Financial Statement Details

6 Months Ended

Dec. 27, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Financial Statement Details

Financial Statement Details

Accounts Receivable, net

Accounts receivable, net consisted of the following:

(in millions of U.S. Dollars)	December 27, 2020	June 28, 2020
Billed trade receivables	$81.1	$71.5
Unbilled contract receivables	1.1	1.2
Royalties	0.5	0.4
	82.7	73.1
Allowance for bad debts	(0.7)	(0.7)
Accounts receivable, net	$82.0	$72.4

Changes in the Company’s allowance for bad debts were as follows:

(in millions of U.S. Dollars)	December 27, 2020
Balance at beginning of period	$0.7
Current period provision change	—
Write-offs, net of recoveries	—
Balance at end of period	$0.7

Inventories

Inventories consisted of the following:

(in millions of U.S. Dollars)	December 27, 2020	June 28, 2020
Raw material	$43.5	$36.9
Work-in-progress	85.8	73.9
Finished goods	15.0	11.1
Inventories	$144.3	$121.9

In addition to inventory held by the Company associated with the Wolfspeed business, the Company holds inventory related to a future Wafer Supply Agreement to be entered into in connection with the LED Business Divestiture as well as unallocated inventoried costs consisting primarily of manufacturing employees’ stock-based compensation, profit sharing and quarterly or annual incentive compensation, matching contributions under the Company’s 401(k) plan, and acquisition related costs.

	December 27, 2020	June 28, 2020
Wolfspeed	$116.4	$97.3
Inventory related to future Wafer Supply Agreement	17.1	19.0
Unallocated inventories	10.8	5.6
Consolidated inventories	$144.3	$121.9

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:

(in millions of U.S. Dollars)	December 27, 2020	June 28, 2020
Accounts payable, trade	$85.1	$88.1
Accrued salaries and wages	54.1	42.3
Accrued expenses	124.1	55.3
Other	4.0	4.1
Accounts payable and accrued expenses	$267.3	$189.8

Other Operating Expense

Other operating expense consisted of the following:

	Three months ended		Six months ended
(in millions of U.S. Dollars)	December 27, 2020	December 29, 2019	December 27, 2020	December 29, 2019
Factory optimization restructuring	$1.3	$1.2	$2.9	$2.4
Severance and other restructuring	—	—	2.8	0.8
Total restructuring costs	1.3	1.2	5.7	3.2
Project, transformation and transaction costs	0.1	7.9	1.3	9.4
Factory optimization start-up costs	1.2	1.5	4.2	2.9
Non-restructuring related executive severance	—	0.3	—	1.5
Other operating expense	$2.6	$10.9	$11.2	$17.0

Accumulated Other Comprehensive Income, net of taxes

Accumulated other comprehensive income, net of taxes, consisted of the following:

(in millions of U.S. Dollars)	December 27, 2020	June 28, 2020
Currency translation gain	$9.5	$9.5
Net unrealized gain on available-for-sale securities (1)	6.0	6.5
Accumulated other comprehensive income, net of taxes	$15.5	$16.0

(1) Amounts as of December 27, 2020 and June 28, 2020 include a $2.4 million loss related to tax on unrealized gain (loss) on available-for-sale securities.

Reclassifications Out of Accumulated Other Comprehensive Income

Reclassifications out of accumulated other comprehensive income were $0.2 million for the three and six months ended December 27, 2020 and $0.1 million for the three and six months ended December 29, 2019. Amounts were reclassified to non-operating expense, net on the consolidated statements of operations.

Non-Operating (Income) Expense, net

The following table summarizes the components of non-operating (income) expense, net:

	Three months ended		Six months ended
(in millions of U.S. Dollars)	December 27, 2020	December 29, 2019	December 27, 2020	December 29, 2019
Foreign currency loss, net	($2.2)	($1.3)	($2.4)	($1.2)
Gain on sale of investments, net	(0.2)	(0.1)	(0.2)	(0.1)
Gain on equity investment, net	(10.4)	(6.4)	(7.0)	(9.9)
Interest income	(2.2)	(4.7)	(4.9)	(10.2)
Interest expense, net of capitalized interest	11.9	7.7	25.0	15.1
Other, net	—	(0.2)	0.3	(0.3)
Non-operating (income) expense, net	($3.1)	($5.0)	$10.8	($6.6)

The change in gain on equity investment, net is due to fluctuations in the Lextar Electronics Corporation (Lextar) stock price.

Statements of Cash Flows - non-cash activities

	Six months ended
	December 27, 2020	December 29, 2019
Lease asset and liability additions (1)	$1.2	$14.3
Lease asset and liability modifications, net	0.2	4.8
Transfer of finance lease liability to accounts payable and accrued expenses (2)	4.2	—

(1) $11.0 million of the lease asset and liability additions for the six months ended December 29, 2019 relates to the increase of right-of-use assets and matching lease liabilities as a result of adopting ASC 842. See Note 4, "Leases", for further information.

(2) In the first quarter of fiscal 2021, the Company executed the available bargain purchase option for certain finance leases relating to property and equipment, net, in order to purchase the assets.

Accrued property and equipment as of December 27, 2020 and December 29, 2019 was $145.0 million and $6.2 million, respectively.