Balance Sheet and Other Details

12 Months Ended

Jul. 01, 2023

Balance Sheet and Other Details

Balance Sheet and Other Details

Note 6. Balance Sheet and Other Details

Contract Balances

Unbilled Receivables: The Company records a receivable when an unconditional right to consideration exists and transfer of control has occurred, such that only the passage of time is required before payment of consideration is due. Timing of revenue recognition may differ from the timing of customer invoicing. Payment terms vary based on product or service offerings and payment is generally required within 30 to 90 days from date of invoicing. Certain performance obligations may require payment before delivery of the service to the customer.

Contract assets: A Contract Asset is recognized when a conditional right to consideration exists and transfer of control has occurred. Contract Assets include fixed fee professional services, where the transfer of services has occurred in advance of the Company's right to invoice. Contract Assets, included in Accounts receivable, net, on the Consolidated Balance Sheets, are not material to the Consolidated Financial Statements. Contract Asset balances will fluctuate based upon the timing of transfer of services, billings and customers’ acceptance of contractual milestones.

Gross receivables include both billed and Unbilled Receivables/Contract Assets. As of July 1, 2023 and July 2, 2022, the Company had total Unbilled Receivables/Contract Assets of $13.7 million and $7.3 million, respectively.

Deferred revenue: Deferred revenue consists of contract liabilities primarily related to support, solution deployment services, software maintenance, product, professional services, and training when the Company has a right to invoice or payments have been received and transfer of control has not occurred. Revenue is recognized on these items when the revenue recognition criteria are met, generally resulting in ratable recognition over the contract term. Contract liabilities are included in Other current liabilities on the Consolidated Balance Sheets.

The Company also has short-term and long-term deferred revenues related to undelivered hardware and professional services, consisting of installations and consulting engagements, which are recognized as the Company's performance obligations under the contract are completed and accepted by the customer.

The following table summarizes the activity related to deferred revenue, for the year ended July 1, 2023 (in millions):

	July 1, 2023
Deferred revenue:
Balance at beginning of period	$	100.4
Revenue deferrals for new contracts(1)	127.9
Revenue recognized during the period(2)	(126.3)
Balance at end of period(3)	$	102.0
Short-term deferred revenue	$	78.6
Long-term deferred revenue	$	23.4

(1) Included in these amounts is the impact from foreign currency exchange rate fluctuations.

(2) Revenue recognized during the period represents releases from the balance at the beginning of the period as well as releases from the following period quarter-end deferrals.

(3) The long-term portion of deferred revenue is included as a component of Other non-current liabilities on the Consolidated Balance Sheets.

Remaining performance obligations: Remaining performance obligations represent the aggregate amount of the transaction price allocated to performance obligations not delivered or are incomplete, as of July 1, 2023. Remaining performance obligations include deferred revenue plus unbilled amounts not yet recorded. The aggregate amount of the transaction price allocated to remaining performance obligations does not include amounts owed under cancellable contracts where there is no substantive termination penalty.

Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidation, adjustments for revenue that has not materialized, and adjustments for currency.

The value of the transaction price allocated to remaining performance obligations as of July 1, 2023, was $256.3 million. The Company expects to recognize 89% of remaining performance obligations as revenue within the next 12 months, and the remainder thereafter.

Accounts Receivable Allowances

The table below presents the activities and balances for allowance for doubtful accounts, as follows (in millions):

	Balance at Beginning of Period		Charged to Costs and Expenses		Deduction(1)		Balance at End of Period
Year Ended July 1, 2023	$	1.4	$	0.4	$	(0.8)	$	1.0
Year Ended July 2, 2022	$	2.0	$	0.9	$	(1.5)	$	1.4
Year Ended July 3, 2021	$	3.0	$	1.1	$	(2.1)	$	2.0

(1) Represents the effect of currency translation adjustments and write-offs of uncollectible accounts, net of recoveries.

Inventories, net

The following table presents the components of inventories, net, as follows (in millions):

	July 1, 2023		July 2, 2022
Finished goods	$	49.0	$	41.6
Work in process	17.7		17.7
Raw materials	49.4		50.8
Inventories, net	$	116.1	$	110.1

Prepayments and Other Current Assets

The following table presents the components of prepayments and other current assets, as follows (in millions):

	July 1, 2023		July 2, 2022
Refundable income taxes	$	27.6	$	14.5
Prepayments	16.5		16.0
Advances to contract manufacturers	9.8		11.8
Transaction tax receivables	5.1		10.4
Fair value of forward contracts	3.5		3.8
Assets held for sale	2.5		2.5
Other current assets	7.1		10.2
Prepayments and other current assets	$	72.1	$	69.2

Property, Plant and Equipment, net

The following table presents the components of property, plant and equipment, net, as follows (in millions):

	July 1, 2023		July 2, 2022
Land	$	19.6	$	19.2
Buildings and improvements	74.9		41.7
Machinery and equipment	362.6		316.7
Furniture, fixtures, software and office equipment	76.7		74.0
Leasehold improvements	70.7		69.8
Construction in progress	24.5		71.2
Property, plant and equipment, gross	629.0		592.6
Less: Accumulated depreciation and amortization	(386.0)		(363.7)
Property, plant and equipment, net	$	243.0	$	228.9

Other non-current assets

The following table presents the components of other non-current assets, as follows (in millions):

	July 1, 2023		July 2, 2022
Operating ROU assets (Note 12)	$	40.4	$	45.2
Long-term restricted cash	4.6		9.3
Deferred contract cost	2.9		2.4
Debt issuance cost - Revolving Credit Facility	2.8		3.5
Deposits	2.3		1.9
Other non-current assets	8.7		3.5
Other non-current assets	$	61.7	$	65.8

Other current liabilities

The following table presents the components of other current liabilities, as follows (in millions):

	July 1, 2023		July 2, 2022
Operating lease liabilities (Note 12)	$	10.1	$	10.1
Income tax payable	4.4		9.6
Restructuring accrual (Note 13)	5.8		—
Interest payable	5.5		4.6
Transaction tax payable	4.3		11.5
Warranty accrual	4.2		4.4
Acquisition related holdback and related accruals	4.1		0.1
Fair value of forward contracts	2.4		8.4
Fair value of contingent consideration (Note 5)	1.1		1.8
Other	7.9		5.8
Other current liabilities	$	49.8	$	56.3

Other Non-current Liabilities

The following table presents the components of other non-current liabilities, as follows (in millions):

	July 1, 2023		July 2, 2022
Pension and post-employment benefits	$	53.2	$	59.6
Operating lease liabilities (Note 12)	29.4		33.5
Long-term deferred revenue	23.4		19.4
Fair value of contingent consideration (Note 5)	18.6		0.7
Financing obligation	15.8		16.0
Uncertain tax position	15.8		12.9
Deferred tax liability	13.9		9.5
Warranty accrual	4.8		6.2
Asset retirement obligations	3.8		3.7
Other	8.0		8.9
Other non-current liabilities	$	186.7	$	170.4

Interest and Other Income, net

The following table presents the components of interest and other income, net, as follows (in millions):

	Years Ended
	July 1, 2023		July 2, 2022		July 3, 2021
Interest income	$	10.2	$	3.4	$	2.9
Foreign exchange gain, net	(2.2)		1.4		—
Other income, net	(0.4)		0.4		0.4
Interest and other income, net	$	7.6	$	5.2	$	3.3