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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
________________________________
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______           
Commission File Number 001-33278

  AVIAT NETWORKS, INC.
(Exact name of registrant as specified in its charter)

Delaware 20-5961564
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
200 Parker Drive, Suite C100A, Austin,Texas 78728
(Address of principal executive offices) (Zip Code)
(408) 941-7100
(Registrant’s telephone number, including area code)

__________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which Registered
Common StockAVNWThe Nasdaq Global Select Market
Indicate by checkmark whether the registrant (l) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  
The number of shares outstanding of the registrant’s Common Stock as of April 28, 2023 was 11,440,689



AVIAT NETWORKS, INC.
QUARTERLY REPORT ON FORM 10-Q
For the Quarterly Period Ended March 31, 2023
Table of Contents
 Page
3



PART I.     FINANCIAL INFORMATION
4



Item 1.Financial Statements
AVIAT NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and par value amounts)March 31,
2023
July 1,
2022
ASSETS
Current Assets:
Cash and cash equivalents$22,456 $36,877 
Marketable securities 10,893 
Accounts receivable, net88,458 73,168 
Unbilled receivables63,344 45,857 
Inventories39,083 25,394 
Customer service inventories1,857 1,775 
Other current assets21,306 12,437 
Total current assets236,504 206,401 
Property, plant and equipment, net10,570 8,887 
Goodwill4,950  
Intangible assets, net6,918  
Deferred income taxes88,750 95,412 
Right of use assets2,669 2,759 
Other assets14,301 10,445 
TOTAL ASSETS
$364,662 $323,904 
LIABILITIES AND EQUITY
Current Liabilities:
Short-term debt$6,200 $ 
Accounts payable61,670 42,394 
Accrued expenses23,397 26,451 
Short-term lease liabilities721 513 
Advance payments and unearned revenue40,348 33,740 
Restructuring liabilities884 1,381 
Total current liabilities133,220 104,479 
Unearned revenue7,628 8,920 
Long-term lease liabilities2,255 2,412 
Other long-term liabilities279 273 
Reserve for uncertain tax positions5,363 5,504 
Deferred income taxes563 563 
Total liabilities149,308 122,151 
Commitments and contingencies (Note 13)
Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued
  
Common stock, $0.01 par value, 300,000,000 shares authorized, 11,436,542 shares issued and outstanding at March 31, 2023; 11,160,160 shares issued and outstanding at July 1, 2022
114 112 
Treasury stock(6,147)(6,147)
Additional paid-in-capital828,411 823,259 
Accumulated deficit(591,253)(599,442)
Accumulated other comprehensive loss(15,771)(16,029)
Total equity215,354 201,753 
TOTAL LIABILITIES AND EQUITY
$364,662 $323,904 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
5



AVIAT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months EndedNine Months Ended
(In thousands, except per share amounts)March 31,
2023
April 1,
2022
March 31,
2023
April 1,
2022
Revenues:
Revenue from product sales$54,811 $52,047 $175,473 $156,361 
Revenue from services28,669 22,469 79,941 69,177 
Total revenues83,480 74,516 255,414 225,538 
Cost of revenues:
Cost of product sales35,745 31,850 111,567 97,789 
Cost of services17,902 15,130 52,340 45,976 
Total cost of revenues53,647 46,980 163,907 143,765 
Gross margin29,833 27,536 91,507 81,773 
Operating expenses:
Research and development expenses6,518 5,259 18,652 17,338 
Selling and administrative expenses15,842 14,867 49,913 41,304 
Restructuring (recovery) charges(23)(72)2,855 (373)
Total operating expenses22,337 20,054 71,420 58,269 
Operating income7,496 7,482 20,087 23,504 
Other (income)/expense, net428 175 2,750 387 
Income before income taxes7,068 7,307 17,337 23,117 
Provision for income taxes2,179 1,278 9,148 6,490 
Net income$4,889 $6,029 $8,189 $16,627 
Net income per share of common stock outstanding:
Basic$0.43 $0.54 $0.72 $1.49 
Diluted$0.41 $0.51 $0.69 $1.40 
Weighted-average shares outstanding:
Basic11,413 11,173 11,319 11,172 
Diluted11,884 11,761 11,829 11,848 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
6



AVIAT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three Months EndedNine Months Ended
(In thousands)March 31,
2023
April 1,
2022
March 31,
2023
April 1,
2022
Net income$4,889 $6,029 $8,189 $16,627 
Other comprehensive income (loss):
Net change in cumulative translation adjustments
370 (786)258 (1,058)
Other comprehensive income (loss)370 (786)258 (1,058)
Comprehensive income$5,259 $5,243 $8,447 $15,569 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

7



AVIAT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
8



 Nine Months Ended
(In thousands)March 31,
2023
April 1,
2022
Operating Activities
Net income$8,189 $16,627 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization of property, plant and equipment4,193 3,444 
Amortization of intangible assets acquired372  
Provision for/(recovery from) uncollectible receivables476 (56)
Share-based compensation5,135 2,464 
Deferred tax assets, net5,189 5,437 
Charges for inventory and customer service inventory write-downs1,715 1,140 
Loss (gain) on disposition of property, plant and equipment, net34 (66)
Noncash lease expense524 620 
Net loss (gain) on marketable securities1,730 (23)
Restructuring charges (recoveries) (373)
Changes in operating assets and liabilities:
Accounts receivable(12,212)(28,252)
Unbilled receivables(17,719)(8,446)
Inventories(8,961)(5,634)
Customer service inventories(958)(1,061)
Accounts payable16,344 7,934 
Accrued expenses(3,594)(569)
Advance payments and unearned revenue1,948 4,719 
Income taxes payable or receivable1,932 (1,400)
Other assets and liabilities(12,814)(6,652)
Change in lease liabilities(528)(641)
Net cash used in operating activities(9,005)(10,788)
Investing Activities
Payments for acquisition of property, plant and equipment(5,055)(1,028)
Proceeds from sale of marketable securities9,163  
Purchase of marketable securities (2,492)
Proceeds from sale of asset held for sale 2,284 
Acquisition, net of cash acquired and purchases of intangible assets(15,769) 
Net cash used in investing activities(11,661)(1,236)
Financing Activities
Proceeds from borrowings50,200  
Repayments of borrowings(44,000) 
Payments for repurchase of common stock - treasury shares (4,611)
Payments for taxes related to net settlement of equity awards(1,055)(358)
Proceeds from issuance of common stock under employee stock plans1,074 931 
Net cash provided by (used in) financing activities6,219 (4,038)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash9 (663)
Net decrease in cash, cash equivalents, and restricted cash(14,438)(16,725)
Cash, cash equivalents, and restricted cash, beginning of period37,104 48,198 
Cash, cash equivalents, and restricted cash, end of period$22,666 $31,473 
9



See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
10



AVIAT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
Three Months Ended March 31, 2023
Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated DeficitAccumulated Other Comprehensive LossTotal Equity
(In thousands, except share amounts)Shares$
Amount
Balance as of December 30, 202211,377,066 $114 $(6,147)$826,812 $(596,142)$(16,141)$208,496 
Net income— — — — 4,889 — 4,889 
Other comprehensive income, net of tax— — — — — 370 370 
Issuance of common stock under employee stock plans71,281 (1)— 328 — — 327 
Shares withheld for taxes related to vesting of equity awards (11,805)1 — (367)— — (366)
Share-based compensation— — — 1,638 — — 1,638 
Balance as of March 31, 202311,436,542 $114 $(6,147)$828,411 $(591,253)$(15,771)$215,354 

Three Months Ended April 1, 2022
Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated DeficitAccumulated Other Comprehensive LossTotal Equity
(In thousands, except share amounts)Shares$
Amount
Balance as of December 31, 202111,195,542 $112 $(3,408)$820,791 $(610,004)$(14,599)$192,892 
Net income— — — — 6,029 — 6,029 
Other comprehensive loss, net of tax— — — — — (786)(786)
Issuance of common stock under employee stock plans37,327 1 — 345 — — 346 
Shares withheld for taxes related to vesting of equity awards  — —  — —  
Stock repurchase(65,951)(1)(1,990)— — — (1,991)
Share-based compensation— — — 840 — — 840 
Balance as of April 1, 202211,166,918 $112 $(5,398)$821,976 $(603,975)$(15,385)$197,330 

11




Nine Months Ended March 31, 2023
Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated DeficitAccumulated Other Comprehensive LossTotal Equity
(In thousands, except share amounts)Shares$
Amount
Balance as of July 1, 202211,160,160 $112 $(6,147)$823,259 $(599,442)$(16,029)$201,753 
Net income— — — — 8,189 — 8,189 
Other comprehensive income, net of tax— — — — — 258 258 
Issuance of common stock under employee stock plans310,355 2 — 1,072 — — 1,074 
Shares withheld for taxes related to vesting of equity awards (33,973) — (1,055)— — (1,055)
Stock repurchase   — — —  
Share-based compensation— — — 5,135 — — 5,135 
Balance as of March 31, 202311,436,542 $114 $(6,147)$828,411 $(591,253)$(15,771)$215,354 


Nine Months Ended April 1, 2022
Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated DeficitAccumulated Other Comprehensive LossTotal Equity
(In thousands, except share amounts)Shares$
Amount
Balance as of July 2, 202111,153,445 $112 $(787)$818,939 $(620,602)$(14,327)$183,335 
Net income— — — — 16,627 — 16,627 
Other comprehensive loss, net of tax— — — — — (1,058)(1,058)
Issuance of common stock under employee stock plans172,996 2 — 931 — — 933 
Shares withheld for taxes related to vesting of equity awards (10,134)— — (358)— — (358)
Stock repurchase(149,389)(2)(4,611)— — (4,613)
Share-based compensation— — — 2,464 — — 2,464 
Balance as of April 1, 202211,166,918 $112 $(5,398)$821,976 $(603,975)$(15,385)$197,330 



See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.



12



AVIAT NETWORKS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1. The Company and Basis of Presentation
The Company
Aviat Networks, Inc. (“Aviat,” the “Company,” “we,” “us,” and “our”) designs, manufactures, and sells a range of wireless networking solutions and services to mobile and fixed telephone service providers, private network operators, government agencies, transportation and utility companies, public safety agencies, and broadcast system operators across the globe. Our products include broadband wireless access base stations and customer premises equipment for fixed and mobile, point-to-point digital microwave radio systems for access, backhaul, trunking, license-exempt applications, supporting new network deployments, network expansion, and capacity upgrades.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information, and we have made estimates, assumptions and judgments affecting the amounts reported in our unaudited condensed consolidated financial statements and the accompanying notes, as discussed in greater detail below. Accordingly, the statements do not include all information and footnotes required by U.S. GAAP for annual consolidated financial statements. In the opinion of our management, such interim financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows for such periods. The results for the three and nine months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the full fiscal year or future operating periods. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended July 1, 2022.
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All intercompany transactions and accounts have been eliminated.
We operate on a 52-week or 53-week year ending on the Friday closest to June 30. The three months ended March 31, 2023 and the three months ended April 1, 2022 both consisted of 13 weeks. Fiscal year 2023 will be comprised of 52 weeks and will end on June 30, 2023. Fiscal year 2022 was comprised of 52 weeks and ended on July 1, 2022.
Use of Estimates
The preparation of unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires us to make estimates, assumptions and judgments affecting the amounts reported and related disclosures. Estimates are based upon historical factors, current circumstances and the experience and judgment of our management. We evaluate our estimates and assumptions on an ongoing basis and may employ outside experts to assist us in making these evaluations. Changes in such estimates, based on more accurate information, or different assumptions or conditions, may affect amounts reported in future periods. Such estimates affect significant items, including revenue recognition, business combinations, provision for uncollectible receivables, inventory valuation, valuation allowances for deferred tax assets, uncertainties in income taxes, contingencies and recoverability of long-lived assets. The actual results that we experience may differ materially from our estimates.
Summary of Significant Accounting Policies
There have been no material changes in our significant accounting policies as of March 31, 2023 and for the nine months ended March 31, 2023, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended July 1, 2022.
13



Accounting Standards Adopted
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13) and also issued subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU 2022-02 (collectively, “Topic 326”). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. Topic 326 became effective for us in our first quarter of fiscal 2023. The adoption had no material impact on our unaudited condensed consolidated financial statements.

Note 2. Balance Sheet Components
Cash, Cash Equivalents, and Restricted Cash
The following table provides a summary of the cash, cash equivalents, and restricted cash reported within our unaudited condensed consolidated balance sheets that reconciles to the corresponding amount in our unaudited condensed consolidated statement of cash flows:

(In thousands)March 31,
2023
July 1,
2022
Cash and cash equivalents$22,456 $36,877 
Restricted cash included in other assets210 227 
Total cash, cash equivalents, and restricted cash in the Statement of Cash Flows$22,666 $37,104 
Accounts Receivable, net
Our net accounts receivable are summarized below:
(In thousands)March 31,
2023
July 1,
2022
Accounts receivable$89,174 $74,102 
Less: Allowances for collection losses(716)(934)
Total accounts receivable, net$88,458 $73,168 
Inventories
Our inventories are summarized below:
(In thousands)March 31,
2023
July 1,
2022
Finished products$24,916 $14,916 
Raw materials and supplies14,167 10,478 
Total inventories
$39,083 $25,394 
Consigned inventories included within raw materials and supplies
$10,408 $9,796 

We record charges to adjust our inventory and customer service inventory due to excess and obsolete inventory resulting from lower sales forecasts, product transitioning, or discontinuance. The charges during the three and nine months ended March 31, 2023 and April 1, 2022, respectively, consisted of the following which were recorded in cost of product sales:
 Three Months EndedNine Months Ended
(In thousands)March 31,
2023
April 1,
2022
March 31,
2023
April 1,
2022
Excess and obsolete inventory$275 $196 $856 $436 
Customer service inventory write-downs302 286 859 704 
Total inventory charges
$577 $482 $1,715 $1,140 
14



Assets Held for Sale
We consider properties to be assets held for sale when management approves and commits to a plan to dispose of a property or group of properties. The property held for sale prior to the sale date is separately presented on our unaudited condensed consolidated balance sheet as "”Assets Held for Sale”.
During the second quarter of fiscal 2021 management initiated the sale of our facility located in the United Kingdom. We completed the sale during the third quarter of fiscal 2022 with proceeds of $2.3 million, reflecting a gain of $0.1 million We have no assets held for sale as of March 31, 2023 and July 1, 2022.
Property, Plant and Equipment, net
Our property, plant and equipment, net are summarized below:
(In thousands)March 31,
2023
July 1,
2022
Land$210 $210 
Buildings and leasehold improvements5,889 5,796 
Software17,075 21,368 
Machinery and equipment47,144 49,584 
Total property, plant and equipment, gross70,318 76,958 
Less: Accumulated depreciation and amortization(59,748)(68,071)
Total property, plant and equipment, net$10,570 $8,887 
    
Included in the total plant, property and equipment above there were $0.8 million of assets in progress which have not been placed in service as of March 31, 2023 and $1.2 million as of July 1, 2022.
Depreciation and amortization expense related to property, plant and equipment, including amortization of software developed for internal use, was as follows:
 Three Months EndedNine Months Ended
(In thousands)March 31,
2023
April 1,
2022
March 31,
2023
April 1,
2022
Depreciation and amortization$1,428 $1,051 $4,193 $3,444 
Accrued Expenses
Our accrued expenses are summarized below:
(In thousands)March 31,
2023
July 1,
2022
Accrued compensation and benefits$8,119 $11,625 
Accrued agent commissions1,119 1,864 
Accrued warranties2,311 2,913 
Other11,848 10,049 
Total accrued expenses$23,397 $26,451 
15



Accrued Warranties
We accrue for the estimated cost to repair or replace products under warranty. Changes in our warranty liability, which are included as a component of accrued expenses in our unaudited condensed consolidated balance sheets were as follows:
Three Months EndedNine Months Ended
(In thousands)March 31,
2023
April 1,
2022
March 31,
2023
April 1,
2022
Balance as of the beginning of the period$2,549 $3,198 $2,913 $3,228 
Warranty provision recorded during the period186 402 560 1,242 
Assumed in Redline acquisition  55  
Consumption during the period(424)(377)(1,217)(1,247)
Balance as of the end of the period$2,311 $3,223 $2,311 $3,223 
Advance Payments and Unearned Revenue
Our advance payments and unearned revenue are summarized below:
(In thousands)March 31,
2023
July 1,
2022
Advance payments$1,425 $1,870 
Unearned revenue38,923 31,870 
Total advance payments and unearned revenue$40,348 $33,740 
Excluded from the balances above are $7.6 million and $8.9 million in long-term unearned revenue as of March 31, 2023 and July 1, 2022, respectively.
Note 3. Fair Value Measurements of Assets and Liabilities
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal market (or most advantageous market in the absence of a principal market) for the asset or liability in an orderly transaction between market participants as of the measurement date. We maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value and establish a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:
Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities;
Level 2 — Observable market-based inputs or observable inputs that are corroborated by market data; and
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The fair values, and valuation input levels of our assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2023 and July 1, 2022 were as follows:
 March 31, 2023July 1, 2022Valuation Inputs
(In thousands)Fair ValueFair Value
Assets:
Cash and cash equivalents:
Money market funds
$ $5,367 Level 1
Bank certificates of deposit
$3,690 $3,682 Level 2
Marketable securities $ $10,893 Level 1
We classify items within Level 1 if quoted prices are available in active markets. Historically our Level 1 items mainly are money market funds. As of July 1, 2022, money market funds were valued at $1.00 net asset value per share.
16



Our marketable securities are included in current assets on our balance sheet as they are available to be converted into cash to fund current operations. These marketable securities are publicly traded stock measured at fair value and classified within Level 1. For the nine months ended March 31, 2023 we recognized a loss of $1.7 million associated with the sales of our marketable securities recorded in Other (income)/expense, net.
We classify items in Level 2 if the observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes, or alternative pricing sources are available with reasonable levels of price transparency. Our bank certificates of deposit are classified within Level 2.
As of March 31, 2023 and July 1, 2022, we did not have any recurring assets or liabilities that were valued using significant unobservable inputs.
Our policy is to recognize asset or liability transfers among Level 1, Level 2, and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During the first nine months of fiscal 2023 and 2022, we had no transfers between levels of the fair value hierarchy of our assets or liabilities measured at fair value.
Note 4. Leases
The Company has facilities under non-cancelable operating lease agreements. These leases have varying terms that range from one to 20 years and contain leasehold improvement incentives, rent holidays and escalation clauses.
We determine if an arrangement contains a lease at inception. These operating leases are included in "Right of use assets" on our unaudited condensed consolidated balance sheets and represent our right to use the underlying asset for the lease term. Our obligations to make lease payments are included in "Short-term lease liabilities" and "Long-term lease liabilities" on our unaudited condensed consolidated balance sheets. We did not enter into any finance leases during the nine months ended March 31, 2023.
The following summarizes our lease costs:
Three Months EndedNine Months Ended
March 31,
2023
April 1, 2022March 31,
2023
April 1, 2022
(In thousands)
Operating lease costs$270 $251 $817 $813 
Short-term lease costs490 623 1,507 1,823 
Variable lease costs12 64 92 138 
Total lease costs
$772 $938 $2,416 $2,774 

The following summarizes our lease term and discount rate for the nine months ended March 31, 2023:
Weighted average remaining lease term6.8 years
Weighted average discount rate5.7 %

17



As of March 31, 2023, our future minimum lease payments under all non-cancelable operating leases with an initial term in excess of one year were as follows (in thousands):
Amount
(In thousands)
Remainder of 2023
$331 
2024734 
2025633 
2026490 
2027169 
Thereafter1,385 
Total lease payments3,742 
Less: interest(766)
Present value of lease liabilities$2,976 

Note 5. Credit Facility and Debt
On May 17, 2021, we entered into Amendment No. 4 to Third Amended and Restated Loan and Security Agreement with Silicon Valley Bank (the “SVB Credit Facility”) which extended the expiration date to June 28, 2024. Under Federal Deposit Insurance Corporation (“FDIC”) receivership, SVB became SVB Bridge Bank as of March 13, 2023, but the Credit Facility remained in full force and effect. The SVB Credit Facility provides for a $25.0 million accounts receivable formula-based revolving credit facility that can be borrowed by our U.S. company, with a $25.0 million sub-limit that can be borrowed by our U.S. and Singapore entities. Loans may be advanced under the SVB Credit Facility based on a borrowing base equal to a specified percentage of the value of eligible accounts of the borrowers under the SVB Credit Facility. The borrowing base is subject to certain eligibility criteria. Availability under the accounts receivable formula based revolving credit facility can also be utilized to issue letters of credit with a $12.0 million sub-limit. We may prepay loans under the SVB Credit Facility in whole or in part at any time without premium or penalty. As of March 31, 2023, available credit under the SVB Credit Facility was $15.8 million, reflecting the available limit of $25.0 million less outstanding letters of credit of $3.0 million. We borrowed $50.2 million and repaid $44.0 million against the SVB Credit Facility during the nine months ended March 31, 2023 at the weighted average interest rate was 6.96%. As of March 31, 2023 there was $6.2 million of borrowing outstanding.
The SVB Credit Facility carries an interest rate computed, at our option, based on either (i) at the prime rate reported in the Wall Street Journal plus a spread of 0.50% to 1.50%, with such spread determined based on our adjusted quick ratio; or (ii) if we satisfy a minimum adjusted quick ratio, a LIBOR rate determined in accordance with the SVB Credit Facility, plus a spread of 2.75%. Any outstanding Singapore subsidiary borrowed loans shall bear interest at an additional 2.00% above the applicable prime or LIBOR rate.
The SVB Credit Facility contains quarterly financial covenants including minimum adjusted quick ratio and minimum profitability (EBITDA) requirements. In the event our adjusted quick ratio falls below a certain level, cash received in our accounts with Silicon Valley Bank may be directly applied to reduce outstanding obligations under the SVB Credit Facility. The SVB Credit Facility also imposes certain restrictions on our ability to dispose of assets, permit a change in control, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments, make certain restricted payments, and enter into transactions with affiliates under certain circumstances. Certain of our assets, including accounts receivable, inventory, and equipment, are pledged as collateral for the SVB Credit Facility. Upon an event of default, outstanding obligations would be immediately due and payable. Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default at a per annum rate of interest equal to 5.00% above the applicable interest rate.
As of March 31, 2023, we were not in compliance with the affirmative covenant in Section 6.8 of the SVB Credit Facility, as amended, which restricts Aviat from having domestic operating or depository accounts with banks other than SVB. We opened a non-SVB deposit account with Wells Fargo Bank, N.A. in the immediate aftermath of the SVB closure by regulatory authorities on March 10, 2023 so that we could continue receiving customer remittances. We subsequently
18



requested and received a waiver from the lender for this noncompliance. We were in compliance with all other aspects of the credit agreement as of March 31, 2023.
At March 31, 2023, the Company held cash and cash equivalents at Silicon Valley Bridge Bank, N.A. (“SVB Bridge Bank”) in excess of government insured limits. On March 10, 2023, Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation, and the FDIC was appointed as receiver and Silicon Valley Bank was subsequently transferred into a new entity, SVB Bridge Bank. On March 12, 2023, the U.S. Treasury Department, the Federal Reserve and the FDIC jointly announced enabling actions that fully protect all Silicon Valley Bank depositors’ insured and uninsured deposits, and that such depositors would have access to all of their funds starting March 13, 2023. On March 14, 2023, the Company was able to access its full deposits with SVB Bridge Bank.

Note 6. Revenue Recognition
Contract Balances, Performance Obligations, and Backlog

The following table provides information about receivables and liabilities from contracts with customers (in thousands):
 March 31, 2023 July 1, 2022
Contract Balances  
Accounts receivable, net$88,458  $73,168 
Contract Assets$63,344  $45,857 
Capitalized commissions$2,231 $2,341 
Contract Liabilities  
Advance payments and unearned revenue$40,348  $33,740 
Unearned revenue, long-term$7,628  $8,920 
Capitalized commissions are classified as current and long term and included in Other current assets and Other assets, respectively. Significant changes in contract balances may arise as a result of recognition over time for services, transfer of control for equipment, and periodic payments (both in arrears and in advance).
From time to time, we may experience unforeseen events that could result in a change to the scope or price associated with an arrangement. When such events occur, we update the transaction price and measure of progress for the performance obligation and recognize the change as a cumulative catch-up to revenue. Because of the nature and type of contracts we engage in, the timeframe to completion and satisfaction of current and future performance obligations can shift; however, this will have no impact on our future obligation to bill and collect.
As of March 31, 2023, we had $48.0 million in advance payments and unearned revenue and long-term unearned revenue, of which approximately 20% is expected to be recognized as revenue in the remainder of fiscal 2023 and the balance thereafter. During the three and nine months ended March 31, 2023 we recognized $5.0 million and $16.9 million, respectively, of revenue which was included in advance payments and unearned revenue at July 1, 2022.
Remaining Performance Obligations
The aggregate amount of transaction price allocated to our unsatisfied (or partially unsatisfied) performance obligations was approximately $111.8 million at March 31, 2023. Of this amount, we expect to recognize approximately 50% as revenue during the next 12 months, with the remaining amount to be recognized as revenue within two to five years.
Note 7. Segment and Geographic Information
We operate in one reportable business segment: the design, manufacturing, and sale of a range of wireless networking products, solutions, and services. Our financial performance is regularly reviewed by our chief operating decision maker who is our Chief Executive Officer (“CEO”).
19



We report revenue by region and country based on the location where our customers accept delivery of our products and services. Revenue by region for the three and nine months ended March 31, 2023 and April 1, 2022 was as follows:
 Three Months EndedNine Months Ended
(In thousands)March 31,
2023
April 1,
2022
March 31,
2023
April 1,
2022
North America
$46,064 $49,042 $146,961 $151,025 
Africa and the Middle East19,235 13,123 44,354 37,360 
Europe3,871 2,898 13,705 8,509 
Latin America and Asia Pacific14,310 9,453 50,394 28,644 
Total revenue
$83,480 $74,516 $255,414 $225,538 
The loss of a significant portion of business from any significant customers could adversely affect our unaudited condensed consolidated financial statements.
Customers accounting for 10% or more of our total revenue were as follows:
Three Months EndedNine Months Ended
March 31,
2023
April 1,
2022
March 31,
2023
April 1,
2022
Motorola Solutions, Inc.*12.0 %*13.0 %
Mobile Telephone Networks Group (MTN Group)12.0 %13.0 %*10.0 %
*Less than 10.0%
Customer accounting for 10% or more of our accounts receivable were as follows:
March 31, 2023July 1, 2022
Mobile Telephone Networks Group (MTN Group)16.0 %17.0 %

Note 8. Equity
Stock Repurchase Program
In November 2021 our Board of Directors approved a stock repurchase program to purchase up to $10.0 million of our common stock. As of March 31, 2023, $8.0 million remains available and we may choose to suspend or discontinue the repurchase program at any time.
During the first nine months of fiscal 2023, we did not repurchase any shares of our common stock in the open market.

Stock Incentive Programs
As of March 31, 2023, we have a stock incentive plan for our employees and non-employee directors, the 2018 Incentive Plan (the “2018 Plan”). The 2018 Plan provides for the issuance of share-based awards in the form of stock options, stock appreciation rights, restricted stock awards and units, and performance share awards and units.
Under the 2018 Plan, option exercise prices are equal to the fair market value of our common stock on the date the options are granted using our closing stock price. After vesting, options generally may be exercised within seven years after the date of grant.
Restricted stock units are not transferable until vested and the restrictions lapse upon the achievement of continued employment or service over a specified time period. Restricted stock units issued to employees generally vest three years from the date of grant (three-year cliff or annually over three years). Restricted stock units issued to non-executive board members generally vest on the day before the next annual stockholders’ meeting.
Vesting of performance share awards and units is subject to the achievement of predetermined financial performance criteria and continued employment through the end of the applicable period. Market-based stock units vest upon meeting certain predetermined share price performance criteria and continued employment through the end of the applicable period.
20



During the nine months ended March 31, 2023, we granted 74,827 restricted stock units, 49,321 market-based stock units and 110,945 stock options to purchase shares of our common stock.
Total compensation expense for share-based awards included in our unaudited condensed consolidated statements of operations was as follows:
Three Months EndedNine Months Ended
(In thousands)March 31,
2023
April 1,
2022
March 31,
2023
April 1,
2022
By Expense Category:
Cost of revenues$125 $