Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 30, 2017 | Feb. 06, 2018 | |
Document Documentand Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 30, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ktcc | |
Entity Registrant Name | KEY TRONIC CORP | |
Entity Central Index Key | 719,733 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 10,759,680 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 30, 2017 | Jul. 01, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 450 | $ 373 |
Trade receivables, net of allowance for doubtful accounts of $0 and $84 | 57,437 | 65,193 |
Inventories, net | 108,873 | 101,590 |
Other | 13,804 | 11,037 |
Total current assets | 180,564 | 178,193 |
Property, plant and equipment, net | 28,473 | 30,496 |
Other assets: | ||
Deferred income tax asset | 7,463 | 6,981 |
Goodwill | 9,957 | 9,957 |
Other intangible assets, net | 4,258 | 4,800 |
Other | 2,097 | 2,413 |
Total other assets | 23,775 | 24,151 |
Total assets | 232,812 | 232,840 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Accounts payable | 61,537 | 53,078 |
Accrued compensation and vacation | 6,482 | 10,005 |
Current portion of debt, net | 5,841 | 5,841 |
Other | 9,810 | 8,829 |
Total current liabilities | 83,670 | 77,753 |
Long-term liabilities: | ||
Term loans | 15,852 | 18,773 |
Revolving loan | 15,633 | 18,335 |
Other long-term obligations | 844 | 1,412 |
Total long-term liabilities | 32,329 | 38,520 |
Total liabilities | 115,999 | 116,273 |
Commitments and contingencies (Note 9) | ||
Shareholders’ equity: | ||
Common stock, no par value—shares authorized 25,000; issued and outstanding 10,760 and 10,760 shares, respectively | 46,048 | 45,797 |
Retained earnings | 73,753 | 73,545 |
Accumulated other comprehensive loss | (2,988) | (2,775) |
Total shareholders’ equity | 116,813 | 116,567 |
Total liabilities and shareholders’ equity | $ 232,812 | $ 232,840 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 30, 2017 | Jul. 01, 2017 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ 0 | $ 84 |
Common stock - par value | $ 0 | $ 0 |
Common stock - shares authorized | 25,000 | 25,000 |
Common stock - shares issued | 10,760 | 10,760 |
Common stock - shares outstanding | 10,760 | 10,760 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 111,725 | $ 118,517 | $ 220,942 | $ 235,652 |
Cost of sales | 102,925 | 108,905 | 204,297 | 216,331 |
Gross profit | 8,800 | 9,612 | 16,645 | 19,321 |
Operating expenses | ||||
Research, development and engineering expenses | 1,495 | 1,603 | 3,005 | 3,187 |
Selling, general and administrative expenses | 5,654 | 5,462 | 10,825 | 10,797 |
Total operating expenses | 7,149 | 7,065 | 13,830 | 13,984 |
Operating income | 1,651 | 2,547 | 2,815 | 5,337 |
Interest expense, net | 616 | 552 | 1,210 | 1,141 |
Income before income taxes | 1,035 | 1,995 | 1,605 | 4,196 |
Income tax provision | 1,259 | 467 | 1,397 | 876 |
Net income (loss) | $ (224) | $ 1,528 | $ 208 | $ 3,320 |
Earnings per share: | ||||
Net income (loss) per share — Basic | $ (0.02) | $ 0.14 | $ 0.02 | $ 0.31 |
Weighted average shares outstanding — Basic | 10,760 | 10,758 | 10,760 | 10,753 |
Net income (loss) per share — Diluted | $ (0.02) | $ 0.14 | $ 0.02 | $ 0.30 |
Weighted average shares outstanding — Diluted | 10,760 | 10,968 | 10,760 | 10,919 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Comprehensive income (loss): | ||||
Net income (loss) | $ (224) | $ 1,528 | $ 208 | $ 3,320 |
Other comprehensive income (loss): | ||||
Unrealized loss on hedging instruments, net of tax | (1,225) | (1,266) | (213) | (2,266) |
Comprehensive income (loss) | $ (1,449) | $ 262 | $ (5) | $ 1,054 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized gain (loss) on foreign exchange contracts, tax | $ (0.6) | $ (0.7) | $ (0.1) | $ (1.2) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | |
Operating activities: | ||
Net income (loss) | $ 208 | $ 3,320 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 3,889 | 3,430 |
Amortization of deferred loan costs | 15 | 0 |
Provision for obsolete inventory | 26 | 306 |
Provision for warranty | 21 | 63 |
Recovery of doubtful accounts | (84) | (1) |
Loss on disposal of assets | 11 | 109 |
Share-based compensation expense | 251 | 355 |
Deferred income taxes | (372) | (900) |
Changes in operating assets and liabilities: | ||
Trade receivables | 7,840 | (4,765) |
Inventories | (7,309) | 8,594 |
Other assets | (3,522) | 836 |
Accounts payable | 8,459 | (7,789) |
Accrued compensation and vacation | (3,523) | (1,876) |
Other liabilities | 990 | 1,448 |
Cash provided by operating activities | 6,900 | 3,130 |
Investing activities: | ||
Purchase of property and equipment | (2,155) | (4,936) |
Proceeds from sale of fixed assets | 982 | 101 |
Cash used in investing activities | (1,173) | (4,835) |
Financing activities: | ||
Payment of financing costs | (12) | (193) |
Proceeds from long term debt | 0 | 3,919 |
Repayments of long term debt | (2,936) | (2,500) |
Borrowings under revolving credit agreement | 91,707 | 79,260 |
Repayments of revolving credit agreement | (94,409) | (78,403) |
Shares withheld for taxes | 0 | (116) |
Cash (used in) provided by financing activities | (5,650) | 1,967 |
Net increase in cash and cash equivalents | 77 | 262 |
Cash and cash equivalents, beginning of period | 373 | 1,018 |
Cash and cash equivalents, end of period | 450 | 1,280 |
Supplemental cash flow information: | ||
Interest payments | 1,202 | 1,127 |
Income tax payments, net of refunds | $ 516 | $ 418 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY - 6 months ended Dec. 30, 2017 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive (Loss) Income |
Balances (Shares) at Jul. 01, 2017 | 10,760 | |||
Balances, Period Start at Jul. 01, 2017 | $ 116,567 | $ 45,797 | $ 73,545 | $ (2,775) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 208 | 208 | ||
Unrealized loss on hedging instruments, net | (213) | (213) | ||
Shares withheld for taxes | 0 | |||
Share-based compensation expense | 251 | $ 251 | ||
Balances (Shares) at Dec. 30, 2017 | 10,760 | |||
Balances, Period End at Dec. 30, 2017 | $ 116,813 | $ 46,048 | $ 73,753 | $ (2,988) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Dec. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | Basis of Presentation The consolidated financial statements included herein have been prepared by Key Tronic Corporation and subsidiaries (the Company) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. The year-end condensed consolidated balance sheet information was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The financial statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 1, 2017 . |
FISCAL YEAR | The Company’s reporting period is a 52/53 week fiscal year ending on the Saturday closest to June 30. The three and six month periods ended December 30, 2017 and December 31, 2016 , were 13 and 26 week periods, respectively. Fiscal year 2018 will end on June 30, 2018 , which is a 52 week year. Fiscal year 2017 which ended on July 1, 2017 , was a 52 week year. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | Significant Accounting Policies Earnings Per Common Share Basic earnings per common share (EPS) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the combination of other potentially dilutive weighted average common shares and the weighted average number of common shares outstanding during the period using the treasury stock method. The computation assumes the proceeds from the exercise of equity awards were used to repurchase common shares at the average market price during the period. The computation of diluted EPS does not assume conversion, exercise, or contingent issuance of common stock equivalent shares that would have an anti-dilutive effect on EPS. Derivative Instruments and Hedging Activities The Company has entered into foreign currency forward contracts, foreign currency swaps and an interest rate swap which are accounted for as cash flow hedges in accordance with ASC 815, Derivatives and Hedging . The effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (AOCI) and is reclassified into earnings in the same period in which the underlying hedged transaction affects earnings. The derivative’s effectiveness represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. The Company uses derivatives to manage the variability of foreign currency fluctuations of expenses in our Mexico facilities and interest rate risk associated with certain borrowings under the Company’s term loan arrangement. The foreign currency forward contracts, foreign currency swaps and interest rate swap have terms that are matched to the underlying transactions being hedged. As a result, these transactions fully offset the hedged risk and no ineffectiveness has been recorded. The Company’s foreign currency forward contracts, foreign currency swaps and interest rate swap potentially expose the Company to credit risk to the extent the counterparty may be unable to meet the terms of the agreement. The Company minimizes such risk by utilizing a counterparty with a strong credit rating. The Company’s counterparty to the foreign currency forward contracts, foreign currency swaps and interest rate swap is a major banking institution. This institution does not require collateral for the contracts, and the Company believes that the risk of the counterparty failing to meet their contractual obligations is remote. The Company does not enter into derivative instruments for trading or speculative purposes. Income Taxes We compute our interim income tax provision through the use of an estimated annual effective tax rate (ETR) applied to year-to-date operating results and specific events that are discretely recognized as they occur. In determining the estimated annual ETR, we analyze various factors, including projections of our annual earnings, taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, our ability to use tax credits and available tax planning alternatives. Discrete items, including the effect of changes in tax laws, tax rates, and certain circumstances with respect to valuation allowances or other unusual or non-recurring tax adjustments, are reflected in the period in which they occur as an addition to, or reduction from, the income tax provision, rather than included in the estimated annual ETR. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences and benefits attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities for a change in tax rates is recognized in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that is more likely than not to be realized. We utilize a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments based on new assessments and changes in estimates and which may not accurately forecast actual outcomes. Our policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. The tax years 1998 through the present remain open to examination by the major U.S. taxing jurisdictions to which we are subject. Refer to Note 6 for further discussions. Impairment of Goodwill and Other Intangible Assets The Company records intangible assets that are acquired individually or with a group of other assets in the financial statements at acquisition. In accordance with ASC 350, Goodwill and Other Intangible Assets , goodwill and intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized but are required to be reviewed for impairment at least annually or when events or circumstances indicate that carrying value may exceed fair value. The Company’s annual goodwill impairment analysis is performed as of the first day of the fourth quarter. The Company’s acquired intangible assets are subject to amortization over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09 (ASU 2014-09), Revenue from Contracts with Customers . The guidance in this Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. This may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. This Update is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. As such, the guidance is effective for the Company beginning in the first quarter of fiscal year 2019. The Company is in the process of implementation in accordance with the planned effective date. Implementation activities are focused on the review of significant customer contracts, identification and development of additional systems capabilities to enable the Company to make reasonable estimates of revenue during the manufacturing process, and the design and implementation of relevant internal controls. The Company has assessed that the impact of the new guidance will result in a change of the Company's revenue recognition model for electronics manufacturing services from "point in time" upon physical delivery to an "over time" model and believes this transition may have a material impact on the Company's consolidated financial statements upon adoption primarily as it will recognize an increase in contract assets for unbilled receivables with a corresponding reduction in finished goods and work-in-process inventory. The new guidance allows for two transition methods in application (i) retrospective approach, or (ii) modified retrospective approach. The Company will adopt the standard using the modified retrospective approach, which will result in an adjustment for the cumulative effect of applying this guidance to contracts in process as of the adoption date. Under this approach, prior financial statements presented will not be restated. Additionally, disclosures required for revenue recognition will include qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments, and assets recognized from costs to obtain or fulfill a contract. Such disclosures are more extensive than what is required under existing GAAP. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases which supersedes ASC 840 Leases and creates a new topic, ASC 842 Leases . This update requires lessees to recognize a lease asset and a lease liability for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with earlier adoption permitted. This update will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Upon initial evaluation, the Company believes the new guidance will have a material impact on its consolidated balance sheets when adopted. The Company is currently assessing the timing of adoption. In August 2016, the FASB issued Accounting Standards Update 2016-15, Classification of Certain Cash Receipts and Cash Payments . This update provides guidance on how to record eight specific cash flow issues. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted and a retrospective transition method to each period should be presented. The Company is currently evaluating the effect of this update on its consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update 2017-04, Simplifying the Test for Goodwill Impairment . Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This update is effective prospectively to impairment tests beginning January 1, 2020, with early adoption permitted. The Company would apply this guidance to applicable impairment tests after the adoption date. The Company is currently evaluating the effect of this update on its consolidated financial statements. In May 2017, the FASB issued Accounting Standards Update 2017-09, Compensation - Stock Compensation . This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This update is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the effect of this update on its consolidated financial statements. In August 2017, the FASB issued Accounting Standards Update 2017-12, Derivatives and Hedging, which amends the hedge accounting recognition and presentation requirements in ASC 815. The Board’s objectives in issuing this update are to (1) improve the transparency and understandability of information about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities and (2) simplify the application of hedge accounting. This update is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the effect of this update on its consolidated financial statements. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Dec. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | Inventories The components of inventories consist of the following (in thousands): December 30, 2017 July 1, 2017 Finished goods $ 14,450 $ 12,244 Work-in-process 22,115 20,596 Raw materials and supplies 72,308 68,750 $ 108,873 $ 101,590 |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Dec. 30, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | Long-Term Debt On September 3, 2014, the Company entered into a five-year term loan in the amount of $35.0 million used to acquire all of the outstanding shares of CDR Manufacturing, Inc. (dba Ayrshire Electronics). The term loan requires quarterly payments of $1.25 million through June 15, 2019, with a final payment of the remaining outstanding balance on August 31, 2019. The Company had an outstanding balance of $18.8 million and $21.3 million under the term loan as of December 30, 2017 and July 1, 2017 , respectively. On August 6, 2015, the Company entered into a First Amendment to the amended and restated credit agreement extending the limit on our line of credit facility to $45.0 million as evidenced by the Second Replacement Revolving Note. The agreement specifies that the proceeds of the revolving line of credit be used primarily for working capital and general corporate purposes. The line of credit is secured by substantially all of the assets of the Company and matures on August 31, 2019 at which time all outstanding balances are payable. As of December 30, 2017 , the Company had an outstanding balance under the credit facility of $15.6 million , $0.4 million in outstanding letters of credit and $29.0 million available for future borrowings. As of July 1, 2017 , the Company had an outstanding balance under the credit facility of $18.3 million , $0.4 million in outstanding letters of credit and $26.3 million available for future borrowings. On December 28, 2016, the Company entered into an equipment term loan agreement in the amount of $3.9 million in order to further invest in production equipment. The equipment term loan is collateralized by production equipment. Under this loan agreement, equal quarterly payments of approximately $0.2 million commenced on March 31, 2017 and will continue through the maturity of the equipment term loan on June 30, 2021. Amortization of the debt issuance costs is reported as interest expense on the consolidated income statement. As of December 30, 2017 , the Company had an outstanding balance of $3.0 million . As of July 1, 2017 , the Company had an outstanding balance of $3.5 million . The Company has available an additional $2.1 million which can be borrowed in the future under this agreement. Borrowings under the revolving line of credit, term loan and equipment term loan bear interest at either a “Base Rate” or a “Fixed Rate,” as elected by the Company. The base rate is the higher of the Wells Fargo Bank prime rate, daily one month London Interbank Offered Rate (LIBOR) plus 1.5% , or the Federal Funds rate plus 1.5% . The fixed rate is LIBOR plus 1.75% , LIBOR plus 2.00% , or LIBOR plus 2.25% depending on the level of the Company’s trailing four quarters Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). The interest rates on outstanding debt as of December 30, 2017 range from 3.57% - 4.50% compared to 3.22% - 4.25% as of July 1, 2017 . Debt maturities as of December 30, 2017 for the next five years and thereafter are as follows (in thousands): Fiscal Years Ending Amount 2018 (1) $ 2,935 2019 5,871 2020 27,754 2021 871 Total debt $ 37,431 Unamortized debt issuance costs $ (105 ) Long-term debt, net of debt issuance costs $ 37,326 (1) Represents scheduled payments for the remaining six-month period ending June 30, 2018. The Company must comply with certain financial covenants, including a cash flow leverage ratio, an asset coverage ratio, and a fixed charge coverage ratio. The credit agreement requires the Company to maintain a minimum profit threshold, limits the maximum capital lease expenditures and restricts the Company from declaring or paying dividends in cash or stock without prior bank approval. The Company is in compliance with all financial covenants for all periods presented. |
TRADE ACCOUNTS RECEIVABLE PURCH
TRADE ACCOUNTS RECEIVABLE PURCHASE PROGRAMS | 6 Months Ended |
Dec. 30, 2017 | |
Receivables [Abstract] | |
TRADE ACCOUNTS RECEIVABLE PURCHASE PROGRAMS | Trade Accounts Receivable Purchase Programs Sale Programs The Company utilizes an Account Purchase Agreement with Wells Fargo Bank, N.A. (“WFB”) which allows the Company to sell and assign to WFB and WFB may purchase from the Company the accounts receivable of certain Company customers in a maximum aggregate amount outstanding of $20.0 million . This agreement may be cancelled at any time by either party. The Company also has an Account Purchase Agreement with Orbian Financial Services (“Orbian”). This agreement allows the Company to sell accounts receivable of certain customers to Orbian and the agreement may be cancelled at any time by either party. Total accounts receivables sold during the six months ended December 30, 2017 and December 31, 2016 was approximately $55.4 million and $38.9 million , respectively. Accounts receivables sold and not yet collected were $2.3 million and $1.6 million as of December 30, 2017 and July 1, 2017 , respectively. The receivables that were sold were removed from the condensed consolidated balance sheets and the cash received is reflected as cash provided by operating activities in the condensed consolidated statements of cash flows. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Dec. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. The Tax Act reduced Federal corporate tax rates effective January 1, 2018 and changed certain other provisions. Effective tax rates for the quarter and the six months ended December 30, 2017 are blended rates reflecting the estimated benefit of two quarters of Federal tax rate reductions for fiscal year 2018. These benefits were offset by a discrete expense of $1.1 million due to the revaluation of our U.S. net deferred tax assets, an adjustment relating to foreign exchange, and required adjustments associated with the transition from a global to a territorial tax system (discussed further below). This discrete adjustment increased the Company’s income tax provisions for the quarter and six months ended December 30, 2017. The Tax Act changed the U.S. tax system from a global to a territorial model. Under the Tax Act, a deemed one-time repatriation of all accumulated earnings and profits (AE&P) in Mexico and China occurred on December 31, 2017. For purposes of calculating the toll tax associated with this deemed repatriation, AE&P pools are stratified into two asset categories, subjected to certain allowable deductions and then the net amounts are subjected to the toll tax ( 15.5% for cash/cash equivalents and 8% for illiquid assets). Management has previously relied upon estimates of AE&P and the related tax pools in Mexico and China in order to calculate the amount of foreign earnings that may potentially be repatriated and the resulting potential U.S. tax liability (see further discussion below). Management will undertake a formal study of the AE&P and tax pools in both Mexico and China during the third and fourth quarters of fiscal year 2018 in order to more accurately calculate the toll tax liability. At this time, management does not believe the toll tax liability will be material to the financial statements after consideration of existing foreign tax credit carryforwards. However, the ability to utilize these foreign tax credits against the toll tax liability is still unclear under the Tax Act as written; we anticipate future guidance from the U.S. Treasury regarding this matter as well as other specifics associated with the toll tax calculation. As such, there may be future discrete adjustments associated with the toll tax because of the lack of clarity regarding the utilization of foreign tax credits. Additional discrete future adjustments may also arise due to potential true-ups that result from the formal AE&P and tax pool studies, as well as other potentially unforeseen tax implications associated with future U.S. Treasury guidance. Because of the shift to a territorial system of taxation in the U.S., the Company recognized a discrete benefit of approximately $2.1 million during the second quarter related to reversing its previously recognized estimated liability associated with estimated future repatriations from Mexico and China. In future years, because of the toll tax on AE&P described above, repatriations of cash will generally be tax-free in the U.S. However, withholding taxes in China and Mexico may still apply to any such future repatriations. Management has not changed its indefinite investment assertions with regards to the portion of AE&P in each jurisdiction that may be repatriated in the future. Accordingly, management estimates that future repatriations of cash from China may result in approximately $0.8 million of withholding tax. There would be no offsetting foreign tax credits in the U.S. and as such, this potential liability is a direct cost associated with actual repatriations. Accordingly, management recognized a $0.8 million deferred tax liability during the second quarter related to this future potential liability. A similar analysis was conducted with anticipated future repatriations in Mexico. Under Mexican tax law, any previously taxed earnings from before 2014 (“CUFIN”) are not subject to withholding when monies are repatriated to another country. Based on management’s estimated future repatriations from Mexico and based on the estimated AE&P in Mexico as of December 31, 2013, no withholding tax liability has been recognized as of December 30, 2017. If in the future, estimated future repatriations exceed CUFIN, the Company will be required to recognize a withholding tax as a deferred tax liability at that time. Similar to China, this withholding would not be creditable and would be a direct cost associated with the actual repatriation. The Company expects to repatriate a portion of its foreign earnings based on increased net sales growth driving additional capital requirements domestically, cash requirements for potential acquisitions and to implement certain tax strategies. The Company currently expects to repatriate approximately $13.3 million of foreign earnings in the future. As noted above, any future repatriations of cash to the U.S. from Mexico and/or China will be tax-free in the U.S. effective January 1, 2018. However, management still must track future anticipated repatriations in order to estimate future withholding tax liabilities as applicable in each jurisdiction. See the above paragraph for further discussion of this matter. All other unremitted foreign earnings are expected to remain permanently reinvested for planned fixed assets purchases and improvements in foreign locations. During the second quarter of fiscal year 2017, the Company signed a unilateral advance pricing agreement (APA) with the Large Taxpayer Division of Mexico’s Servicio de Administración Tributaria (SAT) under an elective framework that has been agreed to by the U.S. and Mexican authorities. The APA is part of a larger program affecting hundreds of U.S. companies with maquiladora operations in Mexico. The general impact of the APA is to increase margins between the maquiladora and U.S. parent company, shifting profits to Mexico from the U.S. The APA was finalized during the fourth quarter of fiscal 2017; the overall impact to the financial statements was not material. The Company has available approximately $7.7 million of gross federal research and development tax credits as of December 30, 2017 . ASC 740 requires the Company to recognize in its financial statements uncertainties in tax positions taken that may not be sustained upon examination by the taxing authorities. Accordingly, as of December 30, 2017 , the Company has recorded $4.0 million of unrecognized tax benefits associated with these federal tax credits, resulting in a net deferred tax benefit of approximately $3.7 million . |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Dec. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | Earnings Per Share The following tables present a reconciliation of the denominator in the basic and diluted EPS calculation and the number of antidilutive common share awards that were not included in the diluted earnings per share calculation. These antidilutive securities occur when equity awards outstanding have an option price greater than the average market price for the period. Three Months Ended (in thousands, except per share information) December 30, 2017 December 31, 2016 Net income (loss) $ (224 ) $ 1,528 Weighted average shares outstanding—basic 10,760 10,758 Effect of dilutive common stock awards — 210 Weighted average shares outstanding—diluted 10,760 10,968 Net income (loss) per share—basic $ (0.02 ) $ 0.14 Net income (loss) per share—diluted $ (0.02 ) $ 0.14 Antidilutive SARs not included in diluted earnings per share 1,105 892 Six Months Ended (in thousands, except per share information) December 30, 2017 December 31, 2016 Net income $ 208 $ 3,320 Weighted average shares outstanding—basic 10,760 10,753 Effect of dilutive common stock awards — 166 Weighted average shares outstanding—diluted 10,760 10,919 Net income per share—basic $ 0.02 $ 0.31 Net income per share—diluted $ 0.02 $ 0.30 Antidilutive SARs not included in diluted earnings per share 1,105 892 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Dec. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE BASED COMPENSATION | Share-based Compensation The Company’s incentive plan provides for equity and liability awards to employees and non-employee directors in the form of stock options, stock appreciation rights (SARs), restricted stock, restricted stock units, stock awards, stock units, performance shares, performance units, and other stock-based or cash-based awards. Compensation cost is recognized on a straight-line basis over the requisite employee service period, which is generally the vesting period, and is recorded as employee compensation expense in cost of goods sold, research, development and engineering, and selling, general and administrative expenses. Share-based compensation is recognized only for those awards that are expected to vest, with forfeitures estimated at the date of grant based on historical experience and future expectations. In addition to service conditions, SARs contain a performance condition. The additional performance condition is based upon the achievement of Return on Invested Capital (ROIC) goals relative to a peer group. All awards with performance conditions are evaluated quarterly to determine the likelihood that performance metrics will be achieved during the performance period. These awards are charged to compensation expense over the requisite service period based on the number of shares expected to vest. The SARs cliff vest after a three-year period from date of grant and expire five years from date of grant. The grant date fair value for the awards granted below were estimated using the Black Scholes option valuation method: July 28, 2017 October 28, 2016 July 26, 2016 SARs Granted 272,500 10,000 242,500 Strike Price $ 7.26 $ 8.04 $ 8.18 Fair Value $ 1.89 $ 2.30 $ 2.42 Total share-based compensation expense recognized during the three months ended December 30, 2017 and December 31, 2016 was approximately $147,000 and $158,000 , respectively. Total share-based compensation expense recognized during the six months ended December 30, 2017 and December 31, 2016 was approximately $251,000 and $355,000 , respectively. As of December 30, 2017 , total unrecognized compensation expense related to unvested share-based compensation arrangements was approximately $0.8 million . This expense is expected to be recognized over a weighted average period of 1.88 years. No SARs were exercised during the three or six months ended December 30, 2017. During the three months ended December 31, 2016 , there were 15,000 SARs exercised with an immaterial amount of intrinsic value. During the six months ended December 31, 2016, there were 117,000 SARs exercised with approximately $367,000 of intrinsic value. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Commitments and Contingencies Litigation and Other Matters The Company is party to certain lawsuits or claims in the ordinary course of business. During the second quarter of fiscal year 2017, the Company commenced the arbitration process with a former customer related to approximately $9 million in inventory purchased and approximately $1 million in outstanding accounts receivables that we believe should be reimbursed by this former customer based on the terms of the manufacturing agreement. The Company is also pursuing reimbursement for certain cancellation fees and other carrying costs already expensed, but believed to be contractually due from the former customer. The Company is actively working through the arbitration process and expects further clarity on the resolution of this matter, whether through negotiations or a scheduled hearing by the end of the third quarter fiscal year 2018. The Company has not accrued for any potential gains or losses related to this claim and legal costs are being expensed as incurred. The ultimate disposition of these matters could have a material effect on our consolidated financial position, results of operations or cash flows. Warranties The Company provides warranties on certain product sales. Allowances for estimated warranty costs are recorded during the period of sale. The determination of such allowances requires the Company to make estimates of product return rates and expected costs to repair or to replace the products under warranty. If actual return rates and/or repair and replacement costs differ significantly from management’s estimates, adjustments to recognize additional cost of sales may be required in future periods. The Company’s warranty reserve was approximately $35,000 as of December 30, 2017 and $32,000 as of July 1, 2017 , respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Dec. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | Fair Value Measurements The Company has adopted ASC 820, Fair Value Measurements , which defines fair value, establishes a framework for assets and liabilities being measured and reported at fair value and expands disclosures about fair value measurements. There are three levels of fair value hierarchy inputs used to value assets and liabilities which include: Level 1 – inputs are quoted market prices for identical assets or liabilities; Level 2 – inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 – inputs are unobservable inputs for the asset or liability. The following table summarizes the fair value of assets (liabilities) of the Company’s derivatives that are required to be measured on a recurring basis as of December 30, 2017 and July 1, 2017 (in thousands): December 30, 2017 Level 1 Level 2 Level 3 Total Fair Value Financial Assets: Interest rate swaps $ — $ 3 $ — $ 3 Foreign currency forward contracts & swaps $ — $ 86 $ — $ 86 Financial Liabilities: Interest rate swap $ — $ (27 ) $ — $ (27 ) Foreign currency forward contracts & swaps $ — $ (4,589 ) $ — $ (4,589 ) July 1, 2017 Level 1 Level 2 Level 3 Total Fair Value Financial Assets: Foreign currency forward contracts & swaps $ — $ 1,010 $ — $ 1,010 Financial Liabilities: Interest rate swap $ — $ (103 ) $ — $ (103 ) Foreign currency forward contracts & swaps $ — $ (5,112 ) $ — $ (5,112 ) The Company currently has forward contracts and swaps to hedge known future cash outflows for expenses denominated in the Mexican peso and an interest rate swap to mitigate risk associated with certain borrowings under the Company’s debt arrangement. These contracts are measured on a recurring basis based on the foreign currency spot rates and forward rates quoted by banks or foreign currency dealers. These contracts are marked to market using level 2 input criteria every period with the unrealized gain or loss, net of tax, reported as a component of shareholders’ equity in accumulated other comprehensive loss, as they qualify for hedge accounting. The carrying values of cash and cash equivalents, accounts receivable and current liabilities reflected on the balance sheets at December 30, 2017 and July 1, 2017 , reasonably approximate their fair value. The Company’s long-term debt primarily consists of a revolving line of credit, a term loan and an equipment term loan. These borrowings bear interest at either a “Base Rate” or a “Fixed Rate,” as elected by the Company. Each of these rates is a variable floating rate dependent upon current market conditions and the Company’s current credit risk as discussed in footnote 4. As a result of the determinable market rates for our revolving line of credit, term loan and equipment term loan, they are classified within Level 2 of the fair value hierarchy. The discounted cash flow of the revolving line of credit is estimated to be $15.6 million and $18.3 million as of December 30, 2017 and July 1, 2017 , respectively, with a carrying value that reasonably approximates the fair value. The discounted cash flow of the term loan is estimated to be $18.8 million as of December 30, 2017 and $21.3 million as of July 1, 2017 , respectively, with a carrying value that reasonably approximates the fair value. The discounted cash flow of the equipment term loan is estimated to be $3.0 million as of December 30, 2017 and $3.5 million as of July 1, 2017 , respectively, with a carrying value that reasonably approximates the fair value. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Dec. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | Derivative Financial Instruments As of December 30, 2017 , the Company had outstanding foreign currency forward contracts and swaps with a total notional amount of $51.3 million . The maturity dates for these contracts and swaps extend through December 2019 . For the three months ended December 30, 2017 , the Company entered into $7.2 million of foreign currency forward contracts and settled $11.2 million of such contracts. During the same period of the previous year, the Company entered into $6.7 million of foreign currency forward contracts and settled $5.0 million of such contracts. For the six months ended December 30, 2017, the Company entered into foreign currency forward contracts of $7.2 million and settled $16.6 million of such contracts. During the same period of the previous year, the Company entered into foreign currency forward contracts of $6.7 million and settled $10.2 million of such contracts. As of December 30, 2017 , the aggregate notional amount of the Company’s outstanding foreign currency contracts and swaps along with their unrealized gains (losses) are expected to mature as summarized below (in thousands): Quarter Ending Notional Contracts and Swaps in MXN Notional Contracts and Swaps in USD Estimated Fair Value March 31, 2018 $ 90,812 $ 5,713 $ (1,120 ) June 30, 2018 $ 95,500 $ 5,811 $ (1,055 ) September 29, 2018 $ 90,443 $ 5,301 $ (867 ) December 29, 2018 $ 125,328 $ 6,746 $ (703 ) March 30, 2019 $ 137,944 $ 6,979 $ (433 ) June 29, 2019 $ 142,947 $ 6,828 $ (152 ) September 28, 2019 $ 148,468 $ 6,740 $ 86 December 28, 2019 $ 152,613 $ 7,187 $ (259 ) On October 1, 2014, the Company entered into an interest rate swap contract with an effective date of September 1, 2015 and a termination date of September 3, 2019, with a notional amount of $25.0 million related to the borrowings outstanding under the term loan. This interest rate swap pays the Company variable interest at the one month LIBOR rate, and the Company pays the counter party a fixed interest rate. The fixed interest rate for the contract is 1.97% that replaces the one month LIBOR rate component of our contractual interest to be paid to WFB as part of our term loan. Based on the terms of the interest rate swap contract and the underlying borrowings outstanding under the term loan, the interest rate contract was determined to be effective, and thus qualifies as a cash flow hedge. The following table summarizes the fair value of derivative instruments in the Consolidated Balance Sheet as of December 30, 2017 and July 1, 2017 (in thousands): December 30, 2017 July 1, 2017 Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value Fair Value Foreign currency forward contracts & swaps Other long-term assets $ 86 $ 1,010 Foreign currency forward contracts & swaps Other current liabilities $ (3,745 ) $ (4,226 ) Foreign currency forward contracts & swaps Other long-term liabilities $ (844 ) $ (886 ) Interest rate swap Other long-term assets $ 3 $ — Interest rate swap Other current liabilities $ (27 ) $ (81 ) Interest rate swap Other long-term liabilities $ — $ (22 ) The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the three months ended December 30, 2017 and December 31, 2016 , respectively (in thousands): Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (1,715 ) $ (2,669 ) $ 1,412 $ (2,972 ) Interest rate swap Interest expense (48 ) 8 24 (16 ) Total $ (1,763 ) $ (2,661 ) $ 1,436 $ (2,988 ) Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (8,325 ) $ (2,717 ) $ 1,341 $ (9,701 ) Interest rate swap Interest expense (248 ) 42 68 (138 ) Total $ (8,573 ) $ (2,675 ) $ 1,409 $ (9,839 ) The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the six months ended December 30, 2017 and December 31, 2016 , respectively (in thousands): Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (2,707 ) $ (2,791 ) $ 2,526 $ (2,972 ) Interest rate swap Interest expense (68 ) (1 ) 53 (16 ) Total $ (2,775 ) $ (2,792 ) $ 2,579 $ (2,988 ) Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (7,245 ) $ (4,906 ) $ 2,450 $ (9,701 ) Interest rate swap Interest expense (328 ) 41 149 (138 ) Total $ (7,573 ) $ (4,865 ) $ 2,599 $ (9,839 ) As of December 30, 2017 , the net amount of unrealized loss expected to be reclassified into earnings within the next 12 months is approximately $3.0 million . As of December 30, 2017 , the Company does not have any foreign exchange contracts with credit-risk-related contingent features. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Dec. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | Goodwill and Other Intangible Assets The Company recorded goodwill in connection with the Ayrshire and Sabre acquisitions resulting primarily from the synergies that resulted from the Company’s acquisitions and the assembled workforce. The goodwill from the acquisitions is not deductible for tax purposes. During the six months ended December 30, 2017 and December 31, 2016 , no impairment was recognized. Goodwill was recorded at $10.0 million as of December 30, 2017 and July 1, 2017 . The components of acquired intangible assets are as follows (in thousands): December 30, 2017 Amortization Period in Years Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: Non-Compete Agreements 3 - 5 $ 568 $ (531 ) $ 37 Customer Relationships 10 4,803 (1,831 ) 2,972 Favorable Lease Agreements 4 - 7 2,941 (1,692 ) 1,249 Total $ 8,312 $ (4,054 ) $ 4,258 July 1, 2017 Amortization Period in Years Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: Non-Compete Agreements 3 - 5 $ 568 $ (483 ) $ 85 Customer Relationships 10 4,803 (1,590 ) 3,213 Favorable Lease Agreements 4 - 7 2,941 (1,439 ) 1,502 Total $ 8,312 $ (3,512 ) $ 4,800 Amortization expense was approximately $265,000 and $282,000 for the three months ended December 30, 2017 and December 31, 2016 , respectively. Amortization expense was approximately $542,000 and $564,000 for the six months ended December 30, 2017 and December 31, 2016 , respectively. Aggregate amortization expense relative to existing intangible assets by fiscal year is currently estimated to be as follows (in thousands): Fiscal Years Ending Amount 2018 (1) 531 2019 818 2020 783 2021 784 2022 531 Thereafter 811 Total amortization expense $ 4,258 (1) Represents estimated amortization for the remaining six-month period ending June 30, 2018. |
SIGNIFICANT ACCOUNTING POLICI21
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share Basic earnings per common share (EPS) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the combination of other potentially dilutive weighted average common shares and the weighted average number of common shares outstanding during the period using the treasury stock method. The computation assumes the proceeds from the exercise of equity awards were used to repurchase common shares at the average market price during the period. The computation of diluted EPS does not assume conversion, exercise, or contingent issuance of common stock equivalent shares that would have an anti-dilutive effect on EPS. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company has entered into foreign currency forward contracts, foreign currency swaps and an interest rate swap which are accounted for as cash flow hedges in accordance with ASC 815, Derivatives and Hedging . The effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (AOCI) and is reclassified into earnings in the same period in which the underlying hedged transaction affects earnings. The derivative’s effectiveness represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. The Company uses derivatives to manage the variability of foreign currency fluctuations of expenses in our Mexico facilities and interest rate risk associated with certain borrowings under the Company’s term loan arrangement. The foreign currency forward contracts, foreign currency swaps and interest rate swap have terms that are matched to the underlying transactions being hedged. As a result, these transactions fully offset the hedged risk and no ineffectiveness has been recorded. The Company’s foreign currency forward contracts, foreign currency swaps and interest rate swap potentially expose the Company to credit risk to the extent the counterparty may be unable to meet the terms of the agreement. The Company minimizes such risk by utilizing a counterparty with a strong credit rating. The Company’s counterparty to the foreign currency forward contracts, foreign currency swaps and interest rate swap is a major banking institution. This institution does not require collateral for the contracts, and the Company believes that the risk of the counterparty failing to meet their contractual obligations is remote. The Company does not enter into derivative instruments for trading or speculative purposes. |
Income Taxes | Income Taxes We compute our interim income tax provision through the use of an estimated annual effective tax rate (ETR) applied to year-to-date operating results and specific events that are discretely recognized as they occur. In determining the estimated annual ETR, we analyze various factors, including projections of our annual earnings, taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, our ability to use tax credits and available tax planning alternatives. Discrete items, including the effect of changes in tax laws, tax rates, and certain circumstances with respect to valuation allowances or other unusual or non-recurring tax adjustments, are reflected in the period in which they occur as an addition to, or reduction from, the income tax provision, rather than included in the estimated annual ETR. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences and benefits attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities for a change in tax rates is recognized in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that is more likely than not to be realized. We utilize a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments based on new assessments and changes in estimates and which may not accurately forecast actual outcomes. Our policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. The tax years 1998 through the present remain open to examination by the major U.S. taxing jurisdictions to which we are subject. Refer to Note 6 for further discussions. |
Impairment of Goodwill | Impairment of Goodwill and Other Intangible Assets The Company records intangible assets that are acquired individually or with a group of other assets in the financial statements at acquisition. In accordance with ASC 350, Goodwill and Other Intangible Assets , goodwill and intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized but are required to be reviewed for impairment at least annually or when events or circumstances indicate that carrying value may exceed fair value. The Company’s annual goodwill impairment analysis is performed as of the first day of the fourth quarter. The Company’s acquired intangible assets are subject to amortization over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09 (ASU 2014-09), Revenue from Contracts with Customers . The guidance in this Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. This may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. This Update is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. As such, the guidance is effective for the Company beginning in the first quarter of fiscal year 2019. The Company is in the process of implementation in accordance with the planned effective date. Implementation activities are focused on the review of significant customer contracts, identification and development of additional systems capabilities to enable the Company to make reasonable estimates of revenue during the manufacturing process, and the design and implementation of relevant internal controls. The Company has assessed that the impact of the new guidance will result in a change of the Company's revenue recognition model for electronics manufacturing services from "point in time" upon physical delivery to an "over time" model and believes this transition may have a material impact on the Company's consolidated financial statements upon adoption primarily as it will recognize an increase in contract assets for unbilled receivables with a corresponding reduction in finished goods and work-in-process inventory. The new guidance allows for two transition methods in application (i) retrospective approach, or (ii) modified retrospective approach. The Company will adopt the standard using the modified retrospective approach, which will result in an adjustment for the cumulative effect of applying this guidance to contracts in process as of the adoption date. Under this approach, prior financial statements presented will not be restated. Additionally, disclosures required for revenue recognition will include qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments, and assets recognized from costs to obtain or fulfill a contract. Such disclosures are more extensive than what is required under existing GAAP. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases which supersedes ASC 840 Leases and creates a new topic, ASC 842 Leases . This update requires lessees to recognize a lease asset and a lease liability for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with earlier adoption permitted. This update will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Upon initial evaluation, the Company believes the new guidance will have a material impact on its consolidated balance sheets when adopted. The Company is currently assessing the timing of adoption. In August 2016, the FASB issued Accounting Standards Update 2016-15, Classification of Certain Cash Receipts and Cash Payments . This update provides guidance on how to record eight specific cash flow issues. This update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted and a retrospective transition method to each period should be presented. The Company is currently evaluating the effect of this update on its consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update 2017-04, Simplifying the Test for Goodwill Impairment . Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This update is effective prospectively to impairment tests beginning January 1, 2020, with early adoption permitted. The Company would apply this guidance to applicable impairment tests after the adoption date. The Company is currently evaluating the effect of this update on its consolidated financial statements. In May 2017, the FASB issued Accounting Standards Update 2017-09, Compensation - Stock Compensation . This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This update is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the effect of this update on its consolidated financial statements. In August 2017, the FASB issued Accounting Standards Update 2017-12, Derivatives and Hedging, which amends the hedge accounting recognition and presentation requirements in ASC 815. The Board’s objectives in issuing this update are to (1) improve the transparency and understandability of information about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities and (2) simplify the application of hedge accounting. This update is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the effect of this update on its consolidated financial statements. |
Maximum Amount Of Income Tax Benefits Percentage Realized Upon Ultimate Settlement | 50.00% |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of inventories consist of the following (in thousands): December 30, 2017 July 1, 2017 Finished goods $ 14,450 $ 12,244 Work-in-process 22,115 20,596 Raw materials and supplies 72,308 68,750 $ 108,873 $ 101,590 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | Debt maturities as of December 30, 2017 for the next five years and thereafter are as follows (in thousands): Fiscal Years Ending Amount 2018 (1) $ 2,935 2019 5,871 2020 27,754 2021 871 Total debt $ 37,431 Unamortized debt issuance costs $ (105 ) Long-term debt, net of debt issuance costs $ 37,326 (1) Represents scheduled payments for the remaining six-month period ending June 30, 2018. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Denominator and Number of Antidilutive Common Share Awards not Included in Diluted Earnings Per Share Calculation | These antidilutive securities occur when equity awards outstanding have an option price greater than the average market price for the period. Three Months Ended (in thousands, except per share information) December 30, 2017 December 31, 2016 Net income (loss) $ (224 ) $ 1,528 Weighted average shares outstanding—basic 10,760 10,758 Effect of dilutive common stock awards — 210 Weighted average shares outstanding—diluted 10,760 10,968 Net income (loss) per share—basic $ (0.02 ) $ 0.14 Net income (loss) per share—diluted $ (0.02 ) $ 0.14 Antidilutive SARs not included in diluted earnings per share 1,105 892 Six Months Ended (in thousands, except per share information) December 30, 2017 December 31, 2016 Net income $ 208 $ 3,320 Weighted average shares outstanding—basic 10,760 10,753 Effect of dilutive common stock awards — 166 Weighted average shares outstanding—diluted 10,760 10,919 Net income per share—basic $ 0.02 $ 0.31 Net income per share—diluted $ 0.02 $ 0.30 Antidilutive SARs not included in diluted earnings per share 1,105 892 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The grant date fair value for the awards granted below were estimated using the Black Scholes option valuation method: July 28, 2017 October 28, 2016 July 26, 2016 SARs Granted 272,500 10,000 242,500 Strike Price $ 7.26 $ 8.04 $ 8.18 Fair Value $ 1.89 $ 2.30 $ 2.42 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes the fair value of assets (liabilities) of the Company’s derivatives that are required to be measured on a recurring basis as of December 30, 2017 and July 1, 2017 (in thousands): December 30, 2017 Level 1 Level 2 Level 3 Total Fair Value Financial Assets: Interest rate swaps $ — $ 3 $ — $ 3 Foreign currency forward contracts & swaps $ — $ 86 $ — $ 86 Financial Liabilities: Interest rate swap $ — $ (27 ) $ — $ (27 ) Foreign currency forward contracts & swaps $ — $ (4,589 ) $ — $ (4,589 ) July 1, 2017 Level 1 Level 2 Level 3 Total Fair Value Financial Assets: Foreign currency forward contracts & swaps $ — $ 1,010 $ — $ 1,010 Financial Liabilities: Interest rate swap $ — $ (103 ) $ — $ (103 ) Foreign currency forward contracts & swaps $ — $ (5,112 ) $ — $ (5,112 ) |
DERIVATIVE FINANCIAL INSTRUME27
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | As of December 30, 2017 , the aggregate notional amount of the Company’s outstanding foreign currency contracts and swaps along with their unrealized gains (losses) are expected to mature as summarized below (in thousands): Quarter Ending Notional Contracts and Swaps in MXN Notional Contracts and Swaps in USD Estimated Fair Value March 31, 2018 $ 90,812 $ 5,713 $ (1,120 ) June 30, 2018 $ 95,500 $ 5,811 $ (1,055 ) September 29, 2018 $ 90,443 $ 5,301 $ (867 ) December 29, 2018 $ 125,328 $ 6,746 $ (703 ) March 30, 2019 $ 137,944 $ 6,979 $ (433 ) June 29, 2019 $ 142,947 $ 6,828 $ (152 ) September 28, 2019 $ 148,468 $ 6,740 $ 86 December 28, 2019 $ 152,613 $ 7,187 $ (259 ) |
Summerized Fair Value of Derivative Instruments in Consolidated Balance Sheets | The following table summarizes the fair value of derivative instruments in the Consolidated Balance Sheet as of December 30, 2017 and July 1, 2017 (in thousands): December 30, 2017 July 1, 2017 Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value Fair Value Foreign currency forward contracts & swaps Other long-term assets $ 86 $ 1,010 Foreign currency forward contracts & swaps Other current liabilities $ (3,745 ) $ (4,226 ) Foreign currency forward contracts & swaps Other long-term liabilities $ (844 ) $ (886 ) Interest rate swap Other long-term assets $ 3 $ — Interest rate swap Other current liabilities $ (27 ) $ (81 ) Interest rate swap Other long-term liabilities $ — $ (22 ) |
Gain (Loss) of Derivative Instruments in Statement of Operations | The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the three months ended December 30, 2017 and December 31, 2016 , respectively (in thousands): Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (1,715 ) $ (2,669 ) $ 1,412 $ (2,972 ) Interest rate swap Interest expense (48 ) 8 24 (16 ) Total $ (1,763 ) $ (2,661 ) $ 1,436 $ (2,988 ) Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (8,325 ) $ (2,717 ) $ 1,341 $ (9,701 ) Interest rate swap Interest expense (248 ) 42 68 (138 ) Total $ (8,573 ) $ (2,675 ) $ 1,409 $ (9,839 ) The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the six months ended December 30, 2017 and December 31, 2016 , respectively (in thousands): Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (2,707 ) $ (2,791 ) $ 2,526 $ (2,972 ) Interest rate swap Interest expense (68 ) (1 ) 53 (16 ) Total $ (2,775 ) $ (2,792 ) $ 2,579 $ (2,988 ) Derivatives Designated as Hedging Instruments Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) AOCI Balance Effective Portion Recorded In AOCI Effective Portion Reclassified From AOCI Into Income AOCI Balance Forward contracts & swaps Cost of sales $ (7,245 ) $ (4,906 ) $ 2,450 $ (9,701 ) Interest rate swap Interest expense (328 ) 41 149 (138 ) Total $ (7,573 ) $ (4,865 ) $ 2,599 $ (9,839 ) |
GOODWILL AND OTHER INTANGIBLE28
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The components of acquired intangible assets are as follows (in thousands): December 30, 2017 Amortization Period in Years Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: Non-Compete Agreements 3 - 5 $ 568 $ (531 ) $ 37 Customer Relationships 10 4,803 (1,831 ) 2,972 Favorable Lease Agreements 4 - 7 2,941 (1,692 ) 1,249 Total $ 8,312 $ (4,054 ) $ 4,258 July 1, 2017 Amortization Period in Years Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: Non-Compete Agreements 3 - 5 $ 568 $ (483 ) $ 85 Customer Relationships 10 4,803 (1,590 ) 3,213 Favorable Lease Agreements 4 - 7 2,941 (1,439 ) 1,502 Total $ 8,312 $ (3,512 ) $ 4,800 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Aggregate amortization expense relative to existing intangible assets by fiscal year is currently estimated to be as follows (in thousands): Fiscal Years Ending Amount 2018 (1) 531 2019 818 2020 783 2021 784 2022 531 Thereafter 811 Total amortization expense $ 4,258 (1) Represents estimated amortization for the remaining six-month period ending June 30, 2018. |
Inventories (Components Of Inve
Inventories (Components Of Inventories) (Detail) - USD ($) $ in Thousands | Dec. 30, 2017 | Jul. 01, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 14,450 | $ 12,244 |
Work-in-process | 22,115 | 20,596 |
Raw materials and supplies | 72,308 | 68,750 |
Inventories | $ 108,873 | $ 101,590 |
Long-Term Debt (Detail)
Long-Term Debt (Detail) - USD ($) | 6 Months Ended | ||||
Dec. 30, 2017 | Jul. 01, 2017 | Dec. 28, 2016 | Aug. 06, 2015 | Sep. 03, 2014 | |
Debt Disclosure [Line Items] | |||||
Line of Credit Facility, Amount Outstanding | $ 15,600,000 | $ 18,300,000 | |||
Letters of Credit Outstanding, Amount | 400,000 | 400,000 | |||
Additional availability of line of credit | 29,000,000 | 26,300,000 | |||
Debt Instrument, Periodic Payment, Principal | 1,250,000 | ||||
Debt Instrument, Unused Borrowing Capacity, Amount | 2,100,000 | ||||
2018 (1) | 2,935,000 | ||||
2,019 | 5,871,000 | ||||
2,020 | 27,754,000 | ||||
2,021 | 871,000 | ||||
Total debt | 37,431,000 | ||||
Unamortized debt issuance costs | (105,000) | ||||
Long-term debt, net of debt issuance costs | $ 37,326,000 | $ 35,000,000 | |||
Line of Credit | One-Month London Interbank Offered Rate | |||||
Debt Disclosure [Line Items] | |||||
Variable rate on line of credit facility (percent) | 1.50% | ||||
Line of Credit | Federal Funds Rate | |||||
Debt Disclosure [Line Items] | |||||
Variable rate on line of credit facility (percent) | 1.50% | ||||
Term Loan | |||||
Debt Disclosure [Line Items] | |||||
Long-term debt, net of debt issuance costs | $ 18,800,000 | 21,300,000 | |||
Equipment Term Loan | |||||
Debt Disclosure [Line Items] | |||||
Debt Instrument, Periodic Payment, Principal | 200,000 | ||||
Long-term debt, net of debt issuance costs | $ 3,000,000 | $ 3,500,000 | $ 3,900,000 | ||
Wells Fargo Bank | |||||
Debt Disclosure [Line Items] | |||||
Increase in revolving line of credit | $ 45,000,000 | ||||
Debt Instrument, Basis Spread on Variable Rate, 1.75% | Line of Credit | Fixed Rate | |||||
Debt Disclosure [Line Items] | |||||
Variable rate on line of credit facility (percent) | 1.75% | ||||
Debt Instrument, Basis Spread on Variable Rate, 2.00% | Line of Credit | Fixed Rate | |||||
Debt Disclosure [Line Items] | |||||
Variable rate on line of credit facility (percent) | 2.00% | ||||
Debt Instrument, Basis Spread on Variable Rate, 2.25% | Line of Credit | Fixed Rate | |||||
Debt Disclosure [Line Items] | |||||
Variable rate on line of credit facility (percent) | 2.25% | ||||
Minimum | |||||
Debt Disclosure [Line Items] | |||||
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 3.569% | 3.22% | |||
Maximum | |||||
Debt Disclosure [Line Items] | |||||
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 4.50% | 4.25% |
Trade Accounts Receivable Pur31
Trade Accounts Receivable Purchase Programs (Detail) - USD ($) $ in Millions | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jul. 01, 2017 | |
Receivables [Abstract] | |||
Account Purchase Agreement Maximum Aggregate Amount | $ 20 | ||
Trade Accounts Receivable Sold To Third Party | 55.4 | $ 38.9 | |
Accounts Receivable Factored To Banking Institutions | $ 2.3 | $ 1.6 |
Income Taxes (Detail)
Income Taxes (Detail) $ in Millions | 6 Months Ended |
Dec. 30, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Income Tax Expense Benefit Continuing Operations Adjustment Of Deferred Tax Asset Liability | $ (1.1) |
Accumulated unremitted earnings tax rate for cash repatriation | 15.50% |
Accumulated unremitted earnings tax rate for non liquid asset | 8.00% |
Tax Benefit from Territorial Tax Conversion | $ 2.1 |
Deferred Tax Liabilities, withholding tax | 0.8 |
Foreign tax credits related to future repatriations of earnings | 13.3 |
Gross potential research and development (R&D) tax credit | 7.7 |
Unrecognized tax benefits associated with federal tax credits | 4 |
Deferred Tax Assets, Tax Credit Carryforwards | $ 3.7 |
Earnings Per Share (Reconciliat
Earnings Per Share (Reconciliation Of Denominator And Number Of Antidilutive Common Share Awards Not Included In Diluted Earnings Per Share Calculation) (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ (224) | $ 1,528 | $ 208 | $ 3,320 |
Weighted average shares outstanding - basic | 10,760 | 10,758 | 10,760 | 10,753 |
Effect of dilutive common stock options (Shares) | 0 | 210 | 0 | 166 |
Weighted average shares outstanding - Diluted | 10,760 | 10,968 | 10,760 | 10,919 |
Net income (loss) per share—diluted | $ (0.02) | $ 0.14 | $ 0.02 | $ 0.31 |
Net income (loss) per share—diluted | $ (0.02) | $ 0.14 | $ 0.02 | $ 0.30 |
Antidilutive options not included in diluted earnings per share (Shares) | 1,105 | 892 | 1,105 | 892 |
Share-Based Compensation (Detai
Share-Based Compensation (Detail) - USD ($) | Oct. 28, 2016 | Jul. 27, 2016 | Jul. 29, 2015 | Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jul. 26, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unrecognized Share-based Compensation Expense | $ 800,000 | $ 800,000 | ||||||
Unrecognized Share-based Compensation, Period for Recognition | 1 year 10 months 17 days | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 367,000 | |||||||
Stock Appreciation Rights (SARs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
SARs Granted | 272,500 | 10,000 | 242,500 | |||||
Strike Price | $ 7.26 | $ 8.18 | $ 8.04 | |||||
Fair Value | $ 1.89 | $ 2.30 | $ 2.42 | |||||
Share-based Compensation Expense | $ 147,000 | $ 158,000 | $ 251,000 | $ 355,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised | 15,000 | 117,000 |
Commitments And Contingencies (
Commitments And Contingencies (Detail) - USD ($) | 6 Months Ended | |
Dec. 30, 2017 | Jul. 01, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Warranty reserve | $ 35,000 | $ 32,000 |
Inventories [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | 9,000,000 | |
Accounts Receivable [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 1,000,000 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets And Liabilities Measured At Fair Value On Recurring Basis) (Detail) - USD ($) $ in Thousands | Dec. 30, 2017 | Jul. 01, 2017 | Dec. 28, 2016 | Oct. 01, 2016 | Sep. 03, 2014 |
Fair Value Disclosures [Line Items] | |||||
Line of Credit Facility, Amount Outstanding | $ 15,600 | $ 18,300 | |||
Long-term Debt | 37,326 | $ 35,000 | |||
Term Loan | |||||
Fair Value Disclosures [Line Items] | |||||
Long-term Debt | 18,800 | 21,300 | |||
Equipment Term Loan | |||||
Fair Value Disclosures [Line Items] | |||||
Long-term Debt | 3,000 | 3,500 | $ 3,900 | ||
Forward Contracts and swaps | |||||
Fair Value Disclosures [Line Items] | |||||
Foreign currency forward contracts, Financial Assets | 86 | 1,010 | |||
Foreign currency forward contracts, Financial Liabilities | (4,589) | (5,112) | |||
Interest Rate Swap | |||||
Fair Value Disclosures [Line Items] | |||||
Foreign currency forward contracts, Financial Assets | $ 3 | ||||
Foreign currency forward contracts, Financial Liabilities | (27) | (103) | |||
Level 1 | Forward Contracts and swaps | |||||
Fair Value Disclosures [Line Items] | |||||
Foreign currency forward contracts, Financial Assets | 0 | 0 | |||
Foreign currency forward contracts, Financial Liabilities | 0 | 0 | |||
Level 1 | Interest Rate Swap | |||||
Fair Value Disclosures [Line Items] | |||||
Foreign currency forward contracts, Financial Assets | 0 | ||||
Foreign currency forward contracts, Financial Liabilities | 0 | 0 | |||
Level 2 | Forward Contracts and swaps | |||||
Fair Value Disclosures [Line Items] | |||||
Foreign currency forward contracts, Financial Assets | 86 | 1,010 | |||
Foreign currency forward contracts, Financial Liabilities | (4,589) | (5,112) | |||
Level 2 | Interest Rate Swap | |||||
Fair Value Disclosures [Line Items] | |||||
Foreign currency forward contracts, Financial Assets | 3 | ||||
Foreign currency forward contracts, Financial Liabilities | (27) | (103) | |||
Level 3 | Forward Contracts and swaps | |||||
Fair Value Disclosures [Line Items] | |||||
Foreign currency forward contracts, Financial Assets | 0 | 0 | |||
Foreign currency forward contracts, Financial Liabilities | 0 | 0 | |||
Level 3 | Interest Rate Swap | |||||
Fair Value Disclosures [Line Items] | |||||
Foreign currency forward contracts, Financial Assets | $ 0 | ||||
Foreign currency forward contracts, Financial Liabilities | $ 0 | $ 0 |
Derivative Financial Instrume37
Derivative Financial Instruments (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Sep. 01, 2015 | |
Derivative [Line Items] | ||||||
Derivative, Notional Amount | $ 51.3 | $ 51.3 | ||||
Contract maturity date | Dec. 24, 2019 | |||||
Foreign currency forward contracts entered | 7.2 | $ 6.7 | $ 7.2 | $ 6.7 | ||
Foreign currency forward contracts settled | 11.2 | $ 5 | 16.6 | $ 10.2 | ||
Derivative, Fixed Interest Rate | 1.97% | |||||
Net amount of existing losses expected to be reclassified into earnings within the next 12 months | $ 3 | $ 3 | ||||
Interest Rate Swap | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | $ 25 |
Schedule of Derivative Instrume
Schedule of Derivative Instruments (Detail) - USD ($) $ in Thousands | Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 |
Derivative [Line Items] | |||||||||
Derivative, Notional Amount | $ 51,300 | ||||||||
Subsequent Event [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Fair Value, Net | $ (259) | $ 86 | $ (152) | $ (433) | $ (703) | $ (867) | $ (1,055) | $ (1,120) | |
Subsequent Event [Member] | Mexico, Pesos | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Notional Amount | 152,613 | 148,468 | 142,947 | 137,944 | 125,328 | 90,443 | 95,500 | 90,812 | |
Subsequent Event [Member] | United States of America, Dollars | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Notional Amount | $ 7,187 | $ 6,740 | $ 6,828 | $ 6,979 | $ 6,746 | $ 5,301 | $ 5,811 | $ 5,713 |
Derivative Financial Instrume39
Derivative Financial Instruments (Summarized Fair Value Of Derivative Instruments In Consolidated Balance Sheets) (Detail) - USD ($) $ in Thousands | Dec. 30, 2017 | Jul. 01, 2017 | Oct. 01, 2016 |
Forward Contracts and swaps | Other Long Term Assets | |||
Derivative Instruments [Line Items] | |||
Foreign currency forward contracts, Asset Fair Value | $ 86 | $ 1,010 | |
Forward Contracts and swaps | Other Current Liabilities | |||
Derivative Instruments [Line Items] | |||
Foreign currency forward contracts, Liability Fair Value | (3,745) | (4,226) | |
Forward Contracts and swaps | Other Long Term Liabilities | |||
Derivative Instruments [Line Items] | |||
Foreign currency forward contracts, Liability Fair Value | (844) | (886) | |
Interest Rate Swap | Other Long Term Assets | |||
Derivative Instruments [Line Items] | |||
Foreign currency forward contracts, Asset Fair Value | 0 | $ 3 | |
Interest Rate Swap | Other Current Liabilities | |||
Derivative Instruments [Line Items] | |||
Foreign currency forward contracts, Liability Fair Value | (27) | (81) | |
Interest Rate Swap | Other Long Term Liabilities | |||
Derivative Instruments [Line Items] | |||
Foreign currency forward contracts, Liability Fair Value | $ 0 | $ (22) |
Derivative Financial Instrume40
Derivative Financial Instruments (Gain (Loss) Of Derivative Instruments In Statement Of Operations) (Detail) - Designated As Hedging Instrument - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Derivatives used in Net Investment Hedge, Net of Tax [Roll Forward] | ||||
AOCI Balance, Period Start | $ (1,763) | $ (8,573) | $ (2,775) | $ (7,573) |
Effective Portion Recorded In AOCI | (2,661) | (2,675) | (2,792) | (4,865) |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 1,436 | 1,409 | 2,579 | 2,599 |
AOCI Balance, Period End | (2,988) | (9,839) | (2,988) | (9,839) |
Forward Contracts and swaps | ||||
Derivatives used in Net Investment Hedge, Net of Tax [Roll Forward] | ||||
AOCI Balance, Period Start | (1,715) | (8,325) | (2,707) | (7,245) |
Effective Portion Recorded In AOCI | (2,669) | (2,717) | (2,791) | (4,906) |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 1,412 | 1,341 | 2,526 | 2,450 |
AOCI Balance, Period End | (2,972) | (9,701) | (2,972) | (9,701) |
Interest Rate Swap | ||||
Derivatives used in Net Investment Hedge, Net of Tax [Roll Forward] | ||||
AOCI Balance, Period Start | (48) | (248) | (68) | (328) |
Effective Portion Recorded In AOCI | 8 | 42 | (1) | 41 |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 24 | 68 | 53 | 149 |
AOCI Balance, Period End | $ (16) | $ (138) | $ (16) | $ (138) |
Goodwill and Other Intangible41
Goodwill and Other Intangible Assets (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jul. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 9,957,000 | $ 9,957,000 | $ 9,957,000 | ||
Amortization of Intangible Assets | 265,000 | $ 282,000 | 542,000 | $ 564,000 | |
Finite-lived Intangible Assets [Roll Forward] | |||||
Gross Carrying Amount | 8,312,000 | 8,312,000 | 8,312,000 | ||
Accumulated Amortization | (4,054,000) | (4,054,000) | (3,512,000) | ||
Net Carrying Amount | 4,258,000 | 4,258,000 | 4,800,000 | ||
Non-Compete Agreements | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Gross Carrying Amount | 568,000 | 568,000 | 568,000 | ||
Accumulated Amortization | (531,000) | (531,000) | (483,000) | ||
Net Carrying Amount | 37,000 | $ 37,000 | 85,000 | ||
Customer Relationships | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Amortization Period in Years | 10 years | ||||
Gross Carrying Amount | 4,803,000 | $ 4,803,000 | 4,803,000 | ||
Accumulated Amortization | (1,831,000) | (1,831,000) | (1,590,000) | ||
Net Carrying Amount | 2,972,000 | 2,972,000 | 3,213,000 | ||
Favorable Lease Agreements | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Gross Carrying Amount | 2,941,000 | 2,941,000 | 2,941,000 | ||
Accumulated Amortization | (1,692,000) | (1,692,000) | (1,439,000) | ||
Net Carrying Amount | $ 1,249,000 | $ 1,249,000 | $ 1,502,000 | ||
Minimum | Non-Compete Agreements | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Amortization Period in Years | 3 years | ||||
Minimum | Favorable Lease Agreements | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Amortization Period in Years | 4 years | ||||
Maximum | Non-Compete Agreements | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Amortization Period in Years | 5 years | ||||
Maximum | Favorable Lease Agreements | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Amortization Period in Years | 7 years |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Aggregate Amortization Expense by Fiscal Year) (Detail) - USD ($) $ in Thousands | Dec. 30, 2017 | Jul. 01, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
2018 (1) | $ 531 | |
2,019 | 818 | |
2,020 | 783 | |
2,021 | 784 | |
2,022 | 531 | |
Thereafter | 811 | |
Total amortization expense | $ 4,258 | $ 4,800 |