classified as both current and long term in included in other assets.

Capitalized commissions are classified as current and long term and included in Other current assets and Other assets, respectively.

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).

3 unchanged sentences

however, this will have no impact on our future obligation to bill and collect.

As of December 30, 2022, we had $ 46.7 million in advance payments and unearned revenue and long-term unearned revenue, of which approximately 38 % is expected to be recognized as revenue in the remainder of fiscal 2023 and the balance thereafter.

During the three and six months ended December 30, 2022 we recognized $ 6.0 million and $ 11.9 million, respectively, of revenue which was included in advance payments and unearned revenue at July 1, 2022.

As of March 31, 2023, we had $ 48.0 million in advance payments and unearned revenue and long-term unearned revenue, of which approximately 20 % is expected to be recognized as revenue in the remainder of fiscal 2023 and the balance thereafter.

During the three and nine months ended March 31, 2023 we recognized $ 5.0 million and $ 16.9 million , respectively, of revenue which was included in advance payments and unearned revenue at July 1, 2022.

Remaining Performance Obligations

The aggregate amount of transaction price allocated to our unsatisfied (or partially unsatisfied) performance obligations was approximately $ 115.9 million at December 30, 2022.

The aggregate amount of transaction price allocated to our unsatisfied (or partially unsatisfied) performance obligations was approximately $ 111.8 million at March 31, 2023.

Of this amount, we expect to recognize approximately 50 % as revenue during the next 12 months, with the remaining amount to be recognized as revenue within two to five years .

4 unchanged sentences

We report revenue by region and country based on the location where our customers accept delivery of our products and services.

Revenue by region for the three and six months ended December 30, 2022 and December 31, 2021 was as follows:

Three Months Ended Six Months Ended

(In thousands) December 30,

2022 December 31,

2021 December 30,

2022 December 31,

Revenue by region for the three and nine months ended March 31, 2023 and April 1, 2022 was as follows:

Three Months Ended Nine Months Ended

(In thousands) March 31,

2023 April 1,

2022 March 31,

2023 April 1,

North America

7 unchanged sentences

Customers accounting for 10% or more of our total revenue were as follows:

Three Months Ended Six Months Ended

2022 December 31,

2021 December 30,

2022 December 31,

Three Months Ended Nine Months Ended

2023 April 1,

2022 March 31,

2023 April 1,

Motorola Solutions, Inc.

* 12.0 % * 13.0 %

Verizon Wireless 10.1 % * * *

Mobile Telephone Networks Group (MTN Group) 12.0 % 13.0 % * 10.0 %

* Less than 10.0%

Customer accounting for 10% or more of our accounts receivable were as follows:

December 30, 2022 July 1, 2022

March 31, 2023 July 1, 2022

Mobile Telephone Networks Group (MTN Group) 16.0 % 17.0 %

* Less than 10.0%

Stock Repurchase Program

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

As of December 30, 2022, $ 8.0 million remains available and we may choose to suspend or discontinue the repurchase program at any time.

During the first six months of fiscal 2023, we did not repurchase any shares of our common stock in the open market.

As of March 31, 2023, $ 8.0 million remains available and we may choose to suspend or discontinue the repurchase program at any time.

During the first nine months of fiscal 2023, we did not repurchase any shares of our common stock in the open market.

Stock Incentive Programs

As of December 30, 2022, we had one stock incentive plan for our employees and non-employee directors, the 2018 Incentive Plan (the “2018 Plan”).

As of March 31, 2023, we have a stock incentive plan for our employees and non-employee directors, the 2018 Incentive Plan (the “2018 Plan”).

The 2018 Plan provides for the issuance of share-based awards in the form of stock options, stock appreciation rights, restricted stock awards and units, and performance share awards and units.

3 unchanged sentences

Restricted stock units issued to employees generally vest three years from the date of grant ( three-year cliff or annually over three years ).

Restricted stock units issued to non-executive board members annually generally vest on the day before the annual stockholders’ meeting.

Restricted stock units issued to non-executive board members generally vest on the day before the next annual stockholders’ meeting.

Vesting of performance share awards and units is subject to the achievement of predetermined financial performance criteria and continued employment through the end of the applicable period.

Market-based stock units vest upon meeting certain predetermined share price performance criteria and continued employment through the end of the applicable period.

During the six months ended December 30, 2022, we granted 72,162 restricted stock units, 49,321 market-based stock units and 110,945 stock options to purchase shares of our common stock.

During the nine months ended March 31, 2023, we granted 74,827 restricted stock units, 49,321 market-based stock units and 110,945 stock options to purchase shares of our common stock.

Total compensation expense for share-based awards included in our unaudited condensed consolidated statements of operations was as follows:

Three Months Ended Six Months Ended

(In thousands) December 30,

2022 December 31,

2021 December 30,

2022 December 31,

Three Months Ended Nine Months Ended

(In thousands) March 31,

2023 April 1,

2022 March 31,

2023 April 1,

By Expense Category:

7 unchanged sentences

Total share-based compensation expense $ 1,638 $ 840 $ 5,135 $ 2,464

As of December 30, 2022, there was approximately $ 2.3 million of total unrecognized compensation expense related to non-vested stock options granted which is expected to be recognized over a weighted-average period of 1.8 years.

As of December 30, 2022, there was $ 10.6 million of total unrecognized compensation expense related to non-vested stock awards which is expected to be recognized over a weighted-average period of 1.8 years.

As of March 31, 2023, there was approximately $ 2.0 million of total unrecognized compensation expense related to non-vested stock options granted which is expected to be recognized over a weighted-average period of 1.6 years.

As of March 31, 2023, there was $ 9.2 million of total unrecognized compensation expense related to non-vested stock awards which is expected to be recognized over a weighted-average period of 1.6 years.

Restructuring Activities

5 unchanged sentences

Cash payments — ( 1,437 ) ( 272 ) ( 100 ) ( 1,809 )

Foreign exchange impact — — — —

Accrual balance, September 30, 2022 — 513 23 986 1,522

1 unchanged sentence

Cash payments ( 452 ) ( 377 ) — ( 149 ) ( 978 )

Foreign exchange impact — — — — —

Accrual balance, December 30, 2022 476 136 23 837 1,472

As of December 30, 2022, the accrual balance of $ 1.5 million was in short-term restructuring liabilities on our unaudited condensed consolidated balance sheets.

Charges, net — — ( 23 ) — ( 23 )

Cash payments ( 75 ) — — ( 490 ) ( 565 )

Accrual balance, March 31, 2023 $ 401 $ 136 $ — $ 347 $ 884

As of March 31, 2023, the accrual balance of $ 0.9 million was in short-term restructuring liabilities on our unaudited condensed 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 second quarter of fiscal 2023, our Board of Directors approved a restructuring plan, (the “Q2 2023 Plan”) which is anticipated to generate cost savings from the elimination of 6 roles.

During the second quarter of fiscal 2023, our Board of Directors approved a restructuring plan, (the “Q2 2023 Plan”) which is anticipated to generate cost savings from the elimination of six roles.

The Q2 2023 plan is expected to be implemented through the end of first half of fiscal 2024.

During the first quarter of fiscal 2023, our Board of Directors approved a restructuring plan, (the “Q1 2023 Plan”) from the acquisition of Redline Communications, Inc.

The Q1 2023 Plan which is anticipated to generate cost saving on integration of Redline, entails a reduction in force of approximately 20 employees due to integrating work into existing Aviat teams, is expected to be implemented through the end of fiscal 2023.

The Q1 2023 Plan, which is anticipated to generate cost saving on integration of Redline, entails a reduction in force of approximately 20 employees due to integrating work into existing Aviat teams.

The Q1 2023 Plan is expected to be implemented through the end of fiscal 2023.

During the fourth quarter of fiscal 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 the end of fiscal year 2023, with a certain number of positions being consolidated.

The Q4 2022 Plan was completed during third quarter of fiscal 2023 with a reduction in force of approximately 11 employees with a certain number of positions being consolidated.

Fiscal 2021 Plan

23 unchanged sentences

$ 7,290 $ ( 372 ) $ 6,918

Amortization of purchased intangible assets for the six months ended December 30, 2022 was $ 0.2 million included in operating expenses.

There were no impairment charges for the three or six months ended December 30, 2022.

Amortization of purchased intangible assets for the nine months ended March 31, 2023 was $ 0.4 million included in operating expenses.

There were no impairment charges for the three or nine months ended March 31, 2023.

Pro forma results of operations for this acquisition have not been presented because the effects on revenue and net income were not material to our historic consolidated financial statements.

The estimated future amortization expense of intangible assets with finite lives as of December 30, 2022 is as follows:

The estimated future amortization expense of intangible assets with finite lives as of March 31, 2023 is as follows:

(In thousands)

5 unchanged sentences

During interim periods, we accrue tax expenses for jurisdictions that are anticipated to be profitable for fiscal 2023.

The determination of our income taxes for the six months ended December 30, 2022 and December 31, 2021 was based on our estimated annual effective tax rate adjusted for losses in certain jurisdictions for which no tax benefit can be recognized.

Our tax expense for the six months ended December 30, 2022 was primarily due to tax expense related to U.S.

and profitable foreign subsidiaries, including deferred tax expense associated with our acquisition of Redline in July 2022 and the subsequent multi-step restructure plan where the two Redline Communication Canadian corporations converted to ULC companies and then amalgamated by the end of September 2022.

The tax expense for the six months ended December 31, 2021 was primarily due to tax expense related to U.S.

The determination of our income taxes for the nine months ended March 31, 2023 and April 1, 2022 was based on our estimated annual effective tax rate adjusted for losses in certain jurisdictions for which no tax benefit can be recognized.

Our tax expense for the nine months ended March 31, 2023 was primarily due to tax expense related to U.S.

and profitable foreign subsidiaries, including tax expense associated with our acquisition of Redline in July 2022 and subsequent restructuring impact.

The tax expense for the nine months ended April 1, 2022 was primarily due to tax expense related to U.S.

and profitable foreign subsidiaries.

8 unchanged sentences

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

Such interest expense was not material for the six months ended December 30, 2022 and December 31, 2021.

Such interest expense was not material for the nine months ended March 31, 2023 and April 1, 2022.

On March 11, 2021, the U.S.

2 unchanged sentences

On August 16, 2022, the U.S.

enacted the Inflation Reduction Act of 2022 (“IRA”) which includes a new corporate alternative minimum tax of 15% on adjusted financial statement income of corporations with profits greater than $1 billion, and a 1% excise tax on stock repurchases by public corporations effective for taxable years beginning after December 31, 2022.

enacted the Inflation Reduction Act of 2022 (“IRA”) which includes a new corporate alternative minimum tax of 15% on adjusted financial statement income of corporations with profits greater than $1 billion, effective for taxable years beginning after December 31, 2022, and a 1% excise tax on stock repurchases by public corporations after December 31, 2022.

We will continue to evaluate the applicability and effect of the IRA as more guidance is issued.

1 unchanged sentence

The following table presents the computation of basic and diluted net income per share:

Three Months Ended Six Months Ended

(In thousands, except per share amounts) December 30,

2022 December 31,

2021 December 30,

2022 December 31,

Three Months Ended Nine Months Ended

(In thousands, except per share amounts) March 31,

2023 April 1,

2022 March 31,

2023 April 1,

Net income $ 4,889 $ 6,029 $ 8,189 $ 16,627

9 unchanged sentences

The following table summarizes the weighted-average equity awards that were excluded from the diluted net income per share calculations since they were anti-dilutive:

Three Months Ended Six Months Ended

(In thousands) December 30,

2022 December 31,

2021 December 30,

2022 December 31,

Three Months Ended Nine Months Ended

(Shares in thousands) March 31,

2023 April 1,

2022 March 31,

2023 April 1,

Stock options 211 121 189 112

7 unchanged sentences

We currently rely on a few vendors for substantially all of our inventory purchases.

As of December 30, 2022, we had outstanding purchase obligations with our suppliers or contract manufacturers of $ 63.8 million.

In addition, we had contractual obligations of approximately $ 3.8 million associated with software licenses as of December 30, 2022.

As of March 31, 2023, we had outstanding purchase obligations with our suppliers or contract manufacturers of $ 47.6 million.

In addition, we had contractual obligations of approximately $ 3.9 million associated with software licenses as of March 31, 2023.

Financial Guarantees and Commercial Commitments

1 unchanged sentence

The terms of the guarantees are generally equal to the remaining term of the related debt or other obligations and are generally limited to two years or less.

As of December 30, 2022, we had no guarantees applicable to our debt arrangements.

As of March 31, 2023, we had no guarantees applicable to our debt arrangements.

We have entered into commercial commitments in the normal course of business including surety bonds, standby letters of credit agreements, and other arrangements with financial institutions primarily relating to the guarantee of future performance on certain contracts to provide products and services to customers.

As of December 30, 2022, we had commercial commitments of $ 68.3 million outstanding that were not recorded on our unaudited condensed consolidated

balance sheets.

As of March 31, 2023, we had commercial commitments of $ 62.8 million outstanding that were not recorded on our unaudited condensed consolidated balance sheets.

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 these performance guarantees in the future.

The following table presents details of our commercial commitments:

(In thousands) March 31,

Letters of credit $ 3,040

1 unchanged sentence

Under the terms of substantially all of our license agreements, we have agreed to defend and pay any final judgment against our customers arising from claims against such customers that our products infringe the intellectual property rights of a third party.

As of December 30, 2022, we have not received any notice that any customer is subject to an infringement claim arising from the use of our products;

As of March 31, 2023, we have not received any notice that any customer is subject to an infringement claim arising from the use of our products;

we have not received any request to defend any customers from infringement claims arising from the use of our products;

1 unchanged sentence

Because the outcome of infringement disputes is related to the specific facts of each case and given the lack of previous or current indemnification claims, we cannot estimate the maximum amount of potential future payments, if any, related to our indemnification provisions.

As of December 30, 2022, we had not recorded any liabilities related to these indemnifications.

As of March 31, 2023, we had not recorded any liabilities related to these indemnifications.

Legal Proceedings

19 unchanged sentences

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 as of December 30, 2022.

No settlement offers were discussed at the meeting and the matter is still ongoing with no subsequent hearing date currently scheduled as of March 31, 2023.

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

8 unchanged sentences

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-Q

Item 1. Financial Statements