What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-11 compared with 2021-02-09 · 123 added, 115 removed, 534 unchanged (31% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

January 1, 2021 July 3, 2020

April 2, 2021 July 3, 2020

Current assets:

Cash and cash equivalents $ 121,943 $ 226,838

Restricted cash 61,626 —

Accounts receivable, net of allowance for credit losses of $ 1,495 and $ 1,451 at January 1, 2021 and July 3, 2020, respectively

Accounts receivable, net of allowance for credit losses of $ 1,628 and $ 1,451 at April 2, 2021 and July 3, 2020, respectively

125,603 120,438

13 unchanged sentences

Accounts payable $ 56,643 $ 41,877

Deferred consideration 61,626 —

Accrued expenses 30,566 23,794

15 unchanged sentences

85,000,000 shares authorized;

55,128,763 and 54,702,322 shares issued and outstanding at January 1, 2021 and July 3, 2020, respectively

55,163,620 and 54,702,322 shares issued and outstanding at April 2, 2021 and July 3, 2020, respectively

Additional paid-in capital 1,100,188 1,074,667

7 unchanged sentences

(In thousands, except per share data)

Second Quarters Ended Six Months Ended

January 1, 2021 December 27, 2019 January 1, 2021 December 27, 2019

Third Quarters Ended Nine Months Ended

April 2, 2021 March 27, 2020 April 2, 2021 March 27, 2020

Net revenues $ 256,857 $ 208,016 $ 673,154 $ 579,233

11 unchanged sentences

Interest expense ( 549 ) ( 58 ) ( 622 ) ( 58 )

Other expense, net ( 981 ) ( 351 ) ( 1,827 ) ( 1,785 )

Other (expense) income, net ( 200 ) 2,186 ( 2,027 ) 401

Income before income taxes 20,997 28,928 56,112 66,943

10 unchanged sentences

Pension benefit plan, net of tax 30 7 92 22

Total other comprehensive loss, net of tax ( 627 ) ( 184 ) ( 697 ) ( 102 )

Total other comprehensive income (loss), net of tax 248 351 ( 449 ) 249

Total comprehensive income $ 15,883 $ 23,916 $ 43,670 $ 58,737

3 unchanged sentences

(In thousands)

For the Second Quarter Ended January 1, 2021

For the Third Quarter Ended April 2, 2021

Common Stock Additional

4 unchanged sentences

Shares Amount

Balance at October 2, 2020 55,045 $ 550 $ 1,082,044 $ 328,253 $ ( 2,955 ) $ 1,407,892

Balance at January 1, 2021 55,129 $ 551 $ 1,092,723 $ 340,939 $ ( 3,582 ) $ 1,430,631

Issuance of common stock under employee stock incentive plans 35 1 10 — — 11

Issuance of common stock under employee stock purchase plan 46 — 3,184 — — 3,184

Stock-based compensation — — 7,455 — — 7,455

Net income — — — 15,635 — 15,635

Other comprehensive loss — — — — ( 627 ) ( 627 )

Balance at January 1, 2021 55,129 $ 551 $ 1,092,723 $ 340,939 $ ( 3,582 ) $ 1,430,631

For the Second Quarter Ended December 27, 2019

Other comprehensive income — — — — 248 248

Balance at April 2, 2021 55,164 $ 552 $ 1,100,188 $ 356,574 $ ( 3,334 ) $ 1,453,980

For the Third Quarter Ended March 27, 2020

Common Stock Additional

4 unchanged sentences

Shares Amount

Balance at September 27, 2019 54,534 $ 545 $ 1,049,952 $ 245,990 $ ( 1,209 ) $ 1,295,278

Balance at December 27, 2019 54,558 $ 545 $ 1,056,238 $ 261,666 $ ( 1,393 ) $ 1,317,056

Issuance of common stock under employee stock incentive plans 19 — — — — —

Issuance of common stock under employee stock purchase plan 41 1 2,392 — — 2,393

Purchase and retirement of common stock ( 6 ) — ( 746 ) — — ( 746 )

1 unchanged sentence

Net income — — — 23,565 — 23,565

Other comprehensive loss — — — — ( 184 ) ( 184 )

Balance at December 27, 2019 54,558 $ 545 $ 1,056,238 $ 261,666 $ ( 1,393 ) $ 1,317,056

For the Six Months Ended January 1, 2021

Other comprehensive income — — — — 351 351

Balance at March 27, 2020 54,612 $ 546 $ 1,064,698 $ 285,231 $ ( 1,042 ) $ 1,349,433

For the Nine Months Ended April 2, 2021

Common Stock Additional

11 unchanged sentences

Other comprehensive loss — — — — ( 449 ) ( 449 )

Balance at January 1, 2021 55,129 $ 551 $ 1,092,723 $ 340,939 $ ( 3,582 ) $ 1,430,631

For the Six Months Ended December 27, 2019

Balance at April 2, 2021 55,164 $ 552 $ 1,100,188 $ 356,574 $ ( 3,334 ) $ 1,453,980

For the Nine Months Ended March 27, 2020

Common Stock Additional

6 unchanged sentences

Issuance of common stock under employee stock incentive plans 510 5 ( 2 ) — — 3

Issuance of common stock under employee stock purchase plan 41 1 2,392 — — 2,393

Purchase and retirement of common stock ( 187 ) ( 2 ) ( 15,681 ) — — ( 15,683 )

1 unchanged sentence

Net income — — — 58,488 — 58,488

Other comprehensive loss — — — — ( 102 ) ( 102 )

Balance at December 27, 2019 54,558 $ 545 $ 1,056,238 $ 261,666 $ ( 1,393 ) $ 1,317,056

Other comprehensive income — — — — 249 249

Balance at March 27, 2020 54,612 $ 546 $ 1,064,698 $ 285,231 $ ( 1,042 ) $ 1,349,433

The accompanying notes are an integral part of the consolidated financial statements.

2 unchanged sentences

(In thousands)

Six Months Ended

January 1, 2021 December 27, 2019

Nine Months Ended

April 2, 2021 March 27, 2020

Cash flows from operating activities:

4 unchanged sentences

(Benefit) provision for deferred income taxes ( 6,357 ) 1,174

Gain on investment — ( 3,810 )

Other non-cash items 3,094 2,402

7 unchanged sentences

Deferred revenues and customer advances 10,509 2,446

Income taxes payable ( 131 ) ( 2,803 )

Other non-current liabilities ( 2,483 ) 3,174

9 unchanged sentences

Purchase and retirement of common stock ( 66 ) ( 15,683 )

Net cash provided by (used in) financing activities 163,122 ( 14,934 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash 763 84

Net decrease in cash, cash equivalents and restricted cash ( 56,099 ) ( 75,895 )

Cash, cash equivalents and restricted cash at beginning of period 226,838 257,932

Cash, cash equivalents and restricted cash at end of period $ 170,739 $ 182,037

Net cash provided by financing activities 163,133 186,713

Effect of exchange rate changes on cash and cash equivalents 352 23

Net (decrease) increase in cash and cash equivalents ( 104,895 ) 149,214

Cash and cash equivalents at beginning of period 226,838 257,932

Cash and cash equivalents at end of period $ 121,943 $ 407,146

Cash paid during the period for:

32 unchanged sentences

These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the fiscal year ended July 3, 2020 which are contained in the Company’s Annual Report on Form 10-K filed with the SEC on August 18, 2020.

The results for the second quarter and six months ended January 1, 2021 are not necessarily indicative of the results to be expected for the full fiscal year.

The results for the third quarter and nine months ended April 2, 2021 are not necessarily indicative of the results to be expected for the full fiscal year.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

All intercompany transactions and balances have been eliminated in consolidation .

All references to the second quarter of fiscal 2021 are to the quarter ended January 1, 2021.

There were 13-weeks during the second quarters ended January 1, 2021 and December 27, 2019, respectively.

There were approximately 26-weeks during the six months ended January 1, 2021 and December 27, 2019, respectively.

All references to the third quarter of fiscal 2021 are to the quarter ended April 2, 2021.

There were 13-weeks during the third quarters ended April 2, 2021 and March 27, 2020, respectively.

There were 39-weeks during the nine months ended April 2, 2021 and March 27, 2020, respectively.

U SE OF E STIMATES

21 unchanged sentences

Revenue recognized at a point in time generally relates to contracts that include a combination of components, modules and sub-assemblies, integrated subsystems and related system integration or other services.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 61 % and 62 % of revenues for the second quarter and six months ended January 1, 2021, respectively.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 79 % and 76 % of revenues for the second quarter and six months ended December 27, 2019, respectively.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 53 % and 59 % of revenues for the third quarter and nine months ended April 2, 2021, respectively.

Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, total ed 70 % and 74 % o f revenues for the third quarter and nine months ended March 27, 2020, respectively.

The Company also engages in long-term contracts for development, production and service activities and recognizes revenue for performance obligations over time.

2 unchanged sentences

The Company’s cost reimbursable contracts typically include cost-plus fixed fee and time and material contracts.

Total revenue recognized under long-term contracts over time was 39 % and 38 % of total revenues for the second quarter and six months ended January 1, 2021, respectively.

Total revenue recognized under long-term contracts over time was 21 % and 24 % of total revenues for the second quarter and six months ended December 27, 2019, respectively.

Total revenue recognized under long-term contracts over t ime was 47 % and 41 % of total revenues for the third quarter and nine months ended April 2, 2021, respectively.

Total revenue recognized under long-term contracts over time was 30 % and 26 % of total revenues for the third quarter and nine months ended March 27, 2020, respectively.

The Company generally does not provide its customers with rights of product return other than those related to assurance warranty provisions that permit repair or replacement of defective goods over a period of 12 to 36 months.

10 unchanged sentences

The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended as necessary.

The allowance is based upon an assessment of the customers’ credit worthiness, reasonable forecasts about the future, history with the customer, and the age of the receivable balance.

The allowance is based upon an assessment of the customer's credit worthiness, reasonable forecasts about the future, history with the customer, and the age of the receivable balance.

The Company typically invoices a customer upon shipment of the product (or completion of a service) for contracts where revenue is recognized at a point in time.

11 unchanged sentences

Contract balances are reported in a net position on a contract-by-contract basis.

The contract asset balances were $ 119,346 and $ 90,289 as of January 1, 2021 and July 3, 2020, respectively.

The contract asset balance increased due to growth in revenue recognized and timing of billable events under long-term contracts over time during the six months ended January 1, 2021.

The contract liability balances were $ 33,887 and $ 19,892 as of January 1, 2021 and July 3, 2020, respectively.

The increase was due to a greater number of long-term contracts with milestone billings across multiple programs.

Revenue recognized for the second quarter and six months ended January 1, 2021 that was included in the contract liability balance a t July 3, 2020 was $ 4,336 and $ 13,366 , respectively.

Revenue recognized for the second quarter and six months ended December 27, 2019 that was included in the contract liability balance at June 30, 2019 was $ 2,898 and $ 8,274 , respectively.

The contract asset balances we re $ 138,378 and $ 90,289 as of April 2, 2021 and July 3, 2020, respectively.

The contract asset balance increased due to growth in revenue recognized over time and timing of billable events under long-term contracts during the nine months ended April 2, 2021.

The contract liabi lity balances were $ 31,954 and $ 19,892 as of April 2, 2021 and July 3, 2020, respectively.

The increase was due to a greater volume of long-term contracts with milestone billings across multiple programs.

Revenue recognized for the third quarter and nine months ended April 2, 2021 that was included in the contract liability balance a t July 3, 2020 was $ 2,133 and $ 15,499 , respectively.

Revenue recognized for the third quarter and nine months ended March 27, 2020 that was included in the contract liability balance at June 30, 2019 was $ 1,564 and $ 9,838 , respectively.

R EMAINING P ERFORMANCE O BLIGATIONS

1 unchanged sentence

The definition of remaining performance obligations excludes contracts with original expected durations of less than one year, as well as those contracts that provide the customer with the right to cancel or terminate the order with no substantial penalty, even if the Company’s historical experience indicates the likelihood of cancellation or termination is remote.

As of January 1, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations w as $ 410,275 .

As of April 2, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 352,229 .

The Company expects to recognize approximately 70 % of its remaining performance obligations as revenue in the next 12 months and the balance thereafter.

1 unchanged sentence

Weighted-average shares were calculated as follows:

Second Quarters Ended Six Months Ended

January 1, 2021 December 27, 2019 January 1, 2021 December 27, 2019

Third Quarters Ended Nine Months Ended

April 2, 2021 March 27, 2020 April 2, 2021 March 27, 2020

Basic weighted-average shares outstanding 55,146 54,604 55,033 54,514

1 unchanged sentence

Diluted weighted-average shares outstanding 55,526 55,127 55,434 55,071

Equity instruments to purchase 114 and 2 shar es of common stock were not included in the calculation of diluted net earnings per share for the second quarter and six months ended January 1, 2021, respectively, because the equity instruments were anti-dilutive.

Equity instruments to purchase 419 and 297 shares of common stock were not included in the calculation of diluted net earnings per share for the second quarter and six months ended December 27, 2019, respectively, because the equity instruments were anti-dilutive.

Equity instruments to purchase 38 and 13 shares of common stock were not included in the calculation of diluted net earnings per share for the third quarter and nine months ended April 2, 2021, respectively, because the equity instruments were anti-dilutive.

Equity instruments to purchase 3 and 136 shares of common stock were not included in the calculation of diluted net earnings per share for the third quarter and nine months ended March 27, 2020, respectively, because the equity instruments were anti-dilutive.

R ECENTLY I SSUED A CCOUNTING P RONOUNCEMENTS

In August 2018, the FASB issued ASU No.

2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715) Changes to the Disclosure Requirements for Defined Benefit Plans , an amendment of the FASB Accounting Standards Codification.

2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715):

Changes to the Disclosure Requirements for Defined Benefit Plans , an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU remove disclosures that no longer are considered cost-beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant.

7 unchanged sentences

This ASU is effective for fiscal years beginning after December 15, 2020, with early adoption permitted.

The Company is currently evaluating the effect that ASU 2019-12 will have on its consolidated financial statements and related disclosures.

The Company does not expect this guidance to have a material impact to its consolidated financial statements or related disclosures.

In March 2021, the FASB issued ASU No.

2021-03, Intangibles—Goodwill and Other (Topic 350):

Accounting Alternative for Evaluating Triggering Events, an amendment of the FASB Accounting Standards Codification.

The amendments in this ASU allow companies to elect not to monitor for goodwill impairment triggering events during the reporting period and instead, to evaluate the facts and circumstances as of the end of the reporting period to determine whether it is more likely than not that goodwill is impaired.

This aligns the triggering event evaluation date with the reporting date, whether that date is an interim or annual reporting date.

This ASU is effective for fiscal years beginning after December 15, 2019, with early adoption permitted for both interim and annual financial statements that have not yet been issued or made available for issuance as of March 30, 2021.

The Company does not expect this guidance to have a material impact to its consolidated financial statements or related disclosures.

R ECENTLY A DOPTED A CCOUNTING P RONOUNCEMENTS

17 unchanged sentences

Effective October 3, 2020, the Company adopted SEC Final Rule Release No.

33-10786, Amendments to Financial Disclosures About Acquired and Disposed Businesses, which includes amendments to its rules and forms related to the disclosure of financial information regarding acquired or disposed businesses.

33-10786, Amendments to Financial Disclosures About Acquired and Disposed Businesses, which includes amendments to the SEC's rules and forms related to the disclosure of financial information regarding acquired or disposed businesses.

The amendments are intended to improve the financial information about acquired or disposed businesses provided to investors, facilitate more timely access to capital, and reduce the complexity and costs of preparing disclosures.

14 unchanged sentences

Cash paid at closing $ 251,229

Additional consideration to be transferred 61,626

Cash paid post closing 61,626

Working capital and net debt adjustment ( 4,737 )

15 unchanged sentences

Net purchase price $ 305,263

The amounts above represent the preliminary fair value estimates as of January 1, 2021 and are subject to subsequent adjustment as the Company obtains additional information during the measurement period and finalizes its fair value estimates.

The preliminary identifia ble intangible asset estimate includes customer relationships of $ 69,327 with a useful life of 11 years, completed technology of $ 40,055 with a useful life of 10 years and backlog of $ 8,088 with a useful life of two years .

The amounts above represent the preliminary fair value estimates as of April 2, 2021 and are subject to subsequent adjustment as the Company obtains additional information during the measurement period and finalizes its fair value estimates.

The preliminary identifia ble intangible asset estimate includes customer relationships of $ 81,000 with a useful life of 11 years, completed technology of $ 25,000 with a useful life of 9 years and backlog of $ 8,000 with a useful life of one year .

Any subsequent adjustments to these fair value estimates occurring during the measurement period will result in an adjustment to goodwill.

2 unchanged sentences

The Company has not furnished pro forma information relating to POC because such information is not material to the Company’s financial results.

The acquisition had an immaterial impact to the Company’s results of operations for the second quarter and six months ended January 1, 2021, given the proximity of the acquisition date to quarter-end .

The revenues and income before income taxes from POC included in the Company's consolidated results for the third quarter ended April 2, 2021, were $ 38,492 and $ 1,065 , respectively.

The revenues and income before income taxes from POC included in the Company's consolidated results for the nine months ending April 2, 2021 were $ 38,709 and $ 782 , respectively.

A MERICAN P ANEL C ORPORATION A CQUISITION

31 unchanged sentences

The Company has estimated the tax value of the intangible assets from this transaction and is amortizing the amount o ver 15 years for tax purposes.

As of January 1, 2021, the Company had $ 49,744 of goodwill deductible for tax purposes.

As of April 2, 2021, the Company had $ 48,840 of goodwill deductible for tax purposes.

Fair Value of Financial Instruments

During the second quarter and six months ended January 1, 2021, the Company received gross proceeds and recorded a loss on sale of a cost-method investment of $ 1,538 and $ 426 , respectively.

The loss on sale of investment is included within Other expense, net in the Consolidated Statements of Operations and Comprehensive Income for the second quarter and six months ended January 1, 2021.

During the nine months ended April 2, 2021, the Company received gross proceeds and recorded a loss on sale of a cost-method investmen t of $ 1,538 and $ 426 , respe ctively.

The loss on sale of investment is included within Other expense, net in the Consolidated Statements of Operations and Comprehensive Income for the nine months ended April 2, 2021.

The fair value of the investment was based on a quoted price of identical instruments in an active market and was recorded at cost within Other non-current assets in the Consolidated Balance Sheet prior to its sale.

7 unchanged sentences

Inventory was comprised of the following:

January 1, 2021 July 3, 2020

April 2, 2021 July 3, 2020

Raw materials $ 148,279 $ 111,225

2 unchanged sentences

Total $ 226,840 $ 178,093

The $ 40,317 increase in inventory was due to an increase in overall demand, especially for larger, more complex integrated subsystems, the acquisition of POC and the advanced purchases of inventory intended to mitigate potential disruptions to the supply chain or unforeseen changes in customer behavior resulting from the COVID pandemic.

During the first quarter of fiscal 2021, the Company reorganized its internal reporting unit structure to align with the Company's market and brand strategy as well as promote scale as the organization continues to grow.

The following table sets forth the changes in the carrying amount of goodwill for the six months ended January 1, 2021:

The following table sets forth the changes in the carrying amount of goodwill for the nine months ended April 2, 2021:

Balance at July 3, 2020 $ 614,076

1 unchanged sentence

Goodwill arising from the POC acquisition 168,234

Balance at January 1, 2021 $ 783,302

Balance at April 2, 2021 $ 782,656

The Company performs its annual goodwill impairment test in the fourth quarter of each fiscal year.

1 unchanged sentence

Restructuring and other charges are typically related to acquisitions and organizational redesign programs initiated as part of discrete po st-acquisition integration activities.

During the six months ended January 1, 2021, the Company incurred net restructuring and other charges of $ 2,248 primarily related to severance costs associated with the elimination of 42 positions across the manufacturing, SG&A and R&D functions.

During the nine months ended April 2, 2021, the Company incurred net restructuring and other charges of $ 2,244 primarily related to severance costs associated with the elimination of 42 positions across the manufacturing, SG&A and R&D functions.

These charges related to changing market and business conditions including talent shifts and resource redundancy resulting from the internal reorganization the Company completed in the first quarter.

5 unchanged sentences

Cash paid ( 2,333 )

Restructuring liability at January 1, 2021 $ 1,317

The Company recorded an income tax provision of $ 4,433 and $ 5,110 on income before income taxes of $ 17,119 and $ 20,786 for the second quarters ended January 1, 2021 and December 27, 2019, respectively.

The Company recorded an income tax provision of $ 6,631 and $ 3,092 on income before income taxes of $ 35,115 and $ 38,015 for the six months ended January 1, 2021 and December 27, 2019, respectively.

During the second quarters ended January 1, 2021 and December 27, 2019, the Company recognized a discrete tax benefit of $ 130 and $ 353 , respectively, related to excess tax benefits on stock-based compensation.

During the six months ended January 1, 2021 and December 27, 2019, the Company recognized a discrete tax benefit of $ 2,610 and $ 6,480 , respectively, related to excess tax benefits on stock-based compensation.

The effective tax rate for the second quarters and six months ended January 1, 2021 and December 27, 2019 differed from the Federal statutory rate primarily due to Federal and State research and development credits, excess tax benefits related to stock-based compensation, non-deductible compensation and state taxes.

During the second quarter ended January 1, 2021, there were no material changes to the Company's unrecognized tax positions.

Restructuring liability at April 2, 2021 $ 508

The Company recorded an income tax provision of $ 5,362 and $ 5,363 on income before income taxes of $ 20,997 and $ 28,928 for the third quarters ended April 2, 2021 and March 27, 2020, respectively.

The Company recorded an income tax provision of $ 11,993 and $ 8,455 on income before income taxes of $ 56,112 and $ 66,943 for the nine months ended April 2, 2021 and March 27, 2020, respectively.

During the third quarters ended April 2, 2021 and March 27, 2020, the Company recognized a discrete tax benefit of $ 175 and $ 159 , respectively, related to excess tax benefits on stock-based compensation.

During the nine months ended April 2, 2021 and March 27, 2020, the Company recognized a discrete tax benefit of $ 2,785 and $ 6,639 , respectively, related to excess tax benefits on stock-based compensation.

The Company also recognized a discrete tax benefit of $ 1,005 , net of $ 251 tax reserve, related to research and development credits and an $ 813 discrete tax benefit from a release of a valuation allowance on a capital loss carryforward, during the third quarter and nine months ended March 27, 2020.

The effective tax rate for the third quarter and nine months ended April 2, 2021 differed from the Federal statutory rate primarily due to Federal and State research and development credits, excess tax benefits related to stock-based compensation, non-deductible compensation and state taxes.

The effective tax rate for the third quarter and nine months ended March 27, 2020 differed from the Federal statutory rate primarily due to Federal research and development credits, excess tax benefits related to stock-based compensation, a release of a valuation allowance on a capital loss carryforward, a modified territorial tax system and a minimum tax on certain foreign earnings, and state taxes.

During the third quarter ended April 2, 2021, there were no material changes to the Company's unrecognized tax positions.

R EVOLVING C REDIT F ACILITY

On September 28, 2018, the Company amended the Revolver to increase and extend the borrowing capacity to a $ 750,000 , 5-year revolving credit line, with the maturity extended to September 28, 2023.

As of January 1, 2021, the Company's outstanding balance of unamortized deferred financing costs was $ 3,697 , which is being amortized to Other expense, net in the Consolidated Statements of Operations and Comprehensive Income on a straight line basis over the term of the Revolver.

The Company drew $ 160,000 from the Revolver to facilitate the acquisition of POC.

As of January 1, 2021, the Company was in compliance with all covenants and conditions under the Revolver and there were outstanding borrowings of $ 160,000 against the Revolver, resulting in interest expense of $ 73 for both the second quarter and six months ended January 1, 2021.

There were outstanding letters of credit of $ 799 as of January 1, 2021.

As of April 2, 2021, the Company's outstanding balance of unamortized deferred financing costs was $ 3,361 , which is being amortized to Other expense, net in the Consolidated Statements of Operations and Comprehensive Income on a straight line basis over the term of the Revolver.

During the second quarter ended January 1, 2021, the Company drew $ 160,000 from the Revolver to facilitate the acquisition of POC.

As of April 2, 2021, the Company was in compliance with all covenants and conditions under the Revolver and there were outstanding borrowings of $ 160,000 against the Revolver, resulting in interest expense of $ 549 and $ 622 for the third quarter and nine months ended April 2, 2021, respectively.

There were outstanding letters of credit of $ 799 as of April 2, 2021.

Employee Benefit Plan

5 unchanged sentences

The funded status may vary from year to year due to changes in the fair value of the Plan’s assets and variations on the underlying assumptions of the projected benefit obligation of the Plan.

The Plan's funded status at January 1, 2021 was a net liability of $ 12,948 , which is recorded in Other non-current liabilities on the Consolidated Balance Sheet.

The Company recorded a net gain of $ 31 and $ 62 in AOCL during the second quarter and six months ended January 1, 2021.

The Company recorded a net gain of $ 8 and $ 15 in AOCL during the second quarter and six months ended December 27, 2019.

The Company recognized net periodic benefit costs of $ 420 and $ 833 associated with the Plan for the second quarter and six months ended January 1, 2021, respectively.

The Company recognized net periodic benefit costs of $ 296 and $ 592 associated with the Plan for the second quarter and six months ended December 27, 2019, respectively.

The Plan's funded status at April 2, 2021 was a net liability of $ 12,261 , which is recorded in Other non-current liabilities on the Consolidated Balance Sheet.

The Company recorded a net gain of $ 30 and $ 92 in AOCL during the third quarter and nine months ended April 2, 2021.

The Company recorded a net gain of $ 7 and $ 22 in AOCL during the third quarter and nine months ended March 27, 2020.

The Company recognized net periodic benefit costs of $ 420 and $ 1,253 associated with the Plan for the third quarter and nine months ended April 2, 2021, respectively.

The Company recognized net periodic benefit costs of $ 304 and $ 896 associated with the Plan for the third quarter and nine months ended March 27, 2020, respectively.

The Company's total expected employer contributions to the Plan during fiscal 2021 are $ 957 .

1 unchanged sentence

S TOCK I NCENTIVE P LANS

At January 1, 2021, the aggregate number of shares authorized for issuance under the Company’s Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”) is 6,782 shares, including 710 shares rolled into the 2018 Plan that were available for future grant under the Company’s 2005 Stock Incentive Plan, as amended and restated (the “2005 Plan”) and 3,000 shares approved by the Company's Shareholders on October 28, 2020.

T he 2018 Plan replaced the 2005 Plan.

At April 2, 2021, the aggregate number of shares authorized for issuance under the Company’s Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”) is 6,782 shares, including 710 shares r olled into the 2018 Plan that were available for future grant under the Company’s 2005 Stock Incentive Plan, as amended and restated (the “2005 Plan”) and 3,000 shares approved by the Company's shareholders on October 28, 2020.

The 2018 Plan replaced the 2005 Plan.

The shares authorized for issuance under the 2018 Plan will continue to be increased by any future cancellations, forfeitures or terminations (other than by exercise) of awards under the 2005 Plan.

2 unchanged sentences

Stock options must be granted with an exercise price of not less than 100% of the fair value of the Company’s common stock on the date of grant and the options generally have a term of seven years .

There were 4,669 shares available for future grant under the 2018 Plan at January 1, 2021 .

There were 4,645 shares available for future grant under the 2018 Plan at April 2, 2021 .

As part of the Com pany's ongoing annual equity grant program for employees, the Company grants performance-based restricted stock awards to certain executives and employees pursuant to the 2018 Plan.

4 unchanged sentences

E MPLOYEE S TOCK P URCHASE P LAN

At January 1, 2021, the aggregate number of shares authorized for issuance under the Company’s 1997 Employee Stock Purchase Plan, as amended and restated (“ESPP”), is 2,300 shares, including 500 shares approved by the Company's Shareholders on October 28, 2020.

At April 2, 2021, the aggregate number of shares authorized for issuance under the Company’s 1997 Employee Stock Purchase Plan, as amended and restated (“ESPP”), i s 2,300 shares, including 500 shares approved by the Company's shareholders on October 28, 2020.

Under the ESPP, rights are granted to purchase shares of common stock at 85 % of the lesser of the market value of such shares at either the beginning or the end of each six-month offering period.

The ESPP permits employees to purchase common stock through payroll deductions, which may not exceed 10 % of an employee’s compensation as defined in the ESPP.

There were 46 shares issued under the ESPP during the six months ended January 1, 2021.

There were no shares issued under the ESPP during the six months ended December 27, 2019.

Shares available for future purchase under the ESPP totaled 483 at January 1, 2021.

There were 46 and 41 shares issued under the ESPP during the nine months ended April 2, 2021 and March 27, 2020, respectively.

Shares available for future purchase under the ESPP totaled 483 at April 2, 2021.

S TOCK O PTION AND A WARD A CTIVITY

6 unchanged sentences

Exercised ( 3 ) 5.52

Outstanding at January 1, 2021 2 $ 5.52 0.62

Outstanding at April 2, 2021 — $ — —

The following table summarizes the status of the Company’s non-vested restricted stock awards and deferred stock awards since July 3, 2020:

5 unchanged sentences

Forfeited ( 47 ) 66.62

Outstanding at January 1, 2021 1,036 $ 70.00

Outstanding at April 2, 2021 1,015 $ 70.92

S TOCK - BASED C OMPENSATION E XPENSE

The Company recognizes expense for its share-based payment plans in the Consolidated Statements of Operations and Comprehensive Income in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”).

The Company had $ 1,026 and $ 542 of capitalized stock-based compensation expense on the Consolidated Balance Sheets for the periods ended January 1, 2021 and July 3, 2020, respectively.

The Company had $ 1,070 and $ 542 of capitalized stock-based compensation expense on the Consolidated Balance Sheets for the periods ended April 2, 2021 and July 3, 2020, respectively.

Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the service period, net of estimated forfeitures.

The following table presents share-based compensation expenses included in the Company’s Consolidated Statements of Operations and Comprehensive Income:

Second Quarters Ended Six Months Ended

January 1, 2021 December 27, 2019 January 1, 2021 December 27, 2019

Third Quarters Ended Nine Months Ended

April 2, 2021 March 27, 2020 April 2, 2021 March 27, 2020

Cost of revenues $ 559 $ 341 $ 1,223 $ 682

12 unchanged sentences

Europe Asia Pacific Eliminations Total

SECOND QUARTER ENDED JANUARY 1, 2021

THIRD QUARTER ENDED APRIL 2, 2021

Net revenues to unaffiliated customers $ 246,231 $ 10,482 $ 144 $ — $ 256,857

1 unchanged sentence

Net revenues $ 246,282 $ 11,216 $ 144 $ ( 785 ) $ 256,857

SECOND QUARTER ENDED DECEMBER 27, 2019

THIRD QUARTER ENDED MARCH 27, 2020

Net revenues to unaffiliated customers $ 196,158 $ 11,408 $ 450 $ — $ 208,016

1 unchanged sentence

Net revenues $ 196,547 $ 12,162 $ 450 $ ( 1,143 ) $ 208,016

SIX MONTHS ENDED JANUARY 1, 2021

NINE MONTHS ENDED APRIL 2, 2021

Net revenues to unaffiliated customers $ 639,851 $ 32,957 $ 346 $ — $ 673,154

1 unchanged sentence

Net revenues $ 640,778 $ 34,599 $ 346 $ ( 2,569 ) $ 673,154

SIX MONTHS ENDED DECEMBER 27, 2019

NINE MONTHS ENDED MARCH 27, 2020

Net revenues to unaffiliated customers $ 539,535 $ 37,569 $ 2,129 $ — $ 579,233

14 unchanged sentences

The following table presents the Company's net revenue by end user for the periods presented:

Second Quarters Ended Six Months Ended

January 1, 2021 December 27, 2019 January 1, 2021 December 27, 2019

Third Quarters Ended Nine Months Ended

April 2, 2021 March 27, 2020 April 2, 2021 March 27, 2020

$ 217,255 $ 187,560 $ 577,093 $ 516,659

8 unchanged sentences

The following table presents the Company's net revenue by end application for the periods presented:

Second Quarters Ended Six Months Ended

January 1, 2021 December 27, 2019 January 1, 2021 December 27, 2019

Third Quarters Ended Nine Months Ended

April 2, 2021 March 27, 2020 April 2, 2021 March 27, 2020

$ 81,481 $ 78,113 $ 238,650 $ 164,360

13 unchanged sentences

The following table presents the Company's net revenue by product grouping for the periods presented:

Second Quarters Ended Six Months Ended

January 1, 2021 December 27, 2019 January 1, 2021 December 27, 2019

Third Quarters Ended Nine Months Ended

April 2, 2021 March 27, 2020 April 2, 2021 March 27, 2020

Components (1)

6 unchanged sentences

(1) Components include technology elements typically performing a single, discrete technological function, which when physically combined with other components may be used to create a module or sub-assembly.

Examples include, but are not limited to, power amplifiers and limiters, switches, oscillators, filters, equalizers, digital and analog converters, chips, MMICs (monolithic microwave integrated circuits), and memory and storage devices.

Examples include, but are not limited to, power amplifiers and limiters,

switches, oscillators, filters, equalizers, digital and analog converters, chips, MMICs (monolithic microwave integrated circuits), and memory and storage devices.

(2) Modules and Sub-assemblies include combinations of multiple functional technology elements and/or components that work together to perform multiple functions but are typically resident on or within a single board or housing.

5 unchanged sentences

The following table presents the Company's net revenue by platform for the periods presented:

Second Quarters Ended Six Months Ended

January 1, 2021 December 27, 2019 January 1, 2021 December 27, 2019

Third Quarters Ended Nine Months Ended

April 2, 2021 March 27, 2020 April 2, 2021 March 27, 2020

$ 120,640 $ 110,728 $ 299,551 $ 303,186

9 unchanged sentences

Europe Asia Pacific Eliminations Total

January 1, 2021 $ 119,455 $ 5,935 $ 7 $ — $ 125,397

April 2, 2021 $ 122,461 $ 5,876 $ 6 $ — $ 128,343

July 3, 2020 $ 82,588 $ 5,144 $ 5 $ — $ 87,737

1 unchanged sentence

Customers comprising 10% or more of the Company’s revenues for the periods shown are as follows:

Second Quarters Ended Six Months Ended

January 1, 2021 December 27, 2019 January 1, 2021 December 27, 2019

Third Quarters Ended Nine Months Ended

April 2, 2021 March 27, 2020 April 2, 2021 March 27, 2020

Raytheon Technologies 18 % 17 % 22 % 15 %

Navy 16 % * * *

Lockheed Martin Corporation

Northrop Grumman Corporation * 10 % * 10 %

14 % 17 % 15 % 17 %

L3Harris Technologies * * * 10 %

2 unchanged sentences

While the Company typically has customers from which it derives 10% or more of its revenue, the sales to each of these customers are spread across multiple programs and platforms.

There were no programs comprising 10% or more of the Company's revenues for the second quarters and six months ended January 1, 2021 and December 27, 2019.

There were no programs comprising 10% or more of the Company's revenues for the third quarters and nine months ended April 2, 2021 and March 27, 2020.

Commitments and Contingencies

8 unchanged sentences

P URCHASE C OMMITMENTS

As of January 1, 2021, the Company has entered into non-cancelable purchase commitments for certain inventory components and services used in its normal operations.

As of April 2, 2021, the Company has entered into non-cancelable purchase commitments for certain inventory components and services used in its normal operations.

The purchase commitments covered by these agreements are for less than one year and aggregate to $ 145,019 .

5 unchanged sentences

The Company has evaluated subsequent events from the date of the Consolidated Balance Sheet through the date the consolidated financial statements were issued.

As of January 1, 2021, the Company held $ 61,626 of Restricted cash and recorded a Deferred consideration liability for a purchase price payout to the employee shareholders of POC.

This payout was made during the third quarter of fiscal 2021.

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