0001049521-22-000067 | 10-Q | XBRL Viewer

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Shareholders' Equity (Details)		3 Months Ended
Shareholders' Equity (Details)	Jun. 24, 2022	Oct. 01, 2021	Sep. 30, 2022 $ / shares	Jul. 01, 2022 $ / shares	Dec. 27, 2021 $ / shares
Equity [Abstract]
Common stock, par value (usd per share)			$ 0.01	$ 0.01
Class of Stock [Line Items]
Common stock, par value (usd per share)			$ 0.01	$ 0.01
Common Stock
Equity [Abstract]
Common stock, par value (usd per share)					$ 0.01
Class of Stock [Line Items]
Common stock, par value (usd per share)					0.01
Common Stock Ownership Percentage	0.10	0.075
Series A Preferred Stock
Equity [Abstract]
Common stock, par value (usd per share)					0.01
Class of Stock [Line Items]
Common stock, par value (usd per share)					$ 0.01
Common Stock Ownership Percentage	0.20	0.10

Stock-Based Compensation - Summary of Nonvested Restricted Stock (Details) - Restricted Stock shares in Thousands	3 Months Ended
	Sep. 30, 2022 $ / shares shares
Number of Shares
Beginning Balance (in shares) \| shares	2,305
Granted (in shares) \| shares	69
Vested (in shares) \| shares	(418)
Forfeited (in shares) \| shares	(43)
Ending Balance (in shares) \| shares	1,913
Weighted Average Grant Date Fair Value
Beginning Balance (usd per share) \| $ / shares	$ 57.47
Granted (usd per share) \| $ / shares	54.16
Vested (usd per share) \| $ / shares	66.02
Forfeited (usd per share) \| $ / shares	57.66
Ending Balance (usd per share) \| $ / shares	$ 55.80

Operating Segment, Geographic Information and Platform - Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2022	Oct. 01, 2021
Revenue from External Customer [Line Items]
Net revenues	$ 227,579	$ 225,013
Airborne
Revenue from External Customer [Line Items]
Net revenues	118,350	116,564
Land
Revenue from External Customer [Line Items]
Net revenues	33,932	35,857
Naval
Revenue from External Customer [Line Items]
Net revenues	33,735	39,977
Other
Revenue from External Customer [Line Items]
Net revenues	$ 41,562	$ 32,615

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

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+ Details

Employee Benefit Plan (Details) - USD ($) $ in Thousands	3 Months Ended
Employee Benefit Plan (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Oct. 01, 2021
Defined Benefit Plan Disclosure [Line Items]
Pension benefit plan, net of tax	$ 48	$ 48
Net periodic benefit cost	221	$ 269
Expected employer contributions	$ 1,093
Defined contribution plan, employer matching contribution, percent of employees' gross pay	6.00%	3.00%
Deferred compensation arrangement with individual, compensation expense	$ 443
Share-based matching contributions on defined contribution plan	3,680	$ 0
Defined contribution plan, employer discretionary contribution amount, cash payment		$ 2,111
Foreign Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan, funded (unfunded) status of plan	$ 4,476

Operating Segment, Geographic Information and Significant Customers - Narrative (Details)	3 Months Ended
	Sep. 30, 2022 segment
Segment Reporting [Abstract]
Number of operating segments	1
Number of Reportable Segments	1

Restructuring (Tables)

3 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

Expenses by Reportable Segment for Restructuring Plans


	Severance & Related
Balance at July 1, 2022	$	4,722
Restructuring charges	204

Cash paid	(3,853)

Balance at September 30, 2022	$	1,073

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Oct. 01, 2021
Income Tax Disclosure [Abstract]
Income tax (benefit) expense	$ (1,022)	$ (441)
Loss before income taxes	(15,357)	(7,581)
Discreet Tax Provision	715	$ 1,611
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	$ 521

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

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+ Details

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Jul. 01, 2022
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 2,058	$ 2,074
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	1,000,000	1,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	85,000,000	85,000,000
Common stock, shares issued (shares)	56,180,255	55,679,747
Common stock, shares outstanding (shares)	56,180,255	55,679,747

Derivatives	3 Months Ended
Derivatives	Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivatives	Derivatives The Company utilizes interest rate derivatives to mitigate interest rate exposure with respect to its financing arrangements. On September 7, 2022, the Company entered into an interest rate Swap (the “initial Swap”) with JP Morgan Chase Bank, N.A. (“JPMorgan”) for a notional amount of $300,000 in order to fix the interest rate associated with a portion of the total $511,500 existing borrowings on the Revolver. The initial Swap agreement was designated and qualified for hedge accounting treatment as a cash flow hedge. The initial Swap matures on February 28, 2027, coterminous with the maturity of the Revolver. The initial Swap established a fixed interest rate on the first $300,000 of the Company's outstanding borrowings against the Revolver obligation at 3.25%. On September 29, 2022, the Company terminated the initial Swap. At the time of termination, the fair value of the initial Swap was an asset of $5,995. The Company received the cash settlement of $5,995 and these proceeds are classified within Operating Activities of the Consolidated Statements of Cash Flows. Following the termination of the initial Swap the Company entered a new Swap agreement (“the Swap”) on September 29, 2022 with JPMorgan. The Swap fixes $300,000 of the total $511,500 existing borrowings of outstanding borrowings under the Revolver at a rate of 3.79%. As of September 30, 2022, the fair value of the hedge was an asset of $69 and is included within Other non-current assets in the Company's Consolidated Balance Sheets. The market risk associated with the Company’s derivative instrument is the result of interest rate movements that are expected to offset the market risk of the underlying arrangement. The counterparty to the Swap is JPMorgan. Based on the credit ratings of the Company’s counterparty as of September 30, 2022, nonperformance is not perceived to be a material risk. Furthermore, none of the Company’s derivatives are subject to collateral or other security arrangements and none contain provisions that are dependent on the Company’s credit ratings from any credit rating agency. While the contract or notional amounts of derivative financial instruments provide one measure of the volume of these transactions, they do not represent the amount of the Company’s exposure to credit risk. The amounts potentially subject to credit risk (arising from the possible inability of the counterparty to meet the terms of their contracts) are generally limited to the amounts, if any, by which the counterparty obligations under the contracts exceed the obligations of the Company to the counterparty. As a result of the above considerations, the Company does not consider the risk of counterparty default to be significant.

Restructuring - Expenses by Reportable Segment for Restructuring Plans (Details) - Severance & Related $ in Thousands	3 Months Ended
	Sep. 30, 2022 USD ($)
Restructuring Reserve [Roll Forward]
Balance at July 1, 2022	$ 4,722
Restructuring charges	204
Cash paid	(3,853)
Balance at September 30, 2022	$ 1,073

Summary of Significant Accounting Policies - Basic and Diluted Weighted Average Shares Outstanding (Details) - shares shares in Thousands	3 Months Ended
	Sep. 30, 2022	Oct. 01, 2021
Earnings Per Share [Abstract]
Basic weighted-average shares outstanding (in shares)	55,931	55,376
Effect of dilutive equity instruments (in shares)	0	0
Diluted weighted-average shares outstanding (in shares)	55,931	55,376
Antidilutive securities excluded from computation of earnings per share (in shares)	416	474

Employee Benefit Plan	3 Months Ended
Employee Benefit Plan	Sep. 30, 2022
Retirement Benefits [Abstract]
Employee Benefit Plan	Employee Benefit Plan PENSION PLAN The Company maintains a defined benefit pension plan (the “Plan”) for its Swiss employees, which is administered by an independent pension fund. The Plan is mandated by Swiss law and meets the criteria for a defined benefit plan under ASC 715, Compensation—Retirement Benefits (“ASC 715”), because participants of the Plan are entitled to a defined rate of return on contributions made. The independent pension fund is a multi-employer plan with unrestricted joint liability for all participating companies for which the Plan’s overfunding or underfunding is allocated to each participating company based on an allocation key determined by the Plan. The Company recognizes a net asset or liability for the Plan equal to the difference between the projected benefit obligation of the Plan and the fair value of the Plan’s assets as required by ASC 715. The funded status may vary from year to year due to changes in the fair value of the Plan’s assets and variations on the underlying assumptions of the projected benefit obligation of the Plan. The Plan's funded status at September 30, 2022 was a net liability of $4,476, which is recorded in Other non-current liabilities on the Consolidated Balance Sheet. The Company recorded a net gain of $48 in AOCL during the first quarter ended September 30, 2022 and October 1, 2021. The Company recognized net periodic benefit costs of $221 and $269 associated with the Plan for the first quarters ended September 30, 2022 and October 1, 2021, respectively. The Company's total expected employer contributions to the Plan during fiscal 2023 are $1,093. 401(k) Plan The Company maintains a qualified 401(k) plan (the “401(k) Plan”) for its U.S. employees. Effective in the first quarter of fiscal 2023, the Company increased the rate of its matching contributions from 3% to 6% of participants' eligible annual compensation and changed the form of these contributions from cash to Company stock. The Company may also make optional contributions to the plan for any plan year at its discretion. The Company had $443 of capitalized stock-based 401(k) matching compensation expense on the Consolidated Balance Sheet for the period ended September 30, 2022. Stock-based 401(k) matching compensation cost is measured based on the value of the matching amount and is recognized as expense as incurred. During the first quarter ended September 30, 2022, the Company recognized share-based matching contributions related to the 401(k) plan of $3,680 as compared to $2,111 of cash match during the first quarter ended October 1, 2021.

- Definition

The entire disclosure for retirement benefits.

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+ Details

Description of Business	3 Months Ended
Description of Business	Sep. 30, 2022
Accounting Policies [Abstract]
Description of Business	Description of Business Mercury Systems, Inc. is a technology company that delivers commercial innovation to rapidly transform the global aerospace and defense industry. Headquartered in Andover, Massachusetts, the Company's end-to-end processing platform enables a broad range of aerospace and defense programs, optimized for mission success in some of the most challenging and demanding environments. Processing technologies that comprise the Company's platform include signal solutions, display, software applications, networking, storage and secure processing. The Company's innovative solutions are mission-ready, trusted and secure, software-defined and open and modular (the Company's differentiators), to meet customers’ most-pressing high-tech needs, including those specific to the defense community. Investors and others should note that the Company announces material financial information using its website (www.mrcy.com), Securities and Exchange Commission (“SEC”) filings, press releases, public conference calls, webcasts, and social media, including Twitter (twitter.com/mrcy and twitter.com/mrcy_CEO) and LinkedIn (www.linkedin.com/company/mercury-systems). Therefore, the Company encourages investors and others interested in Mercury to review the information the Company posts on the social media and other communication channels listed on its website.

Debt	3 Months Ended
Debt	Sep. 30, 2022
Debt Disclosure [Abstract]
Debt	Debt REVOLVING CREDIT FACILITY On February 28, 2022, the Company amended the Revolver to increase and extend the borrowing capacity to a $1,100,000, 5-year revolving credit line, with the maturity extended to February 28, 2027. As of September 30, 2022, the Company's outstanding balance of unamortized deferred financing costs was $4,229, which is being amortized to Other expense, net in the Consolidated Statements of Operations and Comprehensive Loss on a straight line basis over the term of the Revolver. As of September 30, 2022, the Company was in compliance with all covenants and conditions under the Revolver and there were outstanding borrowings of $511,500 against the Revolver, resulting in interest expense of $4,547 for the first quarter ended September 30, 2022. There were outstanding letters of credit of $963 as of September 30, 2022.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Inventory (Tables)

3 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Inventory

Inventory was comprised of the following:


	As of
		September 30, 2022		July 1, 2022
Raw materials		$	189,139	$	178,410
Work in process		67,696		64,287
Finished goods		30,743		27,642
Total		$	287,578	$	270,339

Operating Segment, Geographic Information and Significant Customers (Tables)

3 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Geographic Distribution of Revenues and Long Lived Assets from Continuing Operations

The geographic distribution of the Company’s revenues as determined by country in which the Company's legal subsidiary is domiciled is summarized as follows:


	U.S.		Europe		Asia Pacific		Eliminations		Total
FIRST QUARTER ENDED SEPTEMBER 30, 2022
Net revenues to unaffiliated customers	$	218,822	$	8,752	$	5	$	—	$	227,579
Inter-geographic revenues	147		204		—		(351)		—
Net revenues	$	218,969	$	8,956	$	5	$	(351)	$	227,579
FIRST QUARTER ENDED OCTOBER 1, 2021
Net revenues to unaffiliated customers	$	213,741	$	11,187	$	85	$	—	$	225,013
Inter-geographic revenues	1,559		729		—		(2,288)		—
Net revenues	$	215,300	$	11,916	$	85	$	(2,288)	$	225,013

The following table presents the Company's net revenue by end user for the periods presented:


	First Quarters Ended
	September 30, 2022		October 1, 2021
Domestic(1)	$	205,830	$	189,248
International/Foreign Military Sales(2)	21,749		35,765
Total Net Revenue	$	227,579	$	225,013

(1) Domestic revenues consist of sales where the end user is within the U.S., as well as sales to prime defense contractor customers where the ultimate end user location is not defined.

(2) International/Foreign Military Sales consist of sales to U.S. prime defense contractor customers where the end user is outside the U.S., foreign military sales through the U.S. government and direct sales to non-U.S. based customers intended for end use outside of the U.S.

The following table presents the Company's net revenue by end application for the periods presented:


	First Quarters Ended
	September 30, 2022		October 1, 2021
Radar(1)	$	53,408	$	58,904
Electronic Warfare(2)	35,089		33,941
Other Sensor & Effector(3)	21,203		31,442
Total Sensor & Effector	109,700		124,287
C4I(4)	95,131		83,401
Other(5)	22,748		17,325
Total Net Revenue	$	227,579	$	225,013

(1) Radar includes end-use applications where radio frequency signals are utilized to detect, track and identify objects.

(2) Electronic Warfare includes end-use applications comprising the offensive and defensive use of the electromagnetic spectrum.

(3) Other Sensor and Effector products include all Sensor and Effector end markets other than Radar and Electronic Warfare.

(4) C4I includes rugged secure rackmount servers that are designed to drive the most powerful military processing applications.

(5) Other products include all component and other sales where the end use is not specified.

The following table presents the Company's net revenue by product grouping for the periods presented:


	First Quarters Ended
	September 30, 2022		October 1, 2021
Components(1)	$	31,918	$	35,065
Modules and Sub-assemblies(2)	55,802		34,899
Integrated Subsystems(3)	139,859		155,049
Total Net Revenue	$	227,579	$	225,013

(1) Components represent the basic building blocks of an electronic system. They generally perform a single function such as switching, storing or converting electronic signals. Some examples include power amplifiers and limiters, switches, oscillators, filters, equalizers, digital and analog converters, chips, MMICs (monolithic microwave integrated circuits) and memory and storage devices.

(2) Modules and sub-assemblies combine multiple components to serve a range of complex functions, including processing, networking and graphics display. Typically delivered as computer boards or other packaging, modules and sub-assemblies are usually designed using open standards to provide interoperability when integrated in a subsystem. Examples of modules and sub-assemblies include embedded processing boards, switched fabrics and boards for high-speed input/output, digital receivers, graphics and video, along with multi-chip modules, integrated radio frequency and microwave multi-function assemblies and radio frequency tuners and transceivers.

(3) Integrated subsystems bring components, modules and/or sub-assemblies into one system, enabled with software. Subsystems are typically, but not always, integrated within an open standards-based chassis and often feature interconnect technologies to enable communication between disparate systems. Spares and replacement modules and sub-assemblies are provided for use with subsystems sold by the Company. The Company’s subsystems are deployed in sensor processing, aviation and mission computing and C4I applications.

The following table presents the Company's net revenue by platform for the periods presented:


	First Quarters Ended
	September 30, 2022		October 1, 2021
Airborne(1)	$	118,350	$	116,564
Land(2)	33,932		35,857
Naval(3)	33,735		39,977
Other(4)	41,562		32,615
Total Net Revenues	$	227,579	$	225,013

(1) Airborne platform includes products that relate to personnel, equipment or pieces of equipment designed for airborne applications.

(2) Land platform includes products that relate to fixed or mobile equipment, or pieces of equipment for personnel, weapon systems, vehicles and support elements operating on land.

(3) Naval platform includes products that relate to personnel, equipment or pieces of equipment designed for naval operations.

(4) All platforms other than Airborne, Land or Naval.

The geographic distribution of the Company’s identifiable long-lived assets is summarized as follows:


	U.S.		Europe		Asia Pacific		Eliminations		Total
September 30, 2022	$	121,636	$	4,277	$	—	$	—	$	125,913
July 1, 2022	$	122,712	$	4,476	$	3	$	—	$	127,191

Customers Comprising Ten Percent or More Revenues

Customers comprising 10% or more of the Company’s revenues for the periods shown are as follows:


	First Quarters Ended
	September 30, 2022		October 1, 2021
Lockheed Martin Corporation	16	%	13	%
Raytheon Technologies	13	%	14	%
U.S. Navy	12	%	17	%
Northrop Grumman	10	%	*

	51	%	44	%

* Indicates that the amount is less than 10% of the Company's revenue for the respective period.

Operating Segment, Geographic Information and Significant Customers - Geographic Distribution of Revenues and Long Lived Assets from Continuing Operations (Details) $ in Thousands	3 Months Ended
	Sep. 30, 2022 USD ($) segment	Oct. 01, 2021 USD ($)	Jul. 01, 2022 USD ($)
Segment Reporting [Abstract]
Number of operating segments \| segment	1
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	$ 227,579	$ 225,013
Identifiable long-lived assets	125,913		$ 127,191
Components
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	31,918	35,065
Modules and Sub-assemblies
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	55,802	34,899
Integrated Subsystems
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	139,859	155,049
Total Sensor & Effector
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	109,700	124,287
Radar
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	53,408	58,904
Electronic Warfare
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	35,089	33,941
Other Sensor & Effector
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	21,203	31,442
C4I
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	95,131	83,401
Other End Applications
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	22,748	17,325
Domestic
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	205,830	189,248
International/Foreign Military Sales
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	21,749	35,765
US
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	218,822	213,741
Europe
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	8,752	11,187
Asia Pacific
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	5	85
Reportable Geographical Components \| US
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	218,969	215,300
Identifiable long-lived assets	121,636		122,712
Reportable Geographical Components \| Europe
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	8,956	11,916
Identifiable long-lived assets	4,277		4,476
Reportable Geographical Components \| Asia Pacific
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	5	85
Identifiable long-lived assets	0		3
Geography Eliminations
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	(351)	(2,288)
Identifiable long-lived assets	0		$ 0
Geography Eliminations \| US
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	147	1,559
Geography Eliminations \| Europe
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	204	729
Geography Eliminations \| Asia Pacific
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenues	$ 0	$ 0

Commitments And Contingencies (Details) - USD ($) $ in Thousands	Jun. 23, 2021	Sep. 30, 2022
Embedded Reps of America, LLC Legal Claim
Long-term Purchase Commitment [Line Items]
Damages sought, value	$ 9,000
Non-cancelable purchase commitments
Long-term Purchase Commitment [Line Items]
Purchase commitments for less than one year		$ 150,032

Derivatives (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 29, 2022	Jul. 01, 2022
Derivative [Line Items]
Derivative, Notional Amount	$ 300,000
Derivative, Fixed Interest Rate	3.25%
Long-term debt	$ 511,500		$ 451,500
Swap Agreement
Derivative [Line Items]
Derivative, Notional Amount		$ 300,000
Derivative, Fixed Interest Rate		3.79%
Swap
Derivative [Line Items]
Derivative Asset		$ 5,995

Fair Value of Financial Instruments (Details) - Fair Value, Measurements, Recurring - Fair Value $ in Thousands	Sep. 30, 2022 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurement disclosure	$ 69
Interest Rate Swap \| Swap Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurement disclosure	69
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurement disclosure	0
Level 1 \| Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurement disclosure	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurement disclosure	69
Level 2 \| Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurement disclosure	69
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurement disclosure	0
Level 3 \| Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurement disclosure	$ 0

Stock-Based Compensation - Additional Information (Details) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended
	Oct. 28, 2020	Sep. 30, 2022	Jul. 01, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocation of recognized period costs, capitalized amount		$ 1,104	$ 1,229
Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for issuance under stock incentive plan (in shares)	500	2,300
Shares available for future grant (in shares)		313
Purchase price as a percentage of the lesser of the market value of such shares at either the beginning or the end of each nine-month offering period		85.00%
Percentage of employee compensation that may be uses to purchase common stock through payroll deductions, maximum		10.00%
2018 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for issuance under stock incentive plan (in shares)		7,862
Shares available for future grant (in shares)		281,000
Number of additional shares authorized	3,000
2005 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant (in shares)		948
Number of additional shares authorized	2,000
2005 Stock Incentive Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of stock option		7 years

Debt (Details) - USD ($)		3 Months Ended
Debt (Details) - USD ($)	Feb. 28, 2022	Sep. 30, 2022	Oct. 01, 2021	Jul. 01, 2022
Debt Instrument [Line Items]
Long-term debt		$ 511,500,000		$ 451,500,000
Interest expense		4,547,000	$ 595,000
Amount of outstanding letter of credit		963,000
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 1,100,000,000
Term of revolving credit facility	5 years
Term Loan
Debt Instrument [Line Items]
Debt issuance costs		$ 4,229,000

Acquisitions (Tables)

3 Months Ended

Sep. 30, 2022

Business Combinations [Abstract]

Schedule of the Net Purchase Price and Fair Values of Assets and Liabilities Acquired

The following table presents the net purchase price and the fair values of the assets and liabilities of Atlanta Micro on a preliminary basis:


	Amounts
Consideration transferred
Cash paid at closing	$	91,438

Working capital and net debt adjustment	(416)
Less cash acquired	(1,782)
Net purchase price	$	89,240

Estimated fair value of tangible assets acquired and liabilities assumed
Cash	$	1,782
Accounts receivable	1,568
Inventory	4,475
Fixed assets	547
Other current and non-current assets	2,043
Accounts payable	(529)
Accrued expenses	(865)
Other current and non-current liabilities	(11,084)
Estimated fair value of net tangible assets acquired	(2,063)
Estimated fair value of identifiable intangible assets	34,980
Estimated goodwill	58,105
Estimated fair value of net assets acquired	91,022
Less cash acquired	(1,782)
Net purchase price	$	89,240

The following table presents the net purchase price and the fair values of the assets and liabilities of Avalex on a preliminary basis:


	Amounts
Consideration transferred
Cash paid at closing	$	157,367
Working capital and net debt adjustment	(1,034)
Less cash acquired	(2,188)
Net purchase price	$	154,145

Estimated fair value of tangible assets acquired and liabilities assumed
Cash	$	2,188
Accounts receivable	5,363
Inventory	7,141
Fixed assets	1,245
Other current and non-current assets	5,236
Accounts payable	(1,700)
Accrued expenses	(1,421)
Other current and non-current liabilities	(4,788)
Estimated fair value of net tangible assets acquired	13,264
Estimated fair value of identifiable intangible assets	61,360
Goodwill	81,709
Estimated fair value of net assets acquired	156,333
Less cash acquired	(2,188)
Net purchase price	$	154,145

Stock-Based Compensation (Tables)

3 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Summary of Nonvested Restricted Stock

The following table summarizes the status of the Company’s non-vested restricted stock awards and deferred stock awards since July 1, 2022:


	Non-vested Restricted Stock Awards
	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding at July 1, 2022	2,305	$	57.47
Granted	69	54.16
Vested	(418)	66.02
Forfeited	(43)	57.66
Outstanding at September 30, 2022	1,913	$	55.80

Stock Based Compensation Expenses

The following table presents share-based compensation expenses included in the Company’s Consolidated Statements of Operations and Comprehensive Loss:


	First Quarters Ended
	September 30, 2022		October 1, 2021
Cost of revenues	$	799	$	559
Selling, general and administrative	4,878		7,561
Research and development	1,572		1,407
Stock-based compensation expense before tax	7,249		9,527
Income taxes	(1,957)		(2,477)
Stock-based compensation expense, net of income taxes	$	5,292	$	7,050

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies LEGAL CLAIMS The Company is subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of business. Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to any matters currently pending against the Company and intends to defend itself vigorously. The outcome of these matters, individually and in the aggregate, is not expected to have a material impact on the Company's cash flows, results of operations, or financial position. In June 2021, Embedded Reps of America, LLC (“ERA”), a former sales representative, and James Mazzola, a principal of ERA, filed for binding arbitration related to the termination of ERA’s sales representative agreement raising multiple claims that aggregate to approximately $9,000 in direct damages, with treble damages requested on a number of those claims. ERA was a sales representative of Themis Computer (“Themis”) when Themis was acquired by Mercury. The sales representative agreement provided for termination by either party upon 30 days written notice with ERA entitled to commissions for orders obtained by ERA with product shipment occurring prior to termination. The Company responded to the complaint in July 2021, and an arbitration proceeding was scheduled for September 2022. Final motions in the arbitration proceeding were submitted in late October 2022 and oral arguments are scheduled for early November 2022. The Company anticipates that the arbitrator will make a ruling within 30 to 60 days of the oral arguments. The Company believes the claims in the complaint are without merit and intends to continue to defend itself vigorously. In December 2021, counsel for National Technical Systems, Inc. (“NTS”) sent the Company an environmental demand letter pursuant to Massachusetts General Laws Chapter 21E, Section 4A, and CERCLA 42 U.S.C. Section 9601, related to a site that NTS formerly owned at 533 Main Street, Acton, Massachusetts. NTS received a Notice of Responsibility from the Massachusetts Department of Environmental Protection (“MassDEP”) alleging trichloroethene, freon and 1,4-dioxane contamination in the groundwater emanating from NTS’s former site. NTS alleges in its demand letter that the operations of a predecessor company to Mercury that was acquired in the Company’s acquisition of the Microsemi carve-out business that once owned and operated a facility at 531 Main Street, Acton, Massachusetts contributed to the groundwater contamination. NTS is seeking payment by the Company of NTS’s costs for any required environmental remediation. In April 2022, the Company engaged in a meet and confer session with NTS pursuant to Massachusetts General Laws Chapter 21E, Section 4A to discuss the status of the environmental review performed by NTS and its licensed site professional. In addition, in November 2021, the Company responded to a request for information from MassDEP regarding the detection of PFAS (per- and polyfluoroakyl substances) in the Acton, Massachusetts Water District’s Conant public water supply wells near the former facility at 531 Main Street, Acton, Massachusetts at a level above the standard that MassDEP published for PFAS in October 2020. It is too early to determine what responsibility, if any, the Company may have for these matters. INDEMNIFICATION OBLIGATIONS The Company’s standard product sales and license agreements entered into in the ordinary course of business typically contain an indemnification provision pursuant to which the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with any patent, copyright or other intellectual property infringement claim by any third-party with respect to the Company’s products. Such provisions generally survive termination or expiration of the agreements. The potential amount of future payments the Company could be required to make under these indemnification provisions is, in some instances, unlimited. PURCHASE COMMITMENTS As of September 30, 2022, the Company has entered into non-cancelable purchase commitments for certain inventory components and services used in its normal operations. The purchase commitments covered by these agreements are for less than one year and aggregate to $150,032. OTHER As part of the Company's strategy for growth, the Company continues to explore acquisitions or strategic alliances. The associated acquisition costs incurred in the form of professional fees and services may be material to the future periods in which they occur, regardless of whether the acquisition is ultimately completed. The Company may elect from time to time to purchase and subsequently retire shares of common stock in order to settle employees’ tax liabilities associated with vesting of a restricted stock award or exercise of stock options. These transactions would be treated as a use of cash in financing activities in the Company's Consolidated Statements of Cash Flows.

Goodwill

3 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

In accordance with FASB ASC 350, Intangibles-Goodwill and Other (“ASC 350”), the Company determines its reporting units based upon whether discrete financial information is available, if management regularly reviews the operating results of the component, the nature of the products offered to customers and the market characteristics of each reporting unit. A reporting unit is considered to be an operating segment or one level below an operating segment also known as a component. Component level financial information is reviewed by management across two divisions: Processing and Microelectronics. Accordingly, these were determined to be the Company's reporting units.

The following table sets forth the changes in the carrying amount of goodwill for the first quarter ended September 30, 2022:


	Total
Balance at July 1, 2022	$	937,880









Goodwill adjustment for the Avalex acquisition	4
Balance at September 30, 2022	$	937,884

The Company performs its annual goodwill impairment test in the fourth quarter of each fiscal year.

Acquisitions - Narrative (Details) - USD ($)				3 Months Ended
Acquisitions - Narrative (Details) - USD ($)	Mar. 28, 2022	Nov. 29, 2021	Nov. 05, 2021	Sep. 30, 2022	Jul. 01, 2022
Business Acquisition [Line Items]
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred	$ 58
Estimated goodwill				$ 937,884,000	$ 937,880,000
Goodwill, amortization period				15 years
Atlanta Micro
Business Acquisition [Line Items]
Total consideration		$ 90,000,000
Estimated fair value of identifiable intangible assets		34,980,000
Estimated goodwill		58,105,000
Atlanta Micro \| Customer Relationships
Business Acquisition [Line Items]
Finite-lived intangible assets acquired		$ 27,310,000	$ 41,880,000
Useful life of acquired assets		20 years	9 years
Atlanta Micro \| Developed Technology
Business Acquisition [Line Items]
Finite-lived intangible assets acquired		$ 7,260,000	$ 14,430,000
Useful life of acquired assets		8 years	7 years
Atlanta Micro \| Backlog
Business Acquisition [Line Items]
Finite-lived intangible assets acquired		$ 410,000	$ 5,050,000
Useful life of acquired assets		2 years	1 year
Avalex
Business Acquisition [Line Items]
Total consideration			$ 155,000,000
Estimated fair value of identifiable intangible assets			61,360,000
Estimated goodwill			81,709,000	$ 78,717,000
Post-closing adjustments			$ 151,000

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Basic and Diluted Weighted Average Shares Outstanding

Weighted-average shares were calculated as follows:


	First Quarters Ended
	September 30, 2022	October 1, 2021
Basic weighted-average shares outstanding	55,931	55,376
Effect of dilutive equity instruments	—	—
Diluted weighted-average shares outstanding	55,931	55,376

Fair Value Measures and Disclosures (Tables)

3 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Summary of Financial Assets Measured at Fair Value


	Fair Value Measurements
	September 30, 2022		Level 1		Level 2		Level 3
Assets:



Interest rate swap	$	69	$	—	$	69	$	—

Total	$	69	$	—	$	69	$	—

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared by the Company in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America for interim financial information and with the instructions to the Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in annual consolidated financial statements have been condensed or omitted pursuant to those rules and regulations; however, in the opinion of management the financial information reflects all adjustments, consisting of adjustments of a normal recurring nature, necessary for fair presentation. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the fiscal year ended July 1, 2022 which are contained in the Company’s Annual Report on Form 10-K filed with the SEC on August 16, 2022. The results for the first quarter ended September 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation

Use of Estimates

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Business Combinations

BUSINESS COMBINATIONS

The Company utilizes the acquisition method of accounting under ASC 805, Business Combinations, (“ASC 805”), for all transactions and events in which it obtains control over one or more other businesses, to recognize the fair value of all assets and liabilities acquired, even if less than one hundred percent ownership is acquired, and in establishing the acquisition date fair value as the measurement date for all assets and liabilities assumed. The Company also utilizes ASC 805 for the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in business combinations.

Foreign Currency

FOREIGN CURRENCY

Local currencies are the functional currency for the Company’s subsidiaries in Switzerland, the United Kingdom, France, Japan, Spain and Canada. The accounts of foreign subsidiaries are translated using exchange rates in effect at period-end for assets and liabilities and at average exchange rates during the period for results of operations. The related translation adjustments are reported in Accumulated other comprehensive income (loss) (“AOCI”) in shareholders’ equity. Gains (losses) resulting from non-U.S. currency transactions are included in Other expense, net in the Consolidated Statements of Operations and Comprehensive Loss and were immaterial for all periods presented.

Revenue Recognition

REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, (“ASC 606”). Revenues are derived from the sales of products that are grouped into one of the following three categories: (i) components; (ii) modules and sub-assemblies; and (iii) integrated subsystems. The Company also generates revenues from the performance of services, including systems engineering support, consulting, maintenance and other support, testing and installation. Each promised good or service within a contract is accounted for separately under the guidance of ASC 606 if they are distinct. Promised goods or services not meeting the criteria for being a distinct performance obligation are bundled into a single performance obligation with other goods or services that together meet the criteria for being distinct. The appropriate allocation of the transaction price and recognition of revenue is then determined for the bundled performance obligation.

Revenue recognized at a point in time generally relates to contracts that include a combination of components, modules and sub-assemblies, integrated subsystems and related system integration or other services. Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 37% and 47% of revenues for the first quarters ended September 30, 2022 and October 1, 2021, respectively.

The Company also engages in over time contracts for development, production and service activities and recognizes revenue for performance obligations over time. These over time contracts involve the design, development, manufacture, or modification of complex modules and sub-assemblies or integrated subsystems and related services. Over time contracts include both fixed-price and cost reimbursable contracts. The Company’s cost reimbursable contracts typically include cost-plus fixed fee and time and material contracts.

Total revenue recognized over time was 63% and 53% of total revenues for the first quarters ended September 30, 2022 and October 1, 2021, respectively.

The Company generally does not provide its customers with rights of product return other than those related to assurance warranty provisions that permit repair or replacement of defective goods over a period of 12 to 36 months. The Company accrues for anticipated warranty costs upon product shipment. The Company does not consider activities related to such assurance warranties, if any, to be a separate performance obligation. The Company does offer separately priced extended warranties which generally range from 12 to 36 months that are treated as separate performance obligations. The transaction price allocated to extended warranties is recognized over time in proportion to the costs expected to be incurred in satisfying the obligations under the contract.

The Company's contracts generally do not include significant financing components. The Company's over time contracts may include milestone payments, which align the payment schedule with the progress towards completion on the performance obligation. Otherwise, the Company's contracts are predicated on payment upon completion of the performance obligation. On certain contracts, the Company may be entitled to receive an advance payment, which is not considered a significant financing component because most contracts have a duration of approximately two years on average and it is used to facilitate inventory demands at the onset of a contract and to safeguard the Company from the failure of the other party to abide by some or all of their obligations under the contract.

All revenues are reported net of government assessed taxes (e.g., sales taxes or value-added taxes). Refer to Note M for disaggregation of revenue for the period.

Contract balances result from the timing of revenue recognized, billings and cash collections resulting in the generation of contract assets and liabilities. Contract assets represent revenue recognized in excess of amounts invoiced to the customer and the right to payment is not subject to the passage of time. Instead, while the Company has an enforceable right to payment as progress is made over performance obligations, billings to customers are generally predicated on (i) completion of defined milestones, (ii) monthly costs incurred or (iii) final delivery of goods or services. Contract assets are presented as Unbilled receivables and costs in excess of billings on the Company’s Consolidated Balance Sheets. Contract liabilities consist of deferred product revenue, billings in excess of revenues, deferred service revenue and customer advances. Deferred product revenue represents amounts that have been invoiced to customers, but are not yet recognizable as revenue because the Company has not satisfied its performance obligations under the contract. Billings in excess of revenues represents milestone billing contracts where the billings of the contract exceed recognized revenues. Deferred service revenue primarily represents amounts invoiced to customers for annual maintenance contracts or extended warranty contracts, which are recognized over time in proportion to the costs expected to be incurred in satisfying the obligations under the contract. Customer advances represent deposits received from customers on an order. Contract liabilities are included in deferred revenue as well as other non-current liabilities on the Company’s Consolidated Balance Sheets. Contract balances are reported in a net position on a contract-by-contract basis.

Accounts Receivables

ACCOUNTS RECEIVABLE

Accounts receivable, net, represents amounts that have been billed and are currently due from customers. The Company maintains an allowance for credit losses to provide for the estimated amount of receivables that will not be collected. The Company provides credit to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended as necessary. The allowance is based upon an assessment of the customer's credit worthiness, reasonable forecasts about the future, history with the customer, and the age of the receivable balance. The Company typically invoices a customer upon shipment of the product (or completion of a service) for contracts where revenue is recognized at a point in time. For contracts where revenue is recognized over time, the invoicing events are typically based on specified performance obligation deliverables or milestone events, or quantifiable measures of performance.

Weighted-Average Shares

WEIGHTED-AVERAGE SHARES

Weighted-average shares were calculated as follows:


	First Quarters Ended
	September 30, 2022	October 1, 2021
Basic weighted-average shares outstanding	55,931	55,376
Effect of dilutive equity instruments	—	—
Diluted weighted-average shares outstanding	55,931	55,376

Equity instruments to purchase 416 and 474 shares of common stock were not included in the calculation of diluted net earnings per share for the first quarters ended September 30, 2022 and October 1, 2021, respectively, because the equity instruments were anti-dilutive.

Recently Adopted Accounting Pronouncements

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, an amendment of the FASB Accounting Standards Codification. The amendments in this ASU address diversity and inconsistency related to the recognition and measurement of contract assets and contract liabilities acquired in a business combination and require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. Under current U.S. GAAP, an acquirer generally recognizes assets and liabilities assumed in a business combination, including contract assets and liabilities arising from revenue contracts with customers, at fair value on the acquisition date. ASU No. 2021-08 will result in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under Topic 606. This ASU is effective for fiscal years beginning after December 15, 2022, with early adoption permitted, including adoption in an interim period. The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

Stock-Based Compensation

STOCK INCENTIVE PLANS

At September 30, 2022, the aggregate number of shares authorized for issuance under the Company’s Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”) is 7,862 shares, including 3,000 shares approved by the Company's shareholders on October 28, 2020 and 2,000 shares approved for future grant under the 2018 Plan by the Company's shareholders on October 26, 2022. The 2018 Plan shares available for issuance also include 948 shares rolled into the 2018 Plan that were available for future grant under the Company’s 2005 Stock Incentive Plan, as amended and restated (the “2005 Plan”). The 2018 Plan replaced the 2005 Plan. The shares authorized for issuance under the 2018 Plan will continue to be increased by any future cancellations, forfeitures or terminations (other than by exercise) of awards under the 2005 Plan. The foregoing does not affect any outstanding awards under the 2005 Plan, which remain in full force and effect in accordance with their terms. The 2018 Plan provides for the grant of non-qualified and incentive stock options, restricted stock, stock appreciation rights and deferred stock awards to employees and non-employees. Stock options must be granted with an exercise price of not less than 100% of the fair value of the Company’s common stock on the date of grant and the options generally have a term of seven years. There were 281 available shares for future grant under the 2018 Plan at September 30, 2022.

As part of the Company's ongoing annual equity grant program for employees, the Company grants performance-based restricted stock awards to certain executives and employees pursuant to the 2018 Plan. Performance awards vest based on the requisite service period subject to the achievement of specific financial performance targets. Based on the performance targets, some of these awards require graded vesting which results in more rapid expense recognition compared to traditional time-based vesting over the same vesting period. The Company monitors the probability of achieving the performance targets on a quarterly basis and may adjust periodic stock compensation expense accordingly based on its determination of the likelihood for reaching targets. The performance targets generally include the achievement of internal performance targets in relation to a peer group of companies.

EMPLOYEE STOCK PURCHASE PLAN

At September 30, 2022, the aggregate number of shares authorized for issuance under the Company’s 1997 Employee Stock Purchase Plan, as amended and restated (“ESPP”), is 2,300 shares, including 500 shares approved by the Company's shareholders on October 28, 2020. Under the ESPP, rights are granted to purchase shares of common stock at 85% of the lesser of the market value of such shares at either the beginning or the end of each six-month offering period. The ESPP permits employees to purchase common stock through payroll deductions, which may not exceed 10% of an employee’s compensation as defined in the ESPP. There were no shares issued under the ESPP during the first quarters ended September 30, 2022 and October 1, 2021, respectively. Shares available for future purchase under the ESPP totaled 313 at September 30, 2022.

Operating Segment, Geographic Information and Significant Customers

3 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Operating Segment, Geographic Information and Significant Customers

Operating segments are defined as components of an enterprise evaluated regularly by the Company's chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. During the first quarter of fiscal 2022, the Company announced its 1MPACT value creation initiative to promote scale as the organization continues to grow. The Company evaluated this internal reorganization under FASB ASC 280, Segment Reporting (“ASC 280”) to determine whether this change has impacted the Company's single operating and reportable segment. The Company concluded this change had no effect given the CODM continues to evaluate and manage the Company on the basis of one operating and reportable segment. The Company utilized the management approach for determining its operating segment in accordance with ASC 280.

The geographic distribution of the Company’s revenues as determined by country in which the Company's legal subsidiary is domiciled is summarized as follows:


	U.S.		Europe		Asia Pacific		Eliminations		Total
FIRST QUARTER ENDED SEPTEMBER 30, 2022
Net revenues to unaffiliated customers	$	218,822	$	8,752	$	5	$	—	$	227,579
Inter-geographic revenues	147		204		—		(351)		—
Net revenues	$	218,969	$	8,956	$	5	$	(351)	$	227,579
FIRST QUARTER ENDED OCTOBER 1, 2021
Net revenues to unaffiliated customers	$	213,741	$	11,187	$	85	$	—	$	225,013
Inter-geographic revenues	1,559		729		—		(2,288)		—
Net revenues	$	215,300	$	11,916	$	85	$	(2,288)	$	225,013

The Company offers a broad family of products designed to meet the full range of requirements in compute-intensive, signal processing, image processing and command and control applications. To maintain a competitive advantage, the Company seeks to leverage technology investments across multiple product lines and product solutions.

The Company’s products are typically compute-intensive and require extremely high bandwidth and high throughput. These systems often must also meet significant SWaP constraints for use in aircraft, unmanned aerial vehicles, ships and other platforms and be ruggedized for use in harsh environments. The Company's products transform the massive streams of digital data created in these applications into usable information in real time. The systems can scale from a few processors to thousands of processors.

In recent years, the Company completed a series of acquisitions that changed its technological capabilities, applications and end markets. As these acquisitions and changes occurred, the Company's proportion of revenue derived from the sale of components in different technological areas, and modules, sub-assemblies and integrated subsystems which combine technologies into more complex diverse products has shifted. The following tables present revenue consistent with the Company's strategy of expanding its technological capabilities and program content. As additional information related to the Company’s products by end user, application, product grouping and/or platform is attained, the categorization of these products can vary over time. When this occurs, the Company reclassifies revenue by end user, application, product grouping and/or platform for prior periods. Such reclassifications typically do not materially change the underlying trends of results within each revenue category.

The following table presents the Company's net revenue by end user for the periods presented:


	First Quarters Ended
	September 30, 2022		October 1, 2021
Domestic(1)	$	205,830	$	189,248
International/Foreign Military Sales(2)	21,749		35,765
Total Net Revenue	$	227,579	$	225,013

(1) Domestic revenues consist of sales where the end user is within the U.S., as well as sales to prime defense contractor customers where the ultimate end user location is not defined.

The following table presents the Company's net revenue by end application for the periods presented:


	First Quarters Ended
	September 30, 2022		October 1, 2021
Radar(1)	$	53,408	$	58,904
Electronic Warfare(2)	35,089		33,941
Other Sensor & Effector(3)	21,203		31,442
Total Sensor & Effector	109,700		124,287
C4I(4)	95,131		83,401
Other(5)	22,748		17,325
Total Net Revenue	$	227,579	$	225,013

(1) Radar includes end-use applications where radio frequency signals are utilized to detect, track and identify objects.

(2) Electronic Warfare includes end-use applications comprising the offensive and defensive use of the electromagnetic spectrum.

(3) Other Sensor and Effector products include all Sensor and Effector end markets other than Radar and Electronic Warfare.

(4) C4I includes rugged secure rackmount servers that are designed to drive the most powerful military processing applications.

(5) Other products include all component and other sales where the end use is not specified.

The following table presents the Company's net revenue by product grouping for the periods presented:


	First Quarters Ended
	September 30, 2022		October 1, 2021
Components(1)	$	31,918	$	35,065
Modules and Sub-assemblies(2)	55,802		34,899
Integrated Subsystems(3)	139,859		155,049
Total Net Revenue	$	227,579	$	225,013

The following table presents the Company's net revenue by platform for the periods presented:


	First Quarters Ended
	September 30, 2022		October 1, 2021
Airborne(1)	$	118,350	$	116,564
Land(2)	33,932		35,857
Naval(3)	33,735		39,977
Other(4)	41,562		32,615
Total Net Revenues	$	227,579	$	225,013

(1) Airborne platform includes products that relate to personnel, equipment or pieces of equipment designed for airborne applications.

(2) Land platform includes products that relate to fixed or mobile equipment, or pieces of equipment for personnel, weapon systems, vehicles and support elements operating on land.

(3) Naval platform includes products that relate to personnel, equipment or pieces of equipment designed for naval operations.

(4) All platforms other than Airborne, Land or Naval.

The geographic distribution of the Company’s identifiable long-lived assets is summarized as follows:


	U.S.		Europe		Asia Pacific		Eliminations		Total
September 30, 2022	$	121,636	$	4,277	$	—	$	—	$	125,913
July 1, 2022	$	122,712	$	4,476	$	3	$	—	$	127,191

Identifiable long-lived assets exclude right-of-use assets, goodwill, and intangible assets.

Customers comprising 10% or more of the Company’s revenues for the periods shown are as follows:


	First Quarters Ended
	September 30, 2022		October 1, 2021
Lockheed Martin Corporation	16	%	13	%
Raytheon Technologies	13	%	14	%
U.S. Navy	12	%	17	%
Northrop Grumman	10	%	*

	51	%	44	%

* Indicates that the amount is less than 10% of the Company's revenue for the respective period.

While the Company typically has customers from which it derives 10% or more of its revenue, the sales to each of these customers are spread across multiple programs and platforms. There were no programs comprising 10% or more of the Company's revenues for the first quarters ended September 30, 2022 and October 1, 2021.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Paragraph 21
-Subparagraph (a)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 32
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-Paragraph 26
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 32
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Operating Segment, Geographic Information and Significant Customers - Customers Comprising Ten Percent or more Revenues (Details) - Customer Concentration Risk - Sales Revenue, Net	3 Months Ended
	Sep. 30, 2022	Oct. 01, 2021
Raytheon Company
Revenue, Major Customer [Line Items]
Concentration risk, percentage	16.00%	13.00%
Lockheed Martin Corporation
Revenue, Major Customer [Line Items]
Concentration risk, percentage	13.00%	14.00%
Three Major Customers, Cumulative
Revenue, Major Customer [Line Items]
Concentration risk, percentage	51.00%	44.00%
U.S. Navy
Revenue, Major Customer [Line Items]
Concentration risk, percentage	12.00%	17.00%
Northrop Grumman Corporation [Member]
Revenue, Major Customer [Line Items]
Concentration risk, percentage	10.00%

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Jul. 01, 2022
Current assets:
Cash and cash equivalents	$ 51,981	$ 65,654
Accounts receivable, net of allowance for credit losses of $2,058 and $2,074 at September 30, 2022 and July 1, 2022, respectively	164,210	144,494
Unbilled receivables and costs in excess of billings	330,495	303,356
Inventory	287,578	270,339
Prepaid income taxes	9,743	7,503
Prepaid expenses and other current assets	34,798	23,906
Total current assets	878,805	815,252
Property and equipment, net	125,913	127,191
Estimated goodwill	937,884	937,880
Intangible assets, net	336,968	351,538
Operating lease right-of-use assets, net	63,738	66,366
Other non-current assets	5,734	6,188
Total assets	2,349,042	2,304,415
Current liabilities:
Accounts payable	106,645	98,673
Accrued expenses	28,204	34,954
Accrued compensation	23,989	44,813
Deferred revenues and customer advances	23,168	15,487
Total current liabilities	182,006	193,927
Deferred income taxes	31,552	32,398
Income taxes payable	8,591	9,112
Long-term debt	511,500	451,500
Operating lease liabilities	67,261	69,888
Other non-current liabilities	9,202	10,405
Total liabilities	810,112	767,230
Commitments and contingencies (Note N)
Shareholders' equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued or outstanding	0	0
Common stock, $0.01 par value; 85,000,000 shares authorized; 56,180,255 and 55,679,747 shares issued and outstanding at September 30, 2022 and July 1, 2022, respectively	562	557
Additional paid-in capital	1,156,501	1,145,323
Retained earnings	371,439	385,774
Accumulated other comprehensive income	10,428	5,531
Total shareholders’ equity	1,538,930	1,537,185
Total liabilities and shareholders’ equity	$ 2,349,042	$ 2,304,415

Income Taxes	3 Months Ended
Income Taxes	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company recorded an income tax benefit of $1,022 and $441 on a loss before income taxes of $15,357 and $7,581 for the first quarters ended September 30, 2022 and October 1, 2021, respectively. During the first quarters ended September 30, 2022 and October 1, 2021, the Company recognized a discrete tax provision of $1,611 and $715 related to stock compensation shortfalls. The effective tax rate for the first quarters ended September 30, 2022 and October 1, 2021 differed from the Federal statutory rate primarily due to Federal and state research and development credits, non-deductible compensation, stock compensation shortfalls and state taxes. During the first quarter ended September 30, 2022, the Company released $521 of reserves for unrecognized tax positions as a result of an income tax audit. On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 into law which contained provisions that include a 15% corporate minimum tax effective for the Company in fiscal 2024 and a 1% excise tax on stock buybacks effective January 1, 2023. The Company expects the impact of these provisions to be immaterial.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 17
-Subparagraph (b)
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-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 2
-Subparagraph (a)
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
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-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Subsequent Events	3 Months Ended
Subsequent Events	Sep. 30, 2022
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsThe Company has evaluated subsequent events from the date of the Consolidated Balance Sheet through the date the consolidated financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.

Goodwill (Tables)

3 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill

The following table sets forth the changes in the carrying amount of goodwill for the first quarter ended September 30, 2022:


	Total
Balance at July 1, 2022	$	937,880









Goodwill adjustment for the Avalex acquisition	4
Balance at September 30, 2022	$	937,884

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
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-Paragraph 1
-Subparagraph (h)
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Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
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+ Details

Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jul. 01, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 189,139	$ 178,410
Work in process	67,696	64,287
Finished goods	30,743	27,642
Total	$ 287,578	$ 270,339

Cover - shares	3 Months Ended
Cover - shares	Sep. 30, 2022	Oct. 31, 2022
Document Documentand Entity Information [Abstract]
Entity Incorporation, State or Country Code	MA
Document Transition Report	false
Document Quarterly Report	true
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2022
Entity File Number	0-23599
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Registrant Name	MERCURY SYSTEMS, INC.
City Area Code	978
Local Phone Number	256-1300
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Central Index Key	0001049521
Current Fiscal Year End Date	--06-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		57,982,430
Entity Tax Identification Number	04-2741391
Entity Address, Address Line One	50 MINUTEMAN ROAD
Entity Address, Postal Zip Code	01810
Entity Address, City or Town	ANDOVER
Entity Address, State or Province	MA
Entity Small Business	false
Entity Emerging Growth Company	false
Title of 12(g) Security	Common Stock, par value $0.01 per share
Trading Symbol	MRCY
Security Exchange Name	NASDAQ

Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2022	Oct. 01, 2021
Income Statement [Abstract]
Net revenues	$ 227,579	$ 225,013
Cost of revenues	149,484	136,604
Gross margin	78,095	88,409
Operating expenses:
Selling, general and administrative	38,943	36,956
Research and development	27,766	28,882
Amortization of intangible assets	14,574	13,734
Restructuring and other charges	1,508	12,274
Acquisition costs and other related expenses	2,498	2,138
Total operating expenses	85,289	93,984
Loss from operations	(7,194)	(5,575)
Interest income	29	9
Interest expense	(4,547)	(595)
Other expense, net	(3,645)	(1,420)
Loss before income taxes	(15,357)	(7,581)
Income tax benefit	(1,022)	(441)
Net loss	$ (14,335)	$ (7,140)
Basic net (loss) earnings per share (in dollars per share)	$ (0.26)	$ (0.13)
Diluted net (loss) earnings per share (in dollars per share)	$ (0.26)	$ (0.13)
Weighted-average shares outstanding:
Basic (in shares)	55,931	55,376
Diluted (in shares)	55,931	55,376
Comprehensive loss:
Net loss	$ (14,335)	$ (7,140)
Change in fair value of derivative instruments, net of tax	4,420	0
Foreign currency translation adjustments	429	244
Pension benefit plan, net of tax	48	48
Total other comprehensive income, net of tax	4,897	292
Total comprehensive loss	$ (9,438)	$ (6,848)

Goodwill (Details) $ in Thousands	3 Months Ended
Goodwill (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Goodwill [Roll Forward]
Beginning Balance	$ 937,880
Ending Balance	937,884
Avalex
Goodwill [Roll Forward]
Goodwill adjustment	4
Ending Balance	$ 78,717

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Fair Value of Financial Instruments

3 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments


	Fair Value Measurements
	September 30, 2022		Level 1		Level 2		Level 3
Assets:



Interest rate swap	$	69	$	—	$	69	$	—

Total	$	69	$	—	$	69	$	—

The carrying values of cash and cash equivalents, including money market funds, restricted cash, accounts receivable and payable, contract assets and liabilities and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The Company determined the carrying value of long-term debt approximated fair value due to variable interest rates charged on the borrowings, which reprice frequently. During the first quarter ended September 30, 2022, the Company entered into an interest rate hedging agreement (the “Swap”). Refer to Note O for further information regarding the Swap. The fair value of the Swap is estimated using a discounted cash flow analysis based on the contractual terms of the derivative, leveraging observable inputs other than quoted prices, such as interest rates. As of September 30, 2022 the fair value of the Swap was an asset of $69 and is included within other non-current assets in the Company's Consolidated Balance Sheets.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Acquisitions

3 Months Ended

Sep. 30, 2022

Business Combinations [Abstract]

Acquisitions

ATLANTA MICRO ACQUISITION

On November 29, 2021, the Company acquired Atlanta Micro, Inc. (“Atlanta Micro”) for a purchase price of $90,000, prior to net working capital and net debt adjustments. Based in Norcross, Georgia, Atlanta Micro is a leading designer and manufacturer of high-performance RF modules and components, including advanced monolithic microwave integrated circuits (“MMICs”) which are critical for high-speed data acquisition applications including electronic warfare, radar and weapons. The Company funded the acquisition through the Company's existing revolving credit facility (the “Revolver”). On March 28, 2022, the Company and former owners of Atlanta Micro agreed to post closing adjustments totaling $58, which increased the Company's net purchase price.

The following table presents the net purchase price and the fair values of the assets and liabilities of Atlanta Micro on a preliminary basis:


	Amounts
Consideration transferred
Cash paid at closing	$	91,438

Working capital and net debt adjustment	(416)
Less cash acquired	(1,782)
Net purchase price	$	89,240

Estimated fair value of tangible assets acquired and liabilities assumed
Cash	$	1,782
Accounts receivable	1,568
Inventory	4,475
Fixed assets	547
Other current and non-current assets	2,043
Accounts payable	(529)
Accrued expenses	(865)
Other current and non-current liabilities	(11,084)
Estimated fair value of net tangible assets acquired	(2,063)
Estimated fair value of identifiable intangible assets	34,980
Estimated goodwill	58,105
Estimated fair value of net assets acquired	91,022
Less cash acquired	(1,782)
Net purchase price	$	89,240

The amounts above represent the preliminary fair value estimates as of September 30, 2022 and are subject to subsequent adjustment as the Company obtains additional information during the measurement period and finalizes its fair value estimates. The preliminary identifiable intangible asset estimate includes customer relationships of $27,310 with a useful life of 20 years, completed technology of $7,260 with a useful life of 8 years and backlog of $410 with a useful life of two years. Any subsequent adjustments to these fair value estimates occurring during the measurement period will result in an adjustment to goodwill.

The estimated goodwill of $58,105 largely reflects the potential synergies and expansion of the Company’s offerings across product lines and markets complementary to the Company’s existing products and markets and is not deductible for tax purposes. The goodwill from this acquisition is reported in the Microelectronics reporting unit.

AVALEX ACQUISITION

On September 27, 2021, the Company signed a definitive agreement to acquire Avalex Technologies, LLC. (“Avalex”) for a purchase price of $155,000, prior to net working capital and net debt adjustments. On November 5, 2021, the transaction closed and the Company acquired Avalex. Based in Gulf Breeze, Florida, Avalex is a provider of mission-critical avionics, including rugged displays, integrated communications management systems, digital video recorders and warning systems. The Company funded the acquisition with the Revolver. On March 17, 2022, the Company and former owner of Avalex agreed to post closing adjustments totaling $151, which increased the Company's net purchase price.

The following table presents the net purchase price and the fair values of the assets and liabilities of Avalex on a preliminary basis:


	Amounts
Consideration transferred
Cash paid at closing	$	157,367
Working capital and net debt adjustment	(1,034)
Less cash acquired	(2,188)
Net purchase price	$	154,145

Estimated fair value of tangible assets acquired and liabilities assumed
Cash	$	2,188
Accounts receivable	5,363
Inventory	7,141
Fixed assets	1,245
Other current and non-current assets	5,236
Accounts payable	(1,700)
Accrued expenses	(1,421)
Other current and non-current liabilities	(4,788)
Estimated fair value of net tangible assets acquired	13,264
Estimated fair value of identifiable intangible assets	61,360
Goodwill	81,709
Estimated fair value of net assets acquired	156,333
Less cash acquired	(2,188)
Net purchase price	$	154,145

The amounts above represent the preliminary fair value estimates as of September 30, 2022 and are subject to subsequent adjustment as the Company obtains additional information during the measurement period and finalizes its fair value estimates. The preliminary identifiable intangible asset estimate includes customer relationships of $41,880 with a useful life of 9 years, completed technology of $14,430 with a useful life of 7 years and backlog of $5,050 with a useful life of one year. Any subsequent adjustments to these fair value estimates occurring during the measurement period will result in an adjustment to goodwill.

The estimated goodwill of $81,709 largely reflects the potential synergies and expansion of the Company’s offerings across product lines and markets complementary to the Company’s existing products and markets. The goodwill from this acquisition is reported in the Processing reporting unit. The Company is amortizing the amount over 15 years for tax purposes. As of September 30, 2022, the Company had $78,717 of goodwill deductible for tax purposes.

Stock-Based Compensation - Stock-Based Compensation Expenses (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2022	Oct. 01, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before tax	$ 7,249	$ 9,527
Income taxes	(1,957)	(2,477)
Net compensation expense	5,292	7,050
Cost of revenues
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before tax	799	559
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before tax	4,878	7,561
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before tax	$ 1,572	$ 1,407

Stock-Based Compensation

3 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK INCENTIVE PLANS

EMPLOYEE STOCK PURCHASE PLAN

STOCK AWARD ACTIVITY

The following table summarizes the status of the Company’s non-vested restricted stock awards and deferred stock awards since July 1, 2022:


	Non-vested Restricted Stock Awards
	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding at July 1, 2022	2,305	$	57.47
Granted	69	54.16
Vested	(418)	66.02
Forfeited	(43)	57.66
Outstanding at September 30, 2022	1,913	$	55.80

STOCK-BASED COMPENSATION EXPENSE

The Company recognizes expense for its share-based payment plans in the Consolidated Statements of Operations and Comprehensive Loss in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”). The Company had $1,104 and $1,229 of capitalized stock-based compensation expense on the Consolidated Balance Sheets for the periods ended September 30, 2022 and July 1, 2022, respectively. Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the service period, net of estimated forfeitures.

The following table presents share-based compensation expenses included in the Company’s Consolidated Statements of Operations and Comprehensive Loss:


	First Quarters Ended
	September 30, 2022		October 1, 2021
Cost of revenues	$	799	$	559
Selling, general and administrative	4,878		7,561
Research and development	1,572		1,407
Stock-based compensation expense before tax	7,249		9,527
Income taxes	(1,957)		(2,477)
Stock-based compensation expense, net of income taxes	$	5,292	$	7,050

Restructuring - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2022	Oct. 01, 2021
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	$ 1,508	$ 12,274
Other Members
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	$ 1,304

Restructuring

3 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

Restructuring

During the first quarter ended September 30, 2022, the Company incurred $1,508 of restructuring and other charges. The Company incurs restructuring and other charges in connection with management's decision to undertake certain actions to realign operating expenses through workforce reductions and the closure of certain Company facilities, businesses and product lines. The Company's adjustments reflected in restructuring and other charges are typically related to acquisitions and organizational redesign programs initiated as part of discrete post acquisition integration activities.

Consistent with the Company's definition of restructuring and other charges, 1MPACT is an organizational redesign program initiated on the heels of a series of acquisitions since 2014 rather than a single, discrete acquisition. Since its inception, the Company has selectively engaged with leading consultants to accelerate solution design and implementation for the highest value workstreams. These costs are associated with this discrete transformation initiative and are non-routine and may not be indicative of ongoing results.

Restructuring and other charges primarily related to 1MPACT including $1,304 of third-party consulting costs, as well as $204 of severance costs.

All of the restructuring and other charges are classified as Operating expenses in the Consolidated Statements of Operations and Comprehensive Loss and any remaining severance obligations are expected to be paid within the next twelve months. The restructuring liability is classified as Accrued expenses in the Consolidated Balance Sheets.

The following table presents the detail of charges included in the Company’s liability for restructuring and other charges:


	Severance & Related
Balance at July 1, 2022	$	4,722
Restructuring charges	204

Cash paid	(3,853)

Balance at September 30, 2022	$	1,073

Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

BASIS OF PRESENTATION

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

All references to the first quarter of fiscal 2023 are to the quarter ended September 30, 2022. There were 13 weeks during the first quarters ended September 30, 2022 and October 1, 2021, respectively.

USE OF ESTIMATES

BUSINESS COMBINATIONS

FOREIGN CURRENCY

DERIVATIVES

The Company records the fair value of its derivative financial instruments in its condensed consolidated financial statements in other non-current assets, or other non-current liabilities depending on their net position, regardless of the purpose or intent for holding the derivative contract. Changes in the fair value of the derivative financial instruments are either recognized periodically in earnings or in shareholders’ equity as a component of Other comprehensive income (“OCI”). Changes in the fair value of cash flow hedges that qualify for hedge accounting treatment are recorded in OCI and reclassified into earnings in the same line item on the Consolidated Statements of Operations and Comprehensive Income as the impact of the hedged transaction when the underlying contract matures and, for interest rate exposure derivatives, over the term of the corresponding debt instrument. Changes in the fair values of derivatives not qualifying for hedge accounting are reported in earnings as they occur. All derivatives for the Company qualified for hedge accounting as of September 30, 2022.

REVENUE RECOGNITION

Total revenue recognized over time was 63% and 53% of total revenues for the first quarters ended September 30, 2022 and October 1, 2021, respectively.

All revenues are reported net of government assessed taxes (e.g., sales taxes or value-added taxes). Refer to Note M for disaggregation of revenue for the period.

ACCOUNTS RECEIVABLE

CONTRACT BALANCES

The contract asset balances were $330,495 and $303,356 as of September 30, 2022 and July 1, 2022, respectively. The contract asset balance increased due to growth in revenue recognized under over time contracts as well as industry-wide award delays and supply chain constraints impacting the timing of billing events and cash conversion during the first quarter ended September 30, 2022. The contract liability balances were $23,778 and $15,966 as of September 30, 2022 and July 1, 2022, respectively. The increase was due to the timing of milestone billing events across multiple programs.

Revenue recognized for the first quarter ended September 30, 2022 that was included in the contract liability balance at July 1, 2022 was $4,669. Revenue recognized for the first quarter ended October 1, 2021 that was included in the contract liability balance at July 2, 2021 was $13,137.

REMAINING PERFORMANCE OBLIGATIONS

The Company includes in its computation of remaining performance obligations customer orders for which it has accepted signed sales orders. The definition of remaining performance obligations excludes contracts with original expected durations of less than one year, as well as those contracts that provide the customer with the right to cancel or terminate the order with no substantial penalty, even if the Company’s historical experience indicates the likelihood of cancellation or termination is remote. As of September 30, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was $587,129. The Company expects to recognize approximately 63% of its remaining performance obligations as revenue in the next 12 months and the balance thereafter.

WEIGHTED-AVERAGE SHARES

Weighted-average shares were calculated as follows:


	First Quarters Ended
	September 30, 2022	October 1, 2021
Basic weighted-average shares outstanding	55,931	55,376
Effect of dilutive equity instruments	—	—
Diluted weighted-average shares outstanding	55,931	55,376

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2022	Oct. 01, 2021
Cash flows from operating activities:
Net loss	$ (14,335)	$ (7,140)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	23,701	21,490
Stock-based compensation expense	7,249	9,527
Share-based matching contributions on defined contribution plan	3,680	0
Benefit for deferred income taxes	(814)	(2,171)
Other non-cash items	(1,301)	(1,552)
Cash settlement for termination of interest rate swap	(5,995)	0
Changes in operating assets and liabilities, net of effects of businesses acquired:
Accounts receivable, unbilled receivables, and costs in excess of billings	(47,257)	(9,429)
Inventory	(18,430)	(12,829)
Prepaid income taxes	(2,220)	(11,024)
Prepaid expenses and other current assets	(11,946)	(3,025)
Other non-current assets	2,654	(1,250)
Accounts payable, accrued expenses, and accrued compensation	(17,788)	21,707
Deferred revenues and customer advances	8,270	(5,991)
Income taxes payable	(501)	(4)
Other non-current liabilities	(2,996)	(315)
Net cash used in operating activities	(66,039)	(2,006)
Cash flows from investing activities:
Purchases of property and equipment	(7,328)	(5,377)
Other investing activities	50	(3,237)
Net cash used in investing activities	(7,278)	(8,614)
Net cash provided by (used in) financing activities
Proceeds from issuance of debt	60,000	0
Purchase and retirement of common stock	(63)	(7,316)
Net cash provided by (used in) financing activities	59,937	(7,316)
Effect of exchange rate changes on cash and cash equivalents	(293)	(99)
Net decrease in cash and cash equivalents	(13,673)	(18,035)
Cash and cash equivalents at beginning of period	65,654	113,839
Cash and cash equivalents at end of period	51,981	95,804
Cash paid during the period for:
Interest	3,713	682
Income taxes	4,131	13,373
Non-cash investing activity	$ 507	$ 2,533

Inventory

3 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Inventory

Inventory is stated at the lower of cost (first-in, first-out) or net realizable value, and consists of materials, labor and overhead. On a quarterly basis, the Company uses consistent methodologies to evaluate inventory for net realizable value. Once an item is written down, the value becomes the new inventory cost basis. The Company reduces the value of inventory for excess and obsolete inventory, consisting of on-hand inventory in excess of estimated usage. The excess and obsolete inventory evaluation is based upon assumptions about future demand, historical usage, product mix and possible alternative uses. Inventory was comprised of the following:


	As of
		September 30, 2022		July 1, 2022
Raw materials		$	189,139	$	178,410
Work in process		67,696		64,287
Finished goods		30,743		27,642
Total		$	287,578	$	270,339

Shareholders' Equity	3 Months Ended
Shareholders' Equity	Sep. 30, 2022
Equity [Abstract]
Shareholders' Equity	Shareholders' Equity STOCKHOLDER RIGHTS PLAN On December 27, 2021, the Company's Board of Directors authorized and declared a dividend of one preferred share purchase right (a “Right”), payable on January 10, 2022, for each outstanding share of common stock par value $0.01 per share to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company a unit of Series A Junior Preferred Stock, par value $0.01 per share, of the Company at a designated price per unit, subject to adjustment. The Rights will initially trade with, and will be inseparable from, the shares of common stock. On June 24, 2022, the Company amended the Rights Agreement, dated as of December 27, 2021, to increase the ownership threshold for a person to be an “Acquiring Person” (as defined in the Rights Agreement) from 7.5% of common stock to 10% of common stock (10% of common stock to 20% of common stock in the case of a passive institutional investor). Additional details about the Rights Agreement are contained in the Current Reports on Form 8-K filed by the Company with the SEC on December 29, 2021 and June 24, 2022. On October 26, 2022 the Stockholder Rights Plan expired.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2022	Oct. 01, 2021	Jul. 01, 2022
Significant Accounting Policies [Line Items]
Percentage of revenue recognized	63.00%
Unbilled receivables and costs in excess of billings	$ 330,495		$ 303,356
Contract liability balance	23,778		$ 15,966
Revenue recognized in the contract liability balance	4,669	$ 13,137
Factored accounts receivable	$ 587,129
Minimum
Significant Accounting Policies [Line Items]
Standard warranty period	12 months
Extended warranty period	12 months
Maximum
Significant Accounting Policies [Line Items]
Standard warranty period	36 months
Extended warranty period	36 months
Transferred over Time
Significant Accounting Policies [Line Items]
Percentage of revenue recognized	63.00%	53.00%
Ship and bill
Significant Accounting Policies [Line Items]
Percentage of revenue recognized	37.00%	47.00%

Consolidated Statements of Shareholders' Equity Statement - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income
Beginning balance (in shares) at Jul. 02, 2021		55,241,000
Beginning balance at Jul. 02, 2021	$ 1,484,146	$ 552	$ 1,109,434	$ 374,499	$ (339)
Issuance of common stock under employee stock incentive plans (in shares)		398,000
Issuance of common stock under employee stock incentive plans	0	$ 4	(4)
Purchased and retirement of common stock (in shares)		(138,000)
Issuance of common stock under employee stock purchase plan	(7,316)	$ (1)	(7,315)
Retirement of common stock			9,498
Net loss	(7,140)			(7,140)
Other comprehensive income (loss)	292				292
Ending balance (in shares) at Oct. 01, 2021		55,501,000
Ending balance at Oct. 01, 2021	$ 1,479,480	$ 555	1,111,613	367,359	(47)
Beginning balance (in shares) at Jul. 01, 2022	55,679,747	55,680,000
Beginning balance at Jul. 01, 2022	$ 1,537,185	$ 557	1,145,323	385,774	5,531
Issuance of common stock under employee stock incentive plans (in shares)		418,000
Issuance of common stock under employee stock incentive plans	0	$ 4	(4)
Stock Issued During Period, Shares, Employee Benefit Plan		83,000
Issuance of common stock under defined contribution plan (in shares)	4,123	$ 1	4,122
Purchased and retirement of common stock (in shares)		(1,000)
Issuance of common stock under employee stock purchase plan	(63)	$ 0	(63)
Retirement of common stock			7,123
Net loss	(14,335)			(14,335)
Other comprehensive income (loss)	$ 4,897				4,897
Ending balance (in shares) at Sep. 30, 2022	56,180,255	56,180,000
Ending balance at Sep. 30, 2022	$ 1,538,930	$ 562	$ 1,156,501	$ 371,439	$ 10,428

Acquisitions - Net Purchase Price and Fair Values of Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands	Nov. 29, 2021	Nov. 05, 2021	Sep. 30, 2022	Jul. 01, 2022
Estimated fair value of tangible assets acquired and liabilities assumed
Estimated goodwill			$ 937,884	$ 937,880
Atlanta Micro
Business Combination, Consideration Transferred [Abstract]
Cash paid at closing	$ 91,438
Working capital and net debt adjustment	(416)
Cash Acquired from Acquisition	(1,782)
Net purchase price	89,240
Estimated fair value of tangible assets acquired and liabilities assumed
Cash	1,782
Accounts receivable	1,568
Inventory	4,475
Fixed assets	547
Other current and non-current assets	2,043
Accounts payable	(529)
Accrued expenses	(865)
Other current and non-current liabilities	(11,084)
Estimated fair value of net tangible assets acquired	(2,063)
Estimated fair value of identifiable intangible assets	34,980
Estimated goodwill	58,105
Estimated fair value of net assets acquired	$ 91,022
Avalex
Business Combination, Consideration Transferred [Abstract]
Cash paid at closing		$ 157,367
Working capital and net debt adjustment		(1,034)
Cash Acquired from Acquisition		(2,188)
Net purchase price		154,145
Estimated fair value of tangible assets acquired and liabilities assumed
Cash		2,188
Accounts receivable		5,363
Inventory		7,141
Fixed assets		1,245
Other current and non-current assets		5,236
Accounts payable		(1,700)
Accrued expenses		(1,421)
Other current and non-current liabilities		(4,788)
Estimated fair value of net tangible assets acquired		(13,264)
Estimated fair value of identifiable intangible assets		61,360
Estimated goodwill		81,709	$ 78,717
Estimated fair value of net assets acquired		$ 156,333