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1. Basis of Presentation
The consolidated condensed financial statements have been prepared by Cirrus Logic, Inc. (“Cirrus Logic,” “we,” “us,” “our,” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “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 28, 2015, included in our Annual Report on Form 10-K filed with the Commission on May 27, 2015. In our opinion, the financial statements reflect all material 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. Additionally, prior period amounts have been adjusted to conform to current year presentation.
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2. Recently Issued Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments in this ASU provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is currently evaluating the impact of this ASU and expects no material modifications to its financial statements.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606). The purpose of this ASU is to converge revenue recognition requirements per GAAP and International Financial Reporting Standards (IFRS). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in this ASU are effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption not permitted by the FASB; however, in April 2015 the FASB issued for public comment a proposal to delay the effective date of this ASU to annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact of this ASU on its consolidated financial position, results of operations and cash flows.
In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-03 is to be applied retrospectively and represents a change in accounting principle. This ASU is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. Earlier adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the effect that the adoption of this ASU will have on its financial statements.
In April 2015, the FASB issued ASU No. 2015-04, Compensation – Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets. The ASU is part of the FASB’s “Simplification Initiative” to reduce complexity in accounting standards. The FASB decided to permit entities to measure defined benefit plan assets and obligations as of the month-end that is closest to their fiscal year-end. An entity is required to disclose the accounting policy election and the date used to measure defined benefit plan assets and obligations in accordance with the amendments in this update. The amendments in this update are effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with earlier application permitted. The Company is currently evaluating the likelihood of adoption and the impact this ASU would have on its financial statements.
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3. Marketable Securities
The Company’s investments that have original maturities greater than 90 days have been classified as available-for-sale securities in accordance with U.S. GAAP. Marketable securities are categorized on the consolidated condensed balance sheet as short- and long-term marketable securities, as appropriate.
The following table is a summary of available-for-sale securities at June 27, 2015 (in thousands):
Estimated |
|||||||||||
Gross |
Gross |
Fair Value |
|||||||||
Amortized |
Unrealized |
Unrealized |
(Net Carrying |
||||||||
As of June 27, 2015 |
Cost |
Gains |
Losses |
Amount) |
|||||||
Corporate debt securities |
$ |
157,080 |
$ |
2 |
$ |
(223) |
$ |
156,859 | |||
U.S. Treasury securities |
11,506 |
- |
(2) | 11,504 | |||||||
Commercial paper |
2,490 | 2 |
- |
2,492 | |||||||
Total securities |
$ |
171,076 |
$ |
4 |
$ |
(225) |
$ |
170,855 |
The Company’s specifically identified gross unrealized losses of $225 thousand relates to 43 different securities with total amortized cost of approximately $157.6 million at June 27, 2015. Because the Company does not intend to sell the investments at a loss and the Company will not be required to sell the investments before recovery of its amortized cost basis, it did not consider the investment in these securities to be other-than-temporarily impaired at June 27, 2015. Further, the securities with gross unrealized losses had been in a continuous unrealized loss position for less than 12 months as of June 27, 2015.
The following table is a summary of available-for-sale securities at March 28, 2015 (in thousands):
Estimated |
|||||||||||
Gross |
Gross |
Fair Value |
|||||||||
Amortized |
Unrealized |
Unrealized |
(Net Carrying |
||||||||
As of March 28, 2015 |
Cost |
Gains |
Losses |
Amount) |
|||||||
Corporate debt securities |
$ |
153,896 |
$ |
8 |
$ |
(68) |
$ |
153,836 | |||
U.S. Treasury securities |
28,010 |
- |
(15) | 27,995 | |||||||
Commercial paper |
2,485 | 2 |
- |
2,487 | |||||||
Total securities |
$ |
184,391 |
$ |
10 |
$ |
(83) |
$ |
184,318 |
The Company’s specifically identified gross unrealized losses of $83 thousand relates to 34 different securities with total amortized cost of approximately $154.3 million at March 28, 2015. Because the Company did not intend to sell the investments at a loss and the Company did not expect to be required to sell the investments before recovery of its amortized cost basis, it did not consider the investment in these securities to be other-than-temporarily impaired at March 28, 2015. Further, the securities with gross unrealized losses had been in a continuous unrealized loss position for less than 12 months as of March 28, 2015.
The cost and estimated fair value of available-for-sale securities by contractual maturities were as follows (in thousands):
June 27, 2015 |
March 28, 2015 |
|||||||||||
Amortized |
Estimated |
Amortized |
Estimated |
|||||||||
Cost |
Fair Value |
Cost |
Fair Value |
|||||||||
Within 1 year |
$ |
120,288 |
$ |
120,226 |
$ |
124,275 |
$ |
124,246 | ||||
After 1 year |
50,788 | 50,629 | 60,116 | 60,072 | ||||||||
Total |
$ |
171,076 |
$ |
170,855 |
$ |
184,391 |
$ |
184,318 |
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4. Fair Value of Financial Instruments
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 equivalents, investment portfolio, and pension plan assets / liabilities. 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 (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
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• |
Level 1 - Quoted prices in active markets for identical assets or liabilities. |
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• |
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. |
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• |
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 cash equivalents and investment portfolio assets consist of corporate debt securities, money market funds, U.S. Treasury securities, and commercial paper and are reflected on our consolidated condensed balance sheets under the headings cash and cash equivalents, 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’s long-term revolving facility, described in Note 8, bears interest at a base rate plus applicable margin or LIBOR plus applicable margin. As of June 27, 2015, the fair value of the Company’s long-term revolving facility approximates carrying value based on estimated margin.
As of June 27, 2015 and March 28, 2015, the Company classified all of its investment portfolio and pension plan assets as Level 1 or Level 2 assets. The Company has no Level 3 assets or liabilities. There were no transfers between Level 1, Level 2, or Level 3 measurements for the three month period ending June 27, 2015.
The following table summarizes the fair value of our financial instruments, exclusive of pension plan assets, at June 27, 2015, (in thousands):
Quoted Prices |
|||||||||||
in Active |
Significant |
||||||||||
Markets for |
Other |
Significant |
|||||||||
Identical |
Observable |
Unobservable |
|||||||||
Assets |
Inputs |
Inputs |
|||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||
Assets: |
|||||||||||
Cash equivalents |
|||||||||||
Money market funds |
$ |
1,293 |
$ |
- |
$ |
- |
$ |
1,293 | |||
Available-for-sale securities |
|||||||||||
Corporate debt securities |
$ |
- |
$ |
156,859 |
$ |
- |
$ |
156,859 | |||
U.S. Treasury securities |
11,504 |
- |
- |
11,504 | |||||||
Commercial paper |
- |
2,492 |
- |
2,492 | |||||||
$ |
11,504 |
$ |
159,351 |
$ |
- |
$ |
170,855 |
The fair value of our financial assets at March 28, 2015, was determined using the following inputs (in thousands):
Quoted Prices |
|||||||||||
in Active |
Significant |
||||||||||
Markets for |
Other |
Significant |
|||||||||
Identical |
Observable |
Unobservable |
|||||||||
Assets |
Inputs |
Inputs |
|||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||
Cash equivalents |
|||||||||||
Money market funds |
$ |
996 |
$ |
- |
$ |
- |
$ |
996 | |||
Available-for-sale securities |
|||||||||||
Corporate debt securities |
$ |
- |
$ |
153,836 |
$ |
- |
$ |
153,836 | |||
U.S. Treasury securities |
27,995 |
- |
- |
27,995 | |||||||
Commercial paper |
- |
2,487 |
- |
2,487 | |||||||
$ |
27,995 |
$ |
156,323 |
$ |
- |
$ |
184,318 |
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5. Accounts Receivable, net
The following are the components of accounts receivable, net (in thousands):
June 27, |
March 28, |
||||
2015 |
2015 |
||||
Gross accounts receivable |
$ |
121,194 |
$ |
112,964 | |
Allowance for doubtful accounts |
(356) | (356) | |||
Accounts receivable, net |
$ |
120,838 |
$ |
112,608 |
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6. Inventories
Inventories are comprised of the following (in thousands):
June 27, |
March 28, |
||||
2015 |
2015 |
||||
Work in process |
$ |
83,521 |
$ |
64,663 | |
Finished goods |
42,674 | 19,533 | |||
$ |
126,195 |
$ |
84,196 |
The increase in inventory balances at June 27, 2015, as compared to March 28, 2015, is primarily related to production ramps ahead of customer demand.
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7. Acquisition
Cirrus Logic completed the acquisition of Wolfson Microelectronics plc (the “Acquisition”), a public limited company incorporated in Scotland (“Wolfson”) in the second quarter of fiscal year 2015. Upon completion of the acquisition, Wolfson was re-registered as a private limited company.
The Acquisition was accounted for as a business purchase pursuant to ASC Topic 805, Business Combinations, and the operations of Wolfson have been included in the Company’s consolidated financial statements since August 21, 2014, the date of acquisition. The following table presents the final allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition as of June 27, 2015 (in thousands):
Amount |
||
Cash and cash equivalents |
$ |
25,342 |
Inventory |
30,530 | |
Other current assets |
16,226 | |
Property, plant and equipment |
27,398 | |
Intangible assets |
175,987 | |
Pension assets |
1,625 | |
Total identifiable assets acquired |
$ |
277,108 |
Deferred tax liability - current |
(12,426) | |
Deferred revenue |
(551) | |
Other accrued liabilities |
(39,417) | |
Other long-term liabilities |
(2,449) | |
Total identifiable liabilities assumed |
$ |
(54,843) |
Net identifiable assets acquired |
$ |
222,265 |
Goodwill |
247,216 | |
Net assets acquired |
$ |
469,481 |
The goodwill of $247.2 million arising from the Acquisition is attributable primarily to expected synergies and the product and customer base of Wolfson. None of the goodwill is expected to be deductible for income tax purposes.
The components of the acquired intangible assets and related weighted average amortization periods are detailed below (in thousands):
Intangible assets |
Amount |
Weighted-average Amortization Period (years) |
||
Developed technology |
$ |
74,247 |
6.2 |
|
Technology intellectual property |
14,572 |
5.3 |
||
Trademark |
1,437 |
1.3 |
||
IPR&D |
72,750 |
7.3 |
||
Customer relationships |
12,981 |
10.0 |
||
Total |
$ |
175,987 |
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8. Revolving Credit Facilities
Cirrus Logic’s credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as Administrative Agent, and the Lenders party thereto provides for a $250 million senior secured revolving credit facility (the “Credit Facility”). The Credit Facility replaced Cirrus Logic’s interim credit facility described below, and may be used for general corporate purposes. The Credit Facility matures on August 29, 2017.
The Credit Facility is required to be guaranteed by all of Cirrus Logic’s material domestic subsidiaries (the “Subsidiary Guarantors”). The Credit Facility is secured by substantially all of the assets of Cirrus Logic and any Subsidiary Guarantors, except for certain excluded assets. Borrowings under the Credit Facility may, at Cirrus Logic’s election, bear interest at either (a) a Base Rate plus the Applicable Margin (“Base Rate Loans”) or (b) a LIBOR Rate plus the Applicable Margin (“LIBOR Rate Loans”). The Applicable Margin ranges from 0% to .25% per annum for Base Rate Loans and 1.50% to 2.00% per annum for LIBOR Rate Loans based on Cirrus Logic’s Leverage Ratio (discussed below). A Commitment Fee accrues at a rate per annum ranging from 0.25% to 0.35% (based on the Leverage Ratio) on the average daily unused portion of the Commitment of the Lenders.
The Credit Agreement contains customary affirmative covenants, including, among others, covenants regarding the payment of taxes and other obligations, maintenance of insurance, reporting requirements and compliance with applicable laws and regulations. Further, the Credit Agreement contains customary negative covenants limiting the ability of Cirrus Logic or any Subsidiary to, among other things, incur debt, grant liens, make investments, effect certain fundamental changes, make certain asset dispositions, and make certain restricted payments. The Credit Facility also contains certain financial covenants providing that (a) the ratio of consolidated funded indebtedness to consolidated EBITDA for the prior four consecutive quarters must not be greater than 2.00 to 1.00 (the “Leverage Ratio”) and (b) the sum of cash and Cash Equivalents of Cirrus Logic and its Subsidiaries on a consolidated basis must not be less than $100 million. At June 27, 2015, the Company was in compliance with all covenants under the Credit Agreement.
On June 23, 2015, Cirrus Logic and Wells Fargo Bank, National Association, as Administrative Agent, entered into a first amendment of the Credit Agreement (the “First Amendment”). The First Amendment primarily provides additional flexibility to the Company for certain intercompany transactions. In particular, the First Amendment (i) amended the definition of “Permitted Acquisition” to increase the threshold whereby the Company must provide certain financial statements and certifications to the Administrative Agent; (ii) expanded the Company’s ability to make intercompany investments, including unsecured intercompany indebtedness to fund a Permitted Acquisition; and (iii) provided the Company with the ability, under certain circumstances, to transfer capital stock in a non-guarantor subsidiary to another wholly-owned subsidiary that is not a credit party.
The Company had borrowed $160.4 million under the Credit Facility as of June 27, 2015, which is included in long-term liabilities on the consolidated condensed balance sheets. The borrowings were primarily used for refinancing the $225 million interim credit facility described below, which was used for financing the Acquisition in the second quarter of fiscal year 2015.
Cirrus Logic entered into a credit agreement (the “Interim Credit Agreement”) with Wells Fargo Bank, National Association as administrative agent and lender, on April 29, 2014, in connection with the Acquisition. The Interim Credit Agreement provided for a $225 million senior secured revolving credit facility (the “Interim Facility”). The Interim Facility was to be used for, among other things, payment of the offer consideration in connection with the Acquisition. The Interim Facility was replaced with the Credit Facility described above, maturing with no outstanding borrowings or accrued interest on the maturity date.
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9. Patent Agreement, net
On May 8, 2015, we entered into a patent purchase agreement for the sale of certain Company-owned patents relating to our LED lighting products. As a result of this agreement, on June 22, 2015, the Company received cash consideration of $12.5 million from the purchaser. Under the agreement, the Company undertook to no longer be engaged in LED lighting and received a license under the sold patents for all other fields of use. The proceeds were recorded during fiscal year 2016 as a recovery of costs previously incurred and are reflected as a separate line item on the Consolidated Condensed Statements of Income in operating expenses under the caption “Patent agreement, net.”
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10. Income Taxes
Our provision for income taxes is based on estimated effective tax rates derived from an estimate of annual consolidated earnings before taxes, adjusted for nondeductible expenses, other permanent items and any applicable credits.
The following table presents the provision for income taxes and the effective tax rates (in thousands):
Three Months Ended |
|||||
June 27, |
June 28, |
||||
2015 |
2014 |
||||
Income before income taxes |
$ |
49,498 |
$ |
15,949 | |
Provision for income taxes |
$ |
16,144 |
$ |
5,701 | |
Effective tax rate |
32.6% | 35.7% |
Our income tax expense for the first quarter of fiscal year 2016 was below the federal statutory rate primarily due to income in certain foreign jurisdictions taxed below the federal statutory rate. Our income tax expense for the first quarter of fiscal year 2015 was slightly above the federal statutory rate primarily due to the effect of the permanent differences that are nondeductible for tax purposes.
We record unrecognized tax benefits for the estimated risk associated with tax positions taken on tax returns. The unrecognized tax benefits balance was $3.0 million as of June 27, 2015. Due to the Wolfson acquisition and subsequent post-acquisition integration, it is reasonably possible that the total amount of unrecognized tax benefits could increase within the next 12 months. An estimate of the range of increase is impracticable as of June 27, 2015.
We accrue interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes. As of June 27, 2015, the balance of accrued interest and penalties was zero. No interest or penalties were incurred during the first three months of fiscal year 2016 or 2015.
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 2012 through 2015 remain open to examination by the major taxing jurisdictions to which we are subject.
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11. Pension Plan
The components of the Company’s net periodic pension expense for the three months ended June 27, 2015 and June 28, 2014 are as follows (in thousands):
Three Months Ended |
||||||
June 27, |
June 28, |
|||||
2015 |
2014 |
|||||
Expenses |
$ |
- |
$ |
- |
||
Interest cost |
- |
- |
||||
Expected return on plan assets |
- |
- |
||||
Amortization of actuarial loss |
16 |
- |
||||
$ |
16 |
$ |
- |
Based on an actuarial study performed as of March 28, 2015, the pension plan is underfunded and a long-term liability is reflected in the Company’s consolidated condensed balance sheet under the caption “Other long-term liabilities”.
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13. Legal Matters
From time to time, we are involved in legal proceedings concerning matters arising in connection with the conduct of our business activities. We regularly evaluate the status of legal proceedings in which we are involved in order to assess whether a loss is probable or there is a reasonable possibility that a loss or additional loss may have been incurred and determine if accruals are appropriate. We further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made.
Based on current knowledge, management does not believe that there are any pending matters that could potentially have a material adverse effect on our business, financial condition, results of operations or cash flows. However, we are engaged in various legal actions in the normal course of business. While there can be no assurances in light of the inherent uncertainties involved in any potential legal proceedings, some of which are beyond our control, an adverse outcome in any legal proceeding could be material to our results of operations or cash flows for any particular reporting period.
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14. Stockholders’ Equity
Common Stock
The Company issued a net 0.4 million and 0.2 million shares of common stock during the three month periods ending June 27, 2015 and June 28, 2014, respectively, in connection with stock issuances pursuant to the Company’s 2006 Stock Incentive Plan.
Accumulated Other Comprehensive Loss
The Company updated the functional currencies of its smaller foreign entities (from the U.S. dollar to certain local currencies). As a result, the Company is presenting the foreign currency translation effect, which amounted to a $0.8 million loss for the quarter ended June 27, 2015, within other comprehensive income in the Consolidated Condensed Statements of Comprehensive Income. Additionally, in the current quarter, the Company amortized pension actuarial losses out of accumulated other comprehensive income / (loss) to selling, general and administrative expenses. See Note 11 - Pension Plan above.
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15. Segment Information
We determine our operating segments in accordance with FASB guidelines. Our Chief Executive Officer (“CEO”) has been identified as the chief operating decision maker under these guidelines.
The Company operates and tracks its results in one reportable segment, but reports revenue performance in two product lines, which, beginning in the second quarter of fiscal year 2015, are Portable Audio and Non-Portable Audio and Other. 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, no complete, discrete financial information is maintained for these product lines.
Revenues from our product lines are as follows (in thousands):
Three Months Ended |
|||||
June 27, |
June 28, |
||||
2015 |
2014 |
||||
Portable Audio Products |
$ |
235,866 |
$ |
112,570 | |
Non-Portable Audio and Other Products |
46,767 | 39,995 | |||
$ |
282,633 |
$ |
152,565 |
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16. Subsequent Event
On July 21, 2015, the Company purchased a small, privately-held technology group that broadens our software capabilities for approximately $22 million. The purchase will be funded with our existing cash resources.
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Estimated |
|||||||||||
Gross |
Gross |
Fair Value |
|||||||||
Amortized |
Unrealized |
Unrealized |
(Net Carrying |
||||||||
As of June 27, 2015 |
Cost |
Gains |
Losses |
Amount) |
|||||||
Corporate debt securities |
$ |
157,080 |
$ |
2 |
$ |
(223) |
$ |
156,859 | |||
U.S. Treasury securities |
11,506 |
- |
(2) | 11,504 | |||||||
Commercial paper |
2,490 | 2 |
- |
2,492 | |||||||
Total securities |
$ |
171,076 |
$ |
4 |
$ |
(225) |
$ |
170,855 |
The Company’s specifically identified gross unrealized losses of $225 thousand relates to 43 different securities with total amortized cost of approximately $157.6 million at June 27, 2015. Because the Company does not intend to sell the investments at a loss and the Company will not be required to sell the investments before recovery of its amortized cost basis, it did not consider the investment in these securities to be other-than-temporarily impaired at June 27, 2015. Further, the securities with gross unrealized losses had been in a continuous unrealized loss position for less than 12 months as of June 27, 2015.
The following table is a summary of available-for-sale securities at March 28, 2015 (in thousands):
Estimated |
|||||||||||
Gross |
Gross |
Fair Value |
|||||||||
Amortized |
Unrealized |
Unrealized |
(Net Carrying |
||||||||
As of March 28, 2015 |
Cost |
Gains |
Losses |
Amount) |
|||||||
Corporate debt securities |
$ |
153,896 |
$ |
8 |
$ |
(68) |
$ |
153,836 | |||
U.S. Treasury securities |
28,010 |
- |
(15) | 27,995 | |||||||
Commercial paper |
2,485 | 2 |
- |
2,487 | |||||||
Total securities |
$ |
184,391 |
$ |
10 |
$ |
(83) |
$ |
184,318 |
June 27, 2015 |
March 28, 2015 |
|||||||||||
Amortized |
Estimated |
Amortized |
Estimated |
|||||||||
Cost |
Fair Value |
Cost |
Fair Value |
|||||||||
Within 1 year |
$ |
120,288 |
$ |
120,226 |
$ |
124,275 |
$ |
124,246 | ||||
After 1 year |
50,788 | 50,629 | 60,116 | 60,072 | ||||||||
Total |
$ |
171,076 |
$ |
170,855 |
$ |
184,391 |
$ |
184,318 |
|
Quoted Prices |
|||||||||||
in Active |
Significant |
||||||||||
Markets for |
Other |
Significant |
|||||||||
Identical |
Observable |
Unobservable |
|||||||||
Assets |
Inputs |
Inputs |
|||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||
Assets: |
|||||||||||
Cash equivalents |
|||||||||||
Money market funds |
$ |
1,293 |
$ |
- |
$ |
- |
$ |
1,293 | |||
Available-for-sale securities |
|||||||||||
Corporate debt securities |
$ |
- |
$ |
156,859 |
$ |
- |
$ |
156,859 | |||
U.S. Treasury securities |
11,504 |
- |
- |
11,504 | |||||||
Commercial paper |
- |
2,492 |
- |
2,492 | |||||||
$ |
11,504 |
$ |
159,351 |
$ |
- |
$ |
170,855 |
The fair value of our financial assets at March 28, 2015, was determined using the following inputs (in thousands):
Quoted Prices |
|||||||||||
in Active |
Significant |
||||||||||
Markets for |
Other |
Significant |
|||||||||
Identical |
Observable |
Unobservable |
|||||||||
Assets |
Inputs |
Inputs |
|||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||
Cash equivalents |
|||||||||||
Money market funds |
$ |
996 |
$ |
- |
$ |
- |
$ |
996 | |||
Available-for-sale securities |
|||||||||||
Corporate debt securities |
$ |
- |
$ |
153,836 |
$ |
- |
$ |
153,836 | |||
U.S. Treasury securities |
27,995 |
- |
- |
27,995 | |||||||
Commercial paper |
- |
2,487 |
- |
2,487 | |||||||
$ |
27,995 |
$ |
156,323 |
$ |
- |
$ |
184,318 |
|
June 27, |
March 28, |
||||
2015 |
2015 |
||||
Gross accounts receivable |
$ |
121,194 |
$ |
112,964 | |
Allowance for doubtful accounts |
(356) | (356) | |||
Accounts receivable, net |
$ |
120,838 |
$ |
112,608 |
|
June 27, |
March 28, |
||||
2015 |
2015 |
||||
Work in process |
$ |
83,521 |
$ |
64,663 | |
Finished goods |
42,674 | 19,533 | |||
$ |
126,195 |
$ |
84,196 |
|
Amount |
||
Cash and cash equivalents |
$ |
25,342 |
Inventory |
30,530 | |
Other current assets |
16,226 | |
Property, plant and equipment |
27,398 | |
Intangible assets |
175,987 | |
Pension assets |
1,625 | |
Total identifiable assets acquired |
$ |
277,108 |
Deferred tax liability - current |
(12,426) | |
Deferred revenue |
(551) | |
Other accrued liabilities |
(39,417) | |
Other long-term liabilities |
(2,449) | |
Total identifiable liabilities assumed |
$ |
(54,843) |
Net identifiable assets acquired |
$ |
222,265 |
Goodwill |
247,216 | |
Net assets acquired |
$ |
469,481 |
|
Intangible assets |
Amount |
Weighted-average Amortization Period (years) |
||
Developed technology |
$ |
74,247 |
6.2 |
|
Technology intellectual property |
14,572 |
5.3 |
||
Trademark |
1,437 |
1.3 |
||
IPR&D |
72,750 |
7.3 |
||
Customer relationships |
12,981 |
10.0 |
||
Total |
$ |
175,987 |
|
Three Months Ended |
|||||
June 27, |
June 28, |
||||
2015 |
2014 |
||||
Income before income taxes |
$ |
49,498 |
$ |
15,949 | |
Provision for income taxes |
$ |
16,144 |
$ |
5,701 | |
Effective tax rate |
32.6% | 35.7% |
|
Three Months Ended |
||||||
June 27, |
June 28, |
|||||
2015 |
2014 |
|||||
Expenses |
$ |
- |
$ |
- |
||
Interest cost |
- |
- |
||||
Expected return on plan assets |
- |
- |
||||
Amortization of actuarial loss |
16 |
- |
||||
$ |
16 |
$ |
- |
|
Three Months Ended |
|||||
June 27, |
June 28, |
||||
2015 |
2014 |
||||
Portable Audio Products |
$ |
235,866 |
$ |
112,570 | |
Non-Portable Audio and Other Products |
46,767 | 39,995 | |||
$ |
282,633 |
$ |
152,565 |
|
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