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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 March 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: 0-23599
________________________________________________________________
MERCURY SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
________________________________________________________________
Massachusetts 04-2741391
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
50 MINUTEMAN ROAD 01810
ANDOVERMA
(Address of principal executive offices) (Zip Code)
978-256-1300
(Registrant’s telephone number, including area code)
________________________________________________________________
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  x    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  x    No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See 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 x  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. o
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes      No  x
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per shareMRCYThe Nasdaq Stock Market
Shares of Common Stock outstanding as of April 30, 2020 55,598,732 shares
1


MERCURY SYSTEMS, INC.
INDEX
 
  PAGE
NUMBER
PART I. FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 6.

2


PART I. FINANCIAL INFORMATION
 
ITEM 1.  FINANCIAL STATEMENTS
MERCURY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
March 27, 2020June 30, 2019
Assets
Current assets:
Cash and cash equivalents$407,146  $257,932  
Accounts receivable, net of allowance for doubtful accounts of $1,301 and $1,228 at March 27, 2020 and June 30, 2019, respectively127,129  118,832  
Unbilled receivables and costs in excess of billings86,860  57,387  
Inventory161,858  137,112  
Prepaid income taxes1,129  90  
Prepaid expenses and other current assets11,271  10,819  
Total current assets795,393  582,172  
Property and equipment, net78,664  60,001  
Goodwill614,830  562,146  
Intangible assets, net216,546  206,124  
Operating lease right-of-use assets61,112    
Other non-current assets5,095  6,534  
Total assets$1,771,640  $1,416,977  
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$50,089  $39,030  
Accrued expenses24,727  18,897  
Accrued compensation34,781  28,814  
Deferred revenues and customer advances12,419  11,291  
Total current liabilities122,016  98,032  
Deferred income taxes19,166  17,814  
Income taxes payable1,751  1,273  
Long-term debt200,000    
Operating lease liabilities67,028    
Other non-current liabilities12,246  15,119  
Total liabilities422,207  132,238  
Commitments and contingencies (Note M)
Shareholders’ equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued or outstanding    
Common stock, $0.01 par value; 85,000,000 shares authorized; 54,612,005 and 54,247,532 shares issued and outstanding at March 27, 2020 and June 30, 2019, respectively546  542  
Additional paid-in capital1,064,698  1,058,745  
Retained earnings285,231  226,743  
Accumulated other comprehensive loss(1,042) (1,291) 
Total shareholders’ equity1,349,433  1,284,739  
Total liabilities and shareholders’ equity$1,771,640  $1,416,977  

The accompanying notes are an integral part of the consolidated financial statements.
3


MERCURY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per share data)
(Unaudited)
 Third Quarters EndedNine Months Ended
 March 27, 2020March 31, 2019March 27, 2020March 31, 2019
Net revenues$208,016  $174,636  $579,233  $477,781  
Cost of revenues114,691  100,789  319,002  271,464  
Gross margin93,325  73,847  260,231  206,317  
Operating expenses:
Selling, general and administrative33,991  27,411  96,765  79,971  
Research and development24,967  17,439  71,497  48,579  
Amortization of intangible assets7,848  6,786  22,859  20,906  
Restructuring and other charges66  46  1,815  573  
Acquisition costs and other related expenses111  103  2,652  555  
Total operating expenses66,983  51,785  195,588  150,584  
Income from operations26,342  22,062  64,643  55,733  
Interest income458  205  1,957  342  
Interest expense(58) (2,473) (58) (6,928) 
Other income (expense), net2,186  (328) 401  (2,207) 
Income before income taxes28,928  19,466  66,943  46,940  
Tax provision5,363  5,357  8,455  12,969  
Net income$23,565  $14,109  $58,488  $33,971  
Basic net earnings per share$0.43  $0.30  $1.07  $0.72  
Diluted net earnings per share$0.43  $0.29  $1.06  $0.71  
Weighted-average shares outstanding:
Basic54,604  47,258  54,514  47,164  
Diluted55,127  47,958  55,071  47,783  
Comprehensive income:
Net income$23,565  $14,109  $58,488  $33,971  
Change in fair value of derivative instruments, net of tax  (2,147)   (2,147) 
Foreign currency translation adjustments344  (210) 227  (367) 
Pension benefit plan, net of tax7  (15) 22  (45) 
Total other comprehensive income (loss), net of tax351  (2,372) 249  (2,559) 
Total comprehensive income$23,916  $11,737  $58,737  $31,412  
The accompanying notes are an integral part of the consolidated financial statements.
4


MERCURY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands)
(Unaudited)
For the Third Quarter Ended March 27, 2020
Common StockAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Shareholders’
Equity
SharesAmount
Balance at December 27, 201954,558  $545  $1,056,238  $261,666  $(1,393) $1,317,056  
Issuance of common stock under employee stock incentive plans19  —  —  —  —    
Issuance of common stock under employee stock purchase plan41  1  2,392  —  —  2,393  
Purchase and retirement of common stock(6) —  (746) —  —  (746) 
Stock-based compensation—  —  6,814  —  —  6,814  
Net income—  —  —  23,565  —  23,565  
Other comprehensive income—  —  —  —  351  351  
Balance at March 27, 202054,612  $546  $1,064,698  $285,231  $(1,042) $1,349,433  

For the Third Quarter Ended March 31, 2019
Common StockAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Shareholders’
Equity
SharesAmount
Balance at December 31, 201847,249  $472  $594,670  $199,830  $1,104  $796,076  
Issuance of common stock under employee stock incentive plans25  1  —  —  —  1  
Purchase and retirement of common stock(9) —  (501) —  —  (501) 
Stock-based compensation—  —  5,069  —  —  5,069  
Net income—  —  —  14,109  —  14,109  
Other comprehensive loss—  —  —  —  (2,372) (2,372) 
Balance at March 31, 201947,265  $473  $599,238  $213,939  $(1,268) $812,382  

For the Nine Months Ended March 27, 2020
Common StockAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Shareholders’
Equity
SharesAmount
Balance at June 30, 201954,248  $542  $1,058,745  $226,743  $(1,291) $1,284,739  
Issuance of common stock under employee stock incentive plans510  5  (2) —  —  3  
Issuance of common stock under employee stock purchase plan41  1  2,392  —  —  2,393  
Purchase and retirement of common stock(187) (2) (15,681) —  —  (15,683) 
Stock-based compensation—  —  19,244  —  —  19,244  
Net income—  —  —  58,488  —  58,488  
Other comprehensive income—  —  —  —  249  249  
Balance at March 27, 202054,612  $546  $1,064,698  $285,231  $(1,042) $1,349,433  

For the Nine Months Ended March 31, 2019
Common StockAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Shareholders’
Equity
SharesAmount
Balance at June 30, 201846,924  $469  $590,163  $179,968  $1,291  $771,891  
Issuance of common stock under employee stock incentive plans439  5  (5) —  —    
Issuance of common stock under employee stock purchase plan51  1  1,676  —  —  1,677  
Purchase and retirement of common stock(149) (2) (7,432) —  —  (7,434) 
Stock-based compensation—  —  14,836  —  —  14,836  
Net income—  —  —  33,971  —  33,971  
Other comprehensive loss—  —  —  —  (2,559) (2,559) 
Balance at March 31, 201947,265  $473  $599,238  $213,939  $(1,268) $812,382  
The accompanying notes are an integral part of the consolidated financial statements.
5


MERCURY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Nine Months Ended
 March 27, 2020March 31, 2019
Cash flows from operating activities:
Net income$58,488  $33,971  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense36,579  34,830  
Stock-based compensation expense19,004  14,836  
Provision (benefit) for deferred income taxes1,174  (1,054) 
Gain on sale of investment(3,810)   
Other non-cash items2,402  2,715  
Changes in operating assets and liabilities, net of effects of businesses acquired:
Accounts receivable, unbilled receivables, and costs in excess of billings(34,254) (22,081) 
Inventory(13,525) (13,770) 
Prepaid income taxes (1,046) 3,761  
Prepaid expenses and other current assets508  (724) 
Other non-current assets(165) 137  
Accounts payable, accrued expenses, and accrued compensation17,968  15,610  
Deferred revenues and customer advances2,446  (2,065) 
Income taxes payable(2,485) 4,795  
Other non-current liabilities3,174  587  
Net cash provided by operating activities86,458  71,548  
Cash flows from investing activities:
Acquisition of business, net of cash acquired(96,502) (81,529) 
Purchases of property and equipment(31,788) (17,862) 
Proceeds from sale of investment4,310    
Net cash used in investing activities(123,980) (99,391) 
Cash flows from financing activities:
Proceeds from employee stock plans2,396  1,677  
Borrowings under credit facilities200,000  81,500  
Purchase and retirement of common stock(15,683) (7,434) 
Payments of deferred financing and offering costs  (1,851) 
Net cash provided by financing activities186,713  73,892  
Effect of exchange rate changes on cash and cash equivalents23  (55) 
Net increase in cash and cash equivalents149,214  45,994  
Cash and cash equivalents at beginning of period257,932  66,521  
Cash and cash equivalents at end of period$407,146  $112,515  
Cash paid during the period for:
Interest$  $8,163  
Income taxes$10,457  $5,179  
The accompanying notes are an integral part of the consolidated financial statements.
6


MERCURY SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except per share data)
(Unaudited)
A.Description of Business
Mercury Systems, Inc. (the “Company” or “Mercury”) is the leader in making trusted, secure mission-critical technologies profoundly more accessible to aerospace and defense. Operating at the intersection of high-tech and defense, Mercury specializes in engineering, adapting and manufacturing purpose-built solutions to meet current and emerging high-tech needs. Mercury’s innovative solutions power more than 300 mission-critical aerospace, commercial aviation, defense, security and intelligence programs, including Aegis, Patriot, LTAMDS, SEWIP, F-35, JLTV, Global Hawk and Stormbreaker, delivering Innovation That Matters®.
Headquartered in Andover, MA, Mercury has pioneered a transformational defense electronics business model specifically designed to provide end-users with trusted and secure leading-edge technology, affordably and with significantly shorter lead times. Mercury’s relationships with key commercial processing technology providers, such as Intel, NVIDIA and Xilinx, coupled with its commitment to open standards architecture (“OSA”), allow it to develop products that are optimized for customer success and upgradeability. A proven portfolio of advanced capability, a demonstrated model for accelerated development and a commitment to its cultures and values, uniquely position Mercury to deliver Innovation That Matters® from chip-scale to system-scale.
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.
B. Summary of Significant Accounting Policies
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 June 30, 2019 which are contained in the Company’s Annual Report on Form 10-K filed with the SEC on August 15, 2019. The results for the third quarter and nine months ended March 27, 2020 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.
Effective July 1, 2019, the Company's fiscal year has changed to the 52-week or 53-week period ending on the Friday closest to the last day in June. All references to the third quarter of fiscal 2020 are to the quarter ending March 27, 2020. There were approximately 13-weeks during the third quarters ended March 27, 2020 and March 31, 2019, respectively. There were 39-weeks during the nine months ended March 27, 2020 and March 31, 2019, respectively. There have been no reclassifications of prior comparable periods due to this change.
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
The Company utilizes the acquisition method of accounting under ASC 805, Business Combinations, (“ASC 805”), for all transactions and events 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
7


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
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 (loss) income (“AOCI”) in shareholders’ equity. Gains (losses) resulting from non-U.S. currency transactions are included in other income (expense), net in the Consolidated Statements of Operations and Comprehensive Income and were immaterial for all periods presented.
LEASES
Effective July 1, 2019, the Company adopted ASC 842, Leases, (“ASC 842”), which requires lessees to recognize a right-of-use (“ROU”) asset and lease liability for most lease arrangements. The Company has adopted ASC 842 using the optional transition method and, as a result, there have been no reclassifications of prior comparable periods due to this adoption.
The Company has arrangements involving the lease of facilities, machinery and equipment. Under ASC 842, at inception of the arrangement, the Company determines whether the contract is or contains a lease and whether the lease should be classified as an operating or a financing lease. This determination, among other considerations, involves an assessment of whether the Company can control the underlying asset and have the right to obtain substantially all of the economic benefits or outputs from the asset.
The Company recognizes ROU assets and lease liabilities as of the lease commencement date based on the net present value of the future minimum lease payments over the lease term. ASC 842 requires lessees to use the rate implicit in the lease unless it is not readily determinable and then it may use its incremental borrowing rate (“IBR”) to discount the future minimum lease payments. Most of the Company's lease arrangements do not provide an implicit rate; therefore, the Company uses its IBR to discount the future minimum lease payments. The Company determines its IBR with its credit rating and current economic information available as of the commencement date, as well as the identified lease term. During the assessment of the lease term, the Company considers its renewal options and extensions within the arrangements and the Company includes these options when it is reasonably certain to extend the term of the lease.
The Company has lease arrangements with both lease and non-lease components. Consideration is allocated to lease and non-lease components based on estimated standalone prices. The Company has elected to exclude non-lease components from the calculation of its ROU assets and lease liabilities. In the Company's adoption of ASC 842, leases with an initial term of 12 months or less will not result in recognition of a ROU asset and a lease liability and will be expensed as incurred over the lease term. Leases of this nature were immaterial to the Company’s consolidated financial statements.
The Company has lease arrangements that contain incentives for tenant improvements as well as fixed rent escalation clauses. For contracts with tenant improvement incentives that are determined to be a leasehold improvement that will be owned by the lessee and the Company is reasonably certain to exercise, it records a reduction to the lease liability and amortizes the incentive over the identified term of the lease as a reduction to rent expense. The Company records rental expense on a straight-line basis over the identified lease term on contracts with rent escalation clauses.
Finance leases are not material to the Company's consolidated financial statements and the Company is not a lessor in any material lease arrangements. There are no material restrictions, covenants, sale and leaseback transactions, variable lease payments or residual value guarantees in the Company's lease arrangements. Operating leases are included in Operating lease right-of-use assets, Accrued expenses, and Operating lease liabilities in the Company's Consolidated Balance Sheets. The standard had no impact on the Company's Consolidated Statements of Operations and Comprehensive Income or Consolidated Statements of Cash Flows. See Note N to the consolidated financial statements for more information regarding the adoption of this standard.
REVENUE RECOGNITION
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, (“ASC 606”). The Company is the leader in making trusted, secure mission-critical technologies profoundly more accessible to aerospace and defense. 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
8


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 70% and 74% of revenues for the third quarter and nine months ended March 27, 2020, respectively. Contracts with distinct performance obligations recognized at a point in time, with or without an allocation of the transaction price, totaled 74% and 76% of revenues for the third quarter and nine months ended March 31, 2019, respectively.
The Company also engages in long-term contracts for development, production and service activities and recognizes revenue for performance obligations over time. These long-term contracts involve the design, development, manufacture, or modification of complex modules and sub-assemblies or integrated subsystems and related services. Long-term 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 under long-term contracts over time was 30% and 26% of total revenues for the third quarter and nine months ended March 27, 2020, respectively. Total revenue recognized under long-term contracts over time was 26% and 24% of total revenues for the third quarter and nine months ended March 31, 2019, 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.
All revenues are reported net of government assessed taxes (e.g., sales taxes or value-added taxes). Refer to Note L for disaggregation of revenue for the period.
ACCOUNTS RECEIVABLE 
Accounts receivable, net, represents amounts that have been billed and are currently due from customers. The Company maintains an allowance for doubtful accounts 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 customers’ credit worthiness, 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.
CONTRACT BALANCES 
Contract balances result from the timing of revenue recognized, billings and cash collections, and 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. 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 and the long-term portion of deferred revenue is included within 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.
The contract asset balances were $86,860 and $57,387 as of March 27, 2020 and June 30, 2019, respectively. The contract asset balance increased due to growth in revenue recognized under long-term contracts over time during the nine months ended March 27, 2020. The contract liability balances were $14,858 and $12,362 as of March 27, 2020 and June 30, 2019, respectively. The increase was due to advanced billings across multiple programs.
9


Revenue recognized for the third quarter and nine months ended March 27, 2020 that was previously included in the contract liability balance at June 30, 2019 was $1,564 and $9,838, respectively. Revenue recognized for the third quarter and nine months ended March 31, 2019 that was included in the contract liability balance at June 30, 2018 was $1,173 and $10,156, respectively.
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 March 27, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was $262,425. The Company expects to recognize approximately 60% 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:
Third Quarters EndedNine Months Ended
March 27, 2020March 31, 2019March 27, 2020March 31, 2019
Basic weighted-average shares outstanding54,604  47,258  54,514  47,164  
Effect of dilutive equity instruments523  700  557  619  
Diluted weighted-average shares outstanding55,127  47,958  55,071  47,783  
Equity instruments to purchase 3 and 136 shares of common stock were not included in the calculation of diluted net earnings per share for the third quarter and nine months ended March 27, 2020, because the equity instruments were anti-dilutive. Equity instruments to purchase 11 and 244 shares of common stock were not included in the calculation of diluted net earnings per share for the third quarter and nine months ended March 31, 2019, because the equity instruments were anti-dilutive.
C. Acquisitions
AMERICAN PANEL CORPORATION ACQUISITION
On September 23, 2019, the Company acquired American Panel Corporation (“APC”). Based in Alpharetta, Georgia, APC is a leading innovator in large area display technology for the aerospace and defense market. APC's capabilities are deployed on a wide range of next-generation platforms. The Company acquired APC for an all cash purchase price of $100,000, prior to net working capital and net debt adjustments. The Company funded the acquisition with cash on hand.
10


The following table presents the net purchase price and the fair values of the assets and liabilities of APC on a preliminary basis:
Amounts
Consideration transferred
Cash paid at closing$100,826  
Working capital and net debt adjustment(5,952) 
Liabilities assumed 2,454  
Less cash acquired(826) 
Net purchase price$96,502  
Estimated fair value of tangible assets acquired and liabilities assumed