10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549 

________________________________________________________________

FORM 10-Q

________________________________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 2, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

COMMISSION FILE NUMBER: 0-23599

________________________________________________________________

MERCURY SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

________________________________________________________________

Massachusetts		04-2741391
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
50 MINUTEMAN ROAD		01810
ANDOVER	MA
(Address of principal executive offices)		(Zip Code)

978-256-1300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	MRCY	The Nasdaq Stock Market

____________________________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes  ☐    No  x

Shares of Common Stock outstanding as of April 30, 2021 56,161,158 shares

1

MERCURY SYSTEMS, INC.

INDEX

		PAGE NUMBER
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3
	Consolidated Balance Sheets as of April 2, 2021 and July 3, 2020	3
	Consolidated Statements of Operations and Comprehensive Income for the third quarters and nine months ended April 2, 2021 and March 27, 2020	4
	Consolidated Statements of Shareholders’ Equity for the third quarters and nine months ended April 2, 2021 and March 27, 2020	5
	Consolidated Statements of Cash Flows for the nine months ended April 2, 2021 and March 27, 2020	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34
Item 4.	Controls and Procedures	34
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 6.	Exhibits	35
	Signatures	36

2

PART I. FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

MERCURY SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

	April 2, 2021		July 3, 2020
Assets
Current assets:
Cash and cash equivalents	$	121,943	$	226,838
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
Unbilled receivables and costs in excess of billings	138,378		90,289
Inventory	226,840		178,093
Prepaid income taxes	—		2,498
Prepaid expenses and other current assets	14,177		16,613
Total current assets	626,941		634,769
Property and equipment, net	128,343		87,737
Goodwill	782,656		614,076
Intangible assets, net	294,681		208,748
Operating lease right-of-use assets	65,780		60,613
Other non-current assets	4,919		4,777
Total assets	$	1,903,320	$	1,610,720
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	56,643	$	41,877
Accrued expenses	30,566		23,794
Accrued compensation	42,620		41,270
Deferred revenues and customer advances	32,840		18,974
Total current liabilities	162,669		125,915
Deferred income taxes	37,184		13,889
Income taxes payable	4,117		4,117
Long-term debt	160,000		—
Operating lease liabilities	70,619		66,981
Other non-current liabilities	14,751		15,034
Total liabilities	449,340		225,936
Commitments and contingencies (Note M)
Shareholders’ equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued or outstanding	—		—
Common stock, $0.01 par value; 85,000,000 shares authorized; 55,163,620 and 54,702,322 shares issued and outstanding at April 2, 2021 and July 3, 2020, respectively	552		547
Additional paid-in capital	1,100,188		1,074,667
Retained earnings	356,574		312,455
Accumulated other comprehensive loss	(3,334)		(2,885)
Total shareholders’ equity	1,453,980		1,384,784
Total liabilities and shareholders’ equity	$	1,903,320	$	1,610,720

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

3

MERCURY SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except per share data)

(Unaudited)

	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
Cost of revenues	151,234		114,691		390,745		319,002
Gross margin	105,623		93,325		282,409		260,231
Operating expenses:
Selling, general and administrative	38,250		33,991		102,750		96,765
Research and development	30,218		24,967		85,763		71,497
Amortization of intangible assets	12,717		7,848		28,091		22,859
Restructuring and other charges	(4)		66		2,244		1,815
Acquisition costs and other related expenses	2,730		111		4,966		2,652
Total operating expenses	83,911		66,983		223,814		195,588
Income from operations	21,712		26,342		58,595		64,643
Interest income	34		458		166		1,957
Interest expense	(549)		(58)		(622)		(58)
Other (expense) income, net	(200)		2,186		(2,027)		401
Income before income taxes	20,997		28,928		56,112		66,943
Income tax provision	5,362		5,363		11,993		8,455
Net income	$	15,635	$	23,565	$	44,119	$	58,488
Basic net earnings per share	$	0.28	$	0.43	$	0.80	$	1.07
Diluted net earnings per share	$	0.28	$	0.43	$	0.80	$	1.06
Weighted-average shares outstanding:
Basic	55,146		54,604		55,033		54,514
Diluted	55,526		55,127		55,434		55,071
Comprehensive income:
Net income	$	15,635	$	23,565	$	44,119	$	58,488
Foreign currency translation adjustments	218		344		(541)		227
Pension benefit plan, net of tax	30		7		92		22
Total other comprehensive income (loss), net of tax	248		351		(449)		249
Total comprehensive income	$	15,883	$	23,916	$	43,670	$	58,737

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

4

MERCURY SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)

	For the Third Quarter Ended April 2, 2021
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Amount
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
Stock-based compensation	—	—		7,455		—		—		7,455
Net income	—	—		—		15,635		—		15,635
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 Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Amount
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)
Stock-based compensation	—	—		6,814		—		—		6,814
Net income	—	—		—		23,565		—		23,565
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 Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Amount
Balance at July 3, 2020	54,702	$	547	$	1,074,667	$	312,455	$	(2,885)	$	1,384,784
Issuance of common stock under employee stock incentive plans	417	5		10		—		—		15
Issuance of common stock under employee stock purchase plan	46	—		3,184		—		—		3,184
Purchase and retirement of common stock	(1)	—		(66)		—		—		(66)
Stock-based compensation	—	—		22,393		—		—		22,393
Net income	—	—		—		44,119		—		44,119
Other comprehensive loss	—	—		—		—		(449)		(449)
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 Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Amount
Balance at June 30, 2019	54,248	$	542	$	1,058,745	$	226,743	$	(1,291)	$	1,284,739
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)
Stock-based compensation	—	—		19,244		—		—		19,244
Net income	—	—		—		58,488		—		58,488
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.

5

MERCURY SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended
	April 2, 2021		March 27, 2020
Cash flows from operating activities:
Net income	$	44,119	$	58,488
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	46,241		36,579
Stock-based compensation expense	21,865		19,004
(Benefit) provision for deferred income taxes	(6,357)		1,174
Gain on investment	—		(3,810)
Other non-cash items	3,094		2,402
Changes in operating assets and liabilities, net of effects of businesses acquired:
Accounts receivable, unbilled receivables, and costs in excess of billings	(28,351)		(34,254)
Inventory	(37,499)		(13,525)
Prepaid income taxes	2,480		(1,046)
Prepaid expenses and other current assets	3,939		508
Other non-current assets	3,424		(165)
Accounts payable, accrued expenses, and accrued compensation	9,072		15,483
Deferred revenues and customer advances	10,509		2,446
Other non-current liabilities	(2,483)		3,174
Net cash provided by operating activities	70,053		86,458
Cash flows from investing activities:
Acquisition of business, net of cash acquired	(305,263)		(96,502)
Purchases of property and equipment	(34,708)		(31,788)
Proceeds from sale of investment	1,538		4,310
Net cash used in investing activities	(338,433)		(123,980)
Cash flows from financing activities:
Proceeds from employee stock plans	3,199		2,396
Borrowings under credit facilities	160,000		200,000
Purchase and retirement of common stock	(66)		(15,683)
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:
Interest	$	548	$	—
Income taxes	$	8,454	$	10,457
Supplemental disclosures—non-cash activities:
Non-cash investing activity	$	892	$	—

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

6

MERCURY SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except per share data)

(Unaudited)

A.Description of Business

Mercury Systems, Inc. (the “Company” or “Mercury”) is a leading technology company serving the aerospace and defense industry, positioned at the intersection of high-tech and defense. Headquartered in Andover, Massachusetts, the Company delivers solutions that power a broad range of aerospace and defense programs, optimized for mission success in some of the most challenging and demanding environments. The Company envisions, creates and delivers innovative technology solutions purpose-built to meet its customers’ most-pressing high-tech needs, including those specific to the defense community.

As a leading manufacturer of essential components, modules and subsystems, the Company sells to defense prime contractors, the U.S. government and original equipment manufacturer (“OEM”) commercial aerospace companies. The Company has built a trusted, contemporary portfolio of proven product solutions purpose-built for aerospace and defense that it believes meets and exceeds the performance needs of its defense and commercial customers. Customers add their own applications and algorithms to the Company's specialized, secure and innovative pre-integrated solutions. This allows them to complete their full system by integrating with their platform the sensor technology and, in some cases, the processing from Mercury. The Company's products and solutions are deployed in more than 300 programs with over 25 different defense prime contractors and commercial aviation customers.

The Company's transformational business model accelerates the process of making new technology profoundly more accessible to its customers by bridging the gap between commercial technology and aerospace and defense applications. The Company's long-standing deep relationships with leading high-tech companies, coupled with the Company's high level of research and development (“R&D”) investments and industry-leading trusted and secure design and manufacturing capabilities, are the foundational tenets of this highly successful model.

The Company's capabilities, technology and R&D investment strategy combine to differentiate Mercury in its industry. The Company's technologies and capabilities include secure embedded processing modules and subsystems, mission computers, secure and rugged rack-mount servers, safety-critical avionics, radio frequency (“RF”) components, multi-function assemblies, subsystems and custom microelectronics. The Company maintains its technological edge by investing in critical capabilities and intellectual property in processing and RF, leveraging open standards and open architectures to adapt quickly those building blocks into solutions for highly data-intensive applications, including emerging needs in areas such as artificial intelligence.

The Company's mission critical solutions are deployed by its customers for a variety of applications including command, control, communications, computers, intelligence, surveillance and reconnaissance, electronic intelligence, avionics, electro-optical/infrared, electronic warfare, weapons and missile defense, hypersonics and radar.

Investors and others should note that the Company announces material financial information using its website (www.mrcy.com), Securities and Exchange Commission (“SEC”) filings, press releases, public conference calls, webcasts, and social media, including Twitter (twitter.com/mrcy and twitter.com/mrcy_CEO) and LinkedIn (www.linkedin.com/company/mercury-systems). Therefore, the Company encourages investors and others interested in Mercury to review the information the Company posts on the social media and other communication channels listed on its website.

B.Summary of Significant Accounting Policies

BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared by the Company in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America for interim financial information and with the instructions to the Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in annual consolidated financial statements have been condensed or omitted pursuant to those rules and regulations; however, in the opinion of management the financial information reflects all adjustments, consisting of adjustments of a normal recurring nature, necessary for fair presentation. 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 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.

7

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.

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

BUSINESS COMBINATIONS

The Company utilizes the acquisition method of accounting under ASC 805, Business Combinations, (“ASC 805”), for all transactions and events in which it obtains control over one or more other businesses, to recognize the fair value of all assets and liabilities acquired, even if less than one hundred percent ownership is acquired, and in establishing the acquisition date fair value as the measurement date for all assets and liabilities assumed. The Company also utilizes ASC 805 for the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in business combinations.

FOREIGN CURRENCY

Local currencies are the functional currency for the Company’s subsidiaries in Switzerland, the United Kingdom, France, Japan, Spain and Canada. The accounts of foreign subsidiaries are translated using exchange rates in effect at period-end for assets and liabilities and at average exchange rates during the period for results of operations. The related translation adjustments are reported in Accumulated other comprehensive loss (“AOCL”) in shareholders’ equity. Gains (losses) resulting from non-U.S. currency transactions are included in Other expense, net in the Consolidated Statements of Operations and Comprehensive Income and were immaterial for all periods presented.

REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, (“ASC 606”). Revenues are derived from the sales of products that are grouped into one of the following three categories: (i) components; (ii) modules and sub-assemblies; and (iii) integrated subsystems. The Company also generates revenues from the performance of services, including systems engineering support, consulting, maintenance and other support, testing and installation. Each promised good or service within a contract is accounted for separately under the guidance of ASC 606 if they are distinct. Promised goods or services not meeting the criteria for being a distinct performance obligation are bundled into a single performance obligation with other goods or services that together meet the criteria for being distinct. The appropriate allocation of the transaction price and recognition of revenue is then determined for the bundled performance obligation.

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 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, totaled 70% and 74% of 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. These long-term contracts involve the design, development, manufacture, or modification of complex modules and sub-assemblies or integrated subsystems and related services. Long-term contracts include both fixed-price and cost reimbursable contracts. 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 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. The Company accrues for anticipated warranty costs upon product shipment. The Company does not consider activities related to such assurance warranties, if any, to be a separate performance obligation. The Company does offer separately priced extended warranties which generally range from 12 to 36 months that are treated as separate performance obligations. The transaction price allocated to extended warranties is recognized over time in proportion to the costs expected to be incurred in satisfying the obligations under the contract.

8

All revenues are reported net of government assessed taxes (e.g., sales taxes or value-added taxes). Refer to Note L for disaggregation of revenue for the period.

ACCOUNTS RECEIVABLE

Accounts receivable, net, represents amounts that have been billed and are currently due from customers. The Company maintains an allowance for credit losses to provide for the estimated amount of receivables that will not be collected. The Company provides credit to customers in the normal course of business. 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 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. For contracts where revenue is recognized over time, the invoicing events are typically based on specified performance obligation deliverables or milestone events, or quantifiable measures of performance.

CONTRACT BALANCES    

Contract balances result from the timing of revenue recognized, billings and cash collections, and the generation of contract assets and liabilities. Contract assets represent revenue recognized in excess of amounts invoiced to the customer and the right to payment is not subject to the passage of time. Contract assets are presented as unbilled receivables and costs in excess of billings on the Company’s Consolidated Balance Sheets. Contract liabilities consist of deferred product revenue, billings in excess of revenues, deferred service revenue, and customer advances. Deferred product revenue represents amounts that have been invoiced to customers, but are not yet recognizable as revenue because the Company has not satisfied its performance obligations under the contract. Billings in excess of revenues represents milestone billing contracts where the billings of the contract exceed recognized revenues. Deferred service revenue primarily represents amounts invoiced to customers for annual maintenance contracts or extended warranty contracts, which are recognized over time in proportion to the costs expected to be incurred in satisfying the obligations under the contract. Customer advances represent deposits received from customers on an order. Contract liabilities are included in deferred revenue and the long-term portion of deferred revenue is included within other non-current liabilities on the Company’s Consolidated Balance Sheets. Contract balances are reported in a net position on a contract-by-contract basis.

The contract asset balances were $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 liability 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 at 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.

REMAINING PERFORMANCE OBLIGATIONS

The Company includes in its computation of remaining performance obligations customer orders for which it has accepted signed sales orders. 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 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.

WEIGHTED-AVERAGE SHARES

Weighted-average shares were calculated as follows:

	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
Effect of dilutive equity instruments	380	523	401	557
Diluted weighted-average shares outstanding	55,526	55,127	55,434	55,071

9

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.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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. 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. For public business entities, the standard is effective for fiscal years ending after December 15, 2020. The ASU requires retrospective adoption and permits early adoption for all entities. The Company does not expect this guidance to have a material impact to its consolidated financial statements or related disclosures.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, an amendment of the FASB Accounting Standards Codification. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions for intraperiod tax allocations and deferred tax liabilities for equity method investments and add guidance as to whether a step-up in tax basis of goodwill relates to a business combination or a separate transaction. This ASU is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. 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.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

Effective July 4, 2020, the Company adopted ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which broadens the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. This ASU requires an entity to record an allowance for credit losses for certain financial instruments and financial assets, including trade receivables, based on expected losses rather than incurred losses. The Company will rely on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount and will exercise judgment in determining the relevant information and estimation methods that are appropriate in measurement of the credit losses. This adoption did not have a material impact to the Company's consolidated financial statements or related disclosures.

Effective July 4, 2020 the Company adopted ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU eliminates the requirement to measure the implied fair value of goodwill by assigning the fair value of a reporting unit to all assets and liabilities within that unit, the Step 2 test, from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited by the amount of goodwill in that reporting unit. This adoption did not have a material impact on the Company's consolidated financial statements or related disclosures.

Effective July 4, 2020 the Company adopted ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), an amendment of the FASB Accounting Standards Codification. The ASU provides guidance to determine whether to capitalize implementation costs of a cloud computing arrangement that is a service contract or expense as incurred. Costs of arrangements that do not include a software license should be accounted for as a service contract and expensed as incurred. This adoption did not have a material impact to the Company's consolidated financial statements or related disclosures.

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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 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. Among other changes, the amendments impact SEC rules relating to: the definition of “significant” subsidiaries, requirements to provide financial statements for “significant” acquisitions, and the formulation and usage of pro forma financial information. The final rule is applicable for fiscal years beginning after December 31, 2020, with early adoption permitted as long as all amendments are adopted in their entirety. The Company has early adopted this final rule in conjunction with our acquisition of Physical Optics Corporation ("POC") on December 30, 2020. This adoption did not have a material impact on the Company's consolidated financial statements or related disclosures.

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C. Acquisitions

PHYSICAL OPTICS CORPORATION ACQUISITION

On December 7, 2020, the Company signed a definitive agreement to acquire POC for a purchase price of $310,000, subject to net working capital and net debt adjustments. On December 30, 2020, the transaction closed and the Company acquired POC. Based in Torrance, California, POC more than doubles the Company's global avionics business and expands its collective footprint in the platform and mission management market. The Company funded the acquisition through a combination of cash on hand and the Company's existing revolving credit facility (the "Revolver").

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.

The following table presents the net purchase price and the fair values of the assets and liabilities of POC on a preliminary basis:

	Amounts
Consideration transferred
Cash paid at closing	$	251,229
Cash paid post closing	61,626
Working capital and net debt adjustment	(4,737)
Less cash acquired	(2,855)
Net purchase price	$	305,263
Estimated fair value of tangible assets acquired and liabilities assumed
Cash	$	2,855
Accounts receivable	24,966
Inventory	11,125
Fixed assets	23,236
Other current and non-current assets	14,968
Accounts payable	(3,777)
Accrued expenses	(4,502)
Other current and non-current liabilities	(42,987)
Estimated fair value of net tangible assets acquired	25,884
Estimated fair value of identifiable intangible assets	114,000
Estimated goodwill	168,234
Estimated fair value of net assets acquired	308,118
Less cash acquired	(2,855)
Net purchase price	$	305,263

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 identifiable 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.

The estimated goodwill of $168,234 largely reflects the potential synergies and expansion of the Company’s offerings across product lines and markets complementary to the Company’s existing products and markets and is not deductible for tax purposes. The goodwill from this acquisition is reported in the Mission reporting unit. The Company has not furnished pro forma information relating to POC because such information is not material to the Company’s financial results.

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.

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AMERICAN PANEL CORPORATION ACQUISITION

On September 23, 2019, the Company acquired American Panel Corporation (“APC”). Based in Alpharetta, Georgia, APC is a leading innovator in large area display technology for the aerospace and defense market. APC's capabilities are deployed on a wide range of next-generation platforms. The Company acquired APC for an all cash purchase price of $100,000, prior to net working capital and net debt adjustments. The Company funded the acquisition with cash on hand.

The following table presents the net purchase price and the fair values of the assets and liabilities of APC:

	Amounts
Consideration transferred
Cash paid at closing	$	100,826
Working capital and net debt adjustment	(5,952)
Liabilities assumed	2,454
Less cash acquired	(826)
Net purchase price	$	96,502
Fair value of tangible assets acquired and liabilities assumed
Cash	$	826
Accounts receivable	3,726
Inventory	11,233
Fixed assets	690
Other current and non-current assets	3,494
Accounts payable	(1,554)
Accrued expenses	(1,457)
Other current and non-current liabilities	(5,852)
Fair value of net tangible assets acquired	11,106
Fair value of identifiable intangible assets	33,200
Goodwill	53,022
Fair value of net assets acquired	97,328
Less cash acquired	(826)
Net purchase price	$	96,502

On September 23, 2020, the measurement period for APC expired. The identifiable intangible assets include customer relationships of $20,600 with a useful life of 11 years, completed technology of $10,400 with a useful life of 11 years and backlog of $2,200 with a useful life of two years.

The goodwill of $53,022 largely reflects the potential synergies and expansion of the Company's offerings across product lines and markets complementary to the Company's existing products and markets. The goodwill from this acquisition is reported under the Mission reporting unit. Since APC was a qualified subchapter S subsidiary, the acquisition is treated as an asset purchase for tax purposes. The Company has estimated the tax value of the intangible assets from this transaction and is amortizing the amount over 15 years for tax purposes. As of April 2, 2021, the Company had $48,840 of goodwill deductible for tax purposes.

D.Fair Value of Financial Instruments

During the nine months ended April 2, 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 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.

The carrying values of cash and cash equivalents, including money market funds, restricted cash, accounts receivable and payable, and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The Company determined the carrying value of long-term debt approximated fair value due to variable interest rates charged on the borrowings, which reprice frequently.

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E. Inventory

Inventory is stated at the lower of cost (first-in, first-out) or net realizable value, and consists of materials, labor and overhead. On a quarterly basis, the Company uses consistent methodologies to evaluate inventory for net realizable value. Once an item is written down, the value becomes the new inventory cost basis. The Company reduces the value of inventory for excess and obsolete inventory, consisting of on-hand inventory in excess of estimated usage. The excess and obsolete inventory evaluation is based upon assumptions about future demand, historical usage, product mix and possible alternative uses. Inventory was comprised of the following:

	April 2, 2021		July 3, 2020
Raw materials	$	148,279	$	111,225
Work in process	54,667		49,647
Finished goods	23,894		17,221
Total	$	226,840	$	178,093

F.Goodwill

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 nine months ended April 2, 2021:

	Total
Balance at July 3, 2020	$	614,076
Goodwill adjustment for the APC acquisition	346
Goodwill arising from the POC acquisition	168,234
Balance at April 2, 2021	$	782,656

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

G.Restructuring

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

All of the restructuring and other charges are classified as Operating expenses in the Consolidated Statements of Operations and Comprehensive Income and any remaining severance obligations are expected to be paid within the next twelve months. The restructuring liability is classified as Accrued expenses in the Consolidated Balance Sheets.

The following table presents the detail of activity for the Company’s restructuring plans:

	Severance & Related
Restructuring liability at July 3, 2020	$	597
Restructuring and other charges	2,244
Cash paid	(2,333)
Restructuring liability at April 2, 2021	$	508

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H.Income Taxes

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.

I.Debt

REVOLVING CREDIT FACILITY

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 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.

J.Employee Benefit Plan

PENSION PLAN

The Company maintains a defined benefit pension plan (the “Plan”) for its Swiss employees, which is administered by an independent pension fund. The Plan is mandated by Swiss law and meets the criteria for a defined benefit plan under ASC 715, Compensation—Retirement Benefits (“ASC 715”), because participants of the Plan are entitled to a defined rate of return on contributions made. The independent pension fund is a multi-employer plan with unrestricted joint liability for all participating companies for which the Plan’s overfunding or underfunding is allocated to each participating company based on an allocation key determined by the Plan.

The Company recognizes a net asset or liability for the Plan equal to the difference between the projected benefit obligation of the Plan and the fair value of the Plan’s assets as required by ASC 715. 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 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.

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K.Stock-Based Compensation

STOCK INCENTIVE PLANS

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 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. 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. The foregoing does not affect any outstanding awards under the 2005 Plan, which remain in full force and effect in accordance with their terms. The 2018 Plan provides for the grant of non-qualified and incentive stock options, restricted stock, stock appreciation rights and deferred stock awards to employees and non-employees. 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 4,645 shares available for future grant under the 2018 Plan at April 2, 2021.

As part of the Company'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. Performance awards vest based on the requisite service period subject to the achievement of specific financial performance targets. Based on the performance targets, some of these awards require graded vesting which results in more rapid expense recognition compared to traditional time-based vesting over the same vesting period. The Company monitors the probability of achieving the performance targets on a quarterly basis and may adjust periodic stock compensation expense accordingly based on its determination of the likelihood for reaching targets. The performance targets generally include the achievement of internal performance targets in relation to a peer group of companies.

EMPLOYEE STOCK PURCHASE PLAN

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”), is 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 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.

STOCK OPTION AND AWARD ACTIVITY

The following table summarizes activity of the Company’s stock option plans since July 3, 2020:

	Options Outstanding
	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Outstanding at July 3, 2020	3	$	5.52	1.12
Granted	—	—
Exercised	(3)	5.52
Canceled	—	—
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:

	Non-vested Restricted Stock Awards
	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding at July 3, 2020	957	$	61.59
Granted	519	77.00
Vested	(414)	52.54
Forfeited	(47)	66.62
Outstanding at April 2, 2021	1,015	$	70.92

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STOCK-BASED COMPENSATION EXPENSE

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 $1,070 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:

	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
Selling, general and administrative	6,088		5,476		17,383		15,503
Research and development	764		997		3,259		2,819
Stock-based compensation expense before tax	7,411		6,814		21,865		19,004
Income taxes	(1,927)		(1,772)		(5,685)		(4,941)
Stock-based compensation expense, net of income taxes	$	5,484	$	5,042	$	16,180	$	14,063

L.Operating Segment, Geographic Information and Significant Customers

Operating segments are defined as components of an enterprise evaluated regularly by the Company's CODM in deciding how to allocate resources and assess performance. 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 Company evaluated this reorganization under ASC 280 to determine whether this change has impacted the Company's single operating and reportable segment. The Company concluded this change had no effect given the CODM continues to evaluate and manage the Company on the basis of one operating and reportable segment. The Company utilized the management approach for determining its operating segment in accordance with ASC 280.

The geographic distribution of the Company’s revenues as determined by country in which the Company's legal subsidiary is domiciled is summarized as follows:

	U.S.		Europe		Asia Pacific		Eliminations		Total
THIRD QUARTER ENDED APRIL 2, 2021
Net revenues to unaffiliated customers	$	246,231	$	10,482	$	144	$	—	$	256,857
Inter-geographic revenues	51		734		—		(785)		—
Net revenues	$	246,282	$	11,216	$	144	$	(785)	$	256,857
THIRD QUARTER ENDED MARCH 27, 2020
Net revenues to unaffiliated customers	$	196,158	$	11,408	$	450	$	—	$	208,016
Inter-geographic revenues	389		754		—		(1,143)		—
Net revenues	$	196,547	$	12,162	$	450	$	(1,143)	$	208,016
NINE MONTHS ENDED APRIL 2, 2021
Net revenues to unaffiliated customers	$	639,851	$	32,957	$	346	$	—	$	673,154
Inter-geographic revenues	927		1,642		—		(2,569)		—
Net revenues	$	640,778	$	34,599	$	346	$	(2,569)	$	673,154
NINE MONTHS ENDED MARCH 27, 2020
Net revenues to unaffiliated customers	$	539,535	$	37,569	$	2,129	$	—	$	579,233
Inter-geographic revenues	2,015		2,222		—		(4,237)		—
Net revenues	$	541,550	$	39,791	$	2,129	$	(4,237)	$	579,233

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The Company offers a broad family of products designed to meet the full range of requirements in compute-intensive, signal processing, image processing and command and control applications. To maintain a competitive advantage, the Company seeks to leverage technology investments across multiple product lines and product solutions.

The Company’s products are typically compute-intensive and require extremely high bandwidth and high throughput. These systems often must also meet significant SWaP constraints for use in aircraft, unmanned aerial vehicles, ships and other platforms and be ruggedized for use in harsh environments. The Company's products transform the massive streams of digital data created in these applications into usable information in real time. The systems can scale from a few processors to thousands of processors.

In recent years, the Company completed a series of acquisitions that changed its technological capabilities, applications and end markets. As these acquisitions and changes occurred, the Company's proportion of revenue derived from the sale of components in different technological areas, and modules, sub-assemblies and integrated subsystems which combine technologies into more complex diverse products has shifted. The following tables present revenue consistent with the Company's strategy of expanding its technological capabilities and program content. As additional information related to the Company’s products by end user, application, product grouping and/or platform is attained, the categorization of these products can vary over time. When this occurs, the Company reclassifies revenue by end user, application, product grouping and/or platform for prior periods. Such reclassifications typically do not materially change the underlying trends of results within each revenue category.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Domestic(1)	$	217,255	$	187,560	$	577,093	$	516,659
International/Foreign Military Sales(2)	39,602		20,456		96,061		62,574
Total Net Revenue	$	256,857	$	208,016	$	673,154	$	579,233

(1) Domestic revenues consist of sales where the end user is within the U.S., as well as sales to prime defense contractor customers where the ultimate end user location is not defined. 

(2) International/Foreign Military Sales consist of sales to U.S. prime defense contractor customers where the end user is known to be outside the U.S., foreign military sales through the U.S. government, and direct sales to non-U.S. based customers intended for end use outside of the U.S.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Radar(1)	$	81,481	$	78,113	$	238,650	$	164,360
Electronic Warfare(2)	25,782		37,488		91,342		109,684
Other Sensor & Effector(3)	25,252		26,279		72,352		80,681
Total Sensor & Effector	132,515		141,880		402,344		354,725
C4I(4)	107,144		47,351		219,284		154,140
Other(5)	17,198		18,785		51,526		70,368
Total Net Revenue	$	256,857	$	208,016	$	673,154	$	579,233

    (1) Radar includes end-use applications where radio frequency signals are utilized to detect, track, and identify objects.

    (2) Electronic Warfare includes end-use applications comprising the offensive and defensive use of the electromagnetic spectrum.

    (3) Other Sensor & Effector products include all Sensor & Effector end markets other than Radar and Electronic Warfare.

    (4) C4I includes rugged secure rackmount servers that are designed to drive the most powerful military processing applications.

    (5) Other products include all component and other sales where the end use is not specified.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Components(1)	$	40,355	$	56,786	$	131,330	$	170,515
Modules and Sub-assemblies(2)	21,749		25,805		74,208		90,569
Integrated Subsystems(3)	194,753		125,425		467,616		318,149
Total Net Revenue	$	256,857	$	208,016	$	673,154	$	579,233

(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,

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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. Modules and sub-assemblies may in turn be combined to form an integrated subsystem. Examples of modules and sub-assemblies include, but are not limited to, embedded processing modules, embedded processing boards, switch fabric boards, high speed input/output boards, digital receiver boards, graphics and video processing and Ethernet and IO (input-output) boards, multi-chip modules, integrated radio frequency and microwave multi-function assemblies, tuners and transceivers.

(3) Integrated Subsystems include multiple modules and/or sub-assemblies combined with a backplane or similar functional element and software to enable a solution. These are typically but not always integrated within a chassis and with cooling, power and other elements to address various requirements and are also often combined with additional technologies for interaction with other parts of a complete system or platform. Integrated subsystems also include spare and replacement modules and sub-assemblies sold as part of the same program for use in or with integrated subsystems sold by the Company.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Airborne(1)	$	120,640	$	110,728	$	299,551	$	303,186
Land(2)	54,394		26,130		149,949		66,572
Naval(3)	47,775		44,631		130,616		116,782
Other(4)	34,048		26,527		93,038		92,693
Total Net Revenues	$	256,857	$	208,016	$	673,154	$	579,233

(1) Airborne platform includes products that relate to personnel, equipment, or pieces of equipment designed for airborne applications.

(2) Land platform includes products that relate to fixed or mobile equipment, or pieces of equipment for personnel, weapon systems, vehicles and support elements operating on land.

(3) Naval platform includes products that relate to personnel, equipment, or pieces of equipment designed for naval operations.

(4) All platforms other than Airborne, Land or Naval.

The geographic distribution of the Company’s identifiable long-lived assets is summarized as follows:

	U.S.		Europe		Asia Pacific		Eliminations		Total
April 2, 2021	$	122,461	$	5,876	$	6	$	—	$	128,343
July 3, 2020	$	82,588	$	5,144	$	5	$	—	$	87,737

Identifiable long-lived assets exclude right-of-use assets, goodwill, and intangible assets.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Raytheon Technologies	18	%	17	%	22	%	15	%
U.S. Navy	16	%	*		*		*
Lockheed Martin Corporation	14	%	17	%	15	%	17	%
L3Harris Technologies	*		*		*		10	%
	48	%	34	%	37	%	42	%

*    Indicates that the amount is less than 10% of the Company's revenue for the respective period.

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 third quarters and nine months ended April 2, 2021 and March 27, 2020.

M.Commitments and Contingencies

LEGAL CLAIMS

The Company is subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of its business. Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to any matters currently pending against the Company and intends to defend itself vigorously. The outcome of these matters, individually and in the aggregate, is not expected to have a material impact on the Company’s cash flows, results of operations, or financial position.

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INDEMNIFICATION OBLIGATIONS

The Company’s standard product sales and license agreements entered into in the ordinary course of business typically contain an indemnification provision pursuant to which the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with any patent, copyright or other intellectual property infringement claim by any third party with respect to the Company’s products. Such provisions generally survive termination or expiration of the agreements. The potential amount of future payments the Company could be required to make under these indemnification provisions is, in some instances, unlimited.

PURCHASE COMMITMENTS

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.

OTHER

As part of the Company's strategy for growth, the Company continues to explore acquisitions or strategic alliances. The associated acquisition costs incurred in the form of professional fees and services may be material to the future periods in which they occur, regardless of whether the acquisition is ultimately completed.

The Company may elect from time to time to purchase and subsequently retire shares of common stock in order to settle employees’ tax liabilities associated with vesting of a restricted stock award or exercise of stock options. These transactions would be treated as a use of cash in financing activities in the Company's Consolidated Statements of Cash Flows.

N.Subsequent Events

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

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ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

From time to time, information provided, statements made by our employees or information included in our filings with the Securities and Exchange Commission (“SEC”) may contain statements that are not historical facts but that are “forward-looking statements,” which involve risks and uncertainties. You can identify these statements by the use of the words “may,” “will,” “could,” “should,” “would,” “plans,” “expects,” “anticipates,” “continue,” “estimate,” “project,” “intend,” “likely,” “forecast,” “probable,” “potential,” and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, continued funding of defense programs, the timing and amounts of such funding, general economic and business conditions, including unforeseen weakness in the Company’s markets, effects of epidemics and pandemics such as COVID, effects of any U.S. Federal government shutdown or extended continuing resolution, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, changes in, or in the U.S. Government’s interpretation of, Federal export control or procurement rules and regulations, market acceptance of the Company's products, shortages in components, production delays or unanticipated expenses due to performance quality issues with outsourced components, inability to fully realize the expected benefits from acquisitions and restructurings, or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, increases in interest rates, changes to interest rate swaps or other cash flow hedging arrangements, changes to industrial security and cyber-security regulations and requirements, changes in tax rates or tax regulations, changes to generally accepted accounting principles, difficulties in retaining key employees and customers, unanticipated costs under fixed-price service and system integration engagements, and various other factors beyond our control. These risks and uncertainties also include such additional risk factors as set forth under Part I-Item 1A (Risk Factors) in the Company's Annual Report on Form 10-K for the fiscal year ended July 3, 2020. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

OVERVIEW

Mercury Systems, Inc. is a leading technology company serving the aerospace and defense industry, positioned at the intersection of high-tech and defense. Headquartered in Andover, Massachusetts, we deliver solutions that power a broad range of aerospace and defense programs, optimized for mission success in some of the most challenging and demanding environments. We envision, create and deliver innovative technology solutions purpose-built to meet our customers’ most-pressing high-tech needs, including those specific to the defense community.

As a leading manufacturer of essential components, modules and subsystems, we sell to defense prime contractors, the U.S. government and OEM commercial aerospace companies. We have built a trusted, contemporary portfolio of proven product solutions purpose-built for aerospace and defense that we believe meets and exceeds the performance needs of our defense and commercial customers. Customers add their own applications and algorithms to our specialized, secure and innovative pre-integrated solutions. This allows them to complete their full system by integrating with their platform the sensor technology and, in some cases, the processing from Mercury. Our products and solutions are deployed in more than 300 programs with over 25 different defense prime contractors and commercial aviation customers.

Mercury’s transformational business model accelerates the process of making new technology profoundly more accessible to our customers by bridging the gap between commercial technology and aerospace and defense applications. Our long-standing deep relationships with leading high-tech companies, coupled with our high level of R&D investments and industry-leading trusted and secure design and manufacturing capabilities, are the foundational tenets of this highly successful model.

Our capabilities, technology and R&D investment strategy combine to differentiate Mercury in our industry. Our technologies and capabilities include secure embedded processing modules and subsystems, mission computers, secure and rugged rack-mount servers, safety-critical avionics, RF components, multi-function assemblies, subsystems and custom microelectronics. We maintain our technological edge by investing in critical capabilities and IP in processing and RF, leveraging open standards and open architectures to adapt quickly those building blocks into solutions for highly data-intensive applications, including emerging needs in areas such as AI.

Our mission critical solutions are deployed by our customers for a variety of applications including C4ISR, electronic intelligence, avionics, EO/IR, electronic warfare, weapons and missile defense, hypersonics and radar.

Since we conduct much of our business with our defense customers via commercial items, requests by customers are a primary driver of revenue fluctuations from quarter to quarter. Customers specify delivery date requirements that coincide with their need for our products. Because these customers may use our products in connection with a variety of defense programs or

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other projects of different sizes and durations, a customer’s orders for one quarter generally do not indicate a trend for future orders by that customer. Additionally, order patterns do not necessarily correlate amongst customers and, therefore, we generally cannot identify sequential quarterly trends.

As of April 2, 2021, we had 2,359 employees. We employ hardware and software architects and design engineers, primarily engaged in engineering and research and product development activities to achieve our objectives to fully capitalize upon and maintain our technological leads in the high-performance, real-time sensor processing industry and in mission computing, platform management and other safety-critical applications. Our talent attraction, engagement and retention is critical to execute on our long-term strategy. We invest in our culture and values to drive employee engagement that turns ideas into action, delivering trusted and secure solutions at the speed of innovation. We believe that our success depends on our ability to embrace diversity company-wide and realize the benefits of a diverse workforce that includes a greater variety of solutions to problems, a broader collection of skills and experiences and an array of viewpoints to consider. Mercury is strongly focused on providing an inclusive environment that respects the diversity of the world. We believe that the workforce required to grow our business and deliver creative solutions must be rich in diversity of thought, experience and culture. Our diversity and inclusion initiatives focus on building and maintaining the talent that will create cohesive and collaborative teams that drive innovation. We believe that these values will help our employees realize their full potentials at work to provide Innovation That Matters®.

Our consolidated revenues, acquired revenues, net income, diluted net earnings per share, adjusted earnings per share (“adjusted EPS”), and adjusted EBITDA for the third quarter ended April 2, 2021 were $256.9 million, $38.5 million, $15.6 million, $0.28, $0.64, and $54.8 million, respectively. Our consolidated revenues, acquired revenues, net income, diluted net earnings per share, adjusted EPS, and adjusted EBITDA for the nine months ended April 2, 2021 were $673.2 million, $47.5 million, $44.1 million, $0.80, $1.69, and $142.8 million, respectively. See the Non-GAAP Financial Measures section for a reconciliation to our most directly comparable GAAP financial measures.

OUR RESPONSE TO COVID

The COVID pandemic continues to impact people and countries around the world. This is a time of extraordinary uncertainty. It is also a time when the work we do in support of strategic national priorities is recognized as critical.

At Mercury, we remain focused on the four goals we established at the outset of the COVID crisis: to protect the health, safety, and livelihoods of our people; to mitigate or reduce operational and financial risks to the Company; to continue to deliver on our commitments to customers and shareholders; and to continue the mission-critical work Mercury does every day to support the ongoing security of our nation, our brave men and women in uniform, and the communities in which we all live.

To protect the health, safety, and livelihoods of our employees, we took immediate action on several fronts, instituting a variety of new policies and programs including, but not limited to, additional sick leave for COVID-related circumstances, a work-from-home policy for all employees who can perform their duties remotely as well as increasing overtime pay for eligible employees. We also established a relief fund, with an initial $1 million budget, to assist eligible Mercury employees, including temporary agency employees, experiencing unexpected financial burdens as a result of the COVID crisis. The intent of the     Mercury COVID Relief Fund was to provide financial assistance to employees who may otherwise be unable to pay for basic necessities, unexpected care for immediate family members, or other urgent needs that promote their health and safety during the current COVID crisis.

As we have been designated an “essential business” as a part of the defense industrial base, during the year, our facilities continued to operate while complying with social distancing requirements consistent with Centers for Disease Control and Prevention (“CDC”) guidelines and requirements. We implemented numerous preventive measures to maximize the safety of our facilities, including but not limited to, establishing physical segregation areas, implementing environmental cleaning and disinfection protocols in compliance with CDC guidelines and requirements, temperature and COVID testing at our facilities, and limiting non-essential site visits by internal and external visitors.

We will continue to monitor the COVID pandemic and adapt our policies and programs as needed to protect the health, safety and livelihoods of our people.

RESULTS OF OPERATIONS:

Results of operations for the third quarter ended April 2, 2021 includes a full period of results from the acquisition of Physical Optics Corporation ("POC"). Results of operations for the nine months ended April 2, 2021 include only results from the acquisition date for POC which was acquired on December 30, 2020. Results of operations for the third quarter ended March 27, 2020 include full period results from the acquisition of American Panel Corporation ("APC"). Results of operations for the nine months ended March 27, 2020 include only results from the acquisition date for APC which was acquired on September 23, 2019. Accordingly, the periods presented below are not directly comparable.

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The third quarter ended April 2, 2021 compared to the third quarter ended March 27, 2020

The following table sets forth, for the third quarter ended indicated, financial data from the Consolidated Statements of Operations and Comprehensive Income:

(In thousands)	April 2, 2021		As a % of Total Net Revenue		March 27, 2020		As a % of Total Net Revenue
Net revenues	$	256,857	100.0	%	$	208,016	100.0	%
Cost of revenues	151,234		58.9		114,691		55.1
Gross margin	105,623		41.1		93,325		44.9
Operating expenses:
Selling, general and administrative	38,250		14.9		33,991		16.3
Research and development	30,218		11.8		24,967		12.0
Amortization of intangible assets	12,717		5.0		7,848		3.8
Restructuring and other charges	(4)		—		66		—
Acquisition costs and other related expenses	2,730		1.0		111		0.1
Total operating expenses	83,911		32.7		66,983		32.2
Income from operations	21,712		8.5		26,342		12.7
Interest income	34		—		458		0.2
Interest expense	(549)		(0.2)		(58)		—
Other (expense) income, net	(200)		(0.1)		2,186		1.0
Income before income taxes	20,997		8.2		28,928		13.9
Income tax provision	5,362		2.1		5,363		2.6
Net income	$	15,635	6.1	%	$	23,565	11.3	%

REVENUES

Total revenues increased $48.8 million, or 23.5%, to $256.9 million during the third quarter ended April 2, 2021, as compared to $208.0 million during the third quarter ended March 27, 2020, including “acquired revenue” which represents net revenue from acquired businesses that have been part of Mercury for completion of four full quarters or less (and excludes any intercompany transactions). After the completion of four fiscal quarters, acquired businesses will be treated as organic for current and comparable historical periods. The increase in total revenue was primarily due to an additional $38.5 million and $10.3 million of acquired and organic revenues, respectively. These increases were driven by higher demand for integrated subsystems which increased $69.3 million or 55.3% which was partially offset by decreases in components and modules and sub-assemblies of $16.4 million and $4.1 million, respectively. The increase in total revenue was primarily from the C4I end application which increased $59.8 million and was partially offset by an $11.6 million decrease to electronic warfare ("EW"). The increase was across all platforms and, in particular, land which grew $28.3 million during the third quarter ended April 2, 2021. The largest program increases were related to a classified radar program, as well as the E2D Hawkeye, Abrams and CPS programs. There were no programs comprising 10% or more of our revenues for the third quarters ended April 2, 2021 or March 27, 2020. See the Non-GAAP Financial Measures section for a reconciliation to our most directly comparable GAAP financial measures.

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GROSS MARGIN

Gross margin was 41.1% for the third quarter ended April 2, 2021, a decrease of 380 basis points from the 44.9% gross margin achieved during the third quarter ended March 27, 2020. The lower gross margin was primarily driven by the acquisition of POC which contributed to the increased Customer Funded Research and Development (“CRAD”) of $12.7 million in the quarter, as well as incremental COVID related expenses of $2.3 million and program mix. These gross margin decreases were partially offset by operational efficiencies and $0.6 million lower margin associated with fair value adjustments from purchase accounting for recent acquisitions. CRAD primarily represents engineering labor associated with long-term contracts for customized development, production and service activities. Due to the nature of these efforts, they typically carry a lower margin. These products are predominately grouped within integrated subsystems and to a lesser extent modules and sub-assemblies.

SELLING, GENERAL AND ADMINISTRATIVE

Selling, general and administrative expenses increased $4.3 million, or 12.5%, to $38.3 million during the third quarter ended April 2, 2021, as compared to $34.0 million in the third quarter ended March 27, 2020. The increase was primarily related to the recent acquisition of POC of $4.3 million. Selling, general and administrative expenses decreased as a percentage of revenue to 14.9% for the third quarter ended April 2, 2021 from 16.3% for the third quarter ended March 27, 2020 due to improved operating leverage. The acquisition of POC resulted in a 66 basis point reduction in selling, general and administrative expenses as a percentage of revenue for the third quarter ended April 2, 2021.

RESEARCH AND DEVELOPMENT

Research and development expenses increased $5.2 million, or 21.0%, to $30.2 million during the third quarter ended April 2, 2021, as compared to $25.0 million during the third quarter ended March 27, 2020. The increase was primarily related to $4.3 million of additional employee related compensation from organic growth and the recent acquisition of POC. The increase during the third quarter ended April 2, 2021 was primarily driven by the continued investment in internal R&D to promote future growth, including new opportunities in avionics mission computers, secure processing, radar modernization and our trusted custom microelectronics business. Research and development expenses accounted for 11.8% and 12.0% of our revenues for the third quarters ended April 2, 2021 and March 27, 2020, respectively. The acquisition of POC resulted in a 140 basis point reduction in research and development expenses as a percentage of revenue for the third quarter ended April 2, 2021.

AMORTIZATION OF INTANGIBLE ASSETS

Amortization of intangible assets increased $4.9 million to $12.7 million during the third quarter ended April 2, 2021, as compared to $7.8 million to the third quarter ended March 27, 2020, due to the acquisition of POC.

RESTRUCTURING AND OTHER CHARGES

We did not incur restructuring and other charges during the third quarter ended April 2, 2021, as compared to $0.1 million during the third quarter ended March 27, 2020. Restructuring and other charges are typically related to acquisitions and organizational redesign programs initiated as part of discrete post-acquisition integration activities.

ACQUISITION COSTS AND OTHER RELATED EXPENSES

Acquisition costs and other related expenses were $2.7 million during the third quarter ended April 2, 2021, as compared to $0.1 million during the third quarter ended March 27, 2020. The acquisition costs and other related expenses during the third quarter ended April 2, 2021 were primarily related to costs associated with our continuous evaluation of potential acquisition opportunities. We expect to incur acquisition costs and other related expenses periodically in the future as we continue to seek acquisition opportunities to expand our technological capabilities, especially within the sensor and effector and C4I markets. Transaction costs incurred by the acquiree prior to the consummation of an acquisition would not be reflected in our historical results of operations.

INTEREST INCOME

Interest income decreased to less than $0.1 million during the third quarter ended April 2, 2021, as compared to $0.5 million for the third quarter ended March 27, 2020. This was driven by lower cash on hand during the third quarter ended April 2, 2021, as compared to the prior year.

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INTEREST EXPENSE

We incurred $0.5 million of interest expense during the third quarter ended April 2, 2021, related to the $160.0 million balance on our Revolver to facilitate the acquisition of POC during the second quarter ended January 1, 2021, compared to $0.1 million interest expense during the third quarter ended March 27, 2020.

OTHER (EXPENSE) INCOME, NET

Other (expense) income, net decreased to $0.2 million of Other expense during the third quarter ended April 2, 2021, as compared to $2.2 million of Other income for the third quarter ended March 27, 2020. The third quarter ended April 2, 2021 includes net foreign currency translation gains of $0.7 million, which were partially offset by $0.6 million of financing costs and $0.3 million of litigation and settlement costs. The third quarter ended March 27, 2020 includes a $3.8 million gain on the sale of a cost-method investment, partially offset by foreign currency translation losses of $1.2 million.

INCOME TAXES

We recorded an income tax provision of $5.4 million and $5.4 million on income before income taxes of $21.0 million and $28.9 million for the third quarters ended April 2, 2021 and March 27, 2020, respectively.

During each of the third quarters ended April 2, 2021 and March 27, 2020, we recognized a discrete tax benefit of $0.2 million, related to excess tax benefits on stock-based compensation. We also recognized a discrete tax benefit of $1.0 million, net of a $0.3 million tax reserve, related to research and development credits and a $0.8 million discrete tax benefit from releasing a valuation allowance on a capital loss carryforward during the third quarter ended March 27, 2020.

The effective tax rate for the third quarter 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 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.

Within the calculation of our annual effective tax rate, we have used assumptions and estimates that may change as a result of future guidance and interpretation from the Internal Revenue Service (“IRS”).

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Nine months ended April 2, 2021 compared to the nine months ended March 27, 2020

The following tables set forth, for the nine month periods indicated, financial data from the Consolidated Statements of Operations and Comprehensive Income:

(In thousands)	April 2, 2021		As a % of Total Net Revenue		March 27, 2020		As a % of Total Net Revenue
Net revenues	$	673,154	100.0	%	$	579,233	100.0	%
Cost of revenues	390,745		58.0		319,002		55.1
Gross margin	282,409		42.0		260,231		44.9
Operating expenses:
Selling, general and administrative	102,750		15.3		96,765		16.7
Research and development	85,763		12.7		71,497		12.3
Amortization of intangible assets	28,091		4.2		22,859		3.9
Restructuring and other charges	2,244		0.3		1,815		0.3
Acquisition costs and other related expenses	4,966		0.7		2,652		0.5
Total operating expenses	223,814		33.2		195,588		33.7
Income from operations	58,595		8.8		64,643		11.2
Interest income	166		—		1,957		0.3
Interest expense	(622)		(0.1)		(58)		—
Other (expense) income, net	(2,027)		(0.3)		401		0.1
Income before income taxes	56,112		8.4		66,943		11.6
Income tax provision	11,993		1.8		8,455		1.5
Net income	$	44,119	6.6	%	$	58,488	10.1	%

REVENUES

Total revenues increased $93.9 million, or 16.2%, to $673.2 million during the nine months ended April 2, 2021, as compared to $579.2 million during the nine months ended March 27, 2020. The increase in total revenue was primarily due to an additional $47.3 million and $46.6 million of organic and acquired revenues, respectively. These increases were driven by higher demand for integrated subsystems which increased $149.5 million or 47% which was partially offset by decreases in components and modules and sub-assemblies of $39.2 million and $16.4 million, respectively, during the nine months ended April 2, 2021. The increase in total revenue was primarily from the radar and C4I end applications which increased $74.3 million and $65.1 million and were partially offset by decreases of $18.8 million and $18.3 million from other end applications and EW, respectively. The increase was primarily across the land and naval platforms which grew $83.4 million and $13.8 million during the nine months ended April 2, 2021. The largest program increases were related to a classified radar program, as well as the LTAMDS, Patriot and Abrams programs. There were no programs comprising 10% or more of our revenues for the nine months ended April 2, 2021 or March 27, 2020. See the Non-GAAP Financial Measures section for a reconciliation to our most directly comparable GAAP financial measures.

GROSS MARGIN

Gross margin was 42.0% for the nine months ended April 2, 2021, a decrease of 290 basis points from the 44.9% gross margin achieved during the nine months ended March 27, 2020. The lower gross margin was primarily due to the acquisition of POC which contributed to the increase in CRAD of $17.5 million, as well as incremental COVID related expenses of $7.9 million and program mix. These gross margin decreases were partially offset by operational efficiencies and $1.2 million lower margin associated with fair value adjustments from purchase accounting for recent acquisitions.

SELLING, GENERAL AND ADMINISTRATIVE

Selling, general and administrative expenses increased $6.0 million, or 6.2%, to $102.8 million during the nine months ended April 2, 2021, as compared to $96.8 million during the nine months ended March 27, 2020. The increase was primarily related to $7.9 million of additional employee related compensation from organic growth and our recent acquisitions as well as incremental COVID related expenses of $0.8 million. Selling, general and administrative expenses as a percentage of revenues decreased to 15.3% for the nine months ended April 2, 2021 from 16.7% for the nine months ended March 27, 2020 due to improved operating leverage. The acquisition of POC resulted in a 20 basis point reduction in selling, general and administrative expenses as a percentage of revenue for the nine months ended April 2, 2021.

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RESEARCH AND DEVELOPMENT

Research and development expenses increased $14.3 million, or 20.0%, to $85.8 million during the nine months ended April 2, 2021, as compared to $71.5 million during the nine months ended March 27, 2020. The increase was primarily related to $10.9 million of additional employee related compensation from organic growth and our recent acquisition of POC. The increase during the third quarter ended April 2, 2021 was primarily driven by the continued investment in internal R&D to promote future growth, including new opportunities in avionics missions computers, secure processing, radar modernization and our trusted custom microelectronics business. Research and development expenses accounted for 12.7% and 12.3% of our revenues for the nine months ended April 2, 2021 and March 27, 2020, respectively. The acquisition of POC resulted in a 60 basis point reduction in research and development expenses as a percentage of revenue for the nine months ended April 2, 2021.

RESTRUCTURING AND OTHER CHARGES

Restructuring and other charges were $2.2 million during the nine months ended April 2, 2021, as compared to $1.8 million during the nine months ended March 27, 2020. Restructuring and other charges during the nine months ended April 2, 2021 primarily related to severance costs associated with the elimination of 42 positions, predominantly in 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. Restructuring and other charges are typically related to acquisitions and organizational redesign programs initiated as part of discrete post-acquisition integration activities.

ACQUISITION COSTS AND OTHER RELATED EXPENSES

Acquisition costs and other related expenses were $5.0 million during the nine months ended April 2, 2021, as compared to $2.7 million during the nine months ended March 27, 2020. The acquisition costs and other related expenses we incurred during the nine months ended April 2, 2021 were primarily related to our continuous evaluation of potential acquisition opportunities and the acquisition of POC which was completed on December 30, 2020 while those incurred during the nine months ended March 27, 2020 were related to the acquisition of APC as well as costs associated with our evaluation of potential acquisition opportunities. We expect to incur acquisition costs and other related expenses periodically in the future as we continue to seek acquisition opportunities to expand our technological capabilities, especially within the sensor and effector and C4I markets. Transaction costs incurred by the acquiree prior to the consummation of an acquisition would not be reflected in our historical results of operations.

INTEREST INCOME

Interest income decreased to $0.2 million during the nine months ended April 2, 2021, as compared to $2.0 million during the nine months ended March 27, 2020. The decrease was driven by lower cash on hand during the nine months ended April 2, 2021 compared to the prior period.

INTEREST EXPENSE

We incurred $0.6 million of interest expense during the nine months ended April 2, 2021, related to the $160.0 million draw on our Revolver to facilitate the acquisition of POC, compared to less than $0.1 million of interest expense during the nine months ended March 27, 2020.

OTHER (EXPENSE) INCOME, NET

Other (expense) income, net decreased to $2.0 million of Other expense during the nine months ended April 2, 2021 as compared to $0.4 million of Other Income for the nine months ended March 27, 2020. There were $2.3 million and $2.4 million of financial and registration fees, respectively, for the nine months ended April 2, 2021 and March 27, 2020. The nine months ended April 2, 2021 includes $0.8 million in litigation and settlement expenses and a $0.4 million loss on the sale of a cost-method investment which were partially offset by net foreign currency translation gains of $1.3 million. The nine months ended March 27, 2020 includes a $3.8 million gain on sale of a cost-method investment, partially offset by $0.8 million net foreign currency translation losses during the nine months ended March 27, 2020.

INCOME TAXES

We recorded an income tax provision of $12.0 million and $8.5 million on income before income taxes of $56.1 million and $66.9 million for the nine months ended April 2, 2021 and March 27, 2020, respectively.

During the nine months ended April 2, 2021 and March 27, 2020, we recognized a discrete tax benefit of $2.8 million and $6.6 million, respectively, related to excess tax benefits on stock-based compensation. We also recognized a discrete tax benefit of $1.0 million, net of a $0.3 million tax reserve, related to research and development credits and a $0.8 million discrete tax benefit from releasing a valuation allowance on a capital loss carryforward during the nine months ended March 27, 2020.

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The effective tax rate for the 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 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.

Within the calculation of our annual effective tax rate we have used assumptions and estimates that may change as a result of future guidance and interpretation from the IRS.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity come from existing cash and cash generated from operations, our Revolver and our ability to raise capital under our universal shelf registration statement. Our near-term fixed commitments for cash expenditures consist primarily of payments under operating leases and inventory purchase commitments. We plan to continue to invest in improvements to our facilities, continuous evaluation of potential acquisition opportunities and internal R&D to promote future growth, including new opportunities in avionics mission computers, secure processing, radar modernization and trusted custom microelectronics. Our facilities improvements include buildouts in Andover, Massachusetts, Cypress, California and Hudson, New Hampshire, along with the ongoing expansion of our trusted custom microelectronics business during fiscal 2021.

Based on our current plans, business conditions, including the COVID pandemic, and essential business status, we believe that existing cash and cash equivalents, our available Revolver, cash generated from operations, and our financing capabilities will be sufficient to satisfy our anticipated cash requirements for at least the next twelve months.

Shelf Registration Statement

On September 14, 2020, we filed a shelf registration statement on Form S-3ASR with the SEC. The shelf registration statement, which was effective upon filing with the SEC, registered each of the following securities: debt securities, preferred stock, common stock, warrants and units. We intend to use the proceeds from financings under the shelf registration statement for general corporate purposes, which may include the following:

•the acquisition of other companies or businesses;

•the repayment and refinancing of debt;

•capital expenditures;

•working capital; and

•other purposes as described in the prospectus supplement.

We have an unlimited amount available under the shelf registration statement. Additionally, as part of the shelf registration statement, we have entered into an equity distribution agreement which allows us to sell an aggregate of up to $200.0 million of our common stock from time to time through our agents. The actual dollar amount and number of shares of common stock we sell pursuant to the equity distribution agreement will be dependent on, among other things, market conditions and our fund raising requirements. The agents may sell the common stock by any method deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as amended, including without limitation sales made directly on Nasdaq, on any other existing trading market for the common stock or to or through a market maker. In addition, our common stock may be offered and sold by such other methods, including privately negotiated transactions, as we and the agents may agree.

Revolving Credit Facility

On September 28, 2018, we amended the Revolver to increase and extend the borrowing capacity to a $750.0 million, 5-year revolving credit line, with the maturity extended to September 2023. As of April 2, 2021, we had $160.0 million of outstanding borrowings on the Revolver. See Note I in the accompanying consolidated financial statements for further discussion of the Revolver.

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CASH FLOWS

	As of and For the Nine Months Ended,
(In thousands)	April 2, 2021		March 27, 2020
Net cash provided by operating activities	$	70,053	$	86,458
Net cash used in investing activities	$	(338,433)	$	(123,980)
Net cash provided by financing activities	$	163,133	$	186,713
Net (decrease) increase in cash and cash equivalents	$	(104,895)	$	149,214
Cash and cash equivalents at end of period	$	121,943	$	407,146

Our cash, cash equivalents and restricted cash decreased by $104.9 million from July 3, 2020 to April 2, 2021, primarily as the result of $305.3 million used for the acquisition of POC and $34.7 million invested in purchases of property and equipment, partially offset by $160.0 million of borrowings on our Revolver to facilitate the acquisition of POC and $70.1 million provided by operating activities.

Operating Activities

During the nine months ended April 2, 2021, we generated $70.1 million in cash from operating activities, a decrease of $16.4 million, as compared to the nine months ended March 27, 2020. The decrease was primarily the result of higher inventory purchases resulting from an increase in demand, especially for larger, more complex integrated subsystems and the advanced purchases of inventory intended to mitigate disruptions to the supply chain or unforeseen changes in customer behavior resulting from the COVID pandemic. In addition, the decrease was also attributable to lower comparable net income. These decreases were partially offset by higher sources of cash from deferred revenues and customer advances and prepaid income taxes as well as lower uses of cash from accounts receivable, unbilled receivables, and costs in excess of billings.

Investing Activities

During the nine months ended April 2, 2021, we invested $338.4 million, an increase of $214.5 million, as compared to the nine months ended March 27, 2020. The increase was driven by $305.3 million in cash used for the acquisition of POC and an additional $2.9 million invested in purchases of property and equipment, primarily related to our facilities, during the nine months ended April 2, 2021. We invested $96.5 million in the acquisition of APC which was partially offset by $4.3 million of proceeds from the sale of an investment during the nine months ended March 27, 2020.

Financing Activities

During the nine months ended April 2, 2021, we had $163.1 million in cash provided by financing activities, a decrease of $23.6 million as compared to the nine months ended March 27, 2020. During the nine months ended April 2, 2021, we borrowed $160.0 million on our Revolver to facilitate the acquisition of POC. During the nine months ended March 27, 2020, we had borrowings under the Revolver of $200.0 million, which was drawn to provide access to capital and flexibility in managing operations through the COVID pandemic. Our decrease of $15.6 million in cash used during the nine months ended April 2, 2021 for payments related to the purchase and retirement of common stock used to settle individual employees’ tax liabilities associated with vesting of restricted stock awards is due to a change in our incentive stock plan tax withholding methods.

COMMITMENTS, CONTRACTUAL OBLIGATIONS AND CONTINGENCIES

The following is a schedule of our commitments and contractual obligations outstanding at April 2, 2021:

(In thousands)	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
Purchase obligations	$	145,019	$	145,019	$	—	$	—	$	—
Operating leases	99,242		12,279		24,636		20,986		41,341
	$	244,261	$	157,298	$	24,636	$	20,986	$	41,341

Purchase obligations represent open non-cancelable purchase commitments for certain inventory components and services used in normal operations. The purchase commitments covered by these agreements are for less than one year and aggregated approximately $145.0 million at April 2, 2021.

We have a liability at April 2, 2021 of $4.1 million for uncertain tax positions that have been taken or are expected to be taken in various income tax returns. We do not know the ultimate resolution on these uncertain tax positions and as such, do not

29

know the ultimate timing of payments or amount, if any, related to this liability. Accordingly, these amounts are not included in the above table.

Our standard product sales and license agreements entered into in the ordinary course of business typically contain an indemnification provision pursuant to which we indemnify, hold harmless, and agree to reimburse the indemnified party for losses suffered or incurred in connection with certain intellectual property infringement claims by any third party with respect to our products. Such provisions generally survive termination or expiration of the agreements. The potential amount of future payments we could be required to make under these indemnification provisions is, in some instances, unlimited.

As part of our strategy for growth, we continue to explore acquisitions or strategic alliances. The associated acquisition costs incurred in the form of professional fees and services may be material to the future periods in which they occur, regardless of whether the acquisition is ultimately completed.

OFF-BALANCE SHEET ARRANGEMENTS

Other than certain indemnification provisions in the normal course of business, we do not have any off-balance sheet financing arrangements or liabilities, guarantee contracts, retained or contingent interests in transferred assets, or any obligation arising out of a material variable interest in an unconsolidated entity. We do not have any majority-owned subsidiaries that are not consolidated in the financial statements. Additionally, we do not have an interest in, or relationships with, any special purpose entities.

NON-GAAP FINANCIAL MEASURES

In our periodic communications, we discuss certain important measures that are not calculated according to U.S. generally accepted accounting principles (“GAAP”), including adjusted EBITDA, adjusted income, adjusted EPS, free cash flow, organic revenue and acquired revenue.

Adjusted EBITDA is defined as net income before other non-operating adjustments, interest income and expense, income taxes, depreciation, amortization of intangible assets, restructuring and other charges, impairment of long-lived assets, acquisition and financing costs, fair value adjustments from purchase accounting, litigation and settlement income and expense, COVID related expenses, and stock-based and other non-cash compensation expense. We use adjusted EBITDA as an important indicator of the operating performance of our business. We use adjusted EBITDA in internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to our board of directors, determining the portion of bonus compensation for executive officers and other key employees based on operating performance, evaluating short-term and long-term operating trends in our operations and allocating resources to various initiatives and operational requirements. We believe that adjusted EBITDA permits a comparative assessment of our operating performance, relative to our performance based on our GAAP results, while isolating the effects of charges that may vary from period to period without any correlation to underlying operating performance. We believe that these non-GAAP financial adjustments are useful to investors because they allow investors to evaluate the effectiveness of the methodology and information used by management in our financial and operational decision-making. We believe that trends in our adjusted EBITDA are valuable indicators of our operating performance.

Adjusted EBITDA is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other companies. We expect to continue to incur expenses similar to the adjusted EBITDA financial adjustments described above, and investors should not infer from our presentation of this non-GAAP financial measure that these costs are unusual, infrequent or non-recurring.

30

The following table reconciles our net income, the most directly comparable GAAP financial measure, to our adjusted EBITDA:

	Third Quarters Ended				Nine Months Ended
(In thousands)	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Net income	$	15,635	$	23,565	$	44,119	$	58,488
Other non-operating adjustments, net	(775)		(3,138)		(960)		(3,386)
Interest expense (income), net	515		(400)		456		(1,899)
Income tax provision	5,362		5,363		11,993		8,455
Depreciation	7,243		4,803		18,150		13,720
Amortization of intangible assets	12,717		7,848		28,091		22,859
Restructuring and other charges	(4)		66		2,244		1,815
Impairment of long-lived assets	—		—		—		—
Acquisition and financing costs	3,260		891		7,070		5,009
Fair value adjustments from purchase accounting	182		600		182		1,200
Litigation and settlement expense, net	312		174		750		629
COVID related expenses	2,745		397		8,373		397
Stock-based and other non-cash compensation expense	7,565		6,917		22,371		19,332
Adjusted EBITDA	$	54,757	$	47,086	$	142,839	$	126,619

Adjusted income and adjusted EPS exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. We believe that exclusion of these items assists in providing a more complete understanding of our underlying results and trends and allows for comparability with our peer company index and industry. These non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies. We use these measures along with the corresponding GAAP financial measures to manage our business and to evaluate our performance compared to prior periods and the marketplace. We define adjusted income as net income before other non-operating adjustments, amortization of intangible assets, restructuring and other charges, impairment of long-lived assets, acquisition and financing costs, fair value adjustments from purchase accounting, litigation and settlement income and expense, COVID related expenses, and stock-based and other non-cash compensation expense. The impact to income taxes includes the impact to the effective tax rate, current tax provision and deferred tax provision. Adjusted EPS expresses adjusted income on a per share basis using weighted average diluted shares outstanding.

Adjusted income and adjusted EPS are non-GAAP financial measures and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. We expect to continue to incur expenses similar to the adjusted income and adjusted EPS financial adjustments described above, and investors should not infer from our presentation of these non-GAAP financial measures that these costs are unusual, infrequent or non-recurring.

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The following tables reconcile net income and diluted earnings per share, the most directly comparable GAAP measures, to adjusted income and adjusted EPS:

	Third Quarters Ended
(In thousands, except per share data)	April 2, 2021				March 27, 2020
Net income and diluted earnings per share	$	15,635	$	0.28	$	23,565	$	0.43
Other non-operating adjustments, net	(775)				(3,138)
Amortization of intangible assets	12,717				7,848
Restructuring and other charges	(4)				66
Impairment of long-lived assets	—				—
Acquisition and financing costs	3,260				891
Fair value adjustments from purchase accounting	182				600
Litigation and settlement expense, net	312				174
COVID related expenses	2,745				397
Stock-based and other non-cash compensation expense	7,565				6,917
Impact to income taxes(1)	(6,187)				(4,048)
Adjusted income and adjusted earnings per share	$	35,450	$	0.64	$	33,272	$	0.60
Diluted weighted-average shares outstanding			55,526				55,127

(1) Impact to income taxes is calculated by recasting income before income taxes to include the add-backs involved in determining adjusted income and recalculating the income tax provision using this adjusted income from operations before income taxes. The impact to income taxes includes the impact to the effective tax rate, current tax provision and deferred tax provision.

	Nine Months Ended
(In thousands, except per share data)	April 2, 2021				March 27, 2020
Net income and earnings per share	$	44,119	$	0.80	$	58,488	$	1.06
Other non-operating adjustments, net	(960)				(3,386)
Amortization of intangible assets	28,091				22,859
Restructuring and other charges	2,244				1,815
Impairment of long-lived assets	—				—
Acquisition and financing costs	7,070				5,009
Fair value adjustments from purchase accounting	182				1,200
Litigation and settlement expense, net	750				629
COVID related expenses	8,373				397
Stock-based and other non-cash compensation expense	22,371				19,332
Impact to income taxes(1)	(18,486)				(19,341)
Adjusted income and adjusted earnings per share	$	93,754	$	1.69	$	87,002	$	1.58
Diluted weighted-average shares outstanding			55,434				55,071

(1) Impact to income taxes is calculated by recasting income before income taxes to include the add-backs involved in determining adjusted income and recalculating the income tax provision using this adjusted income from operations before income taxes. The impact to income taxes includes the impact to the effective tax rate, current tax provision and deferred tax provision.

Free cash flow, a non-GAAP measure for reporting cash flow, is defined as cash provided by operating activities less capital expenditures for property and equipment, which includes capitalized software development costs. We believe free cash flow provides investors with an important perspective on cash available for investments and acquisitions after making capital investments required to support ongoing business operations and long-term value creation. We believe that trends in our free cash flow can be valuable indicators of our operating performance and liquidity.

Free cash flow is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other companies. We expect to continue to incur expenditures similar to the free

32

cash flow adjustment described above, and investors should not infer from our presentation of this non-GAAP financial measure that these expenditures reflect all of our obligations which require cash.

The following table reconciles cash provided by operating activities, the most directly comparable GAAP financial measure, to free cash flow:

	Third Quarters Ended				Nine Months Ended
(In thousands)	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Cash provided by operating activities	$	23,185	$	30,082	$	70,053	$	86,458
Purchase of property and equipment	(9,955)		(10,869)		(34,708)		(31,788)
Free cash flow	$	13,230	$	19,213	$	35,345	$	54,670

Organic revenue and acquired revenue are non-GAAP measures for reporting the financial performance of our business. We believe this information provides investors with insight as to our ongoing business performance. Organic revenue represents total company revenue excluding net revenue from acquired companies for the first four full quarters since the entities’ acquisition date (which excludes intercompany transactions). Acquired revenue represents revenue from acquired companies for the first four full quarters since the entities' acquisition date (which excludes intercompany transactions). After the completion of four full fiscal quarters, acquired revenue is treated as organic for current and comparable historical periods.

The following tables reconcile the most directly comparable GAAP financial measure to the non-GAAP financial measure for the third quarters and nine months ended April 2, 2021 and March 27, 2020, respectively:

(In thousands)	April 2, 2021		As a % of Total Net Revenue		March 27, 2020		As a % of Total Net Revenue		$ Change		% Change
Organic revenue	$	218,365	85	%	$	208,016	100	%	$	10,349	5	%
Acquired revenue	38,492		15	%	—		—	%	38,492		100	%
Total revenues	$	256,857	100	%	$	208,016	100	%	$	48,841	23	%

(In thousands)	April 2, 2021		As a % of Total Net Revenue		March 27, 2020		As a % of Total Net Revenue		$ Change		% Change
Organic revenue	$	625,609	93	%	$	578,290	100	%	$	47,319	8	%
Acquired revenue	47,545		7	%	943		—	%	46,602		4,942	%
Total revenues	$	673,154	100	%	$	579,233	100	%	$	93,921	16	%

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

See Note B to our consolidated financial statements (under the caption "Recently Issued Accounting Pronouncements").

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

See Note B to our consolidated financial statements (under the caption "Recently Adopted Accounting Pronouncements").

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ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes in our exposure to market risk from July 3, 2020 to April 2, 2021.

ITEM 4.     CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

We conducted an evaluation under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), regarding the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of April 2, 2021. We continue to review our disclosure controls and procedures and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our Company’s business. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

(b) Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended April 2, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. However, management is in the process of integrating the recently acquired POC business into our overall internal control over financial reporting environment.

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PART II. OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

We are subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of our business. Although legal proceedings are inherently unpredictable, we believe that we have valid defenses with respect to those matters currently pending against us and intend to defend our self vigorously. The outcome of these matters, individually and in the aggregate, is not expected to have a material impact on our cash flows, results of operations, or financial position.

ITEM 1A.     RISK FACTORS

You should carefully review and consider the information regarding certain factors that could materially affect our business, financial condition or future results set forth under Item 1A (Risk Factors) in our Annual Report on Form 10-K for the fiscal year ended July 3, 2020. There have been no changes from the factors disclosed in our 2020 Annual Report on Form 10-K filed on August 18, 2020, although we may disclose changes to such factors from time to time in our future filings with the Securities and Exchange Commission.

ITEM 6.     EXHIBITS

The following Exhibits are filed or furnished, as applicable, herewith:

31.1	Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+	Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	eXtensible Business Reporting Language (XBRL) Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

 +    Furnished herewith. This certificate shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

35

MERCURY SYSTEMS, INC.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Andover, Massachusetts, on May 11, 2021.

MERCURY SYSTEMS, INC.
By:	/S/    MICHAEL D. RUPPERT
	Michael D. Ruppert
	Executive Vice President,
	Chief Financial Officer, and Treasurer

36

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Mark Aslett, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Mercury Systems, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2021

/S/    MARK ASLETT        

Mark Aslett

PRESIDENT AND CHIEF EXECUTIVE OFFICER
[PRINCIPAL EXECUTIVE OFFICER]

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Michael D. Ruppert, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Mercury Systems, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2021

/S/ MICHAEL D. RUPPERT

Michael D. Ruppert

EXECUTIVE VICE PRESIDENT,

CHIEF FINANCIAL OFFICER, AND TREASURER

[PRINCIPAL FINANCIAL OFFICER]

EX-32.1

EXHIBIT 32.1

Mercury Systems, Inc.

Certification Pursuant To

18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Mercury Systems, Inc. (the “Company”) on Form 10-Q for the period ended April 2, 2021 as filed with the Securities and Exchange Commission (the “Report”), we, Mark Aslett, President and Chief Executive Officer of the Company, and Michael D. Ruppert, Executive Vice President, Chief Financial Officer, and Treasurer of the Company, certify, pursuant to Section 1350 of Chapter 63 of Title 18, United States Code, that to our knowledge the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 11, 2021

/S/    MARK ASLETT        

Mark Aslett

PRESIDENT AND CHIEF EXECUTIVE OFFICER

/S/    MICHAEL D. RUPPERT      

Michael D. Ruppert

EXECUTIVE VICE PRESIDENT,

CHIEF FINANCIAL OFFICER, AND TREASURER

XML

Cover - shares	9 Months Ended
	Apr. 02, 2021	Apr. 30, 2021
Document Documentand Entity Information [Abstract]
Entity Incorporation, State or Country Code	MA
Document Transition Report	false
Document Quarterly Report	true
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Apr. 02, 2021
Entity File Number	0-23599
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Entity Registrant Name	MERCURY SYSTEMS, INC.
City Area Code	978
Local Phone Number	256-1300
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Central Index Key	0001049521
Current Fiscal Year End Date	--07-02
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		56,161,158
Entity Tax Identification Number	04-2741391
Entity Address, Address Line One	50 MINUTEMAN ROAD
Entity Address, Postal Zip Code	01810
Entity Address, City or Town	ANDOVER
Entity Address, State or Province	MA
Entity Small Business	false
Entity Emerging Growth Company	false
Title of 12(g) Security	Common Stock, par value $0.01 per share
Trading Symbol	MRCY
Security Exchange Name	NASDAQ

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Apr. 02, 2021	Jul. 03, 2020
Current assets:
Cash and cash equivalents	$ 121,943	$ 226,838
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
Unbilled receivables and costs in excess of billings	138,378	90,289
Inventory	226,840	178,093
Prepaid income taxes	0	2,498
Prepaid expenses and other current assets	14,177	16,613
Total current assets	626,941	634,769
Property and equipment, net	128,343	87,737
Goodwill	782,656	614,076
Intangible assets, net	294,681	208,748
Operating lease right-of-use assets	65,780	60,613
Other non-current assets	4,919	4,777
Total assets	1,903,320	1,610,720
Current liabilities:
Accounts payable	56,643	41,877
Accrued expenses	30,566	23,794
Accrued compensation	42,620	41,270
Deferred revenues and customer advances	32,840	18,974
Total current liabilities	162,669	125,915
Deferred income taxes	37,184	13,889
Income taxes payable	4,117	4,117
Long-term debt	160,000	0
Operating lease liabilities	70,619	66,981
Other non-current liabilities	14,751	15,034
Total liabilities	449,340	225,936
Commitments and contingencies (Note M)
Shareholders' equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued or outstanding	0	0
Common stock, $0.01 par value; 85,000,000 shares authorized; 55,163,620 and 54,702,322 shares issued and outstanding at April 2, 2021 and July 3, 2020, respectively	552	547
Additional paid-in capital	1,100,188	1,074,667
Retained earnings	356,574	312,455
Accumulated other comprehensive income	(3,334)	(2,885)
Total shareholders' equity	1,453,980	1,384,784
Total liabilities and shareholders' equity	$ 1,903,320	$ 1,610,720

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Apr. 02, 2021	Jul. 03, 2020
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 1,628	$ 1,451
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	1,000,000	1,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	85,000,000	85,000,000
Common stock, shares issued (shares)	55,163,620	54,702,322
Common stock, shares outstanding (shares)	55,163,620	54,702,322

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Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2021	Mar. 27, 2020	Apr. 02, 2021	Mar. 27, 2020
Income Statement [Abstract]
Net revenues	$ 256,857	$ 208,016	$ 673,154	$ 579,233
Cost of revenues	151,234	114,691	390,745	319,002
Gross margin	105,623	93,325	282,409	260,231
Operating expenses:
Selling, general and administrative	38,250	33,991	102,750	96,765
Research and development	30,218	24,967	85,763	71,497
Amortization of intangible assets	12,717	7,848	28,091	22,859
Restructuring and other charges	(4)	66	2,244	1,815
Acquisition costs and other related expenses	2,730	111	4,966	2,652
Total operating expenses	83,911	66,983	223,814	195,588
Income from operations	21,712	26,342	58,595	64,643
Interest income	34	458	166	1,957
Interest Expense	(549)	(58)	(622)	(58)
Other (expense) income, net	(200)	2,186	(2,027)	401
Income before income taxes	20,997	28,928	56,112	66,943
Income tax provision	5,362	5,363	11,993	8,455
Net income	$ 15,635	$ 23,565	$ 44,119	$ 58,488
Basic net earnings per share (in dollars per share)	$ 0.28	$ 0.43	$ 0.80	$ 1.07
Diluted net earnings per share (in dollars per share)	$ 0.28	$ 0.43	$ 0.80	$ 1.06
Weighted-average shares outstanding:
Basic (in shares)	55,146	54,604	55,033	54,514
Diluted (in shares)	55,526	55,127	55,434	55,071
Comprehensive income:
Net income	$ 15,635	$ 23,565	$ 44,119	$ 58,488
Foreign currency translation adjustments	218	344	(541)	227
Pension benefit plan, net of tax	30	7	92	22
Total other comprehensive income (loss), net of tax	248	351	(449)	249
Total comprehensive income	$ 15,883	$ 23,916	$ 43,670	$ 58,737

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Consolidated Statements of Shareholders' Equity Statement - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Jun. 30, 2019		54,248,000
Beginning balance at Jun. 30, 2019	$ 1,284,739	$ 542	$ 1,058,745	$ 226,743	$ (1,291)
Issuance of common stock under employee stock incentive plans (in shares)		510,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	3	$ 5	(2)
Issuance of common stock under employee stock purchase plan (in shares)		41,000
Issuance of common stock under employee stock purchase plan	2,393	$ 1	2,392
Purchased and retirement of common stock (in shares)		(187,000)
Purchase and retirement of common stock	(15,683)	$ (2)	(15,681)
Stock-based compensation	19,244		19,244
Net income	58,488			58,488
Other comprehensive income	249
Ending balance (in shares) at Mar. 27, 2020		54,612,000
Ending balance at Mar. 27, 2020	1,349,433	$ 546	1,064,698	285,231	(1,042)
Beginning balance (in shares) at Dec. 27, 2019		54,558,000
Beginning balance at Dec. 27, 2019	1,317,056	$ 545	1,056,238	261,666	(1,393)
Issuance of common stock under employee stock incentive plans (in shares)		19,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	0
Issuance of common stock under employee stock purchase plan (in shares)		41,000
Issuance of common stock under employee stock purchase plan	2,393	$ 1	2,392
Purchased and retirement of common stock (in shares)		(6,000)
Purchase and retirement of common stock	(746)	$ 0	(746)
Stock-based compensation	6,814		6,814
Net income	23,565			23,565
Other comprehensive income	351				351
Ending balance (in shares) at Mar. 27, 2020		54,612,000
Ending balance at Mar. 27, 2020	$ 1,349,433	$ 546	1,064,698	285,231	(1,042)
Beginning balance (in shares) at Jul. 03, 2020	54,702,322	54,702,000
Beginning balance at Jul. 03, 2020	$ 1,384,784	$ 547	1,074,667	312,455	(2,885)
Issuance of common stock under employee stock incentive plans (in shares)		417,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	15	$ 5	10
Issuance of common stock under employee stock purchase plan (in shares)		46,000
Issuance of common stock under employee stock purchase plan	3,184		3,184
Purchased and retirement of common stock (in shares)		(1,000)
Purchase and retirement of common stock	(66)		(66)
Stock-based compensation	22,393		22,393
Net income	44,119			44,119
Other comprehensive income	$ (449)				(449)
Ending balance (in shares) at Apr. 02, 2021	55,163,620	55,164,000
Ending balance at Apr. 02, 2021	$ 1,453,980	$ 552	1,100,188	356,574	(3,334)
Beginning balance (in shares) at Jan. 01, 2021		55,129,000
Beginning balance at Jan. 01, 2021	1,430,631	$ 551	1,092,723	340,939	(3,582)
Issuance of common stock under employee stock incentive plans (in shares)		35,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	11	$ 1	10
Stock-based compensation	7,455		7,455
Net income	15,635			15,635
Other comprehensive income	$ 248				248
Ending balance (in shares) at Apr. 02, 2021	55,163,620	55,164,000
Ending balance at Apr. 02, 2021	$ 1,453,980	$ 552	$ 1,100,188	$ 356,574	$ (3,334)

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Apr. 02, 2021	Mar. 27, 2020
Cash flows from operating activities:
Net income	$ 44,119	$ 58,488
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	46,241	36,579
Stock-based compensation expense	21,865	19,004
(Benefit) provision for deferred income taxes	(6,357)	1,174
Gain on investment	0	(3,810)
Other non-cash items	3,094	2,402
Changes in operating assets and liabilities, net of effects of businesses acquired:
Accounts receivable, unbilled receivable, and cost in excess of billings	(28,351)	(34,254)
Inventory	(37,499)	(13,525)
Prepaid income taxes	2,480	(1,046)
Prepaid expenses and other current assets	3,939	508
Other non-current assets	3,424	(165)
Accounts payable, accrued expenses, and accrued compensation	9,072	15,483
Deferred revenues and customer advances	10,509	2,446
Other non-current liabilities	(2,483)	3,174
Net cash provided by operating activities	70,053	86,458
Cash flows from investing activities:
Acquisition of business, net of cash acquired	(305,263)	(96,502)
Purchases of property and equipment	(34,708)	(31,788)
Proceeds from sale of investment	1,538	4,310
Net cash used in investing activities	(338,433)	(123,980)
Cash flows from financing activities:
Proceeds from employee stock plans	3,199	2,396
Proceeds from issuance of debt	160,000	200,000
Purchase and retirement of common stock	(66)	(15,683)
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:
Interest	548	0
Income taxes	8,454	10,457
Noncash or Part Noncash Acquisition, Investments Acquired	$ 892	$ 0

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Description of Business

9 Months Ended

Apr. 02, 2021

Accounting Policies [Abstract]

Description of Business

Description of Business

Mercury Systems, Inc. (the “Company” or “Mercury”) is a leading technology company serving the aerospace and defense industry, positioned at the intersection of high-tech and defense. Headquartered in Andover, Massachusetts, the Company delivers solutions that power a broad range of aerospace and defense programs, optimized for mission success in some of the most challenging and demanding environments. The Company envisions, creates and delivers innovative technology solutions purpose-built to meet its customers’ most-pressing high-tech needs, including those specific to the defense community.

As a leading manufacturer of essential components, modules and subsystems, the Company sells to defense prime contractors, the U.S. government and original equipment manufacturer (“OEM”) commercial aerospace companies. The Company has built a trusted, contemporary portfolio of proven product solutions purpose-built for aerospace and defense that it believes meets and exceeds the performance needs of its defense and commercial customers. Customers add their own applications and algorithms to the Company's specialized, secure and innovative pre-integrated solutions. This allows them to complete their full system by integrating with their platform the sensor technology and, in some cases, the processing from Mercury. The Company's products and solutions are deployed in more than 300 programs with over 25 different defense prime contractors and commercial aviation customers.

The Company's transformational business model accelerates the process of making new technology profoundly more accessible to its customers by bridging the gap between commercial technology and aerospace and defense applications. The Company's long-standing deep relationships with leading high-tech companies, coupled with the Company's high level of research and development (“R&D”) investments and industry-leading trusted and secure design and manufacturing capabilities, are the foundational tenets of this highly successful model.

The Company's capabilities, technology and R&D investment strategy combine to differentiate Mercury in its industry. The Company's technologies and capabilities include secure embedded processing modules and subsystems, mission computers, secure and rugged rack-mount servers, safety-critical avionics, radio frequency (“RF”) components, multi-function assemblies, subsystems and custom microelectronics. The Company maintains its technological edge by investing in critical capabilities and intellectual property in processing and RF, leveraging open standards and open architectures to adapt quickly those building blocks into solutions for highly data-intensive applications, including emerging needs in areas such as artificial intelligence.

The Company's mission critical solutions are deployed by its customers for a variety of applications including command, control, communications, computers, intelligence, surveillance and reconnaissance, electronic intelligence, avionics, electro-optical/infrared, electronic warfare, weapons and missile defense, hypersonics and radar.

Investors and others should note that the Company announces material financial information using its website (www.mrcy.com), Securities and Exchange Commission (“SEC”) filings, press releases, public conference calls, webcasts, and social media, including Twitter (twitter.com/mrcy and twitter.com/mrcy_CEO) and LinkedIn (www.linkedin.com/company/mercury-systems). Therefore, the Company encourages investors and others interested in Mercury to review the information the Company posts on the social media and other communication channels listed on its website.

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Summary of Significant Accounting Policies

9 Months Ended

Apr. 02, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared by the Company in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America for interim financial information and with the instructions to the Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in annual consolidated financial statements have been condensed or omitted pursuant to those rules and regulations; however, in the opinion of management the financial information reflects all adjustments, consisting of adjustments of a normal recurring nature, necessary for fair presentation. 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 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 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.

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

BUSINESS COMBINATIONS

The Company utilizes the acquisition method of accounting under ASC 805, Business Combinations, (“ASC 805”), for all transactions and events in which it obtains control over one or more other businesses, to recognize the fair value of all assets and liabilities acquired, even if less than one hundred percent ownership is acquired, and in establishing the acquisition date fair value as the measurement date for all assets and liabilities assumed. The Company also utilizes ASC 805 for the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in business combinations.

FOREIGN CURRENCY

Local currencies are the functional currency for the Company’s subsidiaries in Switzerland, the United Kingdom, France, Japan, Spain and Canada. The accounts of foreign subsidiaries are translated using exchange rates in effect at period-end for assets and liabilities and at average exchange rates during the period for results of operations. The related translation adjustments are reported in Accumulated other comprehensive loss (“AOCL”) in shareholders’ equity. Gains (losses) resulting from non-U.S. currency transactions are included in Other expense, net in the Consolidated Statements of Operations and Comprehensive Income and were immaterial for all periods presented.

REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, (“ASC 606”). Revenues are derived from the sales of products that are grouped into one of the following three categories: (i) components; (ii) modules and sub-assemblies; and (iii) integrated subsystems. The Company also generates revenues from the performance of services, including systems engineering support, consulting, maintenance and other support, testing and installation. Each promised good or service within a contract is accounted for separately under the guidance of ASC 606 if they are distinct. Promised goods or services not meeting the criteria for being a distinct performance obligation are bundled into a single performance obligation with other goods or services that together meet the criteria for being distinct. The appropriate allocation of the transaction price and recognition of revenue is then determined for the bundled performance obligation.

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 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, totaled 70% and 74% of 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. These long-term contracts involve the design, development, manufacture, or modification of complex modules and sub-assemblies or integrated subsystems and related services. Long-term contracts include both fixed-price and cost reimbursable contracts. 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 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. The Company accrues for anticipated warranty costs upon product shipment. The Company does not consider activities related to such assurance warranties, if any, to be a separate performance obligation. The Company does offer separately priced extended warranties which generally range from 12 to 36 months that are treated as separate performance obligations. The transaction price allocated to extended warranties is recognized over time in proportion to the costs expected to be incurred in satisfying the obligations under the contract.

All revenues are reported net of government assessed taxes (e.g., sales taxes or value-added taxes). Refer to Note L for disaggregation of revenue for the period.

ACCOUNTS RECEIVABLE

Accounts receivable, net, represents amounts that have been billed and are currently due from customers. The Company maintains an allowance for credit losses to provide for the estimated amount of receivables that will not be collected. The Company provides credit to customers in the normal course of business. 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 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. For contracts where revenue is recognized over time, the invoicing events are typically based on specified performance obligation deliverables or milestone events, or quantifiable measures of performance.

CONTRACT BALANCES    

Contract balances result from the timing of revenue recognized, billings and cash collections, and the generation of contract assets and liabilities. Contract assets represent revenue recognized in excess of amounts invoiced to the customer and the right to payment is not subject to the passage of time. Contract assets are presented as unbilled receivables and costs in excess of billings on the Company’s Consolidated Balance Sheets. Contract liabilities consist of deferred product revenue, billings in excess of revenues, deferred service revenue, and customer advances. Deferred product revenue represents amounts that have been invoiced to customers, but are not yet recognizable as revenue because the Company has not satisfied its performance obligations under the contract. Billings in excess of revenues represents milestone billing contracts where the billings of the contract exceed recognized revenues. Deferred service revenue primarily represents amounts invoiced to customers for annual maintenance contracts or extended warranty contracts, which are recognized over time in proportion to the costs expected to be incurred in satisfying the obligations under the contract. Customer advances represent deposits received from customers on an order. Contract liabilities are included in deferred revenue and the long-term portion of deferred revenue is included within other non-current liabilities on the Company’s Consolidated Balance Sheets. Contract balances are reported in a net position on a contract-by-contract basis.

The contract asset balances were $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 liability 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 at 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.

REMAINING PERFORMANCE OBLIGATIONS

The Company includes in its computation of remaining performance obligations customer orders for which it has accepted signed sales orders. 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 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.

WEIGHTED-AVERAGE SHARES

Weighted-average shares were calculated as follows:

	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
Effect of dilutive equity instruments	380	523	401	557
Diluted weighted-average shares outstanding	55,526	55,127	55,434	55,071

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.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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. 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. For public business entities, the standard is effective for fiscal years ending after December 15, 2020. The ASU requires retrospective adoption and permits early adoption for all entities. The Company does not expect this guidance to have a material impact to its consolidated financial statements or related disclosures.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, an amendment of the FASB Accounting Standards Codification. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions for intraperiod tax allocations and deferred tax liabilities for equity method investments and add guidance as to whether a step-up in tax basis of goodwill relates to a business combination or a separate transaction. This ASU is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. 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.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

Effective July 4, 2020, the Company adopted ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which broadens the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. This ASU requires an entity to record an allowance for credit losses for certain financial instruments and financial assets, including trade receivables, based on expected losses rather than incurred losses. The Company will rely on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount and will exercise judgment in determining the relevant information and estimation methods that are appropriate in measurement of the credit losses. This adoption did not have a material impact to the Company's consolidated financial statements or related disclosures.

Effective July 4, 2020 the Company adopted ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU eliminates the requirement to measure the implied fair value of goodwill by assigning the fair value of a reporting unit to all assets and liabilities within that unit, the Step 2 test, from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited by the amount of goodwill in that reporting unit. This adoption did not have a material impact on the Company's consolidated financial statements or related disclosures.

Effective July 4, 2020 the Company adopted ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), an amendment of the FASB Accounting Standards Codification. The ASU provides guidance to determine whether to capitalize implementation costs of a cloud computing arrangement that is a service contract or expense as incurred. Costs of arrangements that do not include a software license should be accounted for as a service contract and expensed as incurred. This adoption did not have a material impact to the Company's consolidated financial statements or related disclosures.

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 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. Among other changes, the amendments impact SEC rules relating to: the definition of “significant” subsidiaries, requirements to provide financial statements for “significant” acquisitions, and the formulation and usage of pro forma financial information. The final rule is applicable for fiscal years beginning after December 31, 2020, with early adoption permitted as long as all amendments are adopted in their entirety. The Company has early adopted this final rule in conjunction with our acquisition of Physical Optics Corporation ("POC") on December 30, 2020. This adoption did not have a material impact on the Company's consolidated financial statements or related disclosures.

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Acquisitions

9 Months Ended

Apr. 02, 2021

Business Combinations [Abstract]

Acquisitions

Acquisitions

PHYSICAL OPTICS CORPORATION ACQUISITION

On December 7, 2020, the Company signed a definitive agreement to acquire POC for a purchase price of $310,000, subject to net working capital and net debt adjustments. On December 30, 2020, the transaction closed and the Company acquired POC. Based in Torrance, California, POC more than doubles the Company's global avionics business and expands its collective footprint in the platform and mission management market. The Company funded the acquisition through a combination of cash on hand and the Company's existing revolving credit facility (the "Revolver").

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.

The following table presents the net purchase price and the fair values of the assets and liabilities of POC on a preliminary basis:

	Amounts
Consideration transferred
Cash paid at closing	$	251,229
Cash paid post closing	61,626
Working capital and net debt adjustment	(4,737)
Less cash acquired	(2,855)
Net purchase price	$	305,263
Estimated fair value of tangible assets acquired and liabilities assumed
Cash	$	2,855
Accounts receivable	24,966
Inventory	11,125
Fixed assets	23,236
Other current and non-current assets	14,968
Accounts payable	(3,777)
Accrued expenses	(4,502)
Other current and non-current liabilities	(42,987)
Estimated fair value of net tangible assets acquired	25,884
Estimated fair value of identifiable intangible assets	114,000
Estimated goodwill	168,234
Estimated fair value of net assets acquired	308,118
Less cash acquired	(2,855)
Net purchase price	$	305,263

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 identifiable 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.

The estimated goodwill of $168,234 largely reflects the potential synergies and expansion of the Company’s offerings across product lines and markets complementary to the Company’s existing products and markets and is not deductible for tax purposes. The goodwill from this acquisition is reported in the Mission reporting unit. The Company has not furnished pro forma information relating to POC because such information is not material to the Company’s financial results.

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.

AMERICAN PANEL CORPORATION ACQUISITION

On September 23, 2019, the Company acquired American Panel Corporation (“APC”). Based in Alpharetta, Georgia, APC is a leading innovator in large area display technology for the aerospace and defense market. APC's capabilities are deployed on a wide range of next-generation platforms. The Company acquired APC for an all cash purchase price of $100,000, prior to net working capital and net debt adjustments. The Company funded the acquisition with cash on hand.

The following table presents the net purchase price and the fair values of the assets and liabilities of APC:

	Amounts
Consideration transferred
Cash paid at closing	$	100,826
Working capital and net debt adjustment	(5,952)
Liabilities assumed	2,454
Less cash acquired	(826)
Net purchase price	$	96,502
Fair value of tangible assets acquired and liabilities assumed
Cash	$	826
Accounts receivable	3,726
Inventory	11,233
Fixed assets	690
Other current and non-current assets	3,494
Accounts payable	(1,554)
Accrued expenses	(1,457)
Other current and non-current liabilities	(5,852)
Fair value of net tangible assets acquired	11,106
Fair value of identifiable intangible assets	33,200
Goodwill	53,022
Fair value of net assets acquired	97,328
Less cash acquired	(826)
Net purchase price	$	96,502

On September 23, 2020, the measurement period for APC expired. The identifiable intangible assets include customer relationships of $20,600 with a useful life of 11 years, completed technology of $10,400 with a useful life of 11 years and backlog of $2,200 with a useful life of two years.

The goodwill of $53,022 largely reflects the potential synergies and expansion of the Company's offerings across product lines and markets complementary to the Company's existing products and markets. The goodwill from this acquisition is reported under the Mission reporting unit. Since APC was a qualified subchapter S subsidiary, the acquisition is treated as an asset purchase for tax purposes. The Company has estimated the tax value of the intangible assets from this transaction and is amortizing the amount over 15 years for tax purposes. As of April 2, 2021, the Company had $48,840 of goodwill deductible for tax purposes.

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Fair Value of Financial Instruments

9 Months Ended

Apr. 02, 2021

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

During the nine months ended April 2, 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 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.

The carrying values of cash and cash equivalents, including money market funds, restricted cash, accounts receivable and payable, and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The Company determined the carrying value of long-term debt approximated fair value due to variable interest rates charged on the borrowings, which reprice frequently.

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Inventory

9 Months Ended

Apr. 02, 2021

Inventory Disclosure [Abstract]

Inventory

Inventory

Inventory is stated at the lower of cost (first-in, first-out) or net realizable value, and consists of materials, labor and overhead. On a quarterly basis, the Company uses consistent methodologies to evaluate inventory for net realizable value. Once an item is written down, the value becomes the new inventory cost basis. The Company reduces the value of inventory for excess and obsolete inventory, consisting of on-hand inventory in excess of estimated usage. The excess and obsolete inventory evaluation is based upon assumptions about future demand, historical usage, product mix and possible alternative uses. Inventory was comprised of the following:

	April 2, 2021		July 3, 2020
Raw materials	$	148,279	$	111,225
Work in process	54,667		49,647
Finished goods	23,894		17,221
Total	$	226,840	$	178,093

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Goodwill

9 Months Ended

Apr. 02, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

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 nine months ended April 2, 2021:

	Total
Balance at July 3, 2020	$	614,076
Goodwill adjustment for the APC acquisition	346
Goodwill arising from the POC acquisition	168,234
Balance at April 2, 2021	$	782,656

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

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Restructuring

9 Months Ended

Apr. 02, 2021

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

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

All of the restructuring and other charges are classified as Operating expenses in the Consolidated Statements of Operations and Comprehensive Income and any remaining severance obligations are expected to be paid within the next twelve months. The restructuring liability is classified as Accrued expenses in the Consolidated Balance Sheets.

The following table presents the detail of activity for the Company’s restructuring plans:

	Severance & Related
Restructuring liability at July 3, 2020	$	597
Restructuring and other charges	2,244
Cash paid	(2,333)
Restructuring liability at April 2, 2021	$	508

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Income Taxes

9 Months Ended

Apr. 02, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

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.

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Debt

9 Months Ended

Apr. 02, 2021

Debt Disclosure [Abstract]

Debt

Debt

REVOLVING CREDIT FACILITY

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 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.

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Employee Benefit Plan

9 Months Ended

Apr. 02, 2021

Retirement Benefits [Abstract]

Employee Benefit Plan

Employee Benefit Plan

PENSION PLAN

The Company maintains a defined benefit pension plan (the “Plan”) for its Swiss employees, which is administered by an independent pension fund. The Plan is mandated by Swiss law and meets the criteria for a defined benefit plan under ASC 715, Compensation—Retirement Benefits (“ASC 715”), because participants of the Plan are entitled to a defined rate of return on contributions made. The independent pension fund is a multi-employer plan with unrestricted joint liability for all participating companies for which the Plan’s overfunding or underfunding is allocated to each participating company based on an allocation key determined by the Plan.

The Company recognizes a net asset or liability for the Plan equal to the difference between the projected benefit obligation of the Plan and the fair value of the Plan’s assets as required by ASC 715. 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 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.

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Stock-Based Compensation

9 Months Ended

Apr. 02, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

STOCK INCENTIVE PLANS

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 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. 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. The foregoing does not affect any outstanding awards under the 2005 Plan, which remain in full force and effect in accordance with their terms. The 2018 Plan provides for the grant of non-qualified and incentive stock options, restricted stock, stock appreciation rights and deferred stock awards to employees and non-employees. 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 4,645 shares available for future grant under the 2018 Plan at April 2, 2021.

As part of the Company'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. Performance awards vest based on the requisite service period subject to the achievement of specific financial performance targets. Based on the performance targets, some of these awards require graded vesting which results in more rapid expense recognition compared to traditional time-based vesting over the same vesting period. The Company monitors the probability of achieving the performance targets on a quarterly basis and may adjust periodic stock compensation expense accordingly based on its determination of the likelihood for reaching targets. The performance targets generally include the achievement of internal performance targets in relation to a peer group of companies.

EMPLOYEE STOCK PURCHASE PLAN

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”), is 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 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.

STOCK OPTION AND AWARD ACTIVITY

The following table summarizes activity of the Company’s stock option plans since July 3, 2020:

	Options Outstanding
	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Outstanding at July 3, 2020	3	$	5.52	1.12
Granted	—	—
Exercised	(3)	5.52
Canceled	—	—
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:

	Non-vested Restricted Stock Awards
	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding at July 3, 2020	957	$	61.59
Granted	519	77.00
Vested	(414)	52.54
Forfeited	(47)	66.62
Outstanding at April 2, 2021	1,015	$	70.92

STOCK-BASED COMPENSATION EXPENSE

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 $1,070 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:

	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
Selling, general and administrative	6,088		5,476		17,383		15,503
Research and development	764		997		3,259		2,819
Stock-based compensation expense before tax	7,411		6,814		21,865		19,004
Income taxes	(1,927)		(1,772)		(5,685)		(4,941)
Stock-based compensation expense, net of income taxes	$	5,484	$	5,042	$	16,180	$	14,063

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Operating Segment, Geographic Information and Significant Customers

9 Months Ended

Apr. 02, 2021

Segment Reporting [Abstract]

Operating Segment, Geographic Information and Significant Customers

Operating Segment, Geographic Information and Significant Customers

Operating segments are defined as components of an enterprise evaluated regularly by the Company's CODM in deciding how to allocate resources and assess performance. 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 Company evaluated this reorganization under ASC 280 to determine whether this change has impacted the Company's single operating and reportable segment. The Company concluded this change had no effect given the CODM continues to evaluate and manage the Company on the basis of one operating and reportable segment. The Company utilized the management approach for determining its operating segment in accordance with ASC 280.

The geographic distribution of the Company’s revenues as determined by country in which the Company's legal subsidiary is domiciled is summarized as follows:

	U.S.		Europe		Asia Pacific		Eliminations		Total
THIRD QUARTER ENDED APRIL 2, 2021
Net revenues to unaffiliated customers	$	246,231	$	10,482	$	144	$	—	$	256,857
Inter-geographic revenues	51		734		—		(785)		—
Net revenues	$	246,282	$	11,216	$	144	$	(785)	$	256,857
THIRD QUARTER ENDED MARCH 27, 2020
Net revenues to unaffiliated customers	$	196,158	$	11,408	$	450	$	—	$	208,016
Inter-geographic revenues	389		754		—		(1,143)		—
Net revenues	$	196,547	$	12,162	$	450	$	(1,143)	$	208,016
NINE MONTHS ENDED APRIL 2, 2021
Net revenues to unaffiliated customers	$	639,851	$	32,957	$	346	$	—	$	673,154
Inter-geographic revenues	927		1,642		—		(2,569)		—
Net revenues	$	640,778	$	34,599	$	346	$	(2,569)	$	673,154
NINE MONTHS ENDED MARCH 27, 2020
Net revenues to unaffiliated customers	$	539,535	$	37,569	$	2,129	$	—	$	579,233
Inter-geographic revenues	2,015		2,222		—		(4,237)		—
Net revenues	$	541,550	$	39,791	$	2,129	$	(4,237)	$	579,233

The Company offers a broad family of products designed to meet the full range of requirements in compute-intensive, signal processing, image processing and command and control applications. To maintain a competitive advantage, the Company seeks to leverage technology investments across multiple product lines and product solutions.

The Company’s products are typically compute-intensive and require extremely high bandwidth and high throughput. These systems often must also meet significant SWaP constraints for use in aircraft, unmanned aerial vehicles, ships and other platforms and be ruggedized for use in harsh environments. The Company's products transform the massive streams of digital data created in these applications into usable information in real time. The systems can scale from a few processors to thousands of processors.

In recent years, the Company completed a series of acquisitions that changed its technological capabilities, applications and end markets. As these acquisitions and changes occurred, the Company's proportion of revenue derived from the sale of components in different technological areas, and modules, sub-assemblies and integrated subsystems which combine technologies into more complex diverse products has shifted. The following tables present revenue consistent with the Company's strategy of expanding its technological capabilities and program content. As additional information related to the Company’s products by end user, application, product grouping and/or platform is attained, the categorization of these products can vary over time. When this occurs, the Company reclassifies revenue by end user, application, product grouping and/or platform for prior periods. Such reclassifications typically do not materially change the underlying trends of results within each revenue category.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Domestic(1)	$	217,255	$	187,560	$	577,093	$	516,659
International/Foreign Military Sales(2)	39,602		20,456		96,061		62,574
Total Net Revenue	$	256,857	$	208,016	$	673,154	$	579,233

(1) Domestic revenues consist of sales where the end user is within the U.S., as well as sales to prime defense contractor customers where the ultimate end user location is not defined. 

(2) International/Foreign Military Sales consist of sales to U.S. prime defense contractor customers where the end user is known to be outside the U.S., foreign military sales through the U.S. government, and direct sales to non-U.S. based customers intended for end use outside of the U.S.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Radar(1)	$	81,481	$	78,113	$	238,650	$	164,360
Electronic Warfare(2)	25,782		37,488		91,342		109,684
Other Sensor & Effector(3)	25,252		26,279		72,352		80,681
Total Sensor & Effector	132,515		141,880		402,344		354,725
C4I(4)	107,144		47,351		219,284		154,140
Other(5)	17,198		18,785		51,526		70,368
Total Net Revenue	$	256,857	$	208,016	$	673,154	$	579,233

    (1) Radar includes end-use applications where radio frequency signals are utilized to detect, track, and identify objects.

    (2) Electronic Warfare includes end-use applications comprising the offensive and defensive use of the electromagnetic spectrum.

    (3) Other Sensor & Effector products include all Sensor & Effector end markets other than Radar and Electronic Warfare.

    (4) C4I includes rugged secure rackmount servers that are designed to drive the most powerful military processing applications.

    (5) Other products include all component and other sales where the end use is not specified.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Components(1)	$	40,355	$	56,786	$	131,330	$	170,515
Modules and Sub-assemblies(2)	21,749		25,805		74,208		90,569
Integrated Subsystems(3)	194,753		125,425		467,616		318,149
Total Net Revenue	$	256,857	$	208,016	$	673,154	$	579,233

(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.

(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. Modules and sub-assemblies may in turn be combined to form an integrated subsystem. Examples of modules and sub-assemblies include, but are not limited to, embedded processing modules, embedded processing boards, switch fabric boards, high speed input/output boards, digital receiver boards, graphics and video processing and Ethernet and IO (input-output) boards, multi-chip modules, integrated radio frequency and microwave multi-function assemblies, tuners and transceivers.

(3) Integrated Subsystems include multiple modules and/or sub-assemblies combined with a backplane or similar functional element and software to enable a solution. These are typically but not always integrated within a chassis and with cooling, power and other elements to address various requirements and are also often combined with additional technologies for interaction with other parts of a complete system or platform. Integrated subsystems also include spare and replacement modules and sub-assemblies sold as part of the same program for use in or with integrated subsystems sold by the Company.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Airborne(1)	$	120,640	$	110,728	$	299,551	$	303,186
Land(2)	54,394		26,130		149,949		66,572
Naval(3)	47,775		44,631		130,616		116,782
Other(4)	34,048		26,527		93,038		92,693
Total Net Revenues	$	256,857	$	208,016	$	673,154	$	579,233

(1) Airborne platform includes products that relate to personnel, equipment, or pieces of equipment designed for airborne applications.

(2) Land platform includes products that relate to fixed or mobile equipment, or pieces of equipment for personnel, weapon systems, vehicles and support elements operating on land.

(3) Naval platform includes products that relate to personnel, equipment, or pieces of equipment designed for naval operations.

(4) All platforms other than Airborne, Land or Naval.

The geographic distribution of the Company’s identifiable long-lived assets is summarized as follows:

	U.S.		Europe		Asia Pacific		Eliminations		Total
April 2, 2021	$	122,461	$	5,876	$	6	$	—	$	128,343
July 3, 2020	$	82,588	$	5,144	$	5	$	—	$	87,737

Identifiable long-lived assets exclude right-of-use assets, goodwill, and intangible assets.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Raytheon Technologies	18	%	17	%	22	%	15	%
U.S. Navy	16	%	*		*		*
Lockheed Martin Corporation	14	%	17	%	15	%	17	%
L3Harris Technologies	*		*		*		10	%
	48	%	34	%	37	%	42	%

*    Indicates that the amount is less than 10% of the Company's revenue for the respective period.

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 third quarters and nine months ended April 2, 2021 and March 27, 2020.

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Commitments and Contingencies

9 Months Ended

Apr. 02, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

LEGAL CLAIMS

The Company is subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of its business. Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to any matters currently pending against the Company and intends to defend itself vigorously. The outcome of these matters, individually and in the aggregate, is not expected to have a material impact on the Company’s cash flows, results of operations, or financial position.

INDEMNIFICATION OBLIGATIONS

The Company’s standard product sales and license agreements entered into in the ordinary course of business typically contain an indemnification provision pursuant to which the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with any patent, copyright or other intellectual property infringement claim by any third party with respect to the Company’s products. Such provisions generally survive termination or expiration of the agreements. The potential amount of future payments the Company could be required to make under these indemnification provisions is, in some instances, unlimited.

PURCHASE COMMITMENTS

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.

OTHER

As part of the Company's strategy for growth, the Company continues to explore acquisitions or strategic alliances. The associated acquisition costs incurred in the form of professional fees and services may be material to the future periods in which they occur, regardless of whether the acquisition is ultimately completed.

The Company may elect from time to time to purchase and subsequently retire shares of common stock in order to settle employees’ tax liabilities associated with vesting of a restricted stock award or exercise of stock options. These transactions would be treated as a use of cash in financing activities in the Company's Consolidated Statements of Cash Flows.

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Subsequent Events	9 Months Ended
	Apr. 02, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsThe Company has evaluated subsequent events from the date of the Consolidated Balance Sheet through the date the consolidated financial statements were issued.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Apr. 02, 2021

Accounting Policies [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared by the Company in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America for interim financial information and with the instructions to the Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in annual consolidated financial statements have been condensed or omitted pursuant to those rules and regulations; however, in the opinion of management the financial information reflects all adjustments, consisting of adjustments of a normal recurring nature, necessary for fair presentation. 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 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

Use of Estimates

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Business Combinations

BUSINESS COMBINATIONS

The Company utilizes the acquisition method of accounting under ASC 805, Business Combinations, (“ASC 805”), for all transactions and events in which it obtains control over one or more other businesses, to recognize the fair value of all assets and liabilities acquired, even if less than one hundred percent ownership is acquired, and in establishing the acquisition date fair value as the measurement date for all assets and liabilities assumed. The Company also utilizes ASC 805 for the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in business combinations.

Foreign Currency

FOREIGN CURRENCY

Local currencies are the functional currency for the Company’s subsidiaries in Switzerland, the United Kingdom, France, Japan, Spain and Canada. The accounts of foreign subsidiaries are translated using exchange rates in effect at period-end for assets and liabilities and at average exchange rates during the period for results of operations. The related translation adjustments are reported in Accumulated other comprehensive loss (“AOCL”) in shareholders’ equity. Gains (losses) resulting from non-U.S. currency transactions are included in Other expense, net in the Consolidated Statements of Operations and Comprehensive Income and were immaterial for all periods presented.

Revenue Recognition

REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, (“ASC 606”). Revenues are derived from the sales of products that are grouped into one of the following three categories: (i) components; (ii) modules and sub-assemblies; and (iii) integrated subsystems. The Company also generates revenues from the performance of services, including systems engineering support, consulting, maintenance and other support, testing and installation. Each promised good or service within a contract is accounted for separately under the guidance of ASC 606 if they are distinct. Promised goods or services not meeting the criteria for being a distinct performance obligation are bundled into a single performance obligation with other goods or services that together meet the criteria for being distinct. The appropriate allocation of the transaction price and recognition of revenue is then determined for the bundled performance obligation.

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 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, totaled 70% and 74% of 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. These long-term contracts involve the design, development, manufacture, or modification of complex modules and sub-assemblies or integrated subsystems and related services. Long-term contracts include both fixed-price and cost reimbursable contracts. 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 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. The Company accrues for anticipated warranty costs upon product shipment. The Company does not consider activities related to such assurance warranties, if any, to be a separate performance obligation. The Company does offer separately priced extended warranties which generally range from 12 to 36 months that are treated as separate performance obligations. The transaction price allocated to extended warranties is recognized over time in proportion to the costs expected to be incurred in satisfying the obligations under the contract.

All revenues are reported net of government assessed taxes (e.g., sales taxes or value-added taxes). Refer to Note L for disaggregation of revenue for the period.Contract balances result from the timing of revenue recognized, billings and cash collections, and the generation of contract assets and liabilities. Contract assets represent revenue recognized in excess of amounts invoiced to the customer and the right to payment is not subject to the passage of time. Contract assets are presented as unbilled receivables and costs in excess of billings on the Company’s Consolidated Balance Sheets. Contract liabilities consist of deferred product revenue, billings in excess of revenues, deferred service revenue, and customer advances. Deferred product revenue represents amounts that have been invoiced to customers, but are not yet recognizable as revenue because the Company has not satisfied its performance obligations under the contract. Billings in excess of revenues represents milestone billing contracts where the billings of the contract exceed recognized revenues. Deferred service revenue primarily represents amounts invoiced to customers for annual maintenance contracts or extended warranty contracts, which are recognized over time in proportion to the costs expected to be incurred in satisfying the obligations under the contract. Customer advances represent deposits received from customers on an order. Contract liabilities are included in deferred revenue and the long-term portion of deferred revenue is included within other non-current liabilities on the Company’s Consolidated Balance Sheets. Contract balances are reported in a net position on a contract-by-contract basis.

Accounts Receivables

ACCOUNTS RECEIVABLEAccounts receivable, net, represents amounts that have been billed and are currently due from customers. The Company maintains an allowance for credit losses to provide for the estimated amount of receivables that will not be collected. The Company provides credit to customers in the normal course of business. 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 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. For contracts where revenue is recognized over time, the invoicing events are typically based on specified performance obligation deliverables or milestone events, or quantifiable measures of performance.

Weighted-Average Shares

WEIGHTED-AVERAGE SHARES

Weighted-average shares were calculated as follows:

	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
Effect of dilutive equity instruments	380	523	401	557
Diluted weighted-average shares outstanding	55,526	55,127	55,434	55,071

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.

Stock-Based Compensation

STOCK INCENTIVE PLANS

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 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. 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. The foregoing does not affect any outstanding awards under the 2005 Plan, which remain in full force and effect in accordance with their terms. The 2018 Plan provides for the grant of non-qualified and incentive stock options, restricted stock, stock appreciation rights and deferred stock awards to employees and non-employees. 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 4,645 shares available for future grant under the 2018 Plan at April 2, 2021.

As part of the Company'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. Performance awards vest based on the requisite service period subject to the achievement of specific financial performance targets. Based on the performance targets, some of these awards require graded vesting which results in more rapid expense recognition compared to traditional time-based vesting over the same vesting period. The Company monitors the probability of achieving the performance targets on a quarterly basis and may adjust periodic stock compensation expense accordingly based on its determination of the likelihood for reaching targets. The performance targets generally include the achievement of internal performance targets in relation to a peer group of companies.

EMPLOYEE STOCK PURCHASE PLAN

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”), is 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 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.

Recently Adopted Accounting Pronouncements

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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. 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. For public business entities, the standard is effective for fiscal years ending after December 15, 2020. The ASU requires retrospective adoption and permits early adoption for all entities. The Company does not expect this guidance to have a material impact to its consolidated financial statements or related disclosures.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, an amendment of the FASB Accounting Standards Codification. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions for intraperiod tax allocations and deferred tax liabilities for equity method investments and add guidance as to whether a step-up in tax basis of goodwill relates to a business combination or a separate transaction. This ASU is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. 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.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

Effective July 4, 2020, the Company adopted ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which broadens the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. This ASU requires an entity to record an allowance for credit losses for certain financial instruments and financial assets, including trade receivables, based on expected losses rather than incurred losses. The Company will rely on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount and will exercise judgment in determining the relevant information and estimation methods that are appropriate in measurement of the credit losses. This adoption did not have a material impact to the Company's consolidated financial statements or related disclosures.

Effective July 4, 2020 the Company adopted ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU eliminates the requirement to measure the implied fair value of goodwill by assigning the fair value of a reporting unit to all assets and liabilities within that unit, the Step 2 test, from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited by the amount of goodwill in that reporting unit. This adoption did not have a material impact on the Company's consolidated financial statements or related disclosures.

Effective July 4, 2020 the Company adopted ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), an amendment of the FASB Accounting Standards Codification. The ASU provides guidance to determine whether to capitalize implementation costs of a cloud computing arrangement that is a service contract or expense as incurred. Costs of arrangements that do not include a software license should be accounted for as a service contract and expensed as incurred. This adoption did not have a material impact to the Company's consolidated financial statements or related disclosures.

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 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. Among other changes, the amendments impact SEC rules relating to: the definition of “significant” subsidiaries, requirements to provide financial statements for “significant” acquisitions, and the formulation and usage of pro forma financial information. The final rule is applicable for fiscal years beginning after December 31, 2020, with early adoption permitted as long as all amendments are adopted in their entirety. The Company has early adopted this final rule in conjunction with our acquisition of Physical Optics Corporation ("POC") on December 30, 2020. This adoption did not have a material impact on the Company's consolidated financial statements or related disclosures.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Apr. 02, 2021

Accounting Policies [Abstract]

Basic and Diluted Weighted Average Shares Outstanding

Weighted-average shares were calculated as follows:

	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
Effect of dilutive equity instruments	380	523	401	557
Diluted weighted-average shares outstanding	55,526	55,127	55,434	55,071

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Acquisitions (Tables)

9 Months Ended

Apr. 02, 2021

Business Combinations [Abstract]

Schedule of the Net Purchase Price and Fair Values of Assets and Liabilities Acquired

The following table presents the net purchase price and the fair values of the assets and liabilities of POC on a preliminary basis:

	Amounts
Consideration transferred
Cash paid at closing	$	251,229
Cash paid post closing	61,626
Working capital and net debt adjustment	(4,737)
Less cash acquired	(2,855)
Net purchase price	$	305,263
Estimated fair value of tangible assets acquired and liabilities assumed
Cash	$	2,855
Accounts receivable	24,966
Inventory	11,125
Fixed assets	23,236
Other current and non-current assets	14,968
Accounts payable	(3,777)
Accrued expenses	(4,502)
Other current and non-current liabilities	(42,987)
Estimated fair value of net tangible assets acquired	25,884
Estimated fair value of identifiable intangible assets	114,000
Estimated goodwill	168,234
Estimated fair value of net assets acquired	308,118
Less cash acquired	(2,855)
Net purchase price	$	305,263

The following table presents the net purchase price and the fair values of the assets and liabilities of APC:

	Amounts
Consideration transferred
Cash paid at closing	$	100,826
Working capital and net debt adjustment	(5,952)
Liabilities assumed	2,454
Less cash acquired	(826)
Net purchase price	$	96,502
Fair value of tangible assets acquired and liabilities assumed
Cash	$	826
Accounts receivable	3,726
Inventory	11,233
Fixed assets	690
Other current and non-current assets	3,494
Accounts payable	(1,554)
Accrued expenses	(1,457)
Other current and non-current liabilities	(5,852)
Fair value of net tangible assets acquired	11,106
Fair value of identifiable intangible assets	33,200
Goodwill	53,022
Fair value of net assets acquired	97,328
Less cash acquired	(826)
Net purchase price	$	96,502

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Inventory (Tables)

9 Months Ended

Apr. 02, 2021

Inventory Disclosure [Abstract]

Inventory

Inventory was comprised of the following:

	April 2, 2021		July 3, 2020
Raw materials	$	148,279	$	111,225
Work in process	54,667		49,647
Finished goods	23,894		17,221
Total	$	226,840	$	178,093

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Goodwill (Tables)

9 Months Ended

Apr. 02, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill

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

	Total
Balance at July 3, 2020	$	614,076
Goodwill adjustment for the APC acquisition	346
Goodwill arising from the POC acquisition	168,234
Balance at April 2, 2021	$	782,656

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Restructuring (Tables)

9 Months Ended

Apr. 02, 2021

Restructuring and Related Activities [Abstract]

Expenses by Reportable Segment for Restructuring Plans

The following table presents the detail of activity for the Company’s restructuring plans:

	Severance & Related
Restructuring liability at July 3, 2020	$	597
Restructuring and other charges	2,244
Cash paid	(2,333)
Restructuring liability at April 2, 2021	$	508

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Stock-Based Compensation (Tables)

9 Months Ended

Apr. 02, 2021

Share-based Payment Arrangement [Abstract]

Summary of Stock Option Plans

The following table summarizes activity of the Company’s stock option plans since July 3, 2020:

	Options Outstanding
	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Outstanding at July 3, 2020	3	$	5.52	1.12
Granted	—	—
Exercised	(3)	5.52
Canceled	—	—
Outstanding at April 2, 2021	—	$	—	—

Summary of Nonvested Restricted Stock

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

	Non-vested Restricted Stock Awards
	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding at July 3, 2020	957	$	61.59
Granted	519	77.00
Vested	(414)	52.54
Forfeited	(47)	66.62
Outstanding at April 2, 2021	1,015	$	70.92

Stock Based Compensation Expenses

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

	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
Selling, general and administrative	6,088		5,476		17,383		15,503
Research and development	764		997		3,259		2,819
Stock-based compensation expense before tax	7,411		6,814		21,865		19,004
Income taxes	(1,927)		(1,772)		(5,685)		(4,941)
Stock-based compensation expense, net of income taxes	$	5,484	$	5,042	$	16,180	$	14,063

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Operating Segment, Geographic Information and Significant Customers (Tables)

9 Months Ended

Apr. 02, 2021

Segment Reporting [Abstract]

Geographic Distribution of Revenues and Long Lived Assets from Continuing Operations

The geographic distribution of the Company’s revenues as determined by country in which the Company's legal subsidiary is domiciled is summarized as follows:

	U.S.		Europe		Asia Pacific		Eliminations		Total
THIRD QUARTER ENDED APRIL 2, 2021
Net revenues to unaffiliated customers	$	246,231	$	10,482	$	144	$	—	$	256,857
Inter-geographic revenues	51		734		—		(785)		—
Net revenues	$	246,282	$	11,216	$	144	$	(785)	$	256,857
THIRD QUARTER ENDED MARCH 27, 2020
Net revenues to unaffiliated customers	$	196,158	$	11,408	$	450	$	—	$	208,016
Inter-geographic revenues	389		754		—		(1,143)		—
Net revenues	$	196,547	$	12,162	$	450	$	(1,143)	$	208,016
NINE MONTHS ENDED APRIL 2, 2021
Net revenues to unaffiliated customers	$	639,851	$	32,957	$	346	$	—	$	673,154
Inter-geographic revenues	927		1,642		—		(2,569)		—
Net revenues	$	640,778	$	34,599	$	346	$	(2,569)	$	673,154
NINE MONTHS ENDED MARCH 27, 2020
Net revenues to unaffiliated customers	$	539,535	$	37,569	$	2,129	$	—	$	579,233
Inter-geographic revenues	2,015		2,222		—		(4,237)		—
Net revenues	$	541,550	$	39,791	$	2,129	$	(4,237)	$	579,233

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Domestic(1)	$	217,255	$	187,560	$	577,093	$	516,659
International/Foreign Military Sales(2)	39,602		20,456		96,061		62,574
Total Net Revenue	$	256,857	$	208,016	$	673,154	$	579,233

(1) Domestic revenues consist of sales where the end user is within the U.S., as well as sales to prime defense contractor customers where the ultimate end user location is not defined. 

(2) International/Foreign Military Sales consist of sales to U.S. prime defense contractor customers where the end user is known to be outside the U.S., foreign military sales through the U.S. government, and direct sales to non-U.S. based customers intended for end use outside of the U.S.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Radar(1)	$	81,481	$	78,113	$	238,650	$	164,360
Electronic Warfare(2)	25,782		37,488		91,342		109,684
Other Sensor & Effector(3)	25,252		26,279		72,352		80,681
Total Sensor & Effector	132,515		141,880		402,344		354,725
C4I(4)	107,144		47,351		219,284		154,140
Other(5)	17,198		18,785		51,526		70,368
Total Net Revenue	$	256,857	$	208,016	$	673,154	$	579,233

    (1) Radar includes end-use applications where radio frequency signals are utilized to detect, track, and identify objects.

    (2) Electronic Warfare includes end-use applications comprising the offensive and defensive use of the electromagnetic spectrum.

    (3) Other Sensor & Effector products include all Sensor & Effector end markets other than Radar and Electronic Warfare.

    (4) C4I includes rugged secure rackmount servers that are designed to drive the most powerful military processing applications.

    (5) Other products include all component and other sales where the end use is not specified.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Components(1)	$	40,355	$	56,786	$	131,330	$	170,515
Modules and Sub-assemblies(2)	21,749		25,805		74,208		90,569
Integrated Subsystems(3)	194,753		125,425		467,616		318,149
Total Net Revenue	$	256,857	$	208,016	$	673,154	$	579,233

(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.

(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. Modules and sub-assemblies may in turn be combined to form an integrated subsystem. Examples of modules and sub-assemblies include, but are not limited to, embedded processing modules, embedded processing boards, switch fabric boards, high speed input/output boards, digital receiver boards, graphics and video processing and Ethernet and IO (input-output) boards, multi-chip modules, integrated radio frequency and microwave multi-function assemblies, tuners and transceivers.

(3) Integrated Subsystems include multiple modules and/or sub-assemblies combined with a backplane or similar functional element and software to enable a solution. These are typically but not always integrated within a chassis and with cooling, power and other elements to address various requirements and are also often combined with additional technologies for interaction with other parts of a complete system or platform. Integrated subsystems also include spare and replacement modules and sub-assemblies sold as part of the same program for use in or with integrated subsystems sold by the Company.

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Airborne(1)	$	120,640	$	110,728	$	299,551	$	303,186
Land(2)	54,394		26,130		149,949		66,572
Naval(3)	47,775		44,631		130,616		116,782
Other(4)	34,048		26,527		93,038		92,693
Total Net Revenues	$	256,857	$	208,016	$	673,154	$	579,233

(1) Airborne platform includes products that relate to personnel, equipment, or pieces of equipment designed for airborne applications.

(2) Land platform includes products that relate to fixed or mobile equipment, or pieces of equipment for personnel, weapon systems, vehicles and support elements operating on land.

(3) Naval platform includes products that relate to personnel, equipment, or pieces of equipment designed for naval operations.

(4) All platforms other than Airborne, Land or Naval.

The geographic distribution of the Company’s identifiable long-lived assets is summarized as follows:

	U.S.		Europe		Asia Pacific		Eliminations		Total
April 2, 2021	$	122,461	$	5,876	$	6	$	—	$	128,343
July 3, 2020	$	82,588	$	5,144	$	5	$	—	$	87,737

Customers Comprising Ten Percent or More Revenues

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

	Third Quarters Ended				Nine Months Ended
	April 2, 2021		March 27, 2020		April 2, 2021		March 27, 2020
Raytheon Technologies	18	%	17	%	22	%	15	%
U.S. Navy	16	%	*		*		*
Lockheed Martin Corporation	14	%	17	%	15	%	17	%
L3Harris Technologies	*		*		*		10	%
	48	%	34	%	37	%	42	%

*    Indicates that the amount is less than 10% of the Company's revenue for the respective period.

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Description of Business (Details)	9 Months Ended
	Apr. 02, 2021 contractor program
Accounting Policies [Abstract]
Number of programs using products and services | program	300
Nature of Business, Number of Contractors Using Products and Services | contractor	25

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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2021	Mar. 27, 2020	Apr. 02, 2021	Mar. 27, 2020	Jul. 03, 2020
Significant Accounting Policies [Line Items]
Percentage of revenue recognized			70.00%
Unbilled receivables and costs in excess of billings	$ 138,378		$ 138,378		$ 90,289
Contract liability balance	31,954		31,954		$ 19,892
Revenue recognized in the contract liability balance	2,133	$ 1,564	15,499	$ 9,838
Factored accounts receivable	$ 352,229		$ 352,229
Minimum
Significant Accounting Policies [Line Items]
Standard warranty period			12 months
Extended warranty period			12 months
Maximum
Significant Accounting Policies [Line Items]
Standard warranty period			36 months
Extended warranty period			36 months
Transferred over Time
Significant Accounting Policies [Line Items]
Percentage of revenue recognized	47.00%	30.00%	41.00%	26.00%
Ship and bill
Significant Accounting Policies [Line Items]
Percentage of revenue recognized	53.00%	70.00%	59.00%	74.00%

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Summary of Significant Accounting Policies - Basic and Diluted Weighted Average Shares Outstanding (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2021	Mar. 27, 2020	Apr. 02, 2021	Mar. 27, 2020
Earnings Per Share [Abstract]
Basic weighted-average shares outstanding (in shares)	55,146	54,604	55,033	54,514
Effect of dilutive equity instruments (in shares)	380	523	401	557
Diluted weighted-average shares outstanding (in shares)	55,526	55,127	55,434	55,071
Antidilutive securities excluded from computation of earnings per share (in shares)	38	3	13	136

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Acquisitions - Narrative (Details) - USD ($) $ in Thousands					3 Months Ended	9 Months Ended
	Dec. 30, 2020	Dec. 07, 2020	Sep. 23, 2020	Sep. 23, 2019	Apr. 02, 2021	Apr. 02, 2021	Jul. 03, 2020
Business Acquisition [Line Items]
Goodwill					$ 782,656	$ 782,656	$ 614,076
Physical Optics Corporation
Business Acquisition [Line Items]
Total consideration		$ 310,000
Goodwill	$ 168,234
Restricted cash					61,626	61,626
Business Acquisition, Pro Forma Revenue					38,492	38,709
Business Acquisition, Pro Forma Net Income (Loss), Before Tax					$ 1,065	$ 782
Physical Optics Corporation | Customer Relationships
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 81,000
Useful life of acquired assets	11 years
Physical Optics Corporation | Developed Technology
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 25,000
Useful life of acquired assets	9 years
Physical Optics Corporation | Backlog
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 8,000
Useful life of acquired assets	1 year
American Panel Corporation
Business Acquisition [Line Items]
Goodwill				$ 53,022
Payments to acquire business				$ 100,000
Acquired goodwill, amortization period				15 years
Tax deductible goodwill				$ 48,840
American Panel Corporation | Customer Relationships
Business Acquisition [Line Items]
Finite-lived intangible assets acquired			$ 20,600
Useful life of acquired assets			11 years
American Panel Corporation | Developed Technology
Business Acquisition [Line Items]
Finite-lived intangible assets acquired			$ 10,400
Useful life of acquired assets			11 years
American Panel Corporation | Backlog
Business Acquisition [Line Items]
Finite-lived intangible assets acquired			$ 2,200
Useful life of acquired assets			2 years

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Acquisitions - Net Purchase Price and Fair Values of Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands			9 Months Ended
	Dec. 30, 2020	Sep. 23, 2019	Apr. 02, 2021	Mar. 27, 2020	Jul. 03, 2020
Business Combination, Consideration Transferred [Abstract]
Payments to Acquire Businesses, Net of Cash Acquired, Total			$ 305,263	$ 96,502
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Goodwill			$ 782,656		$ 614,076
Physical Optics Corporation
Business Combination, Consideration Transferred [Abstract]
Payments to Acquire Businesses, Gross	$ 251,229
Business Combination, Consideration Transferred, Liabilities Incurred	61,626
Business Combinations, Consideration Received, Working Capital Adjustment	(4,737)
Cash Acquired from Acquisition	(2,855)
Payments to Acquire Businesses, Net of Cash Acquired, Total	305,263
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents	(2,855)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables	24,966
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory	11,125
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	23,236
Business Combination, Recognized Identifiable Assets Acquired And Liabilities Assumed, Other Assets, Current And Noncurrent	14,968
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable	(3,777)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Accrued Liabilities	(4,502)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other	(42,987)
Business Combination, Recognized Identifiable Assets Acquired And Liabilities Assumed, Tangible Assets	25,884
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	114,000
Goodwill	168,234
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total	$ 308,118
American Panel Corporation
Business Combination, Consideration Transferred [Abstract]
Payments to Acquire Businesses, Gross		$ 100,826
Business Combination, Consideration Transferred, Liabilities Incurred		2,454
Business Combinations, Consideration Received, Working Capital Adjustment		(5,952)
Cash Acquired from Acquisition		(826)
Payments to Acquire Businesses, Net of Cash Acquired, Total		96,502
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents		(826)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables		3,726
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory		11,233
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment		690
Business Combination, Recognized Identifiable Assets Acquired And Liabilities Assumed, Other Assets, Current And Noncurrent		3,494
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable		(1,554)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Accrued Liabilities		(1,457)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other		(5,852)
Business Combination, Recognized Identifiable Assets Acquired And Liabilities Assumed, Tangible Assets		11,106
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		33,200
Goodwill		53,022
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total		$ 97,328

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Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	9 Months Ended
	Apr. 02, 2021	Mar. 27, 2020
Fair Value Disclosures [Abstract]
Proceeds from sale of investment	$ 1,538	$ 4,310
Loss on Sale of Investments	$ 426

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Inventory (Details) - USD ($) $ in Thousands	Apr. 02, 2021	Jul. 03, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 148,279	$ 111,225
Work in process	54,667	49,647
Finished goods	23,894	17,221
Total	$ 226,840	$ 178,093

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Goodwill (Details) $ in Thousands	9 Months Ended
	Apr. 02, 2021 USD ($)
Goodwill [Roll Forward]
Beginning Balance	$ 614,076
Goodwill adjustment for the APC acquisition	346
Goodwill arising from the POC acquisition	168,234
Ending Balance	$ 782,656

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Restructuring - Expenses by Reportable Segment for Restructuring Plans (Details) - Severance & Related $ in Thousands	9 Months Ended
	Apr. 02, 2021 USD ($)
Restructuring Reserve [Roll Forward]
Restructuring liability at July 3, 2020	$ 597
Restructuring and other charges	2,244
Cash paid	(2,333)
Restructuring liability at April 2, 2021	$ 508

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Restructuring - Additional Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2021 USD ($)	Mar. 27, 2020 USD ($)	Apr. 02, 2021 USD ($) position	Mar. 27, 2020 USD ($)
Other Income and Expenses [Abstract]
Restructuring and other charges | $	$ (4)	$ 66	$ 2,244	$ 1,815
Restructuring and Related Cost, Number of Positions Eliminated | position			42

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2021	Mar. 27, 2020	Apr. 02, 2021	Mar. 27, 2020
Income Tax Disclosure [Abstract]
Income tax (benefit) expense	$ 5,362	$ 5,363	$ 11,993	$ 8,455
(Loss) income from operations before income taxes	20,997	28,928	56,112	66,943
Excess Tax Benefit from Share-based Compensation, Operating Activities	175	159	$ 2,785	$ 6,639
Income Tax Credits and Adjustments	$ 1,005
Unrecognized Tax Benefits, Period Increase (Decrease)		251
Other Noncash Income Tax Expense		$ 813

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Debt (Details) - USD ($)		3 Months Ended		9 Months Ended
	Sep. 28, 2018	Apr. 02, 2021	Mar. 27, 2020	Apr. 02, 2021	Mar. 27, 2020	Jul. 03, 2020
Debt Instrument [Line Items]
Proceeds from issuance of debt				$ 160,000,000	$ 200,000,000
Long-term debt		$ 160,000,000		160,000,000		$ 0
Interest Expense		(549,000)	$ (58,000)	(622,000)	$ (58,000)
Amount of outstanding letter of credit		799,000		799,000
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 750,000,000
Term of revolving credit facility	5 years
Term Loan
Debt Instrument [Line Items]
Debt issuance costs		$ 3,361,000		$ 3,361,000

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Employee Benefit Plan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2021	Mar. 27, 2020	Apr. 02, 2021	Mar. 27, 2020
Defined Benefit Plan Disclosure [Line Items]
Pension benefit plan, net of tax	$ 30	$ 7	$ 92	$ 22
Net periodic benefit cost	420
Expected employer contributions	957		957
Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Net periodic benefit cost		$ 304	1,253	$ 896
Expected employer contributions	957		957
Pension Plan | Other Noncurrent Liabilities
Defined Benefit Plan Disclosure [Line Items]
Net funded status of plan, liability position	$ 12,261		$ 12,261

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Stock-Based Compensation - Additional Information (Details) - USD ($) shares in Thousands, $ in Thousands		9 Months Ended
	Oct. 28, 2020	Apr. 02, 2021	Mar. 27, 2020	Jul. 03, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocation of recognized period costs, capitalized amount		$ 1,070		$ 542
Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for issuance under stock incentive plan (in shares)	500	2,300
Purchase price as a percentage of the lesser of the market value of such shares at either the beginning or the end of each nine-month offering period		85.00%
Percentage of employee compensation that may be uses to purchase common stock through payroll deductions, maximum		10.00%
Shares available for future grant (in shares)		483
Granted (in shares)		46	41
2018 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for issuance under stock incentive plan (in shares)		6,782
Number of additional shares authorized	3,000
Shares available for future grant (in shares)		4,645
2005 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant (in shares)		710
2005 Stock Incentive Plan | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of stock option		7 years

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Stock-Based Compensation - Summary of Stock Option Plans (Details) - Stock Options - $ / shares shares in Thousands		9 Months Ended
	Jul. 03, 2020	Apr. 02, 2021
Number of Shares
Outstanding at beginning of period (in shares)		3
Granted (in shares)		0
Exercised (in shares)		(3)
Cancelled (in shares)		0
Outstanding at end of period (in shares)	3	0
Weighted Average Exercise Price
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price		$ 0
Exercised (usd per share)		5.52
Cancelled (usd per share)		0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 5.52	$ 0
Weighted Average Remaining Contractual Term (Years)
Outstanding at end of period	1 year 1 month 13 days

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Stock-Based Compensation - Summary of Nonvested Restricted Stock (Details) - Restricted Stock shares in Thousands	9 Months Ended
	Apr. 02, 2021 $ / shares shares
Number of Shares
Beginning Balance (in shares) | shares	957
Granted (in shares) | shares	519
Vested (in shares) | shares	(414)
Forfeited (in shares) | shares	(47)
Ending Balance (in shares) | shares	1,015
Weighted Average Grant Date Fair Value
Beginning Balance (usd per share) | $ / shares	$ 61.59
Granted (usd per share) | $ / shares	77.00
Vested (usd per share) | $ / shares	52.54
Forfeited (usd per share) | $ / shares	66.62
Ending Balance (usd per share) | $ / shares	$ 70.92

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Stock-Based Compensation - Stock-Based Compensation Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2021	Mar. 27, 2020	Apr. 02, 2021	Mar. 27, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before tax	$ 7,411	$ 6,814	$ 21,865	$ 19,004
Income taxes	(1,927)	(1,772)	(5,685)	(4,941)
Net compensation expense	5,484	5,042	16,180	14,063
Cost of revenues
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before tax	559	341	1,223	682
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before tax	6,088	5,476	17,383	15,503
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before tax	$ 764	$ 997	$ 3,259	$ 2,819

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Operating Segment, Geographic Information and Significant Customers - Geographic Distribution of Revenues and Long Lived Assets from Continuing Operations (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2021 USD ($)	Mar. 27, 2020 USD ($)	Apr. 02, 2021 USD ($) segment	Mar. 27, 2020 USD ($)	Jul. 03, 2020 USD ($)
Segment Reporting [Abstract]
Number of operating segments | segment			1
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	$ 256,857	$ 208,016	$ 673,154	$ 579,233
Identifiable long-lived assets	128,343		128,343		$ 87,737
Components
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	40,355	56,786	131,330	170,515
Modules and Sub-assemblies
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	21,749	25,805	74,208	90,569
Integrated Subsystems
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	194,753	125,425	467,616	318,149
Total Sensor & Effector
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	132,515	141,880	402,344	354,725
Radar
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	81,481	78,113	238,650	164,360
Electronic Warfare
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	25,782	37,488	91,342	109,684
Other Sensor & Effector
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	25,252	26,279	72,352	80,681
C4I
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	107,144	47,351	219,284	154,140
Other End Applications
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	17,198	18,785	51,526	70,368
Domestic
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	217,255	187,560	577,093	516,659
International/Foreign Military Sales
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	39,602	20,456	96,061	62,574
US
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	246,231	196,158	639,851	539,535
Europe
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	10,482	11,408	32,957	37,569
Asia Pacific
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	144	450	346	2,129
Reportable Geographical Components | US
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	246,282	196,547	640,778	541,550
Identifiable long-lived assets	122,461		122,461		82,588
Reportable Geographical Components | Europe
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	11,216	12,162	34,599	39,791
Identifiable long-lived assets	5,876		5,876		5,144
Reportable Geographical Components | Asia Pacific
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	144	450	346	2,129
Identifiable long-lived assets	6		6		5
Geography Eliminations
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	(785)	(1,143)	(2,569)	(4,237)
Identifiable long-lived assets	0		0		$ 0
Geography Eliminations | US
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	51	389	927	2,015
Geography Eliminations | Europe
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	734	754	1,642	2,222
Geography Eliminations | Asia Pacific
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	$ 0	$ 0	$ 0	$ 0

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Operating Segment, Geographic Information and Platform - Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 02, 2021	Mar. 27, 2020	Apr. 02, 2021	Mar. 27, 2020
Revenue from External Customer [Line Items]
Net revenues	$ 256,857	$ 208,016	$ 673,154	$ 579,233
Airborne [Member]
Revenue from External Customer [Line Items]
Net revenues	120,640	110,728	299,551	303,186
Land [Member]
Revenue from External Customer [Line Items]
Net revenues	54,394	26,130	149,949	66,572
Naval [Member]
Revenue from External Customer [Line Items]
Net revenues	47,775	44,631	130,616	116,782
Product and Service, Other [Member]
Revenue from External Customer [Line Items]
Net revenues	$ 34,048	$ 26,527	$ 93,038	$ 92,693

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Operating Segment, Geographic Information and Significant Customers - Customers Comprising Ten Percent or more Revenues (Details) - Customer Concentration Risk - Sales Revenue, Net	3 Months Ended		9 Months Ended
	Apr. 02, 2021	Mar. 27, 2020	Apr. 02, 2021	Mar. 27, 2020
Revenue, Major Customer [Line Items]
Concentration risk, percentage	48.00%	34.00%	37.00%	42.00%
Raytheon Company
Revenue, Major Customer [Line Items]
Concentration risk, percentage	18.00%	17.00%	22.00%	15.00%
U.S. Navy
Revenue, Major Customer [Line Items]
Concentration risk, percentage	16.00%
Lockheed Martin Corporation
Revenue, Major Customer [Line Items]
Concentration risk, percentage	14.00%	17.00%	15.00%	17.00%
L3Harris Technologies
Revenue, Major Customer [Line Items]
Concentration risk, percentage				10.00%

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Commitments And Contingencies (Details) $ in Thousands	Apr. 02, 2021 USD ($)
Non-cancelable purchase commitments
Long-term Purchase Commitment [Line Items]
Purchase commitments for less than one year	$ 145,019