CIRRUS LOGIC INC, 10-Q filed on 10/24/2011
Quarterly Report
Document And Entity Information
6 Months Ended
Sep. 24, 2011
Oct. 18, 2011
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
FALSE 
 
Entity Registrant Name
CIRRUS LOGIC INC 
 
Entity Central Index Key
0000772406 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Period End Date
Sep. 24, 2011 
 
Document Fiscal Year Focus
2012 
 
Document Fiscal Period Focus
Q2 
 
Current Fiscal Year End Date
--03-31 
 
Entity Common Stock, Shares Outstanding
 
63,931,403 
Consolidated Condensed Balance Sheets (USD $)
In Thousands
Sep. 24, 2011
Mar. 26, 2011
Assets
 
 
Cash and cash equivalents
$ 39,268 
$ 37,039 
Restricted investments
2,898 
5,786 
Marketable securities
100,130 
159,528 
Accounts receivable, net
44,898 
39,098 
Inventories
49,552 
40,497 
Deferred tax assets
30,803 
30,797 
Other current assets
10,865 
6,725 
Total current assets
278,414 
319,470 
Long-term marketable securities
8,703 
12,702 
Property and equipment, net
50,102 
34,563 
Goodwill and intangibles, net
24,932 
26,152 
Deferred tax assets
90,995 
102,136 
Other assets
7,517 
1,598 
Total assets
460,663 
496,621 
Liabilities and Stockholders' Equity
 
 
Accounts payable
35,256 
27,639 
Accrued salaries and benefits
10,942 
12,402 
Other accrued liabilities
10,105 
5,169 
Deferred income
9,334 
6,844 
Total current liabilities
65,637 
52,054 
Long-term obligations
6,505 
6,188 
Stockholders' equity:
 
 
Capital stock
998,572 
991,947 
Accumulated deficit
(609,167)
(552,814)
Accumulated other comprehensive loss
(884)
(754)
Total stockholders' equity
388,521 
438,379 
Total liabilities and stockholders' equity
$ 460,663 
$ 496,621 
Consolidated Condensed Statements Of Operations (USD $)
In Thousands, except Per Share data
3 Months Ended
Sep. 24, 2011
3 Months Ended
Sep. 25, 2010
6 Months Ended
Sep. 24, 2011
6 Months Ended
Sep. 25, 2010
Consolidated Condensed Statements Of Operations [Abstract]
 
 
 
 
Net sales
$ 101,602 
$ 100,598 
$ 193,844 
$ 182,513 
Cost of sales
47,247 
43,818 
91,780 
78,998 
Gross margin
54,355 
56,780 
102,064 
103,515 
Operating expenses:
 
 
 
 
Research and development
19,682 
15,450 
38,449 
30,542 
Selling, general and administrative
16,760 
15,372 
31,366 
29,383 
Restructuring and other costs, net
 
401 
 
401 
Impairment of non-marketable securities
 
500 
 
500 
Provision for litigation expenses and settlements
 
 
 
135 
Patent agreement, net
 
(4,000)
 
(4,000)
Total operating expenses
36,442 
27,723 
69,815 
56,961 
Income from operations
17,913 
29,057 
32,249 
46,554 
Interest income, net
112 
233 
266 
461 
Other income (expense), net
(27)
(14)
(44)
18 
Income before income taxes
17,998 
29,276 
32,471 
47,033 
Provision (benefit) for income taxes
6,751 
(1,598)
12,046 
(1,443)
Net income
$ 11,247 
$ 30,874 
$ 20,425 
$ 48,476 
Basic income per share:
$ 0.17 
$ 0.45 
$ 0.31 
$ 0.72 
Diluted income per share:
$ 0.17 
$ 0.42 
$ 0.30 
$ 0.67 
Basic weighted average common shares outstanding:
64,426 
68,513 
65,763 
67,576 
Diluted weighted average common shares outstanding:
67,265 
72,878 
68,657 
71,971 
Consolidated Condensed Statements Of Cash Flows (USD $)
In Thousands
6 Months Ended
Sep. 24, 2011
6 Months Ended
Sep. 25, 2010
Cash flows from operating activities:
 
 
Net income
$ 20,425 
$ 48,476 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
4,656 
3,893 
Stock compensation expense
5,958 
4,381 
Deferred income taxes
11,135 
(2,229)
Loss (gain) on retirement or writeoff of long-lived assets
(28)
Impairment of non-marketable securities
 
500 
Net change in operating assets and liabilities:
 
 
Accounts receivable, net
(5,800)
(24,488)
Inventories
(9,055)
(6,567)
Other assets
(4,159)
(1,224)
Accounts payable and other accrued liabilities
11,446 
11,806 
Deferred income
2,490 
1,261 
Income taxes payable
(36)
342 
Net cash provided by operating activities
37,063 
36,123 
Cash flows from investing activities:
 
 
Additions to property, equipment and software
(18,404)
(16,058)
Investments in technology
(6,381)
(737)
Purchase of marketable securities
(70,497)
(103,020)
Proceeds from sale and maturity of marketable securities
133,763 
65,912 
Decrease in restricted investments
2,888 
100 
Decrease (increase) in deposits and other assets
(93)
38 
Net cash provided by (used in) investing activities
41,276 
(53,765)
Cash flows from financing activities:
 
 
Repurchase and retirement of common stock
(76,782)
 
Net proceeds from the issuance of common stock
672 
21,370 
Net cash provided by (used in) financing activities
(76,110)
21,370 
Net increase in cash and cash equivalents
2,229 
3,728 
Cash and cash equivalents at beginning of period
37,039 
16,109 
Cash and cash equivalents at end of period
$ 39,268 
$ 19,837 
Basis Of Presentation
Basis Of Presentation

1.       Basis of Presentation

 

The consolidated condensed financial statements have been prepared by Cirrus Logic, Inc. ("we," "us," "our," or the "Company") pursuant to the rules and regulations of the Securities and Exchange Commission ("Commission"). The accompanying unaudited consolidated condensed financial statements do not include complete footnotes and financial presentations. As a result, these financial statements should be read along with the audited consolidated financial statements and notes thereto for the year ended March 26, 2011, included in our Annual Report on Form 10-K filed with the Commission on May 25, 2011. In our opinion, the financial statements reflect all adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial position, operating results and cash flows, for those periods presented. The preparation of financial statements in conformity with United States ("U.S.") generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect reported assets, liabilities, revenues and expenses, as well as disclosure of contingent assets and liabilities. Actual results could differ from those estimates and assumptions. Moreover, the results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the entire year. Certain reclassifications have been made to the fiscal year 2011 presentation to conform to the fiscal year 2012 presentation. This reclassification had no effect on the results of operations or stockholders' equity.

Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements

 

2.  Recently Issued Accounting Pronouncements

 

In May 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (ASC Topic 220) — Presentation of Comprehensive Income. The amendments from this update will result in more converged guidance on how comprehensive income is presented under both U.S. GAAP and IFRS. With this update to ASC 220, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The amendments in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income, nor does it affect how earnings per share is calculated or presented. Current U.S. GAAP allows reporting entities three alternatives for presenting other comprehensive income and its components in financial statements. One of those presentation options is to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. This update eliminates that option. The amendments in this ASU should be applied retrospectively, and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this guidance is not anticipated to have a material impact on our consolidated financial position, results of operations or cash flows.

 

In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-04, Fair Value Measurement (Accounting Standards Codification ("ASC") Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments in this ASU result in common fair value measurement and disclosure requirements in U.S. GAAP and international financial reporting standards ("IFRS"). Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. To improve consistency in application across jurisdictions some changes in wording are necessary to ensure that U.S. GAAP and IFRS fair value measurement and disclosure requirements are described in the same way. The ASU also provides for certain changes in current GAAP disclosure requirements, for example with respect to the measurement of level 3 assets and for measuring the fair value of an instrument classified in a reporting entity's shareholders' equity. The amendments in this ASU are to be applied prospectively, and are effective during interim and annual periods beginning after December 15, 2011. The adoption of this guidance is not anticipated to have a material impact on our consolidated financial position, results of operations or cash flows.

Fair Value Of Financial Instruments
Fair Value Of Financial Instruments

3.       Fair Value of Financial Instruments

 

The following table summarizes the carrying amount and fair value of the Company's cash and financial instruments (in thousands):

                   
                   
   

September 24, 2011

 

March 26, 2011

 
   

Carrying Amount

 

Fair Value

 

Carrying Amount

 

Fair Value

 

Cash

 

 $            5,066

 

 $          5,066

 

 $            9,626

 

 $            9,626

 

Cash equivalents

 

              34,202

 

             34,202

 

             27,413

 

              27,413

 

Restricted investments

 

                2,898

 

               2,898

 

                5,786

 

                5,786

 

Marketable securities

 

            100,130

 

           100,130

 

            159,528

 

            159,528

 

Long-term marketable securities

 

                8,703

 

               8,703

 

              12,702

 

              12,702

 
   

 $        150,999

 

 $       150,999

 

 $        215,055

 

 $        215,055

 

 

    The Company's investments that have original maturities greater than 90 days have been classified as available-for-sale securities in accordance with ASC Topic 320 - "Investments – Debt and Equity Securities."  Marketable securities are categorized on the consolidated condensed balance sheet as restricted investments and marketable securities, as appropriate.

 

The following table is a summary of available-for-sale securities at September 24, 2011 (in thousands):

 

   

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Estimated Fair Value (Net Carrying Amount)

                 

Corporate debt securities  

 

$         55,562

 

$                  4

 

$              (116)

 

$                 55,450

     Money-market funds

 

          16,545

 

-

 

-

 

                   16,545

U.S. Treasury securities     

 

         22,076

 

                   1

 

                    (5)

 

                   22,072

    Agency discount notes

 

         16,382

 

                10

 

                    (1)

 

                   16,391

    Commercial paper

 

         35,482

 

                  4

 

                  (11)

 

                   35,475

    Total securities

 

$       146,047

 

$                19

 

$              (133)

 

$               145,933

                 

      The Company's specifically identified gross unrealized losses of $133 thousand relates to 37 different securities with amortized costs of approximately $76.4 million at September 24, 2011. The securities with gross unrealized losses have been in a continuous unrealized loss position for less than 12 months as of September 24, 2011.

 

The following table is a summary of cash and marketable securities at March 26, 2011 (in thousands):

 

   

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Estimated Fair Value (Net Carrying Amount)

                 

Corporate debt securities

 

 $          64,227

 

 $                 23

 

 $                 (38)

 

 $                  64,212

Money-market funds 

 

             17,700

 

                    -  

 

                       -  

 

                     17,700

U.S. Treasury securities 

 

             45,768

 

                    13

 

                       -  

 

                     45,781

Agency discount notes 

 

             16,588

 

                      5

 

                      (2)

 

                     16,591

Commercial paper 

 

             61,128

 

                    24

 

                      (7)

 

                     61,145

Total securities 

 

 $        205,411

 

 $                 65

 

 $                 (47)

 

 $                205,429

                 

 

        The Company's specifically identified gross unrealized losses of $47 thousand relates to 28 different securities with a total amortized cost of approximately $61.8 million at March 26, 2011.  The securities with gross unrealized losses had been in a continuous unrealized loss position for less than 12 months as of March 26, 2011.

 

The Company has determined that the only assets and liabilities in the Company's financial statements that are required to be measured at fair value on a recurring basis are the Company's cash and investment portfolio assets. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

 

 

Level 1 - Quoted prices in active markets for identical assets or liabilities.

 

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The Company's investment portfolio assets consist of U.S. Treasury securities, obligations of U.S. government-sponsored enterprises, corporate debt, commercial paper, and money-market funds, and are reflected on our consolidated condensed balance sheet under the headings cash and cash equivalents, restricted investments, marketable securities, and long-term marketable securities. The Company determines the fair value of its investment portfolio assets by obtaining non-binding market prices from its third-party portfolio managers on the last day of the quarter, whose sources may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value.  The Company began classifying certain of its available-for-sale marketable securities as Level 2 in the second quarter of fiscal year 2012. Prior to the quarterly period ending September 24, 2011 the Company classified all investment portfolio assets as Level 1 inputs. These changes in the disclosed classification had no effect on the reported fair values of these investments. Prior period amounts have been reclassified to conform to the current year presentation. The Company has no Level 3 assets. Except as noted above, there were no transfers between level 1, level 2, or level 3 measurements for the three or six month period ending September 24, 2011.

 

The fair value of our financial assets at September 24, 2011, was determined using the following inputs (in thousands):

Description

 

Quoted Prices in Active Markets for Identical  Assets  Level 1

 

Significant Other Observable Inputs   Level 2

 

 Significant Unobservable  Inputs   Level 3

 

Total

                 

Available-for-sale securities

               
                 

Corporate debt securities

 

 $                  -

 

 $         55,450

 

 $                  -  

 

 $         55,450

Money-market funds

 

                          16,545

 

                     -  

 

                     -  

 

             16,545

U.S. Treasury securities

 

              22,072

 

                     -  

 

                     -  

 

             22,072

Agency discount notes

 

                      -  

 

             16,391

 

                     -  

 

             16,391

Commercial paper

 

                      -  

 

             35,475

 

                     -  

 

             35,475

   

 $           38,617

 

 $       107,316

 

 $                  -  

 

 $       145,933

 

The fair value of our financial assets at March 26, 2011, was determined using the following inputs (in thousands):

 

Description

 

Quoted Prices in Active Markets for Identical    Assets     Level 1

 

Significant Other Observable     Inputs      Level 2

 

Significant Unobservable        Inputs         Level 3

 

Total

                 

Available-for-sale securities

               
                 

Corporate debt securities

 

 $                   -  

 

 $          64,212

 

 $                  -  

 

 $          64,212

Money-market funds

 

              17,700

 

                     -  

 

                     -  

 

             17,700

U.S. Treasury securities

 

              45,781

 

                     -  

 

                     -  

 

             45,781

Agency discount notes

 

                      -  

 

             16,591

 

                     -  

 

             16,591

Commercial paper

 

                      -  

 

             61,145

 

                     -  

 

             61,145

   

 $           63,481

 

 $        141,948

 

 $                  -  

 

 $        205,429

 

Accounts Receivable, Net
Accounts Receivable, Net

4.       Accounts Receivable, net

 

         The following are the components of accounts receivable, net (in thousands):

September 24, March 26,
2011 2011
Gross accounts receivable  $              45,351  $                39,519
Allowance for doubtful accounts                     (453)                       (421)
 $              44,898  $                39,098

 

The net average days sales outstanding calculated as of September 24, 2011 and March 26, 2011 were 39 days and 38 days, respectively.

Inventories
Inventories

5.       Inventories

 

        Inventories are comprised of the following (in thousands):

 

September 24, March 26,
2011 2011
Work in process  $              26,932  $                22,048
Finished goods                  22,620                    18,449
 $              49,552  $                40,497

 

The increase in inventory balances at September 24, 2011, as compared to March 26, 2011, is primarily related to the expected increased demand for our products, and reflects planned inventory builds.

Income Taxes
Income Taxes

6.       Income Taxes

 

We recorded income tax expense of $6.8 million and $12.0 million for the second quarter and first six months of fiscal year 2012, both of which were primarily non-cash charges, on pre-tax income of $18.0 million and $32.5 million, respectively, yielding effective tax rates of 37.5 percent and 37.1 percent, respectively.  Our income tax expense for the second quarter and first six months of fiscal year 2012 is based on estimated effective tax rates derived from an estimate of consolidated earnings before taxes, adjusted for nondeductible expenses and other permanent differences for fiscal year 2012.  The estimated effective tax rates were impacted primarily by the worldwide mix of consolidated earnings before taxes.  Our income tax expense for the second quarter and first six months of fiscal year 2012 was slightly above the federal statutory rate primarily due to the effect of state income taxes and nondeductible expenses.

 

We recorded an income tax benefit of $1.6 million and $1.4 million for the second quarter and first six months of fiscal year 2011 on pre-tax income of $29.3 million and $47.0 million, respectively, yielding an effective tax benefit rate of 5.5 percent and 3.1 percent, respectively. Our income tax benefit for the second quarter and first six months of fiscal year 2011 was based on an estimated effective tax rate, which was derived from an estimate of consolidated earnings before taxes for fiscal year 2011.  The estimated effective tax rate was impacted primarily by the worldwide mix of consolidated earnings before taxes and an assessment regarding the ability to realize our deferred tax assets.  This assessment resulted in a $2.2 million increase in deferred tax assets for the three months ended September 25, 2010. Our income tax expense for the second quarter and first six months of fiscal year 2011 was less than the Federal statutory rate primarily as a result of the utilization of a portion of our U.S. deferred tax asset and related valuation allowance.

 

        We had no unrecognized tax benefits as of September 24, 2011.  We do not expect our unrecognized tax benefits to change significantly over the next 12 months.  Our policy is to recognize interest and penalties related to income tax matters in income tax expense. As of September 24, 2011, the balance of accrued interest and penalties was zeroNo interest or penalties were incurred during the first six months of fiscal year 2012. 

 

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. Fiscal years 2008 through 2011 remain open to examination by the major taxing jurisdictions to which we are subject.

Net Income Per Share
Net Income Per Share

7.       Net Income Per Share

 

Basic net income per share is based on the weighted effect of common shares issued and outstanding and is calculated by dividing net income by the basic weighted average shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average number of common shares used in the basic net income per share calculation, plus the equivalent number of common shares that would be issued assuming exercise or conversion of all potentially dilutive items outstanding.

 

         The weighted average outstanding options excluded from our diluted calculation for the quarters ended September 24, 2011, and September 25, 2010, were 953,000, and 397,000, respectively, as the strike price of the options exceeded the average market price during the respective periods. The weighted average outstanding options excluded from our diluted calculation for the six months ended September 24, 2011, and September 25, 2010, were 917,000, and 517,000, respectively, as the strike price of the options exceeded the average market price during the respective periods.

Restructuring And Other Costs, Net
Restructuring And Other Costs, Net

8.       Restructuring And Other Costs, Net

 

        The Company's restructuring initiative relates to our facilities abandonment activities which commenced in fiscal year 2004. In the first six months of fiscal year 2011, we incurred a $0.4 million charge attributable to changed assumptions on future sublease income. The entry to record the changed sublease assumptions is reflected as a separate line item on the consolidated condensed statement of operations in operating expenses under the heading "Restructuring and other costs, net."

 

        As of September 24, 2011, we had a remaining accrual from all of our past restructurings of $0.3 million, primarily related to net lease expenses that will be paid over the lease terms through the summer of calendar year 2012, along with other anticipated lease termination costs.  The remaining balance is classified as a short term restructuring accrual.

Impairment Of Non-Marketable Securities
Impairment Of Non-Marketable Securities

9.       Impairment of Non-Marketable Securities

 

In the second quarter of fiscal year 2011, the Company recognized a loss on the impairment of an equity investment in the amount of $0.5 million. Our original investment was in the form of a note receivable, which was then converted into an equity security. After the conversion, we determined that an impairment indicator existed related to our cost method investment. We performed a fair value analysis of our cost method investment in accordance with FASB ASC Topic 320 - "Investments – Debt and Equity Securities." Based on the results of this analysis as of September 25, 2010, we recognized an impairment of $0.5 million to reduce the carrying value of the cost method investment to zero. The impairment was recorded as a separate line item on the consolidated condensed statement of operations in operating expenses under the caption "Impairment of non-marketable securities."

Patent Agreement, Net
Patent Agreement, Net

10.       Patent Agreement, Net

 

On July 13, 2010, we entered into a Patent Purchase Agreement for the sale of certain Company owned patents. As a result of this agreement, on August 31, 2010, the Company received cash consideration of $4.0 million from the purchaser. The proceeds were recorded as a recovery of costs previously incurred and are reflected as a separate line item on the consolidated condensed statement of operations in operating expenses under the caption "Patent agreement, net."

Legal Matters
Legal Matters

11.       Legal Matters

 

During the first quarter of fiscal year 2011, the Company incurred $135 thousand in settlement costs related to a dispute with a former distributor of the Company's products. This transaction is reflected as a separate line item on the consolidated condensed statement of operations in operating expenses under the caption "Provision for litigation expenses and settlements."

 

On September 1, 2011, HSM Portfolio LLC and Technology Properties Limited LLC (collectively, the "Plaintiffs") filed suit against Cirrus Logic and 17 other defendants in the U.S. District Court, District of Delaware.  The Plaintiffs allege that Cirrus Logic infringed U.S. Patent No. 5,030,853.   In their complaint, the Plaintiffs indicated that they are seeking unspecified monetary damages, including up to treble damages for willful infringement.  Our answer to the complaint is due on October 24, 2011.  At this stage of the litigation, we cannot predict the ultimate outcome and we are unable to estimate any potential liability that we may incur.  

 

      From time to time, other various claims, charges and litigation are asserted or commenced against us arising from, or related to, contractual matters, intellectual property, employment disputes, as well as other issues.  Frequent claims and litigation involving these types of issues are not uncommon in our industry.  As to any of these claims or litigation, we cannot predict the ultimate outcome with certainty.

Stockholder's Equity
Stockholder's Equity

12.       Stockholder's Equity

 

Common Stock

 

        The Company issued 98 thousand and 160 thousand shares of common stock, respectively, for the three and six month periods ending September 24, 2011 in connection with stock option exercises during the current fiscal year, as well as for grants to certain members of our Board of Directors. The Company issued 1.4 million and 3.3 million shares of common stock, respectively, for the three and six month periods ending September 25, 2010 in connection with stock option exercises during the prior fiscal year.

 

Comprehensive Income

 

        The components of comprehensive income, net of tax, are as follows (in thousands):

Three Months Ended

Six Months Ended

September 24,

September 25,

September 24,

September 25,

2011

2010

2011

2010

Net income

 $                11,247

 $                30,874

 $                20,425

 $                48,476

Adjustments to arrive at comprehensive income:

Change in unrealized gain on marketable securities

                      (135)

                        127

                      (130)

                          27

Comprehensive income

 $                11,112

 $                31,001

 $                20,295

 $                48,503

 

Segment Information
Segment Information

13.       Segment Information

 

We determine our operating segments in accordance with FASB ASC Topic 280, "Segment Reporting." Our Chief Executive Officer ("CEO") has been identified as the chief operating decision maker as defined by FASB ASC Topic 280.

 

The Company operates and tracks its results in one reportable segment based on the aggregation of activity from its two product lines under ASC Topic 280. Our CEO receives and uses enterprise-wide financial information to assess financial performance and allocate resources, rather than detailed information at a product line level. Additionally, our product lines have similar characteristics and customers. They share operations support functions such as sales, public relations, supply chain management, various research and development and engineering support, in addition to the general and administrative functions of human resources, legal, finance and information technology. Therefore, there is no complete, discrete financial information maintained for these product lines.

 

Revenue from our product lines are as follows (in thousands):

 Three Months Ended   Six Months Ended 
September 24, September 25, September 24, September 25,
2011 2010 2011 2010
Audio Products  $           83,683  $           71,171  $         154,802  $         125,159
Energy Products               17,919               29,427               39,042               57,354
 $         101,602  $         100,598  $         193,844  $         182,513
Fair Value Of Financial Instruments (Tables)
6 Months Ended
Sep. 24, 2011
12 Months Ended
Mar. 26, 2011
Fair Value Of Financial Instruments [Abstract]
 
 
Schedule Of Carrying Amount And Fair Value Of Cash And Financial Instruments
 
Schedule Of Available-For-Sale Securities
Schedule Of Fair Value Of Financial Assets
                   
                   
   

September 24, 2011

 

March 26, 2011

 
   

Carrying Amount

 

Fair Value

 

Carrying Amount

 

Fair Value

 

Cash

 

 $            5,066

 

 $          5,066

 

 $            9,626

 

 $            9,626

 

Cash equivalents

 

              34,202

 

             34,202

 

             27,413

 

              27,413

 

Restricted investments

 

                2,898

 

               2,898

 

                5,786

 

                5,786

 

Marketable securities

 

            100,130

 

           100,130

 

            159,528

 

            159,528

 

Long-term marketable securities

 

                8,703

 

               8,703

 

              12,702

 

              12,702

 
   

 $        150,999

 

 $       150,999

 

 $        215,055

 

 $        215,055

 
   

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Estimated Fair Value (Net Carrying Amount)

                 

Corporate debt securities  

 

$         55,562

 

$                  4

 

$              (116)

 

$                 55,450

     Money-market funds

 

          16,545

 

-

 

-

 

                   16,545

U.S. Treasury securities     

 

         22,076

 

                   1

 

                    (5)

 

                   22,072

    Agency discount notes

 

         16,382

 

                10

 

                    (1)

 

                   16,391

    Commercial paper

 

         35,482

 

                  4

 

                  (11)

 

                   35,475

    Total securities

 

$       146,047

 

$                19

 

$              (133)

 

$               145,933

                 
   

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Estimated Fair Value (Net Carrying Amount)

                 

Corporate debt securities

 

 $          64,227

 

 $                 23

 

 $                 (38)

 

 $                  64,212

Money-market funds 

 

             17,700

 

                    -  

 

                       -  

 

                     17,700

U.S. Treasury securities 

 

             45,768

 

                    13

 

                       -  

 

                     45,781

Agency discount notes 

 

             16,588

 

                      5

 

                      (2)

 

                     16,591

Commercial paper 

 

             61,128

 

                    24

 

                      (7)

 

                     61,145

Total securities 

 

 $        205,411

 

 $                 65

 

 $                 (47)

 

 $                205,429

                 

Description

 

Quoted Prices in Active Markets for Identical  Assets  Level 1

 

Significant Other Observable Inputs   Level 2

 

 Significant Unobservable  Inputs   Level 3

 

Total

                 

Available-for-sale securities

               
                 

Corporate debt securities

 

 $                  -

 

 $         55,450

 

 $                  -  

 

 $         55,450

Money-market funds

 

                          16,545

 

                     -  

 

                     -  

 

             16,545

U.S. Treasury securities

 

              22,072

 

                     -  

 

                     -  

 

             22,072

Agency discount notes

 

                      -  

 

             16,391

 

                     -  

 

             16,391

Commercial paper

 

                      -  

 

             35,475

 

                     -  

 

             35,475

   

 $           38,617

 

 $       107,316

 

 $                  -  

 

 $       145,933

Description

 

Quoted Prices in Active Markets for Identical    Assets     Level 1

 

Significant Other Observable     Inputs      Level 2

 

Significant Unobservable        Inputs         Level 3

 

Total

                 

Available-for-sale securities

               
                 

Corporate debt securities

 

 $                   -  

 

 $          64,212

 

 $                  -  

 

 $          64,212

Money-market funds

 

              17,700

 

                     -  

 

                     -  

 

             17,700

U.S. Treasury securities

 

              45,781

 

                     -  

 

                     -  

 

             45,781

Agency discount notes

 

                      -  

 

             16,591

 

                     -  

 

             16,591

Commercial paper

 

                      -  

 

             61,145

 

                     -  

 

             61,145

   

 $           63,481

 

 $        141,948

 

 $                  -  

 

 $        205,429

Accounts Receivable, Net (Tables)
Components Of Accounts Receivable, Net
September 24, March 26,
2011 2011
Gross accounts receivable  $              45,351  $                39,519
Allowance for doubtful accounts                     (453)                       (421)
 $              44,898  $                39,098
Inventories (Tables)
Schedule Of Inventories

 

September 24, March 26,
2011 2011
Work in process  $              26,932  $                22,048
Finished goods                  22,620                    18,449
 $              49,552  $                40,497
Stockholder's Equity (Tables)
Components Of Comprehensive Income

Three Months Ended

Six Months Ended

September 24,

September 25,

September 24,

September 25,

2011

2010

2011

2010

Net income

 $                11,247

 $                30,874

 $                20,425

 $                48,476

Adjustments to arrive at comprehensive income:

Change in unrealized gain on marketable securities

                      (135)

                        127

                      (130)

                          27

Comprehensive income

 $                11,112

 $                31,001

 $                20,295

 $                48,503

Segment Information (Tables)
Schedule Of Segment Revenue From Product Lines
 Three Months Ended   Six Months Ended 
September 24, September 25, September 24, September 25,
2011 2010 2011 2010
Audio Products  $           83,683  $           71,171  $         154,802  $         125,159
Energy Products               17,919               29,427               39,042               57,354
 $         101,602  $         100,598  $         193,844  $         182,513
Fair Value Of Financial Instruments (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 24, 2011
Mar. 26, 2011
Minimum maturity period of investments to be classified as available-for-sale securities, days
90 
 
Gross unrealized losses
$ 133 
$ 47 
Amortized costs
146,047 
205,411 
Thirty Seven Different Securities [Member]
 
 
Gross unrealized losses
133 
 
Amortized costs
76,400 
 
Number of securities
37 
 
Twenty Eight Different Securities [Member]
 
 
Gross unrealized losses
 
47 
Amortized costs
 
$ 61,800 
Number of securities
 
28 
Fair Value Of Financial Instruments (Schedule Of Carrying Amount And Fair Value Of Cash And Financial Instruments) (Details) (USD $)
In Thousands
Sep. 24, 2011
Mar. 26, 2011
Fair Value Of Financial Instruments [Abstract]
 
 
Cash, Carrying Amount
$ 5,066 
$ 9,626 
Cash equivalents, Carrying Amount
34,202 
27,413 
Restricted investments, Carrying Amount
2,898 
5,786 
Marketable securities, Carrying Amount
100,130 
159,528 
Long-term marketable securities, Carrying Amount
8,703 
12,702 
Financial instruments, Carrying Amount
150,999 
215,055 
Cash, Fair Value
5,066 
9,626 
Cash equivalents, Fair Value
34,202 
27,413 
Restricted investments, Fair Value
2,898 
5,786 
Marketable securities, Fair Value
100,130 
159,528 
Long-term marketable securities, Fair Value
8,703 
12,702 
Financial instruments, Fair Value
$ 150,999 
$ 215,055 
Fair Value Of Financial Instruments (Schedule Of Cash And Marketable Securities) (Details) (USD $)
In Thousands
Sep. 24, 2011
Mar. 26, 2011
Amortized Cost
$ 146,047 
$ 205,411 
Gross Unrealized Gains
19 
65 
Gross Unrealized Losses
(133)
(47)
Estimated Fair Value (Net Carrying Amount)
145,933 
205,429 
Corporate Debt Securities [Member]
 
 
Amortized Cost
55,562 
64,227 
Gross Unrealized Gains
23 
Gross Unrealized Losses
(116)
(38)
Estimated Fair Value (Net Carrying Amount)
55,450 
64,212 
Money-Market Funds [Member]
 
 
Amortized Cost
16,545 
17,700 
Estimated Fair Value (Net Carrying Amount)
16,545 
17,700 
U.S. Treasury Securities [Member]
 
 
Amortized Cost
22,076 
45,768 
Gross Unrealized Gains
13 
Gross Unrealized Losses
(5)
 
Estimated Fair Value (Net Carrying Amount)
22,072 
45,781 
Agency Discount Notes [Member]
 
 
Amortized Cost
16,382 
16,588 
Gross Unrealized Gains
10 
Gross Unrealized Losses
(1)
(2)
Estimated Fair Value (Net Carrying Amount)
16,391 
16,591 
Commercial Paper [Member]
 
 
Amortized Cost
35,482 
61,128 
Gross Unrealized Gains
24 
Gross Unrealized Losses
(11)
(7)
Estimated Fair Value (Net Carrying Amount)
$ 35,475 
$ 61,145 
Fair Value Of Financial Instruments (Schedule Of Fair Value Of Financial Assets) (Details) (Available-For-Sale Securities [Member], USD $)
In Thousands
Sep. 24, 2011
Mar. 26, 2011
Fair value of financial assets
$ 145,933 
$ 205,429 
Corporate Debt Securities [Member]
 
 
Fair value of financial assets
55,450 
64,212 
Corporate Debt Securities [Member] |
Significant Other Observable Inputs Level 2 [Member]
 
 
Fair value of financial assets
55,450 
64,212 
Money-Market Funds [Member]
 
 
Fair value of financial assets
16,545 
17,700 
Money-Market Funds [Member] |
Quoted Prices In Active Markets For Identical Assets Level 1 [Member]
 
 
Fair value of financial assets
16,545 
17,700 
U.S. Treasury Securities [Member]
 
 
Fair value of financial assets
22,072 
45,781 
U.S. Treasury Securities [Member] |
Quoted Prices In Active Markets For Identical Assets Level 1 [Member]
 
 
Fair value of financial assets
22,072 
45,781 
Agency Discount Notes [Member]
 
 
Fair value of financial assets
16,391 
16,591 
Agency Discount Notes [Member] |
Significant Other Observable Inputs Level 2 [Member]
 
 
Fair value of financial assets
16,391 
16,591 
Commercial Paper [Member]
 
 
Fair value of financial assets
35,475 
61,145 
Commercial Paper [Member] |
Significant Other Observable Inputs Level 2 [Member]
 
 
Fair value of financial assets
35,475 
61,145 
Quoted Prices In Active Markets For Identical Assets Level 1 [Member]
 
 
Fair value of financial assets
38,617 
63,481 
Significant Other Observable Inputs Level 2 [Member]
 
 
Fair value of financial assets
$ 107,316 
$ 141,948 
Accounts Receivable, Net (Narrative) (Details)
Sep. 24, 2011
Mar. 26, 2011
Accounts Receivable, Net [Abstract]
 
 
Average days sales outstanding, net
39 
38 
Accounts Receivable, Net (Components Of Accounts Receivable, Net) (Details) (USD $)
In Thousands
Sep. 24, 2011
Mar. 26, 2011
Accounts Receivable, Net [Abstract]
 
 
Gross accounts receivable
$ 45,351 
$ 39,519 
Allowance for doubtful accounts
(453)
(421)
Accounts receivable, net
$ 44,898 
$ 39,098 
Inventories (Schedule Of Inventories) (Details) (USD $)
In Thousands
Sep. 24, 2011
Mar. 26, 2011
Inventories [Abstract]
 
 
Work in process
$ 26,932 
$ 22,048 
Finished goods
22,620 
18,449 
Total inventories
$ 49,552 
$ 40,497 
Income Taxes (Details) (USD $)
3 Months Ended
Sep. 24, 2011
3 Months Ended
Sep. 25, 2010
6 Months Ended
Sep. 24, 2011
6 Months Ended
Sep. 25, 2010
Income Taxes [Abstract]
 
 
 
 
Income tax expense (benefit)
$ 6,751,000 
$ (1,598,000)
$ 12,046,000 
$ (1,443,000)
Pre-tax income
17,998,000 
29,276,000 
32,471,000 
47,033,000 
Increase in deferred tax assets
 
2,200,000 
 
 
Effective tax rate
37.50% 
5.50% 
37.10% 
3.10% 
Unrecognized tax benefit
 
 
Accrued interest and penalties
 
 
Interest and penalties incurred during period
 
 
$ 0 
 
Net Income Per Share (Details)
3 Months Ended
Sep. 24, 2011
3 Months Ended
Sep. 25, 2010
6 Months Ended
Sep. 24, 2011
6 Months Ended
Sep. 25, 2010
Net Income Per Share [Abstract]
 
 
 
 
Weighted average outstanding options excluded from diluted calculation
953,000 
397,000 
917,000 
517,000 
Restructuring And Other Costs, Net (Details) (USD $)
3 Months Ended
Sep. 25, 2010
6 Months Ended
Sep. 25, 2010
Sep. 24, 2011
Restructuring And Other Costs, Net [Abstract]
 
 
 
Restructuring and other costs, net
$ 401,000 
$ 401,000 
 
Remaining restructuring accrual
 
 
$ 300,000 
Impairment Of Non-Marketable Securities (Details) (USD $)
3 Months Ended
Sep. 25, 2010
Impairment Of Non-Marketable Securities [Abstract]
 
Impairment of non-marketable securities
$ 500,000 
Carrying value of cost method investment
$ 0 
Patent Agreement, Net (Details) (USD $)
In Thousands
3 Months Ended
Sep. 25, 2010
6 Months Ended
Sep. 25, 2010
Patent Agreement, Net [Abstract]
 
 
Cash consideration received recorded as recovery of costs previously incurred
$ 4,000 
$ 4,000 
Legal Matters (Details) (USD $)
In Thousands
3 Months Ended
Jun. 26, 2010
6 Months Ended
Sep. 25, 2010
Legal Matters [Abstract]
 
 
Provision for litigation expenses and settlements
$ 135 
$ 135 
Stockholder's Equity (Narrative) (Details) (USD $)
In Millions, except Share data
0 Months Ended
Nov. 4, 2010
3 Months Ended
Sep. 24, 2011
3 Months Ended
Sep. 25, 2010
6 Months Ended
Sep. 24, 2011
6 Months Ended
Sep. 25, 2010
10 Months Ended
Sep. 24, 2011
Stockholder's Equity [Abstract]
 
 
 
 
 
 
Shares of common stock issued for stock option exercises
 
98,000 
1,400,000 
160,000 
3,300,000 
 
Share repurchase program, amount approved
$ 80 
 
 
 
 
 
Shares repurchased
 
 
 
4,900,000 
 
5,100,000 
Shares repurchased, value
 
 
 
76.8 
 
79.5 
Average cost per share repurchased
 
 
 
$ 15.63 
 
$ 15.51 
Remaining amount available for share repurchases under stock repurchase program
 
 
 
$ 0.5 
 
 
Stockholder's Equity (Components Of Comprehensive Income) (Details) (USD $)
In Thousands
3 Months Ended
Sep. 24, 2011
3 Months Ended
Sep. 25, 2010
6 Months Ended
Sep. 24, 2011
6 Months Ended
Sep. 25, 2010
Stockholder's Equity [Abstract]
 
 
 
 
Net income
$ 11,247 
$ 30,874 
$ 20,425 
$ 48,476 
Change in unrealized gain on marketable securities
(135)
127 
(130)
27 
Comprehensive income
$ 11,112 
$ 31,001 
$ 20,295 
$ 48,503 
Segment Information (Schedule Of Segment Revenue From Product Lines) (Details) (USD $)
In Thousands
3 Months Ended
Sep. 24, 2011
3 Months Ended
Sep. 25, 2010
6 Months Ended
Sep. 24, 2011
6 Months Ended
Sep. 25, 2010
Product revenue
$ 101,602 
$ 100,598 
$ 193,844 
$ 182,513 
Audio Products [Member]
 
 
 
 
Product revenue
83,683 
71,171 
154,802 
125,159 
Energy Products [Member]
 
 
 
 
Product revenue
$ 17,919 
$ 29,427 
$ 39,042 
$ 57,354