Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 26, 2022 | Apr. 29, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 26, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-33486 | |
Entity Registrant Name | INFINERA CORP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0560433 | |
Entity Address, Address Line One | 6373 San Ignacio Avenue | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95119 | |
City Area Code | 408 | |
Local Phone Number | 572-5200 | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | INFN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 215,194,919 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001138639 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Current assets: | ||
Cash | $ 191,937 | $ 190,611 |
Short-term restricted cash | 6,528 | 2,840 |
Accounts receivable, net | 276,056 | 358,954 |
Inventory | 291,690 | 291,367 |
Prepaid expenses and other current assets | 161,188 | 147,989 |
Total current assets | 927,399 | 991,761 |
Property, plant and equipment, net | 158,397 | 160,218 |
Operating lease right-of-use assets | 38,469 | 45,338 |
Intangible assets | 76,266 | 86,574 |
Goodwill | 249,534 | 255,788 |
Long-term restricted cash | 5,563 | 9,070 |
Other long-term assets | 39,910 | 38,475 |
Total assets | 1,495,538 | 1,587,224 |
Current liabilities: | ||
Accounts payable | 188,460 | 216,404 |
Accrued expenses and other current liabilities | 142,903 | 147,029 |
Accrued compensation and related benefits | 79,850 | 88,021 |
Short-term debt, net | 495 | 533 |
Accrued warranty | 21,000 | 23,204 |
Deferred revenue | 129,796 | 137,297 |
Total current liabilities | 562,504 | 612,488 |
Long-term debt, net | 599,474 | 476,789 |
Long-term accrued warranty | 18,585 | 21,106 |
Long-term deferred revenue | 29,907 | 31,612 |
Long-term deferred tax liability | 2,280 | 2,364 |
Long-term operating lease liabilities | 50,404 | 54,326 |
Other long-term liabilities | 62,179 | 64,768 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value Authorized shares – 25,000 and no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value Authorized shares – 500,000 as of March 26, 2022 and December 25, 2021 Issued and outstanding shares – 213,231 as of March 26, 2022 and 211,381 as of December 25, 2021 | 213 | 211 |
Additional paid-in capital | 1,851,002 | 2,026,098 |
Accumulated other comprehensive loss | (15,610) | (4,496) |
Accumulated deficit | (1,665,400) | (1,698,042) |
Total stockholders' equity | 170,205 | 323,771 |
Total liabilities and stockholders’ equity | $ 1,495,538 | $ 1,587,224 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 26, 2022 | Dec. 25, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized shares (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 213,231,000 | 211,381,000 |
Common stock, shares outstanding (in shares) | 213,231,000 | 211,381,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Revenue: | ||
Total revenue | $ 338,874 | $ 330,907 |
Cost of revenue: | ||
Amortization of intangible assets | 6,231 | 4,616 |
Restructuring and other related costs | 150 | 514 |
Total cost of revenue | 227,227 | 213,875 |
Gross profit | 111,647 | 117,032 |
Operating expenses: | ||
Research and development | 73,411 | 73,529 |
Sales and marketing | 35,824 | 32,772 |
General and administrative | 27,890 | 26,506 |
Amortization of intangible assets | 3,746 | 4,405 |
Acquisition and integration costs | 0 | 614 |
Restructuring and other related costs | 7,270 | 2,319 |
Total operating expenses | 148,141 | 140,145 |
Loss from operations | (36,494) | (23,113) |
Other income (expense), net: | ||
Interest income | 53 | 40 |
Interest expense | (4,992) | (11,843) |
Other gain (loss), net | 6,020 | (12,395) |
Total other income (expense), net | 1,081 | (24,198) |
Loss before income taxes | (35,413) | (47,311) |
Provision for income taxes | 6,437 | 1,011 |
Net loss | $ (41,850) | $ (48,322) |
Net loss per common share: | ||
Basic (in dollars per share) | $ (0.20) | $ (0.24) |
Diluted (in dollars per share) | $ (0.20) | $ (0.24) |
Weighted average shares used in computing net loss per common share: | ||
Basic (in shares) | 212,182 | 202,638 |
Diluted (in shares) | 212,182 | 202,638 |
Product | ||
Revenue: | ||
Total revenue | $ 267,453 | $ 254,161 |
Cost of revenue: | ||
Cost of revenue | 182,887 | 165,485 |
Services | ||
Revenue: | ||
Total revenue | 71,421 | 76,746 |
Cost of revenue: | ||
Cost of revenue | $ 37,959 | $ 43,260 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (41,850) | $ (48,322) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustment | (11,201) | (3,833) |
Amortization of actuarial loss | 87 | 861 |
Net change in accumulated other comprehensive income (loss) | (11,114) | (2,972) |
Comprehensive loss | $ (52,964) | $ (51,294) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Additional Paid-in CapitalCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 26, 2020 | 201,397 | |||||||
Beginning balance at Dec. 26, 2020 | $ 426,284 | $ 201 | $ 1,965,245 | $ (11,898) | $ (1,527,264) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Shares of common stock sold in at-the-market equity offering, net of issuance costs (in shares) | 46 | |||||||
Shares of common stock sold in at-the-market equity offering, net of issuance costs | 332 | 332 | ||||||
ESPP shares issued (in shares) | 1,294 | |||||||
ESPP shares issued | 9,013 | $ 2 | 9,011 | |||||
Restricted stock units released (in shares) | 2,269 | |||||||
Restricted stock units released | 2 | $ 2 | ||||||
Shares withheld for tax obligations (in shares) | 194 | |||||||
Shares withheld for tax obligations | (1,938) | (1,938) | ||||||
Stock-based compensation | 10,949 | 10,949 | ||||||
Other comprehensive income (loss) | (2,972) | (2,972) | ||||||
Net loss | (48,322) | |||||||
Ending balance (in shares) at Mar. 27, 2021 | 204,812 | |||||||
Ending balance at Mar. 27, 2021 | $ 393,348 | $ 205 | 1,983,599 | (14,870) | (1,575,586) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting standards update [Extensible List] | Accounting Standards Update 2020-06 | |||||||
Beginning balance (in shares) at Dec. 25, 2021 | 211,381 | |||||||
Beginning balance at Dec. 25, 2021 | $ 323,771 | $ (122,001) | $ 211 | 2,026,098 | $ (196,493) | (4,496) | (1,698,042) | $ 74,492 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
ESPP shares issued (in shares) | 1,234 | |||||||
ESPP shares issued | 8,881 | $ 1 | 8,880 | |||||
Restricted stock units released (in shares) | 675 | |||||||
Restricted stock units released | 1 | $ 1 | ||||||
Shares withheld for tax obligations (in shares) | 59 | |||||||
Shares withheld for tax obligations | (524) | (524) | ||||||
Stock-based compensation | 13,041 | 13,041 | ||||||
Other comprehensive income (loss) | (11,114) | (11,114) | ||||||
Net loss | (41,850) | (41,850) | ||||||
Ending balance (in shares) at Mar. 26, 2022 | 213,231 | |||||||
Ending balance at Mar. 26, 2022 | $ 170,205 | $ 213 | $ 1,851,002 | $ (15,610) | $ (1,665,400) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2022 | Mar. 27, 2021 | ||
Cash Flows from Operating Activities: | |||
Net loss | $ (41,850) | $ (48,322) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 21,572 | 20,546 | |
Non-cash restructuring charges and other related costs | 5,390 | 1,410 | |
Amortization of debt discount and issuance costs | 1,060 | 7,822 | |
Operating lease expense | 2,702 | 5,228 | |
Stock-based compensation expense | 12,939 | 10,974 | |
Other, net | 789 | 2,065 | |
Changes in assets and liabilities: | |||
Accounts receivable | 81,816 | 38,671 | |
Inventory | (1,979) | 4,059 | |
Prepaid expenses and other current assets | (23,481) | 20,669 | |
Accounts payable | (19,829) | (23,584) | |
Accrued liabilities and other current liabilities | (14,351) | (11,964) | |
Deferred revenue | (8,990) | (8,944) | |
Net cash provided by operating activities | 15,788 | 18,630 | |
Cash Flows from Investing Activities: | |||
Purchase of property and equipment, net | (16,059) | (11,721) | |
Net cash used in investing activities | (16,059) | (11,721) | |
Cash Flows from Financing Activities: | |||
Repayment of revolving line of credit | 0 | (77,000) | |
Repayment of mortgage payable | (121) | (22) | |
Payment of term license obligation | (1,418) | (2,544) | |
Principal payments on finance lease obligations | (400) | (309) | |
Proceeds from issuance of common stock | 8,875 | 9,344 | |
Tax withholding paid on behalf of employees for net share settlement | (524) | (1,938) | |
Net cash provided by (used in) financing activities | 6,412 | (72,469) | |
Effect of exchange rate changes on cash | (4,634) | (278) | |
Net change in cash | 1,507 | (65,838) | |
Cash and restricted cash at beginning of period | 202,521 | 315,383 | |
Cash and restricted cash at end of period | [1] | 204,028 | 249,545 |
Supplemental disclosures of cash flow information: | |||
Cash paid for income taxes, net | 1,967 | 4,355 | |
Cash paid for interest | 7,137 | 7,654 | |
Supplemental schedule of non-cash investing and financing activities: | |||
Property and equipment included in accounts payable and accrued liabilities | 1,477 | 255 | |
Transfer of inventory to fixed assets | 2,037 | 1,041 | |
Unpaid term licenses (included in accounts payable, accrued liabilities and other long-term liabilities) | 9,290 | 10,533 | |
Restricted Cash and Cash Equivalents [Abstract] | |||
Cash | 191,937 | 234,029 | |
Short-term restricted cash | 6,528 | 3,288 | |
Long-term restricted cash | 5,563 | 12,228 | |
Total cash and restricted cash | [1] | $ 204,028 | $ 249,545 |
[1] | Reconciliation of cash and restricted cash to the condensed consolidated balance sheets: March 26, March 27, Cash $ 191,937 $ 234,029 Short-term restricted cash 6,528 3,288 Long-term restricted cash 5,563 12,228 Total cash and restricted cash $ 204,028 $ 249,545 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 26, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation Infinera Corporation (the “Company”) prepared its interim condensed consolidated financial statements that accompany these notes in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021, other than the adoption of an accounting pronouncement as described in Note 2, "Recent Accounting Pronouncements". The Company has made certain estimates, assumptions and judgments that can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Significant estimates, assumptions and judgments made by management include revenue recognition, stock-based compensation, employee benefit and pension plans, inventory valuation, accrued warranty, operating and finance lease liabilities, restructuring and other related costs, loss contingencies, and accounting for income taxes. Other less significant estimates, assumptions and judgments made by management include allowances for sales returns, allowances for credit losses, useful life of intangible assets, and property, plant and equipment. Management believes that the estimates and judgments upon which they rely are reasonable based upon information available to them at the time that these estimates and judgments are made. The Company expects uncertainties around its key accounting estimates to continue to evolve depending on the duration and degree of impact associated with the outbreak of novel strains of the coronavirus (“COVID-19”). These estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in the Company's condensed consolidated financial statements. The interim financial information is unaudited, but reflects all adjustments that are, in management’s opinion, necessary to provide a fair presentation of results for the interim periods presented. All adjustments are of a normal recurring nature. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated. This interim information should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021. For the three-months ended March 26, 2022, no customer accounted for 10% or more of the Company's total revenue. For the three-months ended March 27, 2021, one customer accounted for 10% of the Company's total revenue. There have been no material changes in the Company’s significant accounting policies for the three- months ended March 26, 2022 compare d to those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 26, 2022 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In August 2020, the FASB issued ASU 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity" ("ASU 2020-06"). ASU 2020-06 simplifies the accounting for convertible instruments by removing certain separation models in ASC 470-20, Debt—Debt with Conversion and Other Options, for convertible instruments. On December 26, 2021, the Company adopted ASU 2020-06 using the modified retrospective method. Applying the transition guidance, the Company was required to apply the guidance to all impacted financial instruments that were outstanding as of December 26, 2021 with the cumulative effect recognized as an adjustment to the opening balance of accumulated deficit. The adoption of ASU 2020-06 required the Company to record a $196.5 million reduction of additional paid in capital, on December 26, 2021, due to the recombination of the equity conversion component of convertible debt remaining outstanding, which was initially separated and recorded in equity. The $122.0 million increase in debt represented the removal of the remaining debt discounts recorded for this previous separation. The Company recognized a $74.5 million cumulative effect decrease of initially applying ASU 2020-06 as an adjustment to the December 26, 2021 opening balance of accumulated deficit. Interest expense recognized in future periods will be reduced as a result of accounting for the convertible senior notes as a liability instrument. Since the Company had a net loss for the three-months ended March 26, 2022, the convertible senior notes were determined to be anti-dilutive and therefore had no impact to basic or diluted net loss per share for the periods as a result of adopting ASU 2020-06. The prior period consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods. Accounting Pronouncements Not Yet Effective In March 2020, the FASB issued ASU 2020-04 (Topic 848), "Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. The update was effective upon issuance and may generally be applied through December 31, 2022 to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR. The Company will apply the amendments when its relevant contracts are modified upon transition to alternative reference rates. |
Leases
Leases | 3 Months Ended |
Mar. 26, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company has operating leases for real estate (facilities) and automobiles. For the three-months ended March 26, 2022 and March 27, 2021, operating lease expense was $9.3 million and $7.3 million, respectively. Included in operating lease expense were rent expense and impairment charges due to restructuring resulting in abandonment of certain lease facilities, amounting to $5.6 million and $2.0 million, for the three-months ended March 26, 2022 and March 27, 2021, respectively. Variable lease cost, short-term lease cost and sublease income were immaterial during the three-months ended March 26, 2022 and March 27, 2021. The following table presents operating lease liabilities in both current and long-term (in thousands): March 26, December 25, Accrued expenses and other current liabilities $ 14,846 $ 16,542 Other long-term liabilities 50,404 54,326 Total operating lease liability $ 65,250 $ 70,868 The Company also has finance leases. The lease term for these arrangements range from three The following table presents finance lease expense comprising of amortization of right of use asset and interest expense (in thousands): Three Months Ended March 26, March 27, Amortization of right of use asset $ 240 $ 226 Interest expense 32 51 Total finance lease expense $ 272 $ 277 The following table presents balance sheet detail of finance lease liability (in thousands): March 26, December 25, Accrued expenses and other current liabilities $ 1,075 $ 1,291 Other long-term liabilities 735 954 Total finance lease liability $ 1,810 $ 2,245 The following table presents maturity of lease liabilities under the Company's non-cancelable leases as of March 26, 2022 (in thousands): Operating Lease Finance Lease Total lease payments $ 83,479 $ 1,910 Less: interest (1) 18,229 100 Present value of lease liabilities $ 65,250 $ 1,810 (1) Calculated using the interest rate for each lease. The following table presents supplemental information for the Company's non-cancelable leases for the three-months ended March 26, 2022 (in thousands, except for weighted average and percentage data): Operating Lease Finance Lease Weighted average remaining lease term 5.85 years 1.52 years Weighted average discount rate 9.20 % 7.01 % Cash paid for amounts included in the measurement of lease liabilities $ 7,900 $ 400 Leased assets obtained in exchange for new lease liabilities $ 883 $ — |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 26, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Capitalization of Costs to Obtain a Contract The ending balances of the Company's capitalized costs to obtain a contract as of March 26, 2022 and December 25, 2021 were not material. Disaggregation of Revenue The following table presents the Company's revenue disaggregated by geography, based on the shipping address of the customer (in thousands): Three Months Ended March 26, March 27, United States $ 170,185 $ 157,649 Other Americas 20,911 19,531 Europe, Middle East and Africa 108,611 114,908 Asia Pacific 39,167 38,819 Total revenue $ 338,874 $ 330,907 The Company sells its products directly to customers who are predominantly service providers and to channel partners that sell on its behalf. The following table presents the Company's revenue disaggregated by sales channel (in thousands): Three Months Ended March 26, March 27, Direct $ 260,892 $ 271,301 Indirect 77,982 59,606 Total revenue $ 338,874 $ 330,907 Contract Balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands): March 26, December 25, Assets (Liabilities) Accounts receivable, net $ 276,056 $ 358,954 Contract assets $ 58,612 $ 49,052 Deferred revenue $ (159,703) $ (168,909) Revenue recognized for the three-months ended March 26, 2022 that was included in the deferred revenue balance at the beginning of the reporting period was $44.9 million. Revenue recognized for the three-months ended March 27, 2021 that was included in the deferred revenue balance at the beginning of the reporting period was $31.3 million. Changes in the contract asset and liability balances during the three-month periods ended March 26, 2022 and March 27, 2021 were not materially impacted by other factors. Transaction Price Allocated to the Remaining Performance Obligation The Company’s remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially satisfied, consisting of deferred revenue and backlog. The Company’s backlog represents purchase orders received from customers for future product shipments and services. The Company’s backlog is subject to future events that could cause the amount or timing of the related revenue to change, and, in certain cases, may be canceled without penalty. Orders in backlog may be fulfilled several quarters following receipt or may relate to multi-year support service obligations. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) pursuant to contracts that are not subject to cancellation without penalty at the end of the reporting period (in thousands): Remainder of 2022 2023 2024 2025 2026 Thereafter Total Revenue expected to be recognized in the future as of March 26, 2022 $ 661,174 $ 119,111 $ 26,998 $ 7,052 $ 3,673 $ 3,522 $ 821,530 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 26, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables represent the Company’s fair value hierarchy for its assets and liabilities measured at fair value on a recurring basis (in thousands): As of March 26, 2022 As of December 25, 2021 Fair Value Measured Using Fair Value Measured Using Level 1 Level 2 Total Level 1 Level 2 Total Assets (Liabilities) Foreign currency exchange forward contracts $ — $ (2) $ (2) $ — $ (221) $ (221) Disclosure of Fair Values Financial instruments that are not re-measured at fair value include accounts receivable, accounts payable, accrued liabilities, and debt. The carrying values of these financial instruments other than the Company's 2024 Notes and 2027 Notes (collectively referred to as "convertible senior notes" below) approximate their fair values. The fair value of convertible senior notes were determined based on the quoted bid price of the convertible senior notes in an over-the-counter market on March 25, 2022 (the last trading day of the quarter). The following table presents the estimated fair values of the convertible senior notes (in thousands): As of March 26, 2022 As of December 25, 2021 Fair Value Measured Using Fair Value Measured Using Level 1 Level 2 Total Level 1 Level 2 Total Convertible Senior Notes $ — $ 720,392 $ 720,392 $ — $ 765,412 $ 765,412 During the three-months ended March 26, 2022, there were no transfers of assets or liabilities between Level 1 and Level 2 of the fair value hierarchy. As of each of March 26, 2022 and December 25, 2021, none of the Company’s existing assets or liabilities were classified as Level 3. The Company measures goodwill and intangible assets at fair value on a nonrecurring basis when there are identifiable events or changes in circumstances that may have a significant adverse impact on the fair value of these assets. The Company performed an analysis of impairment indicators of these assets and noted no adverse impact to their fair values as of March 26, 2022. Facilities-related Charges The Company classifies certain facilities-related charges within Level 3 of the fair value hierarchy and applies fair value accounting on a nonrecurring basis when impairment indicators exist or upon the existence of observable fair values. In connection with its restructuring plans (as discussed in Note 9, “Restructuring and Other Related Costs” to the Notes to Condensed Consolidated Financial Statements), the Company incurred facilities related charges of $5.6 million and $2.0 million for the three-months ended March 26, 2022 and March 27, 2021, respectively. These charges primarily consisted of impairment charges incurred for operating lease right-of-use assets and were calculated at fair value based on estimated future sublease rental receipts that the Company could reasonably obtain over the remaining lease term at the discount rate. Facilities-related charges are classified as Level 3 measurement due to the significance of these unobservable inputs. See Note 9, "Restructuring and Other Related Costs" to the Notes to Condensed Consolidated Financial Statements for more information. Cash As of March 26, 2022, the Company had $204.0 million of cash and restricted cash, including $75.3 million of cash held by its foreign subsidiaries. As of December 25, 2021, the Company had $202.5 million of cash and restricted cash, including $77.6 million of cash held by its foreign subsidiaries. The Company's cash held by its foreign subsidiaries is used for operating and investing activities in those locations, and the Company does not currently have the need or the intent to repatriate those funds to the United States. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 26, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Foreign Currency Exchange Forward Contracts The Company transacts business in various foreign currencies, has international sales, cost of sales, and expenses denominated in foreign currencies, and carries foreign-currency-denominated account balances, subjecting the Company to foreign currency risk. The Company’s primary foreign currency risk management objective is to protect the U.S. dollar value of future cash flows and minimize the volatility of reported earnings. The Company utilizes foreign currency forward contracts, which are primarily short term in nature. Historically, the Company entered into foreign currency exchange forward contracts to manage its exposure to fluctuation in foreign exchange rates that arise from its Euro and British pound denominated account balances. Gains and losses on these contracts were intended to offset the impact of foreign exchange rate fluctuations on the underlying foreign currency denominated account balances, and therefore did not subject the Company to material balance sheet risk. As of March 26, 2022 and December 25, 2021, the Company posted collateral of $0.9 million for both periods, on its derivative instruments to cover potential credit risk exposure. This amount is classified as other long-term restricted cash on the accompanying condensed consolidated balance sheets. For both the three-months ended March 26, 2022 and March 27, 2021, the before-tax effect of the foreign currency exchange forward contracts was a net gain of $0.3 million, included in other gain (loss), net in the condensed consolidated statements of operations. In each of these periods, the impact of the gross gains and losses was offset by foreign exchange rate fluctuations on the underlying foreign currency denominated amounts. As of March 26, 2022, the Company did not designate foreign currency exchange forward contracts as hedges for accounting purposes. Accordingly, changes in the fair value are recorded in the accompanying condensed consolidated statements of operations. These contracts were entered into with one institution with high credit quality and the Company consistently monitors the creditworthiness of the counterparties. The fair value of derivative instruments not designated as hedging instruments in the Company’s condensed consolidated balance sheets was as follows (in thousands): As of March 26, 2022 As of December 25, 2021 Gross Notional (1) Accrued expenses and other current liabilities Gross (1) Accrued expenses and other current liabilities Foreign currency exchange forward contracts Related to Euro denominated monetary balances $ — $ — $ 21,981 $ (139) Related to British Pound denominated monetary balances 7,383 (2) 7,566 (82) $ 7,383 $ (2) $ 29,547 $ (221) (1) Represents the face amounts of forward contracts that were outstanding as of the end of the period noted. Accounts Receivable Factoring The Company sells certain designated trade account receivables based on factoring arrangements with well-established factoring companies. Pursuant to the terms of the arrangements, the Company accounts for these transactions in accordance with ASC Topic 860, "Transfers and Servicing". The Company's factor purchases trade accounts receivables on a non-recourse basis and without any further obligations. Trade accounts receivables balances sold are removed from the condensed consolidated balance sheets and cash received is reflected as cash provided by operating activities in the condensed consolidated statements of cash flows. The difference between the fair value of the Company's trade receivables and the proceeds received is recorded as interest expense in the Company's condensed consolidated statements of operations. For the three-months ended March 26, 2022 and March 27, 2021, the Company's recognized factoring related interest expense was approximately $0.1 million. For the three-months ended March 26, 2022 and March 27, 2021, the Company's gross amount of trade accounts receivables sold were approximately $24.0 million and $31.0 million, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 26, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net tangible and identified intangible assets acquired. The following table presents details of the Company’s goodwill during the three-months ended March 26, 2022 (in thousands): Balance as of December 25, 2021 $ 255,788 Foreign currency translation adjustments (6,254) Balance as of March 26, 2022 $ 249,534 The gross carrying amount of goodwill may change due to the effects of foreign currency fluctuations as a portion of these assets are denominated in foreign currency. To date, the Company has not recognized any impairment losses on goodwill. Intangible Assets The following tables present details of the Company’s intangible assets as of March 26, 2022 and December 25, 2021 (in thousands, except for weighted average data): March 26, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life (In Years) Intangible assets with finite lives: Customer relationships and backlog 155,863 (107,139) 48,724 4.0 Developed technology 179,497 (151,955) 27,542 1.3 Total intangible assets with finite lives $ 335,360 $ (259,094) $ 76,266 December 25, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life (In Years) Intangible assets with finite lives: Customer relationships and backlog 157,495 (104,701) 52,794 4.2 Developed technology 182,844 (149,064) 33,780 1.5 Total intangible assets with finite lives $ 340,339 $ (253,765) $ 86,574 The gross carrying amount of intangible assets and the related amortization expense of intangible assets may change due to the effects of foreign currency fluctuations as a portion of these assets are denominated in foreign currency. Amortization expenses were $10.0 million and $9.0 million for the three-month periods ended March 26, 2022 and March 27, 2021, respectively. Intangible assets are carried at cost less accumulated amortization and impairment, if any. Amortization expenses are recorded to the appropriate cost and expense categories. The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of March 26, 2022 (in thousands): Fiscal Years Total Remainder of 2022 2023 2024 2025 2026 Thereafter Total future amortization expense $ 76,266 $ 28,118 $ 23,329 $ 9,025 $ 9,025 $ 6,769 $ — |
Balance Sheet Details
Balance Sheet Details | 3 Months Ended |
Mar. 26, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | Balance Sheet Details Restricted Cash The Company’s restricted cash balance is held in deposit accounts at various banks globally. These amounts primarily collateralize the Company’s issuances of standby letters of credit and bank guarantees. Allowance for Credit Losses The following table provides a rollforward of the allowance for credit losses for accounts receivable for the three-months ended March 26, 2022 (in thousands): Balance as of December 25, 2021 $ 1,304 Additions (1) 755 Write offs (2) (182) Other (3) (23) Balance as of March 26, 2022 $ 1,854 (1) The new additions during the three-months ended March 26, 2022 are primarily due to specific reserves. (2) The write offs during the three-months ended March 26, 2022 are primarily amounts fully reserved previously. (3) Primarily represents foreign currency translation adjustments. Selected Balance Sheet Items The following table provides details of selected balance sheet items (in thousands): March 26, December 25, Inventory Raw materials $ 41,225 $ 39,379 Work in process 55,356 53,924 Finished goods 195,109 198,064 Total inventory $ 291,690 $ 291,367 Property, plant and equipment, net Computer hardware $ 46,233 $ 45,824 Computer software (1) 52,962 56,820 Laboratory and manufacturing equipment 283,357 287,875 Land and building 12,369 12,369 Furniture and fixtures 2,603 2,164 Leasehold and building improvements 51,053 51,471 Construction in progress 30,097 18,807 Subtotal 478,674 475,330 Less accumulated depreciation and amortization (2) (320,277) (315,112) Total property, plant and equipment, net $ 158,397 $ 160,218 Accrued expenses and other current liabilities Loss contingency related to non-cancelable purchase commitments $ 30,555 $ 26,481 Taxes payable 48,498 43,308 Short-term operating and finance lease liability 15,921 17,792 Restructuring accrual 6,776 8,610 Other accrued expenses and other current liabilities 41,153 50,838 Total accrued expenses $ 142,903 $ 147,029 (1) Included in computer software at March 26, 2022 and December 25, 2021 were $26.3 million and $25.9 million, respectively, related to enterprise resource planning (“ERP”) systems that the Company implemented. The unamortized ERP costs at March 26, 2022 and December 25, 2021 were $8.2 million and $8.9 million, respectively. Also included in computer software at March 26, 2022 and December 25, 2021 was $18.1 million and $20.9 million, respectively, related to term licenses. The unamortized term license costs at March 26, 2022 and December 25, 2021 was $8.8 million and $9.2 million, respectively. (2) Depreciation expense was $11.6 million and $11.5 million (which includes depreciation of capitalized ERP cost of $0.8 million and $0.6 million, respectively) for the three-months ended March 26, 2022 and March 27, 2021, respectively. Also included in depreciation expense for three-months ended March 26, 2022 and March 27, 2021 was $1.7 million and $1.6 million, respectively, related to term licenses. |
Restructuring and Other Related
Restructuring and Other Related Costs | 3 Months Ended |
Mar. 26, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Related Costs | Restructuring and Other Related Costs In December 2018, the Company implemented a restructuring initiative (the “2018 Restructuring Plan”) as part of a comprehensive review of the Company's operations and ongoing integration activities in order to optimize resources for future growth, improve efficiencies and address redundancies following the Acquisition. As part of the 2018 Restructuring Plan, the Company made several changes to improve its research and development efficiency by consolidating its manufacturing and development sites, including closure of its Berlin, Germany site, reducing headcount at its Munich, Germany site, and processing changes to leverage the Company's engineering and product line development resources across regions and prioritizing research and development initiatives. The Berlin and Munich initiatives were substantially completed in 2020. In 2021 and in the three-months ended March 26, 2022, the Company incurred lease-related impairment charges from consolidation of its Munich site resulting in partial abandonment of the leased facility. In connection with the acquisition of Telecom Holding Parent LLC (“Coriant”, the Acquisition), the Company assumed restructuring liabilities associated with Coriant's previous restructuring and reorganization plans consisting of termination benefits primarily comprised of severance payments. These costs are recorded at estimated fair value. During 2020, the Company implemented a new restructuring initiative (the "2020 Restructuring Plan") that was primarily intended to reduce costs and consolidate its operations. The identified cost reduction initiatives under the 2020 Restructuring Plan were completed in fiscal year 2021. In 2021, the Company announced a plan to restructure certain international research & development operations (the "2021 Restructuring Plan"). The Company estimates it will incur total costs related to the restructuring ranging from $15.0 million to $17.0 million, of which $5.5 million was recorded in the three-months ended March 26, 2022. The 2021 Restructuring Plan is expected to be substantially completed with the associated payments made in 2022. Additional restructuring activities may occur in the future in connection with the Company’s ongoing transformation initiatives. The following table presents restructuring and other related costs included in cost of revenue and operating expenses in the accompanying condensed consolidated statements of operations under the 2021 Restructuring Plan (in thousands): Three Months Ended March 26, 2022 March 27, 2021 Cost of Operating Expenses Cost of Operating Expenses Severance and other related expenses $ 140 $ 1,461 $ 514 $ 272 Lease related impairment charges — 5,592 — 1,950 Asset impairment — 84 — 51 Others 10 133 — 46 Total $ 150 $ 7,270 $ 514 $ 2,319 Restructuring liabilities are reported within accrued expenses, operating lease liabilities and other long-term liabilities in the accompanying condensed consolidated balance sheets (in thousands): Severance and other related expenses Lease related impairment charges Asset impairment Others Total Balance at December 25, 2021 $ 7,536 $ — $ — $ 1,346 $ 8,882 Charges 1,601 5,592 84 143 7,420 Cash Payments (3,558) (459) — — (4,017) Non-Cash Settlements and Other (159) (5,133) (84) (14) (5,390) Balance at March 26, 2022 $ 5,420 $ — $ — $ 1,475 $ 6,895 As of March 26, 2022, the Company's restructuring liability was primarily comprised of $6.0 million related to the 2021 Restructuring Plan and $0.9 million related to assumed restructuring liabilities associated with Coriant's previous restructuring and reorganization plans, which was substantially completed in previous years. The liability related to the 2021 Restructuring Plan is expected to be paid by end of 2022. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 26, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated other comprehensive loss includes certain changes in equity that are excluded from net loss. The following table sets forth the changes in accumulated other comprehensive loss by component for the three-months ended March 26, 2022 (in thousands): Foreign Currency Translation Actuarial Gain (Loss) on Pension Accumulated Tax Effect Total Balance at December 25, 2021 $ (7,829) $ 4,297 $ (964) $ (4,496) Other comprehensive loss before reclassifications (11,201) — — (11,201) Amounts reclassified from accumulated other comprehensive loss — 87 — 87 Net current-period other comprehensive income (loss) (11,201) 87 — (11,114) Balance at March 26, 2022 $ (19,030) $ 4,384 $ (964) $ (15,610) |
Basic and Diluted Net Loss Per
Basic and Diluted Net Loss Per Common Share | 3 Months Ended |
Mar. 26, 2022 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss Per Common Share | Basic and Diluted Net Loss Per Common ShareBasic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed using net loss and the weighted average number of common shares outstanding plus potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed release of outstanding restricted stock units (“RSUs”) and performance shares (referred to herein as the “PSUs”), assumed issuance of common stock under the Company’s 2007 Employee Stock Purchase Plan (the “ESPP”) using the treasury stock method, and shares of common stock issuable upon conversion of convertible senior notes. The Company includes the common shares underlying PSUs in the calculation of diluted net income per common share only when they become contingently issuable. As the Company incurred net losses during the three-month periods ended March 26, 2022 and March 27, 2021, all potentially issuable shares of common stock were determined to be anti-dilutive. The following table sets forth the computation of net loss per common share – basic and diluted (in thousands, except per share amounts): Three Months Ended March 26, March 27, Net loss $ (41,850) $ (48,322) Weighted average common shares outstanding - basic and diluted 212,182 202,638 Net loss per common share - basic and diluted $ (0.20) $ (0.24) The following sets forth the potentially dilutive shares excluded from the computation of the diluted net loss per share because their effect was anti-dilutive (in thousands): Three Months Ended March 26, March 27, Convertible senior notes (1) 69,930 5,841 Restricted stock units 17,887 15,851 Performance stock units 2,824 3,065 Employee stock purchase plan shares 1,095 930 Total 91,736 25,687 (1) The convertible senior notes were calculated under the if-converted method for 2022 due to the adoption of ASU 2020-06 and under the treasury stock method for 2021. Prior to the adoption of ASU 2020-06, the Company used the treasury stock method for calculating any potential dilutive effect of the conversion spread of its convertible senior notes. The conversion spread had a dilutive impact for the 2027 Notes during the three-month periods ended March 26, 2022 and March 27, 2021 since the average market price of the Company’s common stock during the period exceeded the initial conversion price of $7.66 per share. However, the potential shares of common stock issuable upon the conversion of the convertible senior notes were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive. After the adoption of ASU 2020-06, the Company used the if-converted method for calculating any potential dilutive effect of the convertible senior notes for the three-months ended March 26, 2022. Under this method, the Company calculates diluted earnings per share under both the cash and share settlement assumptions to determine which is more dilutive. If share settlement is more dilutive, the Company calculates diluted earnings per share assuming that all of the convertible senior notes were converted solely into shares of common stock at the beginning of the reporting period. The potential impact upon the conversion of the convertible senior notes was excluded from the calculation of diluted net loss per share for the three-months ended March 26, 2022 because the effect would have been anti-dilutive. |
Debt
Debt | 3 Months Ended |
Mar. 26, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following is a summary of our debt as of March 26, 2022 (post-ASU 2020-06 adoption) (in millions): Net Carrying Value Unpaid Principal Balance Contractual Maturity Date Current Long-Term 2024 Notes $ — $ 397.1 $ 402.5 September 2024 2027 Notes $ — $ 195.2 $ 200.0 March 2027 Asset-based Revolving Credit Facility $ — $ — $ — March 2024 Mortgage $ 0.5 $ 7.2 $ 7.7 March 2024 $ 0.5 $ 599.5 $ 610.2 The following is a summary of our debt as of December 25, 2021 (pre-ASU 2020-06 adoption) (in millions): Net Carrying Value Unpaid Principal Balance Contractual Maturity Date Current Long-Term 2024 Notes $ — $ 329.2 $ 402.5 September 2024 2027 Notes $ — $ 140.3 $ 200.0 March 2027 Asset-based Revolving Credit Facility $ — $ — $ — March 2024 Mortgage $ 0.5 $ 7.3 $ 7.8 March 2024 Total Debt $ 0.5 $ 476.8 $ 610.3 Interest Expense The following table presents the interest expense related to the contractual interest coupon, the amortization of debt issuance costs, and the amortization of debt discounts on our convertible senior notes (in thousands): Three Months Ended March 26, 2022 March 27, 2021 Contractual interest expense $ 3,388 $ 3,388 Amortization of debt issuance costs 767 455 Amortization of debt discount — 7,082 Total interest expense $ 4,155 $ 10,925 2.50% 2027 Convertible Senior Notes In March 2020, the Company issued the 2027 Notes due on March 1, 2027, unless earlier repurchased, redeemed or converted. The 2027 Notes are governed by an indenture dated as of March 9, 2020 (the “2027 Indenture”), between the Company and U.S. Bank National Association, as trustee. The 2027 Notes are unsecured, and the 2027 indenture does not contain any financial covenants or any restrictions on the payment of dividends, the incurrence of senior debt or other indebtedness, or the issuance or repurchase of the Company's other securities by the Company. Interest is payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2020. The net proceeds to the Company were approximately $193.3 million after deducting initial purchasers' fee and other debt issuance costs. The Company intends to use the net proceeds for general corporate purposes, including working capital to fund growth and potential strategic projects. For the conversion obligation, the Company intends to pay or deliver, either cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election. The initial conversion rate is 130.5995 shares of common stock per $1,000 principal amount of 2027 Notes, subject to anti-dilution adjustments, which is equivalent to a conversion price of approximately $7.66 per share of common stock. The Company may not redeem the 2027 Notes prior to March 5, 2024. The Company may redeem for cash all or any portion of the 2027 Notes, at its option, on or after March 5, 2024 if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2027 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the 2027 Notes. The 2027 Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 2027 Notes; equal in right of payment to any of the Company's existing and future liabilities that are not so subordinated, (including the 2024 Notes); effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s current or future subsidiaries. Throughout the term of the 2027 Notes, the conversion rate may be adjusted upon the occurrence of certain events, including for any cash dividends. Holders of the 2027 Notes will not receive any cash payment representing accrued and unpaid interest upon conversion of a 2027 Note. Accrued but unpaid interest will be deemed to be paid in full upon conversion rather than canceled, extinguished or forfeited. Prior to December 1, 2026, holders may convert their 2027 Notes under the following circumstances: • during any fiscal quarter commencing after the fiscal quarter ended on June 27, 2020 (and only during such fiscal quarter) if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2027 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; • if the Company calls any or all of the 2027 Notes for redemption, such 2027 Notes called for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; • upon the occurrence of specified corporate events described under the 2027 Indenture, such as a consolidation, merger or binding share exchange; or • at any time on or after December 1, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2027 Notes at any time, regardless of the foregoing circumstances. If the Company undergoes a fundamental change as defined in the 2027 Indenture, holders may require the Company to repurchase for cash all or any portion of their 2027 Notes at a repurchase price equal to 100% of the principal amount of the 2027 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, upon the occurrence of a “make-whole fundamental change” (as defined in the 2027 Indenture), the Company may, in certain circumstances, be required to increase the conversion rate by a number of additional shares for a holder that elects to convert its 2027 Notes in connection with such make-whole fundamental change. There have been no changes to the initial conversion price of the 2027 Notes since issuance and during the three- months ended March 26, 2022, none of the conditions allowing holders of the 2027 Notes to convert early were met. The 2027 Notes are therefore not convertible during the three- months ending June 25, 2022. Prior to the adoption of ASU 2020-06 on December 26, 2021 and in accounting for the issuance of the 2027 Notes, the 2027 Notes were separated into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated conversion feature. The carrying amount of the equity component representing the conversion option was $67.8 million and was determined by deducting the fair value of the liability component from the par value of the 2027 Notes. The equity component was recorded in additional paid-in-capital and was not re-measured as long as it continued to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (the “debt discount”) was amortized to interest expense over the contractual term of the 2027 Notes at an effective interest rate of 9.92%. Prior to the adoption of ASU 2020-06 on December 26, 2021 and in accounting for the debt issuance costs o f $6.7 million related to the 2027 Notes, the Company allocated the total amount incurred to the liability and equity components of the 2027 Notes based on their relative values. Issuance costs attributable to the liability component were $4.3 million and were amortized to interest expense using the effective interest method over the contractual term of the 2027 Notes. Issuance costs attributable to the equity component were netted with the equity component in additional paid-in-capital. On December 26, 2021, the Company adopted ASU 2020-06 based on a modified retrospective transition method. Under such transition, prior-period information has not been retrospectively adjusted. In accounting for the 2027 Notes after adoption of ASU 2020-06, the 2027 Notes are accounted for as a single liability. The issuance cost related to the 2027 Notes is being amortized to interest expense over the contractual term of the 2027 Notes at an effective interest rate of 3.0%. Unamortized debt issuance costs will be amortized over the remaining life of the 2027 Notes, which is approximately 59 months. The net carrying amount of the 2027 Notes as of March 26, 2022 (post-ASU 2020-06 adoption) and as of December 25, 2021 (pre-ASU 2020-06 adoption) was as follows (in thousands): March 26, 2022 December 25, 2021 Principal $ 200,000 $ 200,000 Unamortized debt discount — (56,270) Unamortized issuance costs (4,815) (3,472) Net carrying amount $ 195,185 $ 140,258 Asset-based revolving credit facility On August 1, 2019, the Company entered into a Credit Agreement (the "Credit Agreement") with Wells Fargo Bank, National Association. The Credit Agreement provides for a senior secured asset-based revolving credit facility of up to $100 million (the "Credit Facility"), which the Company may draw upon from time to time. The Company may increase the total commitments under the Credit Facility by up to an additional $50 million, subject to certain conditions. The Credit Agreement provides for a $50 million letter of credit sub-facility and a $10 million swing loan sub-facility. On December 23, 2019, the Company exercised its option to increase the total commitments under the Credit Facility and entered into an Increase Joinder and Amendment Number One to the Credit Agreement (the “Amendment”), with BMO Harris Bank N.A. and Wells Fargo Bank, National Association, as administrative agent. The Amendment increased the total commitments under the Credit Facility to $150 million. The proceeds of the loans under the Credit Agreement, as amended by the Amendment (the “Amended Credit Agreement”) may be used to pay the fees, costs and expenses incurred in connection with the Amended Credit Agreement and for working capital and general corporate purposes. The Credit Facility matures, and all outstanding loans become due and payable, on March 5, 2024. Availability under the Credit Facility is based upon periodic borrowing base certifications valuing certain inventory and accounts receivable, as reduced by certain reserves. The Credit Facility is secured by first-priority security interest (subject to certain exceptions) in inventory, certain related assets, specified deposit accounts, and certain other accounts in certain domestic subsidiaries. Loans under the Amended Credit Agreement bear interest, at the Company's option, at either a rate based on LIBOR for the applicable interest period or a base rate, in each case plus a margin. The margin ranges from 2.00% to 2.50% for LIBOR rate loans and 1.00% to 1.50% for base rate loans, depending on the utilization of the Credit Facility. The commitment fee payable on the unused portion of the Credit Facility ranges from 0.375% to 0.625% per annum, also based on the current utilization of the Credit Facility. The letter of credit will accrue a fee at a per annum rate equal to the applicable LIBOR rate margin times by the average amount of the letter of credit usage during the immediately preceding quarter, in addition to the fronting fees, commissions and other fees. Effective January 1, 2022, with the cessation of LIBOR, the Credit Facility provides for an alternative benchmark rate for LIBOR-based loans, which may include Term Secured Overnight Financing Rate (SOFR) or other prevailing market rate as determined by the agent plus a spread based on prevailing market convention for the applicable interest period plus a margin ranging from 2.00% to 2.50%. The Amended Credit Agreement contains customary affirmative covenants, such as financial statement reporting requirements and delivery of borrowing base certificates. The Amended Credit Agreement also contains customary covenants that limit the ability of the Company and its subsidiaries to, among other things, incur debt, create liens and encumbrances, engage in certain fundamental changes, dispose of assets, prepay certain indebtedness, make restricted payments, make investments, and engage in transactions with affiliates. The Amended Credit Agreement also contains a financial covenant that requires the Company to maintain a minimum amount of liquidity and customary events of default. In connection with the Credit Facility, the Company incurred lender and other third-party costs of approximately $4.9 million in 2019, which were recorded as a deferred asset and are amortized to interest expense using a straight-line method over the term of the Credit Facility. For the three-months ended March 26, 2022, the Company recorded $0.3 million as amortization of deferred debt issuance cost, and $0.3 million as contractual interest expense and related charges. In January 2021, the Company repaid in full the then outstanding principal balance of $77.0 million. As of March 26, 2022, the Company had availability of $138.7 million under the Credit Facility and had letters of credit outstanding of approximately $11.3 million. Finance Assistance Agreement During March 2019, the Company signed an agreement with a third-party contract manufacturer that governs the transfer of the activities from the legacy Coriant manufacturing facility in Berlin, Germany to the contract manufacturer. Subsequently in May 2019, the Company entered into a financing assistance agreement with the contract manufacturer whereby the contract manufacturer agreed to provide funding of up to $40.0 million to cover severance, retention and other costs associated with the transfer. The funding is secured against certain foreign assets, carries a fixed interest rate of 6% and is repayable in 12 months from the date of each draw down. In October 2020, the Company and the contract manufacturer amended the payment terms to extend the due date by six months, set the fixed interest rate at 3% during such period, and allow for the phased transfer of inventory to offset the amount due. In 2021, the Company repaid the entire outstanding principal balance and accrued interest. Mortgage Payable In March 2019, the Company mortgaged a property it owns. The Company received proceeds of $8.7 million in connection with the loan. The loan carries a fixed interest rate of 5.25% and is repayable in 59 equal monthly installments of principal balance plus accrued unpaid interest due five years from the date of the loan. On September 24, 2021, the loan was amended to reduce the interest rate from 5.25% to 3.80% for the remaining 31 equal monthly installments of approximately $0.1 million each. In connection with the amendment, the Company paid a fee of $0.1 million which is being amortized over the remaining life of the loan. As of March 26, 2022, $7.7 million of the loan remained outstanding, of which $0.5 million was included in short-term debt and $7.2 million was included in long-term debt. 2.125% 2024 Convertible Senior Notes In September 2018, the Company issued the 2024 Notes due on September 1, 2024, unless earlier repurchased, redeemed or converted. The 2024 Notes are governed by a base indenture dated as of September 11, 2018 and a first supplemental indenture dated as of September 11, 2018 (together, the “2024 Indenture”), between the Company and U.S. Bank National Association, as trustee. The 2024 Notes are unsecured, and the 2024 Indenture does not contain any financial covenants or any restrictions on the payment of dividends, the incurrence of senior debt or other indebtedness, or the issuance or repurchase of the Company's other securities by the Company. Interest is payable semi-annually in arrears on March 1 and September 1 of each year, which commenced on March 1, 2019. The net proceeds to the Company were approximately $391.4 million, of which approximately $48.9 million was used to pay the cost of the capped call transactions with certain financial institutions (“Capped Calls”). The Company also used a portion of the remaining net proceeds to fund the cash portion of the purchase price of the Acquisition, including fees and expenses relating thereto, and intends to use the remaining net proceeds for general corporate purposes. The Capped Calls have an initial strike price of $9.87 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2024 Notes. The Capped Calls have initial cap prices of $15.19 per share, subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, 40.8 million shares of common stock. The Capped Calls transactions are expected generally to reduce or offset potential dilution to the Company's common stock upon any conversion of the 2024 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2024 Notes, as the case may be, with such reduction and/or offset subject to a cap. The Capped Calls expire on various dates between July 5, 2024 and August 29, 2024. The Capped Calls were recorded as a reduction of the Company’s stockholders’ equity in the accompanying condensed consolidated balance sheets. For the conversion obligation, the Company intends to pay or deliver, either cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election. The initial conversion rate is 101.2812 shares of common stock per $1,000 principal amount of 2024 Notes, subject to anti-dilution adjustments, which is equivalent to a conversion price of approximately $9.87 per share of common stock. The Company did not have the right to redeem the 2024 Notes prior to Septem ber 5, 2021. The Company may redeem for cash all or any portion of the 2024 Notes, at its option, on or after September 5, 2021, if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including the trading day immediately preceding the date on which the Company provides notice of re demption at a redemption price equal to 100% of the principal amount of the 2024 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the 2024 Notes. The 2024 Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 2024 Notes; equal in right of payment to any of the Company's existing and future liabilities that are not so subordinated, including the 2027 Notes; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s current or future subsidiaries. Throughout the term of the 2024 Notes, the conversion rate may be adjusted upon the occurrence of certain events, including for any cash dividends. Holders of the 2024 Notes will not receive any cash payment representing accrued and unpaid interest upon conversion of a 2024 Note. Accrued but unpaid interest will be deemed to be paid in full upon conversion rather than canceled, extinguished or forfeited. Prior to June 1, 2024, holders may convert their 2024 Notes under the following circumstances: • during any fiscal quarter commencing after the fiscal quarter ended on December 29, 2018 (and only during such fiscal quarter) if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2024 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; • if the Company calls the 2024 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; • upon the occurrence of specified corporate events described under the 2024 Indenture, such as a consolidation, merger or binding share exchange; or • at any time on or after June 1, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2024 Notes at any time, regardless of the foregoing circumstances. If the Company undergoes a fundamental change as defined in the 2024 Indenture, holders may require the Company to repurchase for cash all or any portion of their 2024 Notes at a repurchase price equal to 100% of the principal amount of the 2024 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, upon the occurrence of a “make-whole fundamental change” (as defined in the 2024 Indenture), the Company may, in certain circumstances, be required to increase the conversion rate by a number of additional shares for a holder that elects to convert its 2024 Notes in connection with such make-whole fundamental change . There have been no changes to the initial conversion price of the 2024 Notes since issuance and during the three-months ended March 26, 2022, none of the conditions allowing holders of the 2024 Notes to convert early were met. The 2024 Notes are therefore not convertible during the three-months ending June 25, 2022. Prio r to the adoption of ASU 2020-06 on December 26, 2021 and in accounting for the issuance of the 2024 Notes, the 2024 Notes were separated into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated conversion feature. The carrying amount of the equity component representing the conversion option wa s $128.7 million and was determined by deducting the fair value of the liability component from the par value of the 2024 Notes. The equity component was recorded in additional paid-in-capital and was not re-measured as long as it continued to meet the conditions for equity classification. The debt discount was amortized to interest expense over the contractual term of the 2024 Notes at an effective interest rate of 9.92%. Prior to the adoption of ASU 2020-06 on December 26, 2021 and in accounting for the debt issuance costs o f $12.9 million r elated to the 2024 Notes, the Company allocated the total amount incurred to the liability and equity components of the 2024 Notes based on their relative values. Issuance costs attributable to the liability component were $8.7 million and were amortized to interest expense using the effective interest method over the contractual term of the 2024 Notes. Issuance costs attributable to the equity component were netted with the equity component in additional paid-in-capital. On December 26, 2021, the Company adopted ASU 2020-06 based on a modified retrospective transition method. Under such transition, prior-period information has not been retrospectively adjusted. In accounting for the 2024 Notes after adoption of ASU 2020-06, the 2024 Notes are accounted for as a single liability. The issuance cost related to the 2024 Notes is being amortized to interest expense over the contractual term of the 2024 Notes at an effective interest rate of 2.7% . Unamortized debt issuance costs will be amortized over the remaining life of the 2024 Notes, which is approximately 29 months. The net carrying amount of the 2024 Notes as of March 26, 2022 (post-ASU 2020-06 adoption) and as of December 25, 2021 (pre-ASU 2020-06 adoption) was as follows (in thousands): March 26, 2022 December 25, 2021 Principal $ 402,500 $ 402,500 Unamortized debt discount — (68,755) Unamortized issuance costs (5,403) (4,488) Net carrying amount $ 397,097 $ 329,257 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 26, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesThe following table sets forth commitments and contingencies related to our various obligations (in thousands): Payments Due by Period Total Remainder of 2022 2023 2024 2025 2026 Thereafter Operating leases (1)(2) $ 83,479 $ 16,035 $ 14,703 $ 13,253 $ 12,251 $ 9,614 $ 17,623 Finance lease obligations (3) 1,910 931 802 177 — — — 2027 Notes, including interest (4) 225,000 2,500 5,000 5,000 5,000 5,000 202,500 2024 Notes, including interest (4) 423,883 4,277 8,553 411,053 — — — Mortgage Payable, including interest (4) 8,197 586 781 6,830 — — — Total contractual obligations $ 742,469 $ 24,329 $ 29,839 $ 436,313 $ 17,251 $ 14,614 $ 220,123 (1) The Company leases facilities under non-cancelable operating lease agreements. These leases have varying terms that range from one (2) The Company has contractual commitments to remove leasehold improvements and return certain properties to a specified condition when the leases terminate. At the inception of a lease with such conditions, the Company records an asset retirement obligation liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. Asset retirement obligations were $5.1 million as of each of March 26, 2022 and December 25, 2021, respectively. Of the $5.1 million as of March 26, 2022, $5.0 million is classified as other long-term liabilities on the accompanying condensed consolidated balance sheets. The remainder is classified as accrued expenses and other current liabilities. (3) The Company has finance leases for manufacturing and other equipment. The above payment schedule includes interest. See Note 3, "Leases" to the Notes to Condensed Consolidated Financial Statements for more information. (4) See Note 12, "Debt" to the Notes to Condensed Consolidated Financial Statements for more information. Loss Contingencies The Company is subject to the possibility of various losses arising in the ordinary course of business. These may relate to disputes, litigation and other legal actions. In the preparation of its quarterly and annual financial statements, the Company considers the likelihood of loss or the incurrence of a liability, including whether it is probable, reasonably possible or remote that a liability has been incurred, as well as the Company’s ability to reasonably estimate the amount of loss, in determining loss contingencies. In accordance with U.S. GAAP, an estimated loss contingency is accrued when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company regularly evaluates current information to determine whether any accruals should be adjusted and whether new accruals are required. As of each of March 26, 2022 and December 25, 2021, the Company has accrued the estimated liabilities associated with certain loss contingencies. Indemnification Obligations From time to time, the Company enters into certain types of contracts that contingently require it to indemnify parties against third-party claims. The terms of such indemnification obligations vary. These contracts may relate to: (i) certain real estate leases under which the Company may be required to indemnify property owners for environmental and other liabilities, and other claims arising from the Company’s use of the applicable premises; and (ii) certain agreements with the Company’s officers, directors and certain key employees, under which the Company may be required to indemnify such persons for liabilities. In addition, the Company has agreed to indemnify certain customers for claims made against the Company’s products, where such claims allege infringement of third-party intellectual property rights, including, but not limited to, patents, registered trademarks, and/or copyrights. Under the aforementioned intellectual property indemnification clauses, the Company may be obligated to defend the customer and pay for the damages awarded against the customer under an infringement claim as well as the customer’s attorneys’ fees and costs. These indemnification obligations generally do not expire after termination or expiration of the agreement containing the indemnification obligation. In certain cases, there are limits on and exceptions to the Company’s potential liability for indemnification. The Company cannot estimate the amount of potential future payments, if any, that it might be required to make as a result of these agreements. The maximum potential amount of any future payments that the Company could be required to make under these indemnification obligations could be significant. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 26, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stockholders' Equity | Stockholders’ Equity 2016 Equity Incentive Plan and Employee Stock Purchase Plan In February of 2007, the Company's board of directors adopted the ESPP and the Company's stockholders approved the ESPP in May of 2007. The ESPP was last amended by the Company's stockholders in May 2019 to increase the shares authorized under the ESPP to a total of approximately 31.6 million shares of common stock. The ESPP has a 20-year term. Eligible employees may purchase the Company’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or the end of six-month offering periods. An employee’s payroll deductions under the ESPP are limited to a maximum of 15% of the employee’s compensation and an employee may not purchase more than 3,000 shares per purchase period. In February 2016, the Company's board of directors adopted the 2016 Plan and the Company's stockholders approved the 2016 Plan in May 2016. In May 2018, May 2019, May 2020 and May 2021, the Company's stockholders approved amendments to the 2016 Plan to increase the number of shares authorized for issuance under the 2016 Plan by 1.5 million shares, 7.3 million shares, 8.1 million shares and 4.4 million shares, respectively. As of March 26, 2022, the Company reserved a total of 35.2 million shares of common stock for the award of stock options, RSUs and PSUs to employees, non-employees, consultants and members of the Company's board of directors pursuant to the 2016 Plan, plus any shares subject to awards granted under the 2007 Plan that, after the effective date of the 2016 Plan, expire, are forfeited or otherwise terminate without having been exercised in full to the extent such awards were exercisable, and shares issued pursuant to awards granted under the 2007 Plan that, after the effective date of the 2016 Plan, are forfeited to or repurchased by the Company due to failure to vest. The 2016 Plan has a maximum term of 10 years from the date of adoption, or it can be earlier terminated by the Company's board of directors. The 2007 Plan was canceled and there are no outstanding grants under the 2007 plan. Stock-based Compensation Plans As described above, the Company has stock-based compensation plans pursuant to which the Company has granted RSUs and PSUs, as well as an ESPP for all eligible employees. (in thousands except weighted average data) Number of Weighted Aggregate Outstanding at December 25, 2021 11,607 $ 7.66 $ 110,849 RSUs granted 7,193 $ 8.85 RSUs released (536) $ 6.33 $ 4,545 RSUs canceled (377) $ 7.80 Outstanding at March 26, 2022 17,887 $ 8.17 $ 155,617 (in thousands except weighted average data) Number of Weighted Aggregate Outstanding at December 25, 2021 2,114 $ 6.66 $ 20,184 PSUs granted 899 $ 8.38 PSUs released (140) $ 4.88 $ 1,313 PSUs canceled (49) $ 6.94 Outstanding at March 26, 2022 2,824 $ 7.29 $ 24,569 Expected to vest at March 26, 2022 2,674 $ 23,264 The aggregate intrinsic value of unreleased RSUs and unreleased PSUs is calculated using the closing price of the Company's common stock of $8.70 at March 25, 2022 (the last trading day of the quarter). The aggregate intrinsic value of RSUs and PSUs released is calculated using the fair market value of the common stock at the date of release. The following table presents total stock-based compensation cost for instruments granted but not yet amortized, of the Company’s equity compensation plans as of March 26, 2022. These costs are expected to be amortized on a straight-line basis over the following weighted-average periods (in thousands, except for weighted average period data): Unrecognized Weighted RSUs $ 115,742 2.4 PSUs $ 13,530 2.3 Employee Stock Purchase Plan The fair value of the ESPP shares was estimated at the date of grant using the following assumptions: Three Months Ended March 26, 2022 March 27, 2021 Volatility 39% 50% Risk-free interest rate 0.67% 0.06% Expected life 0.5 years 0.5 years Estimated fair value $2.21 $3.11 Stock-based compensation expense related to ESPP for the three-months ended March 26, 2022 was approximately $1.3 million, and for the three-months ended March 27, 2021 was approximately $1.7 million. Restricted Stock Units Pursuant to the 2016 Plan, the Company has granted RSUs to employees and non-employee members of the Company's board of directors. All RSUs awarded are subject to each individual's continued service to the Company through each applicable vesting date. The Company accounted for the fair value of the RSUs using the closing market price of the Company’s common stock on the date of grant. Amortization of stock-based compensation related to RSUs for the three-months ended March 26, 2022 was approximately $10.9 million, and for the three-months ended March 27, 2021 was approximately $9.8 million. Performance Stock Units Pursuant to the 2016 Plan, the Company has granted PSUs to certain of the Company’s executive officers, senior management and certain employees. All PSUs awarded are subject to each individual's continued service to the Company through each applicable vesting date and if the performance metrics are not met within the time limits specified in the award agreements, the PSUs will be canceled. The following table summarizes by grant year, the Company’s PSU activity for the three-months ended March 26, 2022 (in thousands): Total Number of Performance Stock Units 2019 2020 2021 2022 Outstanding at December 25, 2021 2,114 185 1,270 659 — PSUs granted 899 — — — 899 PSUs released (140) (140) — — — PSUs canceled (49) — (30) (19) — Outstanding at March 26, 2022 2,824 45 1,240 640 899 Stock-based compensation expense related to PSUs for the three-months ended March 26, 2022 was approximately $0.9 million. Stock-based compensation expense related to PSUs for the three-months ended March 27, 2021 was a credit of approximately $0.6 million due to PSU cancellations. Stock-Based Compensation The following tables summarize the effects of stock-based compensation on the Company’s condensed consolidated balance sheets and statements of operations for the periods presented (in thousands): March 26, December 25, Stock-based compensation effects in inventory $ 3,817 $ 3,707 Three Months Ended March 26, March 27, Income tax benefit associated with stock-based compensation $ 2,226 $ 1,717 Stock-based compensation effects in net loss before income taxes Cost of revenue $ 1,889 $ 1,796 Research and development 4,841 4,297 Sales and marketing 2,767 3,199 General and administration 3,442 1,682 Total stock-based compensation expense $ 12,939 $ 10,974 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 26, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income taxes for the three-months ended March 26, 2022 represented a tax expense of $6.4 million on pre-tax losses of $35.4 million. This compared to a tax expense of $1.0 million, on pre-tax losses of $47.3 million for the three-months ended March 27, 2021. Provision for income taxes increased by approximately $5.4 million during the three-months ended March 26, 2022, compared to the corresponding period in 2021 as a result of an increase in income taxes and withholding taxes in foreign jurisdictions, primarily driven by an increase in Germany's withholding tax rate to 18.8% as compared to 5.3% in the three months ended March 27, 2021.The Company must assess the likelihood that some portion or all of its deferred tax assets will be recovered from future taxable income within the respective jurisdictions. In the past, the Company established a valuation allowance against its deferred tax assets as it determined that its ability to recover the value of these assets did not meet the “more-likely-than-not” standard. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management judgment is required on an on-going basis to determine whether it needs to maintain the valuation allowance recorded against its net deferred tax assets. The Company must consider all positive and negative evidence, including its forecasts of taxable income over the applicable carryforward periods, its current financial performance, its market environment and other factors in evaluating the need for a valuation allowance against its net U.S. deferred tax assets. At March 26, 2022, the Company does not believe that it is more-likely-than-not that it would be able to utilize its domestic deferred tax assets in the foreseeable future. Accordingly, the domestic net deferred tax assets continued to be fully reserved with a valuation allowance. To the extent that the Company determines that deferred tax assets are realizable on a more-likely-than-not basis, and adjustment is needed, that adjustment will be recorded in the period that the determination is made and would generally decrease the valuation allowance and record a corresponding benefit to earnings. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 26, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information 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, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Company’s Chief Executive Officer (the "CEO”). The CEO reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region for purposes of allocating resources and evaluating financial performance. The Company has one business activity as a provider of optical transport networking equipment, software and related services. Accordingly, the Company is considered a single reporting segment and operating unit structure. Revenue by geographic region is based on the shipping address of the customer. For more information regarding revenue disaggregated by geography, see Note 4, “Revenue Recognition” to the Notes to Condensed Consolidated Financial Statements. Additionally, the following table sets forth our property, plant and equipment, net by geographic region (in thousands): March 26, December 25, 2021 United States $ 141,327 $ 141,977 Other Americas 2,981 2,687 Europe, Middle East and Africa 11,022 12,245 Asia Pacific 3,067 3,309 Total property, plant and equipment, net $ 158,397 $ 160,218 |
Guarantees
Guarantees | 3 Months Ended |
Mar. 26, 2022 | |
Guarantees [Abstract] | |
Guarantees | Guarantees Product Warranties Activity related to product warranty was as follows (in thousands): Three Months Ended March 26, 2022 March 27, 2021 Beginning balance $ 44,310 $ 40,708 Charges to operations 5,975 5,317 Utilization (5,709) (6,543) Change in estimate (1) (4,991) (595) Balance at the end of the period $ 39,585 $ 38,887 (1) The Company records product warranty liabilities based on the latest quality and cost information available as of the date the revenue is recorded. The changes in estimate shown here are due to changes in overall actual failure rates, the mix of new compared to used units related to replacement of failed units, and changes in the estimated cost of repair and product recalls. As the Company's products mature over time, failure rates and repair costs associated with such products generally decline, leading to favorable changes in warranty reserves. Letters of Credit and Bank Guarantees The Company had $22.4 million and $22.5 million of standby letters of credit, bank guarantees and surety bonds outstanding as of March 26, 2022 and December 25, 2021, respectively. Details are provided in the table below (in thousands). March 26, December 25, Customer performance guarantees $ 18,961 $ 16,307 Value added tax license 286 287 Property leases 2,034 4,684 Pension plans 912 1,004 Credit cards 150 150 Other liabilities 72 68 Total $ 22,415 $ 22,500 Of the $19.0 million and $16.3 million related to customer performance guarantees as of March 26, 2022 and December 25, 2021, respectively, approximately $4.0 million was used to secure surety bonds in the aggregate of $5.5 million. Of the aforementioned standby letters of credit and bank guarantees outstanding, $11.2 million was backed by cash collateral from third-party institutions. As of each of March 26, 2022 and December 25, 2021, the Credit Facility included a $50.0 million letter of credit sub-facility, pursuant to which letters of credit in the amount of $11.3 million and $11.5 million, respectively, had been issued and outstanding. Approximately $176.4 million and $200.0 million of assets of certain Company subsidiaries have been pledged to secure the Credit Facility and other obligations as of March 26, 2022 and December 25, 2021, respectively. |
Pension and Post-Retirement Ben
Pension and Post-Retirement Benefit Plans | 3 Months Ended |
Mar. 26, 2022 | |
Retirement Benefits [Abstract] | |
Pension and Post-Retirement Benefit Plans | Pension and Post-Retirement Benefit PlansAs a result of the Acquisition, the Company acquired a number of post-employment plans in Germany, as well as a number of smaller post-employment plans in other countries, including both defined contribution and defined benefit plans. The defined benefit plans expose the Company to actuarial risks such as investment risk, interest rate risk, life expectancy risk and salary risk. The characteristics of the defined benefit plans and the risks associated with them vary depending on legal, fiscal and economic requirements. Components of Net Periodic Benefit Cost Net periodic benefit cost for the Company's pension and other post-retirement benefit plans consisted of the following (in thousands): Three Months Ended March 26, 2022 March 27, 2021 Service cost $ 80 $ 114 Interest cost 333 322 Expected return on plan assets (780) (737) Amortization of actuarial loss 87 861 Total net periodic benefit cost $ (280) $ 560 The components of net periodic benefit costs other than the service cost component are included in other gain (loss), net, in the Company’s condensed consolidated statements of operations. Actuarial gains and losses are amortized using a corridor approach. The gain/loss corridor is equal to 10% of the greater of the pension benefit obligation and the market-related value of assets. Gains and losses in excess of the corridor are generally amortized over the average future working lifetime of the pension plan participants. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 26, 2022 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In August 2020, the FASB issued ASU 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity" ("ASU 2020-06"). ASU 2020-06 simplifies the accounting for convertible instruments by removing certain separation models in ASC 470-20, Debt—Debt with Conversion and Other Options, for convertible instruments. On December 26, 2021, the Company adopted ASU 2020-06 using the modified retrospective method. Applying the transition guidance, the Company was required to apply the guidance to all impacted financial instruments that were outstanding as of December 26, 2021 with the cumulative effect recognized as an adjustment to the opening balance of accumulated deficit. The adoption of ASU 2020-06 required the Company to record a $196.5 million reduction of additional paid in capital, on December 26, 2021, due to the recombination of the equity conversion component of convertible debt remaining outstanding, which was initially separated and recorded in equity. The $122.0 million increase in debt represented the removal of the remaining debt discounts recorded for this previous separation. The Company recognized a $74.5 million cumulative effect decrease of initially applying ASU 2020-06 as an adjustment to the December 26, 2021 opening balance of accumulated deficit. Interest expense recognized in future periods will be reduced as a result of accounting for the convertible senior notes as a liability instrument. Since the Company had a net loss for the three-months ended March 26, 2022, the convertible senior notes were determined to be anti-dilutive and therefore had no impact to basic or diluted net loss per share for the periods as a result of adopting ASU 2020-06. The prior period consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods. Accounting Pronouncements Not Yet Effective In March 2020, the FASB issued ASU 2020-04 (Topic 848), "Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. The update was effective upon issuance and may generally be applied through December 31, 2022 to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR. The Company will apply the amendments when its relevant contracts are modified upon transition to alternative reference rates. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Leases [Abstract] | |
Schedule of Assets And Liabilities, Lessee | The following table presents operating lease liabilities in both current and long-term (in thousands): March 26, December 25, Accrued expenses and other current liabilities $ 14,846 $ 16,542 Other long-term liabilities 50,404 54,326 Total operating lease liability $ 65,250 $ 70,868 March 26, December 25, Accrued expenses and other current liabilities $ 1,075 $ 1,291 Other long-term liabilities 735 954 Total finance lease liability $ 1,810 $ 2,245 |
Schedule of Lease Costs | The following table presents finance lease expense comprising of amortization of right of use asset and interest expense (in thousands): Three Months Ended March 26, March 27, Amortization of right of use asset $ 240 $ 226 Interest expense 32 51 Total finance lease expense $ 272 $ 277 The following table presents supplemental information for the Company's non-cancelable leases for the three-months ended March 26, 2022 (in thousands, except for weighted average and percentage data): Operating Lease Finance Lease Weighted average remaining lease term 5.85 years 1.52 years Weighted average discount rate 9.20 % 7.01 % Cash paid for amounts included in the measurement of lease liabilities $ 7,900 $ 400 Leased assets obtained in exchange for new lease liabilities $ 883 $ — |
Schedule of Operating Lease Liabilities | The following table presents maturity of lease liabilities under the Company's non-cancelable leases as of March 26, 2022 (in thousands): Operating Lease Finance Lease Total lease payments $ 83,479 $ 1,910 Less: interest (1) 18,229 100 Present value of lease liabilities $ 65,250 $ 1,810 (1) Calculated using the interest rate for each lease. Payments Due by Period Total Remainder of 2022 2023 2024 2025 2026 Thereafter Operating leases (1)(2) $ 83,479 $ 16,035 $ 14,703 $ 13,253 $ 12,251 $ 9,614 $ 17,623 Finance lease obligations (3) 1,910 931 802 177 — — — 2027 Notes, including interest (4) 225,000 2,500 5,000 5,000 5,000 5,000 202,500 2024 Notes, including interest (4) 423,883 4,277 8,553 411,053 — — — Mortgage Payable, including interest (4) 8,197 586 781 6,830 — — — Total contractual obligations $ 742,469 $ 24,329 $ 29,839 $ 436,313 $ 17,251 $ 14,614 $ 220,123 (1) The Company leases facilities under non-cancelable operating lease agreements. These leases have varying terms that range from one (2) The Company has contractual commitments to remove leasehold improvements and return certain properties to a specified condition when the leases terminate. At the inception of a lease with such conditions, the Company records an asset retirement obligation liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. Asset retirement obligations were $5.1 million as of each of March 26, 2022 and December 25, 2021, respectively. Of the $5.1 million as of March 26, 2022, $5.0 million is classified as other long-term liabilities on the accompanying condensed consolidated balance sheets. The remainder is classified as accrued expenses and other current liabilities. (3) The Company has finance leases for manufacturing and other equipment. The above payment schedule includes interest. See Note 3, "Leases" to the Notes to Condensed Consolidated Financial Statements for more information. (4) See Note 12, "Debt" to the Notes to Condensed Consolidated Financial Statements for more information. |
Schedule of Finance Lease Liabilities | The following table presents maturity of lease liabilities under the Company's non-cancelable leases as of March 26, 2022 (in thousands): Operating Lease Finance Lease Total lease payments $ 83,479 $ 1,910 Less: interest (1) 18,229 100 Present value of lease liabilities $ 65,250 $ 1,810 (1) Calculated using the interest rate for each lease. Payments Due by Period Total Remainder of 2022 2023 2024 2025 2026 Thereafter Operating leases (1)(2) $ 83,479 $ 16,035 $ 14,703 $ 13,253 $ 12,251 $ 9,614 $ 17,623 Finance lease obligations (3) 1,910 931 802 177 — — — 2027 Notes, including interest (4) 225,000 2,500 5,000 5,000 5,000 5,000 202,500 2024 Notes, including interest (4) 423,883 4,277 8,553 411,053 — — — Mortgage Payable, including interest (4) 8,197 586 781 6,830 — — — Total contractual obligations $ 742,469 $ 24,329 $ 29,839 $ 436,313 $ 17,251 $ 14,614 $ 220,123 (1) The Company leases facilities under non-cancelable operating lease agreements. These leases have varying terms that range from one (2) The Company has contractual commitments to remove leasehold improvements and return certain properties to a specified condition when the leases terminate. At the inception of a lease with such conditions, the Company records an asset retirement obligation liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. Asset retirement obligations were $5.1 million as of each of March 26, 2022 and December 25, 2021, respectively. Of the $5.1 million as of March 26, 2022, $5.0 million is classified as other long-term liabilities on the accompanying condensed consolidated balance sheets. The remainder is classified as accrued expenses and other current liabilities. (3) The Company has finance leases for manufacturing and other equipment. The above payment schedule includes interest. See Note 3, "Leases" to the Notes to Condensed Consolidated Financial Statements for more information. (4) See Note 12, "Debt" to the Notes to Condensed Consolidated Financial Statements for more information. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents the Company's revenue disaggregated by geography, based on the shipping address of the customer (in thousands): Three Months Ended March 26, March 27, United States $ 170,185 $ 157,649 Other Americas 20,911 19,531 Europe, Middle East and Africa 108,611 114,908 Asia Pacific 39,167 38,819 Total revenue $ 338,874 $ 330,907 The Company sells its products directly to customers who are predominantly service providers and to channel partners that sell on its behalf. The following table presents the Company's revenue disaggregated by sales channel (in thousands): Three Months Ended March 26, March 27, Direct $ 260,892 $ 271,301 Indirect 77,982 59,606 Total revenue $ 338,874 $ 330,907 |
Schedule of Contract with Customer, Asset and Liability | The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands): March 26, December 25, Assets (Liabilities) Accounts receivable, net $ 276,056 $ 358,954 Contract assets $ 58,612 $ 49,052 Deferred revenue $ (159,703) $ (168,909) |
Schedule of Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) pursuant to contracts that are not subject to cancellation without penalty at the end of the reporting period (in thousands): Remainder of 2022 2023 2024 2025 2026 Thereafter Total Revenue expected to be recognized in the future as of March 26, 2022 $ 661,174 $ 119,111 $ 26,998 $ 7,052 $ 3,673 $ 3,522 $ 821,530 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables represent the Company’s fair value hierarchy for its assets and liabilities measured at fair value on a recurring basis (in thousands): As of March 26, 2022 As of December 25, 2021 Fair Value Measured Using Fair Value Measured Using Level 1 Level 2 Total Level 1 Level 2 Total Assets (Liabilities) Foreign currency exchange forward contracts $ — $ (2) $ (2) $ — $ (221) $ (221) The following table presents the estimated fair values of the convertible senior notes (in thousands): As of March 26, 2022 As of December 25, 2021 Fair Value Measured Using Fair Value Measured Using Level 1 Level 2 Total Level 1 Level 2 Total Convertible Senior Notes $ — $ 720,392 $ 720,392 $ — $ 765,412 $ 765,412 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Instruments not Designated as Hedging Instruments | The fair value of derivative instruments not designated as hedging instruments in the Company’s condensed consolidated balance sheets was as follows (in thousands): As of March 26, 2022 As of December 25, 2021 Gross Notional (1) Accrued expenses and other current liabilities Gross (1) Accrued expenses and other current liabilities Foreign currency exchange forward contracts Related to Euro denominated monetary balances $ — $ — $ 21,981 $ (139) Related to British Pound denominated monetary balances 7,383 (2) 7,566 (82) $ 7,383 $ (2) $ 29,547 $ (221) (1) Represents the face amounts of forward contracts that were outstanding as of the end of the period noted. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table presents details of the Company’s goodwill during the three-months ended March 26, 2022 (in thousands): Balance as of December 25, 2021 $ 255,788 Foreign currency translation adjustments (6,254) Balance as of March 26, 2022 $ 249,534 |
Schedule of Finite-Lived Intangible Assets | The following tables present details of the Company’s intangible assets as of March 26, 2022 and December 25, 2021 (in thousands, except for weighted average data): March 26, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life (In Years) Intangible assets with finite lives: Customer relationships and backlog 155,863 (107,139) 48,724 4.0 Developed technology 179,497 (151,955) 27,542 1.3 Total intangible assets with finite lives $ 335,360 $ (259,094) $ 76,266 December 25, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life (In Years) Intangible assets with finite lives: Customer relationships and backlog 157,495 (104,701) 52,794 4.2 Developed technology 182,844 (149,064) 33,780 1.5 Total intangible assets with finite lives $ 340,339 $ (253,765) $ 86,574 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of March 26, 2022 (in thousands): Fiscal Years Total Remainder of 2022 2023 2024 2025 2026 Thereafter Total future amortization expense $ 76,266 $ 28,118 $ 23,329 $ 9,025 $ 9,025 $ 6,769 $ — |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Allowance for Credit Losses | The following table provides a rollforward of the allowance for credit losses for accounts receivable for the three-months ended March 26, 2022 (in thousands): Balance as of December 25, 2021 $ 1,304 Additions (1) 755 Write offs (2) (182) Other (3) (23) Balance as of March 26, 2022 $ 1,854 (1) The new additions during the three-months ended March 26, 2022 are primarily due to specific reserves. (2) The write offs during the three-months ended March 26, 2022 are primarily amounts fully reserved previously. |
Schedule of Details of Selected Balance Sheet Items | The following table provides details of selected balance sheet items (in thousands): March 26, December 25, Inventory Raw materials $ 41,225 $ 39,379 Work in process 55,356 53,924 Finished goods 195,109 198,064 Total inventory $ 291,690 $ 291,367 Property, plant and equipment, net Computer hardware $ 46,233 $ 45,824 Computer software (1) 52,962 56,820 Laboratory and manufacturing equipment 283,357 287,875 Land and building 12,369 12,369 Furniture and fixtures 2,603 2,164 Leasehold and building improvements 51,053 51,471 Construction in progress 30,097 18,807 Subtotal 478,674 475,330 Less accumulated depreciation and amortization (2) (320,277) (315,112) Total property, plant and equipment, net $ 158,397 $ 160,218 Accrued expenses and other current liabilities Loss contingency related to non-cancelable purchase commitments $ 30,555 $ 26,481 Taxes payable 48,498 43,308 Short-term operating and finance lease liability 15,921 17,792 Restructuring accrual 6,776 8,610 Other accrued expenses and other current liabilities 41,153 50,838 Total accrued expenses $ 142,903 $ 147,029 (1) Included in computer software at March 26, 2022 and December 25, 2021 were $26.3 million and $25.9 million, respectively, related to enterprise resource planning (“ERP”) systems that the Company implemented. The unamortized ERP costs at March 26, 2022 and December 25, 2021 were $8.2 million and $8.9 million, respectively. Also included in computer software at March 26, 2022 and December 25, 2021 was $18.1 million and $20.9 million, respectively, related to term licenses. The unamortized term license costs at March 26, 2022 and December 25, 2021 was $8.8 million and $9.2 million, respectively. (2) Depreciation expense was $11.6 million and $11.5 million (which includes depreciation of capitalized ERP cost of $0.8 million and $0.6 million, respectively) for the three-months ended March 26, 2022 and March 27, 2021, respectively. Also included in depreciation expense for three-months ended March 26, 2022 and March 27, 2021 was $1.7 million and $1.6 million, respectively, related to term licenses. |
Restructuring and Other Relat_2
Restructuring and Other Related Costs (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table presents restructuring and other related costs included in cost of revenue and operating expenses in the accompanying condensed consolidated statements of operations under the 2021 Restructuring Plan (in thousands): Three Months Ended March 26, 2022 March 27, 2021 Cost of Operating Expenses Cost of Operating Expenses Severance and other related expenses $ 140 $ 1,461 $ 514 $ 272 Lease related impairment charges — 5,592 — 1,950 Asset impairment — 84 — 51 Others 10 133 — 46 Total $ 150 $ 7,270 $ 514 $ 2,319 |
Schedule of Restructuring Reserve by Type of Cost | Restructuring liabilities are reported within accrued expenses, operating lease liabilities and other long-term liabilities in the accompanying condensed consolidated balance sheets (in thousands): Severance and other related expenses Lease related impairment charges Asset impairment Others Total Balance at December 25, 2021 $ 7,536 $ — $ — $ 1,346 $ 8,882 Charges 1,601 5,592 84 143 7,420 Cash Payments (3,558) (459) — — (4,017) Non-Cash Settlements and Other (159) (5,133) (84) (14) (5,390) Balance at March 26, 2022 $ 5,420 $ — $ — $ 1,475 $ 6,895 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Loss | The following table sets forth the changes in accumulated other comprehensive loss by component for the three-months ended March 26, 2022 (in thousands): Foreign Currency Translation Actuarial Gain (Loss) on Pension Accumulated Tax Effect Total Balance at December 25, 2021 $ (7,829) $ 4,297 $ (964) $ (4,496) Other comprehensive loss before reclassifications (11,201) — — (11,201) Amounts reclassified from accumulated other comprehensive loss — 87 — 87 Net current-period other comprehensive income (loss) (11,201) 87 — (11,114) Balance at March 26, 2022 $ (19,030) $ 4,384 $ (964) $ (15,610) |
Basic and Diluted Net Loss Pe_2
Basic and Diluted Net Loss Per Common Share (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Net Loss Per Common Share Basic and Diluted | The following table sets forth the computation of net loss per common share – basic and diluted (in thousands, except per share amounts): Three Months Ended March 26, March 27, Net loss $ (41,850) $ (48,322) Weighted average common shares outstanding - basic and diluted 212,182 202,638 Net loss per common share - basic and diluted $ (0.20) $ (0.24) |
Schedule of Antidilutive Shares Excluded from Computation of Diluted Net Loss Per Share | The following sets forth the potentially dilutive shares excluded from the computation of the diluted net loss per share because their effect was anti-dilutive (in thousands): Three Months Ended March 26, March 27, Convertible senior notes (1) 69,930 5,841 Restricted stock units 17,887 15,851 Performance stock units 2,824 3,065 Employee stock purchase plan shares 1,095 930 Total 91,736 25,687 (1) The convertible senior notes were calculated under the if-converted method for 2022 due to the adoption of ASU 2020-06 and under the treasury stock method for 2021. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Convertible Senior Notes | The following is a summary of our debt as of March 26, 2022 (post-ASU 2020-06 adoption) (in millions): Net Carrying Value Unpaid Principal Balance Contractual Maturity Date Current Long-Term 2024 Notes $ — $ 397.1 $ 402.5 September 2024 2027 Notes $ — $ 195.2 $ 200.0 March 2027 Asset-based Revolving Credit Facility $ — $ — $ — March 2024 Mortgage $ 0.5 $ 7.2 $ 7.7 March 2024 $ 0.5 $ 599.5 $ 610.2 The following is a summary of our debt as of December 25, 2021 (pre-ASU 2020-06 adoption) (in millions): Net Carrying Value Unpaid Principal Balance Contractual Maturity Date Current Long-Term 2024 Notes $ — $ 329.2 $ 402.5 September 2024 2027 Notes $ — $ 140.3 $ 200.0 March 2027 Asset-based Revolving Credit Facility $ — $ — $ — March 2024 Mortgage $ 0.5 $ 7.3 $ 7.8 March 2024 Total Debt $ 0.5 $ 476.8 $ 610.3 The net carrying amount of the 2027 Notes as of March 26, 2022 (post-ASU 2020-06 adoption) and as of December 25, 2021 (pre-ASU 2020-06 adoption) was as follows (in thousands): March 26, 2022 December 25, 2021 Principal $ 200,000 $ 200,000 Unamortized debt discount — (56,270) Unamortized issuance costs (4,815) (3,472) Net carrying amount $ 195,185 $ 140,258 The net carrying amount of the 2024 Notes as of March 26, 2022 (post-ASU 2020-06 adoption) and as of December 25, 2021 (pre-ASU 2020-06 adoption) was as follows (in thousands): March 26, 2022 December 25, 2021 Principal $ 402,500 $ 402,500 Unamortized debt discount — (68,755) Unamortized issuance costs (5,403) (4,488) Net carrying amount $ 397,097 $ 329,257 |
Schedule of Interest Expense Recognized Related To Notes | The following table presents the interest expense related to the contractual interest coupon, the amortization of debt issuance costs, and the amortization of debt discounts on our convertible senior notes (in thousands): Three Months Ended March 26, 2022 March 27, 2021 Contractual interest expense $ 3,388 $ 3,388 Amortization of debt issuance costs 767 455 Amortization of debt discount — 7,082 Total interest expense $ 4,155 $ 10,925 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Lease Liabilities | The following table presents maturity of lease liabilities under the Company's non-cancelable leases as of March 26, 2022 (in thousands): Operating Lease Finance Lease Total lease payments $ 83,479 $ 1,910 Less: interest (1) 18,229 100 Present value of lease liabilities $ 65,250 $ 1,810 (1) Calculated using the interest rate for each lease. Payments Due by Period Total Remainder of 2022 2023 2024 2025 2026 Thereafter Operating leases (1)(2) $ 83,479 $ 16,035 $ 14,703 $ 13,253 $ 12,251 $ 9,614 $ 17,623 Finance lease obligations (3) 1,910 931 802 177 — — — 2027 Notes, including interest (4) 225,000 2,500 5,000 5,000 5,000 5,000 202,500 2024 Notes, including interest (4) 423,883 4,277 8,553 411,053 — — — Mortgage Payable, including interest (4) 8,197 586 781 6,830 — — — Total contractual obligations $ 742,469 $ 24,329 $ 29,839 $ 436,313 $ 17,251 $ 14,614 $ 220,123 (1) The Company leases facilities under non-cancelable operating lease agreements. These leases have varying terms that range from one (2) The Company has contractual commitments to remove leasehold improvements and return certain properties to a specified condition when the leases terminate. At the inception of a lease with such conditions, the Company records an asset retirement obligation liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. Asset retirement obligations were $5.1 million as of each of March 26, 2022 and December 25, 2021, respectively. Of the $5.1 million as of March 26, 2022, $5.0 million is classified as other long-term liabilities on the accompanying condensed consolidated balance sheets. The remainder is classified as accrued expenses and other current liabilities. (3) The Company has finance leases for manufacturing and other equipment. The above payment schedule includes interest. See Note 3, "Leases" to the Notes to Condensed Consolidated Financial Statements for more information. (4) See Note 12, "Debt" to the Notes to Condensed Consolidated Financial Statements for more information. |
Schedule of Finance Lease Liabilities | The following table presents maturity of lease liabilities under the Company's non-cancelable leases as of March 26, 2022 (in thousands): Operating Lease Finance Lease Total lease payments $ 83,479 $ 1,910 Less: interest (1) 18,229 100 Present value of lease liabilities $ 65,250 $ 1,810 (1) Calculated using the interest rate for each lease. Payments Due by Period Total Remainder of 2022 2023 2024 2025 2026 Thereafter Operating leases (1)(2) $ 83,479 $ 16,035 $ 14,703 $ 13,253 $ 12,251 $ 9,614 $ 17,623 Finance lease obligations (3) 1,910 931 802 177 — — — 2027 Notes, including interest (4) 225,000 2,500 5,000 5,000 5,000 5,000 202,500 2024 Notes, including interest (4) 423,883 4,277 8,553 411,053 — — — Mortgage Payable, including interest (4) 8,197 586 781 6,830 — — — Total contractual obligations $ 742,469 $ 24,329 $ 29,839 $ 436,313 $ 17,251 $ 14,614 $ 220,123 (1) The Company leases facilities under non-cancelable operating lease agreements. These leases have varying terms that range from one (2) The Company has contractual commitments to remove leasehold improvements and return certain properties to a specified condition when the leases terminate. At the inception of a lease with such conditions, the Company records an asset retirement obligation liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. Asset retirement obligations were $5.1 million as of each of March 26, 2022 and December 25, 2021, respectively. Of the $5.1 million as of March 26, 2022, $5.0 million is classified as other long-term liabilities on the accompanying condensed consolidated balance sheets. The remainder is classified as accrued expenses and other current liabilities. (3) The Company has finance leases for manufacturing and other equipment. The above payment schedule includes interest. See Note 3, "Leases" to the Notes to Condensed Consolidated Financial Statements for more information. (4) See Note 12, "Debt" to the Notes to Condensed Consolidated Financial Statements for more information. |
Schedule of Maturities of Long-term Debt | The following table sets forth commitments and contingencies related to our various obligations (in thousands): Payments Due by Period Total Remainder of 2022 2023 2024 2025 2026 Thereafter Operating leases (1)(2) $ 83,479 $ 16,035 $ 14,703 $ 13,253 $ 12,251 $ 9,614 $ 17,623 Finance lease obligations (3) 1,910 931 802 177 — — — 2027 Notes, including interest (4) 225,000 2,500 5,000 5,000 5,000 5,000 202,500 2024 Notes, including interest (4) 423,883 4,277 8,553 411,053 — — — Mortgage Payable, including interest (4) 8,197 586 781 6,830 — — — Total contractual obligations $ 742,469 $ 24,329 $ 29,839 $ 436,313 $ 17,251 $ 14,614 $ 220,123 (1) The Company leases facilities under non-cancelable operating lease agreements. These leases have varying terms that range from one (2) The Company has contractual commitments to remove leasehold improvements and return certain properties to a specified condition when the leases terminate. At the inception of a lease with such conditions, the Company records an asset retirement obligation liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. Asset retirement obligations were $5.1 million as of each of March 26, 2022 and December 25, 2021, respectively. Of the $5.1 million as of March 26, 2022, $5.0 million is classified as other long-term liabilities on the accompanying condensed consolidated balance sheets. The remainder is classified as accrued expenses and other current liabilities. (3) The Company has finance leases for manufacturing and other equipment. The above payment schedule includes interest. See Note 3, "Leases" to the Notes to Condensed Consolidated Financial Statements for more information. (4) See Note 12, "Debt" to the Notes to Condensed Consolidated Financial Statements for more information. |
Schedule of Short-term Debt | The following table sets forth commitments and contingencies related to our various obligations (in thousands): Payments Due by Period Total Remainder of 2022 2023 2024 2025 2026 Thereafter Operating leases (1)(2) $ 83,479 $ 16,035 $ 14,703 $ 13,253 $ 12,251 $ 9,614 $ 17,623 Finance lease obligations (3) 1,910 931 802 177 — — — 2027 Notes, including interest (4) 225,000 2,500 5,000 5,000 5,000 5,000 202,500 2024 Notes, including interest (4) 423,883 4,277 8,553 411,053 — — — Mortgage Payable, including interest (4) 8,197 586 781 6,830 — — — Total contractual obligations $ 742,469 $ 24,329 $ 29,839 $ 436,313 $ 17,251 $ 14,614 $ 220,123 (1) The Company leases facilities under non-cancelable operating lease agreements. These leases have varying terms that range from one (2) The Company has contractual commitments to remove leasehold improvements and return certain properties to a specified condition when the leases terminate. At the inception of a lease with such conditions, the Company records an asset retirement obligation liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. Asset retirement obligations were $5.1 million as of each of March 26, 2022 and December 25, 2021, respectively. Of the $5.1 million as of March 26, 2022, $5.0 million is classified as other long-term liabilities on the accompanying condensed consolidated balance sheets. The remainder is classified as accrued expenses and other current liabilities. (3) The Company has finance leases for manufacturing and other equipment. The above payment schedule includes interest. See Note 3, "Leases" to the Notes to Condensed Consolidated Financial Statements for more information. (4) See Note 12, "Debt" to the Notes to Condensed Consolidated Financial Statements for more information. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Company's Equity Award Activity - RSUs | (in thousands except weighted average data) Number of Weighted Aggregate Outstanding at December 25, 2021 11,607 $ 7.66 $ 110,849 RSUs granted 7,193 $ 8.85 RSUs released (536) $ 6.33 $ 4,545 RSUs canceled (377) $ 7.80 Outstanding at March 26, 2022 17,887 $ 8.17 $ 155,617 |
Summary of Company's Equity Award Activity - PSUs | (in thousands except weighted average data) Number of Weighted Aggregate Outstanding at December 25, 2021 2,114 $ 6.66 $ 20,184 PSUs granted 899 $ 8.38 PSUs released (140) $ 4.88 $ 1,313 PSUs canceled (49) $ 6.94 Outstanding at March 26, 2022 2,824 $ 7.29 $ 24,569 Expected to vest at March 26, 2022 2,674 $ 23,264 |
Schedule of Total Stock Based Compensation Cost for Instruments Granted but Not Yet Amortized | The following table presents total stock-based compensation cost for instruments granted but not yet amortized, of the Company’s equity compensation plans as of March 26, 2022. These costs are expected to be amortized on a straight-line basis over the following weighted-average periods (in thousands, except for weighted average period data): Unrecognized Weighted RSUs $ 115,742 2.4 PSUs $ 13,530 2.3 |
Schedule of Estimated Fair Value of ESPP Shares | The fair value of the ESPP shares was estimated at the date of grant using the following assumptions: Three Months Ended March 26, 2022 March 27, 2021 Volatility 39% 50% Risk-free interest rate 0.67% 0.06% Expected life 0.5 years 0.5 years Estimated fair value $2.21 $3.11 |
Schedule of Nonvested Performance Based Units Activity by Grant Year | The following table summarizes by grant year, the Company’s PSU activity for the three-months ended March 26, 2022 (in thousands): Total Number of Performance Stock Units 2019 2020 2021 2022 Outstanding at December 25, 2021 2,114 185 1,270 659 — PSUs granted 899 — — — 899 PSUs released (140) (140) — — — PSUs canceled (49) — (30) (19) — Outstanding at March 26, 2022 2,824 45 1,240 640 899 |
Summary of Effects of Stock-Based Compensation on Company's Balance Sheets and Statements of Operations | The following tables summarize the effects of stock-based compensation on the Company’s condensed consolidated balance sheets and statements of operations for the periods presented (in thousands): March 26, December 25, Stock-based compensation effects in inventory $ 3,817 $ 3,707 Three Months Ended March 26, March 27, Income tax benefit associated with stock-based compensation $ 2,226 $ 1,717 Stock-based compensation effects in net loss before income taxes Cost of revenue $ 1,889 $ 1,796 Research and development 4,841 4,297 Sales and marketing 2,767 3,199 General and administration 3,442 1,682 Total stock-based compensation expense $ 12,939 $ 10,974 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Long Lived Assets | Additionally, the following table sets forth our property, plant and equipment, net by geographic region (in thousands): March 26, December 25, 2021 United States $ 141,327 $ 141,977 Other Americas 2,981 2,687 Europe, Middle East and Africa 11,022 12,245 Asia Pacific 3,067 3,309 Total property, plant and equipment, net $ 158,397 $ 160,218 |
Guarantees (Tables)
Guarantees (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Guarantees [Abstract] | |
Schedule of Activity Related to Product Warranty | Activity related to product warranty was as follows (in thousands): Three Months Ended March 26, 2022 March 27, 2021 Beginning balance $ 44,310 $ 40,708 Charges to operations 5,975 5,317 Utilization (5,709) (6,543) Change in estimate (1) (4,991) (595) Balance at the end of the period $ 39,585 $ 38,887 (1) The Company records product warranty liabilities based on the latest quality and cost information available as of the date the revenue is recorded. The changes in estimate shown here are due to changes in overall actual failure rates, the mix of new compared to used units related to replacement of failed units, and changes in the estimated cost of repair and product recalls. As the Company's products mature over time, failure rates and repair costs associated with such products generally decline, leading to favorable changes in warranty reserves. |
Schedule of Guarantor Obligations | Details are provided in the table below (in thousands). March 26, December 25, Customer performance guarantees $ 18,961 $ 16,307 Value added tax license 286 287 Property leases 2,034 4,684 Pension plans 912 1,004 Credit cards 150 150 Other liabilities 72 68 Total $ 22,415 $ 22,500 |
Pension and Post-Retirement B_2
Pension and Post-Retirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | Net periodic benefit cost for the Company's pension and other post-retirement benefit plans consisted of the following (in thousands): Three Months Ended March 26, 2022 March 27, 2021 Service cost $ 80 $ 114 Interest cost 333 322 Expected return on plan assets (780) (737) Amortization of actuarial loss 87 861 Total net periodic benefit cost $ (280) $ 560 |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies - Additional Information (Details) | 3 Months Ended |
Mar. 27, 2021 | |
Sales Revenue, Net | Customer Concentration Risk | Customer A | |
Concentration Risk [Line Items] | |
Concentration risk | 10.00% |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 26, 2021 | Dec. 25, 2021 |
Significant Accounting Policies [Line Items] | |||
Long-term debt, net | $ 599,474 | $ 476,789 | |
Accumulated deficit | $ (1,665,400) | $ (1,698,042) | |
Accounting Standards Update 2020-06 | Cumulative Effect, Period of Adoption, Adjustment | |||
Significant Accounting Policies [Line Items] | |||
Additional Paid in Capital | $ 196,500 | ||
Long-term debt, net | 122,000 | ||
Accumulated deficit | $ 74,500 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Rent expense | $ 9,300 | $ 7,300 | |
Accelerated rent expense | 5,600 | $ 2,000 | |
Finance lease, right-of-use asset | $ 5,400 | $ 5,500 | |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Term of finance lease | 3 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Term of finance lease | 5 years |
Leases - Operating Leases (Deta
Leases - Operating Leases (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Leases [Abstract] | ||
Accrued expenses and other current liabilities | $ 14,846 | $ 16,542 |
Other long-term liabilities | 50,404 | 54,326 |
Total operating lease liability | $ 65,250 | $ 70,868 |
Finance lease, liability, current, statement of financial position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Finance lease, liability, statement of financial position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Leases - Finance Leases (Detail
Leases - Finance Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | |
Leases [Abstract] | |||
Amortization of right of use asset | $ 240 | $ 226 | |
Interest expense | 32 | 51 | |
Total finance lease expense | 272 | $ 277 | |
Accrued expenses and other current liabilities | 1,075 | $ 1,291 | |
Other long-term liabilities | 735 | 954 | |
Total finance lease liability | $ 1,810 | $ 2,245 | |
Finance lease, liability, current, statement of financial position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | |
Finance lease, liability, statement of financial position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Leases - Operating Lease Maturi
Leases - Operating Lease Maturity (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Operating Lease | ||
Total lease payments | $ 83,479 | |
Less: interest | 18,229 | |
Operating Lease, Liability | 65,250 | $ 70,868 |
Finance Lease | ||
Total lease payments | 1,910 | |
Less: interest | 100 | |
Present value of lease liabilities | $ 1,810 | $ 2,245 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) $ in Thousands | 3 Months Ended |
Mar. 26, 2022USD ($) | |
Leases [Abstract] | |
Weighted average remaining lease term | 5 years 10 months 6 days |
Weighted average discount rate | 9.20% |
Cash paid for amounts included in the measurement of lease liabilities | $ 7,900 |
Leased assets obtained in exchange for new lease liabilities | $ 883 |
Weighted average remaining lease term | 1 year 6 months 7 days |
Weighted average discount rate | 7.01% |
Cash paid for amounts included in the measurement of lease liabilities | $ 400 |
Leased assets obtained in exchange for new lease liabilities | $ 0 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 338,874 | $ 330,907 |
Direct | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 260,892 | 271,301 |
Indirect | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 77,982 | 59,606 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 170,185 | 157,649 |
Other Americas | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 20,911 | 19,531 |
Europe, Middle East and Africa | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 108,611 | 114,908 |
Asia Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 39,167 | $ 38,819 |
Revenue Recognition - Contract
Revenue Recognition - Contract with Customer, Asset and Liability (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 276,056 | $ 358,954 |
Contract assets | 58,612 | 49,052 |
Deferred revenue | $ (159,703) | $ (168,909) |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue recognized | $ 44.9 | $ 31.3 |
Revenue Recognition - Revenue,
Revenue Recognition - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction (Details) $ in Thousands | Mar. 26, 2022USD ($) |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized in the future as of March 26, 2022 | $ 821,530 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-03-27 | |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized in the future as of March 26, 2022 | $ 661,174 |
Revenue expected to be recognized in the future, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized in the future as of March 26, 2022 | $ 119,111 |
Revenue expected to be recognized in the future, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized in the future as of March 26, 2022 | $ 26,998 |
Revenue expected to be recognized in the future, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized in the future as of March 26, 2022 | $ 7,052 |
Revenue expected to be recognized in the future, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized in the future as of March 26, 2022 | $ 3,673 |
Revenue expected to be recognized in the future, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized in the future as of March 26, 2022 | $ 3,522 |
Revenue expected to be recognized in the future, period |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value Measured Using - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Convertible Senior Notes | ||
Assets (Liabilities) | ||
Convertible Senior Notes | $ 720,392 | $ 765,412 |
Convertible Senior Notes | Level 1 | ||
Assets (Liabilities) | ||
Convertible Senior Notes | 0 | 0 |
Convertible Senior Notes | Level 2 | ||
Assets (Liabilities) | ||
Convertible Senior Notes | 720,392 | 765,412 |
Foreign currency exchange forward contracts | ||
Assets (Liabilities) | ||
Foreign currency exchange forward contracts | (2) | (221) |
Foreign currency exchange forward contracts | Level 1 | ||
Assets (Liabilities) | ||
Foreign currency exchange forward contracts | 0 | 0 |
Foreign currency exchange forward contracts | Level 2 | ||
Assets (Liabilities) | ||
Foreign currency exchange forward contracts | $ (2) | $ (221) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||
Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | Dec. 26, 2020 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Accelerated rent expense | $ 5,600 | $ 2,000 | ||||
Total cash and restricted cash | 204,028 | [1] | $ 249,545 | [1] | $ 202,521 | $ 315,383 |
Foreign Subsidiary | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Total cash and restricted cash | 75,300 | $ 77,600 | ||||
Level 3 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Accelerated rent expense | $ 5,600 | |||||
[1] | Reconciliation of cash and restricted cash to the condensed consolidated balance sheets: March 26, March 27, Cash $ 191,937 $ 234,029 Short-term restricted cash 6,528 3,288 Long-term restricted cash 5,563 12,228 Total cash and restricted cash $ 204,028 $ 249,545 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | |
Derivative [Line Items] | |||
Collateral on derivative instruments | $ 900 | $ 900 | |
Before-tax effect of foreign currency exchange forward contracts not designated as hedging instruments, gain (loss) | $ 300 | ||
Interest expense | 4,992 | 11,843 | |
Trade Accounts Receivable | |||
Derivative [Line Items] | |||
Interest expense | 100 | 100 | |
Receivables sold | $ 24,000 | $ 31,000 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Derivative Instruments Not Designated as Hedging Activities (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Derivative [Line Items] | ||
Prepaid expenses and other current assets | $ 161,188 | $ 147,989 |
Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Gross Notional | 7,383 | 29,547 |
Accrued expenses and other current liabilities | (2) | (221) |
Not Designated as Hedging Instrument | Related to Euro denominated monetary balances | ||
Derivative [Line Items] | ||
Gross Notional | 0 | 21,981 |
Accrued expenses and other current liabilities | 0 | (139) |
Not Designated as Hedging Instrument | Related to British Pound denominated monetary balances | ||
Derivative [Line Items] | ||
Gross Notional | 7,383 | 7,566 |
Accrued expenses and other current liabilities | $ (2) | $ (82) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill Roll Forward (Details) $ in Thousands | 3 Months Ended |
Mar. 26, 2022USD ($) | |
Goodwill [Roll Forward] | |
Balance as of December 25, 2021 | $ 255,788 |
Foreign currency translation adjustments | (6,254) |
Balance as of March 26, 2022 | $ 249,534 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Purchased Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 26, 2022 | Dec. 25, 2021 | |
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 335,360 | $ 340,339 |
Accumulated Amortization | (259,094) | (253,765) |
Net Carrying Amount | 76,266 | 86,574 |
Customer relationships and backlog | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | 155,863 | 157,495 |
Accumulated Amortization | (107,139) | (104,701) |
Net Carrying Amount | $ 48,724 | $ 52,794 |
Weighted Average Remaining Useful Life (In Years) | 4 years | 4 years 2 months 12 days |
Developed technology | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 179,497 | $ 182,844 |
Accumulated Amortization | (151,955) | (149,064) |
Net Carrying Amount | $ 27,542 | $ 33,780 |
Weighted Average Remaining Useful Life (In Years) | 1 year 3 months 18 days | 1 year 6 months |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 10 | $ 9 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Net Carrying Amount | $ 76,266 | $ 86,574 |
Remainder of 2022 | 28,118 | |
2023 | 23,329 | |
2024 | 9,025 | |
2025 | 9,025 | |
2026 | 6,769 | |
Thereafter | $ 0 |
Balance Sheet Details - Allowan
Balance Sheet Details - Allowance for credit losses (Details) $ in Thousands | 3 Months Ended |
Mar. 26, 2022USD ($) | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance as of December 25, 2021 | $ 1,304 |
Additions | 755 |
Write offs | (182) |
Other | (23) |
Balance as of March 26, 2022 | $ 1,854 |
Balance Sheet Details - Selecte
Balance Sheet Details - Selected Balance Sheet Items (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | |
Inventory | |||
Raw materials | $ 41,225 | $ 39,379 | |
Work in process | 55,356 | 53,924 | |
Finished goods | 195,109 | 198,064 | |
Total inventory | 291,690 | 291,367 | |
Property, plant and equipment, net | |||
Subtotal | 478,674 | 475,330 | |
Less accumulated depreciation and amortization | (320,277) | (315,112) | |
Total property, plant and equipment, net | 158,397 | 160,218 | |
Accrued expenses and other current liabilities | |||
Loss contingency related to non-cancelable purchase commitments | 30,555 | 26,481 | |
Taxes payable | 48,498 | 43,308 | |
Short-term operating and finance lease liability | 15,921 | 17,792 | |
Restructuring accrual | 6,776 | 8,610 | |
Other accrued expenses and other current liabilities | 41,153 | 50,838 | |
Total accrued expenses | 142,903 | 147,029 | |
Depreciation | 11,600 | $ 11,500 | |
License Agreement Terms | |||
Accrued expenses and other current liabilities | |||
Depreciation | 1,700 | 1,600 | |
Computer hardware | |||
Property, plant and equipment, net | |||
Subtotal | 46,233 | 45,824 | |
Computer software | |||
Property, plant and equipment, net | |||
Subtotal | 52,962 | 56,820 | |
Laboratory and manufacturing equipment | |||
Property, plant and equipment, net | |||
Subtotal | 283,357 | 287,875 | |
Land and building | |||
Property, plant and equipment, net | |||
Subtotal | 12,369 | 12,369 | |
Furniture and fixtures | |||
Property, plant and equipment, net | |||
Subtotal | 2,603 | 2,164 | |
Leasehold and building improvements | |||
Property, plant and equipment, net | |||
Subtotal | 51,053 | 51,471 | |
Construction in progress | |||
Property, plant and equipment, net | |||
Subtotal | 30,097 | 18,807 | |
Enterprise Resource Planning Systems | |||
Property, plant and equipment, net | |||
Subtotal | 26,300 | 25,900 | |
Total property, plant and equipment, net | 8,200 | 8,900 | |
Accrued expenses and other current liabilities | |||
Depreciation | 800 | $ 600 | |
Enterprise Resource Planning Systems | License | |||
Property, plant and equipment, net | |||
Subtotal | 18,100 | 20,900 | |
Total property, plant and equipment, net | $ 8,800 | $ 9,200 |
Restructuring and Other Relat_3
Restructuring and Other Related Costs - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Dec. 25, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | $ 7,420 | |
Restructuring liability | 6,895 | $ 8,882 |
Severance and other related expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 1,601 | |
Restructuring liability | 5,420 | $ 7,536 |
Severance and other related expenses | Telecom Holding Parent LLC | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring liability | 900 | |
2021 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 5,500 | |
2021 Restructuring Plan | Severance and other related expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring liability | 6,000 | |
2021 Restructuring Plan | Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated costs | 15,000 | |
2021 Restructuring Plan | Maximum | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated costs | $ 17,000 |
Restructuring and Other Relat_4
Restructuring and Other Related Costs - Restructuring and Other Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | $ 7,420 | |
Cost of Revenue | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 150 | $ 514 |
Operating Expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 7,270 | 2,319 |
Severance and other related expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 1,601 | |
Severance and other related expenses | Cost of Revenue | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 140 | 514 |
Severance and other related expenses | Operating Expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 1,461 | 272 |
Lease related impairment charges | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 5,592 | |
Lease related impairment charges | Cost of Revenue | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 0 | 0 |
Lease related impairment charges | Operating Expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 5,592 | 1,950 |
Asset impairment | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 84 | |
Asset impairment | Cost of Revenue | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 0 | 0 |
Asset impairment | Operating Expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 84 | 51 |
Others | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 143 | |
Others | Cost of Revenue | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | 10 | 0 |
Others | Operating Expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related costs | $ 133 | $ 46 |
Restructuring and Other Relat_5
Restructuring and Other Related Costs - Schedule of Restructuring Reserve by Type of Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 26, 2022USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 8,882 |
Charges | 7,420 |
Cash Payments | (4,017) |
Non-Cash Settlements and Other | (5,390) |
Ending balance | 6,895 |
Severance and other related expenses | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 7,536 |
Charges | 1,601 |
Cash Payments | (3,558) |
Non-Cash Settlements and Other | (159) |
Ending balance | 5,420 |
Lease related impairment charges | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0 |
Charges | 5,592 |
Cash Payments | (459) |
Non-Cash Settlements and Other | (5,133) |
Ending balance | 0 |
Asset impairment | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0 |
Charges | 84 |
Cash Payments | 0 |
Non-Cash Settlements and Other | (84) |
Ending balance | 0 |
Others | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 1,346 |
Charges | 143 |
Cash Payments | 0 |
Non-Cash Settlements and Other | (14) |
Ending balance | $ 1,475 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 323,771 | $ 426,284 |
Other comprehensive loss before reclassifications | (11,201) | |
Amounts reclassified from accumulated other comprehensive loss | 87 | |
Net change in accumulated other comprehensive income (loss) | (11,114) | (2,972) |
Ending balance | 170,205 | 393,348 |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (7,829) | |
Other comprehensive loss before reclassifications | (11,201) | |
Amounts reclassified from accumulated other comprehensive loss | 0 | |
Net change in accumulated other comprehensive income (loss) | (11,201) | |
Ending balance | (19,030) | |
Actuarial Gain (Loss) on Pension | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 4,297 | |
Other comprehensive loss before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive loss | 87 | |
Net change in accumulated other comprehensive income (loss) | 87 | |
Ending balance | 4,384 | |
Accumulated Tax Effect | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (964) | |
Other comprehensive loss before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive loss | 0 | |
Net change in accumulated other comprehensive income (loss) | 0 | |
Ending balance | (964) | |
Total | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (4,496) | (11,898) |
Net change in accumulated other comprehensive income (loss) | (11,114) | (2,972) |
Ending balance | $ (15,610) | $ (14,870) |
Basic and Diluted Net Loss Pe_3
Basic and Diluted Net Loss Per Common Share - Computation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (41,850) | $ (48,322) |
Weighted average common shares outstanding - basic (in shares) | 212,182 | 202,638 |
Weighted average common shares outstanding - diluted (in shares) | 212,182 | 202,638 |
Net loss per common share - basic (in dollars per share) | $ (0.20) | $ (0.24) |
Net loss per common share - diluted (in dollars per share) | $ (0.20) | $ (0.24) |
Basic and Diluted Net Loss Pe_4
Basic and Diluted Net Loss Per Common Share - Antidilutive Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from earnings per share computation (in shares) | 91,736 | 25,687 |
Convertible senior notes(1) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from earnings per share computation (in shares) | 69,930 | 5,841 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from earnings per share computation (in shares) | 17,887 | 15,851 |
Performance stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from earnings per share computation (in shares) | 2,824 | 3,065 |
Employee stock purchase plan shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from earnings per share computation (in shares) | 1,095 | 930 |
Basic and Diluted Net Loss Pe_5
Basic and Diluted Net Loss Per Common Share - Narrative (Details) | Mar. 26, 2022$ / shares |
2027 Notes | Senior Notes | |
Debt Instrument [Line Items] | |
Conversion price (in dollars per share) | $ 7.66 |
Debt - Components of Convertibl
Debt - Components of Convertible Senior Notes (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 | Sep. 24, 2021 | Mar. 31, 2019 |
Debt Instrument [Line Items] | ||||
Current | $ 500 | $ 500 | ||
Long-term debt, net | 599,474 | 476,789 | ||
Unpaid Principal Balance | 610,200 | 610,300 | ||
Asset-based Revolving Credit Facility | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Current | 0 | 0 | ||
Long-term debt, net | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | ||
Mortgage | ||||
Debt Instrument [Line Items] | ||||
Current | 500 | 500 | ||
Long-term debt, net | 7,200 | 7,300 | ||
Unpaid Principal Balance | 7,700 | 7,800 | ||
Contractual Interest Rates | 3.80% | 5.25% | ||
2024 Notes | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, net | 397,097 | 329,257 | ||
2024 Notes | Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Current | 0 | 0 | ||
Long-term debt, net | 397,100 | 329,200 | ||
Unpaid Principal Balance | 402,500 | 402,500 | ||
2027 Notes | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, net | 195,185 | 140,258 | ||
2027 Notes | Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Current | 0 | 0 | ||
Long-term debt, net | 195,200 | 140,300 | ||
Unpaid Principal Balance | $ 200,000 | $ 200,000 |
Debt - Interest Expense Recogni
Debt - Interest Expense Recognized Related to Notes Prior to Capitalization of Interest (Details) - 2024 Notes - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Debt Instrument [Line Items] | ||
Contractual interest expense | $ 3,388 | $ 3,388 |
Amortization of debt issuance costs | 767 | 455 |
Amortization of debt discount | 0 | 7,082 |
Total interest expense | $ 4,155 | $ 10,925 |
Debt - Narrative (Details)
Debt - Narrative (Details) $ / shares in Units, shares in Millions | Jan. 01, 2022 | Sep. 24, 2021USD ($)installment | Sep. 05, 2021d | Dec. 23, 2019USD ($) | Jan. 31, 2021USD ($) | Oct. 31, 2020 | Mar. 31, 2020USD ($)d | Mar. 28, 2020 | May 31, 2019USD ($) | Mar. 31, 2019USD ($)installment | Sep. 30, 2018USD ($) | Mar. 26, 2022USD ($)d$ / sharesshares | Mar. 27, 2021USD ($) | Dec. 25, 2021USD ($) | Dec. 28, 2019USD ($) | Aug. 01, 2019USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Repayment, lines of credit | $ 0 | $ 77,000,000 | ||||||||||||||
Unpaid Principal Balance | 610,200,000 | $ 610,300,000 | ||||||||||||||
Current | 500,000 | 500,000 | ||||||||||||||
Long-term debt, net | 599,474,000 | 476,789,000 | ||||||||||||||
Loans Payable | Fabrinet | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Contractual Interest Rates | 3.00% | 6.00% | ||||||||||||||
Debt instrument, face amount | $ 40,000,000 | |||||||||||||||
Debt term | 6 months | 12 months | ||||||||||||||
2027 Notes | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Debt instrument, face amount | 200,000,000 | 200,000,000 | ||||||||||||||
Long-term debt, net | 195,185,000 | 140,258,000 | ||||||||||||||
2027 Notes | Additional Paid-in Capital | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Conversion option related to convertible senior notes, net of allocated costs | 67,800,000 | |||||||||||||||
Credit Agreement | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Amortization of debt issuance costs | 300,000 | |||||||||||||||
Debt issuance costs, net | $ 4,900,000 | |||||||||||||||
Contractual interest expense | 300,000 | |||||||||||||||
Debt available borrowing capacity | 138,700,000 | |||||||||||||||
Letters of credit outstanding | 11,300,000 | |||||||||||||||
Credit Agreement | Long-term Debt | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Repayment, lines of credit | $ 77,000,000 | |||||||||||||||
Credit Agreement | LIBOR | Minimum | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Variable rate | 2.00% | |||||||||||||||
Credit Agreement | LIBOR | Maximum | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Variable rate | 2.50% | |||||||||||||||
Credit Agreement | Base Rate | Minimum | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Variable rate | 1.00% | |||||||||||||||
Credit Agreement | Base Rate | Maximum | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Variable rate | 1.50% | |||||||||||||||
Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Variable rate | 2.00% | |||||||||||||||
Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Variable rate | 2.50% | |||||||||||||||
Credit Agreement | Revolving Credit Facility | Minimum | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Commitment fee percentage | 0.375% | |||||||||||||||
Credit Agreement | Revolving Credit Facility | Maximum | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Commitment fee percentage | 0.625% | |||||||||||||||
2024 Notes | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Debt instrument, face amount | 402,500,000 | 402,500,000 | ||||||||||||||
Convertible threshold minimum percentage | 130.00% | |||||||||||||||
Threshold trading days | d | 20 | |||||||||||||||
Threshold consecutive trading days | d | 30 | |||||||||||||||
Purchase price as a percentage on principal amount of the notes upon the occurrence of a fundamental change | 100.00% | |||||||||||||||
Amortization of debt issuance costs | 767,000 | 455,000 | ||||||||||||||
Contractual interest expense | 3,388,000 | $ 3,388,000 | ||||||||||||||
Long-term debt, net | 397,097,000 | 329,257,000 | ||||||||||||||
Conversion ratio | 0.1012812 | |||||||||||||||
2024 Notes | Additional Paid-in Capital | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Conversion option related to convertible senior notes, net of allocated costs | 128,700,000 | |||||||||||||||
2.125% Convertible Senior Notes, Circumstance 2 | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 1,000 | |||||||||||||||
Threshold trading days | d | 5 | |||||||||||||||
Threshold consecutive trading days | d | 5 | |||||||||||||||
Convertible, threshold maximum percentage | 98.00% | |||||||||||||||
2.125% Convertible Senior Notes, Circumstance 1 | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Convertible threshold minimum percentage | 130.00% | |||||||||||||||
Threshold trading days | d | 20 | |||||||||||||||
Threshold consecutive trading days | d | 30 | |||||||||||||||
Senior Notes | 2027 Notes | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Contractual Interest Rates | 2.50% | |||||||||||||||
Proceeds from issuance of 2024 notes | $ 193,300,000 | |||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 7.66 | |||||||||||||||
Convertible threshold minimum percentage | 130.00% | |||||||||||||||
Threshold trading days | d | 20 | |||||||||||||||
Threshold consecutive trading days | d | 30 | |||||||||||||||
Purchase price as a percentage on principal amount of the notes upon the occurrence of a fundamental change | 100.00% | |||||||||||||||
Additional effective rate of interest to be used on amortized carrying value | 9.92% | |||||||||||||||
Debt Issuance costs, gross | 6,700,000 | |||||||||||||||
Amortization of debt issuance costs | 4,300,000 | |||||||||||||||
Convertible debt, remaining discount amortization period | 59 months | |||||||||||||||
Conversion ratio | 0.1305995 | |||||||||||||||
Senior Notes | Convertible Senior Notes, 2.5%, Due March 1, 2027, Circumstance 2 | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 1,000 | |||||||||||||||
Threshold trading days | d | 5 | |||||||||||||||
Threshold consecutive trading days | d | 5 | |||||||||||||||
Convertible, threshold maximum percentage | 98.00% | |||||||||||||||
Senior Notes | Convertible Senior Notes, 2.5%, Due March 1, 2027, Circumstance 1 | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Convertible threshold minimum percentage | 130.00% | |||||||||||||||
Threshold trading days | d | 20 | |||||||||||||||
Threshold consecutive trading days | d | 30 | |||||||||||||||
Additional effective rate of interest to be used on amortized carrying value | 3.00% | |||||||||||||||
Senior Notes | 2024 Notes | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Contractual Interest Rates | 2.125% | |||||||||||||||
Proceeds from issuance of 2024 notes | $ 391,400,000 | |||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 9.87 | |||||||||||||||
Purchase price as a percentage on principal amount of the notes upon the occurrence of a fundamental change | 100.00% | |||||||||||||||
Additional effective rate of interest to be used on amortized carrying value | 9.92% | 2.70% | ||||||||||||||
Debt Issuance costs, gross | 12,900,000 | |||||||||||||||
Amortization of debt issuance costs | 8,700,000 | |||||||||||||||
Convertible debt, remaining discount amortization period | 29 months | |||||||||||||||
Payment of capped call | $ 48,900,000 | |||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 9.87 | |||||||||||||||
Cap price (in dollars per share) | $ / shares | $ 15.19 | |||||||||||||||
Number of shares covered by capped transactions (in shares) | shares | 40.8 | |||||||||||||||
Asset-based Revolving Credit Facility | Revolving Credit Facility | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Unpaid Principal Balance | $ 0 | 0 | ||||||||||||||
Current | 0 | 0 | ||||||||||||||
Long-term debt, net | 0 | 0 | ||||||||||||||
Asset-based Revolving Credit Facility | Credit Agreement | Revolving Credit Facility | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Maximum borrowing capacity | $ 150,000,000 | $ 100,000,000 | ||||||||||||||
Additional borrowing capacity | 50,000,000 | |||||||||||||||
Asset-based Revolving Credit Facility | Credit Agreement | Letter of Credit | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Maximum borrowing capacity | 50,000,000 | |||||||||||||||
Asset-based Revolving Credit Facility | Credit Agreement | Swing Loan Sub-Facility | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Maximum borrowing capacity | $ 10,000,000 | |||||||||||||||
Mortgage | ||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||
Contractual Interest Rates | 3.80% | 5.25% | ||||||||||||||
Debt term | 5 years | |||||||||||||||
Proceeds from debt | $ 8,700,000 | |||||||||||||||
Debt payment installments | installment | 31 | 59 | ||||||||||||||
Debt payment | $ 100,000 | |||||||||||||||
Debt instrument, fee amount | $ 100,000 | |||||||||||||||
Unpaid Principal Balance | 7,700,000 | 7,800,000 | ||||||||||||||
Current | 500,000 | 500,000 | ||||||||||||||
Long-term debt, net | $ 7,200,000 | $ 7,300,000 |
Debt - Net Carrying Amounts Of
Debt - Net Carrying Amounts Of the Debt Obligation (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Debt Instrument [Line Items] | ||
Long-term debt, net | $ 599,474 | $ 476,789 |
2027 Notes | ||
Debt Instrument [Line Items] | ||
Principal | 200,000 | 200,000 |
Unamortized debt discount | 0 | (56,270) |
Unamortized issuance costs | (4,815) | (3,472) |
Long-term debt, net | 195,185 | 140,258 |
2024 Notes | ||
Debt Instrument [Line Items] | ||
Principal | 402,500 | 402,500 |
Unamortized debt discount | 0 | (68,755) |
Unamortized issuance costs | (5,403) | (4,488) |
Long-term debt, net | $ 397,097 | $ 329,257 |
Commitments and Contingencies -
Commitments and Contingencies - Future Annual Minimum Operating Lease Payments (Details) $ in Thousands | Mar. 26, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Total | $ 83,479 |
Remainder of 2022 | 16,035 |
2023 | 14,703 |
2024 | 13,253 |
2025 | 12,251 |
2026 | 9,614 |
Thereafter | $ 17,623 |
Commitments and Contingencies_2
Commitments and Contingencies - Financing Lease Obligations (Details) $ in Thousands | Mar. 26, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Total lease payments | $ 1,910 |
Remainder of 2022 | 931 |
2023 | 802 |
2024 | 177 |
2025 | 0 |
2026 | 0 |
Thereafter | $ 0 |
Commitments and Contingencies_3
Commitments and Contingencies - Future Interest and Principal Payments (Details) $ in Thousands | Mar. 26, 2022USD ($) |
Mortgage | |
Debt Instrument [Line Items] | |
Total | $ 8,197 |
Remainder of 2022 | 586 |
2023 | 781 |
2024 | 6,830 |
2025 | 0 |
2026 | 0 |
Thereafter | 0 |
Convertible Senior Notes 2027 | Senior Notes | |
Debt Instrument [Line Items] | |
Total | 225,000 |
Remainder of 2022 | 2,500 |
2023 | 5,000 |
2024 | 5,000 |
2025 | 5,000 |
2026 | 5,000 |
Thereafter | 202,500 |
Convertible Senior Notes 2024 | Senior Notes | |
Debt Instrument [Line Items] | |
Total | 423,883 |
Remainder of 2022 | 4,277 |
2023 | 8,553 |
2024 | 411,053 |
2025 | 0 |
2026 | 0 |
Thereafter | $ 0 |
Commitments and Contingencies_4
Commitments and Contingencies - Total Contractual Obligations (Details) $ in Thousands | Mar. 26, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Total contractual obligations | $ 742,469 |
Remainder of 2022 | 24,329 |
2023 | 29,839 |
2024 | 436,313 |
2025 | 17,251 |
2026 | 14,614 |
Thereafter | $ 220,123 |
Commitments and Contingencies_5
Commitments and Contingencies - Additional Information (Details) $ in Millions | Mar. 26, 2022USD ($) |
Loss Contingencies [Line Items] | |
Asset retirement obligations | $ 5.1 |
Other long term liabilities | |
Loss Contingencies [Line Items] | |
Asset retirement obligations | $ 5 |
Minimum | |
Loss Contingencies [Line Items] | |
Operating lease term | 1 year |
Maximum | |
Loss Contingencies [Line Items] | |
Operating lease term | 11 years |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | ||||||
May 31, 2019 | Feb. 28, 2016 | Mar. 26, 2022 | Mar. 27, 2021 | Mar. 25, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Closing price of common stock (in dollars per share) | $ 8.70 | |||||||
2016 Equity Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Plan maximum term | 10 years | |||||||
Increase in number of shares authorized (in shares) | 7,300,000 | 4,400,000 | 8,100,000 | 1,500,000 | ||||
Reserved common stock for issuance of options (in shares) | 35,200,000 | |||||||
ESPP | 2007 Equity Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized to be issued (in shares) | 31,600,000 | |||||||
Plan maximum term | 20 years | |||||||
Payroll deduction price as a percentage of market value | 85.00% | |||||||
Maximum employee subscription rate | 15.00% | |||||||
Maximum number of shares per employee (in shares) | 3,000 | |||||||
Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Amortization of stock-based compensation | $ 10.9 | $ 9.8 | ||||||
Performance stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Amortization of stock-based compensation | $ 0.9 | $ 0.6 |
Stockholders' Equity - Equity A
Stockholders' Equity - Equity Award Activity - RSUs (Details) - Restricted Stock Units $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 26, 2022USD ($)$ / sharesshares | |
Number of Restricted Stock Units | |
Number of units, beginning balance (in shares) | shares | 11,607 |
Number of units granted (in shares) | shares | 7,193 |
Number of units released (in shares) | shares | (536) |
Number units canceled (in shares) | shares | (377) |
Number of units, ending balance (in shares) | shares | 17,887 |
Weighted Average Grant Date Fair Value Per Share | |
Weighted-average grant date fair value per share, beginning balance (in dollars per share) | $ / shares | $ 7.66 |
Weighted-average grant date fair value per share, granted (in dollars per share) | $ / shares | 8.85 |
Weighted-average grant date fair value per share, released (in dollars per share) | $ / shares | 6.33 |
Weighted-average grant date fair value per share, canceled (in dollars per share) | $ / shares | 7.80 |
Weighted-average grant date fair value per share, ending balance (in dollars per share) | $ / shares | $ 8.17 |
Aggregate Intrinsic Value | |
Aggregate intrinsic value , beginning balance | $ | $ 110,849 |
RSUs released | $ | 4,545 |
Aggregate intrinsic value , ending balance | $ | $ 155,617 |
Stockholders' Equity - Equity_2
Stockholders' Equity - Equity Award Activity - PSUs (Details) - Performance stock units $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 26, 2022USD ($)$ / sharesshares | |
Number of Performance Stock Units | |
Number of units, beginning balance (in shares) | 2,114 |
Number of units granted (in shares) | 899 |
Number of units released (in shares) | (140) |
Number units canceled (in shares) | (49) |
Number of units, ending balance (in shares) | 2,824 |
Number of restricted stock units, expected to vest (in shares) | 2,674 |
Weighted Average Grant Date Fair Value Per Share | |
Weighted-average grant date fair value per share, beginning balance (in dollars per share) | $ / shares | $ 6.66 |
Weighted-average grant date fair value per share, granted (in dollars per share) | $ / shares | 8.38 |
Weighted-average grant date fair value per share, released (in dollars per share) | $ / shares | 4.88 |
Weighted-average grant date fair value per share, canceled (in dollars per share) | $ / shares | 6.94 |
Weighted-average grant date fair value per share, ending balance (in dollars per share) | $ / shares | $ 7.29 |
Aggregate Intrinsic Value | |
Aggregate intrinsic value , beginning balance | $ | $ 20,184 |
PSUs released | $ | 1,313 |
Aggregate intrinsic value , ending balance | $ | 24,569 |
Expected to vest at March 26, 2022 | $ | $ 23,264 |
Stockholders' Equity - Total St
Stockholders' Equity - Total Stock Based Compensation Cost for Instruments Granted but Not Yet Amortized (Details) $ in Thousands | 3 Months Ended |
Mar. 26, 2022USD ($) | |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense, Net | $ 115,742 |
Weighted Average Period (in Years) | 2 years 4 months 24 days |
Performance stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense, Net | $ 13,530 |
Weighted Average Period (in Years) | 2 years 3 months 18 days |
Stockholders' Equity - Estimate
Stockholders' Equity - Estimated Fair Value of ESPP, Valuation Assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 12,939 | $ 10,974 |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 39.00% | 50.00% |
Risk-free interest rate | 0.67% | 0.06% |
Expected life | 6 months | 6 months |
Estimated fair value (in dollars per share) | $ 2.21 | $ 3.11 |
Stock based compensation expense | $ 1,300 | $ 1,700 |
Stockholders' Equity - Nonveste
Stockholders' Equity - Nonvested Performance Based Units Activity By Grant Year (Details) shares in Thousands | 3 Months Ended |
Mar. 26, 2022shares | |
PSUs | |
Number of Performance Stock Units | |
Number of units, beginning balance (in shares) | 2,114 |
Number of units granted (in shares) | 899 |
Number of units released (in shares) | (140) |
Number units canceled (in shares) | (49) |
Number of units, ending balance (in shares) | 2,824 |
2018 | PSUs | |
Number of Performance Stock Units | |
Number of units, beginning balance (in shares) | 185 |
Number of units granted (in shares) | 0 |
Number of units released (in shares) | (140) |
Number units canceled (in shares) | 0 |
Number of units, ending balance (in shares) | 45 |
2019 | PSUs | |
Number of Performance Stock Units | |
Number of units, beginning balance (in shares) | 1,270 |
Number of units granted (in shares) | 0 |
Number of units released (in shares) | 0 |
Number units canceled (in shares) | (30) |
Number of units, ending balance (in shares) | 1,240 |
2020 | PSUs | |
Number of Performance Stock Units | |
Number of units, beginning balance (in shares) | 659 |
Number of units granted (in shares) | 0 |
Number of units released (in shares) | 0 |
Number units canceled (in shares) | (19) |
Number of units, ending balance (in shares) | 640 |
2021 | |
Number of Performance Stock Units | |
Number of units granted (in shares) | 899 |
2021 | PSUs | |
Number of Performance Stock Units | |
Number of units, beginning balance (in shares) | 0 |
Number of units granted (in shares) | 899 |
Number of units released (in shares) | 0 |
Number units canceled (in shares) | 0 |
Number of units, ending balance (in shares) | 899 |
Stockholders' Equity - Balance
Stockholders' Equity - Balance Sheet and Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | |
Effects Of Stock Based Compensation [Line Items] | |||
Income tax benefit associated with stock-based compensation | $ 2,226 | $ 1,717 | |
Total stock-based compensation expense | 12,939 | 10,974 | |
Cost of revenue | |||
Effects Of Stock Based Compensation [Line Items] | |||
Stock-based compensation effects in net loss before income taxes | 1,889 | 1,796 | |
Research and development | |||
Effects Of Stock Based Compensation [Line Items] | |||
Stock-based compensation effects in net loss before income taxes | 4,841 | 4,297 | |
Sales and marketing | |||
Effects Of Stock Based Compensation [Line Items] | |||
Stock-based compensation effects in net loss before income taxes | 2,767 | 3,199 | |
General and administration | |||
Effects Of Stock Based Compensation [Line Items] | |||
Stock-based compensation effects in net loss before income taxes | 3,442 | $ 1,682 | |
Inventory Valuation and Obsolescence | |||
Effects Of Stock Based Compensation [Line Items] | |||
Stock-based compensation effects in inventory | $ 3,817 | $ 3,707 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Income Tax Disclosure [Abstract] | ||
Tax expense | $ 6,437 | $ 1,011 |
Pre-tax loss | 35,413 | $ 47,311 |
Provision for income taxes increase | $ 5,400 | |
Foreign Tax Authority | ||
Income Tax Examination [Line Items] | ||
Effective withholding tax | 18.80% | 5.30% |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022USD ($)segment | Dec. 25, 2021USD ($) | |
Segment Reporting [Abstract] | ||
Number of business activities | segment | 1 | |
Number of reporting segments | segment | 1 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property, plant and equipment, net | $ 158,397 | $ 160,218 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property, plant and equipment, net | 141,327 | 141,977 |
Other Americas | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property, plant and equipment, net | 2,981 | 2,687 |
Europe, Middle East and Africa | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property, plant and equipment, net | 11,022 | 12,245 |
Asia Pacific | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property, plant and equipment, net | $ 3,067 | $ 3,309 |
Guarantees - Activity Related t
Guarantees - Activity Related to Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 44,310 | $ 40,708 |
Charges to operations | 5,975 | 5,317 |
Utilization | (5,709) | (6,543) |
Change in estimate | (4,991) | (595) |
Balance at the end of the period | $ 39,585 | $ 38,887 |
Guarantees - Narrative (Details
Guarantees - Narrative (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Guarantor Obligations [Line Items] | ||
Total | $ 22,415 | $ 22,500 |
Bond secure amount | 4,000 | |
Debt instrument, collateral amount | 176,400 | 200,000 |
Credit Agreement | ||
Guarantor Obligations [Line Items] | ||
Letters of credit outstanding | 11,300 | |
Surety Bond | ||
Guarantor Obligations [Line Items] | ||
Bond secure amount | 5,500 | |
Letter of Credit | ||
Guarantor Obligations [Line Items] | ||
Customer performance guarantees | 18,961 | 16,307 |
Cash collateral | 11,200 | |
Letter of Credit | Banker's Guarantees or Performance Bonds | ||
Guarantor Obligations [Line Items] | ||
Maximum borrowing capacity | $ 50,000 | 50,000 |
Line of credit, outstanding | $ 11,500 |
Guarantees - Letters of Credit
Guarantees - Letters of Credit and Bank Guarantees (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Guarantor Obligations [Line Items] | ||
Total | $ 22,415 | $ 22,500 |
Letter of Credit | ||
Guarantor Obligations [Line Items] | ||
Customer performance guarantees | 18,961 | 16,307 |
Value added tax license | 286 | 287 |
Property leases | 2,034 | 4,684 |
Pension plans | 912 | 1,004 |
Credit cards | 150 | 150 |
Other liabilities | $ 72 | $ 68 |
Pension and Post-Retirement B_3
Pension and Post-Retirement Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Retirement Benefits [Abstract] | ||
Service cost | $ 80 | $ 114 |
Interest cost | 333 | 322 |
Expected return on plan assets | (780) | (737) |
Amortization of actuarial loss | 87 | 861 |
Total net periodic benefit cost | $ (280) | $ 560 |