ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended June 26, 2016 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
North Carolina | 56-1572719 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
4600 Silicon Drive Durham, North Carolina | 27703 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $0.00125 par value | The NASDAQ Stock Market LLC | |
Preferred Stock Purchase Rights | The NASDAQ Stock Market LLC |
Large accelerated filer | ý | Accelerated filer | ¨ |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page | ||
Part I | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
Part III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
PART IV | ||
Item 15. | ||
• | Lighting Products |
• | LED Products |
• | Power and RF Products |
• | increase the quality, performance and diameter of our substrate and epitaxial materials; |
• | continually improve our manufacturing processes; |
• | develop brighter, more efficient and lower cost LED chip and component products; |
• | create new, and improve existing, LED components; |
• | improve existing LED lighting products and develop new LED lighting systems and related controls; and |
• | develop higher power diodes/switches and higher power/linearity RF devices. |
• | achievement of technology breakthroughs required to make commercially viable devices; |
• | the accuracy of our predictions for market requirements; |
• | our ability to predict, influence and/or react to evolving standards; |
• | acceptance of our new product designs; |
• | acceptance of new technology in certain markets; |
• | the availability of qualified research and development personnel; |
• | our timely completion of product designs and development; |
• | our ability to develop repeatable processes to manufacture new products in sufficient quantities, with the desired specifications and at competitive costs; |
• | our ability to effectively transfer products and technology from development to manufacturing; |
• | our customers’ ability to develop competitive products incorporating our products; and |
• | market acceptance of our products and our customers’ products. |
• | expand the capability of information systems to support a more complex business; |
• | maintain, expand and purchase adequate manufacturing facilities and equipment, as well as secure sufficient third-party manufacturing resources, to meet customer demand; |
• | manage an increasingly complex supply chain that has the ability to scale to maintain a sufficient supply of raw materials and deliver on time to our manufacturing facilities or our third party manufacturing facilities; |
• | expand research and development, sales and marketing, technical support, distribution capabilities, manufacturing planning and administrative functions; |
• | manage organizational complexity and communication; |
• | expand the skills and capabilities of our current management team; |
• | add experienced senior level managers; |
• | attract and retain qualified employees; and |
• | adequately maintain and adjust the operational and financial controls that support our business. |
• | the failure to obtain, on a timely basis or at all, the regulatory approvals required to complete the transaction without the imposition of conditions that may cause the parties to abandon the transaction, or the failure to satisfy, on a timely basis or at all, the other closing conditions set forth in the APA; |
• | the disruption to and uncertainty in our business and our relationships with our customers, including attempts by our customers to renegotiate their relationships with us or decisions by our customers to defer or delay purchases from us; |
• | the diversion of our management’s attention away from the operation of the businesses we are retaining; |
• | difficulties in hiring, retaining and motivating key personnel during this process or as a result of uncertainties generated by this process or any developments or actions relating to it; |
• | our incurrence of significant transaction costs in connection with the transaction, regardless of whether it is completed; |
• | the restrictions on and obligations with respect to our business set forth in the APA and, following closing, the transition services agreement and the wafer supply agreement; |
• | the separation of the Wolfspeed business from the businesses we are retaining and the operation of our retained businesses without the Wolfspeed business; |
• | any required payments of indemnification obligations under the APA for retained liabilities and breaches of representations, warranties or covenants; |
• | fluctuations in our market value, including the depreciation in our market value if the transaction is not completed or the failure of the transaction, even if completed, to increase our market value; |
• | failure to realize the full purchase price anticipated under the APA; |
• | costs associated with the removal, collection and destruction of the product; |
• | payments made to replace product; |
• | costs associated with repairing the product; |
• | the write-down or destruction of existing inventory; |
• | insurance recoveries that fail to cover the full costs associated with product recalls; |
• | lost sales due to the unavailability of product for a period of time; |
• | delays, cancellations or rescheduling of orders for our products; or |
• | increased product returns. |
• | variability in our process repeatability and control; |
• | contamination of the manufacturing environment; |
• | equipment failure, power outages, fires, flooding, information or other system failures or variations in the manufacturing process; |
• | lack of consistency and adequate quality and quantity of piece parts, other raw materials and other bill of materials items; |
• | inventory shrinkage or human errors; |
• | defects in production processes (including system assembly) either within our facilities or at our suppliers; and |
• | any transitions or changes in our production process, planned or unplanned. |
• | the failure of an acquired business, investee or joint venture to meet our performance expectations; |
• | identification of additional liabilities relating to an acquired business; |
• | loss of existing customers of our current and acquired businesses due to concerns that new product lines may be in competition with the customers’ existing product lines; |
• | difficulty integrating an acquired business's operations, personnel and financial and operating systems into our current business; |
• | diversion of management attention; |
• | difficulty separating the operations, personnel and financial and operating systems of a spin-off or divestiture from our current business; |
• | uncertainty of the financial markets or circumstances that cause conditions that are less favorable and/or different than expected; and |
• | expenses incurred to complete a transaction may be significantly higher than anticipated. |
• | protection of intellectual property and trade secrets; |
• | tariffs, customs, trade sanctions, trade embargoes and other barriers to importing/exporting materials and products in a cost effective and timely manner, or changes in applicable tariffs or custom rules; |
• | timing and availability of export licenses; |
• | rising labor costs; |
• | disruptions in or inadequate infrastructure of the countries where we operate; |
• | difficulties in collecting accounts receivable; |
• | difficulties in staffing and managing international operations; |
• | the burden of complying with foreign and international laws and treaties; and |
• | the burden of complying with and changes in international taxation policies. |
• | pay substantial damages; |
• | indemnify our customers; |
• | stop the manufacture, use and sale of products found to be infringing; |
• | incur asset impairment charges; |
• | discontinue the use of processes found to be infringing; |
• | expend significant resources to develop non-infringing products or processes; or |
• | obtain a license to use third party technology. |
• | the jurisdiction in which profits are determined to be earned and taxed; |
• | changes in government administrations, such as the Presidency and Congress of the U.S. as well as in the states and countries in which we operate; |
• | changes in tax laws or interpretation of such tax laws and changes in generally accepted accounting principles; |
• | the resolution of issues arising from tax audits with various authorities; |
• | changes in the valuation of our deferred tax assets and liabilities; |
• | adjustments to estimated taxes upon finalization of various tax returns; |
• | increases in expenses not deductible for tax purposes, including impairment of goodwill in connection with acquisitions; |
• | changes in available tax credits; |
• | the recognition and measurement of uncertain tax positions; |
• | the lack of sufficient excess tax benefits (credits) in our additional paid-in-capital pool in situations where our realized tax deductions for certain stock-based compensation awards (such as non-qualified stock options and restricted stock) are less than those originally anticipated; and |
• | the repatriation of non-U.S. earnings for which we have not previously provided for U.S. taxes or any changes in legislation that may result in these earnings being taxed within the U.S., regardless of our decision regarding repatriation of funds. |
• | regulatory penalties, fines, legal liabilities and the forfeiture of certain tax benefits; |
• | suspension of production; |
• | alteration of our fabrication, assembly and test processes; and |
• | curtailment of our operations or sales. |
• | increasing our vulnerability to downturns in our business, to competitive pressures and to adverse general economic and industry conditions; |
• | requiring the dedication of an increased portion of our expected cash flows from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital expenditures, research and development and stock repurchases; |
• | limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
• | placing us at a competitive disadvantage compared to our peers that may have less indebtedness than we have by limiting our ability to borrow additional funds needed to operate and grow our business; and |
• | increasing our interest expense if interest rates increase. |
Size (approximate gross square footage) | ||||||||||||||||
Location | Segment Utilization1 | Total | Production | Facility Services and Warehousing | Administrative Function | Housing / Other | ||||||||||
Owned Facilities | ||||||||||||||||
Durham, NC | All | 966,844 | 536,169 | 83,860 | 346,815 | — | ||||||||||
Research Triangle Park, NC | 3 | 203,995 | 90,613 | 62,855 | 50,527 | — | ||||||||||
Racine, WI | 1 | 802,845 | 160,000 | 418,000 | 224,845 | — | ||||||||||
Huizhou, China | 2 | 808,488 | 332,271 | 101,105 | 41,764 | 333,348 | ||||||||||
Total owned | 2,782,172 | 1,119,053 | 665,820 | 663,951 | 333,348 | |||||||||||
Leased Facilities | ||||||||||||||||
Durham, NC | 1 | 189,430 | 15,200 | 167,584 | 6,646 | — | ||||||||||
Laredo, TX | 1 | 100,545 | — | 97,545 | 3,000 | — | ||||||||||
Goleta, CA | 1,2 | 25,623 | — | 1,882 | 23,741 | — | ||||||||||
Yorkville, WI | 1 | 79,016 | — | 77,316 | 1,700 | — | ||||||||||
Fayetteville, AR | 3 | 26,076 | 10,767 | — | 15,309 | |||||||||||
Sesto Fiorentino, Italy | 1,2 | 63,670 | 20,672 | 24,998 | 18,000 | — | ||||||||||
Hong Kong | All | 29,955 | — | — | 29,955 | — | ||||||||||
Misc. sales and support offices | All | 59,661 | — | 9,976 | 49,685 | — | ||||||||||
Total leased | 573,976 | 46,639 | 379,301 | 148,036 | — | |||||||||||
Total gross square footage | 3,356,148 | 1,165,692 | 1,045,121 | 811,987 | 333,348 |
Fiscal 2016 | Fiscal 2015 | ||||||||||||||
High | Low | High | Low | ||||||||||||
First Quarter | $27.56 | $23.95 | $52.83 | $41.11 | |||||||||||
Second Quarter | 28.16 | 22.12 | 41.42 | 27.28 | |||||||||||
Third Quarter | 32.44 | 24.07 | 39.56 | 29.75 | |||||||||||
Fourth Quarter | 30.14 | 22.43 | 35.90 | 27.00 |
6/26/2011 | 6/24/2012 | 6/30/2013 | 6/29/2014 | 6/28/2015 | 6/26/2016 | ||||||||||||||||||
Cree, Inc. | $100.00 | $72.00 | $187.96 | $142.76 | $79.51 | $68.29 | |||||||||||||||||
NASDAQ Composite Index | 100.00 | 110.21 | 131.57 | 172.15 | 201.17 | 184.18 | |||||||||||||||||
NASDAQ Electronic Components Index | 100.00 | 103.07 | 121.86 | 155.49 | 171.82 | 168.74 |
Fiscal Years Ended | |||||||||||||||||||
June 26, 2016 | June 28, 2015* | June 29, 2014* | June 30, 2013* | June 24, 2012* | |||||||||||||||
Consolidated Statement of Income Data1 | |||||||||||||||||||
Revenue, net | $1,616,627 | $1,632,505 | $1,647,641 | $1,385,982 | $1,164,658 | ||||||||||||||
Operating (loss) income | (10,471 | ) | (73,550 | ) | 133,236 | 95,454 | 38,231 | ||||||||||||
Net (loss) income | (21,536 | ) | (64,692 | ) | 123,490 | 86,227 | 43,715 | ||||||||||||
(Loss) earnings per share: | |||||||||||||||||||
Basic | ($0.21 | ) | ($0.57 | ) | $1.02 | $0.74 | $0.38 | ||||||||||||
Diluted | ($0.21 | ) | ($0.57 | ) | $1.00 | $0.73 | $0.38 | ||||||||||||
Weighted average shares used in per share calculation: | |||||||||||||||||||
Basic | 101,783 | 113,022 | 120,623 | 116,621 | 114,693 | ||||||||||||||
Diluted | 101,783 | 113,022 | 122,914 | 117,979 | 115,225 | ||||||||||||||
June 26, 2016 | June 28, 2015* | June 29, 2014* | June 30, 2013* | June 24, 2012* | |||||||||||||||
Consolidated Balance Sheet Data1 | |||||||||||||||||||
Total cash, cash equivalents and short-term investments | $605,305 | $713,191 | $1,162,466 | $1,023,915 | $744,513 | ||||||||||||||
Working capital | 933,708 | 1,053,464 | 1,467,236 | 1,308,355 | 1,015,104 | ||||||||||||||
Total assets | 2,766,060 | 2,948,033 | 3,338,981 | 3,048,062 | 2,744,192 | ||||||||||||||
Total long-term liabilities | 175,237 | 231,295 | 45,943 | 37,061 | 37,481 | ||||||||||||||
Total shareholders’ equity | 2,367,824 | 2,461,952 | 2,986,383 | 2,803,590 | 2,557,534 |
• | Lighting Products |
• | LED Products |
• | Power and RF Products |
• | Overall Demand for Products and Applications using LEDs. Our potential for growth depends significantly on the continued adoption of LEDs within the general lighting market and our ability to affect this rate of adoption. Demand also fluctuates based on various market cycles, a continuously evolving LED industry supply chain, and evolving competitive dynamics in the market. These uncertainties make demand difficult to forecast for us and our customers. |
• | Intense and Constantly Evolving Competitive Environment. Competition in the LED and lighting industries is intense. Many companies have made significant investments in LED development and production equipment. Product pricing pressures exist as market participants often undertake pricing strategies to gain or protect market share, increase the utilization of their production capacity and open new applications to LED-based solutions. To remain competitive, market participants must continuously increase product performance and reduce costs. To address these competitive pressures, we have invested in research and development activities to support new product development and to deliver higher levels of performance and lower costs to differentiate our products in the market. |
• | Lighting Sales Channel Development. Commercial lighting is usually sold through lighting agents and distributors in the North American lighting market. The lighting agents typically have exclusive sales rights for a defined territory and are typically aligned with one large lighting company for a majority of their product sales. The size, quality and capability of the lighting agent has a significant effect on winning new projects and sales in a given geographic market. While these agents or distributors can sell other lighting products, the large traditional lighting companies have taken steps to prevent their channel partners from selling competing product lines. We are constantly working to improve the capabilities of our existing channel partners as well as develop new partners to improve our sales effectiveness in each geographic market. |
• | Technological Innovation and Advancement. Innovations and advancements in LEDs and lighting continue to expand the potential commercial application for our products. However, new technologies or standards could emerge or improvements could be made in existing technologies that could reduce or limit the demand for our products in certain markets. |
• | Intellectual Property Issues. Market participants rely on patented and non-patented proprietary information relating to product development, manufacturing capabilities and other core competencies of their business. Protection of intellectual property is critical. Therefore, steps such as additional patent applications, confidentiality and non-disclosure agreements, as well as other security measures are generally taken. To enforce or protect intellectual property rights, litigation or threatened litigation is common. |
• | Our year-over-year revenue remained flat at $1.6 billion. |
• | Gross margin increased to 30%. Gross profit increased by $13 million to $487 million. |
• | Operating loss was $10 million in fiscal 2016 compared to operating loss of $74 million in fiscal 2015. Net loss per diluted share was $0.21 in fiscal 2016 compared to net loss per diluted share of $0.57 in fiscal 2015. |
• | Combined cash, cash equivalents and short-term investments decreased to $0.6 billion at June 26, 2016 compared to $0.7 billion at June 28, 2015. Cash provided by operating activities was $203 million in fiscal 2016, compared to $181 million in fiscal 2015. |
• | We spent $150 million to repurchase 5.8 million shares of our common stock. |
• | Inventories increased to $304 million at June 26, 2016 compared to $281 million at June 28, 2015. |
• | We spent $120 million on purchases of property and equipment in fiscal 2016 compared to $206 million in fiscal 2015. |
• | Complete the sale of our Wolfspeed business to Infineon. |
• | Grow company revenue. |
◦ | Grow commercial lighting revenue with the market, potentially adding to that growth through product line expansion and/or strategic acquisitions, and maintain consumer lighting revenue in a similar range while transitioning to a new generation LED bulb family. |
◦ | Maintain LED revenue in a similar range through new product design wins to offset the competitive environment. |
• | Improve operating margin. |
◦ | Increase lighting margins through a combination of lower costs and higher value new products. |
◦ | Maintain LED margins in a similar range by reducing product costs and increasing performance levels. |
◦ | Manage company operating expenses to grow slower than revenue. |
• | Continue to innovate in all of our businesses to differentiate our products in the market. |
• | Improve the customer experience and service levels in all of our businesses. |
Fiscal Years Ended | ||||||||||||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | ||||||||||||||||||
Dollars | % of Revenue | Dollars | % of Revenue | Dollars | % of Revenue | |||||||||||||||
Revenue, net | $1,616,627 | 100 | % | $1,632,505 | 100 | % | $1,647,641 | 100 | % | |||||||||||
Cost of revenue, net | 1,129,553 | 70 | % | 1,158,586 | 71 | % | 1,029,885 | 63 | % | |||||||||||
Gross profit | 487,074 | 30 | % | 473,919 | 29 | % | 617,756 | 37 | % | |||||||||||
Research and development | 168,848 | 10 | % | 182,797 | 11 | % | 181,382 | 11 | % | |||||||||||
Sales, general and administrative | 283,052 | 18 | % | 290,730 | 18 | % | 268,460 | 16 | % | |||||||||||
Amortization or impairment of acquisition-related intangibles | 28,732 | 2 | % | 26,220 | 2 | % | 31,988 | 2 | % | |||||||||||
Loss on disposal or impairment of long-lived assets | 16,913 | 1 | % | 47,722 | 3 | % | 2,690 | 0 | % | |||||||||||
Operating (loss) income | (10,471 | ) | (1 | )% | (73,550 | ) | (5 | )% | 133,236 | 8 | % | |||||||||
Non-operating (expense) income, net | (13,035 | ) | (1 | )% | (10,389 | ) | (1 | )% | 13,295 | 1 | % | |||||||||
(Loss) income before income taxes | (23,506 | ) | (1 | )% | (83,939 | ) | (5 | )% | 146,531 | 9 | % | |||||||||
Income tax (benefit) expense | (1,970 | ) | — | % | (19,247 | ) | (1 | )% | 23,041 | 1 | % | |||||||||
Net (loss) income | ($21,536 | ) | (1 | )% | ($64,692 | ) | (4 | )% | $123,490 | 7 | % | |||||||||
Basic (loss) earnings per share | ($0.21 | ) | ($0.57 | ) | $1.02 | |||||||||||||||
Diluted (loss) earnings per share | ($0.21 | ) | ($0.57 | ) | $1.00 |
Capacity and overhead cost reductions | Amounts incurred through June 28, 2015 | Amounts incurred during fiscal year 2016 | Cumulative amounts incurred through June 26, 2016 | Affected Line Item in the Consolidated Statements of (Loss)Income | |||||||||
Loss on disposal or impairment of long-lived assets | $ | 42,716 | $ | 15,506 | $ | 58,222 | Loss on disposal or impairment of long-lived assets | ||||||
Severance expense | 2,019 | 264 | 2,283 | Sales, general and administrative expenses | |||||||||
Lease termination and facility consolidation costs | 1,246 | 3,079 | 4,325 | Sales, general and administrative expenses | |||||||||
Increase in channel inventory reserves | 26,479 | — | 26,479 | Revenue, net | |||||||||
Increase in inventory reserves | 11,091 | — | 11,091 | Cost of revenue, net | |||||||||
Total restructuring charges | $ | 83,551 | $ | 18,849 | $ | 102,400 |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | 2015 to 2016 | 2014 to 2015 | |||||||||||||||||||||
Lighting Products | $ | 889,133 | $ | 906,502 | $ | 706,425 | $ | (17,369 | ) | (2 | )% | $ | 200,077 | 28 | % | ||||||||||
Percent of revenue | 55 | % | 55 | % | 43 | % | |||||||||||||||||||
LED Products | 610,835 | 602,082 | 833,684 | 8,753 | 1 | % | (231,602 | ) | (28 | )% | |||||||||||||||
Percent of revenue | 38 | % | 37 | % | 51 | % | |||||||||||||||||||
Power and RF Products | 116,659 | 123,921 | 107,532 | (7,262 | ) | (6 | )% | 16,389 | 15 | % | |||||||||||||||
Percent of revenue | 7 | % | 8 | % | 6 | % | |||||||||||||||||||
Total revenue | $1,616,627 | $1,632,505 | $1,647,641 | ($15,878 | ) | (1 | )% | ($15,136 | ) | (1 | )% |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | 2015 to 2016 | 2014 to 2015 | |||||||||||||||||||||
Lighting Products gross profit | $ | 238,242 | $ | 235,542 | $ | 197,304 | $ | 2,700 | 1 | % | $ | 38,238 | 19 | % | |||||||||||
Lighting Products gross margin | 27 | % | 26 | % | 28 | % | |||||||||||||||||||
LED Products | 212,367 | 190,912 | 381,003 | 21,455 | 11 | % | (190,091 | ) | (50 | )% | |||||||||||||||
LED Products Gross Margin | 35 | % | 32 | % | 46 | % | |||||||||||||||||||
Power and RF Products gross profit | 56,069 | 67,764 | 60,723 | (11,695 | ) | (17 | )% | 7,041 | 12 | % | |||||||||||||||
Power and RF Products gross margin | 48 | % | 55 | % | 56 | % | |||||||||||||||||||
Unallocated costs | (19,604 | ) | (20,299 | ) | (21,274 | ) | 695 | (3 | )% | 975 | (5 | )% | |||||||||||||
Consolidated gross profit | $487,074 | $473,919 | $617,756 | $13,155 | 3 | % | ($143,837 | ) | (23 | )% | |||||||||||||||
Consolidated gross margin | 30 | % | 29 | % | 37 | % |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | 2015 to 2016 | 2014 to 2015 | |||||||||||||||||||||
Research and development | $168,848 | $182,797 | $181,382 | ($13,949 | ) | (8 | )% | $1,415 | 1 | % | |||||||||||||||
Percent of revenue | 10 | % | 11 | % | 11 | % |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | 2015 to 2016 | 2014 to 2015 | |||||||||||||||||||||
Sales, general and administrative | $283,052 | $290,730 | $268,460 | ($7,678 | ) | (3 | )% | $22,270 | 8 | % | |||||||||||||||
Percent of revenue | 18 | % | 18 | % | 16 | % |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | 2015 to 2016 | 2014 to 2015 | |||||||||||||||||||||
Customer relationships | $6,374 | $5,614 | $7,359 | $760 | 14 | % | ($1,745 | ) | (24 | )% | |||||||||||||||
Developed technology | 20,321 | 18,642 | 19,446 | 1,679 | 9 | % | (804 | ) | (4 | )% | |||||||||||||||
Non-compete agreements | 2,037 | 1,960 | 1,960 | 77 | 4 | % | — | — | % | ||||||||||||||||
Trade names, finite-lived | 4 | 23 | (4 | ) | (100 | )% | (19 | ) | (83 | )% | |||||||||||||||
Total | $28,732 | $26,220 | $28,788 | $2,512 | 10 | % | ($2,568 | ) | (9 | )% |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | 2015 to 2016 | 2014 to 2015 | |||||||||||||||||||||
Loss on disposal or impairment of long-lived assets | $16,913 | $47,722 | $2,690 | ($30,809 | ) | (65 | )% | $45,032 | 1,674 | % |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | 2015 to 2016 | 2014 to 2015 | |||||||||||||||||||||
Gain on sale of investments, net | $238 | $925 | $68 | ($687 | ) | (74 | )% | $857 | 1,260 | % | |||||||||||||||
Loss on equity method investment | (15,357 | ) | (22,624 | ) | — | 7,267 | (32 | )% | (22,624 | ) | — | ||||||||||||||
Dividends from equity method investment | 1,655 | 2,581 | — | (926 | ) | (36 | )% | 2,581 | — | ||||||||||||||||
Interest income, net | 4,472 | 9,086 | 11,932 | (4,614 | ) | (51 | )% | (2,846 | ) | (24 | )% | ||||||||||||||
Foreign currency (loss) gain, net | (4,500 | ) | (929 | ) | 45 | (3,571 | ) | 384 | % | (974 | ) | (2,164 | )% | ||||||||||||
Other, net | 457 | 572 | 1,250 | (115 | ) | (20 | )% | (678 | ) | (54 | )% | ||||||||||||||
Non-operating (expense) income, net | ($13,035 | ) | ($10,389 | ) | $13,295 | ($2,646 | ) | 25 | % | ($23,684 | ) | (178 | )% |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | 2015 to 2016 | 2014 to 2015 | |||||||||||||||||||
Income tax (benefit) expense | ($1,970 | ) | ($19,247 | ) | $23,041 | 17,277 | (90 | )% | (42,288 | ) | (184 | )% | |||||||||||
Effective tax rate | 8 | % | 23 | % | 16 | % |
Payments Due by Period | |||||||||||||||||||
Total | Less than One Year | One to Three Years | Three to Five Years | More Than Five Years | |||||||||||||||
Operating lease obligations | $11,359 | $4,850 | $4,637 | $1,846 | $26 | ||||||||||||||
Purchase obligations | 134,494 | 131,482 | 1,321 | 895 | 796 | ||||||||||||||
Long-term debt | 160,000 | 160,000 | |||||||||||||||||
Interest payments on long-term debt1 | 12,329 | 2,723 | 5,446 | 4,160 | |||||||||||||||
Other long-term liabilities2 | — | — | — | — | — | ||||||||||||||
Total contractual obligations | $318,182 | $139,055 | $11,404 | $166,901 | $822 |
June 26, 2016 | June 28, 2015 | Change | |||||||||
Cash and cash equivalents | $166,154 | $139,710 | $26,444 | ||||||||
Short-term investments | 439,151 | 573,481 | (134,330 | ) | |||||||
Total cash, cash equivalents and short-term investments | $605,305 | $713,191 | ($107,886 | ) |
Three Months Ended | ||||||||
June 26, 2016 | June 28, 2015 | Change | ||||||
Days of sales outstanding (a) | 38 | 44 | (6 | ) | ||||
Days of supply in inventory (b) | 99 | 83 | 16 | |||||
Days in accounts payable (c) | (43 | ) | (48 | ) | 5 | |||
Cash conversion cycle | 94 | 79 | 15 |
a) | Days of sales outstanding (DSO) measures the average collection period of our receivables. DSO is based on the ending net trade receivables and the revenue, net for the quarter then ended. DSO is calculated by dividing ending accounts receivable, net of applicable allowances and reserves, by the average net revenue per day for the respective 90 day period. |
b) | Days of supply in inventory (DSI) measures the average number of days from procurement to sale of our product. DSI is based on ending inventory and cost of revenue, net for the quarter then ended. DSI is calculated by dividing ending inventory by average cost of revenue, net per day for the respective 90 day period. |
c) | Days in accounts payable (DPO) measures the average number of days our payables remain outstanding before payment. DPO is based on ending accounts payable and cost of revenue, net for the quarter then ended. DPO is calculated by dividing ending accounts payable by the average cost of revenue, net per day for the respective 90 day period. |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | 2015 to 2016 | 2014 to 2015 | |||||||||||||||
Cash provided by operating activities | $203,316 | $181,254 | $319,308 | $22,062 | ($138,054 | ) | |||||||||||||
Cash used in investing activities | (7,903 | ) | (16,137 | ) | (242,265 | ) | 8,234 | 226,128 | |||||||||||
Cash (used in) provided by financing activities | (167,859 | ) | (311,353 | ) | 19,542 | 143,494 | (330,895 | ) | |||||||||||
Effect of foreign exchange changes | (1,110 | ) | (878 | ) | 170 | (232 | ) | (1,048 | ) | ||||||||||
Net (decrease) increase in cash and cash equivalents | $26,444 | ($147,114 | ) | $96,755 | $173,558 | ($243,869 | ) |
• | Level 1 - Valuations based on quoted prices in active markets for identical instruments that we are able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. |
• | Level 2 - Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. |
• | Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
Page | |
/s/ PricewaterhouseCoopers LLP | |
Raleigh, North Carolina | |
August 25, 2016 |
June 26, 2016 | June 28, 2015 | ||||||
(In thousands, except par value) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $166,154 | $139,710 | |||||
Short-term investments | 439,151 | 573,481 | |||||
Total cash, cash equivalents and short-term investments | 605,305 | 713,191 | |||||
Accounts receivable, net | 165,611 | 186,157 | |||||
Income tax receivable | 6,304 | — | |||||
Inventories | 303,542 | 280,576 | |||||
Deferred income taxes | — | 39,190 | |||||
Prepaid expenses | 26,810 | 29,932 | |||||
Other current assets | 44,788 | 54,851 | |||||
Assets held for sale | 4,347 | 4,353 | |||||
Total current assets | 1,156,707 | 1,308,250 | |||||
Property and equipment, net | 599,723 | 635,072 | |||||
Goodwill | 618,828 | 616,345 | |||||
Intangible assets, net | 302,810 | 310,729 | |||||
Other long-term investments | 40,179 | 57,595 | |||||
Deferred income taxes | 38,564 | 8,951 | |||||
Other assets | 9,249 | 11,091 | |||||
Total assets | $2,766,060 | $2,948,033 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable, trade | $132,286 | $163,128 | |||||
Accrued salaries and wages | 44,642 | 45,415 | |||||
Income taxes payable | — | 2,035 | |||||
Other current liabilities | 46,071 | 44,208 | |||||
Total current liabilities | 222,999 | 254,786 | |||||
Long-term liabilities: | |||||||
Long-term debt | 160,000 | 200,000 | |||||
Deferred income taxes | 943 | 10,211 | |||||
Other long-term liabilities | 14,294 | 21,084 | |||||
Total long-term liabilities | 175,237 | 231,295 | |||||
Commitments and contingencies (Note 13) | |||||||
Shareholders’ equity: | |||||||
Preferred stock, par value $0.01; 3,000 shares authorized at June 26, 2016 and June 28, 2015; none issued and outstanding | — | — | |||||
Common stock, par value $0.00125; 200,000 shares authorized at June 26, 2016 and June 28, 2015; 100,829 and 105,507 shares issued and outstanding at June 26, 2016 and June 28, 2015, respectively | 125 | 131 | |||||
Additional paid-in-capital | 2,359,584 | 2,285,554 | |||||
Accumulated other comprehensive income, net of taxes | 8,728 | 5,798 | |||||
(Accumulated deficit)/retained earnings | (613 | ) | 170,469 | ||||
Total shareholders’ equity | 2,367,824 | 2,461,952 | |||||
Total liabilities and shareholders’ equity | $2,766,060 | $2,948,033 |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
(In thousands, except per share data) | |||||||||||
Revenue, net | $1,616,627 | $1,632,505 | $1,647,641 | ||||||||
Cost of revenue, net | 1,129,553 | 1,158,586 | 1,029,885 | ||||||||
Gross profit | 487,074 | 473,919 | 617,756 | ||||||||
Operating expenses: | |||||||||||
Research and development | 168,848 | 182,797 | 181,382 | ||||||||
Sales, general and administrative | 283,052 | 290,730 | 268,460 | ||||||||
Amortization or impairment of acquisition-related intangibles | 28,732 | 26,220 | 31,988 | ||||||||
Loss on disposal or impairment of long-lived assets | 16,913 | 47,722 | 2,690 | ||||||||
Total operating expenses | 497,545 | 547,469 | 484,520 | ||||||||
Operating (loss) income | (10,471 | ) | (73,550 | ) | 133,236 | ||||||
Non-operating (expense) income, net | (13,035 | ) | (10,389 | ) | 13,295 | ||||||
(Loss) income before income taxes | (23,506 | ) | (83,939 | ) | 146,531 | ||||||
Income tax (benefit) expense | (1,970 | ) | (19,247 | ) | 23,041 | ||||||
Net (loss) income | ($21,536 | ) | ($64,692 | ) | $123,490 | ||||||
(Loss) earnings per share: | |||||||||||
Basic | ($0.21 | ) | ($0.57 | ) | $1.02 | ||||||
Diluted | ($0.21 | ) | ($0.57 | ) | $1.00 | ||||||
Weighted average shares used in per share calculation: | |||||||||||
Basic | 101,783 | 113,022 | 120,623 | ||||||||
Diluted | 101,783 | 113,022 | 122,914 |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
(In thousands) | |||||||||||
Net (loss) income | ($21,536 | ) | ($64,692 | ) | $123,490 | ||||||
Other comprehensive income (loss): | |||||||||||
Currency translation (loss) gain, net of tax benefit of $0, $0 and $0, respectively | (362 | ) | (3,563 | ) | 57 | ||||||
Net unrealized gain (loss) on available-for-sale securities, net of tax (expense) benefit of ($1,936), $1,284, and ($1,946), respectively | 3,292 | (2,044 | ) | 3,104 | |||||||
Other comprehensive income (loss) | 2,930 | (5,607 | ) | 3,161 | |||||||
Comprehensive (loss) income | ($18,606 | ) | ($70,299 | ) | $126,651 |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
(In thousands) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net (loss) income | ($21,536 | ) | ($64,692 | ) | $123,490 | ||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 159,145 | 173,323 | 164,010 | ||||||||
Stock-based compensation | 58,728 | 64,299 | 61,686 | ||||||||
Excess tax benefit from share-based payment arrangements | (12 | ) | (1,395 | ) | (19,235 | ) | |||||
Impairment of acquisition-related intangibles | — | 254 | 3,200 | ||||||||
Loss on disposal or impairment of long-lived assets | 16,913 | 47,722 | 2,690 | ||||||||
Amortization of premium/discount on investments | 5,314 | 6,152 | 10,158 | ||||||||
Loss on equity method investment | 15,357 | 22,624 | — | ||||||||
Foreign exchange loss on equity method investment | 2,057 | 347 | — | ||||||||
Deferred income taxes | (15,839 | ) | (21,346 | ) | 2,371 | ||||||
Changes in operating assets and liabilities, net of effect of acquisition: | |||||||||||
Accounts receivable, net | 21,800 | 37,853 | (32,651 | ) | |||||||
Inventories | (23,269 | ) | 3,528 | (87,012 | ) | ||||||
Prepaid expenses and other assets | 8,103 | (11,112 | ) | 7,926 | |||||||
Accounts payable, trade | (12,090 | ) | (44,796 | ) | 66,297 | ||||||
Accrued salaries and wages and other liabilities | (11,355 | ) | (31,507 | ) | 16,378 | ||||||
Net cash provided by operating activities | 203,316 | 181,254 | 319,308 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | (120,018 | ) | (206,160 | ) | (178,557 | ) | |||||
Purchases of patent and licensing rights | (14,443 | ) | (19,491 | ) | (20,183 | ) | |||||
Proceeds from sale of property and equipment | 5,296 | 285 | 117 | ||||||||
Purchases of short-term investments | (220,823 | ) | (349,802 | ) | (625,820 | ) | |||||
Proceeds from maturities of short-term investments | 312,524 | 419,802 | 493,288 | ||||||||
Proceeds from sale of short-term investments | 42,074 | 219,795 | 88,890 | ||||||||
Purchase of other long-term investments | — | (80,566 | ) | — | |||||||
Purchase of acquired business, net of cash acquired | (12,513 | ) | — | — | |||||||
Net cash used in investing activities | (7,903 | ) | (16,137 | ) | (242,265 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from long-term debt borrowings | 653,000 | 695,000 | — | ||||||||
Payments on long-term debt borrowings | (693,000 | ) | (495,000 | ) | — | ||||||
Net proceeds from issuance of common stock | 21,682 | 36,929 | 100,006 | ||||||||
Excess tax benefit from share-based payment arrangements | 12 | 1,395 | 19,235 | ||||||||
Repurchases of common stock | (149,553 | ) | (549,677 | ) | (99,699 | ) | |||||
Net cash (used in) provided by financing activities | (167,859 | ) | (311,353 | ) | 19,542 | ||||||
Effects of foreign exchange changes on cash and cash equivalents | (1,110 | ) | (878 | ) | 170 | ||||||
Net increase (decrease) in cash and cash equivalents | 26,444 | (147,114 | ) | 96,755 | |||||||
Cash and cash equivalents: | |||||||||||
Beginning of period | 139,710 | 286,824 | 190,069 | ||||||||
End of period | $166,154 | $139,710 | $286,824 | ||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest | $3,110 | $1,002 | $— | ||||||||
Cash paid for income taxes | $14,722 | $28,834 | $10,292 | ||||||||
Significant non-cash transactions: | |||||||||||
Accrued property and equipment | $3,721 | $24,243 | $15,700 |
Common Stock | Additional Paid-in Capital | (Accumulated deficit)/Retained Earnings | Accumulated Other Comprehensive Income | Total Shareholders’ Equity | ||||||||||||||||||
Number of Shares | Par Value | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
Balance at June 30, 2013 | 119,623 | $148 | $2,025,764 | $769,434 | $8,244 | $2,803,590 | ||||||||||||||||
Net income | — | — | — | 123,490 | — | 123,490 | ||||||||||||||||
Currency translation gain, net of tax benefit of $0 | — | — | — | — | 57 | 57 | ||||||||||||||||
Unrealized gain on available-for-sale securities, net of tax expense of $1,946 | — | — | — | — | 3,104 | 3,104 | ||||||||||||||||
Comprehensive income | 126,651 | |||||||||||||||||||||
Income tax benefit from stock option exercises | — | — | 8,198 | — | — | 8,198 | ||||||||||||||||
Repurchased shares | (2,259 | ) | (3 | ) | — | (108,106 | ) | (108,109 | ) | |||||||||||||
Stock-based compensation | — | — | 62,415 | — | — | 62,415 | ||||||||||||||||
Exercise of stock options and issuance of shares | 2,750 | 4 | 93,634 | — | — | 93,638 | ||||||||||||||||
Balance at June 29, 2014 | 120,114 | $149 | $2,190,011 | $784,818 | $11,405 | $2,986,383 | ||||||||||||||||
Net loss | — | — | — | (64,692 | ) | — | (64,692 | ) | ||||||||||||||
Currency translation loss, net of tax benefit of $0 | — | — | — | — | (3,563 | ) | (3,563 | ) | ||||||||||||||
Unrealized loss on available-for-sale securities, net of tax benefit of $1,284 | — | — | — | — | (2,044 | ) | (2,044 | ) | ||||||||||||||
Comprehensive income | (70,299 | ) | ||||||||||||||||||||
Income tax expense from stock option exercises | — | — | (1,010 | ) | — | — | (1,010 | ) | ||||||||||||||
Repurchased shares | (16,034 | ) | (20 | ) | — | (549,657 | ) | (549,677 | ) | |||||||||||||
Stock-based compensation | — | — | 64,720 | — | — | 64,720 | ||||||||||||||||
Exercise of stock options and issuance of shares | 1,427 | 2 | 31,833 | — | — | 31,835 | ||||||||||||||||
Balance at June 28, 2015 | 105,507 | $131 | $2,285,554 | $170,469 | $5,798 | $2,461,952 | ||||||||||||||||
Net loss | — | — | — | (21,536 | ) | — | (21,536 | ) | ||||||||||||||
Currency translation loss, net of tax benefit of $0 | — | — | — | — | (362 | ) | (362 | ) | ||||||||||||||
Unrealized gain on available-for-sale securities, net of tax expense of $1,936 | — | — | — | — | 3,292 | 3,292 | ||||||||||||||||
Comprehensive loss | (18,606 | ) | ||||||||||||||||||||
Income tax expense from stock option exercises | — | — | (3,525 | ) | — | — | (3,525 | ) | ||||||||||||||
Repurchased shares | (5,842 | ) | (7 | ) | — | (149,546 | ) | (149,553 | ) | |||||||||||||
Stock-based compensation | — | — | 58,425 | — | — | 58,425 | ||||||||||||||||
Exercise of stock options and issuance of shares | 1,164 | 1 | 19,130 | — | — | 19,131 | ||||||||||||||||
Balance at June 26, 2016 | 100,829 | $125 | $2,359,584 | ($613 | ) | $8,728 | $2,367,824 |
• | Lighting Products |
• | LED Products |
• | Power and RF Products |
As Previously Reported | Revision Adjustments | As Revised | |||||||||
Intangible assets, net | $ | 317,154 | $ | (6,425 | ) | $ | 310,729 | ||||
Deferred income taxes | 8,893 | 58 | 8,951 | ||||||||
Total assets | 2,954,400 | (6,367 | ) | 2,948,033 | |||||||
Deferred income taxes | 12,174 | (1,963 | ) | 10,211 | |||||||
Total long-term liabilities | 233,258 | (1,963 | ) | 231,295 | |||||||
Retained earnings | 174,873 | (4,404 | ) | 170,469 | |||||||
Total shareholders' equity | 2,466,356 | (4,404 | ) | 2,461,952 | |||||||
Total liabilities and shareholders' equity | 2,954,400 | (6,367 | ) | 2,948,033 |
Fiscal Years Ended | |||||||||||||||||||||||
June 28, 2015 | June 29, 2014 | ||||||||||||||||||||||
As Previously Reported | Revision Adjustments | As Revised | As Previously Reported | Revision Adjustments | As Revised | ||||||||||||||||||
Cost of revenue, net | $ | 1,157,549 | $ | 1,037 | $ | 1,158,586 | $ | 1,028,846 | $ | 1,039 | $ | 1,029,885 | |||||||||||
Gross profit | 474,956 | (1,037 | ) | 473,919 | 618,795 | (1,039 | ) | 617,756 | |||||||||||||||
Operating (loss) income | (72,513 | ) | (1,037 | ) | (73,550 | ) | 134,275 | (1,039 | ) | 133,236 | |||||||||||||
(Loss) income before income taxes | (82,902 | ) | (1,037 | ) | (83,939 | ) | 147,570 | (1,039 | ) | 146,531 | |||||||||||||
Income tax (benefit) expense | (18,851 | ) | (396 | ) | (19,247 | ) | 23,379 | (338 | ) | 23,041 | |||||||||||||
Net (loss) income | (64,051 | ) | (641 | ) | (64,692 | ) | 124,191 | (701 | ) | 123,490 | |||||||||||||
Earnings (loss) per share: | |||||||||||||||||||||||
Basic | (0.57 | ) | — | (0.57 | ) | 1.03 | (0.01 | ) | 1.02 | ||||||||||||||
Diluted | (0.57 | ) | — | (0.57 | ) | 1.01 | (0.01 | ) | 1.00 |
• | Held-to-Maturity – Debt securities that the entity has the positive intent and ability to hold to maturity, which are reported at amortized cost. |
• | Trading – Debt and equity securities that are bought and held principally for the purpose of selling in the near term, which are reported at fair value, with unrealized gains and losses included in earnings. |
• | Available-for-Sale – Debt and equity securities not classified as either held-to-maturity or trading securities, which are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity. |
Machinery and equipment | 3 to 15 years | |
Buildings and building improvements | 5 to 40 years | |
Furniture and fixtures | 3 to 5 years | |
Aircraft and vehicles | 5 to 20 years | |
Leasehold improvements | Shorter of estimated useful life or lease term |
Cash consideration paid to stockholders | $ | 13,797 | |
Post closing adjustments | 181 | ||
Contingent consideration | 4,625 | ||
Total purchase price | $ | 18,603 |
Tangible assets: | |||
Cash and cash equivalents | $ | 1,284 | |
Accounts receivable | 1,006 | ||
Inventories | 143 | ||
Property and equipment | 935 | ||
Other assets | 270 | ||
Total tangible assets | 3,638 | ||
Intangible assets: | |||
Patents | 40 | ||
Customer relationships | 4,500 | ||
Developed technology | 11,403 | ||
In-process research & development | 7,565 | ||
Non-compete agreements | 231 | ||
Goodwill | 2,483 | ||
Total intangible assets | 26,222 | ||
Liabilities assumed: | |||
Accounts payable | 55 | ||
Accrued expenses and liabilities | 1,911 | ||
Other long-term liabilities | 9,291 | ||
Total liabilities assumed | 11,257 | ||
Net assets acquired | $ | 18,603 |
Asset Amount | Estimated Life in Years | ||||
Patents | $40 | 20 | |||
Customer relationships | 4,500 | 4 | |||
Developed technology | 11,403 | 10 | |||
In-process research and development1 | 7,565 | 7 | |||
Non-compete agreements | 231 | 3 | |||
Total identifiable intangible assets | $23,739 |
June 26, 2016 | June 28, 2015 | ||||||
Billed trade receivables | $217,691 | $246,969 | |||||
Unbilled contract receivables | 2,135 | 2,223 | |||||
219,826 | 249,192 | ||||||
Allowance for sales returns, discounts and other incentives | (48,710 | ) | (58,094 | ) | |||
Allowance for bad debts | (5,505 | ) | (4,941 | ) | |||
Accounts receivable, net | $165,611 | $186,157 |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
Balance at beginning of period | $58,094 | $29,010 | $26,500 | ||||||||
Current period claims | (163,523 | ) | (148,715 | ) | (115,568 | ) | |||||
Provision for sales returns, discounts and other incentives | 154,139 | 177,799 | 118,078 | ||||||||
Balance at end of period | $48,710 | $58,094 | $29,010 |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
Balance at beginning of period | $4,941 | $2,761 | $2,471 | ||||||||
Current period provision | 564 | 2,184 | 903 | ||||||||
Write-offs, net of recoveries | — | (4 | ) | (613 | ) | ||||||
Balance at end of period | $5,505 | $4,941 | $2,761 |
June 26, 2016 | June 28, 2015 | ||||||
Raw material | $83,299 | $86,331 | |||||
Work-in-progress | 96,779 | 93,424 | |||||
Finished goods | 123,464 | 100,821 | |||||
Inventories | $303,542 | $280,576 |
June 26, 2016 | June 28, 2015 | ||||||
Furniture and fixtures | $14,280 | $12,525 | |||||
Land and buildings | 386,573 | 367,519 | |||||
Machinery and equipment | 1,126,936 | 1,060,599 | |||||
Aircraft and vehicles | 10,455 | 10,489 | |||||
Computer hardware/software | 44,095 | 38,366 | |||||
Leasehold improvements and other | 6,497 | 6,698 | |||||
Construction in progress | 150,114 | 178,757 | |||||
1,738,950 | 1,674,953 | ||||||
Accumulated depreciation | (1,139,227 | ) | (1,039,881 | ) | |||
Property and equipment, net | $599,723 | $635,072 |
June 26, 2016 | June 28, 2015 | ||||||
Accrued taxes | $12,720 | $13,935 | |||||
Accrued professional fees | 7,980 | 10,180 | |||||
Accrued warranty | 20,207 | 13,006 | |||||
Accrued other | 5,164 | 7,087 | |||||
Other current liabilities | $46,071 | $44,208 |
June 26, 2016 | June 28, 2015 | ||||||
Currency translation gain | $4,624 | $4,986 | |||||
Net unrealized gain on available-for-sale securities | 4,104 | 812 | |||||
Accumulated other comprehensive income, net of taxes | $8,728 | $5,798 |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
Gain on sale of investments, net | $238 | $925 | $68 | ||||||||
Loss on equity method investment | (15,357 | ) | (22,624 | ) | — | ||||||
Dividends from equity method investment | 1,655 | 2,581 | — | ||||||||
Interest income, net | 4,472 | 9,086 | 11,932 | ||||||||
Foreign currency (loss) gain, net | (4,500 | ) | (929 | ) | 45 | ||||||
Other, net | 457 | 572 | 1,250 | ||||||||
Non-operating (expense) income, net | ($13,035 | ) | ($10,389 | ) | $13,295 |
Accumulated Other Comprehensive Income Component | Amount Reclassified from Accumulated Other Comprehensive Income | Affected Line Item in the Consolidated Statements of (Loss)Income | ||||||||||||
Fiscal Years Ended | ||||||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | ||||||||||||
Net unrealized gain on available-for-sale securities, net of taxes | $238 | $925 | $68 | Non-operating (expense) income, net | ||||||||||
238 | 925 | 68 | (Loss) income before income taxes | |||||||||||
20 | 210 | 11 | Income tax (benefit) expense | |||||||||||
$218 | $715 | $57 | Net (loss) income |
June 26, 2016 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
Municipal bonds | $186,893 | $3,562 | ($15 | ) | $190,440 | ||||||||||
Corporate bonds | 165,766 | 3,074 | (73 | ) | 168,767 | ||||||||||
Non-U.S. certificates of deposit | 73,127 | — | — | 73,127 | |||||||||||
U.S. certificates of deposit | 3,500 | — | — | 3,500 | |||||||||||
Commercial paper | 3,317 | — | — | 3,317 | |||||||||||
Total short-term investments | $432,603 | $6,636 | ($88 | ) | $439,151 |
June 26, 2016 | |||||||||||||||||||||||
Less than 12 Months | Greater than 12 Months | Total | |||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
Municipal bonds | $2,936 | ($9 | ) | $3,535 | ($6 | ) | $6,471 | ($15 | ) | ||||||||||||||
Corporate bonds | 27,578 | (73 | ) | — | — | 27,578 | (73 | ) | |||||||||||||||
Total | $30,514 | ($82 | ) | $3,535 | ($6 | ) | $34,049 | ($88 | ) | ||||||||||||||
Number of securities with an unrealized loss | 22 | 3 | 25 |
June 28, 2015 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
Municipal bonds | $194,123 | $988 | ($341 | ) | $194,770 | ||||||||||
Corporate bonds | 152,831 | 832 | (158 | ) | 153,505 | ||||||||||
Non-U.S. certificates of deposit | 225,206 | — | — | 225,206 | |||||||||||
Total short-term investments | $572,160 | $1,820 | ($499 | ) | $573,481 |
June 28, 2015 | |||||||||||||||||||||||
Less than 12 Months | Greater than 12 Months | Total | |||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
Municipal bonds | $53,204 | ($341 | ) | $— | $— | $53,204 | ($341 | ) | |||||||||||||||
Corporate bonds | 46,636 | (143 | ) | 1,812 | (15 | ) | 48,448 | (158 | ) | ||||||||||||||
Total | $99,840 | ($484 | ) | $1,812 | ($15 | ) | $101,652 | ($499 | ) | ||||||||||||||
Number of securities with an unrealized loss | 54 | 1 | 55 |
Within One Year | After One, Within Five Years | After Five, Within Ten Years | After Ten Years | Total | |||||||||||||||
Municipal bonds | $31,874 | $124,745 | $33,821 | $— | $190,440 | ||||||||||||||
Corporate bonds | 14,672 | 116,541 | 37,554 | — | 168,767 | ||||||||||||||
Non-U.S. certificates of deposit | 73,127 | — | — | — | 73,127 | ||||||||||||||
U.S. certificates of deposit | 500 | 3,000 | — | — | 3,500 | ||||||||||||||
Commercial paper | 3,317 | — | — | — | 3,317 | ||||||||||||||
Total short-term investments | $123,490 | $244,286 | $71,375 | $— | $439,151 |
• | Level 1 - Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. |
• | Level 2 - Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. |
• | Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
June 26, 2016 | June 28, 2015 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Cash equivalents | |||||||||||||||||||||||||||||||
Municipal bonds | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Non-U.S. certificates of deposit | — | 137 | — | 137 | — | 157 | — | 157 | |||||||||||||||||||||||
Money market funds | 576 | — | — | 576 | 16,457 | — | — | 16,457 | |||||||||||||||||||||||
Total cash equivalents | 576 | 137 | — | 713 | 16,457 | 157 | — | 16,614 | |||||||||||||||||||||||
Short-term investments | |||||||||||||||||||||||||||||||
Municipal bonds | — | 190,440 | — | 190,440 | — | 194,770 | — | 194,770 | |||||||||||||||||||||||
Corporate bonds | — | 168,767 | — | 168,767 | — | 153,505 | — | 153,505 | |||||||||||||||||||||||
U.S certificates of deposit | — | 3,500 | — | 3,500 | — | — | — | — | |||||||||||||||||||||||
Commercial paper | — | 3,317 | — | 3,317 | — | — | — | — | |||||||||||||||||||||||
Non-U.S. certificates of deposit | — | 73,127 | — | 73,127 | — | 225,206 | — | 225,206 | |||||||||||||||||||||||
Total short-term investments | — | 439,151 | — | 439,151 | — | 573,481 | — | 573,481 | |||||||||||||||||||||||
Other long-term investments | |||||||||||||||||||||||||||||||
Common stock of non-U.S. corporations | — | 40,179 | — | 40,179 | — | 57,595 | — | 57,595 | |||||||||||||||||||||||
Total other long-term investments | — | 40,179 | — | 40,179 | — | 57,595 | — | 57,595 | |||||||||||||||||||||||
Total assets | $576 | $479,467 | $— | $480,043 | $16,457 | $631,233 | $— | $647,690 |
• | Lighting Products |
• | LED Products |
• | Power and RF Products |
LED Products | Lighting Products | Power and RF Products | Consolidated Total | |||||||||||
$245,857 | $337,781 | $35,190 | $618,828 |
LED Products | Lighting Products | Power and RF Products | Consolidated Total | |||||||||||
$245,857 | $337,781 | $32,707 | $616,345 |
June 26, 2016 | June 28, 2015 | ||||||||||||||||||||||
Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||
Intangible assets with finite lives: | |||||||||||||||||||||||
Customer relationships | $141,420 | ($78,438 | ) | $62,982 | $136,920 | ($72,063 | ) | $64,857 | |||||||||||||||
Developed technology | 181,728 | (111,884 | ) | 69,844 | 162,760 | (91,562 | ) | 71,198 | |||||||||||||||
Non-compete agreements | 10,475 | (9,994 | ) | 481 | 10,244 | (7,958 | ) | 2,286 | |||||||||||||||
Trade names, finite-lived | 520 | (520 | ) | — | 520 | (520 | ) | — | |||||||||||||||
Patent and licensing rights | 145,780 | (55,957 | ) | 89,823 | 150,038 | (57,330 | ) | 92,708 | |||||||||||||||
Total intangible assets with finite lives | 479,923 | (256,793 | ) | 223,130 | 460,482 | (229,433 | ) | 231,049 | |||||||||||||||
Trade names, indefinite-lived | 79,680 | 79,680 | 79,680 | 79,680 | |||||||||||||||||||
Total intangible assets | $559,603 | ($256,793 | ) | $302,810 | $540,162 | ($229,433 | ) | $310,729 |
Fiscal Year Ending | |||
June 25, 2017 | $39,068 | ||
June 24, 2018 | 37,530 | ||
June 30, 2019 | 24,674 | ||
June 28, 2020 | 19,402 | ||
June 27, 2021 | 18,026 | ||
Thereafter | 84,430 | ||
Total future amortization expense | $223,130 |
Number of Shares | ||
For exercise of outstanding common stock options | 11,247 | |
For vesting of outstanding stock units | 1,589 | |
For future equity awards under 2013 Long-Term Incentive Compensation Plan | 4,141 | |
For future issuance under the Non-Employee Director Stock Compensation and Deferral Program | 76 | |
For future issuance to employees under the 2005 Employee Stock Purchase Plan | 885 | |
Total common shares reserved | 17,938 | |
Series A preferred stock reserved for exercise of rights issued under shareholder rights plan | 200 |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
Basic: | |||||||||||
Net (loss) income | ($21,536 | ) | ($64,692 | ) | $123,490 | ||||||
Weighted average common shares | 101,783 | 113,022 | 120,623 | ||||||||
Basic (loss) earnings per share | ($0.21 | ) | ($0.57 | ) | $1.02 |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
Diluted: | |||||||||||
Net (loss) income | ($21,536 | ) | ($64,692 | ) | $123,490 | ||||||
Weighted average common shares - basic | 101,783 | 113,022 | 120,623 | ||||||||
Dilutive effect of stock options, nonvested shares and Employee Stock Purchase Plan purchase rights | — | — | 2,291 | ||||||||
Weighted average common shares - diluted | 101,783 | 113,022 | 122,914 | ||||||||
Diluted (loss) earnings per share | ($0.21 | ) | ($0.57 | ) | $1.00 |
Number of Shares | Weighted Average Exercise price | Weighted Average Remaining Contractual Term | Total Intrinsic Value | |||||||||
Outstanding at June 28, 2015 | 10,714 | $43.10 | ||||||||||
Granted | 2,020 | 26.16 | ||||||||||
Exercised | (253 | ) | 25.24 | |||||||||
Forfeited or expired | (1,234 | ) | 43.48 | |||||||||
Outstanding at June 26, 2016 | 11,247 | $40.42 | 3.94 | $198 | ||||||||
Vested and expected to vest at June 26, 2016 | 11,048 | $40.58 | 3.90 | $198 | ||||||||
Exercisable at June 26, 2016 | 6,841 | $41.75 | 2.96 | $198 |
Options Outstanding | Options Exercisable | |||||||||||||||
Range of Exercise Price | Number | Weighted Average Remaining Contractual Life (Years) | Weighted Average Exercise Price | Number | Weighted Average Exercise Price | |||||||||||
$0.01 to $30.92 | 4,636 | 4.18 | $27.71 | 2,747 | $28.77 | |||||||||||
$30.93 to $43.94 | 748 | 1.93 | 35.83 | 617 | 35.89 | |||||||||||
$43.95 to $45.13 | 2,427 | 5.12 | 45.13 | 820 | 45.13 | |||||||||||
$45.14 to $54.26 | 241 | 3.79 | 48.65 | 168 | 48.66 | |||||||||||
$54.27 to $75.55 | 3,195 | 3.22 | 55.74 | 2,490 | 55.94 | |||||||||||
Total | 11,247 | 3.94 | $40.42 | 6,842 | $41.75 |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
Weighted average grant date fair value per share of options | $8.79 | $15.27 | $19.31 | ||||||||
Total intrinsic value of options exercised | $838 | $9,418 | $67,044 |
Number of RSAs/RSUs | Weighted Average Grant-Date Fair Value | |||||
Nonvested at June 28, 2015 | 926 | $45.47 | ||||
Granted | 1,214 | 26.08 | ||||
Vested | (354 | ) | 44.76 | |||
Forfeited | (155 | ) | 40.55 | |||
Nonvested at June 26, 2016 | 1,631 | $31.66 |
Fiscal Years Ended | |||||||||||
Income Statement Classification: | June 26, 2016 | June 28, 2015 | June 29, 2014 | ||||||||
Cost of revenue, net | $12,394 | $12,836 | $11,353 | ||||||||
Research and development | 13,842 | 16,524 | 15,392 | ||||||||
Sales, general and administrative | 32,491 | 34,941 | 34,941 | ||||||||
Total stock-based compensation expense | $58,727 | $64,301 | $61,686 |
Fiscal Years Ended | ||||||||
Stock Option Grants: | June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||
Risk-free interest rate | 1.18 | % | 1.17 | % | 1.16 | % | ||
Expected life, in years | 3.66 | 3.54 | 3.80 | |||||
Expected volatility | 43.3 | % | 45.2 | % | 44.5 | % | ||
Dividend yield | — | — | — |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
Domestic | ($45,278 | ) | ($41,593 | ) | $57,867 | ||||||
Foreign | 21,772 | (42,346 | ) | 88,664 | |||||||
Total (loss) income before income taxes | ($23,506 | ) | ($83,939 | ) | $146,531 |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
Current: | |||||||||||
Federal | $5,347 | ($12,470 | ) | $3,423 | |||||||
Foreign | 7,278 | 13,327 | 15,371 | ||||||||
State | 1,244 | 1,242 | 1,876 | ||||||||
Total current | 13,869 | 2,099 | 20,670 | ||||||||
Deferred: | |||||||||||
Federal | (26,086 | ) | (7,418 | ) | (88 | ) | |||||
Foreign | 12,340 | (12,754 | ) | 3,003 | |||||||
State | (2,093 | ) | (1,174 | ) | (544 | ) | |||||
Total deferred | (15,839 | ) | (21,346 | ) | 2,371 | ||||||
Income tax (benefit) expense | ($1,970 | ) | ($19,247 | ) | $23,041 |
Fiscal Years Ended | |||||||||||||||||
June 26, 2016 | % of Loss | June 28, 2015 | % of Loss | June 29, 2014 | % of Income | ||||||||||||
Federal income tax provision at statutory rate | ($8,227 | ) | 35% | ($29,379 | ) | 35% | $51,286 | 35% | |||||||||
(Decrease) increase in income tax expense resulting from: | |||||||||||||||||
State tax provision, net of federal benefit | (748 | ) | 3% | (817 | ) | 1% | 2,530 | 2% | |||||||||
State tax credits | (269 | ) | 1% | (585 | ) | 1% | (1,004 | ) | (1)% | ||||||||
Tax exempt interest | (2,019 | ) | 9% | (2,413 | ) | 3% | (815 | ) | (1)% | ||||||||
48C investment tax credit | (4,334 | ) | 18% | (6,826 | ) | 8% | (11,310 | ) | (8)% | ||||||||
(Decrease) increase in tax reserve | (80 | ) | —% | (225 | ) | —% | 15,411 | 11% | |||||||||
Change in tax depreciation methodology | — | —% | — | —% | (18,475 | ) | (12)% | ||||||||||
Research and development credits | (2,138 | ) | 9% | (2,081 | ) | 2% | (1,574 | ) | (1)% | ||||||||
Foreign tax credit | (954 | ) | 4% | (389 | ) | —% | (490 | ) | —% | ||||||||
Increase (decrease) in valuation allowance | 9,286 | (39)% | — | —% | (20 | ) | —% | ||||||||||
Qualified production activities deduction | — | —% | (520 | ) | 1% | (2,362 | ) | (1)% | |||||||||
Stock-based compensation | 1,346 | (6)% | 2,988 | (4)% | 2,024 | 1% | |||||||||||
Statutory rate differences | 2,748 | (12)% | 18,738 | (22)% | (14,285 | ) | (10)% | ||||||||||
Foreign earnings taxed in U.S. | 1,165 | (5)% | 1,793 | (2)% | — | —% | |||||||||||
Foreign currency fluctuations | 748 | (3)% | (818 | ) | 1% | (20 | ) | —% | |||||||||
Other | 1,506 | (6)% | 1,287 | (1)% | 2,145 | 1% | |||||||||||
Income tax (benefit) expense | ($1,970 | ) | 8% | ($19,247 | ) | 23% | $23,041 | 16% |
June 26, 2016 | June 28, 2015 | ||||||
Deferred tax assets: | |||||||
Compensation | $3,176 | $1,864 | |||||
Inventories | 19,656 | 23,172 | |||||
Sales return reserve and allowance for bad debts | 6,615 | 8,266 | |||||
Warranty reserve | 8,013 | 5,042 | |||||
Federal and state net operating loss carryforwards | 11,443 | 7,237 | |||||
Federal credits | 8,802 | 3,688 | |||||
State credits | 3,286 | 2,573 | |||||
48C investment tax credits | 17,838 | 14,980 | |||||
Investments | 872 | 953 | |||||
Stock-based compensation | 48,191 | 40,291 | |||||
Deferred revenue | 4,159 | 4,850 | |||||
Other | 2,792 | 2,034 | |||||
Total gross deferred assets | 134,843 | 114,950 | |||||
Less valuation allowance | (10,770 | ) | (1,485 | ) | |||
Deferred tax assets, net | 124,073 | 113,465 | |||||
Deferred tax liabilities: | |||||||
Property and equipment | (9,549 | ) | (13,337 | ) | |||
Intangible assets | (69,355 | ) | (57,819 | ) | |||
Investments | (2,445 | ) | (505 | ) | |||
Prepaid taxes and other | (1,527 | ) | (1,350 | ) | |||
Foreign earnings recapture | (3,576 | ) | (2,524 | ) | |||
Total gross deferred liability | (86,452 | ) | (75,535 | ) | |||
Deferred tax asset, net | $37,621 | $37,930 |
Balance at June 26, 2016 | |||||||||||||||
Assets | Liabilities | ||||||||||||||
Current | Noncurrent | Current | Noncurrent | ||||||||||||
U.S. federal income taxes | $— | $26,411 | $— | $— | |||||||||||
Foreign income taxes | — | 12,153 | — | (943 | ) | ||||||||||
Total net deferred tax assets/(liabilities) | $— | $38,564 | $— | ($943 | ) |
Balance at June 28, 2015 | |||||||||||||||
Assets | Liabilities | ||||||||||||||
Current | Noncurrent | Current | Noncurrent | ||||||||||||
U.S. federal income taxes | $23,231 | $52 | $— | ($8,915 | ) | ||||||||||
Foreign income taxes | 15,959 | 8,899 | — | (1,296 | ) | ||||||||||
Total net deferred tax assets/(liabilities) | $39,190 | $8,951 | $— | ($10,211 | ) |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
Balance at beginning of period | $17,795 | $18,389 | $2,732 | ||||||||
Increases related to prior year tax positions | 617 | — | 18,040 | ||||||||
Decreases related to prior year tax positions | (530 | ) | (407 | ) | (741 | ) | |||||
Expiration of statute of limitations for assessment of taxes | (155 | ) | (187 | ) | (1,642 | ) | |||||
Balance at end of period | $17,727 | $17,795 | $18,389 |
June 26, 2016 | June 28, 2015 | ||||||
Accrued interest and penalties | ($5 | ) | $10 |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
Recognized interest and penalties (benefit) | ($15 | ) | ($94 | ) | ($51 | ) |
Fiscal Years Ended | |||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | |||||||||
Balance at beginning of period | $13,968 | $6,822 | $6,171 | ||||||||
Warranties accrued in current period | 19,866 | 9,242 | 4,256 | ||||||||
Recall costs accrued in current period | 5,756 | 5,418 | — | ||||||||
Changes in estimates for pre-existing warranties | — | — | 907 | ||||||||
Expenditures | (18,059 | ) | (7,514 | ) | (4,512 | ) | |||||
Balance at end of period | $21,531 | $13,968 | $6,822 |
Fiscal Years Ending | Minimum Rental Amount | ||
June 25, 2017 | $4,850 | ||
June 24, 2018 | 2,974 | ||
June 30, 2019 | 1,663 | ||
June 28, 2020 | 1,269 | ||
June 27, 2021 | 577 | ||
Thereafter | 26 | ||
Total future minimum rental payments | $11,359 |
• | Lighting Products |
• | LED Products |
• | Power and RF Products |
Revenue | Gross Profit and Gross Margin | ||||||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||||||
June 26, 2016 | June 28, 2015 | June 29, 2014 | June 26, 2016 | June 28, 2015 | June 29, 2014 | ||||||||||||||||||
Lighting Products | $ | 889,133 | $ | 906,502 | $ | 706,425 | $ | 238,242 | $ | 235,542 | $ | 197,304 | |||||||||||
Lighting Products gross margin | 27 | % | 26 | % | 28 | % | |||||||||||||||||
LED Products | 610,835 | 602,082 | 833,684 | 212,367 | 190,912 | 381,003 | |||||||||||||||||
LED Products gross margin | 35 | % | 32 | % | 46 | % | |||||||||||||||||
Power and RF Products | 116,659 | 123,921 | 107,532 | 56,069 | 67,764 | 60,723 | |||||||||||||||||
Power and RF Products gross margin | 48 | % | 55 | % | 56 | % | |||||||||||||||||
Total segment reporting | $1,616,627 | $1,632,505 | $1,647,641 | 506,678 | 494,218 | 639,030 | |||||||||||||||||
Unallocated costs | (19,604 | ) | (20,299 | ) | (21,274 | ) | |||||||||||||||||
Consolidated gross profit | $487,074 | $473,919 | $617,756 | ||||||||||||||||||||
Consolidated gross margin | 30 | % | 29 | % | 37 | % |
June 26, 2016 | June 28, 2015 | ||||||
Lighting Products | $ | 172,261 | $ | 150,755 | |||
LED Products | 106,787 | 114,203 | |||||
Power and RF Products | 19,628 | 11,536 | |||||
Total segment inventories | 298,676 | 276,494 | |||||
Unallocated inventories | 4,866 | 4,082 | |||||
Consolidated inventories | $303,542 | $280,576 |
For the Years Ended | ||||||||
June 26, 2016 | June 28, 2015 | 6/29/2014 | ||||||
United States | 59 | % | 57 | % | 49 | % | ||
China | 20 | % | 21 | % | 27 | % | ||
Europe | 8 | % | 9 | % | 9 | % | ||
South Korea | 1 | % | 1 | % | 2 | % | ||
Japan | 4 | % | 4 | % | 6 | % | ||
Malaysia | 1 | % | 1 | % | 1 | % | ||
Taiwan | 1 | % | 1 | % | 1 | % | ||
Other | 6 | % | 6 | % | 5 | % | ||
Total percentage of revenue | 100 | % | 100 | % | 100 | % |
June 26, 2016 | June 28, 2015 | ||||||
United States | $488,342 | $502,579 | |||||
China | 108,183 | 131,140 | |||||
Other | 3,198 | 1,353 | |||||
Total tangible long-lived assets | $599,723 | $635,072 |
Capacity and overhead cost reductions | Amounts incurred through June 28, 2015 | Amounts incurred during fiscal year 2016 | Cumulative amounts incurred through June 26, 2016 | Affected Line Item in the Consolidated Statements of (Loss)Income | |||||||||
Loss on disposal or impairment of long-lived assets | $ | 42,716 | $ | 15,506 | $ | 58,222 | Loss on disposal or impairment of long-lived assets | ||||||
Severance expense | 2,019 | 264 | 2,283 | Sales, general and administrative expenses | |||||||||
Lease termination and facility consolidation costs | 1,246 | 3,079 | 4,325 | Sales, general and administrative expenses | |||||||||
Increase in channel inventory reserves | 26,479 | — | 26,479 | Revenue, net | |||||||||
Increase in inventory reserves | 11,091 | — | 11,091 | Cost of revenue, net | |||||||||
Total restructuring charges | $ | 83,551 | $ | 18,849 | $ | 102,400 |
Severance liability at June 30, 2014 | $ | — | |
Severance expense | 2,019 | ||
Severance payments | — | ||
Severance liability at June 28, 2015 | $ | 2,019 | |
Severance charge | 264 | ||
Severance payments | (2,283 | ) | |
Severance liability at June 26, 2016 | $ | — |
September 27, 2015* | December 27, 2015* | March 27, 2016 | June 26, 2016 | Fiscal Year 2016 | |||||||||||||||
Revenue, net | $425,489 | $435,806 | $366,919 | $388,413 | $1,616,627 | ||||||||||||||
Cost of revenue, net | 294,916 | 301,361 | 257,886 | 275,390 | 1,129,553 | ||||||||||||||
Gross profit | 130,573 | 134,445 | 109,033 | 113,023 | 487,074 | ||||||||||||||
Net (loss) income | (24,489 | ) | 13,442 | 152 | (10,641 | ) | (21,536 | ) | |||||||||||
(Loss) earnings per share: | |||||||||||||||||||
Basic | ($0.24 | ) | $0.13 | $— | ($0.11 | ) | ($0.21 | ) | |||||||||||
Diluted | ($0.24 | ) | $0.13 | $— | ($0.11 | ) | ($0.21 | ) | |||||||||||
September 28, 2014* | December 28, 2014* | March 29, 2015* | June 28, 2015* | Fiscal Year 2015* | |||||||||||||||
Revenue, net | $427,672 | $413,157 | $409,519 | $382,157 | $1,632,505 | ||||||||||||||
Cost of revenue, net | 292,111 | 276,637 | 284,371 | 305,467 | 1,158,586 | ||||||||||||||
Gross profit | 135,561 | 136,520 | 125,148 | 76,690 | 473,919 | ||||||||||||||
Net income (loss) | 10,955 | 11,977 | 476 | (88,100 | ) | (64,692 | ) | ||||||||||||
(Loss) earnings per share: | |||||||||||||||||||
Basic | $0.09 | $0.10 | $— | ($0.83 | ) | ($0.57 | ) | ||||||||||||
Diluted | $0.09 | $0.10 | $— | ($0.83 | ) | ($0.57 | ) |
(i) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
(ii) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
(iii) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
EXHIBIT NO. | DESCRIPTION | |
3.1 | Articles of Incorporation, as amended (incorporated herein by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2002, as filed with the Securities and Exchange Commission on August 19, 2002) | |
3.2 | Bylaws, as amended and restated (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated January 27, 2015, filed with the Securities and Exchange Commission on January 28, 2015) | |
4.1 | Specimen Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2002, as filed with the Securities and Exchange Commission on August 19, 2002) | |
4.2 | Amended and Restated Rights Agreement, dated April 24, 2012, between Cree, Inc. and American Stock Transfer & Trust Company, LLC (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, dated April 24, 2012, as filed with the Securities and Exchange Commission on April 26, 2012) | |
4.3 | Amendment No. 1 to Amended and Restated Rights Agreement, dated as of January 29, 2013 (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, dated January 29, 2013, as filed with the Securities and Exchange Commission on January 31, 2013) | |
4.4 | Amendment No. 2 to Amended and Restated Rights Agreement, dated as of February 11, 2015 (incorporated herein by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K, dated February 11, 2015, filed with the Securities and Exchange Commission on February 11, 2015) | |
10.1* | 2004 Long-Term Incentive Compensation Plan, as amended (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, dated October 23, 2012, as filed with the Securities and Exchange Commission on October 25, 2012) | |
10.2* | Addendum to Form of Master Stock Option Award Agreement Terms and Conditions for Grants of Nonqualified Stock Options to Non-Employee Directors (incorporated herein by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2009, as filed with the Securities and Exchange Commission on October 21, 2009) | |
10.3* | Form of Nonqualified Stock Option Award Agreement for Non-Employee Directors (incorporated herein by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 23, 2012, as filed with the Securities and Exchange Commission on October 17, 2012) | |
10.4* | Form of Master Stock Option Award Agreement for Grants of Nonqualified Stock Options (incorporated herein by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 24, 2006, as filed with the Securities and Exchange Commission on November 2, 2006) | |
10.5* | Form of Master Stock Option Award Agreement for Grants of Nonqualified Stock Options (incorporated herein by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 26, 2010, as filed with the Securities and Exchange Commission on January 19, 2011) | |
10.6* | Form of Nonqualified Stock Option Agreement (incorporated herein by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 23, 2012, as filed with the Securities and Exchange Commission on October 17, 2012) | |
10.7* | Form of Master Restricted Stock Award Agreement (incorporated herein by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 24, 2006, as filed with the Securities and Exchange Commission on November 2, 2006) | |
10.8* | Form of Restricted Stock Award Agreement (incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 23, 2012, as filed with the Securities and Exchange Commission on October 17, 2012) | |
10.9* | Non-Employee Director Stock Compensation and Deferral Program (incorporated herein by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2009, as filed with the Securities and Exchange Commission on October 21, 2009) | |
10.10* | Amendment One to Non-Employee Director Stock Compensation and Deferral Program (incorporated herein by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 26, 2010, as filed with the Securities and Exchange Commission on January 19, 2011) | |
10.11* | Master Performance Unit Award Agreement, dated August 18, 2008, between Cree, Inc. and Charles M. Swoboda (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated August 18, 2008, as filed with the Securities and Exchange Commission on August 22, 2008) | |
10.12* | Cree, Inc. Severance Plan for Section 16 Officers, as amended (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated October 28, 2013, as filed with the Securities and Exchange Commission on October 31, 2013) | |
10.13* | Change in Control Agreement for Chief Executive Officer, effective December 17, 2012, between Cree, Inc. and Charles M. Swoboda (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, dated December 17, 2012, as filed with the Securities and Exchange Commission on December 20, 2012) | |
10.14* | Form of Cree, Inc. Change in Control Agreement for Section 16 Officers other than the Chief Executive Officer (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, dated December 17, 2012, as filed with the Securities and Exchange Commission on December 20, 2012) | |
10.15* | Form of Cree, Inc. Indemnification Agreement for Directors and Officers (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated October 25, 2010, as filed with the Securities and Exchange Commission on October 29, 2010) | |
10.16* | Form of Master Performance Unit Award Agreement (incorporated herein by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K, dated August 30, 2013, as filed with the Securities and Exchange Commission on September 5, 2013) | |
10.17* | Form of Stock Unit Award Agreement (Time-Based) (incorporated herein by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 29, 2013, as filed with the Securities and Exchange Commission on October 23, 2013) | |
10.18* | Form of Stock Unit Award Agreement (Performance-Based) (incorporated herein by reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 29, 2013, as filed with the Securities and Exchange Commission on October 23, 2013) | |
10.19* | 2005 Employee Stock Purchase Plan, as amended (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, dated October 29, 2013, as filed with the Securities and Exchange Commission on October 29, 2013) | |
10.20* | Form of Nonqualified Stock Option Award Agreement (incorporated herein by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2013, as filed with the Securities and Exchange Commission on January 22, 2014) | |
10.21* | Form of Restricted Stock Unit Award Agreement (incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2013, as filed with the Securities and Exchange Commission on January 22, 2014) | |
10.22* | Form of Master Performance Unit Award Agreement (incorporated herein by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K, dated August 25, 2014, filed with the Securities and Exchange Commission on August 29, 2014) | |
10.23* | 2013 Long-Term Incentive Compensation Plan, as amended (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K, dated October 28, 2014, filed with the Securities and Exchange Commission on October 28, 2014) | |
10.24 | Credit Agreement, dated January 9, 2015, by and between Cree, Inc., Wells Fargo Bank, National Association, as administrative agent and lender, E-conolight LLC, a domestic subsidiary of the Company, as guarantor, and the other lenders party thereto (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K, dated January 9, 2015, filed with the Securities and Exchange Commission on January 12, 2015) | |
10.25* | Notice of Grant to Charles M. Swoboda (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated August 24, 2015, filed with the Securities and Exchange Commission on August 27, 2015) | |
10.26* | Notice of Grant to Michael E. McDevitt (incorporated herein by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, dated August 24, 2015, filed with the Securities and Exchange Commission on August 27, 2015) | |
10.27* | Management Incentive Compensation Plan, as amended and restated (incorporated herein by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, dated August 24, 2015, as filed with the Securities and Exchange Commission on August 27, 2015) | |
10.28* | Schedule of Compensation for Non-Employee Directors (incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2015, as filed with the Securities and Exchange Commission on October 21, 2015) | |
10.29* | Form of Performance Share Award Agreement - Section 16 Officer (incorporated herein by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2015, as filed with the Securities and Exchange Commission on October 21, 2015) | |
21.1 | Subsidiaries of the Company | |
23.1 | Consent of PricewaterhouseCoopers LLP | |
23.2 | Consent of KPMG | |
31.1 | Certification by Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification by Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
99.1** | Audited financial statements of Lextar Electronics Corporation as of and for the years ended December 31, 2015 and 2014. | |
101 | The following materials from Cree, Inc.’s Annual Report on Form 10-K for the fiscal year ended June 26, 2016 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of (Loss) Income; (iii) Consolidated Statements of Comprehensive (Loss) Income; (iv) Consolidated Statements of Cash Flows; (v) Consolidated Statements of Shareholders' Equity; and (vi) Notes to Consolidated Financial Statements |
* | Management contract or compensatory plan |
** | The financial statements as of and for the years ended December 31, 2015 and 2014 of Lextar Electronics Corporation, prepared by Lextar and audited by its independent public accounting firm, are included in this Annual Report pursuant to Rule 3-09 of Regulation S-X. |
CREE, INC. | |
Date: | August 25, 2016 |
By: | /s/ CHARLES M. SWOBODA |
Charles M. Swoboda | |
Chairman, Chief Executive Officer and President | |
(Principal Executive Officer) |
Signature | Title | Date | ||
/s/ CHARLES M. SWOBODA | Chairman, Chief Executive Officer and President | August 25, 2016 | ||
Charles M. Swoboda | ||||
/s/ MICHAEL E. MCDEVITT | Executive Vice President and Chief Financial Officer | August 25, 2016 | ||
Michael E. McDevitt | (Principal Financial and Chief Accounting Officer) | |||
/s/ CLYDE R. HOSEIN | Director | August 25, 2016 | ||
Clyde R. Hosein | ||||
/s/ ROBERT A. INGRAM | Director | August 25, 2016 | ||
Robert A. Ingram | ||||
/s/ DARREN R. JACKSON | Director | August 25, 2016 | ||
Darren R. Jackson | ||||
/s/ C. HOWARD NYE | Director | August 25, 2016 | ||
C. Howard Nye | ||||
/s/ JOHN B. REPLOGLE | Director | August 25, 2016 | ||
John B. Replogle | ||||
/s/ ROBERT L. TILLMAN | Director | August 25, 2016 | ||
Robert L. Tillman | ||||
/s/ THOMAS H. WERNER | Director | August 25, 2016 | ||
Thomas H. Werner | ||||
/s/ ANNE C. WHITAKER | Director | August 25, 2016 | ||
Anne C. Whitaker |
EXHIBIT NO. | DESCRIPTION | |
3.1 | Articles of Incorporation, as amended (incorporated herein by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2002, as filed with the Securities and Exchange Commission on August 19, 2002) | |
3.2 | Bylaws, as amended and restated (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated January 27, 2015, filed with the Securities and Exchange Commission on January 28, 2015) | |
4.1 | Specimen Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2002, as filed with the Securities and Exchange Commission on August 19, 2002) | |
4.2 | Amended and Restated Rights Agreement, dated April 24, 2012, between Cree, Inc. and American Stock Transfer & Trust Company, LLC (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, dated April 24, 2012, as filed with the Securities and Exchange Commission on April 26, 2012) | |
4.3 | Amendment No. 1 to Amended and Restated Rights Agreement, dated as of January 29, 2013 (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, dated January 29, 2013, as filed with the Securities and Exchange Commission on January 31, 2013) | |
4.4 | Amendment No. 2 to Amended and Restated Rights Agreement, dated as of February 11, 2015 (incorporated herein by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K, dated February 11, 2015, filed with the Securities and Exchange Commission on February 11, 2015) | |
10.1* | 2004 Long-Term Incentive Compensation Plan, as amended (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, dated October 23, 2012, as filed with the Securities and Exchange Commission on October 25, 2012) | |
10.2* | Addendum to Form of Master Stock Option Award Agreement Terms and Conditions for Grants of Nonqualified Stock Options to Non-Employee Directors (incorporated herein by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2009, as filed with the Securities and Exchange Commission on October 21, 2009) | |
10.3* | Form of Nonqualified Stock Option Award Agreement for Non-Employee Directors (incorporated herein by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 23, 2012, as filed with the Securities and Exchange Commission on October 17, 2012) | |
10.4* | Form of Master Stock Option Award Agreement for Grants of Nonqualified Stock Options (incorporated herein by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 24, 2006, as filed with the Securities and Exchange Commission on November 2, 2006) | |
10.5* | Form of Master Stock Option Award Agreement for Grants of Nonqualified Stock Options (incorporated herein by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 26, 2010, as filed with the Securities and Exchange Commission on January 19, 2011) | |
10.6* | Form of Nonqualified Stock Option Agreement (incorporated herein by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 23, 2012, as filed with the Securities and Exchange Commission on October 17, 2012) | |
10.7* | Form of Master Restricted Stock Award Agreement (incorporated herein by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 24, 2006, as filed with the Securities and Exchange Commission on November 2, 2006) | |
10.8* | Form of Restricted Stock Award Agreement (incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 23, 2012, as filed with the Securities and Exchange Commission on October 17, 2012) | |
10.9* | Non-Employee Director Stock Compensation and Deferral Program (incorporated herein by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2009, as filed with the Securities and Exchange Commission on October 21, 2009) | |
10.10* | Amendment One to Non-Employee Director Stock Compensation and Deferral Program (incorporated herein by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 26, 2010, as filed with the Securities and Exchange Commission on January 19, 2011) | |
10.11* | Master Performance Unit Award Agreement, dated August 18, 2008, between Cree, Inc. and Charles M. Swoboda (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated August 18, 2008, as filed with the Securities and Exchange Commission on August 22, 2008) | |
10.12* | Cree, Inc. Severance Plan for Section 16 Officers, as amended (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated October 28, 2013, as filed with the Securities and Exchange Commission on October 31, 2013) | |
10.13* | Change in Control Agreement for Chief Executive Officer, effective December 17, 2012, between Cree, Inc. and Charles M. Swoboda (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, dated December 17, 2012, as filed with the Securities and Exchange Commission on December 20, 2012) | |
10.14* | Form of Cree, Inc. Change in Control Agreement for Section 16 Officers other than the Chief Executive Officer (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, dated December 17, 2012, as filed with the Securities and Exchange Commission on December 20, 2012) | |
10.15* | Form of Cree, Inc. Indemnification Agreement for Directors and Officers (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated October 25, 2010, as filed with the Securities and Exchange Commission on October 29, 2010) | |
10.16* | Form of Master Performance Unit Award Agreement (incorporated herein by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K, dated August 30, 2013, as filed with the Securities and Exchange Commission on September 5, 2013) | |
10.17* | Form of Stock Unit Award Agreement (Time-Based) (incorporated herein by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 29, 2013, as filed with the Securities and Exchange Commission on October 23, 2013) | |
10.18* | Form of Stock Unit Award Agreement (Performance-Based) (incorporated herein by reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 29, 2013, as filed with the Securities and Exchange Commission on October 23, 2013) | |
10.19* | 2005 Employee Stock Purchase Plan, as amended (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, dated October 29, 2013, as filed with the Securities and Exchange Commission on October 29, 2013) | |
10.20* | Form of Nonqualified Stock Option Award Agreement (incorporated herein by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2013, as filed with the Securities and Exchange Commission on January 22, 2014) | |
10.21* | Form of Restricted Stock Unit Award Agreement (incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2013, as filed with the Securities and Exchange Commission on January 22, 2014) | |
10.22* | Form of Master Performance Unit Award Agreement (incorporated herein by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K, dated August 25, 2014, filed with the Securities and Exchange Commission on August 29, 2014) | |
10.23* | 2013 Long-Term Incentive Compensation Plan, as amended (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K, dated October 28, 2014, filed with the Securities and Exchange Commission on October 28, 2014) | |
10.24 | Credit Agreement, dated January 9, 2015, by and between Cree, Inc., Wells Fargo Bank, National Association, as administrative agent and lender, E-conolight LLC, a domestic subsidiary of the Company, as guarantor, and the other lenders party thereto (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K, dated January 9, 2015, filed with the Securities and Exchange Commission on January 12, 2015) | |
10.25* | Notice of Grant to Charles M. Swoboda (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated August 24, 2015, filed with the Securities and Exchange Commission on August 27, 2015) | |
10.26* | Notice of Grant to Michael E. McDevitt (incorporated herein by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, dated August 24, 2015, filed with the Securities and Exchange Commission on August 27, 2015) | |
10.27* | Management Incentive Compensation Plan, as amended and restated (incorporated herein by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, dated August 24, 2015, as filed with the Securities and Exchange Commission on August 27, 2015) | |
10.28* | Schedule of Compensation for Non-Employee Directors (incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2015, as filed with the Securities and Exchange Commission on October 21, 2015) | |
10.29* | Form of Performance Share Award Agreement - Section 16 Officer (incorporated herein by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2015, as filed with the Securities and Exchange Commission on October 21, 2015) | |
21.1 | Subsidiaries of the Company | |
23.1 | Consent of PricewaterhouseCoopers LLP | |
23.2 | Consent of KPMG | |
31.1 | Certification by Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification by Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
99.1** | Audited financial statements of Lextar Electronics Corporation as of and for the years ended December 31, 2015 and 2014. | |
101 | The following materials from Cree, Inc.’s Annual Report on Form 10-K for the fiscal year ended June 26, 2016 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of (Loss) Income; (iii) Consolidated Statements of Comprehensive (Loss) Income; (iv) Consolidated Statements of Cash Flows; (v) Consolidated Statements of Shareholders' Equity; and (vi) Notes to Consolidated Financial Statements |
* | Management contract or compensatory plan |
** | The financial statements as of and for the years ended December 31, 2015 and 2014 of Lextar Electronics Corporation, prepared by Lextar and audited by its independent public accounting firm, are included in this Annual Report pursuant to Rule 3-09 of Regulation S-X. |
• | Registration Statements on Form S-8 (Nos. 333-164515, 333-171874 and 333-179218) pertaining to the Cree, Inc. 2004 Long-Term Incentive Compensation Plan (as amended), |
• | Registration Statement on Form S-8 (No. 333-149547) pertaining to the LED Lighting Fixtures, Inc. 2006 Stock Plan, |
• | Registration Statement on Form S-8 (No. 333-191972) pertaining to the Cree, Inc. 2005 Employee Stock Purchase Plan (as amended), |
• | Registration Statement on Form S-8 (No. 333-164516) pertaining to the Cree, Inc. Non-employee Director Stock Compensation and Deferral Program, and |
• | Registration Statement on Form S-8 (Nos. 333-191973 and 333-198381) pertaining to the Cree, Inc. 2013 Long-Term Incentive Compensation Plan |
1. | I have reviewed this annual report on Form 10-K of Cree, 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 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 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 controls 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. |
/s/ CHARLES M. SWOBODA | |
Charles M. Swoboda | |
Chairman, Chief Executive Officer and President |
1. | I have reviewed this annual report on Form 10-K of Cree, 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 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 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 controls 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. |
/s/ MICHAEL E. MCDEVITT | |
Michael E. McDevitt | |
Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ CHARLES M. SWOBODA | |
Charles M. Swoboda | |
Chairman, Chief Executive Officer and President | |
August 25, 2016 |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ MICHAEL E. MCDEVITT | |
Michael E. McDevitt | |
Executive Vice President and Chief Financial Officer | |
August 25, 2016 |
Note | December 31, 2015 | December 31, 2014 | Note | December 31, 2015 | December 31, 2014 | ||
Assets | Liabilities | ||||||
Current assets: | Current liabilities: | ||||||
Cash and cash equivalents | 6 | $5,240,128 | 5,397,182 | Short-term borrowings | 16 | $ - | 924,629 |
Financial assets measured at fair value through profit or loss-current | 7, 17 | 1,875 | 240 | Accounts payable | 3,285,365 | 3,162,169 | |
Accounts receivable, net | 9 | 3,732,499 | 3,593,240 | Accounts payable to related parties | 34 | 29,844 | 4,914 |
Accounts receivable from related parties, net | 9, 34 | 1,194,187 | 1,540,628 | Financial liabilities measured at fair value through profit or loss-current | 7, 17 | 50,026 | 86,175 |
Other financial assets | 6,9 | 199,981 | 35,850 | Current tax liabilities | 28 | 35,917 | 129,797 |
Inventories | 10 | 3,004,148 | 2,825,163 | Other current liabilities | 1,151,106 | 1,323,600 | |
Other current assets | 222,855 | 332,341 | Current installments of long-term borrowings | 18 | 851,250 | 1,250 | |
Total current assets | 13,595,673 | 13,724,644 | Total current liabilities | 5,403,508 | 5,632,534 | ||
Noncurrent assets: | |||||||
Investments in equity-accounted investees | 11 | 242,381 | 232,756 | Noncurrent liabilities: | |||
Available-for-sale financial assets-noncurrent | 8 | 116,921 | 219,552 | Long-term borrowings, excluding current installments | 18 | 947,500 | 1,798,750 |
Property, plant and equipment, net | 13, 35 | 7,705,603 | 9,445,343 | Convertible bonds payable | 17 | 1,886,125 | 1,842,643 |
Intangible assets | 14 | 17,388 | 18,487 | Other noncurrent liabilities | 28 | 179,989 | 179,802 |
Deferred tax assets | 28 | 243,219 | 255,368 | Total noncurrent liabilities | 3,013,614 | 3,821,195 | |
Long-term prepayments for rents | 15 | 101,529 | 99,960 | Total liabilities | 8,417,122 | 9,453,729 | |
Other noncurrent assets | 20, 35 | 371,124 | 294,166 | ||||
Total noncurrent assets | 8,798,165 | 10,565,632 | Equity | 12, 17, 21, 22 | |||
Common stock, $10 par value | 6,025,723 | 6,228,300 | |||||
Capital collected in advance | 412 | 1,238 | |||||
Capital surplus | 6,973,068 | 7,158,596 | |||||
Retained earnings | 1,119,627 | 1,377,377 | |||||
Other components of equity | 191,791 | 21,618 | |||||
Treasury stock | (333,905) | - | |||||
Equity attributable to stockholders of Lextar Electronics Corporation | 13,976,716 | 14,787,129 | |||||
Non-controlling interests | - | 49,418 | |||||
Total equity | 13,976,716 | 14,836,547 | |||||
Total Assets | $22,393,838 | 24,290,276 | Total Liabilities and Equity | $22,393,838 | 24,290,276 | ||
Note | 2015 | 2014 | 2013 (Unaudited) | |||||
Net revenue | 23, 34 | $ | 14,230,534 | 14,517,137 | 13,751,666 | |||
Cost of sales | 10, 19, 20, 22, 24, 34 | 12,632,960 | 12,392,047 | 12,005,060 | ||||
Gross profit | 1,597,574 | 2,125,090 | 1,746,606 | |||||
Selling and distribution expenses | 9, 14, 19, 20, 22, 24 | 450,505 | 338,134 | 287,725 | ||||
General and administrative expenses | 14, 19, 20, 22, 24, 34 | 453,436 | 554,000 | 558,502 | ||||
Research and development expenses | 14, 19, 20, 24, 34 | 562,834 | 432,110 | 366,137 | ||||
Other income | 12, 25 | 75,228 | 69,055 | 665,397 | ||||
Other gains and losses | 17, 26 | 174,712 | 14,588 | 65,061 | ||||
Finance costs | 17, 27 | (87,214) | (132,388) | (165,807) | ||||
Share of profit (loss) of equity-accounted investees | 11 | 10,873 | (12,694 | ) | (13,997 | ) | ||
Profit before income tax | 304,398 | 739,407 | 1,084,896 | |||||
Income tax expense | 28 | 905 | 92,442 | 204,175 | ||||
Profit for the year | 303,493 | 646,965 | 880,721 | |||||
Other comprehensive income | ||||||||
Items that will never be reclassified to profit or loss | ||||||||
Remeasurement of defined benefit obligations | 190 | 2,939 | 22,113 | |||||
Items that are or may be reclassified to profit or loss | ||||||||
Foreign operations – foreign currency translation differences | 136,645 | 185,770 | 60,786 | |||||
Net change in fair value of available-for-sale financial assets | (38,808 | ) | (47,162 | ) | (44,293 | ) | ||
Other comprehensive income, net of tax | 98,027 | 141,547 | 38,606 | |||||
Total comprehensive income for the year | $ | 401,520 | 788,512 | 919,327 | ||||
Profit attributable to: | ||||||||
Stockholders of Lextar Electronics Corporation | $ | 308,934 | 661,163 | 912,475 | ||||
Non-controlling interests | (5,441 | ) | (14,198 | ) | (31,754 | ) | ||
Profit for the year | $ | 303,493 | 646,965 | 880,721 | ||||
Total comprehensive income attributable to: | ||||||||
Stockholders of Lextar Electronics Corporation | $ | 407,700 | 802,668 | 951,128 | ||||
Non-controlling interests | (6,180 | ) | (14,156 | ) | (31,801 | ) | ||
Total comprehensive income for the year | $ | 401,520 | 788,512 | 919,327 | ||||
Earnings per share | ||||||||
Basic earnings per share | 29 | $ | 0.50 | 1.23 | 1.78 | |||
Diluted earnings per share | 29 | $ | 0.50 | 1.15 | 1.73 |
Equity attributable to owners of parent | ||||||||||||
Share capital | Retained earnings | Other components of equity | ||||||||||
Exchange differences on | Unrealized losses | |||||||||||
Ordinary | Capital collected | Capital | Legal | Special | Unappropriated | translation of foreign financial | on available- for-sale financial | Treasury | Non-controlling | |||
shares | in advance | surplus | reserve | reserve | retained earnings | statements | assets | Others | stock | interests | Total equity | |
Balance on January 1, 2013 (Unaudited) | 4,304,724 | 895 | 3,433,042 | 124,258 | 201 | 665,128 | (32,595) | (2,196) | — | — | — | 8,493,457 |
Profit (loss) for the year ended December 31, 2013 (Unaudited) | — | — | — | — | — | 912,475 | - | - | — | — | (31,754) | 880,721 |
Other comprehensive income (loss) for the year ended December 31, 2013 (Unaudited) | — | — | — | — | — | 22,113 | 60,833 | (44,293) | — | — | (47) | 38,606 |
Comprehensive income (loss) for the year ended December 31, 2013 (Unaudited) | — | — | — | — | — | 934,588 | 60,833 | (44,293) | — | — | (31,801) | 919,327 |
Appropriation and distribution of retained earnings (Unaudited) : | ||||||||||||
Legal reserve | — | — | — | 29,095 | - | (29,095) | — | — | — | — | — | — |
Special reserve | — | — | — | — | 34,590 | (34,590) | — | — | — | — | — | — |
Cash dividends to shareholders | — | — | — | — | — | (225,524) | — | — | — | — | — | (225,524) |
Issuance of shares due to merger (Unaudited) | 849,750 | — | 1,402,088 | — | — | — | — | — | — | — | — | 2,251,838 |
Non-controlling interest acquired due to merger (Unaudited) | — | — | - | — | — | — | — | — | — | — | 48,877 | 48,877 |
Retirement of treasury stock due to merger (Unaudited) | (144,931) | — | (122,961) | — | — | (116,175) | — | — | — | — | — | (384,067) |
Conversion of convertible bonds (Unaudited) | — | 5,009 | (467) | — | — | — | — | — | — | — | — | 4,542 |
Conversion of convertible bonds to ordinary shares (Unaudited) | 220,425 | (401) | 302,438 | — | — | — | — | — | — | — | — | 522,462 |
Share-based payment transactions (Unaudited) | — | — | 34,039 | — | — | — | — | — | 54,542 | — | — | 88,581 |
Employee stock options exercised (Unaudited) | — | 4,114 | — | — | — | — | — | — | — | — | — | 4,114 |
Issuance of shares for exercise of employee stock options (Unaudited) | 4,042 | (4,325) | 283 | — | — | — | — | — | — | — | — | — |
Issuance of restricted employee stock (Unaudited) | 88,000 | — | 136,400 | — | — | — | — | — | (224,400) | — | — | — |
Difference between consideration and carrying amount of subsidiaries acquired or disposed (Unaudited) | — | — | 7,485 | — | — | — | — | — | — | — | (7,485) | — |
Contribution by non-controlling interests (Unaudited) | — | — | — | — | — | — | — | — | — | — | 37,500 | 37,500 |
Changes in non-controlling interests (Unaudited) | — | — | — | — | — | — | — | — | — | — | 1,066 | 1,066 |
Balance on December 31, 2013 (Unaudited) | 5,322,010 | 5,292 | 5,192,347 | 153,353 | 34,791 | 1,194,332 | 28,238 | (46,489) | (169,858) | — | 48,157 | 11,762,173 |
Profit (loss) for the year ended December 31, 2014 | — | — | — | — | — | 661,163 | - | - | — | — | (14,198) | 646,965 |
Other comprehensive income (loss) for the year ended December 31, 2014 | — | — | — | — | — | 2,939 | 185,728 | (47,162) | — | — | 42 | 141,547 |
Comprehensive income (loss) for the year ended December 31, 2014 | — | — | — | — | — | 664,102 | 185,728 | (47,162) | — | — | (14,156) | 788,512 |
Appropriation and distribution of retained earnings : | — | — | — | |||||||||
Legal reserve | — | — | — | 97,956 | — | (97,956) | — | — | — | — | — | — |
Special reserve | — | — | — | — | (16,540) | 16,540 | — | — | — | — | — | — |
Cash dividends on ordinary shares | — | — | — | — | — | (669,201) | — | — | — | — | — | (669,201) |
Capital increase by cash | 830,000 | — | 1,660,000 | — | — | — | — | — | — | — | — | 2,490,000 |
Retirement of treasury stock | (8,700) | — | (13,695) | — | — | — | — | — | — | 22,395 | — | - |
Issuance of convertible bonds | — | — | 195,200 | — | — | — | — | — | — | — | — | 195,200 |
Conversion of convertible bonds | — | 125,157 | (11,688) | — | — | — | — | — | — | — | — | 113,469 |
Conversion of convertible bonds to ordinary shares | 49,558 | (129,649) | 80,091 | — | — | — | — | — | — | — | — | — |
Difference between consideration and carrying amount of subsidiaries acquired or disposed | — | — | 4,736 | — | — | — | — | — | — | — | (4,736) | — |
Share-based payment transactions | — | — | (6,894) | — | — | — | — | — | 109,486 | — | — | 102,592 |
Employee stock options exercised | — | 33,649 | — | — | — | — | — | — | — | — | — | 33,649 |
Issuance of shares for exercise of employee stock options | 13,432 | (33,211) | 19,779 | — | — | — | — | — | — | — | — | — |
Issuance of restricted employee stock | 22,000 | — | 38,720 | — | — | — | — | — | (60,720) | — | — | — |
Expiration of restricted employee stock | — | — | — | — | — | — | — | — | 22,395 | (22,395) | — | — |
Contribution by non-controlling interests | — | — | — | — | — | — | — | — | — | — | 25,000 | 25,000 |
Changes in non-controlling interests | — | — | — | — | — | — | — | — | — | — | (4,847) | (4,847) |
Balance on December 31, 2014 | 6,228,300 | 1,238 | 7,158,596 | 251,309 | 18,251 | 1,107,817 | 213,966 | (93,651) | (98,697) | — | 49,418 | 14,836,547 |
Profit (loss) for the year ended December 31, 2015 | — | — | — | — | — | 308,934 | — | — | — | — | (5,441) | 303,493 |
Other comprehensive income (loss) for the year ended December 31, 2015 | — | — | — | — | — | 190 | 137,384 | (38,808) | — | — | (739) | 98,027 |
Comprehensive income (loss) for the year ended December 31, 2015 | — | — | — | — | — | 309,124 | 137,384 | (38,808) | — | — | (6,180) | 401,520 |
Appropriation and distribution of retained earnings : | — | — | ||||||||||
Legal reserve | — | — | — | 62,986 | — | (62,986) | — | — | — | — | — | — |
Special reserve | — | — | — | — | (18,251) | 18,251 | — | — | — | — | — | — |
Cash dividends on ordinary shares | — | — | (93,443) | — | — | (566,874) | — | — | — | — | — | (660,317) |
Acquisition of treasury stock | — | — | — | — | — | — | — | — | — | (618,001) | — | (618,001) |
Retirement of treasury stock | (206,692) | — | (94,724) | — | — | — | — | — | — | 301,416 | — | — |
Conversion of convertible bonds | — | 104 | (9) | — | — | — | — | — | — | — | — | 95 |
Conversion of convertible bonds to ordinary shares | 245 | (622) | 377 | — | — | — | — | — | — | — | — | — |
Share-based payment transactions | — | — | (960) | — | — | — | — | — | 54,277 | — | — | 53,317 |
Loss of control of subsidiary | — | — | — | — | — | — | — | — | — | — | (43,238) | (43,238) |
Employee stock options exercised | — | 412 | — | — | — | — | — | — | — | — | — | 412 |
Issuance of shares for exercise of employee stock options | 3,870 | (720) | 3,231 | — | — | — | — | — | — | — | — | 6,381 |
Expiration of restricted employee stock | — | — | — | — | — | — | — | — | 17,320 | (17,320) | — | — |
Balance on December 31, 2015 | 6,025,723 | 412 | 6,973,068 | 314,295 | — | 805,332 | 351,350 | (132,459) | (27,100) | (333,905) | — | 13,976,716 |
2015 | 2014 | 2013 (Unaudited) | |||||
Cash flows from operating activities: | |||||||
Profit before income tax | $ | 304,398 | 739,407 | 1,084,896 | |||
Adjustments for: | |||||||
Depreciation | 2,080,207 | 2,046,212 | 1,970,885 | ||||
Amortization | 77,278 | 52,497 | 40,900 | ||||
Changes in fair values of financial instruments | (37,849) | 41,736 | 16,394 | ||||
Interest expense | 87,214 | 132,388 | 165,807 | ||||
Interest income | (32,134) | (40,610) | (30,233) | ||||
Share-based payment transactions | 53,317 | 102,592 | 88,581 | ||||
Share of profit (loss) of equity-accounted investees | (10,873) | 12,694 | 13,997 | ||||
Gain on bargain purchase | — | — | (552,561) | ||||
Cash dividends received from associates accounted for using equity method | — | — | 6,206 | ||||
Loss (gain) from disposal of property, plant and equipment | (167,090) | 3,389 | (621) | ||||
Gain from transfer of the right of long-term prepaid rents | — | — | (61,919) | ||||
Gain from loss of control of subsidiary | (15,045) | — | — | ||||
Others | (3,290 | ) | (38 | ) | 13,122 | ||
2,031,735 | 2,350,860 | 1,670,558 | |||||
Change in: | |||||||
- Accounts receivable | 175,567 | (452,850) | 476,181 | ||||
- Inventories | (199,640) | (747,581) | (126,079) | ||||
- Other current assets | 156,391 | 177,730 | (101,055) | ||||
- Other financial assets | (164,571) | 3,384 | 61,481 | ||||
- Other operating assets | (7,125) | — | — | ||||
- Accounts payable | 189,661 | 198,543 | (725,666) | ||||
- Other current liabilities | (1,608) | (126,233) | (153,535) | ||||
- Other non-current liabilities | 19,005 | (25,168 | ) | 22,623 | |||
167,680 | (972,175 | ) | (546,050 | ) | |||
Cash generated from operating activities | 2,503,813 | 2,118,092 | 2,209,404 | ||||
Cash received from interest income | 32,639 | 43,560 | 26,535 | ||||
Cash paid for interest | (46,073) | (92,596) | (159,430) | ||||
Cash paid for income taxes | (154,015 | ) | (150,156 | ) | (17,631 | ) | |
Net cash provided by operating activities | 2,336,364 | 1,918,900 | 2,058,878 | ||||
Cash flows from investing activities: | |||||||
Acquisitions of available-for-sale financial assets | — | (74,022) | (9,875) | ||||
Proceeds from disposal of available-for-sale financial assets | 74,878 | — | — | ||||
Return of financial assets due to capital reduction | — | 1,050 | — | ||||
Net cash outflows from loss of control of subsidiary | (35,978) | — | — | ||||
Acquisitions of property, plant and equipment | (624,023) | (2,112,821) | (669,412) | ||||
Proceeds from disposals of property, plant and equipment | 416,525 | 32,600 | 53,635 | ||||
Decrease (increase) in refundable deposits | (992) | 703 | 1,043 | ||||
Net cash inflows from business combination | — | — | 1,872,412 | ||||
Increase in other noncurrent assets | (141,762) | (85,237) | (13,342) | ||||
Proceeds from transfer of the right of long-term prepaid rents | — | 141,492 | — | ||||
Net cash provided by (used in) investing activities | (311,352 | ) | (2,096,235 | ) | 1,234,461 | ||
Cash flows from financing activities: | |||||||
Decrease in short-term borrowings, net | (924,629) | (142,895) | 750,516 | ||||
Proceeds from issuance of convertible bonds | — | 1,995,000 | — | ||||
Repayments of long-term borrowings | (1,250) | (3,143,693) | (1,867,121) | ||||
Increase in guarantee deposits | (775) | (291) | 1,223 | ||||
Cash dividends | (660,317) | (669,201) | (225,524) | ||||
Proceeds from issuance of common stock | — | 2,490,000 | — | ||||
Proceeds from exercise of employee stock options | 6,793 | 33,649 | 4,114 | ||||
Cost of acquisition of treasury stock | (618,001) | — | — | ||||
Net change of non-controlling interests and others | — | 25,000 | 37,500 | ||||
Net cash provided by (used in) financing activities | (2,198,179 | ) | 587,569 | (1,299,292 | ) | ||
Effect of exchange rate change on cash held | 16,113 | 33,337 | (32,969 | ) | |||
Net increase (decrease) in cash and cash equivalents | (157,054) | 443,571 | 1,961,078 | ||||
Cash and cash equivalents at January 1 | 5,397,182 | 4,953,611 | 2,992,533 | ||||
Cash and cash equivalents at December 31 | $ | 5,240,128 | 5,397,182 | 4,953,611 |
(1) | Organization |
(2) | The Authorization of Financial Statements |
(3) | New Accounting Pronouncements Under International Financial Reporting Standards (“IFRS”) |
(a) | New and revised standards, amendments and interpretations in issue but not yet effective |
New standards and amendments | Effective date per IASB |
IFRS 9 “ Financial Instruments” | January 1, 2018 |
Amendments to IFRS 10 and IAS 28, Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | Subject to IASB’s announcement |
Amendments to IFRS 10, IFRS 12 and IAS 28, Investments Entities: Applying the Consolidation Exception | January 1, 2016 |
Amendments to IFRS 11, Accounting for Acquisitions of Interests in Joint Operations | January 1, 2016 |
IFRS 14, Regulatory Deferral Accounts | January 1, 2016 |
IFRS 15, Revenue from Contracts with Customers | January 1, 2018 |
IFRS 16, Lease | January 1, 2019 |
Amendments to IAS 1, Presentation of Financial Statements -Disclosure Initiative | January 1, 2016 |
Amendments to IAS 7, Statement of Cash Flows - Disclosure Initiative | January 1, 2017 |
Amendments to IAS 12, Recognition of Deferred Tax Assets for Unrealized Losses | January 1, 2017 |
Amendments to IAS 16 and IAS 38, Clarification of Acceptable Methods of Depreciation and Amortization | January 1, 2016 |
Amendments to IAS 16 and IAS 41, Agriculture: Bearer Plants | January 1, 2016 |
Amendments to IAS 27, Equity Method in Separate Financial Statements | January 1, 2016 |
Annual Improvements to IFRS: 2012-2014 cycles | January 1, 2016 |
(b) | Except for the items discussed below, the Company believes that the initial adoption of aforementioned standards or interpretations will not have any significant impact on its accounting policies. |
1. | IFRS 9, Financial Instruments |
2. | IFRS 15, Revenue from Contracts with Customers |
(4) | Summary of Significant Accounting Policies |
(a) | Statement of compliance |
(b) | Basis of preparation |
1. | The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the consolidated statements of financial position: |
(i) | Financial instruments measured at fair value through profit or loss (including derivative financial instruments) (note 7); |
(ii) | Available-for-sale financial assets measured at fair value (note 8); and |
(iii) | Defined benefit asset (liability) is recognized as the fair value the plan assets less the present value of the defined benefit obligation (note 20). |
2. | Functional and presentation currency |
(c) | Basis of consolidation |
1. | Principle of preparation of the consolidated financial statements |
(i) | The aggregate of: |
A. | the far value of the consideration received, and |
B. | the fair value of any retained non-controlling investment in the former subsidiary at the date when the Company losses control. |
(ii) | The aggregate of the carrying amount of the former subsidiary’s assets (including goodwill), liabilities and non-controlling interests at the date when the Company losses control. |
2. | List of subsidiaries in the consolidated financial statements |
Percentage of Ownership (%) | |||||||||
Name of investor | Name of subsidiary | Main Activities and Location | December 31,2015 | December 31,2014 | |||||
The Company | Lextar (Singapore) Pte. Ltd. (LEXSG) | General Investing (Singapore) | 100% | 100% | |||||
〞 | Liang Li Investment Co., Ltd. (Liang Li) | General Investing (Taiwan) | 100% | 100% | |||||
〞 | Wellypower Optronics Corp. (Wellypower) | Investment and sale of products (Taiwan) | 100% | 100% | |||||
〞 | Apower Optronics Corp. (Apower) | Investment and sale of products (BVI) | 100% | 100% | |||||
〞 | Wellybond Corporation (Wellybond) | General Investing (Taiwan) | 100% | 100% | |||||
〞 | Wellybond Optronics (H.K.) Limited (Wellybond (H.K.)) | General Investing (Hong Kong) | 100% | 100% | |||||
〞 | Trendylite Corporation (Trendylite) | Sale of products (Taiwan) | 100% | 100% | |||||
LEXSG | Lextar Electronics (SuZhou) Co., Ltd. (LEXZ) | Manufacture of Light-Emitting Diode (wafer、light bar、module) (PRC) | 100% | 100% | |||||
〞 | Lextar Electronics (Xiamen) Co., Ltd. (LEXM) | 〞 | 100% | 100% | |||||
〞 | Lextar Electronics Korea Ltd. | Sale of Light-Emitting Diode and After-sales service (South Korea) | 100% | 100% | |||||
Wellypower | Wellypower Optronics (SuZhou) Corporation (Wellypower (SuZhou)) | Manufacture and sale of CCFL、LED and PCB surface mount technology (PRC) | 13.36% | 13.36% | |||||
Apower | Wellypower Optronics (SuZhou) Corporation (Wellypower (SuZhou)) | 〞 | 86.64% | 86.64% | |||||
Wellybond (H.K.) | SuZhou Welly Trading Co., Ltd (SuZhou Welly ) | Import and export trade, Wholesale (PRC) | 100% | 100% | |||||
Liang Li and Wellybond | Verticil Electronics Corporation (Verticil) | Business of power convertors (Taiwan) | 0 (Note 2) | 32.17% (Note 1) | |||||
Verticil | Wellypower Electronics (Samoa) Corp. ( Wellypower (Samoa)) | Investment holding (Samoa) | 0 (Note 2) | 100% (Note 1) | |||||
Wellypower (Samoa) | Weiliyang (Suzhou) Optoelectronics Co., Ltd. (Weiliyang (Suzhou)) | Manufacture and sale of light products and power supply (PRC) | 0 (Note 2) | 100% (Note 1) |
Note 2: | Beginning May 2015, the Company lost control over the financial and operating policies of Verticil because it no longer has the majority vote in the board of director’s meeting, resulting in the exclusion of Verticil as a subsidiary in the consolidated financial statements of the Company. Therefore, the Company’s investment in Vercitil and its subsidiaries was accounted for under available-for-sale financial asset།noncurrent. |
(d) | Foreign currencies |
1. | Foreign currency transaction |
2. | Foreign operations |
(e) | Classification of current and non-current assets and liabilities |
1. | The asset expected to realize, or intends to sell or consume, in its normal operating cycle; |
2. | The asset primarily held for the purpose of trading; |
3. | The asset expected to realize within twelve months after the reporting date; or |
4. | Cash and cash equivalent excluding the asset restricted to be exchanged or used to settle a liability for at least twelve months after the reporting date. |
1. | The liability expected to settle in its normal operating cycle; |
2. | The liability primarily held for the purpose of trading; |
3. | The liability is due to be settled within twelve months after the reporting date; or |
4. | The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issuance of equity instruments, do not affect its classification. |
(f) | Cash and cash equivalents |
(g) | Financial instruments |
1. | Financial assets |
(i) | Financial assets measured at fair value through profit or loss |
(ii) | Available-for-sale financial assets |
(iii) | Receivables |
(iv) | Impairment of financial assets |
(v) | De-recognition of financial assets |
2. | Financial liabilities |
(i) | Convertible bonds |
(ii) |
(ii) | Financial liabilities measured at fair value through profit or loss |
(iii) | Other financial liabilities |
(iv) | De-recognition of financial liabilities |
(v) | Offsetting of financial assets and liabilities |
3. | Derivative financial instruments |
(h) | Inventories |
(i) | Investment in associates |
(j) | Property, plant and equipment |
1. | Recognition and measurement |
2. | Subsequent cost |
3. | Depreciation |
(i) | Buildings: 35 years |
(ii) | Machinery and equipment: 3 ~9 years |
(iii) | Other equipment: 1 ~ 6 years |
(k) | Long-term prepaid rent |
(l) | Lease |
1. | Lessor |
2. | Lessee |
(m) | Intangible assets |
1. | Goodwill |
2. | Research & development |
3. | Other intangible assets |
4. | Subsequent expenditure |
5. | Amortization |
(n) | Impairment – non-financial assets |
(o) | Provisions |
(p) | Treasury stock |
(q) | Revenue recognition |
1. | Goods sold |
2. | Government grants |
(r) | Employee benefits |
1. | Defined contribution plans |
2. | Defined benefit plans |
3. | Short-term employee benefits |
(s) | Share-based payment transactions |
(t) | Borrowing cost |
(u) | Income taxes |
1. | Current income taxes |
2. | Deferred income taxes |
(i) | temporary difference on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither taxable profit or loss; |
(ii) | temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and |
(iii) | temporary differences arising on the initial recognition of goodwill. |
(v) | Business combination |
(w) | Earnings per share |
(x) | Operating segments and geographic information |
(5) | Use of Judgments and Estimates |
(6) | Cash and Cash Equivalents |
December 31, 2015 | December 31, 2014 | ||||
Cash on hand and demand deposits | $ | 2,672,124 | 1,787,570 | ||
Time deposits | 1,674,004 | 2,328,612 | |||
Bond acquired under repurchase agreement | 894,000 | 1,281,000 | |||
$ | 5,240,128 | 5,397,182 |
(7) | Derivative Financial Instruments |
1. | Derivative Financial Instruments |
December 31, 2015 | December 31, 2014 | ||||
Financial assets measured at fair value through profit or loss-current: | |||||
Forward exchange contracts | $ | 1,875 | 206 | ||
Redemption rights of bonds payable at the option of the Company or the bondholders (note 17) | — | 34 | |||
$ | 1,875 | 240 | |||
Financial liabilities measured at fair value through profit or loss-current: | |||||
Forward exchange contracts | $ | 15,037 | 42,351 | ||
Foreign exchange swap contracts | 5,816 | 28,639 | |||
Redemption rights of bonds payable at the option of the Company or the bondholders (note 17) | 29,173 | 15,185 | |||
$ | 50,026 | 86,175 |
December 31, 2015 | |||
Derivative financial Instruments | Nominal amount ___(thousand)__ | Currency | __Maturity date___ |
Forward exchange contracts | USD 58,000 | sell USD / buy NTD | 2016.1.11~2016.5.10 |
Forward exchange contracts | USD 1,049 | sell USD / buy JPY | 2016.1.25~2016.4.25 |
Forward exchange contracts | EUR 1,480 | sell EUR / buy NTD | 2016.1.11~2016.4.08 |
Forward exchange contracts | JPY 62,063 | buy JPY / sell NTD | 2016.1.25~2016.3.25 |
Forward exchange contracts | USD 10,000 | sell CNY / buy USD | 2016.1.26~2016.3.25 |
Foreign exchange swap contracts | USD 31,000 | swap in USD/swap out NTD | 2016.2.05~2016.4.11 |
December 31, 2014 | |||
Derivative financial Instruments | Nominal amount ___(thousand)__ | Currency | __Maturity date___ |
Forward exchange contracts | USD 28,000 | sell USD / buy NTD | 2015.1.12~2015.2.10 |
Forward exchange contracts | USD 1,708 | sell USD / buy JPY | 2015.1.26~2015.2.25 |
Forward exchange contracts | JPY 72,198 | buy JPY / sell NTD | 2015.1.26 |
Foreign exchange swap contracts | USD 36,500 | Swap in USD/Swap out NTD | 2015.1.12~2015.3.10 |
(8) | Available-for-sale financial assets – noncurrent |
December 31, 2015 | December 31, 2014 | ||||
Equity securities | $ | 249,380 | 313,203 | ||
Less: unrealized losses | (132,459 | ) | (93,651 | ) | |
$ | 116,921 | 219,552 |
(9) | Accounts Receivable, net (including related and non-related parties) |
December 31, 2015 | December 31, 2014 | |||||
Accounts receivable | $ | 3,841,894 | 3,600,336 | |||
Accounts receivable- related parties | 1,203,388 | 1,541,113 | ||||
Other receivables | 199,981 | 35,850 | ||||
Less: allowance for doubtful accounts | (15,792) | (6,136) | ||||
allowance for sales returns and discounts | (102,804 | ) | (1,445 | ) | ||
$ | 5,126,667 | 5,169,718 |
December 31, 2015 | December 31, 2014 | ||||
Past due 0~30 days | $ | 106,271 | 66,680 | ||
Past due 31~60 days | 21,897 | 13,205 | |||
Past due 61~90 days | 1,114 | 2,803 | |||
Past due over 91 days | 10,058 | 2,480 | |||
$ | 139,340 | 85,168 |
For the year ended December 31, | |||||||||
2015 | 2014 | 2013 (Unaudited) | |||||||
Individually assessed for impairment | Collectively assessed for impairment | Individually assessed for impairment | Collectively assessed for impairment | Individually assessed for impairment | Collectively assessed for impairment | ||||
Balance on January 1 | $ | 500 | 5,636 | 62,444 | 17,557 | 4,093 | 1,700 | ||
Acquired in business combination | 73,092 | 38,953 | |||||||
Recognized (reversal) of impairment loss | (500) | 10,156 | 14,915 | (11,921) | (14,741) | (23,096) | |||
Write-off | - | - | (76,859 | ) | - | - | - | ||
Balance on December 31 | $ - | 15,792 | 500 | 5,636 | 62,444 | 17,557 |
(10) | Inventories |
December 31, 2015 | December 31, 2014 | ||||
Raw materials | $ | 194,989 | 180,029 | ||
Work in progress | 1,386,291 | 1,375,414 | |||
Finished goods | 1,422,868 | 1,269,720 | |||
$ | 3,004,148 | 2,825,163 |
(11) | Investments in equity-accounted investees |
December 31, 2015 | December 31, 2014 | ||||
Associates | $ | 242,381 | 232,756 |
(a) | The financial information for investments accounted for using the equity method that are individually insignificant was as follows: |
December 31, 2015 | December 31, 2014 | |
Carrying amount of individually insignificant associates’ equity | $ 844,568 | 652,553 |
(b) | The aggregate amount of the Company’s share of its associates was as follows: |
2015 | 2014 | 2013 (Unaudited) | ||||
The Company’s share of profits (loss) of associates | 10,873 | (12,694 | ) | 13,997 | ||
The Company’s share of other comprehensive income | — | — | — | |||
Total | 10,873 | (12,694 | ) | 13,997 |
(12) | Subsidiaries and non-controlling interest |
(a) | Although the Company is presumed to have disposed certain parts of its subsidiary’s shares, it is still deemed to have control over its subsidiary |
2014 | |||
Share portion of Verticil after increment of capital | $ | 24,573 | |
Share portion of Verticil before increment of capital | 19,837 | ||
Capital surplus-difference between the consideration and the carrying amount of subsidiaries acquired or disposed of | $ 4,736 |
(b) | Loss of control over subsidiary |
(i) | Proceeds received from the transaction of disposal of Verticil shares |
(ii) | Loss of control over subsidiary’s assets and liabilities |
Items | Amounts | ||
Cash and cash equivalents | $ | 61,441 | |
Accounts receivable and other current assets | 58,042 | ||
Accounts payable and other current liabilities | (60,979) | ||
Property, plant and equipment (note 13) | 4,146 | ||
Other non-current assets | 1,205 | ||
Derecognized net assets | $ | 63,855 |
(iii) | Disposal gain recognized due to loss of control over the subsidiary |
The fair value of the remaining share interests | $ | 10,199 | |
Proceeds received | 25,463 | ||
Non-controlling interests | 43,238 | ||
Less: net assets derecognized | (63,855 | ) | |
$ | 15,045 |
(iv) | Net cash outflows as a result of derecognition of the subsidiary |
Cash and cash equivalents derecognized | $ | 35,978 |
(13) | Property, plant and equipment |
For the year ended December 31, 2015 | |||||||||||||||||||
Balance, Beginning of Year | Additions | Impairment | Effect of loss of control of Subsidiary | Disposal or Write off | Transfer from Construction in progress and Testing equipment | Effect of change in exchange rate | Balance, End of Year | ||||||||||||
Cost: | |||||||||||||||||||
Land | 716,511 | 736 | — | - | (167,861 | ) | — | — | 549,386 | ||||||||||
Buildings | 3,999,844 | (1,854 | ) | — | - | (55,308 | ) | — | 100,650 | 4,043,332 | |||||||||
Machinery and equipment | 11,884,142 | 90,677 | — | - | (167,216 | ) | 23,534 | 12,235,656 | |||||||||||
Other equipment | 878,819 | 41,690 | — | (12,635 | ) | (3,541 | ) | 2,564 | 915,604 | ||||||||||
Construction in progress and testing equipment | 194,383 | 343,767 | — | — | — | 2,552 | 127,476 | ||||||||||||
17,673,699 | 475,016 | — | (12,635 | ) | (393,926 | ) | 129,300 | 17,871,454 | |||||||||||
Accumulated depreciation and impairment loss: | |||||||||||||||||||
Land | — | — | — | — | — | — | — | — | |||||||||||
Buildings | 274,399 | 117,452 | — | — | (13,329) | — | 5,224 | 383,746 | |||||||||||
Machinery and equipment | 7,248,728 | 1,855,992 | (2,434) | — | (128,445) | — | 6,398 | 8,980,239 | |||||||||||
Other equipment | 703,940 | 106,763 | - | (8,489) | (2,717) | — | 1,028 | 800,525 | |||||||||||
Construction in progress and testing equipment | 1,289 | - | - | - | - | - | 52 | 1,341 | |||||||||||
$ | 8,228,356 | 2,080,207 | (2,434) | (8,489) | (144,491 | ) | - | 12,702 | 10,165,851 | ||||||||||
Net carrying amounts | $ | 9,445,343 | 7,705,603 |
For the year ended December 31, 2014 | |||||||||||||||
Balance, Beginning of Year (Unaudited) | Additions | Impairment | Disposal or Write off | Transfer from Construction in progress and Testing equipment | Effect of change in exchange rate | Balance, End of Year | |||||||||
Cost: | |||||||||||||||
Land | $ | 167,126 | 549,385 | — | — | — | — | 716,511 | |||||||
Buildings | 3,219,479 | 645,749 | — | — | — | 134,616 | 3,999,844 | ||||||||
Machinery and equipment | 11,044,244 | 215,254 | — | (95,259) | 690,486 | 29,417 | 11,884,142 | ||||||||
Other equipment | 805,867 | 83,828 | — | (2,197) | 4,130 | (12,809) | 878,819 | ||||||||
Construction in progress and testing equipment | 67,078 | 828,173 | - - | - | (694,616) | (6,252) | 194,383 | ||||||||
$ | 15,303,794 | 2,322,389 | - | (97,456 | ) | - | 144,972 | 17,673,699 | |||||||
Accumulated depreciation and impairment loss: | |||||||||||||||
Land | — | — | — | — | — | — | - | ||||||||
Buildings | 161,717 | 105,903 | — | — | — | 6,779 | 274,399 | ||||||||
Machinery and equipment | 5,463,695 | 1,820,825 | — | (43,944) | — | 8,152 | 7,248,728 | ||||||||
Other equipment | 584,246 | 119,484 | — | (1,304) | — | 1,514 | 703,940 | ||||||||
Construction in progress and testing equipment | - | - | 1,213 | - | - | 76 | 1,289 | ||||||||
$ | 6,209,658 | 2,046,212 | 1,213) | (45,248 | ) | - | 16,521 | 8,228,356 | |||||||
Net carrying amounts | $ | 9,094,136 | 9,445,343 |
(14) | Intangible Assets |
For the year ended December 31, 2015 | ||||||
Balance, Beginning of Year | Additions | Balance, End of Year | ||||
Cost: | ||||||
Customer Relationship | 44,153 | — | 44,153 | |||
Core Technology | 19,962 | — | 19,962 | |||
Patent and royalty | 29,950 | — | 29,950 | |||
Goodwill | 8,768 | — | 8,768 | |||
102,833 | — | 102,833 | ||||
Accumulated amortization: | ||||||
Customer Relationship | 44,153 | — | 44,153 | |||
Core Technology | 19,962 | — | 19,962 | |||
Patent and royalty | 20,231 | 1,099 | 21,330 | |||
Goodwill | — | — | — | |||
84,346 | 1,099 | 85,445 | ||||
Net carrying amounts | 18,487 | 17,388 |
For the year ended December 31, 2014 | ||||||
Balance, Beginning of Year (Unaudited) | Additions | Balance, End of Year | ||||
Cost: | ||||||
Customer Relationship | 44,153 | — | 44,153 | |||
Core Technology | 19,962 | — | 19,962 | |||
Patent and royalty | 29,950 | — | 29,950 | |||
Goodwill | 8,768 | — | 8,768 | |||
102,833 | — | 102,833 | ||||
Accumulated amortization: | ||||||
Customer Relationship | 44,153 | — | 44,153 | |||
Core Technology | 19,962 | — | 19,962 | |||
Patent and royalty | 19,132 | 1,099 | 20,231 | |||
Goodwill | — | — | — | |||
83,247 | 1,099 | 84,346 | ||||
Net carrying amounts | 19,586 | 18,487 |
2015 | 2014 | 2013 (Unaudited) | |
Operating cost | $— | — | — |
Operating expenses | 1,099 | 1,099 | 7,403 |
(15) | Long-term prepayments for rents |
Location | Period | December 31, 2015 | December 31, 2014 | |||
Suzhou Industrial Park Chung Yuan Road | 2010~2060 | $ | 61,071 | 60,046 | ||
Suzhou Industrial Park Wei Ting Town Feng Ting Avenue | 2003~2053 | 40,458 | 39,914 | |||
$ | 101,529 | 99,960 |
(16) | Short-term borrowings |
December 31, 2015 | December 31, 2014 | ||||
Unsecured bank loans | $ | — | 924,629 | ||
Annual interest rates | — | 1.84%~2.055% |
(17) | Convertible bonds payable |
December 31, 2015 | December 31, 2014 | ||||
Aggregate principal amount | $ | 3,000,000 | 3,000,000 | ||
Unamortized discount | (136,275 | ) | (179,857 | ) | |
Accumulated converted amount | (977,600 | ) | (977,500 | ) | |
Ending balance of bonds payable | 1,886,125 | 1,842,643 | |||
Less : Bonds payable – current | — | — | |||
Ending balance of bonds payable – non-current | 1,886,125 | 1,842,643 | |||
Embedded derivative component - the value of redemption rights at the option of the Company/bondholders (recorded as current financial assets (liabilities) at fair value through profit or loss) | |||||
First domestic unsecured convertible bonds | (2 | ) | 34 | ||
Second domestic unsecured convertible bonds | (29,171 | ) | (15,185 | ) | |
Equity component – conversion right (recorded as capital surplus – stock option) | 197,331 | 197,340 |
2015 | 2014 | 2013 (Unaudited) | ||||
Embedded derivative component - revaluation profit (loss) on redemption rights at the option of the Company/bondholders (recorded as other gains and losses) | (14,022 | ) | 5,442 | 3,466 | ||
Interest expense | 43,577 | 43,091 | 5,821 |
1st domestic unsecured convertible bonds | 2nd domestic unsecured convertible bonds | |
Offering amount | $1,000,000 thousand | $2,000,000 thousand |
Issue date | August 16, 2012 | January 9, 2014 |
Issuance price | At par value | At par value |
Face interest rate | 0% | 0% |
Effective rate | 2.167026% | 2.34195% |
Issue period | August 16, 2012 to August 16, 2017 | January 9, 2014 to January 9, 2019 |
Redemption at the option of the Company | The Company may redeem the bonds at face value with cash or by converting them into stocks at any time after September 16, 2012 if the closing price of the common shares on TWSE on each trading day during a period of 30 consecutive trading dates exceeds at least 30% of the conversion price or if the outstanding balance of the Bonds is less than 10% of the offering amount. | The Company may redeem the bonds at face value with cash or by converting them into stocks at any time after July 9, 2014 if the closing price of the common shares on TWSE on each trading day during a period of 30 consecutive trading dates exceeds at least 30% of the conversion price or if the outstanding balance of the Bonds is less than 10% of the offering amount. |
Redemption at the option of the holder | Each holder has the right to require the Company to redeem the holder’s bonds on August 16, 2014 at a redemption price equal to the principal amount of the bonds with a yield-to-maturity of 1% per annum. | Each holder has the right to require the Company to redeem the holder’s bonds on January 9, 2017 at a redemption price equal to the principal amount of the bonds with a yield-to-maturity of 0.5% per annum. |
Conversion period | Unless the bonds are in the lock-out period, each Holder of the bonds will have the right at any time during the period from September 17, 2012, to August 6, 2017, to convert their bonds. The Company should deliver the common shares to the Holder within 5 days after accepting the demand for conversion. | Unless the bonds are in the lock-out period, each Holder of the bonds will have the right at any time during the period from February 10, 2014, to December 30, 2018, to convert their bonds. The Company should deliver the common shares to the Holder within 5 days after accepting the demand for conversion. |
Conversion price on December 31,2015 (note) | $23.3 | $30.08 |
(18) | Long-term borrowings |
December 31, 2015 | ||||||
Currency | Rate | Maturity year | Amounts | |||
Unsecured bank loans | NTD | 1.73%~1.8847% | 2017 | $ | 1,798,750 | |
Less:current portions | (851,250) | |||||
Total | $947,500 |
December 31, 2014 | ||||||
Currency | Rate | Maturity year | Amounts | |||
Unsecured bank loans | NTD | 1.8%~1.943% | 2016~2017 | $ | 1,800,000 | |
Less:current portions | (1,250) | |||||
Total | $1,798,750 |
(19) | Operating lease |
December 31, 2015 | December 31, 2014 | ||||
Less than one year | $ | 28,516 | 33,054 | ||
Between one and five years | 63,194 | 59,465 | |||
Over five years | 0 | 9,266 | |||
$ | 91,710 | 101,785 |
(20) | Employee benefits |
(a) | Defined benefit plans |
(i) | Recognized assets (liabilities) for defined benefit obligations at the reporting date were as follows: |
December 31, 2015 | December 31, 2014 | ||||
Present value of the defined benefit obligations | $ | (17,794 | ) | (20,594) | |
Fair value of plan assets | 48,859 | 47,299 | |||
Surplus in the plan | 31,065 | 26,705 | |||
Recognized assets for defined benefit obligations | $ | 31,065 | 26,705 |
(ii) | Movement in net defined benefit asset (liability) |
Defined benefit obligation | Fair value of plan assets | Net defined benefit asset (liability) | ||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||
Balance at January 1, | (20,594 | ) | (23,677 | ) | 47,299 | 45,251 | 26,705 | 21,574 | ||||
Included in profit or loss | ||||||||||||
Service cost | (115 | ) | (199 | ) | — | — | (115 | ) | (199 | ) | ||
Interest cost | (463 | ) | (473 | ) | — | — | (463 | ) | (473 | ) | ||
Expected return on plan assets | — | — | 1,075 | 802 | 1,075 | 802 | ||||||
(578 | ) | (672 | ) | 1,075 | 802 | 497 | 130 | |||||
Included in OCI | ||||||||||||
Remeasurement (loss) gain: | ||||||||||||
Actuarial (loss) gain arising from: | ||||||||||||
- demographic assumptions | (378 | ) | 48 | — | — | (378 | ) | 48 | ||||
- financial assumptions | (2,278 | ) | 918 | — | — | (2,278 | ) | 918 | ||||
- experience adjustment | 2,651 | 1,639 | — | — | 2,651 | 1,639 | ||||||
Return on plan assets excluding interest income | — | — | 187 | 296 | 187 | 296 | ||||||
(5 | ) | 2,605 | 187 | 296 | 182 | 2,901 | ||||||
Other | ||||||||||||
Effect of acquisition of subsidiary | — | — | — | — | — | — | ||||||
Contributions paid by the employer | — | — | 298 | 950 | 298 | 950 | ||||||
Benefits paid | — | — | — | — | — | — | ||||||
Curtailment settlement gains | 3,383 | 1,150 | — | — | 3,383 | 1,150 | ||||||
3,383 | 1,150 | 298 | 950 | 3,681 | 2,100 | |||||||
Balance at December 31, 2015 | (17,794 | ) | (20,594 | ) | 48,859 | 47,299 | 31,065 | 26,705 |
(iii) | Plan assets |
(iv) | Defined benefit obligation |
A. | Principal actuarial assumptions |
As of December 31, | ||||
2015 | 2014 | |||
Discount rate | 1.50 | % | 2.25 | % |
Expected long-term rate of return on plan assets | 1.50 | % | 1.75 | % |
Rate of increase in future salary | 2.00 | % | 2.00 | % |
B. | Sensitivity analysis |
December 31, 2015 | ||||
Changes in assumptions | ||||
+0.25% | -0.25% | |||
Discount rate 1.50% | $ | (716 | ) | 753 |
Rate of increase in future salary 2% | 748 | (714) |
Expected employee turnover rate 110% | Expected employee turnover rate 90% | |||
Employee turnover rate 2.12% | $ | (192 | ) | 195 |
(b) | Defined contribution plan |
(21) | Capital and Other Components of Equity |
(a) | Common stock |
2015 | 2014 | |||
(in thousands of shares) | ||||
Balance on January 1 | 622,830 | 532,201 | ||
Capital increase by cash | — | 83,000 | ||
Retirement of treasury stock | (20,000 | ) | — | |
Employee stock options exercised | 387 | 1,343 | ||
Conversion of convertible bonds | 24 | 4,956 | ||
Retirement of restricted stock | (669 | ) | (870 | ) |
Issuance of restricted employee stock (note 22) | — | 2,200 | ||
Balance on December 31 | 602,572 | 622,830 |
(b) | Capital surplus |
December 31, 2015 | December 31, 2014 | ||||
From common stock | $ | 6,131,320 | 6,421,797 | ||
From merger | 360,201 | 360,201 | |||
1.From employee stock option | 40,210 | 43,928 | |||
2.From convertible bonds | 197,331 | 197,340 | |||
Difference between the consideration and carrying amount of subsidiaries acquired | 12,221 | 12,221 | |||
3. Increase in treasury stock | 119,303 | - | |||
From restricted employee stock | 112,482 | 123,109 | |||
6,973,068 | 7,158,596 |
(c) | Legal reserve |
(d) | Special reserve |
(e) | Distribution of earnings and dividend policy |
(i) | profit sharing to employees: at least 5 percent and not more than 20 percent; |
(ii) | remuneration of directors: no more than 1 percent; and |
(iii) | all or a portion of the remaining balance shall be distributed as shareholders’ dividends. |
For fiscal year 2014 | For fiscal year 2013 (Unaudited) | |||||||
Appropriation of earnings | Dividends per share | Appropriation of earnings | Dividends per share | |||||
Cash dividends to shareholders | 566,874 | 0.91 | 669,201 | 1.23924677 | ||||
Employee bonus | 85,031 | 132,241 | ||||||
Compensation of directors and supervisors | 5,669 | 8,816 | ||||||
90,700 | 141,057 |
(f) | Treasury shares |
For the year ended December 31, 2015 | ||||||||
Reason to Reacquire | Number of Shares, Beginning of Period | Addition During the Period | Reduction During the Period | Number of Shares, End of Period | ||||
Due to the expiration of the restricted employee stock | — | 669 | 669 | — | ||||
In order to maintain the Company’s credibility and stockholders’ equity | — | 39,970 | 20,000 | 19,970 |
For the year ended December 31, 2014 | ||||
Reason to Reacquire | Number of Shares, Beginning of Period | Addition During the Period | Reduction During the Period | Number of Shares, End of Period |
Due to the expiration of the restricted employee stock | — | 870 | 870 | — |
(22) | Share-based payment |
(a) | Employee stock option plans |
For the years ended December 31, | |||||||
2015 | 2014 | 2013(Unaudited) | |||||
Number of options (in thousands) | Weighted- average exercise price (per share) | Number of options (in thousands) | Weighted- average exercise price (per share) | Number of options (in thousands) | Weighted- average exercise price (per share) | ||
Outstanding at January 1 | 4,847 | $25.39 | 8,214 | 26.72 | 8,687 | 27.00 | |
Options exercised | (384) | 17.67 | (1,360) | 24.75 | (385) | 10.70 | |
Options expired | (483) | 26.14 | (2,007) | 28.36 | (88) | 10.70 | |
Outstanding at December 31 | 3,980 | 26.04 | 4,847 | 25.39 | 8,214 | 26.72 | |
Exercisable at December 31 | 3,140 | 25.54 | 2,032 | 24.66 | 1,064 | 10.70 |
December 31, 2015 | December 31, 2014 | |
Range of exercise price (NT$) | 10.3~26.5 | 10.3~27.9 |
Weighted-average expected time remaining until expiration (year) | 1 | 2 |
Plan | Grant date | Total number of options issued (in thousands) | Contractual life of options | Vesting Conditions | Exercise price (per share) (Note 2) | ||
2007 Employee stock option plan | Dec. 28, 2007 (Note 1) | 2,500 | 10 years | Future 4~8 year | $ | 10.3 | |
2012 Employee stock option plan | Feb. 10, 2012 | 7,150 | 5 years | Future 2~4 year | $ | 27.9 |
(b) | Fair value of stock options |
Plan of 2007 | Plan of 2012 | |
Excise price of stock options (NTD) | 11.4 | 30.5 |
Expected volatility | 8.4% | 42.84% |
Expected continuing period | 10 years | 5 years |
Risk-free interest rate | 1.199% | 1.425% |
Cash dividend rate | 0% | 0% |
(c) | Restricted stock |
(d) | The related employee benefit expenses recognized on employee stock options were $53,317 thousand, $102,592 thousand and $88,581 thousand (Unaudited) for the years ended December 31, 2015, 2014 and 2013, respectively. |
(23) | Revenue |
For the years ended December 31, | ||||||
2015 | 2014 | 2013 (Unaudited) | ||||
Sales of Backlight products | $ | 8,491,532 | 10,334,617 | 10,128,068 | ||
Sales of Lighting products | 5,621,105 | 4,012,256 | 3,528,817 | |||
Others | 117,897 | 170,264 | 94,781 | |||
$14,230,534 | 14,517,137 | 13,751,666 |
(24) | The Nature of Expenses |
(a) | Depreciation of property, plant and equipment |
For the years ended December 31, | |||||
2015 | 2014 | 2013 (Unaudited) | |||
Recognized in cost of sales | $ | 1,930,563 | 1,904,240 | 1,768,065 | |
Recognized in operating expenses(i) | 149,644 | 141,972 | 202,820 | ||
$2,080,207 | 2,046,212 | 1,970,885 |
(b) | Amortization of intangible assets |
For the years ended December 31, | |||||
2015 | 2014 | 2013 (Unaudited) | |||
Recognized in cost of sales | $ | 56,862 | 25,068 | 10,854 | |
Recognized in operating expenses(i) | 20,416 | 27,429 | 30,046 | ||
$77,278 | 52,497 | 40,900 |
(c) | Employee benefits expenses |
For the years ended December 31, | |||||
2015 | 2014 | 2013 (Unaudited) | |||
Salaries and wages | $ | 2,107,565 | 2,201,815 | 2,380,395 | |
Labor and health insurances | 130,877 | 144,555 | 153,995 | ||
Retirement benefits | 129,128 | 124,693 | 119,987 | ||
Other employee benefits | 64,362 | 56,830 | 82,264 | ||
$2,431,932 | 2,527,893 | 2,736,641 | |||
Employee benefits expense summarized by function | |||||
Recognized in cost of sales | $ | 1,718,189 | 1,823,849 | 2,062,205 | |
Recognized in operating expenses(i) | 713,743 | 704,044 | 674,436 | ||
$2,431,932 | 2,527,893 | 2,736,641 |
(i) | Operating expenses are inclusive of selling and distribution expenses, general and administrative expenses and research and development expenses. |
(25) | Other Income |
For the years ended December 31, | |||||
2015 | 2014 | 2013 (Unaudited) | |||
Interest income | $ | 32,134 | 40,610 | 30,233 | |
Gain on bargain purchase | - | - | 552,561 | ||
Gain on right of long-term prepared rent transfer | - | - | 61,919 | ||
Others | 43,094 | 28,445 | 20,684 | ||
$75,228 | 69,055 | 665,397 |
(26) | Other Gains and Losses |
For the years ended December 31, | |||||
2015 | 2014 | 2013 (Unaudited) | |||
Gain from loss of control of subsidiary | $ | 15,045 | - | - | |
Foreign exchange gains, net | 52,913 | 166,781 | 121,180 | ||
Loss on valuation of financial assets (liabilities), net | (55,861) | (128,181) | (43,540) | ||
Gain (Loss) from disposals of property, plant and equipment | 167,090 | (3,389) | 622 | ||
Others | (4,475) | (20,623) | (13,201) | ||
$174,712 | 14,588 | 65,061 |
(27) | Finance Costs |
For the years ended December 31, | |||||
2015 | 2014 | 2013 (Unaudited) | |||
Interest expense | $ | 87,214 | 134,466 | 170,046 | |
Less: Capitalization of interest | - | (2,078) | (4,239) | ||
$87,214 | 132,388 | 165,807 |
(28) | Income Taxes |
(a) | The components of income tax expense (benefit) for the years ended December 31, 2015, 2014 and 2013 were as follows: |
For the years ended December 31, | |||
2015 | 2014 | 2013 (Unaudited) | |
Current tax expense (benefit) | $(11,012) | 38,584 | 204,884 |
Deferred tax expense (benefit) | 11,917 | 53,858 | (709) |
Income tax expense | $905 | 92,442 | 204,175 |
(b) | For the years ended December 31, 2015, 2014 and 2013, there were no income tax recognized in other comprehensive income. |
(c) | Reconciliation of the expected income tax expenses calculated based on the ROC statutory income tax rate compared with the actual income tax expenses as reported in the consolidated statements of comprehensive income for the years ended December 31, 2015, 2014 and 2013, was as follows: |
For the years ended December 31, | ||||||||||||||
2015 | 2014 | 2013 (Unaudited) | ||||||||||||
Rate | Amount | Rate | Amount | Rate | Amount | |||||||||
Profit before income taxes | $304,398 | $739,407 | $ | 1,084,896 | ||||||||||
Expected income tax expenses | 17.00 | % | 51,748 | 17.00 | % | 125,699 | 17.00 | % | 184,432 | |||||
Effect of different subsidiaries income tax rate | 35.91 | % | 109,314 | 4.70 | % | 34,722 | (1.290 | )% | (14,034) | |||||
Utilization of previously unrecognized tax loss carryforwards | (7.910 | )% | (24,082) | - | - | - | - | |||||||
Utilization of previously unrecognized investment tax credits | (12.380 | )% | (37,689) | (5.860 | )% | (43,369) | (5.250 | )% | (57,000) | |||||
Nondeductible expenses | 1.21 | % | 3,668 | 1.60 | % | 11,851 | 0.84 | % | 9,143 | |||||
Recognition of previously unrecognized deferred taxes assets associated with investment in subsidiaries | (18.350 | )% | (55,848) | - | - | - | - | |||||||
Tax-exempt income | (6.580 | )% | (20,036) | - | - | - | - | |||||||
Tax on undistributed retained earnings | 8.13 | % | 24,767 | 7.91 | % | 58,512 | 8.28 | % | 89,814 | |||||
Adjustment of surtax upon stockholders’ approval of distributions | (19.220 | )% | (58,512) | (12.150 | )% | (89,814) | (2.090 | )% | (22,726) | |||||
Adjustments to prior years | 4.90 | % | 14,906 | - | - | - | - | |||||||
Others | (2.410 | )% | (7,331) | (0.700 | )% | (5,159) | 1.34 | % | 14,546 | |||||
Income tax expenses | $905 | 92,442 | 204,175 | |||||||||||
Effective tax rate | 0.30 | % | 12.50 | % | 18.82 | % |
(d) | The components of deferred tax assets and liabilities were as follows: |
Deferred tax assets | Deferred tax liabilities | Total | ||||||||
December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||
Inventories | $ | 57,004 | 49,271 | - | - | 57,004 | 49,271 | |||
Foreign investment losses (gains) under the equity method | 111,146 | 129,968 | (122,745) | (122,745) | (11,599) | 7,223 | ||||
Investment tax credits | - | 5,525 | - | - | - | 5,525 | ||||
Government grant | 36,794 | 37,866 | - | - | 36,794 | 37,866 | ||||
Land value increment provision | - | - | - | (17,985) | - | (17,985) | ||||
Others | 38,275 | 32,738 | (1,428) | (1,428) | 36,847 | 31,310 | ||||
$243,219 | 255,368 | (124,173) | (142,158) | 119,046 | 113,210 |
(e) | Changes in deferred tax assets and liabilities were as follows: |
January 1, 2014 | Recognized in profit or loss | Effect of exchange rate and others | December 31, 2014 | Recognized in profit or loss | Effect of exchange rate and others | December 31, 2015 | |||||||||
Investment tax credits | $ | 42,555 | (37,030) | - | 5,525 | (5,525) | - | - | |||||||
Inventories | 56,782 | (7,511) | - | 49,271 | 7,733 | - | 57,004 | ||||||||
Foreign investment losses (gains) under the equity method | 31,687 | (24,464) | - | 7,223 | (18,822) | - | (11,599) | ||||||||
Government grant | 35,969 | 650 | 1,247 | 37,866 | (840) | (232) | 36,794 | ||||||||
Land value increment provision | (17,985) | - | - | (17,985) | - | 17,985 | - | ||||||||
Others | 16,813 | 14,497 | - | 31,310 | 5,537 | - | 36,847 | ||||||||
$ | 165,821 | (53,858 | ) | 1,247 | 113,210 | (11,917 | ) | 17,753 | 119,046 |
(f) | Unrecognized deferred tax assets |
December 31, 2015 | December 31, 2014 | |
Unused investment tax credits | $ - | 233,195 |
Unused tax losses carryforwards | 490,408 | 475,797 |
$490,408 | 708,992 |
Unused tax losses carryforwards | |
Expiration at the year: | |
2016 | 9,193 |
2017 | 17,564 |
2018 | 2,696 |
2019 | 354 |
2022 | 6,128 |
2023 | 216 |
2024 | 904 |
2025 | 23,321 |
No expiration | 448,582 |
508,958 |
(g) | Unrecognized deferred tax liabilities |
(h) | Assessments by the tax authorities |
(i) | The integrated income tax system |
(29) | Earnings per share |
(a) | Basic earnings per share for the years ended December 31, 2015, 2014 and 2013 were calculated as follows: |
For the years ended December 31, | |||
2015 | 2014 | 2013 (Unaudited) | |
Profit attributable to Lextar’s stockholders | $308,934 | 661,163 | 912,475 |
Weighted-average number of common shares outstanding during the year: (in thousands) | |||
Issued common shares at beginning of year | 622,830 | 523,401 | 430,472 |
Effect of issuance of shares due to merger | 77,758 | ||
Effect of retirement of treasury stock due to merger | (13,262) | ||
Effect of retirement of treasury stock | (8,098) | - | |
Effect of conversion of convertible bonds payable | 23 | 4,231 | 17,545 |
Effect of issuance of employee stock options | 340 | 1,082 | 350 |
Effect of issuance of restricted shares | (273) | 1,036 | |
Effect of capital increase by cash | - | 7,050 | - |
Weighted-average number of common shares (basic) | 614,822 | 536,800 | 512,863 |
Basic earnings per share (NT$) | $0.50 | 1.23 | 1.78 |
(b) | Diluted earnings per share for the years ended December 31, 2015, 2014 and 2013 was calculated as follows: |
For the years ended December 31, | |||||
2015 | 2014 | 2013 (Unaudited) | |||
Profit attributable to Lextar’s shareholders (basic) | $ | 308,934 | 661,163 | 912,475 | |
The interest of convertible bonds payable | 419 | 35,766 | 4,831 | ||
Profit attributable to Lextar’s stockholders (diluted) | $ 309,353 | 696,929 | 917,306 | ||
Weighted-average number of common shares outstanding during the year (including the effect of dilutive potential common stock): (in thousands) | |||||
Weighted-average number of common shares (basic) | 614,822 | 536,800 | 512,863 | ||
Effect of convertible bonds payable | 997 | 61,752 | 10,306 | ||
Effect of employee stock bonus | 3,784 | 4,745 | 4,781 | ||
Effect of restricted shares | 4,272 | 4,601 | 1,102 | ||
Effect of issuance of employee stock options | 169 | 413 | 1,225 | ||
Weighted-average number of common shares (diluted) | 624,044 | 608,311 | 530,277 | ||
Diluted earnings per share (NT$) | $0.50 | 1.15 | 1.73 |
(30) | Financial Instruments |
(a) | Fair value and carrying amount |
December 31, 2015 | December 31, 2014 | |||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |
Financial assets: | ||||
Available-for-sale financial assets-noncurrent | 16,921 | 16,921 | 219,552 | 219,552 |
Foreign currency forward contracts | 1,875 | 1,875 | 206 | 206 |
Refundable deposits | 17,800 | 17,800 | 23,800 | 23,800 |
Financial liabilities: | ||||
Long-term borrowings (including current installments) | 1,798,750 | 1,808,628 | 1,800,000 | 1,811,732 |
Convertible bonds payable | 1,886,125 | 1,943,468 | 1,842,643 | 1,906,989 |
Redemption rights of convertible bonds payable | 29,173 | 29,173 | 15,185 | 15,185 |
Foreign currency forward and swap contracts | 20,853 | 20,853 | 70,990 | 70,990 |
(b) | Valuation techniques and assumptions applied in fair value measurement |
(c) | Fair value measurements recognized in the consolidated statements of financial position |
(i) | Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active markets accessible to the entity at the measurement date. |
(ii) | Level 2 inputs: Other than quoted prices included in Level 1, inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. |
(iii) | Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. |
Level 1 | Level 2 | Level 3 | Total | |
December 31, 2015 | ||||
Assets: | ||||
Financial assets measured at fair value through profit or loss | $ - | - | 1,875 | 1,875 |
Available-for-sale financial assets | 106,722 | - | - | 106,722 |
Liabilities: | ||||
Financial liabilities measured at fair value through profit or loss | - | - | (50,026) | (50,026) |
December 31, 2014 | ||||
Assets: | ||||
Financial assets measured at fair value through profit or loss | $ - | - | 240 | 240 |
Available-for-sale financial assets | 219,552 | - | - | 219,552 |
Liabilities: | ||||
Financial liabilities measured at fair value through profit or loss | - | - | (86,175) | (86,175) |
(d) | Reconciliation for recurring fair value measurements categorized within Level 3 |
Forward Exchange | Convertible Bonds | Available-for- Sale financial Assets | ||||||
Balance at January 1, 2013 (Unaudited) | $ | (3,745 | ) | (4,625) | - | |||
Net realized/unrealized gains included in: | ||||||||
Profit or loss (Unaudited) | (44,950) | 3,466 | - | |||||
Purchases (Unaudited) | 25,089 | 1,493 | - | |||||
Disposals (Unaudited) | - | - | - | |||||
Balance at December 31, 2013 (Unaudited) | (23,606 | ) | 334 | - | ||||
Net realized/unrealized gains included in: | ||||||||
Profit or loss | (133,623) | 5,442 | - | |||||
Purchases | 86,445 | - | 74,022 | |||||
Redemption | - | (20,927 | ) | - | ||||
Balance at December 31, 2014 | (70,784 | ) | (15,151 | ) | 74,022 | |||
Net realized/unrealized gains included in: | ||||||||
Profit or loss | (41,904) | (14,022) | - | |||||
Purchases | 93,710 | - | - | |||||
Redemption | - | - | (74,022 | ) | ||||
Balance at December 31, 2015 | $ | (18,978 | ) | (29,173 | ) | - |
(e) | Description of valuation processes for fair value measurements categorized within Level 3 |
(31) | Financial Risk Management |
(a) | Risk management framework |
(b) | Financial risk information |
(i) | Credit risk |
(ii) | Liquidity risk |
Contractual cash flows | 1/1/2016 | 1/1/2017 | 2019 and~ thereafter | ||||||
December 31, 2015 | |||||||||
Non-derivative financial liabilities: | |||||||||
Short-term and long-term borrowings (including convertible bonds payable) | $ | 3,852,839 | 876,568 | 978,271 | 1,998,000 | ||||
Accounts payable | 3,315,209 | 3,315,209 | - | - | |||||
Accrued expense & other current liabilities | 986,757 | 986,757 | - | - | |||||
Derivative financial liabilities | |||||||||
Outflow | 3,358,137 | 3,358,137 | - | - | |||||
Inflow | (3,339,159 | ) | (3,339,159 | ) | - | - | |||
$ | 8,173,783 | 5,197,512 | 978,271 | 1,998,000 | |||||
December 31, 2014 | |||||||||
Non-derivative financial liabilities: | |||||||||
Short-term and long-term borrowings (including convertible bonds payable) | $ | 4,825,545 | 971,512 | 877,447 | 2,976,586 | ||||
Accounts payable | 3,167,083 | 3,167,083 | - | - | |||||
Accrued expense & other current liabilities | 1,293,924 | 1,293,924 | - | - | |||||
Derivative financial liabilities | |||||||||
Outflow | 2,116,675 | 2,116,675 | - | - | |||||
Inflow | (2,045,891 | ) | (2,045,891 | ) | - | - | |||
$ | 9,357,336 | 5,503,303 | 877,447 | 2,976,586 |
(iii) | Market risk |
A. | Currency risk |
a. | The Company’s significant exposure to foreign currency risk was as follows: |
Foreign currency amounts | Exchange rate | NTD | |
December 31, 2015 | |||
Financial assets | |||
Monetary items | |||
USD | 160,573 | 33.05 | 5,306,939 |
EUR | 1,684 | 36.12 | 60,831 |
CNY | 9 | 5.0896 | 44 |
Non-monetary items | |||
Forward Exchange Agreement | |||
& Exchange rate SWAP | |||
USD | 53 | 33.05 | 1,760 |
JPY | 419 | 0.2743 | 115 |
Financial liabilities | |||
Monetary items | |||
USD | 67,299 | 33.05 | 2,224,230 |
JPY | 281,453 | 0.2743 | 77,204 |
Non-monetary items | |||
Forward Exchange Agreement | |||
& Exchange rate SWAP | |||
USD | 615 | 33.05 | 20,340 |
EUR | 14 | 36.12 | 513 |
December 31, 2014 |
Foreign currency amounts | Exchange rate | NTD | |
Financial assets | |||
Monetary items | |||
USD | 186,152 | 31.766 | 5,913,318 |
CNY | 319 | 5.1223 | 1,633 |
Non-monetary items | |||
Forward Exchange Agreement | |||
& Exchange rate SWAP | |||
USD | 6 | 31.766 | 206 |
Financial liabilities | |||
Monetary items | |||
USD | 107,261 | 31.766 | 3,407,253 |
JPY | 508,305 | 0.2659 | 135,159 |
CNY | 19 | 5.1223 | 96 |
Non-monetary items | |||
Forward Exchange Agreement | |||
& Exchange rate SWAP | |||
USD | 2,203 | 31.766 | 69,980 |
JPY | 3,798 | 0.2659 | 1,010 |
b. | Sensitivity analysis |
For the years ended December 31, | ||||
2015 | 2014 | |||
1% of depreciation | $ | 30,664 | 23,724 | |
1% of appreciation | (30,664) | (23,724) |
B. | Interest rate risk |
C. | Equity price risk |
(32) | Capital management |
December 31, 2015 | December 31, 2014 | ||||
Total liabilities | $ | 8,417,122 | 9,453,729 | ||
Total liabilities and equity | 22,393,838 | 24,290,276 | |||
Debt-to-equity ratio | 38 | % | 39 | % |
(33) | Investing and financing activities not affecting current cash flow |
(a) | For conversion of convertible bonds to common stocks, please refer to note 17. |
(b) | For retirement of treasury stock, please refer to note 21. |
(c) | For issuance of restricted stocks to employees, please refer to note 22. |
(34) | Related-party transactions |
(a) | Compensation to executive officers |
For the years ended December 31, | |||||
2015 | 2014 | 2013 (Unaudited) | |||
Short-term employee benefits | $ | 39,755 | 43,547 | 50,635 | |
Post-employment benefits | 316 | 324 | 301 | ||
Termination benefits | - | - | - | ||
Employee bonuses | 2,229 | 5,408 | 4,518 | ||
Share-based payments | 17,375 | 30,834 | 14,560 | ||
$59,675 | 80,113 | 70,014 |
(b) | Except as disclosed in the consolidated financial statements and other notes, the significant related party transactions were as follows: |
1. | Sales |
Sales | Accounts receivable from related parties | ||||||
For the years ended December 31, | December 31, | ||||||
2015 | 2014 | 2013 (Unaudited) | 2015 | 2014 | |||
Entities with significant influence over the Company | $ | 3,325,018 | 2,699,452 | 2,358,812 | 1,194,187 | 1,528,981 | |
Associates | 9,297 | 26,375 | 8,054 | - | 11,647 | ||
Other related parties | - | - | 6,616 | - | - | ||
$3,334,315 | 2,725,827 | 2,373,482 | 1,194,187 | 1,540,628 |
2. | Purchases |
Purchases | Accounts payable to related parties | ||||||||
For the years ended December 31, | December 31, | ||||||||
2015 | 2014 | 2013 (Unaudited) | 2015 | 2014 | |||||
Entities with significant influence over the Company | $ | 34,838 | 25,254 | 5,451 | 15,861 | 4,914 | |||
Associates | 178 | 6,433 | 7,052 | - | - | ||||
Other related parties | 34,858 | - | 399,697 | 13,983 | - | ||||
$ | 69,874 | 31,687 | 412,200 | 29,844 | 4,914 |
3. | Acquisition and disposal of property, plant and equipment and others |
For the years ended December 31, | |||
2015 | 2014 | 2013 (Unaudited) | |
Entities with significant influence over the Company | $ - | 31,778 | 45,989 |
December 31, 2015 | December 31, 2014 | |
Entities with significant influence over the Company | $32 | 41,072 |
(35) | Pledged assets |
Pledged assets | Object | December 31, 2015 | December 31, 2014 | |||
Machinery and equipment | Long-term borrowings | $ - | 1,475,269 | |||
Other financial assets (classified under other non-current financial assets) | Guarantee for land lease and collateral for provisional attachment | 17,800 | 23,800 | |||
$ | 17,800 | 1,499,069 |
(36) | Commitments and contingencies |
(a) | The aggregated unpaid amounts of contracts pertaining to the purchase of equipment were as follows: |
December 31, 2015 | December 31, 2014 | |||||
Acquisition of equipment | NTD | $ | 695,034 | 625,693 |
(b) | The amount of guarantee notes issued of credit as collateral for the bank loans were as follows: |
December 31, 2015 | December 31, 2014 | |||||
Guarantee notes issued | USD | $ | 47,700 | 181,500 | ||
Guarantee notes issued | NTD | $ | 4,300,000 | 4,700,000 |
(c) | As of December 31, 2014, the Company provided endorsement guarantee for operation and bank loans amounting to USD73,000 thousand, respectively. |
(d) | Guarantee notes issued for customs were as follows: |
December 31, 2015 | December 31, 2014 | |||
Guarantees for customs | CNY | $ - | 13,500 |
(e) | The Company entered into patent license agreements with Toyoda Gosei Co., Ltd. According to the agreements, the Company shall pay a certain amount of royalty based on the sales. |
(f) | The Company disagreed with the pursuit of assessment on the income tax returns in 2010 and 2011, and requested for a reexamination. The tax effect of the reexamination is $5,065 thousand. Please refer to note 28. |
(g) | The Company entered into supply agreements and patent license agreements with Cree Inc. According to the agreements, the Company shall keep a sufficient supply of capacity, and shall pay a certain amount of royalty based on the sales of products authorized. |
(37) | Geographic and Other Revenue Information |
(a) | Geographic information |
1. | Net revenue |
For the years ended December 31, | |||||
2015 | 2014 | 2013 (Unaudited) | |||
China | $ | 9,205,015 | 10,297,028 | 9,771,881 | |
Malaysia | 1,558,374 | 1,607,875 | 1,261,028 | ||
Japan | 1,069,946 | 957,634 | 601,680 | ||
America | 623,897 | 49,201 | 89,449 | ||
Taiwan | 427,222 | 610,255 | 946,270 | ||
Others | 1,346,080 | 995,144 | 1,081,358 | ||
$14,230,534 | 14,517,137 | 13,751,666 |
2. | Consolidated noncurrent assets |
December 31, 2015 | December 31, 2014 | ||||
Taiwan | $ | 4,945,595 | 6,632,337 | ||
PRC | 3,194,000 | 3,168,046 | |||
$ | 8,139,596 | 9,800,383 |
(i) | Noncurrent assets are not inclusive of financial instruments, deferred tax, and pension-related assets. |
For the years ended December 31 | |||||||||
2015 | % | 2014 | % | 2013 (Unaudited) | % | ||||
AU Optronics Corp and its subsidiaries | $ | 2,731,407 | 19 | 3,718,585 | 26 | 2,358,812 | 17 | ||
OSRAM Company | 1,981,016 | 14 | 2,252,989 | 15 | 2,261,493 | 17 | |||
$4,712,423 | 33 | 5,971,574 | 41 | 4,620,305 | 34 |
(38) | Subsequent events |
(a) | During the time from January to June in 2016, the Company bought back 20,000 thousand shares as treasury stock, with the average price of $16 per share, amounting to $319,989 thousand. |
(b) | On April 19, 2016, the board of directors of the Company approved a resolution to allow the Company to issue 50,000 thousand new shares for restricted employee stock options without charge. The resolution has already been approved in the shareholders’ meeting on June 3, 2016, but has yet to be submitted to the authority. Please refer to the Market Observation Post System for related information. |
(c) | The Company entered into a syndicated loan amounting to $3 billion with 7 banks in July 2016. The syndicated loan is led by Bank of Taiwan. As of the report date, the credit line of the syndicated loan has not yet been used. |
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Document and Entity Information - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 26, 2016 |
Dec. 24, 2015 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CREE INC | |
Entity Central Index Key | 0000895419 | |
Current Fiscal Year End Date | --06-26 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-K | |
Document Period End Date | Jun. 26, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 100,850,243 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Public Float | $ 2,821,982,837 |
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands |
Jun. 26, 2016 |
Jun. 28, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 3,000 | 3,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.00125 | $ 0.00125 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 100,829 | 105,507 |
Common stock, shares outstanding | 100,829 | 105,507 |
Consolidated Statements of (Loss) Income - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Income Statement [Abstract] | |||
Revenue, net | $ 1,616,627 | $ 1,632,505 | $ 1,647,641 |
Cost of revenue, net | 1,129,553 | 1,158,586 | 1,029,885 |
Gross profit | 487,074 | 473,919 | 617,756 |
Operating expenses: | |||
Research and development | 168,848 | 182,797 | 181,382 |
Sales, general and administrative | 283,052 | 290,730 | 268,460 |
Amortization or impairment of acquisition-related intangibles | 28,732 | 26,220 | 31,988 |
Loss on disposal or impairment of long-lived assets | 16,913 | 47,722 | 2,690 |
Total operating expenses | 497,545 | 547,469 | 484,520 |
Operating (loss) income | (10,471) | (73,550) | 133,236 |
Non-operating (expense) income, net | (13,035) | (10,389) | 13,295 |
(Loss) income before income taxes | (23,506) | (83,939) | 146,531 |
Income tax (benefit) expense | (1,970) | (19,247) | 23,041 |
Net (loss) income | $ (21,536) | $ (64,692) | $ 123,490 |
(Loss) earnings per share: | |||
Basic | $ (0.21) | $ (0.57) | $ 1.02 |
Diluted | $ (0.21) | $ 0 | $ 1.00 |
Weighted average shares used in per share calculation: | |||
Basic | 101,783 | 113,022 | 120,623 |
Diluted | 101,783 | 113,022 | 122,914 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (21,536) | $ (64,692) | $ 123,490 |
Currency translation (loss) gain, net of tax benefit of $0, $0 and $0, respectively | (362) | (3,563) | 57 |
Net unrealized gain (loss) on available-for-sale securities, net of tax (expense) benefit of ($1,936), $1,284, and ($1,946), respectively | 3,292 | (2,044) | 3,104 |
Other comprehensive income (loss) | 2,930 | (5,607) | 3,161 |
Comprehensive (loss) income | $ (18,606) | $ (70,299) | $ 126,651 |
Consolidated Statements of Comprehensive Income Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Statement of Comprehensive Income [Abstract] | |||
Tax benefit on currency translation gain (loss) | $ 0 | $ 0 | $ 0 |
Tax (expense) benefit on net unrealized gain (loss) on available-for-sale securities | $ (1,936) | $ 1,284 | $ (1,946) |
Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Statement of Stockholders' Equity [Abstract] | |||
Tax benefit on currency translation gain (loss) | $ 0 | $ 0 | $ 0 |
Tax (expense) benefit on net unrealized gain (loss) on available-for-sale securities | $ (1,936) | $ 1,284 | $ (1,946) |
Business |
12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2016 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Business | Business Cree, Inc. (the Company) is a leading innovator of lighting-class light emitting diode (LED) products, lighting products and wide bandgap semiconductor products for power and radio-frequency (RF) applications. The Company's products are targeted for applications such as indoor and outdoor lighting, video displays, transportation, electronic signs and signals, power supplies, inverters and wireless systems. The Company's lighting products primarily consist of LED lighting systems and bulbs. The Company designs, manufactures and sells lighting fixtures and lamps for the commercial, industrial and consumer markets. The Company's LED products consist of LED components, LED chips and silicon carbide (SiC) materials. The Company's success in selling LED products depends upon its ability to offer innovative products and to enable its customers to develop and market LED-based products that successfully compete against other LED-based products and drive LED adoption against traditional lighting products. In addition, the Company develops, manufactures and sells power and RF devices based on wide bandgap semiconductor materials such as SiC and gallium nitride (GaN). The Company's power products are made from SiC and provide increased efficiency, faster switching speeds and reduced system size and weight over comparable silicon-based power devices. The Company's RF devices are made from GaN and provide improved efficiency, bandwidth and frequency of operation as compared to silicon or gallium arsenide (GaAs). As discussed more fully below in Note 19, “Subsequent Event,” on July 13, 2016, the Company executed a definitive agreement to sell its Power and RF Products segment and certain related portions of its SiC materials and gemstones business included within its LED Products segment (the Company refers to the business that it is selling, collectively, as the Wolfspeed business) to Infineon Technologies AG (Infineon). The majority of the Company's products are manufactured at its production facilities located in North Carolina, Wisconsin and China. The Company also uses contract manufacturers for certain products and aspects of product fabrication, assembly and packaging. The Company operates research and development facilities in North Carolina, California, Wisconsin, India, Italy and China (including Hong Kong). Cree, Inc. is a North Carolina corporation established in 1987 and is headquartered in Durham, North Carolina. The Company's three reportable segments are:
For financial results by reportable segment, please refer to Note 14, “Reportable Segments.” |
Basis of Presentation and Summary of Significant Accounting Policies |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Changes in Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. Fiscal Year The Company’s fiscal year is a 52 or 53-week period ending on the last Sunday in the month of June. The Company’s 2016, 2015 and 2014 fiscal years were 52-week fiscal years. The Company’s 2017 fiscal year will be a 52-week fiscal year. Reclassifications Certain prior period amounts in the accompanying consolidated financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on previously reported net income or shareholders’ equity. Revision of Prior Period Financial Statements During the third quarter of fiscal 2016, the Company identified errors in its previously reported financial statements in which amortization expense was understated as certain patents were being amortized over a life longer than the life of the underlying patent right. The Company assessed the materiality of these errors on prior periods’ financial statements in accordance with the United States Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 99, Materiality, codified in the Accounting Standards Codification (ASC) 250, Presentation of Financial Statements, and concluded that they were not material individually or in the aggregate to any prior annual or interim periods. However, through the second quarter of fiscal 2016 the aggregate amount of the prior period errors of $6.8 million before income taxes would have been material to our interim Consolidated Statements of Income (Loss) for the third quarter of fiscal 2016. Consequently, in accordance with ASC 250, the Company corrected these errors, and other immaterial errors, for all prior periods presented by revising the consolidated financial statements and other financial information included herein. Periods not presented herein will be revised, as applicable, in future filings. The following table summarizes the effects of the revision on the Consolidated Balance Sheet as of June 28, 2015 (in thousands):
The following table summarizes the effects of the revision on the Consolidated Statements of Income (Loss) (in thousands):
The revision had no net impact on the Company’s net cash provided by operating activities. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. The Company evaluates its estimates on an ongoing basis, including those related to revenue recognition, product warranty obligations, valuation of inventories, tax related contingencies, valuation of stock-based compensation, valuation of long-lived and intangible assets, other contingencies and litigation, among others. The Company generally bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates. Segment Information U.S. GAAP requires segmentation based on an entity’s internal organization and reporting of revenue and operating income based upon internal accounting methods commonly referred to as the “management approach.” Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it currently has three operating and reportable segments. Cash and Cash Equivalents Cash and cash equivalents consist of unrestricted cash accounts and highly liquid investments with an original maturity of three months or less when purchased. Cash and cash equivalents are stated at cost, which approximates fair value. The Company holds cash and cash equivalents at several major financial institutions, which often exceed insurance limits set by the Federal Deposit Insurance Corporation (FDIC). The Company has not historically experienced any losses due to such concentration of credit risk. Investments Investments in certain securities may be classified into three categories:
The Company reassesses the appropriateness of the classification (i.e. held-to-maturity, trading or available-for-sale) of its investments at the end of each reporting period. When the fair value of an investment declines below its original cost, the Company considers all available evidence to evaluate whether the decline is other-than-temporary. Among other things, the Company considers the duration and extent of the decline and economic factors influencing the capital markets. For the fiscal years ended June 26, 2016, June 28, 2015, and June 29, 2014, the Company had no other-than-temporary declines below the cost basis of its investments. The Company utilizes specific identification in computing realized gains and losses on the sale of investments. Realized gains and losses on the sale of investments are reported in other income and expense. Investments in marketable securities with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Other long-term investments consist of the Company's approximately 14% common stock ownership interest in Lextar Electronics Corporation (Lextar), which the Company acquired in December 2014. This investment was accounted for under the equity method from the date of investment until June 2016 when the Company chose not to stand for re-election as a member of the Lextar board of directors. The Company utilizes the fair value option in accounting for its investment in Lextar. The Company has determined that for its fiscal years ended June 26, 2016 and June 28, 2015, Lextar has met the conditions of a significant subsidiary under Rule 1-02(w) of Regulation S-X for which the Company is required, pursuant to Rule 3-09 of Regulation S-X, to file separate financial statements as an exhibit to its Annual Report on Form 10-K. As such, separate financial statements for Lextar, prepared by Lextar and audited by its independent public accounting firm, are filed as Exhibit 99.1 to the Company's Annual Report. Inventories Inventories are stated at lower of cost or market, with cost determined on a first-in, first-out (FIFO) method or an average cost method; and with market not to exceed net realizable value. The Company writes down its inventory balances for estimates of excess and obsolete amounts. These write-downs are recognized as a component of cost of revenue. At the point of the write-down, a new lower-cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established lower-cost basis. The Company recognized charges for write-downs in inventories of $3.6 million, $15.2 million and $5.2 million, for fiscal 2016, 2015 and 2014, respectively. Property and Equipment Property and equipment are stated at cost and depreciated on a straight-line basis over the assets’ estimated useful lives. Leasehold improvements are amortized over the lesser of the asset life or the life of the related lease. In general, the Company’s policy for useful lives is as follows:
Expenditures for repairs and maintenance are charged to expense as incurred. The costs for major renewals and improvements are capitalized and depreciated over their estimated useful lives. The cost and related accumulated depreciation of the assets are removed from the accounts upon disposition and any resulting gain or loss is reflected in operating income. Shipping and Handling Costs Shipping and handling costs are included in Cost of revenue, net in the Consolidated Statements of (Loss) Income and are recognized as a period expense during the period in which they are incurred. Goodwill and Intangible Assets The Company recognizes the assets acquired and liabilities assumed in business combinations at their respective fair values at the date of acquisition, with any excess purchase price recognized as goodwill. Valuation of intangible assets entails significant estimates and assumptions including, but not limited to, estimating future cash flows from product revenue, developing appropriate discount rates, continuation of customer relationships and renewal of customer contracts, and approximating the useful lives of the intangible assets acquired. Goodwill The Company recognizes goodwill as an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company tests goodwill for impairment at least annually as of the first day of the fiscal fourth quarter, or when indications of potential impairment exist. The Company monitors for the existence of potential impairment indicators throughout the fiscal year. The Company conducts impairment testing for goodwill at the reporting unit level. Reporting units may be operating segments as a whole or an operation one level below an operating segment, referred to as a component. The Company has determined that its reporting units are its three operating and reportable segments. The Company may initiate goodwill impairment testing by considering qualitative factors to determine whether it is more likely than not that a reporting unit’s carrying value is greater than its fair value. Such factors may include the following, among others: a significant decline in the reporting unit’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates; as well as changes in management, key personnel, strategy and customers. If the Company’s qualitative assessment indicates that goodwill impairment is more likely than not, the Company performs the two-step goodwill impairment test. Alternatively, the Company may bypass the qualitative test and initiate goodwill impairment testing with the first step of the two-step goodwill impairment test. During the first step of the goodwill impairment test, the Company compares the fair value of the reporting unit to its carrying value, including goodwill. The Company derives a reporting unit’s fair value through a combination of the market approach (a guideline transaction method) and the income approach (a discounted cash flow analysis). The income approach utilizes a discount rate from the capital asset pricing model. If all reporting units are analyzed during the first step of the goodwill impairment test, their respective fair values are reconciled back to the Company’s consolidated market capitalization. If the fair value of a reporting unit exceeds its carrying value, then the Company concludes that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, the Company performs the second step of the goodwill impairment test to measure possible goodwill impairment loss. During the second step, the Company hypothetically values the reporting unit’s tangible and intangible assets and liabilities as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying value of its goodwill. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the carrying value of the reporting unit’s goodwill. Once an impairment loss is recognized, the adjusted carrying value of the goodwill becomes the new accounting basis of the goodwill for the reporting unit. Indefinite-Lived Intangible Assets The Company’s indefinite-lived intangible assets are tested for impairment at least annually in the fiscal fourth quarter or when indications of potential impairment exist. The Company monitors for the existence of potential impairment indicators throughout the fiscal year. The Company’s impairment test may begin with a qualitative test to determine whether it is more likely than not that an indefinite-lived intangible asset’s carrying value is greater than its fair value. In performing this test, the Company may consider the following qualitative factors, among others: a significant decline in expected future cash flows; changes in industry and market conditions such as the deterioration in the environment in which the Company operates or an increased competitive environment; changes in management, key personnel, strategy, or customers; as well as other economic factors. If the Company’s qualitative assessment indicates that asset impairment is more likely than not, the Company performs a quantitative impairment test by comparing the fair value of the indefinite-lived intangible asset to its carrying value. Alternatively, the Company may bypass the qualitative test and initiate impairment testing with the quantitative impairment test. Determining the fair value of indefinite-lived intangible assets entails significant estimates and assumptions including, but not limited to, determining the timing and expected costs to complete development projects, estimating future cash flows from product revenue, developing appropriate discount rates, estimating probability rates for the successful completion of development projects, continuation of customer relationships and renewal of customer contracts, and approximating the useful lives of the intangible assets acquired. If the fair value of the indefinite-lived intangible asset exceeds its carrying value, then the Company concludes that no impairment has occurred. If the carrying value of the indefinite-lived intangible asset exceeds its fair value, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the carrying value. Once an impairment loss is recognized, the adjusted carrying value becomes the new accounting basis of the indefinite-lived intangible asset. Finite-Lived Intangible Assets U.S. GAAP requires that intangible assets, other than goodwill and indefinite-lived intangibles, must be amortized over their useful lives. The Company is currently amortizing its acquired intangible assets with finite lives over periods ranging from one to 20 years. Patent rights reflect costs incurred by the Company in applying for and maintaining patents owned by the Company and costs incurred in purchasing patents and related rights from third parties. Licensing rights reflect costs incurred by the Company in acquiring licenses under patents owned by others. The Company amortizes both on a straight-line basis over the expected useful life of the associated patent rights, which is generally the lesser of 20 years from the date of the patent application or the license period. Royalties payable under licenses for patents owned by others are generally expensed as incurred. The Company reviews its capitalized patent portfolio and recognizes impairment charges when circumstances warrant, such as when patents have been abandoned or are no longer being pursued. Long-Lived Assets The Company reviews long-lived assets such as property and equipment for impairment based on changes in circumstances that indicate their carrying amounts may not be recoverable. In making these determinations, the Company uses certain assumptions, including but not limited to: (1) estimations of the fair market value of the assets and (2) estimations of future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, length of service the asset will be used in the Company’s operations and estimated salvage values. Contingent Liabilities The Company recognizes contingent liabilities when it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Disclosure in the notes to the financial statements is required for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a loss may have been incurred. See Note 13, “Commitments and Contingencies,” for a discussion of loss contingencies in connection with pending and threatened litigation. The Company expenses as incurred the costs of defending legal claims against the Company. Revenue Recognition The Company recognizes product revenue when the earnings process is complete, as evidenced by persuasive evidence of an arrangement (typically in the form of a purchase order), when the sales price is fixed or determinable, collection of revenue is reasonably assured, and title and risk of loss have passed to the customer. The Company provides its customers with limited rights of return for non-conforming shipments and product warranty claims. The Company estimates an allowance for anticipated sales returns based upon an analysis of historical sales returns and other relevant data. The Company recognizes an allowance for non-conforming returns at the time of sale as a reduction of product revenue and as a reduction to the related accounts receivable balance. The Company recognizes a liability for product warranty claims at the time of sale as an increase to cost of revenue. A substantial portion of the Company’s products are sold through distributors. Distributors stock inventory and sell the Company’s products to their own customer base, which may include: value added resellers; manufacturers who incorporate the Company’s products into their own manufactured goods; or ultimate end users of the Company’s products. The Company recognizes revenue upon shipment of its products to its distributors. This arrangement is often referred to as a “sell-in” or “point-of-purchase” model as opposed to a “sell-through” or “point-of-sale” model, where revenue is deferred and not recognized until the distributor sells the product through to their customer. Certain of the Company’s distributors are provided limited rights that allow them to return a portion of inventory (product exchange rights or stock rotation rights) and receive credits for changes in selling prices (price protection rights) or customer pricing arrangements under the Company’s “ship and debit” program or other targeted sales incentives. These estimates are calculated based upon historical experience, product shipment analysis, current economic conditions, on-hand inventory at the distributor, and customer contractual arrangements. The Company believes that it can reasonably and reliably estimate the allowance for distributor credits at the time of sale. Accordingly, estimates for these rights are recognized at the time of sale as a reduction of product revenue and as a reduction to the related accounts receivable balance. From time to time, the Company will issue a new price book for its products, and provide a credit to certain distributors for inventory quantities on hand if required by the Company’s agreement with the distributor. This practice is known as price protection. These credits are applied against the reserve that the Company establishes upon initial shipment of product to the distributor. Under the ship and debit program, products are sold to distributors at negotiated prices and the distributors are required to pay for the products purchased within the Company’s standard commercial terms. Subsequent to the initial product purchase, a distributor may request a price allowance for a particular part number(s) for certain target customers, prior to the distributor reselling the particular part to that customer. If the Company approves an allowance and the distributor resells the product to the target customer, the Company credits the distributor according to the allowance the Company approved. These credits are applied against the reserve that the Company establishes upon initial shipment of product to the distributor. In addition, the Company runs sales incentive programs with certain distributors and retailers, such as product rebates and cooperative advertising campaigns. The Company recognizes these incentives at the time they are offered to customers and records a credit to their account with an offsetting expense as either a reduction to revenue, increase to cost of revenue, or marketing expense depending on the type of sales incentive. From time to time, the Company may enter into licensing arrangements related to its intellectual property. Revenue from licensing arrangements is recognized when earned and estimable. The timing of revenue recognition is dependent on the terms of each license agreement. Generally, the Company will recognize non-refundable upfront licensing fees related to patent licenses immediately upon receipt of the funds if the Company has no significant future obligations to perform under the arrangement. However, the Company will defer recognition for licensing fees where the Company has significant future performance requirements, the fee is not fixed (such as royalties earned as a percentage of future revenue), or the fees are otherwise contingent. Accounts Receivable For product revenue, the Company typically invoices its customers at the time of shipment for the sales order value of products shipped. Accounts receivable are recognized at the invoiced amount and are not subject to any interest or finance charges. The Company does not have any off-balance sheet credit exposure related to any of its customers. Allowance for Doubtful Accounts The Company evaluates the collectability of accounts receivable based on a combination of factors. In cases where the Company becomes aware of circumstances that may impair a specific customer’s ability to meet its financial obligations subsequent to the original sale, the Company will recognize an allowance against amounts due, and thereby reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes an allowance for doubtful accounts based on the length of time the receivables are past due and consideration of other factors such as industry conditions, the current business environment and the Company’s historical experience. Advertising The Company expenses the costs of producing advertisements at the time production occurs and expenses the cost of communicating the advertising in the period in which the advertising is used. Advertising costs are included in Sales, general and administrative expenses in the Consolidated Statements of (Loss) Income and amounted to approximately $12.6 million, $25.6 million, and $26.6 million for the years ended June 26, 2016, June 28, 2015 and June 29, 2014, respectively. Research and Development Research and development activities are expensed when incurred. (Loss) Earnings Per Share Basic (loss) earnings per share is computed by dividing net (loss) income by the weighted average number of shares of common stock outstanding for the applicable period. Diluted (loss) earnings per share is determined in the same manner as basic (loss) earnings per share except that the number of shares is increased to assume exercise of potentially dilutive stock options, nonvested restricted stock and contingently issuable shares using the treasury stock method, unless the effect of such increases would be anti-dilutive. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recognized in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares. Stock-Based Compensation The Company recognizes compensation expense for all share-based payments granted based on the fair value of the shares on the date of grant. Compensation expense is then recognized over the award’s vesting period. Fair Value of Financial Instruments Cash and cash equivalents, short-term investments, accounts and interest receivable, accounts payable and other liabilities approximate their fair values at June 26, 2016 and June 28, 2015 due to the short-term nature of these instruments. Taxes Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are recognized for deductible temporary differences, along with net operating loss carryforwards and credit carryforwards, if it is more likely than not that the tax benefits will be realized. To the extent a deferred tax asset cannot be recognized under the preceding criteria, allowances are established. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Taxes payable which are not based on income are accrued ratably over the period to which they apply. For example, payroll taxes are accrued each period end based upon the amount of payroll taxes that are owed as of that date; whereas taxes such as property taxes and franchise taxes are accrued over the fiscal year to which they apply if paid at the end of a period, or they are amortized ratably over the fiscal year if they are paid in advance. Sales Taxes The Company presents sales taxes collected from customers and remitted to governmental authorities on a net basis (i.e. excluded from revenue and expenses). Foreign Currency Translation Foreign currency translation adjustments are recognized in Other comprehensive income (loss) in the Consolidated Statements of Comprehensive (Loss) Income for changes between the foreign subsidiaries’ functional currency and the United States (U.S.) dollar. Foreign currency translation gains and losses are included in the Company’s equity account balance of Accumulated other comprehensive income, net of taxes in the Consolidated Balance Sheets until such time that the subsidiaries are either sold or substantially liquidated. Because the Company and its subsidiaries transact business in currencies other than the U.S. Dollar, the Company will continue to experience varying amounts of foreign currency exchange gains and losses for subsidiaries with U.S. dollar functional currency. Recently Issued Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09: Revenue from Contracts with Customers (Topic 606). The FASB has subsequently issued multiple ASUs which amend and clarify the guidance in Topic 606. The ASU establishes a principles-based approach for accounting for revenue arising from contracts with customers and supersedes existing revenue recognition guidance. The ASU provides that an entity should apply a five-step approach for recognizing revenue, including (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. Also, the entity must provide various disclosures concerning the nature, amount and timing of revenue and cash flows arising from contracts with customers. The effective date will be the first quarter of the Company's fiscal year ending June 30, 2019, using one of two retrospective application methods. The Company is currently analyzing the impact of this new accounting guidance. Income Taxes In November 2015, the FASB issued ASU No. 2015-17: Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The ASU requires entities to present deferred tax assets and deferred tax liabilities as noncurrent in a classified balance sheet. The ASU simplifies the current guidance, which requires entities to separately present deferred tax assets and deferred tax liabilities as current or noncurrent in a classified balance sheet. The ASU is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early application of the ASU is permitted as of the beginning of an interim or annual reporting period and may be applied either prospectively or retrospectively to all periods presented. The Company has adopted the provisions of this ASU prospectively for the interim period ended December 27, 2015 and therefore, prior periods were not retrospectively adjusted. The Company’s adoption of the new accounting guidance did not have a significant impact on its consolidated financial statements. Leases In February 2016, the FASB issued ASU No. 2016-02: Leases (Topic 842). The ASU requires that a lessee recognize in its statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. For income statement purposes, leases are still required to be classified as either operating or finance. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. The effective date will be the first quarter of the Company's fiscal year ending June 28, 2020, using a modified retrospective approach. The Company is currently analyzing the impact of this new pronouncement. Stock Compensation In March 2016, the FASB issued ASU No. 2016-09: Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU simplifies the current stock compensation guidance for tax consequences. The ASU requires an entity to recognize all excess tax benefits and tax deficiencies as income tax expense or benefit in its income statement. The ASU also eliminates the requirement to defer recognition of an excess tax benefit until the benefit is realized through a reduction to taxes payable. For cash flows statement purposes, excess tax benefits should be classified as an operating activity and cash payments made to taxing authorities on the employee’s behalf for withheld shares should be classified as financing activity. The ASU is effective for public companies for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently analyzing the impact of this new pronouncement. |
Acquisition Acquisition |
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Business Combination Disclosure | Acquisition On July 8, 2015, the Company closed on the acquisition of Arkansas Power Electronics International, Inc. (APEI), a global leader in power modules and power electronics applications, pursuant to a merger agreement with APEI and certain shareholders of APEI, whereby the Company acquired all of the outstanding share capital of APEI in exchange for a base purchase price of $13.8 million, subject to certain adjustments. In addition, if certain goals are achieved over the next two years, additional cash payments totaling up to $4.6 million may be made to the former APEI shareholders. Payments totaling $2.8 million were made to the former APEI shareholders in July 2016 based on achievement of the first year goals. The Company expects that the second year goals will also be achieved. In connection with this acquisition, APEI became a wholly owned subsidiary of the Company, renamed Cree Fayetteville, Inc. (Cree Fayetteville). Cree Fayetteville is not considered a significant subsidiary of the Company and its results from operations are reported as part of the Company's Power and RF Products segment. The total purchase price for this acquisition was as follows (in thousands):
The purchase price for this acquisition has been allocated to the assets acquired and liabilities assumed based on their estimated fair values as follows (in thousands):
The identifiable intangible assets acquired as a result of the acquisition will be amortized over their respective estimated useful lives as follows (in thousands, except for years):
(1) In-process research and development (IPR&D) is initially classified as indefinite-lived assets and tested for impairment at least annually or when indications of potential impairment exist. The IPR&D was completed in January 2016 and is classified as Developed technology in Note 7, "Goodwill and Intangible Assets." Goodwill largely consists of expansion of product offerings of power modules and power electronics applications, manufacturing and other synergies of the combined companies, and the value of the assembled workforce. The assets, liabilities and operating results of APEI have been included in the Company's consolidated financial statements from the date of acquisition and are not significant to the Company as a whole. |
Financial Statement Details |
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Jun. 26, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Statement Details [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Statement Details | Financial Statement Details Accounts Receivable, net The following table summarizes the components of accounts receivable, net (in thousands):
The following table summarizes the changes in the Company’s allowance for sales returns, discounts and other incentives (in thousands):
The following table summarizes the changes in the Company’s allowance for bad debts (in thousands):
Inventories The following table summarizes the components of inventories (in thousands):
Property and Equipment, net The following table summarizes the components of property and equipment, net (in thousands):
Depreciation of property and equipment totaled $118.8 million, $136.3 million and $125.3 million for the years ended June 26, 2016, June 28, 2015 and June 29, 2014, respectively. During the years ended June 26, 2016, June 28, 2015 and June 29, 2014, the Company recognized approximately $10.3 million, $44.3 million and $1.3 million, respectively, as losses on disposals or impairments of property and equipment. These charges are reflected in Loss on disposal or impairment of long-lived assets in the Consolidated Statements of (Loss) Income. Other Current Liabilities The following table summarizes the components of other current liabilities (in thousands):
Accumulated Other Comprehensive Income, net of taxes The following table summarizes the components of accumulated other comprehensive income, net of taxes (in thousands):
Non-Operating (Expense) Income, net The following table summarizes the components of non-operating (expense) income, net (in thousands):
Reclassifications Out of Accumulated Other Comprehensive Income, net of taxes The following table summarizes the amounts reclassified out of accumulated other comprehensive income, net of taxes (in thousands):
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Investments |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Investments consist of municipal bonds, corporate bonds, commercial paper and certificates of deposit. All short-term investments are classified as available-for-sale. Other long-term investments consist of the Company's ownership interest in Lextar. The following table summarizes short-term investments (in thousands):
The following table presents the gross unrealized losses and estimated fair value of the Company’s short-term investments, aggregated by investment type and the length of time that individual securities have been in a continuous unrealized loss position (in thousands, except numbers of securities):
The following table summarizes short-term investments (in thousands):
The following table presents the gross unrealized losses and estimated fair value of the Company’s short-term investments, aggregated by investment type and the length of time that individual securities have been in a continuous unrealized loss position (in thousands, except numbers of securities):
The Company utilizes specific identification in computing realized gains and losses on the sale of investments. Realized gains on the sale of investments for the fiscal year ended June 26, 2016 of $238 thousand were included in Non-operating (expense) income, net in the Consolidated Statements of (Loss) Income and unrealized gains and losses are included as a separate component of equity, net of tax, unless the loss is determined to be other-than-temporary. The Company evaluates its investments for possible impairment or a decline in fair value below cost basis that is deemed to be other-than-temporary on a periodic basis. It considers such factors as the length of time and extent to which the fair value has been below the cost basis, the financial condition of the investee, and its ability and intent to hold the investment for a period of time that may be sufficient for an anticipated full recovery in market value. Accordingly, the Company considered declines in its investments to be temporary in nature, and did not consider its investments to be impaired as of June 26, 2016 and June 28, 2015. The contractual maturities of short-term investments at June 26, 2016 were as follows (in thousands):
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Fair Value of Financial Instruments |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices and discounted cash flows. U.S. GAAP also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions regarding what a third party would use in pricing an asset or liability. The fair value hierarchy is categorized into three levels based on the reliability of inputs as follows:
The financial assets for which the Company performs recurring fair value remeasurements are cash equivalents and short-term investments and long-term investments. As of June 26, 2016, financial assets utilizing Level 1 inputs included money market funds, and financial assets utilizing Level 2 inputs included municipal bonds, corporate bonds, U.S. agency securities, non-U.S. certificates of deposit, non-U.S. government securities and common stock of non-U.S. corporations. Level 2 assets are valued based on quoted prices in active markets for instruments that are similar or using a third-party pricing service’s consensus price, which is a weighted average price based on multiple sources. These sources determine prices utilizing market income models which factor in, where applicable, transactions of similar assets in active markets, transactions of identical assets in infrequent markets, interest rates, bond or credit default swap spreads and volatility. The Company did not have any financial assets requiring the use of Level 3 inputs as of June 26, 2016. There were no transfers between Level 1 and Level 2 during the year ended June 26, 2016. The following table sets forth financial instruments carried at fair value within the U.S. GAAP hierarchy (in thousands):
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The Company’s reporting units for goodwill impairment testing are:
As of the first day of the fourth quarter of fiscal 2016, the Company performed a step one quantitative goodwill impairment assessment on each reporting unit. For the step one impairment test, the Company derived each reporting unit's fair value through a combination of the market approach (a guideline transaction method) and the income approach (a discounted cash flow analysis). The Company utilized a discount rate from the capital asset pricing model for the discounted cash flow analysis. Once the reporting unit fair values were calculated, the Company reconciled the reporting units' relative fair values to the Company's market capitalization as of the testing date. The Company then compared the carrying value of each reporting unit, inclusive of its assigned goodwill, to its fair value. The Company determined that the fair value of each reporting unit exceeded its carrying value, and as a result, step two of the goodwill impairment test was not necessary. Goodwill assigned to the Power and RF Products reporting unit increased by $2.5 million during fiscal 2016 due to the acquisition of APEI, as discussed in Note 3, "Acquisition." Goodwill by reporting unit as of June 26, 2016 was as follows (in thousands):
Goodwill by reporting unit as of June 28, 2015 was as follows (in thousands):
Intangible Assets The following table presents the components of intangible assets, net (in thousands):
Total amortization of finite-lived intangible assets was $40.4 million, $37.1 million and $38.7 million for the years ended June 26, 2016, June 28, 2015 and June 29, 2014, respectively. Beginning in the third quarter of fiscal 2016, the Company started amortizing IPR&D assets acquired in the APEI acquisition that were completed during the respective period. As of the first day of the fourth quarter of fiscal 2016, the Company performed a step one quantitative impairment assessment on each of the Company’s indefinite-lived trade names. The Company determined that the fair value of each indefinite-lived trade name was greater than its carrying value and therefore a step two quantitative impairment assessment was not required. The Company invested $14.4 million, $19.5 million and $20.2 million for the years ended June 26, 2016, June 28, 2015 and June 29, 2014, respectively, for patent and licensing rights. For the fiscal years ended June 26, 2016, June 28, 2015 and June 29, 2014, the Company recognized $6.7 million, $3.4 million and $1.4 million, respectively, in impairment charges related to its patent portfolio. Total future amortization expense of finite-lived intangible assets is estimated to be as follows (in thousands):
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Long-term Debt Long-term Debt |
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Jun. 26, 2016 | |
Long-term Debt, Unclassified [Abstract] | |
Long-term Debt | Long-term Debt On January 9, 2015, the Company entered into a new credit agreement (Credit Agreement) with Wells Fargo Bank, National Association (Wells Fargo Bank) and other lenders party thereto for a $500 million secured revolving line of credit under which the Company can borrow, repay and reborrow loans from time to time prior to its scheduled maturity date of January 9, 2020. Proceeds of the initial loans made under the Credit Agreement were used to repay amounts outstanding under the Company's previous $150 million unsecured credit agreement with Wells Fargo Bank, entered into on August 12, 2014. The Company classifies balances outstanding under its line of credit as Long-term debt in the Consolidated Balance Sheets. At June 26, 2016, the Company had $160 million outstanding under the Credit Agreement and $340 million available for borrowing. For the year ended June 26, 2016, the average interest rate under the Credit Agreement was 1.14%. The average commitment fee percentage for the Credit Agreement was 0.09% for the year ended June 26, 2016. For the year ended June 28, 2015, the average interest rate under the Credit Agreement and the previous credit agreement was 0.95%. The average commitment fee percentage for these credit agreements was 0.09% for the year ended June 28, 2015. The Company was in compliance with all covenants in the Credit Agreement at June 26, 2016. |
Shareholders' Equity |
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity On June 18, 2015, the Board of Directors approved the Company's fiscal 2016 stock repurchase program, authorizing the Company to repurchase shares of its common stock having an aggregate purchase price not exceeding $500 million for all purchases from June 29, 2015 through the expiration of the program on June 26, 2016. During fiscal 2016, the Company repurchased 5.8 million shares of its common stock under the program at an average price of $25.78 per share with an aggregate value of $149.6 million. The repurchase program could be implemented through open market or privately negotiated transactions at the discretion of the Company’s management. From the inception of the predecessor stock repurchase program in January 2001 through June 26, 2016, the Company has repurchased 34.2 million shares of its common stock at an average price of $29.34 per share with an aggregate value of $1.0 billion. The Company will continue to determine the time and extent of any repurchases based on its evaluation of market conditions and other factors. On May 29, 2002, the Board adopted a shareholder rights plan, pursuant to which stock purchase rights were distributed to shareholders at a rate of one right with respect to each share of common stock held of record as of June 10, 2002. Subsequently issued shares of common stock also carry stock purchase rights under the plan. The rights plan is designed to enhance the Board’s ability to prevent an acquirer from depriving shareholders of the long-term value of their investment and to protect shareholders against attempts to acquire the Company by means of unfair or abusive takeover tactics. Unless terminated by the Board, the rights become exercisable based upon certain limited conditions related to acquisitions of stock, tender offers and certain business combinations involving the Company. The shareholder rights plan includes a review mechanism requiring the independent members of the Board to review and evaluate the plan at least every three years to consider whether the maintenance of the plan continues to be in the best interests of the Company and its shareholders and to communicate their conclusion to the Board. The Board has delegated this responsibility to the Governance and Nominations Committee, which is composed of all independent directors of the Board. On April 24, 2012, the shareholder rights plan was amended and restated to, among other things, extend the expiration date from June 10, 2012 to September 30, 2018, and to remove provisions in the rights plan stipulating that certain actions can be taken only with the concurrence of a majority of the members of the Board who are not affiliated with an acquiring person (more specifically, those who are “Continuing Directors,” as defined in the original rights plan adopted in 2002). On January 29, 2013, the shareholder rights plan was amended solely to change the expiration date from September 30, 2018 to April 24, 2017. On February 11, 2015, the shareholder rights plan was further amended to revise the definition of “Acquiring Person” to provide that the level of beneficial ownership of the Company’s common stock at which a person becomes an “Acquiring Person” and therefore triggers the consequences under the shareholder rights plan of becoming an Acquiring Person is increased for certain passive investors (defined therein as “13G Investors”) from 15% to 18% of the Company’s outstanding common stock (with no change to the triggering ownership threshold for other investors). At June 26, 2016, the Company had reserved a total of approximately 17.9 million shares of its common stock and 0.2 million shares of its Series A preferred stock for future issuance as follows (in thousands):
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | (Loss) Earnings Per Share The following presents the computation of basic (loss) earnings per share (in thousands, except per share amounts):
The following computation reconciles the differences between the basic and diluted (loss) earnings per share presentations (in thousands, except per share amounts):
Potential common shares that would have the effect of increasing diluted earnings per share or decreasing diluted loss per share are considered to be anti-dilutive and as such, these shares are not included in calculating diluted (loss) earnings per share. For the fiscal years ended June 26, 2016, June 28, 2015 and June 29, 2014, there were 11.4 million, 7.0 million and 2.6 million, respectively, of potential common shares not included in the calculation of diluted (loss) earnings per share because their effect was anti-dilutive. |
Stock-Based Compensation |
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Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Overview of Employee Stock-Based Compensation Plans The Company currently has one equity-based compensation plan, the 2013 Long-Term Incentive Compensation Plan (2013 LTIP), from which stock-based compensation awards can be granted to employees and directors. At June 26, 2016, there were 10.6 million shares authorized for issuance under the plan and 4.1 million shares remaining for future grants. The 2013 LTIP provides for awards in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other awards. The Company has other equity-based compensation plans that have been terminated so that no future grants can be made under those plans, but under which stock options, restricted stock and restricted stock units are currently outstanding. The Company’s stock-based awards can be either service-based or performance-based. Performance-based conditions are generally tied to future financial and/or operating performance of the Company. The compensation expense with respect to performance-based grants is recognized if the Company believes it is probable that the performance condition will be achieved. The Company reassesses the probability of the achievement of the performance condition at each reporting period, and adjusts the compensation expense for subsequent changes in the estimate or actual outcome. As with non-performance based awards, compensation expense is recognized over the vesting period. The vesting period runs from the date of grant to the expected date that the performance objective is likely to be achieved. The Company also has an Employee Stock Purchase Plan (ESPP) that provides employees with the opportunity to purchase common stock at a discount. At June 26, 2016, there were 4.5 million shares authorized for issuance under the ESPP, as amended, with 0.9 million shares remaining for future issuance. The ESPP limits employee contributions to 15% of each employee’s compensation (as defined in the plan) and allows employees to purchase shares at a 15% discount to the fair market value of common stock on the purchase date two times per year. The ESPP provides for a twelve-month participation period, divided into two equal six-month purchase periods, and also provides for a look-back feature. At the end of each six-month period in April and October, participants purchase the Company’s common stock through the ESPP at a 15% discount to the fair market value of the common stock on the first day of the twelve-month participation period or the purchase date, whichever is lower. The plan also provides for an automatic reset feature to start participants on a new twelve-month participation period if the fair market value of common stock declines during the first six-month purchase period. Stock Option Awards The following table summarizes option activity as of June 26, 2016 and changes during the fiscal year then ended (numbers of shares in thousands):
The total intrinsic value in the table above represents the total pretax intrinsic value, which is the total difference between the closing price of the Company’s common stock on June 24, 2016 (the last trading day of fiscal 2016) of $23.90 and the exercise price for in-the-money options that would have been received by the holders if all instruments had been exercised on June 26, 2016. As of June 26, 2016, there was $30.2 million of unrecognized compensation cost related to nonvested stock options, which is expected to be recognized over a weighted average period of 1.47 years. The following table summarizes information about stock options outstanding and exercisable at June 26, 2016 (shares in thousands):
Other information pertaining to the Company’s stock option awards is as follows (in thousands, except per share data):
Restricted Stock Awards and Units A summary of nonvested restricted stock awards (RSAs) and restricted stock unit awards (RSUs) outstanding as of June 26, 2016 and changes during the year then ended is as follows (in thousands, except number of shares and units):
As of June 26, 2016, there was $30.2 million of unrecognized compensation cost related to nonvested awards, which is expected to be recognized over a weighted average period of 2 years. Stock-Based Compensation Valuation and Expense The Company accounts for its employee stock-based compensation plans using the fair value method. The fair value method requires the Company to estimate the grant-date fair value of its stock-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term. The Company uses the Black-Scholes option-pricing model to estimate the fair value of the Company’s stock option and ESPP awards. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, the risk-free interest rate and expected dividends. Due to the inherent limitations of option-valuation models, future events that are unpredictable and the estimation process utilized in determining the valuation of the stock-based awards, the ultimate value realized by award holders may vary significantly from the amounts expensed in the Company’s financial statements. For RSAs and RSUs, the grant-date fair value is based upon the market price of the Company’s common stock on the date of the grant. This fair value is then amortized to compensation expense over the requisite service period or vesting term. Stock-based compensation expense is recognized net of estimated forfeitures such that expense is recognized only for those stock-based awards that are expected to vest. A forfeiture rate is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Total stock-based compensation expense was as follows (in thousands):
The weighted average assumptions used to value stock option grants were as follows:
The following describes each of these assumptions and the Company’s methodology for determining each assumption: Risk-Free Interest Rate The Company estimates the risk-free interest rate using the U.S. Treasury bill rate with a remaining term equal to the expected life of the award. Expected Life The expected life represents the period that the stock option awards are expected to be outstanding. In determining the appropriate expected life of its stock options, the Company segregates its grantees into categories based upon employee levels that are expected to be indicative of similar option-related behavior. The expected useful lives for each of these categories are then estimated giving consideration to (1) the weighted average vesting periods, (2) the contractual lives of the stock options, (3) the relationship between the exercise price and the fair market value of the Company’s common stock, (4) expected employee turnover, (5) the expected future volatility of the Company’s common stock, and (6) past and expected exercise behavior, among other factors. Expected Volatility The Company estimates expected volatility giving consideration to the expected life of the respective award, the Company’s current expected growth rate, implied volatility in traded options for its common stock, and the historical volatility of its common stock. Expected Dividend Yield The Company estimates the expected dividend yield by giving consideration to its current dividend policies as well as those anticipated in the future considering the Company’s current plans and projections. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The following were the components of (loss) income before income taxes (in thousands):
The following were the components of income tax (benefit) expense (in thousands):
Actual income tax (benefit) expense differed from the amount computed by applying the U.S. federal tax rate of 35% to pre-tax earnings as a result of the following (in thousands, except percentages):
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows (in thousands):
The components giving rise to the net deferred tax assets (liabilities) have been included in the Consolidated Balance Sheets as follows (in thousands):
The research and development credit, which had previously expired on December 31, 2014, was reinstated as part of the Protecting Americans from Tax Hikes Act of 2015, enacted on December 18, 2015. This legislation retroactively reinstated and permanently extended the research and development credit. The benefit of this credit for fiscal 2016 as well as the period December 31, 2014 through June 28, 2015 has been included in the fiscal year 2016 tax benefit representing a $1.3 million and $0.8 million benefit, respectively. During the second quarter of fiscal 2014, the Company was notified by the Internal Revenue Service that it had been allocated $30 million of federal tax credits as part of the American Recovery and Reinvestment Act of 2009 - Phase II (Internal Revenue Code Section 48C). This $30 million allocation is in addition to the $39 million previously allocated to the Company in the third quarter of fiscal 2010. The tax benefit (net of related basis adjustments) will be amortized into income over the useful life (5 years) of the underlying equipment that was placed into service to generate these credits. Since fiscal 2010, the Company has recognized an income tax benefit of $37.2 million related to the credits generated to date, with $4.3 million of this amount recognized as a tax benefit for the year ended June 26, 2016. During the fourth quarter of fiscal 2016, the Company concluded it is likely that sufficient future taxable income needed to fully utilize net operating loss carryovers in Luxembourg will not be generated due to additional losses on the Company’s equity method investment held there. The Company recorded a $9.5 million valuation allowance against the related deferred tax asset, representing the $32.4 million net operating loss carryover net of tax. This resulted in an additional $9.5 million of income tax expense during the fourth quarter of fiscal 2016. During the fourth quarter of fiscal 2016, the Company concluded it is likely that it will fully utilize all North Carolina income tax credits due to the expected taxable gain on the sale of the Wolfspeed Business. As a result, the Company released a $1.9 million valuation allowance against the related deferred tax asset. This resulted in an additional $1.9 million of income tax benefit during the fourth quarter of fiscal 2016. As of June 28, 2016, the Company had approximately $36.2 million of foreign net operating loss carryovers, of which $32.4 million are offset by a valuation allowance. The foreign net operating loss carryovers have no carry forward limitation. As of June 26, 2016, the Company had approximately $22.7 million of state net operating loss carryovers, of which approximately $15.1 million are offset by a valuation allowance. Additionally, the Company had $6.9 million of state income tax credit carryforwards. The state net operating loss carryovers and income tax credit carryforwards will begin to expire in fiscal 2021 and fiscal 2017, respectively. Furthermore, the Company had approximately $0.8 million of alternative minimum tax credit carryforwards, $5.8 million of 48C credit carryforwards, $1.9 million of research and development credit carryforwards, and $1.6 million of state income tax credit carryforwards that relate to excess stock option benefits which, if and when realized, will be recognized in Additional paid-in-capital in the Consolidated Balance Sheets. U.S. GAAP requires a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is cumulatively more than 50% likely to be realized upon ultimate settlement. As of June 28, 2015 the Company’s liability for unrecognized tax benefits was $17.8 million. The Company recognized a $0.6 million increase to the liability for unrecognized tax benefits due to uncertainty regarding intercompany transactions recently challenged by the Italian tax authority, and a $0.5 million decrease to the liability for unrecognized tax benefits due to a decrease in the effective tax rate related to an uncertainty regarding a change in tax depreciation methodology adopted in fiscal 2014. In addition there was a $0.2 million decrease to the amount of unrecognized tax benefits following statute expiration. As a result, the total liability for unrecognized tax benefits as of June 26, 2016 was $17.7 million. If any portion of this $17.7 million is recognized, the Company will then include that portion in the computation of its effective tax rate. Although the ultimate timing of the resolution and/or closure of audits is highly uncertain, the Company believes it is reasonably possible that approximately $4.3 million of gross unrecognized tax benefits will change in the next 12 months as a result of pending audit settlements or statute requirements. The following is a tabular reconciliation of the Company’s change in uncertain tax positions (in thousands):
The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the Income tax (benefit) expense line item in the Consolidated Statements of (Loss) Income. Total interest and penalties accrued were as follows (in thousands):
Total interest and penalties recognized were as follows (in thousands):
The Company files U.S. federal, U.S. state and foreign tax returns. For U.S. federal purposes, the Company is generally no longer subject to tax examinations for fiscal years prior to 2013. For U.S. state tax returns, the Company is generally no longer subject to tax examinations for fiscal years prior to 2012. For foreign purposes, the Company is generally no longer subject to examination for tax periods 2005 and prior. Certain carryforward tax attributes generated in prior years remain subject to examination, adjustment and recapture. The Company is currently under audit by the Italian Revenue Agency for the fiscal year ended June 30, 2013. The Company provides for U.S. income taxes on the earnings of foreign subsidiaries unless the subsidiaries’ earnings are considered indefinitely reinvested outside the United States. As of June 26, 2016, U.S. income taxes were not provided for on a cumulative total of approximately $255.0 million of undistributed earnings for certain non-U.S. subsidiaries, as the Company currently intends to reinvest these earnings in these foreign operations indefinitely. If, at a later date, these earnings were repatriated to the U.S., the Company would be required to pay taxes on these amounts. Determination of the amount of any deferred tax liability on these undistributed earnings is not practicable. During the fiscal year ended June 26, 2011, the Company was awarded a tax holiday in Malaysia with respect to its manufacturing and distribution operations. This arrangement allows for 0% tax for 10 years starting in the fiscal year ended June 26, 2011. For the fiscal years 2014, 2015, and 2016, the Company did not meet the requirements for the tax holiday, and as such, no benefit has been recognized. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Warranties The following table summarizes the changes in the Company’s product warranty liabilities (in thousands):
Product warranties are estimated and recognized at the time the Company recognizes revenue. The warranty periods range from 90 days to 10 years. The Company accrues warranty liabilities at the time of sale, based on historical and projected incident rates and expected future warranty costs. The Company accrues estimated costs related to product recalls based on a formal campaign soliciting repair or return of that product when they are deemed probable and reasonably estimable. The warranty reserves, which are primarily related to Lighting Products, are evaluated quarterly based on various factors including historical warranty claims, assumptions about the frequency of warranty claims, and assumptions about the frequency of product failures derived from quality testing, field monitoring and the Company’s reliability estimates. As of June 26, 2016, $1.3 million of the Company’s product warranty liabilities were classified as long-term. In June 2015, the Company issued a voluntary recall of its linear LED T8 replacement lamps due to the hazard of overheating and melting. The Company expects the majority of the costs of the recall to be recoverable from insurance proceeds resulting in an immaterial impact to the Company's financial results. Lease Commitments The Company primarily leases manufacturing, office, housing and warehousing space under the terms of non-cancelable operating leases. These leases expire at various times through May 2022. The Company recognizes net rent expense on a straight-line basis over the life of the lease. Rent expense associated with these operating leases totaled approximately $6.6 million, $8.2 million and $5.8 million for each of the fiscal years ended June 26, 2016, June 28, 2015 and June 29, 2014, respectively. Certain agreements require that the Company pay property taxes and general property maintenance in addition to the minimum rental payments. Future minimum rental payments as of June 26, 2016 (under leases currently in effect) are as follows (in thousands):
Litigation The Company is currently a party to various legal proceedings. While management presently believes that the ultimate outcome of such proceedings, individually and in the aggregate, will not materially harm the Company’s financial position, cash flows, or overall trends in results of operations, legal proceedings are subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include money damages or, in matters for which injunctive relief or other conduct remedies may be sought, an injunction prohibiting the Company from selling one or more products at all or in particular ways. Were unfavorable final outcomes to occur, there exists the possibility of a material adverse impact on the Company’s business, results of operation, financial position and overall trends. The outcomes in these matters are not reasonably estimable. |
Reportable Segments |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segments | Reportable Segments The Company’s operating and reportable segments are:
The Company’s CODM reviews segment performance and allocates resources based upon segment revenue and segment gross profit. Reportable Segments Description Lighting Products Segment The Company’s Lighting Products segment primarily consists of LED lighting systems and bulbs. The Company designs, manufactures and sells lighting systems for indoor and outdoor applications, with its primary focus on LED lighting systems for the commercial, industrial and consumer markets. Lighting products are sold to distributors, retailers and direct to customers. The Company's portfolio of lighting products is designed for use in settings such as office and retail space, restaurants and hospitality, schools and universities, manufacturing, healthcare, airports, municipal, residential, street lighting and parking structures, among other applications. LED Products Segment The Company’s LED Products segment includes LED chips, LED components, and SiC materials. LED Chips LED chip products include blue and green LED chips based on GaN and related materials. LED chips or die are solid-state electronic components used in a number of applications and are currently available in a variety of brightness levels, wavelengths (color) and sizes. The Company uses LED chips internally in the manufacturing of its LED components. Customers use the blue and green LED chips in a variety of applications including video screens, gaming displays, function indicator lights, and automotive backlights, headlamps and directional indicators. Customers may also combine blue LED chips with phosphors to create white LEDs, which are used in various applications for indoor and outdoor illumination and backlighting, full-color display screens, liquid crystal displays (LCD) backlighting, white keypads and the camera flash function. LED Components LED component products include a range of packaged LED products from the Company’s XLamp® LED components and LED modules for lighting applications to the Company’s high-brightness LED components. The Company’s XLamp LED components and LED modules are lighting class packaged LED products designed to meet a broad range of market needs for lighting applications including general illumination (both indoor and outdoor applications), portable, architectural, signal and transportation lighting. The Company uses XLamp LED components in its own lighting products. The Company also sells XLamp LED components externally to customers and distributors for use in a variety of products, primarily for lighting applications. The Company’s high-brightness LED components consist of surface mount (SMD) and through-hole packaged LED products. The SMD LED component products are available in a full range of colors designed to meet a broad range of market needs, including video, signage, general illumination, transportation, gaming and specialty lighting markets. The Company's through-hole packaged LED component products are available in a full range of colors, primarily designed for the signage market, and provide users with color and brightness consistency across a wide viewing area. SiC Materials The Company’s SiC materials are targeted for customers who use them to manufacture products for RF, power switching, gemstones and other applications. Corporate, government and university customers also buy SiC materials for research and development directed at RF and high power devices. The Company sells its SiC materials in bulk form, as a bare wafer or with SiC and GaN epitaxial films. Power and RF Products Segment The Company’s Power and RF Products segment includes power devices and RF devices. Power Devices The Company’s SiC-based power products include Schottky diodes, SiC metal semiconductor field-effect transistors (MOSFETs), and SiC power modules at various voltages. The Company's power products provide increased efficiency, faster switching speeds and reduced system size and weight over comparable silicon-based power devices. Power products are sold primarily to customers and distributors for use in power supplies used in computer servers, solar inverters, uninterruptible power supplies, industrial power supplies and other applications. RF Devices The Company’s RF devices include a variety of GaN high electron mobility transistors (HEMTs) and monolithic microwave integrated circuits (MMICs), which are optimized for military, telecom and other commercial applications. The Company's RF devices are made from SiC and GaN and provide improved efficiency, bandwidths and frequency of operation as compared to silicon or GaAs. The Company also provides custom die manufacturing for GaN HEMTs and MMICs that allow a customer to design its own custom RF circuits to be fabricated by the Company, or have the Company design and fabricate products that meet the customer's specific requirements. Financial Results by Reportable Segment The table below reflects the results of the Company’s reportable segments as reviewed by the Company’s CODM for fiscal 2016, 2015 and 2014. The Company used the same accounting policies to derive the segment results reported below as those used in the Company’s consolidated financial statements. The Company’s CODM does not review inter-segment transactions when evaluating segment performance and allocating resources to each segment, and inter-segment transactions are not included in the segment revenue presented in the table below. As such, total segment revenue in the table below is equal to the Company’s consolidated revenue. The Company’s CODM reviews gross profit as the lowest and only level of segment profit. As such, all items below gross profit in the Consolidated Statements of (Loss) Income must be included to reconcile the consolidated gross profit presented in the table below to the Company’s consolidated income before income taxes. In order to determine gross profit for each reportable segment, the Company allocates direct costs and indirect costs to each segment’s cost of revenue. The Company allocates indirect costs, such as employee benefits for manufacturing employees, shared facilities services, information technology, purchasing, and customer service, when the costs are identifiable and beneficial to the reportable segment. The Company allocates these indirect costs based on a reasonable measure of utilization that considers the specific facts and circumstances of the costs being allocated. Unallocated costs in the table below consisted primarily of manufacturing employees’ stock-based compensation, expenses for profit sharing and quarterly or annual incentive plans and matching contributions under the Company’s 401(k) plan. These costs were not allocated to the reportable segments' gross profit because the Company’s CODM does not review them regularly when evaluating segment performance and allocating resources. Revenue, gross profit and gross margin for each of the Company's segments were as follows (in thousands, except percentages):
Assets by Reportable Segment Inventories are the only assets reviewed by the Company’s CODM when evaluating segment performance and allocating resources to the segments. The CODM reviews all of the Company's assets other than inventories on a consolidated basis. The following table sets forth the Company’s inventories by reportable segment for the fiscal years ended June 26, 2016 and June 28, 2015. Unallocated inventories in the table below were not allocated to the reportable segments because the Company’s CODM does not review them when evaluating performance and allocating resources to each segment. Unallocated inventories consisted primarily of manufacturing employees’ stock-based compensation, profit sharing and quarterly or annual incentive compensation and matching contributions under the Company’s 401(k) plan. Inventories for each of the Company's segments were as follows (in thousands):
Geographic Information The Company conducts business in several geographic areas. Revenue is attributed to a particular geographic region based on the shipping address for the products. The following table sets forth the percentage of revenue from external customers by geographic area:
The following table sets forth the Company’s tangible long-lived assets by country (in thousands):
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Concentrations of Risk |
12 Months Ended |
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Jun. 26, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Risk | Concentrations of Risk Financial instruments, which may subject the Company to a concentration of risk, consist principally of short-term investments, cash equivalents, and accounts receivable. Short-term investments consist primarily of municipal bonds, corporate bonds, commercial paper and certificates of deposit at interest rates that vary by security. The Company’s cash equivalents consist primarily of money market funds. Certain bank deposits may at times be in excess of the FDIC insurance limits. The Company sells its products on account to manufacturers, distributors, retailers and others worldwide and generally requires no collateral. Revenue from Arrow Electronics, Inc. represented 10%, 12% and 13% of revenue for fiscal 2016, 2015, and 2014, respectively. Revenue from The Home Depot, Inc. represented 8% of revenue in fiscal 2016 and 11% in both fiscal 2015 and 2014. No customers individually accounted for more than 10% of the consolidated accounts receivable balance at June 26, 2016 and June 28, 2015. Arrow Electronics, Inc. is a customer of the LED Products and Power and RF Products segments. The Home Depot, Inc. is a customer of the Lighting Products segment. |
Retirement Savings Plan |
12 Months Ended |
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Jun. 26, 2016 | |
General Discussion of Pension and Other Postretirement Benefits [Abstract] | |
Retirement Savings Plan | Retirement Savings Plan The Company sponsors one employee benefit plan (the 401(k) Plan) pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended. All U.S. employees are eligible to participate under the 401(k) Plan on the first day of a new fiscal month after the date of hire. Under the 401(k) Plan, there is no fixed dollar amount of retirement benefits; rather, the Company matches a defined percentage of employee deferrals, and employees vest in these matching funds over time. Employees choose their investment elections from a list of available investment options. During the fiscal years ended June 26, 2016, June 28, 2015 and June 29, 2014, the Company contributed approximately $7.0 million, $6.9 million and $6.3 million to the 401(k) Plan, respectively. The Pension Benefit Guaranty Corporation does not insure the 401(k) Plan. |
Related Party Transactions |
12 Months Ended |
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Jun. 26, 2016 | |
Related Party Transaction, Due from (to) Related Party [Abstract] | |
Related Party Transactions | Related Party Transactions In July 2010, Mark Swoboda was appointed Chief Executive Officer of Intematix Corporation (Intematix). Mark Swoboda is the brother of the Company’s Chairman, Chief Executive Officer and President, Charles M. Swoboda. For a number of years the Company has purchased raw materials from Intematix pursuant to standard purchase orders in the ordinary course of business. During fiscal 2016, the Company purchased $3.9 million of raw materials from Intematix, and the Company had $0.3 million outstanding payable to Intematix as of June 26, 2016. During fiscal 2015, the Company purchased $7.2 million of raw materials from Intematix, and the Company had $0.1 million outstanding payable to Intematix as of June 28, 2015. The Company currently owns approximately 14% of the common stock of Lextar Electronics Corporation, an investment that was purchased in December 2014. During fiscal 2016, the Company purchased approximately $31.7 million of inventory from Lextar and the Company had $7.6 million outstanding payable to Lextar as of June 26, 2016. |
Costs Associated with LED Business Restructuring Costs Associated with LED Business Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities Disclosure | Costs Associated with LED Business Restructuring In June 2015, our Board of Directors approved a plan to restructure the LED Products business. The restructuring reduced excess capacity and overhead in order to improve the cost structure moving forward. The primary components of the restructuring include the planned sale or abandonment of certain manufacturing equipment, facility consolidation and the elimination of certain positions. The restructuring activity ended in the second quarter of fiscal 2016. During fiscal 2016, the company realized$18.8 million in LED restructuring charges which were partially offset by a $1.1 million gain on the sale of long-lived assets related to the restructuring which were sold for a value in excess of their estimated net realizable value during fiscal 2016. The following table summarizes the actual charges incurred (in thousands):
In the table above, the lease termination costs relate to the relocation of certain manufacturing operations from a leased facility in Huizhou, China to a company-owned facility which is also in Huizhou, China. In June 2015, the Company ceased using the leased facility and recognized a $0.5 million charge for the lease contract termination cost. In the table above, the severance expense relates to a reduction in manufacturing and support positions. There is not a significant retention period for impacted employees. The following table presents the changes in the severance liability under the LED Products restructuring plan (in thousands):
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Subsequent Event |
12 Months Ended |
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Jun. 26, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On July 13, 2016, the Company executed an Asset Purchase Agreement (the APA) with Infineon. The transaction, which was approved by both the Company’s Board of Directors and Infineon’s Supervisory Board, is expected to close by the end of calendar year 2016, subject to customary closing conditions and governmental approvals. Pursuant to the APA, the Company will sell to Infineon, and Infineon will (i) purchase from the Company (a) the assets comprising the Company’s Power and RF Products segment, including manufacturing facilities and equipment, inventory, intellectual property rights, contracts, real estate, and the outstanding equity interests of Cree Fayetteville, Inc, one of the Company’s wholly-owned subsidiaries, and (b) certain related portions of the Company’s SiC materials and gemstones business included within the LED Products segment (the Company refers to the business that it is selling, collectively, as the Wolfspeed business) and (ii) assume certain liabilities related to the Wolfspeed business. The Company will retain certain liabilities associated with the Wolfspeed business arising prior to the closing of the transaction. Infineon is expected to hire most of the Company’s approximately 545 Wolfspeed employees either at the closing of the transaction or following a transition period. The purchase price for the Wolfspeed business will be $850 million in cash, which is subject to certain adjustments. In connection with the transaction, the Company and Infineon will also enter into certain ancillary and related agreements, including (i) an intellectual property assignment and license agreement, which will assign to Infineon certain intellectual property owned by the Company and license to Infineon certain additional intellectual property owned by the Company, (ii) a transition services agreement, which is designed to ensure a smooth transition of the Wolfspeed business to Infineon, and (iii) a wafer supply agreement, pursuant to which the Company will supply Infineon with silicon carbide wafers and silicon carbide boules for a transitional period of time. The APA contains customary representations, warranties and covenants, including covenants to cooperate in seeking regulatory approvals, as well as the Company’s agreement to not compete with the Wolfspeed business for five years following the closing of the transaction and to indemnify Infineon for certain damages that Infineon may suffer following the closing of the transaction. Infineon's obligation to purchase the Wolfspeed business is subject to the satisfaction or waiver of a number of conditions set forth in the APA, including regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and certain similar non-U.S. regulations, the approval of the Committee on Foreign Investment in the United States and other customary closing conditions. The APA provides for customary termination rights of the parties and also provides that in the event the APA is terminated for certain specified regulatory-related circumstances, Infineon may be required to pay the Company a termination fee ranging from $12.5 million to $42.5 million. The Company will report the Wolfspeed business as discontinued operations beginning in the first quarter of fiscal 2017. |
Quarterly Results of Operations |
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Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Results of Operations - Unaudited | Quarterly Results of Operations - Unaudited The following is a summary of the Company’s consolidated quarterly results of operations for each of the fiscal years ended June 26, 2016 and June 28, 2015 (in thousands, except per share data):
*As revised to reflect the correction of an immaterial error. For additional information, see Note 2, "Basis of Presentation and Summary of Significant Accounting Policies." |
Basis of Presentation and Summary of Significant Accounting Policies (Policy) |
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Basis of Presentation and Changes in Significant Accounting Policies [Abstract] | ||||||||||||||||||||||
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. |
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Fiscal Year | Fiscal Year The Company’s fiscal year is a 52 or 53-week period ending on the last Sunday in the month of June. The Company’s 2016, 2015 and 2014 fiscal years were 52-week fiscal years. The Company’s 2017 fiscal year will be a 52-week fiscal year. |
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Reclassifications | Reclassifications Certain prior period amounts in the accompanying consolidated financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on previously reported net income or shareholders’ equity. |
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Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. The Company evaluates its estimates on an ongoing basis, including those related to revenue recognition, product warranty obligations, valuation of inventories, tax related contingencies, valuation of stock-based compensation, valuation of long-lived and intangible assets, other contingencies and litigation, among others. The Company generally bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates. |
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Segment Information | Segment Information U.S. GAAP requires segmentation based on an entity’s internal organization and reporting of revenue and operating income based upon internal accounting methods commonly referred to as the “management approach.” Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it currently has three operating and reportable segments. The table below reflects the results of the Company’s reportable segments as reviewed by the Company’s CODM for fiscal 2016, 2015 and 2014. The Company used the same accounting policies to derive the segment results reported below as those used in the Company’s consolidated financial statements. The Company’s CODM does not review inter-segment transactions when evaluating segment performance and allocating resources to each segment, and inter-segment transactions are not included in the segment revenue presented in the table below. As such, total segment revenue in the table below is equal to the Company’s consolidated revenue. The Company’s CODM reviews gross profit as the lowest and only level of segment profit. As such, all items below gross profit in the Consolidated Statements of (Loss) Income must be included to reconcile the consolidated gross profit presented in the table below to the Company’s consolidated income before income taxes. In order to determine gross profit for each reportable segment, the Company allocates direct costs and indirect costs to each segment’s cost of revenue. The Company allocates indirect costs, such as employee benefits for manufacturing employees, shared facilities services, information technology, purchasing, and customer service, when the costs are identifiable and beneficial to the reportable segment. The Company allocates these indirect costs based on a reasonable measure of utilization that considers the specific facts and circumstances of the costs being allocated. Unallocated costs in the table below consisted primarily of manufacturing employees’ stock-based compensation, expenses for profit sharing and quarterly or annual incentive plans and matching contributions under the Company’s 401(k) plan. These costs were not allocated to the reportable segments' gross profit because the Company’s CODM does not review them regularly when evaluating segment performance and allocating resources. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of unrestricted cash accounts and highly liquid investments with an original maturity of three months or less when purchased. Cash and cash equivalents are stated at cost, which approximates fair value. The Company holds cash and cash equivalents at several major financial institutions, which often exceed insurance limits set by the Federal Deposit Insurance Corporation (FDIC). The Company has not historically experienced any losses due to such concentration of credit risk. |
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Investments | Investments Investments in certain securities may be classified into three categories:
The Company reassesses the appropriateness of the classification (i.e. held-to-maturity, trading or available-for-sale) of its investments at the end of each reporting period. When the fair value of an investment declines below its original cost, the Company considers all available evidence to evaluate whether the decline is other-than-temporary. Among other things, the Company considers the duration and extent of the decline and economic factors influencing the capital markets. For the fiscal years ended June 26, 2016, June 28, 2015, and June 29, 2014, the Company had no other-than-temporary declines below the cost basis of its investments. The Company utilizes specific identification in computing realized gains and losses on the sale of investments. Realized gains and losses on the sale of investments are reported in other income and expense. Investments in marketable securities with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Other long-term investments consist of the Company's approximately 14% common stock ownership interest in Lextar Electronics Corporation (Lextar), which the Company acquired in December 2014. This investment was accounted for under the equity method from the date of investment until June 2016 when the Company chose not to stand for re-election as a member of the Lextar board of directors. The Company utilizes the fair value option in accounting for its investment in Lextar. The Company has determined that for its fiscal years ended June 26, 2016 and June 28, 2015, Lextar has met the conditions of a significant subsidiary under Rule 1-02(w) of Regulation S-X for which the Company is required, pursuant to Rule 3-09 of Regulation S-X, to file separate financial statements as an exhibit to its Annual Report on Form 10-K. As such, separate financial statements for Lextar, prepared by Lextar and audited by its independent public accounting firm, are filed as Exhibit 99.1 to the Company's Annual Report. |
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Inventories | Inventories Inventories are stated at lower of cost or market, with cost determined on a first-in, first-out (FIFO) method or an average cost method; and with market not to exceed net realizable value. The Company writes down its inventory balances for estimates of excess and obsolete amounts. These write-downs are recognized as a component of cost of revenue. At the point of the write-down, a new lower-cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established lower-cost basis. The Company recognized charges for write-downs in inventories of $3.6 million, $15.2 million and $5.2 million, for fiscal 2016, 2015 and 2014, respectively. |
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Property and Equipment | Property and Equipment Property and equipment are stated at cost and depreciated on a straight-line basis over the assets’ estimated useful lives. Leasehold improvements are amortized over the lesser of the asset life or the life of the related lease. In general, the Company’s policy for useful lives is as follows:
Expenditures for repairs and maintenance are charged to expense as incurred. The costs for major renewals and improvements are capitalized and depreciated over their estimated useful lives. The cost and related accumulated depreciation of the assets are removed from the accounts upon disposition and any resulting gain or loss is reflected in operating income. |
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Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are included in Cost of revenue, net in the Consolidated Statements of (Loss) Income and are recognized as a period expense during the period in which they are incurred. |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company recognizes the assets acquired and liabilities assumed in business combinations at their respective fair values at the date of acquisition, with any excess purchase price recognized as goodwill. Valuation of intangible assets entails significant estimates and assumptions including, but not limited to, estimating future cash flows from product revenue, developing appropriate discount rates, continuation of customer relationships and renewal of customer contracts, and approximating the useful lives of the intangible assets acquired. Goodwill The Company recognizes goodwill as an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company tests goodwill for impairment at least annually as of the first day of the fiscal fourth quarter, or when indications of potential impairment exist. The Company monitors for the existence of potential impairment indicators throughout the fiscal year. The Company conducts impairment testing for goodwill at the reporting unit level. Reporting units may be operating segments as a whole or an operation one level below an operating segment, referred to as a component. The Company has determined that its reporting units are its three operating and reportable segments. The Company may initiate goodwill impairment testing by considering qualitative factors to determine whether it is more likely than not that a reporting unit’s carrying value is greater than its fair value. Such factors may include the following, among others: a significant decline in the reporting unit’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates; as well as changes in management, key personnel, strategy and customers. If the Company’s qualitative assessment indicates that goodwill impairment is more likely than not, the Company performs the two-step goodwill impairment test. Alternatively, the Company may bypass the qualitative test and initiate goodwill impairment testing with the first step of the two-step goodwill impairment test. During the first step of the goodwill impairment test, the Company compares the fair value of the reporting unit to its carrying value, including goodwill. The Company derives a reporting unit’s fair value through a combination of the market approach (a guideline transaction method) and the income approach (a discounted cash flow analysis). The income approach utilizes a discount rate from the capital asset pricing model. If all reporting units are analyzed during the first step of the goodwill impairment test, their respective fair values are reconciled back to the Company’s consolidated market capitalization. If the fair value of a reporting unit exceeds its carrying value, then the Company concludes that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, the Company performs the second step of the goodwill impairment test to measure possible goodwill impairment loss. During the second step, the Company hypothetically values the reporting unit’s tangible and intangible assets and liabilities as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying value of its goodwill. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the carrying value of the reporting unit’s goodwill. Once an impairment loss is recognized, the adjusted carrying value of the goodwill becomes the new accounting basis of the goodwill for the reporting unit. Indefinite-Lived Intangible Assets The Company’s indefinite-lived intangible assets are tested for impairment at least annually in the fiscal fourth quarter or when indications of potential impairment exist. The Company monitors for the existence of potential impairment indicators throughout the fiscal year. The Company’s impairment test may begin with a qualitative test to determine whether it is more likely than not that an indefinite-lived intangible asset’s carrying value is greater than its fair value. In performing this test, the Company may consider the following qualitative factors, among others: a significant decline in expected future cash flows; changes in industry and market conditions such as the deterioration in the environment in which the Company operates or an increased competitive environment; changes in management, key personnel, strategy, or customers; as well as other economic factors. If the Company’s qualitative assessment indicates that asset impairment is more likely than not, the Company performs a quantitative impairment test by comparing the fair value of the indefinite-lived intangible asset to its carrying value. Alternatively, the Company may bypass the qualitative test and initiate impairment testing with the quantitative impairment test. Determining the fair value of indefinite-lived intangible assets entails significant estimates and assumptions including, but not limited to, determining the timing and expected costs to complete development projects, estimating future cash flows from product revenue, developing appropriate discount rates, estimating probability rates for the successful completion of development projects, continuation of customer relationships and renewal of customer contracts, and approximating the useful lives of the intangible assets acquired. If the fair value of the indefinite-lived intangible asset exceeds its carrying value, then the Company concludes that no impairment has occurred. If the carrying value of the indefinite-lived intangible asset exceeds its fair value, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the carrying value. Once an impairment loss is recognized, the adjusted carrying value becomes the new accounting basis of the indefinite-lived intangible asset. Finite-Lived Intangible Assets U.S. GAAP requires that intangible assets, other than goodwill and indefinite-lived intangibles, must be amortized over their useful lives. The Company is currently amortizing its acquired intangible assets with finite lives over periods ranging from one to 20 years. Patent rights reflect costs incurred by the Company in applying for and maintaining patents owned by the Company and costs incurred in purchasing patents and related rights from third parties. Licensing rights reflect costs incurred by the Company in acquiring licenses under patents owned by others. The Company amortizes both on a straight-line basis over the expected useful life of the associated patent rights, which is generally the lesser of 20 years from the date of the patent application or the license period. Royalties payable under licenses for patents owned by others are generally expensed as incurred. The Company reviews its capitalized patent portfolio and recognizes impairment charges when circumstances warrant, such as when patents have been abandoned or are no longer being pursued. |
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Long-Lived Assets | Long-Lived Assets The Company reviews long-lived assets such as property and equipment for impairment based on changes in circumstances that indicate their carrying amounts may not be recoverable. In making these determinations, the Company uses certain assumptions, including but not limited to: (1) estimations of the fair market value of the assets and (2) estimations of future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, length of service the asset will be used in the Company’s operations and estimated salvage values. |
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Contingent Liabilities | Contingent Liabilities The Company recognizes contingent liabilities when it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Disclosure in the notes to the financial statements is required for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a loss may have been incurred. See Note 13, “Commitments and Contingencies,” for a discussion of loss contingencies in connection with pending and threatened litigation. The Company expenses as incurred the costs of defending legal claims against the Company. |
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Revenue Recognition | Revenue Recognition The Company recognizes product revenue when the earnings process is complete, as evidenced by persuasive evidence of an arrangement (typically in the form of a purchase order), when the sales price is fixed or determinable, collection of revenue is reasonably assured, and title and risk of loss have passed to the customer. The Company provides its customers with limited rights of return for non-conforming shipments and product warranty claims. The Company estimates an allowance for anticipated sales returns based upon an analysis of historical sales returns and other relevant data. The Company recognizes an allowance for non-conforming returns at the time of sale as a reduction of product revenue and as a reduction to the related accounts receivable balance. The Company recognizes a liability for product warranty claims at the time of sale as an increase to cost of revenue. A substantial portion of the Company’s products are sold through distributors. Distributors stock inventory and sell the Company’s products to their own customer base, which may include: value added resellers; manufacturers who incorporate the Company’s products into their own manufactured goods; or ultimate end users of the Company’s products. The Company recognizes revenue upon shipment of its products to its distributors. This arrangement is often referred to as a “sell-in” or “point-of-purchase” model as opposed to a “sell-through” or “point-of-sale” model, where revenue is deferred and not recognized until the distributor sells the product through to their customer. Certain of the Company’s distributors are provided limited rights that allow them to return a portion of inventory (product exchange rights or stock rotation rights) and receive credits for changes in selling prices (price protection rights) or customer pricing arrangements under the Company’s “ship and debit” program or other targeted sales incentives. These estimates are calculated based upon historical experience, product shipment analysis, current economic conditions, on-hand inventory at the distributor, and customer contractual arrangements. The Company believes that it can reasonably and reliably estimate the allowance for distributor credits at the time of sale. Accordingly, estimates for these rights are recognized at the time of sale as a reduction of product revenue and as a reduction to the related accounts receivable balance. From time to time, the Company will issue a new price book for its products, and provide a credit to certain distributors for inventory quantities on hand if required by the Company’s agreement with the distributor. This practice is known as price protection. These credits are applied against the reserve that the Company establishes upon initial shipment of product to the distributor. Under the ship and debit program, products are sold to distributors at negotiated prices and the distributors are required to pay for the products purchased within the Company’s standard commercial terms. Subsequent to the initial product purchase, a distributor may request a price allowance for a particular part number(s) for certain target customers, prior to the distributor reselling the particular part to that customer. If the Company approves an allowance and the distributor resells the product to the target customer, the Company credits the distributor according to the allowance the Company approved. These credits are applied against the reserve that the Company establishes upon initial shipment of product to the distributor. In addition, the Company runs sales incentive programs with certain distributors and retailers, such as product rebates and cooperative advertising campaigns. The Company recognizes these incentives at the time they are offered to customers and records a credit to their account with an offsetting expense as either a reduction to revenue, increase to cost of revenue, or marketing expense depending on the type of sales incentive. From time to time, the Company may enter into licensing arrangements related to its intellectual property. Revenue from licensing arrangements is recognized when earned and estimable. The timing of revenue recognition is dependent on the terms of each license agreement. Generally, the Company will recognize non-refundable upfront licensing fees related to patent licenses immediately upon receipt of the funds if the Company has no significant future obligations to perform under the arrangement. However, the Company will defer recognition for licensing fees where the Company has significant future performance requirements, the fee is not fixed (such as royalties earned as a percentage of future revenue), or the fees are otherwise contingent. |
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Accounts Receivable | Accounts Receivable For product revenue, the Company typically invoices its customers at the time of shipment for the sales order value of products shipped. Accounts receivable are recognized at the invoiced amount and are not subject to any interest or finance charges. The Company does not have any off-balance sheet credit exposure related to any of its customers. |
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Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company evaluates the collectability of accounts receivable based on a combination of factors. In cases where the Company becomes aware of circumstances that may impair a specific customer’s ability to meet its financial obligations subsequent to the original sale, the Company will recognize an allowance against amounts due, and thereby reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes an allowance for doubtful accounts based on the length of time the receivables are past due and consideration of other factors such as industry conditions, the current business environment and the Company’s historical experience. |
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Advertising | Advertising The Company expenses the costs of producing advertisements at the time production occurs and expenses the cost of communicating the advertising in the period in which the advertising is used. Advertising costs are included in Sales, general and administrative expenses in the Consolidated Statements of (Loss) Income and amounted to approximately $12.6 million, $25.6 million, and $26.6 million for the years ended June 26, 2016, June 28, 2015 and June 29, 2014, respectively. |
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Research and Development | Research and Development Research and development activities are expensed when incurred. |
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Earnings Per Share | (Loss) Earnings Per Share Basic (loss) earnings per share is computed by dividing net (loss) income by the weighted average number of shares of common stock outstanding for the applicable period. Diluted (loss) earnings per share is determined in the same manner as basic (loss) earnings per share except that the number of shares is increased to assume exercise of potentially dilutive stock options, nonvested restricted stock and contingently issuable shares using the treasury stock method, unless the effect of such increases would be anti-dilutive. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recognized in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares. |
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Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation expense for all share-based payments granted based on the fair value of the shares on the date of grant. Compensation expense is then recognized over the award’s vesting period. Stock-Based Compensation Valuation and Expense The Company accounts for its employee stock-based compensation plans using the fair value method. The fair value method requires the Company to estimate the grant-date fair value of its stock-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term. The Company uses the Black-Scholes option-pricing model to estimate the fair value of the Company’s stock option and ESPP awards. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, the risk-free interest rate and expected dividends. Due to the inherent limitations of option-valuation models, future events that are unpredictable and the estimation process utilized in determining the valuation of the stock-based awards, the ultimate value realized by award holders may vary significantly from the amounts expensed in the Company’s financial statements. For RSAs and RSUs, the grant-date fair value is based upon the market price of the Company’s common stock on the date of the grant. This fair value is then amortized to compensation expense over the requisite service period or vesting term. Stock-based compensation expense is recognized net of estimated forfeitures such that expense is recognized only for those stock-based awards that are expected to vest. A forfeiture rate is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments Cash and cash equivalents, short-term investments, accounts and interest receivable, accounts payable and other liabilities approximate their fair values at June 26, 2016 and June 28, 2015 due to the short-term nature of these instruments. |
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Taxes | Taxes Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are recognized for deductible temporary differences, along with net operating loss carryforwards and credit carryforwards, if it is more likely than not that the tax benefits will be realized. To the extent a deferred tax asset cannot be recognized under the preceding criteria, allowances are established. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Taxes payable which are not based on income are accrued ratably over the period to which they apply. For example, payroll taxes are accrued each period end based upon the amount of payroll taxes that are owed as of that date; whereas taxes such as property taxes and franchise taxes are accrued over the fiscal year to which they apply if paid at the end of a period, or they are amortized ratably over the fiscal year if they are paid in advance. |
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Excise Taxes | Sales Taxes The Company presents sales taxes collected from customers and remitted to governmental authorities on a net basis (i.e. excluded from revenue and expenses). |
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Foreign Currency Translation | Foreign Currency Translation Foreign currency translation adjustments are recognized in Other comprehensive income (loss) in the Consolidated Statements of Comprehensive (Loss) Income for changes between the foreign subsidiaries’ functional currency and the United States (U.S.) dollar. Foreign currency translation gains and losses are included in the Company’s equity account balance of Accumulated other comprehensive income, net of taxes in the Consolidated Balance Sheets until such time that the subsidiaries are either sold or substantially liquidated. Because the Company and its subsidiaries transact business in currencies other than the U.S. Dollar, the Company will continue to experience varying amounts of foreign currency exchange gains and losses for subsidiaries with U.S. dollar functional currency. |
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Recently Adopted and Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09: Revenue from Contracts with Customers (Topic 606). The FASB has subsequently issued multiple ASUs which amend and clarify the guidance in Topic 606. The ASU establishes a principles-based approach for accounting for revenue arising from contracts with customers and supersedes existing revenue recognition guidance. The ASU provides that an entity should apply a five-step approach for recognizing revenue, including (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. Also, the entity must provide various disclosures concerning the nature, amount and timing of revenue and cash flows arising from contracts with customers. The effective date will be the first quarter of the Company's fiscal year ending June 30, 2019, using one of two retrospective application methods. The Company is currently analyzing the impact of this new accounting guidance. Income Taxes In November 2015, the FASB issued ASU No. 2015-17: Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The ASU requires entities to present deferred tax assets and deferred tax liabilities as noncurrent in a classified balance sheet. The ASU simplifies the current guidance, which requires entities to separately present deferred tax assets and deferred tax liabilities as current or noncurrent in a classified balance sheet. The ASU is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early application of the ASU is permitted as of the beginning of an interim or annual reporting period and may be applied either prospectively or retrospectively to all periods presented. The Company has adopted the provisions of this ASU prospectively for the interim period ended December 27, 2015 and therefore, prior periods were not retrospectively adjusted. The Company’s adoption of the new accounting guidance did not have a significant impact on its consolidated financial statements. Leases In February 2016, the FASB issued ASU No. 2016-02: Leases (Topic 842). The ASU requires that a lessee recognize in its statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. For income statement purposes, leases are still required to be classified as either operating or finance. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. The effective date will be the first quarter of the Company's fiscal year ending June 28, 2020, using a modified retrospective approach. The Company is currently analyzing the impact of this new pronouncement. Stock Compensation In March 2016, the FASB issued ASU No. 2016-09: Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU simplifies the current stock compensation guidance for tax consequences. The ASU requires an entity to recognize all excess tax benefits and tax deficiencies as income tax expense or benefit in its income statement. The ASU also eliminates the requirement to defer recognition of an excess tax benefit until the benefit is realized through a reduction to taxes payable. For cash flows statement purposes, excess tax benefits should be classified as an operating activity and cash payments made to taxing authorities on the employee’s behalf for withheld shares should be classified as financing activity. The ASU is effective for public companies for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently analyzing the impact of this new pronouncement. |
Basis of Presentation and Summary of Significant Accounting Policies Revision of Prior Period Financial Statements (Tables) |
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Change in Accounting Estimate [Table Text Block] | The following table summarizes the effects of the revision on the Consolidated Balance Sheet as of June 28, 2015 (in thousands):
The following table summarizes the effects of the revision on the Consolidated Statements of Income (Loss) (in thousands):
The revision had no net impact on the Company’s net cash provided by operating activities. The following table summarizes the effects of the revision on the Consolidated Statements of Income (Loss) (in thousands):
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Acquisition Acquisition (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The total purchase price for this acquisition was as follows (in thousands):
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Purchase Price Allocation [Table Text Block] | The purchase price for this acquisition has been allocated to the assets acquired and liabilities assumed based on their estimated fair values as follows (in thousands):
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Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The identifiable intangible assets acquired as a result of the acquisition will be amortized over their respective estimated useful lives as follows (in thousands, except for years):
(1) In-process research and development (IPR&D) is initially classified as indefinite-lived assets and tested for impairment at least annually or when indications of potential impairment exist. |
Financial Statement Details (Tables) |
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Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the components of inventories | The following table summarizes the components of inventories (in thousands):
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Summary of the components of property and equipment, net | The following table summarizes the components of property and equipment, net (in thousands):
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Summary of the components of other current liabilities | The following table summarizes the components of other current liabilities (in thousands):
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Summary of the components of accumulated other comprehensive income, net of taxes | The following table summarizes the components of accumulated other comprehensive income, net of taxes (in thousands):
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Summary of the components of non-operating (loss) income, net | The following table summarizes the components of non-operating (expense) income, net (in thousands):
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Summary of the amounts reclassified out of accumulated other comprehensive income | The following table summarizes the amounts reclassified out of accumulated other comprehensive income, net of taxes (in thousands):
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Summary of the changes in allowance for sales returns, discounts and other incentives [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Summary of the components of accounts receivable and allowances | The following table summarizes the changes in the Company’s allowance for sales returns, discounts and other incentives (in thousands):
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Summary of the changes in the allowance for bad debts [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Summary of the components of accounts receivable and allowances | The following table summarizes the changes in the Company’s allowance for bad debts (in thousands):
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Components of accounts receivable, net [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Summary of the components of accounts receivable and allowances | The following table summarizes the components of accounts receivable, net (in thousands):
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Investments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Short-term Investments by Type | The following table summarizes short-term investments (in thousands):
The following table summarizes short-term investments (in thousands):
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Summary of Gross Unrealized Losses and Fair Value of Short-term Investments by Type and Length of Time | The following table presents the gross unrealized losses and estimated fair value of the Company’s short-term investments, aggregated by investment type and the length of time that individual securities have been in a continuous unrealized loss position (in thousands, except numbers of securities):
The following table presents the gross unrealized losses and estimated fair value of the Company’s short-term investments, aggregated by investment type and the length of time that individual securities have been in a continuous unrealized loss position (in thousands, except numbers of securities):
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Contractual Maturities of Short-term Investments by Type | The contractual maturities of short-term investments at June 26, 2016 were as follows (in thousands):
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Fair Value of Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments Carried at Fair Value | The following table sets forth financial instruments carried at fair value within the U.S. GAAP hierarchy (in thousands):
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Goodwill and Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill by Reporting Unit | Goodwill by reporting unit as of June 26, 2016 was as follows (in thousands):
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Components of Intangible Assets | The following table presents the components of intangible assets, net (in thousands):
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Schedule of Future Amortization Expense of Finite-lived Intangible Assets | Total future amortization expense of finite-lived intangible assets is estimated to be as follows (in thousands):
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Shareholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||
Shares Reserved for Future Issuance | At June 26, 2016, the Company had reserved a total of approximately 17.9 million shares of its common stock and 0.2 million shares of its Series A preferred stock for future issuance as follows (in thousands):
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Earnings Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic Earnings Per Share Computation | The following presents the computation of basic (loss) earnings per share (in thousands, except per share amounts):
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Diluted Earnings Per Share Computation | The following computation reconciles the differences between the basic and diluted (loss) earnings per share presentations (in thousands, except per share amounts):
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Option Activity | The following table summarizes option activity as of June 26, 2016 and changes during the fiscal year then ended (numbers of shares in thousands):
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Summary of Stock Options Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable at June 26, 2016 (shares in thousands):
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Schedule of Other Information Pertaining to Stock Option Awards | Other information pertaining to the Company’s stock option awards is as follows (in thousands, except per share data):
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Summary of Nonvested Restricted Stock Awards and Restricted Stock Unit Awards Outstanding | A summary of nonvested restricted stock awards (RSAs) and restricted stock unit awards (RSUs) outstanding as of June 26, 2016 and changes during the year then ended is as follows (in thousands, except number of shares and units):
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Summary of Total Stock-Based Compensation Expense | Total stock-based compensation expense was as follows (in thousands):
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Schedule of Weighted Average Assumptions Utilized to Value Stock Option Grants | The weighted average assumptions used to value stock option grants were as follows:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Income Before Income Taxes | The following were the components of (loss) income before income taxes (in thousands):
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Components of Income Tax Expense | The following were the components of income tax (benefit) expense (in thousands):
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Schedule of Effective Income Tax Rate and Amount Reconciliation | Actual income tax (benefit) expense differed from the amount computed by applying the U.S. federal tax rate of 35% to pre-tax earnings as a result of the following (in thousands, except percentages):
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Schedule of Tax Effects of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows (in thousands):
|
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Components Giving Rise to Net Deferred Tax Assets (Liabilities) Included in Accompanying Consolidated Balance Sheet | The components giving rise to the net deferred tax assets (liabilities) have been included in the Consolidated Balance Sheets as follows (in thousands):
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Reconciliation of the Change in Uncertain Tax Positions | The following is a tabular reconciliation of the Company’s change in uncertain tax positions (in thousands):
The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the Income tax (benefit) expense line item in the Consolidated Statements of (Loss) Income. Total interest and penalties accrued were as follows (in thousands):
Total interest and penalties recognized were as follows (in thousands):
|
Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | The following table summarizes the changes in the Company’s product warranty liabilities (in thousands):
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Future Minimum Rental Payments | Future minimum rental payments as of June 26, 2016 (under leases currently in effect) are as follows (in thousands):
|
Reportable Segments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenues, gross profit and gross margin, by segment | Revenue, gross profit and gross margin for each of the Company's segments were as follows (in thousands, except percentages):
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Schedule of inventories, by segment | Inventories for each of the Company's segments were as follows (in thousands):
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Schedule of percentage of revenues from external customers by geographic area | The following table sets forth the percentage of revenue from external customers by geographic area:
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Schedule of tangible long-lived assets by country | The following table sets forth the Company’s tangible long-lived assets by country (in thousands):
|
Costs Associated with LED Business Restructuring Costs Associated with LED Business Restucturing (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs [Table Text Block] | The following table summarizes the actual charges incurred (in thousands):
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Severance Liability [Table Text Block] | The following table presents the changes in the severance liability under the LED Products restructuring plan (in thousands):
|
Quarterly Results of Operations (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Results of Operations | The following is a summary of the Company’s consolidated quarterly results of operations for each of the fiscal years ended June 26, 2016 and June 28, 2015 (in thousands, except per share data):
*As revised to reflect the correction of an immaterial error. For additional information, see Note 2, "Basis of Presentation and Summary of Significant Accounting Policies." |
Business Narrative (Details) |
12 Months Ended |
---|---|
Jun. 26, 2016
reportable_segments
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of Reportable Segments | 3 |
Basis of Presentation and Summary of Significant Accounting Policies Revision of Prior Period Financial Statements (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | 42 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2016 |
Mar. 27, 2016 |
Dec. 27, 2015 |
Sep. 27, 2015 |
Jun. 28, 2015 |
Mar. 29, 2015 |
Dec. 28, 2014 |
Sep. 28, 2014 |
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
Dec. 27, 2015 |
Jun. 30, 2013 |
|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Cost of revenue, net | $ 1,158,586 | $ 1,029,885 | |||||||||||
Intangible assets, net | $ 302,810 | $ 310,729 | $ 302,810 | 310,729 | |||||||||
Deferred income taxes | 38,564 | 8,951 | 38,564 | 8,951 | |||||||||
Total assets | 2,766,060 | 2,948,033 | 2,766,060 | 2,948,033 | |||||||||
Deferred income taxes | 943 | 10,211 | 943 | 10,211 | |||||||||
Total long-term liabilities | 175,237 | 231,295 | 175,237 | 231,295 | |||||||||
(Accumulated deficit)/retained earnings | (613) | 170,469 | (613) | 170,469 | |||||||||
Total shareholders' equity | 2,367,824 | 2,461,952 | 2,367,824 | 2,461,952 | 2,986,383 | $ 2,803,590 | |||||||
Total liabilities and shareholders' equity | 2,766,060 | 2,948,033 | 2,766,060 | 2,948,033 | |||||||||
Gross profit | 113,023 | $ 109,033 | $ 134,445 | $ 130,573 | 76,690 | $ 125,148 | $ 136,520 | $ 135,561 | 487,074 | 473,919 | 617,756 | ||
Operating (loss) income | (10,471) | (73,550) | 133,236 | ||||||||||
(Loss) income before income taxes | (23,506) | (83,939) | 146,531 | ||||||||||
Income tax (benefit) expense | (1,970) | (19,247) | 23,041 | ||||||||||
Net (loss) income | $ (10,641) | $ 152 | $ 13,442 | $ (24,489) | $ (88,100) | $ 476 | $ 11,977 | $ 10,955 | $ (21,536) | $ (64,692) | $ 123,490 | ||
Basic | $ (0.11) | $ 0.00 | $ 0.13 | $ (0.24) | $ (0.83) | $ 0.00 | $ 0.10 | $ 0.09 | $ (0.21) | $ (0.57) | $ 1.02 | ||
Diluted | $ (0.11) | $ 0.00 | $ 0.13 | $ (0.24) | $ (0.83) | $ 0.00 | $ 0.10 | $ 0.09 | $ (0.21) | $ 0 | $ 1.00 | ||
As Previously Reported [Member] | |||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Cost of revenue, net | $ 1,157,549 | $ 1,028,846 | |||||||||||
Intangible assets, net | $ 317,154 | 317,154 | |||||||||||
Deferred income taxes | 8,893 | 8,893 | |||||||||||
Total assets | 2,954,400 | 2,954,400 | |||||||||||
Deferred income taxes | 12,174 | 12,174 | |||||||||||
Total long-term liabilities | 233,258 | 233,258 | |||||||||||
(Accumulated deficit)/retained earnings | 174,873 | 174,873 | |||||||||||
Total shareholders' equity | 2,466,356 | 2,466,356 | |||||||||||
Total liabilities and shareholders' equity | 2,954,400 | 2,954,400 | |||||||||||
Gross profit | 474,956 | 618,795 | |||||||||||
Operating (loss) income | (72,513) | 134,275 | |||||||||||
(Loss) income before income taxes | (82,902) | 147,570 | |||||||||||
Income tax (benefit) expense | (18,851) | 23,379 | |||||||||||
Net (loss) income | $ (64,051) | $ 124,191 | |||||||||||
Basic | $ (0.57) | $ 1.03 | |||||||||||
Diluted | $ (0.57) | $ 1.01 | |||||||||||
Revision Adjustment [Member] | |||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Cost of revenue, net | $ 1,037 | $ 1,039 | |||||||||||
Intangible assets, net | (6,425) | (6,425) | |||||||||||
Deferred income taxes | 58 | 58 | |||||||||||
Total assets | (6,367) | (6,367) | |||||||||||
Deferred income taxes | (1,963) | (1,963) | |||||||||||
Total long-term liabilities | (1,963) | (1,963) | |||||||||||
(Accumulated deficit)/retained earnings | (4,404) | (4,404) | |||||||||||
Total shareholders' equity | (4,404) | (4,404) | |||||||||||
Total liabilities and shareholders' equity | $ (6,367) | (6,367) | |||||||||||
Gross profit | (1,037) | (1,039) | |||||||||||
Operating (loss) income | (1,037) | (1,039) | |||||||||||
(Loss) income before income taxes | (1,037) | (1,039) | $ 6,800 | ||||||||||
Income tax (benefit) expense | (396) | (338) | |||||||||||
Net (loss) income | $ (641) | $ (701) | |||||||||||
Basic | $ 0.00 | $ (0.01) | |||||||||||
Diluted | $ 0.00 | $ (0.01) |
Financial Statement Details (Summary of the Components of Accounts Receivable, Net) (Details) - USD ($) $ in Thousands |
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
Jun. 30, 2013 |
---|---|---|---|---|
Accounts Receivable, Net [Abstract] | ||||
Receivables, gross | $ 219,826 | $ 249,192 | ||
Allowance for bad debts | (5,505) | (4,941) | ||
Accounts receivable, net | 165,611 | 186,157 | ||
Billed trade receivables [Member] | ||||
Accounts Receivable, Net [Abstract] | ||||
Receivables, gross | 217,691 | 246,969 | ||
Unbilled contract receivables [Member] | ||||
Accounts Receivable, Net [Abstract] | ||||
Receivables, gross | 2,135 | 2,223 | ||
Sales Returns, Discounts and Other Incentives [Member] | ||||
Accounts Receivable, Net [Abstract] | ||||
Allowance for sales returns, discounts and other incentives | $ (48,710) | $ (58,094) | $ (29,010) | $ (26,500) |
Financial Statement Details (Summary of Changes in Allowance for Sales Returns and Other Incentives) (Details) - Sales Returns, Discounts and Other Incentives [Member] - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 58,094 | $ 29,010 | $ 26,500 |
Current period claims | (163,523) | (148,715) | (115,568) |
Provision for sales returns, discounts and other incentives | 154,139 | 177,799 | 118,078 |
Balance at end of period | $ 48,710 | $ 58,094 | $ 29,010 |
Financial Statement Details (Rollforward of Allowance for Bad Debts) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of period | $ 4,941 | ||
Balance at end of period | 5,505 | $ 4,941 | |
Allowance for Bad Debts [Member] | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of period | 4,941 | 2,761 | $ 2,471 |
Current period provision | 564 | 2,184 | 903 |
Write-offs, net of recoveries | 0 | (4) | (613) |
Balance at end of period | $ 5,505 | $ 4,941 | $ 2,761 |
Financial Statement Details (Summary of the Components of Inventories) (Details) - USD ($) $ in Thousands |
Jun. 26, 2016 |
Jun. 28, 2015 |
---|---|---|
Inventory, Net [Abstract] | ||
Raw material | $ 83,299 | $ 86,331 |
Work-in-progress | 96,779 | 93,424 |
Finished goods | 123,464 | 100,821 |
Inventories | $ 303,542 | $ 280,576 |
Financial Statement Details Financial Statement Details (Summary of the Components of Other Current Liabilities) (Details) - USD ($) $ in Thousands |
Jun. 26, 2016 |
Jun. 28, 2015 |
---|---|---|
Financial Statement Details [Abstract] | ||
Accrued taxes | $ 12,720 | $ 13,935 |
Accrued professional fees | 7,980 | 10,180 |
Accrued warranty | 20,207 | 13,006 |
Accrued other | 5,164 | 7,087 |
Other current liabilities | $ 46,071 | $ 44,208 |
Financial Statement Details Financial Statement Details (Components of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands |
Jun. 26, 2016 |
Jun. 28, 2015 |
---|---|---|
Financial Statement Details [Abstract] | ||
Currency translation gain | $ 4,624 | $ 4,986 |
Net unrealized gain on available-for-sale securities | 4,104 | 812 |
Accumulated other comprehensive income, net of taxes | $ 8,728 | $ 5,798 |
Financial Statement Details Financial Statement Details (Components of Non-Operating Income) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Financial Statement Details [Abstract] | |||
Gain on sale of investments, net | $ 238 | $ 925 | $ 68 |
Loss on equity method investment | (15,357) | (22,624) | 0 |
Dividends from equity method investment | 1,655 | 2,581 | 0 |
Interest income, net | 4,472 | 9,086 | 11,932 |
Foreign currency (loss) gain, net | (4,500) | (929) | 45 |
Other, net | 457 | 572 | 1,250 |
Non-operating (expense) income, net | $ (13,035) | $ (10,389) | $ 13,295 |
Financial Statement Details Financial Statement Details (Amount Reclassified Out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2016 |
Mar. 27, 2016 |
Dec. 27, 2015 |
Sep. 27, 2015 |
Jun. 28, 2015 |
Mar. 29, 2015 |
Dec. 28, 2014 |
Sep. 28, 2014 |
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Non-operating (expense) income, net | $ (13,035) | $ (10,389) | $ 13,295 | ||||||||
(Loss) income before income taxes | (23,506) | (83,939) | 146,531 | ||||||||
Income tax (benefit) expense | (1,970) | (19,247) | 23,041 | ||||||||
Net (loss) income | $ (10,641) | $ 152 | $ 13,442 | $ (24,489) | $ (88,100) | $ 476 | $ 11,977 | $ 10,955 | (21,536) | (64,692) | 123,490 |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Non-operating (expense) income, net | 238 | 925 | 68 | ||||||||
(Loss) income before income taxes | 238 | 925 | 68 | ||||||||
Income tax (benefit) expense | 20 | 210 | 11 | ||||||||
Net (loss) income | $ 218 | $ 715 | $ 57 |
Goodwill and Intangible Assets Goodwill and Intangible Assets (Schedule of Goodwill by Reportable Segment) (Details) - USD ($) $ in Thousands |
Jun. 26, 2016 |
Jun. 28, 2015 |
---|---|---|
Goodwill [Line Items] | ||
Goodwill | $ 618,828 | $ 616,345 |
LED Products [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 245,857 | 245,857 |
Lighting Products [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 337,781 | 337,781 |
Power and RF Products [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 35,190 | $ 32,707 |
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill, Acquired During Period | $ 2,483 | ||
Amortization of intangible assets | 40,400 | $ 37,100 | $ 38,700 |
Investments in intangible assets | 14,443 | 19,491 | 20,183 |
Impairment charges related to patent portfolio | $ 6,700 | $ 3,400 | $ 1,400 |
Goodwill and Intangible Assets (Schedule of Future Amortization Expense of Intangible Assets) (Details) - USD ($) $ in Thousands |
Jun. 26, 2016 |
Jun. 28, 2015 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
June 25, 2017 | $ 39,068 | |
June 24, 2018 | 37,530 | |
June 30, 2019 | 24,674 | |
June 28, 2020 | 19,402 | |
June 27, 2021 | 18,026 | |
Thereafter | 84,430 | |
Future amortization expense of intangible assets, total | $ 223,130 | $ 231,049 |
Long-term Debt Long-term Debt (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jan. 08, 2015 |
|
Long-term Debt, Unclassified [Abstract] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 500,000 | $ 150,000 | |
Long-term Line of Credit, Noncurrent | 160,000 | $ 200,000 | |
Line of Credit Facility, Remaining Borrowing Capacity | $ 340,000 | ||
Long-term Debt, Average Interest Rate | 1.14% | 0.95% | |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.09% | 0.09% |
Earnings Per Share (Basic Earnings Per Share Computation) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2016 |
Mar. 27, 2016 |
Dec. 27, 2015 |
Sep. 27, 2015 |
Jun. 28, 2015 |
Mar. 29, 2015 |
Dec. 28, 2014 |
Sep. 28, 2014 |
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Earnings Per Share [Abstract] | |||||||||||
Net (loss) income | $ (10,641) | $ 152 | $ 13,442 | $ (24,489) | $ (88,100) | $ 476 | $ 11,977 | $ 10,955 | $ (21,536) | $ (64,692) | $ 123,490 |
Weighted average common shares | 101,783 | 113,022 | 120,623 | ||||||||
Basic (loss) earnings per share | $ (0.11) | $ 0.00 | $ 0.13 | $ (0.24) | $ (0.83) | $ 0.00 | $ 0.10 | $ 0.09 | $ (0.21) | $ (0.57) | $ 1.02 |
Earnings Per Share (Diluted Earnings Per Share Computation) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2016 |
Mar. 27, 2016 |
Dec. 27, 2015 |
Sep. 27, 2015 |
Jun. 28, 2015 |
Mar. 29, 2015 |
Dec. 28, 2014 |
Sep. 28, 2014 |
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Earnings Per Share [Abstract] | |||||||||||
Net (loss) income | $ (10,641) | $ 152 | $ 13,442 | $ (24,489) | $ (88,100) | $ 476 | $ 11,977 | $ 10,955 | $ (21,536) | $ (64,692) | $ 123,490 |
Weighted average common shares - basic | 101,783 | 113,022 | 120,623 | ||||||||
Dilutive effect of stock options, nonvested shares and Employee Stock Purchase Plan purchase rights | 0 | 0 | 2,291 | ||||||||
Weighted average common shares - diluted | 101,783 | 113,022 | 122,914 | ||||||||
Diluted (loss) earnings per share | $ (0.11) | $ 0.00 | $ 0.13 | $ (0.24) | $ (0.83) | $ 0.00 | $ 0.10 | $ 0.09 | $ (0.21) | $ 0 | $ 1.00 |
Earnings Per Share (Narrative) (Details) - shares shares in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Common stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive potential common shares excluded from diluted earnings per share calculation | 11.4 | 7.0 | 2.6 |
Stock-Based Compensation (Schedule of Other Information Pertaining to Stock-Based Awards of Options) (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Share-based Compensation [Abstract] | |||
Weighted average grant date fair value per share of options | $ 8.79 | $ 15.27 | $ 19.31 |
Total intrinsic value of options exercised | $ 838 | $ 9,418 | $ 67,044 |
Stock-Based Compensation (Total Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Employee Service share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 58,727 | $ 64,301 | $ 61,686 |
Cost of Revenue, Net [Member] | |||
Employee Service share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 12,394 | 12,836 | 11,353 |
Research and Development [Member] | |||
Employee Service share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 13,842 | 16,524 | 15,392 |
Sales, General and Administrative [Member] | |||
Employee Service share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 32,491 | $ 34,941 | $ 34,941 |
Stock-Based Compensation (Schedule of Weighted Average Assumptions Utilized to Value Stock Option Grants) (Details) |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Share-based Compensation [Abstract] | |||
Risk-free interest rate | 1.18% | 1.17% | 1.16% |
Expected life, in years | 3 years 7 months 28 days | 3 years 6 months 15 days | 3 years 9 months 18 days |
Expected volatility | 43.30% | 45.20% | 44.50% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Income Taxes (Components of Income from Continuing Operations) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ (45,278) | $ (41,593) | $ 57,867 |
Foreign | 21,772 | (42,346) | 88,664 |
(Loss) income before income taxes | $ (23,506) | $ (83,939) | $ 146,531 |
Income Taxes (Components of Income Tax Expense from Continuing Operations) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Current, Federal | $ 5,347 | $ (12,470) | $ 3,423 |
Current, Foreign | 7,278 | 13,327 | 15,371 |
Current, State | 1,244 | 1,242 | 1,876 |
Total current | 13,869 | 2,099 | 20,670 |
Deferred, Federal | (26,086) | (7,418) | (88) |
Deferred, Foreign | 12,340 | (12,754) | 3,003 |
Deferred, State | (2,093) | (1,174) | (544) |
Total deferred | (15,839) | (21,346) | 2,371 |
Income tax (benefit) expense | $ (1,970) | $ (19,247) | $ 23,041 |
Income Taxes (Schedule of Tax Effects of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Jun. 26, 2016 |
Jun. 28, 2015 |
---|---|---|
Components of Deferred Tax Assets and Liabilities [Abstract] | ||
Compensation | $ 3,176 | $ 1,864 |
Inventories | 19,656 | 23,172 |
Sales return reserve and allowance for bad debts | 6,615 | 8,266 |
Warranty reserve | 8,013 | 5,042 |
Federal and state net operating loss carryforwards | 11,443 | 7,237 |
Federal credits | 8,802 | 3,688 |
State credits | 3,286 | 2,573 |
48C investment tax credits | 17,838 | 14,980 |
Investments | 872 | 953 |
Stock-based compensation | 48,191 | 40,291 |
Deferred revenue | 4,159 | 4,850 |
Other | 2,792 | 2,034 |
Total gross deferred assets | 134,843 | 114,950 |
Less valuation allowance | (10,770) | (1,485) |
Deferred tax assets, net | 124,073 | 113,465 |
Property and equipment | (9,549) | (13,337) |
Intangible assets | (69,355) | (57,819) |
Investments | (2,445) | (505) |
Prepaid taxes and other | (1,527) | (1,350) |
Foreign earnings recapture | (3,576) | (2,524) |
Total gross deferred liability | (86,452) | (75,535) |
Deferred tax asset, net | $ 37,621 | $ 37,930 |
Income Taxes (Components Giving Rise to Net Deferred Tax Assets (Liabilities) Included in Accompanying Consolidated Balance Sheet) (Details) - USD ($) $ in Thousands |
Jun. 26, 2016 |
Jun. 28, 2015 |
---|---|---|
Operating Loss Carryforwards [Line Items] | ||
Deferred Tax Assets, Net, Current | $ 0 | $ 39,190 |
Deferred Tax Assets, Net, Noncurrent | 38,564 | 8,951 |
Deferred Tax Liabilities, Net, Current | 0 | 0 |
Deferred Tax Liabilities, Net, Noncurrent | (943) | (10,211) |
Internal Revenue Service (IRS) [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred Tax Assets, Net, Current | 0 | 23,231 |
Deferred Tax Assets, Net, Noncurrent | 26,411 | 52 |
Deferred Tax Liabilities, Net, Current | 0 | 0 |
Deferred Tax Liabilities, Net, Noncurrent | 0 | (8,915) |
Hong Kong and Other Income Taxes [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred Tax Assets, Net, Current | 0 | 15,959 |
Deferred Tax Assets, Net, Noncurrent | 12,153 | 8,899 |
Deferred Tax Liabilities, Net, Current | 0 | 0 |
Deferred Tax Liabilities, Net, Noncurrent | $ (943) | $ (1,296) |
Income Taxes (Reconciliation of Company's Change in Uncertain Tax Positions) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Reconciliation of Changes in Uncertain Tax Positions [Roll Forward] | |||
Balance at beginning of period | $ 17,795 | $ 18,389 | $ 2,732 |
Increases related to prior year tax positions | 617 | 0 | 18,040 |
Decreases related to prior year tax positions | (530) | (407) | (741) |
Expiration of statute of limitations for assessment of taxes | (155) | (187) | (1,642) |
Balance at end of period | 17,727 | 17,795 | 18,389 |
Accrued interest and penalties | (5) | 10 | |
Recognized interest and penalties (benefit) | $ (15) | $ (94) | $ (51) |
Commitments and Contingencies (Schedule of Product Warranty Liability) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | |||
Balance at beginning of period | $ 13,968 | $ 6,822 | $ 6,171 |
Warranties accrued in current period | 19,866 | 9,242 | 4,256 |
Recall cossts accrued in current period | 5,756 | 5,418 | 0 |
Changes in estimates for pre-existing warranties | 0 | 0 | 907 |
Expenditures | (18,059) | (7,514) | (4,512) |
Balance at end of period | 21,531 | $ 13,968 | $ 6,822 |
Product Warranty Liability, Long-term | $ 1,300 | ||
Minimum [Member] | |||
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | |||
Product Warranty, Range Period | 90 days | ||
Maximum [Member] | |||
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | |||
Product Warranty, Range Period | 10 years |
Commitments and Contingencies (Future Minimum Rental Payments) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense associated with operating leases | $ 6,600 | $ 8,200 | $ 5,800 |
Minimum Rental Amount, June 25, 2017 | 4,850 | ||
Minimum Rental Amount, June 24, 2018 | 2,974 | ||
Minimum Rental Amount, June 30, 2019 | 1,663 | ||
Minimum Rental Amount, June 28, 2020 | 1,269 | ||
Minimum Rental Amount, June 27, 2021 | 577 | ||
Minimum Rental Amount, Thereafter | 26 | ||
Total future minimum rental payments | $ 11,359 |
Reportable Segments Schedule of Financial Results, by Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2016 |
Mar. 27, 2016 |
Dec. 27, 2015 |
Sep. 27, 2015 |
Jun. 28, 2015 |
Mar. 29, 2015 |
Dec. 28, 2014 |
Sep. 28, 2014 |
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 388,413 | $ 366,919 | $ 435,806 | $ 425,489 | $ 382,157 | $ 409,519 | $ 413,157 | $ 427,672 | $ 1,616,627 | $ 1,632,505 | $ 1,647,641 |
Gross profit | $ 113,023 | $ 109,033 | $ 134,445 | $ 130,573 | $ 76,690 | $ 125,148 | $ 136,520 | $ 135,561 | $ 487,074 | $ 473,919 | $ 617,756 |
Gross margin | 30.00% | 29.00% | 37.00% | ||||||||
Lighting Products [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 889,133 | $ 906,502 | $ 706,425 | ||||||||
Gross profit | $ 238,242 | $ 235,542 | $ 197,304 | ||||||||
Gross margin | 27.00% | 26.00% | 28.00% | ||||||||
LED Products [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 610,835 | $ 602,082 | $ 833,684 | ||||||||
Gross profit | $ 212,367 | $ 190,912 | $ 381,003 | ||||||||
Gross margin | 35.00% | 32.00% | 46.00% | ||||||||
Power and RF Products [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 116,659 | $ 123,921 | $ 107,532 | ||||||||
Gross profit | $ 56,069 | $ 67,764 | $ 60,723 | ||||||||
Gross margin | 48.00% | 55.00% | 56.00% | ||||||||
SegmentsTotal [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross profit | $ 506,678 | $ 494,218 | $ 639,030 | ||||||||
Unallocated costs [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross profit | $ (19,604) | $ (20,299) | $ (21,274) |
Reportable Segments Schedule of Inventory by Reportable Segment (Details) - USD ($) $ in Thousands |
Jun. 26, 2016 |
Jun. 28, 2015 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Inventories | $ 303,542 | $ 280,576 |
Lighting Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Inventories | 172,261 | 150,755 |
LED Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Inventories | 106,787 | 114,203 |
Power and RF Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Inventories | 19,628 | 11,536 |
Total segment inventories [Member] | ||
Segment Reporting Information [Line Items] | ||
Inventories | 298,676 | 276,494 |
Unallocated inventories [Member] | ||
Segment Reporting Information [Line Items] | ||
Inventories | $ 4,866 | $ 4,082 |
Reportable Segments (Schedule of Long-Lived Assets Including Net Property and Equipment by Country) (Details) - USD ($) $ in Thousands |
Jun. 26, 2016 |
Jun. 28, 2015 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Tangible long-lived assets | $ 599,723 | $ 635,072 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Tangible long-lived assets | 488,342 | 502,579 |
China | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Tangible long-lived assets | 108,183 | 131,140 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Tangible long-lived assets | $ 3,198 | $ 1,353 |
Concentrations of Risk (Schedule of Revenue by Major Customer in Percent) (Details) - Sales Revenue, Net [Member] |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% |
Customer Concentration Risk [Member] | Arrow Electronics, Inc. [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 10.00% | 12.00% | 13.00% |
Customer Concentration Risk [Member] | The Home Depot, Inc. [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 8.00% | 11.00% | 11.00% |
Concentrations of Risk (Schedule of Accounts Receivable from Customers in Percent) (Details) |
12 Months Ended |
---|---|
Jun. 26, 2016 | |
Credit Concentration Risk [Member] | Accounts Receivable [Member] | |
Concentration Risk [Line Items] | |
Customers meeting concentration risk criteria | 0 |
Retirement Savings Plan (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016
USD ($)
plans
|
Jun. 28, 2015
USD ($)
|
Jun. 29, 2014
USD ($)
|
|
General Discussion of Pension and Other Postretirement Benefits [Abstract] | |||
Employee Benefit Plans, Number Of Plans | plans | 1 | ||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ | $ 7.0 | $ 6.9 | $ 6.3 |
Related Party Transactions (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
|
Related Party Transaction [Line Items] | ||
Equity Method Investment, Ownership Percentage | 14.00% | |
Intematix Corporation [Member] | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Purchases from Related Party | $ 3.9 | $ 7.2 |
Outstanding Payable to Related Party | 0.3 | $ 0.1 |
Lextar Electronics Corporation [Member] | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Purchases from Related Party | 31.7 | |
Outstanding Payable to Related Party | $ 7.6 |
Costs Associated with LED Business Restructuring Schedule of Severance Liability (Details) - Employee Severance [Member] - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 30, 2014 |
|
Restructuring Cost and Reserve [Line Items] | |||
Supplemental Unemployment Benefits, Severance Benefits | $ 0 | $ 2,019 | $ 0 |
Severance Costs | 264 | 2,019 | |
Severance Payments | $ (2,283) | $ 0 |
Subsequent Event Subsequent Event (Details) - Subsequent Event [Member] |
6 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Subsequent Event [Line Items] | |
Disposal group, number of employees | 545 |
Proceeds from Divestiture of Businesses | $ 850 |
Minimum [Member] | |
Subsequent Event [Line Items] | |
Gain (Loss) on Contract Termination | 12.5 |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Gain (Loss) on Contract Termination | $ 42.5 |
Quarterly Results of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2016 |
Mar. 27, 2016 |
Dec. 27, 2015 |
Sep. 27, 2015 |
Jun. 28, 2015 |
Mar. 29, 2015 |
Dec. 28, 2014 |
Sep. 28, 2014 |
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
|
Quarterly Financial Data [Abstract] | |||||||||||
Revenue, net | $ 388,413 | $ 366,919 | $ 435,806 | $ 425,489 | $ 382,157 | $ 409,519 | $ 413,157 | $ 427,672 | $ 1,616,627 | $ 1,632,505 | $ 1,647,641 |
Cost of revenue, net | 275,390 | 257,886 | 301,361 | 294,916 | 305,467 | 284,371 | 276,637 | 292,111 | 1,129,553 | 1,158,586 | 1,029,885 |
Gross profit | 113,023 | 109,033 | 134,445 | 130,573 | 76,690 | 125,148 | 136,520 | 135,561 | 487,074 | 473,919 | 617,756 |
Net (loss) income | $ (10,641) | $ 152 | $ 13,442 | $ (24,489) | $ (88,100) | $ 476 | $ 11,977 | $ 10,955 | $ (21,536) | $ (64,692) | $ 123,490 |
(Loss) earnings per share: | |||||||||||
Basic | $ (0.11) | $ 0.00 | $ 0.13 | $ (0.24) | $ (0.83) | $ 0.00 | $ 0.10 | $ 0.09 | $ (0.21) | $ (0.57) | $ 1.02 |
Diluted | $ (0.11) | $ 0.00 | $ 0.13 | $ (0.24) | $ (0.83) | $ 0.00 | $ 0.10 | $ 0.09 | $ (0.21) | $ 0 | $ 1.00 |
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