SecProbe.io

CORRESP
 1
 filename1.htm

 Document Securities and Exchange Commission March 27, 2025 Page 1 Aviat Networks, Inc. 200 Parker Drive Suite C100A Austin, TX 78728 Phone: +1 408 941 7100 Fax: +1 512 582 4605 March 27, 2025 Attn: Dale Welcome, Hugh West Division of Corporation Finance Office of Manufacturing United States Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549-3561 Re:    Aviat Networks, Inc. Form 10-K for the Fiscal Year Ended June 28, 2024 Filed October 4, 2024 Form 8-K filed February 4, 2025 File No. 001-33278 Dear Mr. Welcome and Mr. West: Set forth below are the responses of Aviat Networks, Inc. (the “ Corporation , ” “ we ,” “ us ” or “ our ”), to the comments received from the staff of the Division of Corporation Finance (the “ Staff ”) of the U.S. Securities and Exchange Commission (the “ Commission ”) by letter dated March 14, 2025, with respect to the Form 10-K for fiscal year ended June 28, 2024 (the “ Form 10-K ”) and Form 8-K filed on February 4, 2025. For your convenience, each response is prefaced by the exact text of the Staff’s corresponding comment in bold, italicized text. All references to page numbers and captions correspond to the Form 10-K unless otherwise specified. Capitalized terms used but not defined in this letter have the meanings ascribed to such terms in the Form 10-K. Form 10-K for the Fiscal Year ended June 28, 2024 Management’s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Estimates Revenue Recognition, page 44 1. We note for certain contracts you recognize revenue based on an over-time recognition model using the cost-input method and certain judgment is required when estimating total contract costs and progress to completion on the over-time arrangements, as well as whether a loss is expected to be incurred on the contract. Please address the following items. A.    Tell us whether you have recognized material favorable or unfavorable changes in estimates with respect to these contracts and provide us the gross amounts of favorable and unfavorable changes recognized during each period presented as part of your response. B.    Tell us the amount of contract losses recognized during each period presented and the status of material loss contracts. C.    Revise your disclosures in future filings to quantify and discuss the gross impacts of changes in contract estimates, including contract losses, during each period presented pursuant to Item 303(b)(3) of Regulation S-K. Securities and Exchange Commission March 27, 2025 Page 2 RESPONSE : Response to Comment 1A : The Company respectfully advises the Staff that it has not recognized material favorable or unfavorable changes in estimates with respect to the contracts referred to in the comment. The gross amounts of favorable and unfavorable changes recognized in revenue during the fiscal years indicated below, were as follows (in thousands): 2024 2023 2022 Favorable adjustments $ 3,733  $ 5,352  $ 4,403  Unfavorable adjustments (5,445) (5,285) (5,501) Net adjustments $ (1,712) $ 67  $ (1,098) Response to Comment 1B : Further, the Company respectfully advises the Staff that it has not recognized material loss contracts during the periods presented in the Form 10-K. The amount of contract losses recognized during the fiscal years indicated below were as follows (in thousands): 2024 2023 2022 Loss contracts recorded $ (225) $ (432) $ (644) Response to Comment 1C : The Company respectfully acknowledges the Staff’s comment, and it believes the disclosure of the impact of favorable and unfavorable changes in contract estimates and estimated contract losses is not material for the periods presented. For future periods with immaterial changes in estimates or amounts of contract losses, the Company will include a disclosure explaining that changes in contract estimates, including contract losses, are not considered material for each period presented. However, if there are favorable or unfavorable changes in estimates or amounts of contract losses which are material, the Company will provide disclosures to separately quantify and discuss the gross impacts of changes in contract estimates, including contract losses, during each period presented, pursuant to Item 303(b)(3) of Regulation S-K. Form 8-K filed February 4, 2025 Exhibit 99.1 2. We refer to your presentation of adjusted EBITDA and non-GAAP diluted earnings per share in the headline of your earnings release. In future filings, please revise your disclosures to also present, with equal or greater prominence, the most direct comparable GAAP financial measures. Refer to Item 10(e)(1)(i)(A) of Regulation S-K and Question 102.10(a) of the Division of Corporation Finance’s Compliance and Disclosure Interpretations on Non-GAAP Financial Measures. RESPONSE :     The Company respectfully acknowledges the Staff’s comment. In its future filings, the Company will present the most direct comparable GAAP financial measures in its headlines with equal or greater prominence to any applicable non-GAAP financial measures, to comply with Item 10(e)(1)(i)(A) of Regulation S-K and Question 102.10(a) of the Division of Corporation Finance’s Compliance and Disclosure Interpretations on Non-GAAP Financial Measures. Securities and Exchange Commission March 27, 2025 Page 3 3. We note that you discuss non-GAAP total operating expenses in your narrative, but do not present a reconciliation to GAAP total operating expenses in your table. Please revise your disclosure accordingly in future filings. Refer to Item 10(e)(1)(i)(B) of Regulation S-K. RESPONSE :     The Company respectfully acknowledges the Staff’s comment. In its future filings, the Company will provide a reconciliation from non-GAAP total operating expenses to GAAP total operating expenses to comply with Item 10(e)(1)(i)(B) of Regulation S-K. For an illustration of such proposed disclosure, please see the below reconciliation of non-GAAP total operating expenses to GAAP total operating expenses for the three and six months ended December 27, 2024:   Three Months Ended Six Months Ended December 27, 2024 % of Revenue December 29, 2023 % of Revenue December 27, 2024 % of Revenue December 29, 2023 % of Revenue   (In thousands, except percentages) GAAP operating expense $ 32,916   27.8   % $ 32,938  35.2  % $ 68,272   33.0   % $ 59,243  32.8  % Share-based compensation (1,863) (1,824) (3,423) (3,475) Merger and acquisition and other expenses (514) (3,723) (4,295) (6,394) Restructuring charges (1,415) (2,000) (1,415) (2,644) Non-GAAP operating expense $ 29,124   24.6   % $ 25,391  27.1  % $ 59,139   28.6   % $ 46,730  25.9  % *    *    *    *    * Securities and Exchange Commission March 27, 2025 Page 4 Please direct any questions that you have with respect to the foregoing, or any requests for additional supplemental information required by the Staff, to the undersigned at (512) 582-4676 or michael.connaway@aviatnet.com, or to Katherine Terrell Frank at (214) 220-7869 or kfrank@velaw.com. Very truly yours, Aviat Networks, Inc. By:     /s/ Michael Connaway  Name:    Michael Connaway Title:    Senior Vice President and Chief Financial Officer cc:    Erin R. Boase, General Counsel and Vice President of Legal Affairs Michael Gibson, Vinson & Elkins L.L.P. Katherine Terrell Frank, Vinson & Elkins L.L.P.