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Level 1 | – | Quoted prices in active markets for identical assets or liabilities. | ||
Level 2 | – | Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||
Level 3 | – | Prices or valuations that require management inputs that are both significant to the fair value measurement and unobservable. |
As of September 27, 2014 | As of December 28, 2013 | ||||||||||||||||||||||||||||||
Fair Value Measured Using | Fair Value Measured Using | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Money market funds | $ | 15,369 | $ | — | $ | — | $ | 15,369 | $ | 51,749 | $ | — | $ | — | $ | 51,749 | |||||||||||||||
Certificates of deposit | — | 3,460 | — | 3,460 | — | 3,840 | — | 3,840 | |||||||||||||||||||||||
Commercial paper | — | 83,838 | — | 83,838 | — | 85,860 | — | 85,860 | |||||||||||||||||||||||
Corporate bonds | — | 202,804 | — | 202,804 | — | 150,595 | — | 150,595 | |||||||||||||||||||||||
U.S. treasuries | 8,833 | — | — | 8,833 | 4,804 | — | — | 4,804 | |||||||||||||||||||||||
Foreign currency exchange forward contracts | — | — | — | — | — | 29 | — | 29 | |||||||||||||||||||||||
Total assets | $ | 24,202 | $ | 290,102 | $ | — | $ | 314,304 | $ | 56,553 | $ | 240,324 | $ | — | $ | 296,877 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Foreign currency exchange forward contracts | $ | — | $ | 32 | $ | — | $ | 32 | $ | — | $ | 26 | $ | — | $ | 26 |
September 27, 2014 | |||||||||||||||
Adjusted Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Money market funds | $ | 15,369 | $ | — | $ | — | $ | 15,369 | |||||||
Certificates of deposit | 3,460 | — | — | 3,460 | |||||||||||
Commercial paper | 83,838 | 2 | (2 | ) | 83,838 | ||||||||||
Corporate bonds | 202,959 | 19 | (174 | ) | 202,804 | ||||||||||
U.S. treasuries | 8,829 | 5 | (1 | ) | 8,833 | ||||||||||
Total available-for-sale investments | $ | 314,455 | $ | 26 | $ | (177 | ) | $ | 314,304 |
December 28, 2013 | |||||||||||||||
Adjusted Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Money market funds | $ | 51,749 | $ | — | $ | — | $ | 51,749 | |||||||
Certificates of deposit | 3,840 | — | — | 3,840 | |||||||||||
Commercial paper | 85,870 | 2 | (12 | ) | 85,860 | ||||||||||
Corporate bonds | 150,711 | 27 | (143 | ) | 150,595 | ||||||||||
U.S. treasuries | 4,802 | 2 | — | 4,804 | |||||||||||
Total available-for-sale investments | $ | 296,972 | $ | 31 | $ | (155 | ) | $ | 296,848 |
Amortized Cost | Cumulative OTTI in Earnings | Unrealized Gain | OTTI Loss in Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
Balance at December 29, 2012 | $ | 2,707 | $ | (394 | ) | $ | 784 | $ | (618 | ) | $ | 166 | ||||||||
Call on investments | (87 | ) | 13 | (25 | ) | 20 | (5 | ) | ||||||||||||
Investments sold | (2,620 | ) | 381 | (759 | ) | 598 | (161 | ) | ||||||||||||
Balance at September 28, 2013 | $ | — | $ | — | $ | — | $ | — | $ | — |
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As of September 27, 2014 | As of December 28, 2013 | ||||||||||||||||||||||
Gross Notional(1) | Prepaid Expenses and Other Assets | Other Accrued Liabilities | Gross Notional(1) | Prepaid Expenses and Other Assets | Other Accrued Liabilities | ||||||||||||||||||
Foreign currency exchange forward contracts | |||||||||||||||||||||||
Related to euro denominated receivables | $ | 20,980 | — | $ | (30 | ) | $ | 16,867 | 27 | $ | — | ||||||||||||
Related to British pound denominated receivables | 165 | — | — | 13,271 | — | (26 | ) | ||||||||||||||||
Related to restricted cash | 1,287 | — | (2 | ) | 1,391 | 2 | — | ||||||||||||||||
$ | 22,432 | $ | — | $ | (32 | ) | $ | 31,529 | $ | 29 | $ | (26 | ) |
(1) | Represents the face amounts of forward contracts that were outstanding as of the period noted. |
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September 27, 2014 | December 28, 2013 | ||||||
Inventory: | |||||||
Raw materials | $ | 11,584 | $ | 14,311 | |||
Work in process | 44,462 | 49,172 | |||||
Finished goods (1) | 74,787 | 60,202 | |||||
Total inventory | $ | 130,833 | $ | 123,685 | |||
Property, plant and equipment, net: | |||||||
Computer hardware | $ | 8,515 | $ | 9,692 | |||
Computer software(2) | 17,679 | 16,988 | |||||
Laboratory and manufacturing equipment | 158,446 | 146,834 | |||||
Furniture and fixtures | 1,343 | 1,347 | |||||
Leasehold improvements | 37,258 | 35,913 | |||||
Construction in progress | 6,465 | 8,950 | |||||
Subtotal | $ | 229,706 | $ | 219,724 | |||
Less accumulated depreciation and amortization | (154,742 | ) | (140,056 | ) | |||
Total property, plant and equipment, net | $ | 74,964 | $ | 79,668 | |||
Accrued expenses: | |||||||
Loss contingency related to non-cancelable purchase commitments | $ | 6,242 | $ | 5,120 | |||
Professional and other consulting fees | 1,033 | 1,411 | |||||
Taxes payable | 1,620 | 2,372 | |||||
Royalties | 2,152 | 1,540 | |||||
Accrued rebate and customer prepay liability | 758 | 3,807 | |||||
Accrued interest on convertible senior notes | 875 | 219 | |||||
Other accrued expenses | 10,913 | 7,962 | |||||
Total accrued expenses | $ | 23,593 | $ | 22,431 |
(1) | Included in finished goods inventory at September 27, 2014 and December 28, 2013 were $16.2 million and $9.2 million, respectively, of inventory at customer locations for which product acceptance had not occurred. |
(2) | Included in computer software at September 27, 2014 and December 28, 2013 were $7.9 million and $7.9 million, respectively, related to an enterprise resource planning ("ERP") system that the Company implemented during 2012. The unamortized ERP costs at September 27, 2014 and December 28, 2013 were $5.4 million and $6.3 million, respectively. |
September 27, 2014 | December 28, 2013 | ||||||
Restricted cash related to outstanding standby letters of credit | |||||||
Value added tax license | $ | 1,362 | $ | 1,430 | |||
Customer proposal guarantee | 1,771 | 1,446 | |||||
Property leases | 699 | 699 | |||||
Other | 392 | 329 | |||||
Total restricted cash | $ | 4,224 | $ | 3,904 |
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Unrealized Gain on Other Available-for-Sale Securities | Foreign Currency Translation | Accumulated Tax Effect | Total | |||||||||||||
Balance at December 28, 2013 | $ | (124 | ) | $ | (2,602 | ) | $ | (760 | ) | $ | (3,486 | ) | ||||
Net current-period other comprehensive loss | (27 | ) | (142 | ) | — | (169 | ) | |||||||||
Balance at September 27, 2014 | $ | (151 | ) | $ | (2,744 | ) | $ | (760 | ) | $ | (3,655 | ) |
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• | during any fiscal quarter commencing after the fiscal quarter ended on September 28, 2013 (and only during such fiscal quarter) if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; |
• | during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; |
• | upon the occurrence of specified corporate events described under the Indenture, such as a consolidation, merger or binding share exchange; or |
• | at any time on or after December 1, 2017 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. |
Other Non-Current Assets | Long-Term Debt | Additional Paid-in Capital | |||||||||
Principal amount | $ | — | $ | 150,000 | $ | — | |||||
Debt discount | — | (45,000 | ) | — | |||||||
Equity component | — | — | 45,000 | ||||||||
Debt issuance cost | 3,872 | — | (1,659 | ) | |||||||
Initial transaction amounts | $ | 3,872 | $ | 105,000 | $ | 43,341 | |||||
Amortization of debt issuance cost | (851 | ) | — | — | |||||||
Amortization of debt discount | — | 9,888 | — | ||||||||
Net carrying amount at September 27, 2014 | $ | 3,021 | $ | 114,888 | $ | 43,341 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 27, 2014 | September 28, 2013 | September 27, 2014 | September 28, 2013 | ||||||||||||
Contractual interest expense | $ | 656 | $ | 656 | $ | 1,969 | $ | 875 | |||||||
Amortization of debt issuance costs | 169 | 152 | 493 | 202 | |||||||||||
Amortization of debt discount | 1,956 | 1,770 | 5,724 | 2,350 | |||||||||||
Total interest expense | $ | 2,781 | $ | 2,578 | $ | 8,186 | $ | 3,427 |
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Number of Stock Options | Weighted-Average Exercise Price Per Share | Aggregate Intrinsic Value | ||||||||
Outstanding at December 28, 2013 | 6,367 | $ | 7.26 | $ | 17,452 | |||||
Stock options granted | 25 | $ | 9.02 | |||||||
Stock options exercised | (1,280 | ) | $ | 6.99 | $ | 3,210 | ||||
Stock options canceled | (92 | ) | $ | 12.39 | ||||||
Outstanding at September 27, 2014 | 5,020 | $ | 7.24 | $ | 17,631 | |||||
Vested and expected to vest as of September 27, 2014 | 5,017 | $ | 17,622 | |||||||
Exercisable at September 27, 2014 | 4,921 | $ | 7.24 | $ | 17,329 |
Number of Restricted Stock Units | Weighted- Average Grant Date Fair Value Per Share | Aggregate Intrinsic Value | ||||||||
Outstanding at December 28, 2013 | 6,583 | $ | 7.72 | $ | 64,443 | |||||
RSUs granted | 2,415 | $ | 8.37 | |||||||
RSUs released | (2,625 | ) | $ | 7.74 | $ | 22,477 | ||||
RSUs canceled | (424 | ) | $ | 7.88 | ||||||
Outstanding at September 27, 2014 | 5,949 | $ | 7.97 | $ | 63,122 | |||||
Expected to vest at September 27, 2014 | 5,751 | $ | 61,021 |
Number of Performance Stock Units | Weighted- Average Grant Date Fair Value Per Share | Aggregate Intrinsic Value | ||||||||
Outstanding at December 28, 2013 | 721 | $ | 7.04 | $ | 7,054 | |||||
PSUs granted | 508 | $ | 7.53 | |||||||
PSUs released | (255 | ) | $ | 6.36 | $ | 2,097 | ||||
PSUs canceled | (97 | ) | $ | 7.18 | ||||||
Outstanding at September 27, 2014 | 877 | $ | 7.49 | $ | 9,298 | |||||
Expected to vest at September 27, 2014 | 659 | $ | 6,994 |
Unrecognized Compensation Expense, Net | Weighted- Average Period (in years) | |||
Stock options | 317 | 1.5 | ||
RSUs | 30,599 | 2.3 | ||
PSUs | 2,704 | 1.6 |
Three Months Ended | Nine Months Ended | ||||||
Employee and Director Stock Options | September 27, 2014 | September 28, 2013 | September 27, 2014 | September 28, 2013 | |||
Volatility | N/A | N/A | 52% | N/A | |||
Risk-free interest rate | N/A | N/A | 1.3% | N/A | |||
Expected life | N/A | N/A | 4.3 years | N/A | |||
Estimated fair value | N/A | N/A | $3.85 | N/A | |||
Total stock-based compensation expense | $108 | $665 | $623 | $2,190 |
N/A | Not applicable because the Company did not grant any stock options to employees for the periods presented. |
Three Months Ended | Nine Months Ended | ||||||
Employee Stock Purchase Plan | September 27, 2014 | September 28, 2013 | September 27, 2014 | September 28, 2013 | |||
Volatility | 46% | 49% | 46% - 51% | 46% - 49% | |||
Risk-free interest rate | 0.06% | 0.10% | 0.02% - 0.11% | 0.10% - 0.14% | |||
Expected life | 0.5 years | 0.5 years | 0.25 - 0.5 years | 0.5 years | |||
Estimated fair value | $2.54 | $3.00 | $2.05 - $2.57 | $1.87 - $3.00 | |||
Total stock-based compensation expense | $1,092 | $777 | $2,726 | $2,050 |
Year Ended | |
December 28, 2013 | |
Infinera Volatility | 55% |
NASDAQ Telecom Composite Index Volatility | 23% |
Risk-free interest rate | 0.42% |
Correlation with NASDAQ Telecom Composite Index | 0.56 |
Estimated fair value | $6.27 - $7.06 |
Nine Months Ended | ||
September 27, 2014 | ||
Infinera Volatility | 49% - 50% | |
IGN Index Volatility | 25% | |
Risk-free interest rate | 0.66% - 0.71% | |
Correlation with IGN Index | 0.60 | |
Estimated fair value | $6.59 - $7.60 |
September 27, 2014 | December 28, 2013 | ||||||
Stock-based compensation effects in inventory | $ | 3,160 | $ | 3,189 | |||
Stock-based compensation effects in deferred inventory cost | $ | 13 | $ | 15 | |||
Stock-based compensation effects in fixed assets | $ | 126 | $ | 145 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 27, 2014 | September 28, 2013 | September 27, 2014 | September 28, 2013 | ||||||||||||
Stock-based compensation effects included in net income (loss) before income taxes | |||||||||||||||
Cost of revenue | $ | 492 | $ | 422 | $ | 1,421 | $ | 1,382 | |||||||
Research and development | 2,270 | 2,434 | 6,488 | 8,175 | |||||||||||
Sales and marketing | 1,982 | 1,853 | 5,517 | 5,659 | |||||||||||
General and administration | 1,628 | 1,807 | 4,707 | 4,167 | |||||||||||
6,372 | 6,516 | 18,133 | 19,383 | ||||||||||||
Cost of revenue – amortization from balance sheet (1) | 999 | 1,127 | 2,714 | 4,419 | |||||||||||
Total stock-based compensation expense | $ | 7,371 | $ | 7,643 | $ | 20,847 | $ | 23,802 |
(1) | Stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods and recognized in the current period. |
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Three Months Ended | Nine Months Ended | ||||||||||||||
September 27, 2014 | September 28, 2013 | September 27, 2014 | September 28, 2013 | ||||||||||||
Americas: | |||||||||||||||
United States | $ | 120,769 | $ | 103,113 | $ | 367,802 | $ | 270,437 | |||||||
Other Americas | 9,230 | 2,024 | 17,526 | 6,544 | |||||||||||
129,999 | 105,137 | 385,328 | 276,981 | ||||||||||||
Europe, Middle East and Africa | 34,131 | 32,262 | 78,978 | 103,022 | |||||||||||
Asia Pacific and Japan | 9,429 | 4,621 | 17,467 | 25,027 | |||||||||||
Total revenue | $ | 173,559 | $ | 142,020 | $ | 481,773 | $ | 405,030 |
September 27, 2014 | December 28, 2013 | ||||||
United States | $ | 72,428 | $ | 76,850 | |||
Other Americas | 237 | 319 | |||||
Europe, Middle East and Africa | 943 | 1,451 | |||||
Asia Pacific and Japan | 1,356 | 1,048 | |||||
Total property, plant and equipment, net | $ | 74,964 | $ | 79,668 |
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Three Months Ended | Nine Months Ended | ||||||||||||||
September 27, 2014 | September 28, 2013 | September 27, 2014 | September 28, 2013 | ||||||||||||
Beginning balance | $ | 27,948 | $ | 19,701 | $ | 22,908 | $ | 16,482 | |||||||
Charges to operations | 5,820 | 5,220 | 18,181 | 16,646 | |||||||||||
Utilization | (2,312 | ) | (2,645 | ) | (7,924 | ) | (6,783 | ) | |||||||
Change in estimate (1) | (3,650 | ) | 886 | (5,359 | ) | (3,183 | ) | ||||||||
Balance at the end of the period | $ | 27,806 | $ | 23,162 | $ | 27,806 | $ | 23,162 |
(1) | The Company records hardware warranty liabilities based on the latest quality and cost information available as of that date. The changes in estimate shown here are due to changes in overall actual failure rates and the resulting impact of these changes on the Company’s estimate of expected future returns, as well as changes in the estimated cost and the mix of new versus used units related to replacement of failed units. |
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As of September 27, 2014 | As of December 28, 2013 | ||||||||||||||||||||||||||||||
Fair Value Measured Using | Fair Value Measured Using | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Money market funds | $ | 15,369 | $ | — | $ | — | $ | 15,369 | $ | 51,749 | $ | — | $ | — | $ | 51,749 | |||||||||||||||
Certificates of deposit | — | 3,460 | — | 3,460 | — | 3,840 | — | 3,840 | |||||||||||||||||||||||
Commercial paper | — | 83,838 | — | 83,838 | — | 85,860 | — | 85,860 | |||||||||||||||||||||||
Corporate bonds | — | 202,804 | — | 202,804 | — | 150,595 | — | 150,595 | |||||||||||||||||||||||
U.S. treasuries | 8,833 | — | — | 8,833 | 4,804 | — | — | 4,804 | |||||||||||||||||||||||
Foreign currency exchange forward contracts | — | — | — | — | — | 29 | — | 29 | |||||||||||||||||||||||
Total assets | $ | 24,202 | $ | 290,102 | $ | — | $ | 314,304 | $ | 56,553 | $ | 240,324 | $ | — | $ | 296,877 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Foreign currency exchange forward contracts | $ | — | $ | 32 | $ | — | $ | 32 | $ | — | $ | 26 | $ | — | $ | 26 |
September 27, 2014 | |||||||||||||||
Adjusted Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Money market funds | $ | 15,369 | $ | — | $ | — | $ | 15,369 | |||||||
Certificates of deposit | 3,460 | — | — | 3,460 | |||||||||||
Commercial paper | 83,838 | 2 | (2 | ) | 83,838 | ||||||||||
Corporate bonds | 202,959 | 19 | (174 | ) | 202,804 | ||||||||||
U.S. treasuries | 8,829 | 5 | (1 | ) | 8,833 | ||||||||||
Total available-for-sale investments | $ | 314,455 | $ | 26 | $ | (177 | ) | $ | 314,304 |
December 28, 2013 | |||||||||||||||
Adjusted Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Money market funds | $ | 51,749 | $ | — | $ | — | $ | 51,749 | |||||||
Certificates of deposit | 3,840 | — | — | 3,840 | |||||||||||
Commercial paper | 85,870 | 2 | (12 | ) | 85,860 | ||||||||||
Corporate bonds | 150,711 | 27 | (143 | ) | 150,595 | ||||||||||
U.S. treasuries | 4,802 | 2 | — | 4,804 | |||||||||||
Total available-for-sale investments | $ | 296,972 | $ | 31 | $ | (155 | ) | $ | 296,848 |
Amortized Cost | Cumulative OTTI in Earnings | Unrealized Gain | OTTI Loss in Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
Balance at December 29, 2012 | $ | 2,707 | $ | (394 | ) | $ | 784 | $ | (618 | ) | $ | 166 | ||||||||
Call on investments | (87 | ) | 13 | (25 | ) | 20 | (5 | ) | ||||||||||||
Investments sold | (2,620 | ) | 381 | (759 | ) | 598 | (161 | ) | ||||||||||||
Balance at September 28, 2013 | $ | — | $ | — | $ | — | $ | — | $ | — |
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As of September 27, 2014 | As of December 28, 2013 | ||||||||||||||||||||||
Gross Notional(1) | Prepaid Expenses and Other Assets | Other Accrued Liabilities | Gross Notional(1) | Prepaid Expenses and Other Assets | Other Accrued Liabilities | ||||||||||||||||||
Foreign currency exchange forward contracts | |||||||||||||||||||||||
Related to euro denominated receivables | $ | 20,980 | — | $ | (30 | ) | $ | 16,867 | 27 | $ | — | ||||||||||||
Related to British pound denominated receivables | 165 | — | — | 13,271 | — | (26 | ) | ||||||||||||||||
Related to restricted cash | 1,287 | — | (2 | ) | 1,391 | 2 | — | ||||||||||||||||
$ | 22,432 | $ | — | $ | (32 | ) | $ | 31,529 | $ | 29 | $ | (26 | ) |
(1) | Represents the face amounts of forward contracts that were outstanding as of the period noted. |
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September 27, 2014 | December 28, 2013 | ||||||
Inventory: | |||||||
Raw materials | $ | 11,584 | $ | 14,311 | |||
Work in process | 44,462 | 49,172 | |||||
Finished goods (1) | 74,787 | 60,202 | |||||
Total inventory | $ | 130,833 | $ | 123,685 | |||
Property, plant and equipment, net: | |||||||
Computer hardware | $ | 8,515 | $ | 9,692 | |||
Computer software(2) | 17,679 | 16,988 | |||||
Laboratory and manufacturing equipment | 158,446 | 146,834 | |||||
Furniture and fixtures | 1,343 | 1,347 | |||||
Leasehold improvements | 37,258 | 35,913 | |||||
Construction in progress | 6,465 | 8,950 | |||||
Subtotal | $ | 229,706 | $ | 219,724 | |||
Less accumulated depreciation and amortization | (154,742 | ) | (140,056 | ) | |||
Total property, plant and equipment, net | $ | 74,964 | $ | 79,668 | |||
Accrued expenses: | |||||||
Loss contingency related to non-cancelable purchase commitments | $ | 6,242 | $ | 5,120 | |||
Professional and other consulting fees | 1,033 | 1,411 | |||||
Taxes payable | 1,620 | 2,372 | |||||
Royalties | 2,152 | 1,540 | |||||
Accrued rebate and customer prepay liability | 758 | 3,807 | |||||
Accrued interest on convertible senior notes | 875 | 219 | |||||
Other accrued expenses | 10,913 | 7,962 | |||||
Total accrued expenses | $ | 23,593 | $ | 22,431 |
(1) | Included in finished goods inventory at September 27, 2014 and December 28, 2013 were $16.2 million and $9.2 million, respectively, of inventory at customer locations for which product acceptance had not occurred. |
(2) | Included in computer software at September 27, 2014 and December 28, 2013 were $7.9 million and $7.9 million, respectively, related to an enterprise resource planning ("ERP") system that the Company implemented during 2012. The unamortized ERP costs at September 27, 2014 and December 28, 2013 were $5.4 million and $6.3 million, respectively. |
September 27, 2014 | December 28, 2013 | ||||||
Restricted cash related to outstanding standby letters of credit | |||||||
Value added tax license | $ | 1,362 | $ | 1,430 | |||
Customer proposal guarantee | 1,771 | 1,446 | |||||
Property leases | 699 | 699 | |||||
Other | 392 | 329 | |||||
Total restricted cash | $ | 4,224 | $ | 3,904 |
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Unrealized Gain on Other Available-for-Sale Securities | Foreign Currency Translation | Accumulated Tax Effect | Total | |||||||||||||
Balance at December 28, 2013 | $ | (124 | ) | $ | (2,602 | ) | $ | (760 | ) | $ | (3,486 | ) | ||||
Net current-period other comprehensive loss | (27 | ) | (142 | ) | — | (169 | ) | |||||||||
Balance at September 27, 2014 | $ | (151 | ) | $ | (2,744 | ) | $ | (760 | ) | $ | (3,655 | ) |
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Other Non-Current Assets | Long-Term Debt | Additional Paid-in Capital | |||||||||
Principal amount | $ | — | $ | 150,000 | $ | — | |||||
Debt discount | — | (45,000 | ) | — | |||||||
Equity component | — | — | 45,000 | ||||||||
Debt issuance cost | 3,872 | — | (1,659 | ) | |||||||
Initial transaction amounts | $ | 3,872 | $ | 105,000 | $ | 43,341 | |||||
Amortization of debt issuance cost | (851 | ) | — | — | |||||||
Amortization of debt discount | — | 9,888 | — | ||||||||
Net carrying amount at September 27, 2014 | $ | 3,021 | $ | 114,888 | $ | 43,341 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 27, 2014 | September 28, 2013 | September 27, 2014 | September 28, 2013 | ||||||||||||
Contractual interest expense | $ | 656 | $ | 656 | $ | 1,969 | $ | 875 | |||||||
Amortization of debt issuance costs | 169 | 152 | 493 | 202 | |||||||||||
Amortization of debt discount | 1,956 | 1,770 | 5,724 | 2,350 | |||||||||||
Total interest expense | $ | 2,781 | $ | 2,578 | $ | 8,186 | $ | 3,427 |
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Number of Stock Options | Weighted-Average Exercise Price Per Share | Aggregate Intrinsic Value | ||||||||
Outstanding at December 28, 2013 | 6,367 | $ | 7.26 | $ | 17,452 | |||||
Stock options granted | 25 | $ | 9.02 | |||||||
Stock options exercised | (1,280 | ) | $ | 6.99 | $ | 3,210 | ||||
Stock options canceled | (92 | ) | $ | 12.39 | ||||||
Outstanding at September 27, 2014 | 5,020 | $ | 7.24 | $ | 17,631 | |||||
Vested and expected to vest as of September 27, 2014 | 5,017 | $ | 17,622 | |||||||
Exercisable at September 27, 2014 | 4,921 | $ | 7.24 | $ | 17,329 |
Number of Restricted Stock Units | Weighted- Average Grant Date Fair Value Per Share | Aggregate Intrinsic Value | ||||||||
Outstanding at December 28, 2013 | 6,583 | $ | 7.72 | $ | 64,443 | |||||
RSUs granted | 2,415 | $ | 8.37 | |||||||
RSUs released | (2,625 | ) | $ | 7.74 | $ | 22,477 | ||||
RSUs canceled | (424 | ) | $ | 7.88 | ||||||
Outstanding at September 27, 2014 | 5,949 | $ | 7.97 | $ | 63,122 | |||||
Expected to vest at September 27, 2014 | 5,751 | $ | 61,021 |
Number of Performance Stock Units | Weighted- Average Grant Date Fair Value Per Share | Aggregate Intrinsic Value | ||||||||
Outstanding at December 28, 2013 | 721 | $ | 7.04 | $ | 7,054 | |||||
PSUs granted | 508 | $ | 7.53 | |||||||
PSUs released | (255 | ) | $ | 6.36 | $ | 2,097 | ||||
PSUs canceled | (97 | ) | $ | 7.18 | ||||||
Outstanding at September 27, 2014 | 877 | $ | 7.49 | $ | 9,298 | |||||
Expected to vest at September 27, 2014 | 659 | $ | 6,994 |
Unrecognized Compensation Expense, Net | Weighted- Average Period (in years) | |||
Stock options | 317 | 1.5 | ||
RSUs | 30,599 | 2.3 | ||
PSUs | 2,704 | 1.6 |
Three Months Ended | Nine Months Ended | ||||||
Employee and Director Stock Options | September 27, 2014 | September 28, 2013 | September 27, 2014 | September 28, 2013 | |||
Volatility | N/A | N/A | 52% | N/A | |||
Risk-free interest rate | N/A | N/A | 1.3% | N/A | |||
Expected life | N/A | N/A | 4.3 years | N/A | |||
Estimated fair value | N/A | N/A | $3.85 | N/A | |||
Total stock-based compensation expense | $108 | $665 | $623 | $2,190 |
N/A | Not applicable because the Company did not grant any stock options to employees for the periods presented. |
Three Months Ended | Nine Months Ended | ||||||
Employee Stock Purchase Plan | September 27, 2014 | September 28, 2013 | September 27, 2014 | September 28, 2013 | |||
Volatility | 46% | 49% | 46% - 51% | 46% - 49% | |||
Risk-free interest rate | 0.06% | 0.10% | 0.02% - 0.11% | 0.10% - 0.14% | |||
Expected life | 0.5 years | 0.5 years | 0.25 - 0.5 years | 0.5 years | |||
Estimated fair value | $2.54 | $3.00 | $2.05 - $2.57 | $1.87 - $3.00 | |||
Total stock-based compensation expense | $1,092 | $777 | $2,726 | $2,050 |
Year Ended | |
December 28, 2013 | |
Infinera Volatility | 55% |
NASDAQ Telecom Composite Index Volatility | 23% |
Risk-free interest rate | 0.42% |
Correlation with NASDAQ Telecom Composite Index | 0.56 |
Estimated fair value | $6.27 - $7.06 |
Nine Months Ended | ||
September 27, 2014 | ||
Infinera Volatility | 49% - 50% | |
IGN Index Volatility | 25% | |
Risk-free interest rate | 0.66% - 0.71% | |
Correlation with IGN Index | 0.60 | |
Estimated fair value | $6.59 - $7.60 |
September 27, 2014 | December 28, 2013 | ||||||
Stock-based compensation effects in inventory | $ | 3,160 | $ | 3,189 | |||
Stock-based compensation effects in deferred inventory cost | $ | 13 | $ | 15 | |||
Stock-based compensation effects in fixed assets | $ | 126 | $ | 145 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 27, 2014 | September 28, 2013 | September 27, 2014 | September 28, 2013 | ||||||||||||
Stock-based compensation effects included in net income (loss) before income taxes | |||||||||||||||
Cost of revenue | $ | 492 | $ | 422 | $ | 1,421 | $ | 1,382 | |||||||
Research and development | 2,270 | 2,434 | 6,488 | 8,175 | |||||||||||
Sales and marketing | 1,982 | 1,853 | 5,517 | 5,659 | |||||||||||
General and administration | 1,628 | 1,807 | 4,707 | 4,167 | |||||||||||
6,372 | 6,516 | 18,133 | 19,383 | ||||||||||||
Cost of revenue – amortization from balance sheet (1) | 999 | 1,127 | 2,714 | 4,419 | |||||||||||
Total stock-based compensation expense | $ | 7,371 | $ | 7,643 | $ | 20,847 | $ | 23,802 |
(1) | Stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods and recognized in the current period. |
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Three Months Ended | Nine Months Ended | ||||||||||||||
September 27, 2014 | September 28, 2013 | September 27, 2014 | September 28, 2013 | ||||||||||||
Americas: | |||||||||||||||
United States | $ | 120,769 | $ | 103,113 | $ | 367,802 | $ | 270,437 | |||||||
Other Americas | 9,230 | 2,024 | 17,526 | 6,544 | |||||||||||
129,999 | 105,137 | 385,328 | 276,981 | ||||||||||||
Europe, Middle East and Africa | 34,131 | 32,262 | 78,978 | 103,022 | |||||||||||
Asia Pacific and Japan | 9,429 | 4,621 | 17,467 | 25,027 | |||||||||||
Total revenue | $ | 173,559 | $ | 142,020 | $ | 481,773 | $ | 405,030 |
September 27, 2014 | December 28, 2013 | ||||||
United States | $ | 72,428 | $ | 76,850 | |||
Other Americas | 237 | 319 | |||||
Europe, Middle East and Africa | 943 | 1,451 | |||||
Asia Pacific and Japan | 1,356 | 1,048 | |||||
Total property, plant and equipment, net | $ | 74,964 | $ | 79,668 |
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Three Months Ended | Nine Months Ended | ||||||||||||||
September 27, 2014 | September 28, 2013 | September 27, 2014 | September 28, 2013 | ||||||||||||
Beginning balance | $ | 27,948 | $ | 19,701 | $ | 22,908 | $ | 16,482 | |||||||
Charges to operations | 5,820 | 5,220 | 18,181 | 16,646 | |||||||||||
Utilization | (2,312 | ) | (2,645 | ) | (7,924 | ) | (6,783 | ) | |||||||
Change in estimate (1) | (3,650 | ) | 886 | (5,359 | ) | (3,183 | ) | ||||||||
Balance at the end of the period | $ | 27,806 | $ | 23,162 | $ | 27,806 | $ | 23,162 |
(1) | The Company records hardware warranty liabilities based on the latest quality and cost information available as of that date. The changes in estimate shown here are due to changes in overall actual failure rates and the resulting impact of these changes on the Company’s estimate of expected future returns, as well as changes in the estimated cost and the mix of new versus used units related to replacement of failed units. |
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