Company Quick10K Filing
Infinera
Price5.60 EPS-3
Shares181 P/E-2
MCap1,011 P/FCF-6
Net Debt198 EBIT-426
TEV1,210 TEV/EBIT-3
TTM 2019-09-28, in MM, except price, ratios
10-Q 2020-06-27 Filed 2020-08-06
10-Q 2020-03-28 Filed 2020-05-15
10-K 2019-12-28 Filed 2020-03-04
10-Q 2019-09-28 Filed 2019-11-12
10-Q 2019-06-29 Filed 2019-08-08
10-Q 2019-03-30 Filed 2019-05-09
10-K 2018-12-29 Filed 2019-03-14
10-Q 2018-09-29 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-08
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-30 Filed 2018-02-28
10-Q 2017-09-30 Filed 2017-11-08
10-Q 2017-07-01 Filed 2017-08-08
10-Q 2017-04-01 Filed 2017-05-10
10-K 2016-12-31 Filed 2017-02-23
10-Q 2016-09-24 Filed 2016-11-01
10-Q 2016-06-25 Filed 2016-08-02
10-Q 2016-03-26 Filed 2016-05-04
10-K 2015-12-26 Filed 2016-02-23
10-Q 2015-09-26 Filed 2015-11-05
10-Q 2015-06-27 Filed 2015-07-31
10-Q 2015-03-28 Filed 2015-05-04
10-K 2014-12-27 Filed 2015-02-18
10-Q 2014-09-27 Filed 2014-10-29
10-Q 2014-06-28 Filed 2014-08-01
10-Q 2014-03-29 Filed 2014-04-30
10-K 2013-12-28 Filed 2014-02-21
10-Q 2013-09-28 Filed 2013-11-01
10-Q 2013-06-29 Filed 2013-08-05
10-Q 2013-03-30 Filed 2013-05-07
10-K 2012-12-29 Filed 2013-03-05
10-Q 2012-09-29 Filed 2012-11-06
10-Q 2012-06-30 Filed 2012-08-07
10-Q 2012-03-31 Filed 2012-05-07
10-K 2011-12-31 Filed 2012-03-06
10-Q 2011-09-24 Filed 2011-11-01
10-Q 2011-06-25 Filed 2011-08-02
10-Q 2011-03-26 Filed 2011-05-03
10-K 2010-12-25 Filed 2011-03-01
10-Q 2010-09-25 Filed 2010-11-02
10-Q 2010-06-26 Filed 2010-08-03
10-Q 2010-03-27 Filed 2010-05-05
10-K 2009-12-26 Filed 2010-03-01
8-K 2020-08-10 Amend Bylaw, Exhibits
8-K 2020-08-05 Earnings, Exhibits
8-K 2020-08-05 Officers, Exhibits
8-K 2020-05-29
8-K 2020-05-21
8-K 2020-05-11
8-K 2020-04-30
8-K 2020-04-13
8-K 2020-03-04
8-K 2020-03-04
8-K 2020-02-25
8-K 2020-01-03
8-K 2019-12-23
8-K 2019-11-12
8-K 2019-11-05
8-K 2019-08-20
8-K 2019-08-07
8-K 2019-08-01
8-K 2019-08-01
8-K 2019-06-03
8-K 2019-05-23
8-K 2019-05-08
8-K 2019-03-04
8-K 2019-02-21
8-K 2019-01-24
8-K 2018-12-10
8-K 2018-11-06
8-K 2018-10-01
8-K 2018-09-06
8-K 2018-08-07
8-K 2018-07-23
8-K 2018-05-24
8-K 2018-05-09
8-K 2018-02-15
8-K 2018-02-07

INFN 10Q Quarterly Report

Part I. Financial Information
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-31.1 infn-06272020exhibit311.htm
EX-31.2 infn-06272020exhibit312.htm
EX-32.1 infn-06272020exhibit321.htm

Infinera Earnings 2020-06-27

Balance SheetIncome StatementCash Flow
1.91.51.10.80.40.02012201420172020
Assets, Equity
0.40.30.20.0-0.1-0.22012201420172020
Rev, G Profit, Net Income
0.40.30.20.0-0.1-0.22012201420172020
Ops, Inv, Fin

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 27, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number: 001-33486
INFINERA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
 
77-0560433
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
140 Caspian Court
Sunnyvale, CA 94089
(Address of principal executive offices, including zip code)
(408) 572-5200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of exchange on which registered
Common stock, par value $0.001 per share
 
INFN
 
The Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  
Large accelerated filer
 
Accelerated Filer

Non-accelerated filer
 
Smaller reporting company
 
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of August 3, 2020, 187,385,376 shares of the registrant’s Common Stock, $0.001 par value, were issued and outstanding.
 



INFINERA CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE FISCAL QUARTER ENDED JUNE 27, 2020
INDEX
 
 
 
Page
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 6.
 
 
 
 



PART I. FINANCIAL INFORMATION
 

Item 1.
Condensed Consolidated Financial Statements (Unaudited)
INFINERA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par values)
(Unaudited)
 
June 27,
2020
 
December 28,
2019
ASSETS
 
 
 
Current assets:
 
 
 
Cash
$
202,782

 
$
109,201

Short-term restricted cash
4,307

 
4,339

Accounts receivable, net of allowance for doubtful accounts of $3,183 in 2020 and $4,005 in 2019
289,107

 
349,645

Inventory
288,159

 
340,429

Prepaid expenses and other current assets
168,052

 
139,217

Total current assets
952,407

 
942,831

Property, plant and equipment, net
145,110

 
150,793

Operating lease right-of-use assets
60,798

 
68,081

Intangible assets
143,762

 
170,346

Goodwill
251,050

 
249,848

Long-term restricted cash
17,108

 
19,257

Other non-current assets
25,623

 
27,182

Total assets
$
1,595,858

 
$
1,628,338

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
195,947

 
$
273,397

Accrued expenses and other current liabilities
172,100

 
193,168

Accrued compensation and related benefits
52,674

 
92,221

Short-term debt, net
27,726

 
31,673

Accrued warranty
17,674

 
21,107

Deferred revenue
95,932

 
103,753

Total current liabilities
562,053

 
715,319

Long-term debt, net
508,459

 
323,678

Long-term financing lease obligations
1,869

 
2,394

Accrued warranty, non-current
19,409

 
22,241

Deferred revenue, non-current
31,300

 
36,067

Deferred tax liability
5,564

 
8,700

Operating lease liabilities
63,819

 
64,210

Other long-term liabilities
73,531

 
69,194

Commitments and contingencies (Note 13)

 

Stockholders’ equity:
 
 
 
Preferred stock, $0.001 par value
   Authorized shares – 25,000 and no shares issued and outstanding

 

Common stock, $0.001 par value
Authorized shares – 500,000 as of June 27, 2020 and December 28, 2019
Issued and outstanding shares – 187,299 as of June 27, 2020 and 181,134 as of December 28, 2019
187

 
181

Additional paid-in capital
1,838,677

 
1,740,884

Accumulated other comprehensive loss
(27,566
)
 
(34,639
)
Accumulated deficit
(1,481,444
)
 
(1,319,891
)
Total stockholders' equity
329,854

 
386,535

Total liabilities and stockholders’ equity
$
1,595,858

 
$
1,628,338

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


INFINERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 
Three Months Ended
 
Six Months Ended
 
June 27,
2020
 
June 29,
2019
 
June 27,
2020
 
June 29,
2019
Revenue:
 
 
 
 
 
 
 
Product
$
261,227

 
$
226,866

 
$
516,419

 
$
449,873

Services
70,360

 
69,384

 
145,441

 
139,084

Total revenue
331,587

 
296,250

 
661,860

 
588,957

Cost of revenue:
 
 
 
 
 
 
 
Cost of product
186,519

 
177,501

 
388,311

 
335,318

Cost of services
36,599

 
36,831

 
77,294

 
73,507

Amortization of intangible assets
8,721

 
8,098

 
17,349

 
16,350

Acquisition and integration costs
750

 
10,700

 
1,785

 
12,764

Restructuring and related
1,591

 
1,864

 
2,748

 
23,330

Total cost of revenue
234,180

 
234,994

 
487,487

 
461,269

Gross profit
97,407

 
61,256

 
174,373

 
127,688

Operating expenses:

 
 
 
 
 
 
Research and development
67,090

 
73,937

 
135,270

 
147,597

Sales and marketing
31,816

 
37,651

 
68,505

 
77,688

General and administrative
30,101

 
35,672

 
59,721

 
68,716

Amortization of intangible assets
4,585

 
6,745

 
9,140

 
13,802

Acquisition and integration costs
3,344

 
12,164

 
12,566

 
19,298

Restructuring and related
5,097

 
3,471

 
10,677

 
20,659

Total operating expenses
142,033

 
169,640

 
295,879

 
347,760

Loss from operations
(44,626
)
 
(108,384
)
 
(121,506
)
 
(220,072
)
Other income (expense), net:
 
 
 
 
 
 
 
Interest income
54

 
183

 
78

 
949

Interest expense
(12,436
)
 
(7,280
)
 
(21,230
)
 
(14,843
)
Other gain (loss), net
(1,992
)
 
3,210

 
(14,674
)
 
287

Total other income (expense), net
(14,374
)
 
(3,887
)
 
(35,826
)
 
(13,607
)
Loss before income taxes
(59,000
)
 
(112,271
)
 
(157,332
)
 
(233,679
)
Provision for income taxes
2,635

 
1,385

 
3,571

 
1,578

Net loss
$
(61,635
)
 
$
(113,656
)
 
$
(160,903
)
 
$
(235,257
)
Net loss per common share:
 
 
 
 
 
 
 
Basic
$
(0.33
)
 
$
(0.64
)
 
$
(0.88
)
 
$
(1.33
)
Diluted
$
(0.33
)
 
$
(0.64
)
 
$
(0.88
)
 
$
(1.33
)
Weighted average shares used in computing net loss per common share:
 
 
 
 
 
 
 
Basic
185,596

 
178,677

 
183,810

 
177,542

Diluted
185,596

 
178,677

 
183,810

 
177,542

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


INFINERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
 
 
Three Months Ended
 
Six Months Ended
 
June 27,
2020
 
June 29,
2019
 
June 27,
2020
 
June 29,
2019
Net loss
$
(61,635
)
 
$
(113,656
)
 
$
(160,903
)
 
$
(235,257
)
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Change in unrealized gain on available-for-sale investments

 
24

 

 
89

Foreign currency translation adjustment
18,068

 
(1,949
)
 
6,962

 
(7,506
)
Actuarial gain on pension liabilities
505

 
403

 
111

 
481

Net change in accumulated other comprehensive loss
18,573

 
(1,522
)
 
7,073

 
(6,936
)
Comprehensive loss
$
(43,062
)
 
$
(115,178
)
 
$
(153,830
)
 
$
(242,193
)
The accompanying notes are an integral part of these condensed consolidated financial statements.

5


INFINERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
 
 
 
Three Months Ended June 27, 2020
 
 
Common Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Accumulated
Deficit
 
Total Stockholders' Equity
 
 
Shares
 
Amount
 
Balance at March 28, 2020
 
183,198

 
$
183

 
$
1,827,484

 
$
(46,139
)
 
$
(1,419,809
)
 
$
361,719

Restricted stock units released
 
4,323

 
4

 

 

 

 
4

Shares withheld for tax obligations
 
(222
)
 

 
(1,319
)
 

 

 
(1,319
)
Stock-based compensation
 

 

 
12,512

 

 

 
12,512

Other comprehensive loss
 

 

 

 
18,573

 

 
18,573

Net loss
 

 

 

 

 
(61,635
)
 
(61,635
)
Balance at June 27, 2020
 
187,299

 
$
187

 
$
1,838,677

 
$
(27,566
)
 
$
(1,481,444
)
 
$
329,854



 
 
Six Months Ended June 27, 2020
 
 
Common Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Accumulated
Deficit
 
Total Stockholders' Equity
 
 
Shares
 
Amount
 
Balance at December 28, 2019
 
181,134

 
$
181

 
$
1,740,884

 
$
(34,639
)
 
$
(1,319,891
)
 
$
386,535

ESPP shares issued
 
1,839

 
2

 
7,392

 

 

 
7,394

Restricted stock units released
 
4,548

 
4

 

 

 

 
4

Shares withheld for tax obligations
 
(222
)
 

 
(1,319
)
 

 

 
(1,319
)
Stock-based compensation
 

 

 
23,923

 

 

 
23,923

Cumulative-effect adjustment from adoption of Topic 326
 

 

 

 

 
(650
)
 
(650
)
Conversion option related to convertible senior notes, net of allocated costs

 

 

 
67,797

 

 

 
67,797

Other comprehensive loss
 

 

 

 
7,073

 

 
7,073

Net loss
 

 

 

 

 
(160,903
)
 
(160,903
)
Balance at June 27, 2020
 
187,299

 
$
187

 
$
1,838,677

 
$
(27,566
)
 
$
(1,481,444
)
 
$
329,854






6


 
 
Three Months Ended June 29, 2019
 
 
Common Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Accumulated
Deficit
 
Total Stockholders' Equity
 
 
Shares
 
Amount
 
Balance at March 30, 2019
 
177,415

 
$
177

 
$
1,702,710

 
$
(30,714
)
 
$
(1,054,874
)
 
$
617,299

Restricted stock units released
 
2,004

 
2

 
(2
)
 

 

 

Shares withheld for tax obligations
 
(80
)
 

 
(354
)
 

 

 
(354
)
Stock-based compensation
 

 

 
13,303

 

 

 
13,303

Other comprehensive loss
 

 

 

 
(1,522
)
 

 
(1,522
)
Net loss
 

 

 

 

 
(113,656
)
 
(113,656
)
Balance at June 29, 2019
 
179,339

 
$
179

 
$
1,715,657

 
$
(32,236
)
 
$
(1,168,530
)
 
$
515,070




 
 
Six Months Ended June 29, 2019
 
 
Common Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Accumulated
Deficit
 
Total Stockholders' Equity
 
 
Shares
 
Amount
 
Balance at December 29, 2018
 
175,452

 
$
175

 
$
1,685,916

 
$
(25,300
)
 
$
(956,970
)
 
703,821

ESPP shares issued
 
1,825

 
2

 
7,738

 

 

 
7,740

Restricted stock units released
 
2,142

 
2

 
(2
)
 

 

 

Shares withheld for tax obligations
 
(80
)
 
 
 
(354
)
 
 
 
 
 
(354
)
Stock-based compensation
 

 

 
22,359

 

 

 
22,359

Cumulative-effect adjustment from adoption of Topic 842
 

 

 

 

 
23,697

 
23,697

Other comprehensive loss
 

 

 

 
(6,936
)
 

 
(6,936
)
Net loss
 

 

 

 

 
(235,257
)
 
(235,257
)
Balance at June 29, 2019
 
179,339

 
$
179

 
$
1,715,657

 
$
(32,236
)
 
$
(1,168,530
)
 
$
515,070




The accompanying notes are an integral part of these condensed consolidated financial statements.


7


INFINERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
Six Months Ended
 
June 27,
2020
 
June 29,
2019
Cash Flows from Operating Activities:
 
 
 
Net loss
$
(160,903
)
 
$
(235,257
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
Depreciation and amortization
51,369

 
62,143

Non-cash restructuring charges and related costs
2,818

 
14,538

Amortization of debt discount and issuance costs
13,016

 
9,245

Operating lease expense
9,873

 
19,913

Stock-based compensation expense
24,479

 
21,760

Other, net
3,001

 
10

Changes in assets and liabilities:
 
 
 
Accounts receivable
53,989

 
55,216

Inventory
50,164

 
(30,640
)
Prepaid expenses and other assets
(26,961
)
 
(30,958
)
Accounts payable
(77,358
)
 
4,726

Accrued liabilities and other expenses
(59,939
)
 
1,604

Deferred revenue
(11,637
)
 
(12,267
)
Net cash used in operating activities
(128,089
)
 
(119,967
)
Cash Flows from Investing Activities:
 
 
 
Proceeds from sale of non-marketable equity investments

 
1,009

Proceeds from maturities of investments

 
25,085

Acquisition of business, net of cash acquired

 
(10,000
)
Purchase of property and equipment, net
(19,002
)
 
(15,784
)
Net cash (used in)/provided by investing activities
(19,002
)
 
310

Cash Flows from Financing Activities:
 
 
 
Proceeds from issuance of 2027 Notes
194,500

 

Proceeds from mortgage payable

 
8,584

Proceeds from revolving line of credit
55,000

 

Repayment of revolving line of credit
(8,000
)
 

Repayment of third party manufacturing funding
(3,960
)
 

Payment of debt issuance cost
(2,073
)
 

Repayment of mortgage payable
(166
)
 
(96
)
Principal payments on financing lease obligations
(922
)
 

Proceeds from issuance of common stock
7,399

 
7,740

Minimum tax withholding paid on behalf of employees for net share settlement
(1,319
)
 
(354
)
Net cash provided by financing activities
240,459

 
15,874

Effect of exchange rate changes on cash and restricted cash
(1,968
)
 
(33
)

8


Net change in cash, cash equivalents and restricted cash
91,400

 
(103,816
)
Cash, cash equivalents and restricted cash at beginning of period
132,797

 
242,337

Cash, cash equivalents and restricted cash at end of period(1)
$
224,197

 
$
138,521

 
 
 
 
Supplemental disclosures of cash flow information:
 
 
 
Cash paid for income taxes, net of refunds
$
(773
)
 
$
13,606

Cash paid for interest
$
7,320

 
$
4,687

Supplemental schedule of non-cash investing and financing activities:
 
 
 
Unpaid debt issuance cost
$
382

 
$

Third-party manufacturer funding for transfer expenses incurred
$

 
$
3,327

Transfer of inventory to fixed assets
$
118

 
$
2,195



(1)     Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:
 
June 27,
2020
 
June 29,
2019
 
 
 
 
 
(In thousands)
Cash and cash equivalents
$
202,782

 
$
109,034

Short-term restricted cash
4,307

 
2,742

Long-term restricted cash
17,108

 
26,745

Total cash, cash equivalents and restricted cash
$
224,197

 
$
138,521



The accompanying notes are an integral part of these condensed consolidated financial statements.

9


INFINERA CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.
Basis of Presentation and Significant Accounting Policies
Basis of Presentation
Infinera Corporation (the “Company”) prepared its interim condensed consolidated financial statements that accompany these notes in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019.
The Company has made certain estimates, assumptions and judgments that can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Significant estimates, assumptions and judgments made by management include revenue recognition, stock-based compensation, employee benefit and pension plans, inventory valuation, accrued warranty, operating lease liabilities, business combinations, fair value measurement of investments and accounting for income taxes. Other less significant estimates, assumptions and judgments made by management include allowances for sales returns, allowances for doubtful accounts, useful life of intangible assets, and property, plant and equipment. Management believes that the estimates and judgments upon which they rely are reasonable based upon information available to them at the time that these estimates and judgments are made. The Company expects uncertainties around its key accounting estimates to continue to evolve depending on the duration and degree of impact associated with the recent outbreak of a novel strain of the coronavirus (“COVID-19”). These estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in the Company's condensed consolidated financial statements.
The interim financial information is unaudited, but reflects all adjustments that are, in management’s opinion, necessary to provide a fair presentation of results for the interim periods presented. All adjustments are of a normal recurring nature. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated.
This interim information should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019.
To date, a few of the Company’s customers have accounted for a significant portion of its revenue. For the three months ended June 27, 2020, one customer accounted for 13% of the Company's total revenue and for the three months ended June 29, 2019, the same customer accounted for 13% of the Company's total revenue. For each of the six months ended June 27, 2020 and June 29, 2019, the same customer accounted for 12% of the Company's total revenue.
Certain reclassifications have been made to prior period balances in order to conform to the current period presentation of the cash flows from operating activities in the condensed consolidated statements of cash flows. Certain other reclassifications have been made to prior period balances in order to conform to the current period presentation of accrued expenses and other current liabilities in Note 8, “Balance Sheet Details” to the Notes to Condensed Consolidated Financial Statements. These reclassifications were not material and had no impact on previously reported net cash used in operating activities for the period ended June 29, 2020 and on the Company's Condensed consolidated Balance sheets for the periods ended June 27, 2020 and December 28, 2019.
There have been no material changes in the Company’s significant accounting policies for the six months ended June 27, 2020 compared to those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019, with the exception of updates to the policy noted below as a result of the adoption of ASU 2016-13 "Financial Instruments-Credit Losses (Topic 326)" ("Topic 326") as of December 29, 2019.
Allowance for doubtful accounts
The Company maintains an allowance for doubtful accounts for estimated credit losses resulting from the inability of its customers to make required payments and reviews the allowance quarterly. The Company determines expected credit losses by performing credit evaluations of its customers' financial condition, establishing both a

10


general reserve and specific reserves for customers in an adverse financial condition and adjusting for its expectations of changes in conditions that may impact the collectability of outstanding receivables. The Company considers a customer's receivable balance past due when the amount is due beyond the credit terms extended. The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, and geographic or country-specific risks. Amounts are written off when receivables are determined to be uncollectible.
2.
Recent Accounting Pronouncements
Accounting Pronouncements Recently Adopted
        
In June 2016, the Financial Accounting Standards Board ("FASB") issued Topic 326, in order to improve financial reporting of expected credit losses on financial instruments and other commitments to extend credit. Topic 326 requires that an entity measure and recognize expected credit losses for financial assets held at amortized cost and replaces the incurred loss impairment methodology in prior U.S. GAAP with a methodology that requires consideration of a broader range of information to estimate credit losses. The Company adopted Topic 326 on a modified retrospective basis in the first quarter of 2020 through a cumulative-effect adjustment at the beginning of the first quarter of 2020 and the impact of the adoption was not material to the Company's consolidated financial statements as credit losses are not expected to be significant based on historical collection trends, the financial condition of the Company’s customers, and external market factors. The Company will continue to actively monitor the impact of the COVID-19 pandemic on expected credit losses.
In August 2018, the FASB issued Accounting Standards Update No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). This update eliminates, adds and modifies certain disclosure requirements for fair value measurements. ASU 2018-13 was effective for the Company in its first quarter of 2020. The Company adopted ASU 2018-13 in the first quarter of 2020 and the impact of the adoption was not material to the Company's consolidated financial statements.
Accounting Pronouncements Not Yet Effective
In March 2020, the FASB issued Accounting Standards Update No. 2020-04 (Topic 848), "Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. The standard was effective upon issuance and may generally be applied through December 31, 2022 to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR. The Company is currently evaluating the impact the adoption of ASU 2020-04 would have on its consolidated financial statements.
In December 2019, FASB issued Accounting Standards Update No. 2019-12, "Simplifying the Accounting for Income Taxes" (“ASU 2019-12”), as part of its simplification initiative. ASU 2019-12 removes certain exceptions from Accounting Standards Codification ("ASC") 740, "Income Taxes" ("ASC 740"), including (i) the exception to the incremental approach for intra period tax allocation when there is a loss from continuing operations and income or a gain from other items such as discontinued operations or other comprehensive income; (ii) the exception to accounting for outside basis differences of equity method investments and foreign subsidiaries; and (iii) the exception to limit tax benefit recognized in interim period in cases when the year-to-date losses exceeds anticipated losses. ASU 2019-12 also simplifies U.S. GAAP in several other areas of ASC 740 such as (i) franchise taxes and other taxes partially based on income; (ii) step-up in tax basis goodwill considered part of a business combination in which the book goodwill was originally recognized or should be considered a separate transaction; (iii) separate financial statements of entities not subject to tax; and (iv) interim recognition of enactment of tax laws or rate changes. ASU 2019-12 is effective for the Company for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2020, with early adoption permitted. The Company elected not to early adopt ASU 2019-12 as of June 27, 2020. The Company is currently evaluating the impact the adoption of ASU 2019-12 would have on its consolidated financial statements.
In August 2018, the FASB issued Accounting Standards Update No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans” (“ASU 2018-14”). This update eliminates, adds and modifies certain

11


disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018-14 is effective for the Company in its first quarter of 2021, with early adoption permitted. The Company is currently evaluating the impact the adoption of ASU 2018-14 would have on its consolidated financial statements.
3.    Leases
The Company has operating leases for real estate and automobiles. The operating lease expense for the three months and six months ended June 27, 2020 was $6.5 million and $15.0 million (including $1.4 million of rent expense due to restructuring resulting in abandonment of certain lease facilities), respectively. The operating lease expense for the three and six months ended June 29, 2019 was $6.7 million and $23.4 million (including $10.2 million of accelerated rent expense due to restructuring resulting in abandonment of certain lease facilities), respectively. Variable lease cost, short-term lease cost and sublease income were immaterial during the three months and six months ended June 27, 2020 and June 29, 2019.
As of June 27, 2020, $17.0 million was included in accrued expenses and other current liabilities and $63.8 million as long-term operating lease liabilities. As of December 28, 2019, $18.1 million was included in accrued expenses and other current liabilities and $64.2 million as long term operating lease liabilities.
The following table presents maturity of lease liabilities under the Company's non-cancelable operating leases as of June 27, 2020 (in thousands):
Remainder of 2020
 
$
13,162

2021
 
19,454

2022
 
16,040

2023
 
12,919

2024
 
10,890

Thereafter
 
36,613

Total lease payments
 
109,078

Less: interest(1)
 
28,245

Present value of lease liabilities
 
$
80,833


(1) Calculated using the interest rate for each lease.
The following table presents supplemental information for the Company's non-cancelable operating leases for the six months ended June 27, 2020 (in thousands, except for weighted average and percentage data):
Weighted average remaining lease term
 
6.89 years

Weighted average discount rate
 
9.12
%
Cash paid for amounts included in the measurement of lease liabilities
 
$
12,919

Operating cash flow from operating leases
 
$
12,919

Leased assets obtained in exchange for new operating lease liabilities
 
$
4,501


Financing Lease Obligations
During the three and six months ended June 27, 2020, there were no new finance lease arrangements. The lease term for existing arrangements range from 3 - 5 years with options to purchase at the end of the term. Finance lease cost for the three months and six months ended June 27, 2020 was approximately $0.2 million and $0.5 million, respectively. Finance lease cost for the for the three and six months ended June 29, 2019 was zero.
As of June 27, 2020, $1.1 million was included in accrued expenses and other current liabilities and $1.9 million as long-term finance lease obligation related to these equipment finance lease arrangements. As of December 28, 2019, $1.4 million was included in accrued expenses and other current liabilities and $2.4 million as a long-term finance lease obligation related to these equipment finance lease arrangements.

12


The following table presents maturity of lease liability under the Company's finance leases as of June 27, 2020 (in thousands):
 
 
 
Remainder of 2020
 
$
646

2021
 
1,210

2022
 
942

2023
 
411

Thereafter
 

Total lease payments
 
3,209

Less: interest
 
236

Present value of lease liabilities
 
$
2,973


The following table presents supplemental information for the Company's finance leases for the six months ended June 27, 2020 (in thousands, except for weighted average and percentage data):
Weighted average remaining lease term
 
2.63 years