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Standard | Description | Date of adoption | Effect on the financial statements or other significant matters | |||
Standards that are not yet adopted | ||||||
Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) | This standard is based on principles that govern the recognition of revenue at an amount to which an entity expects to be entitled when products and services are transferred to customers. In August 2015, the FASB deferred the effective date by one year while providing the option to adopt the standard on the original effective date of January 1, 2017. In March 2016, the FASB issued additional guidance regarding principal versus agent considerations in the accounting of revenue. The standard may be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. | January 1, 2018 | The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements and related disclosures. | |||
ASU No. 2016-02, Leases (Topic 842) | This standard requires lessees to put most leases on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. Lessees would recognize a right-to-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The new standard should be applied on a modified retrospective basis. | January 1, 2019 | The Company is beginning to evaluate the impact that the adoption of this standard will have on its consolidated financial statements. | |||
ASU No. 2016-09, Stock Compensation (Topic 718) | This standard requires income tax effects of awards to be recognized in the income statement when the awards vest or are settled, allowing an employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, and to make a policy election to account for forfeitures as they occur. Early adoption is permitted for an entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. | January 1, 2017 | The Company is beginning to evaluate the impact that the adoption of this standard will have on its consolidated financial statements. | |||
Standards that were adopted | ||||||
ASU No. 2015-03 and ASU 2015-15, Interest - Imputation of Interest (Subtopic 835-30) | ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. ASU 2015-15 was issued to provide clarification to ASU 2015-03 in that fees related to line-of-credit arrangements should continue to be presented as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement. | January 1, 2016 | The adoption of this standard did not have a material impact on the consolidated financial statements. At March 31, 2016, the Company presented debt issuance costs of $3.3 million related to its secured revolving credit facility as an asset on its consolidated balance sheet. |
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March 31, 2016 | December 31, 2015 | |||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | ||||||||||||||||||
Cash equivalents (1): | ||||||||||||||||||||||||
Money market funds | $ | 56,821 | $ | — | $ | 56,821 | $ | 51,059 | $ | — | $ | 51,059 | ||||||||||||
Total cash equivalents | $ | 56,821 | $ | — | $ | 56,821 | $ | 51,059 | $ | — | $ | 51,059 | ||||||||||||
Marketable securities: | ||||||||||||||||||||||||
U.S. agency securities | $ | — | $ | 14,440 | $ | 14,440 | $ | — | $ | 14,451 | $ | 14,451 | ||||||||||||
Commercial paper | — | 1,200 | 1,200 | — | 2,197 | 2,197 | ||||||||||||||||||
Corporate debt securities | — | 112,459 | 112,459 | — | 165,825 | 165,825 | ||||||||||||||||||
Municipal securities | — | 11,852 | 11,852 | — | 11,913 | 11,913 | ||||||||||||||||||
Total marketable securities | $ | — | $ | 139,951 | $ | 139,951 | $ | — | $ | 194,386 | $ | 194,386 |
(in thousands) | March 31, 2016 | December 31, 2015 | ||||||
Less than one year | $ | 83,678 | $ | 122,199 | ||||
Greater than one year but less than two years | 56,273 | 72,187 | ||||||
Total | $ | 139,951 | $ | 194,386 |
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(in thousands) | March 31, 2016 | December 31, 2015 | |||||
Components | $ | 8,319 | $ | 9,476 | |||
Finished goods | 131,417 | 178,756 | |||||
Total inventory | $ | 139,736 | $ | 188,232 |
(dollars in thousands) | Useful life (in years) | March 31, 2016 | December 31, 2015 | ||||||
Leasehold improvements | 3–10 | $ | 40,860 | $ | 40,841 | ||||
Production, engineering and other equipment | 4 | 25,969 | 25,174 | ||||||
Tooling | 1–2 | 19,844 | 19,537 | ||||||
Computers and software | 2 | 14,931 | 14,581 | ||||||
Furniture and office equipment | 3 | 11,444 | 11,389 | ||||||
Construction in progress | 5,368 | 4,632 | |||||||
Tradeshow equipment and other | 2-5 | 6,217 | 4,136 | ||||||
Gross property and equipment | 124,633 | 120,290 | |||||||
Less: Accumulated depreciation and amortization | (56,908 | ) | (50,240) | ||||||
Property and equipment, net | $ | 67,725 | $ | 70,050 |
March 31, 2016 | |||||||||||
(in thousands) | Gross carrying value | Accumulated amortization | Net carrying value | ||||||||
Purchased technology and other amortizable assets | $ | 39,451 | $ | (10,045 | ) | $ | 29,406 | ||||
In-process research and development (IPR&D) | 7,375 | — | 7,375 | ||||||||
Total intangible assets | $ | 46,826 | $ | (10,045 | ) | $ | 36,781 |
December 31, 2015 | |||||||||||
(in thousands) | Gross carrying value | Accumulated amortization | Net carrying value | ||||||||
Purchased technology and other amortizable assets | $ | 32,952 | $ | (8,540 | ) | $ | 24,412 | ||||
IPR&D | 6,615 | — | 6,615 | ||||||||
Total intangible assets | $ | 39,567 | $ | (8,540 | ) | $ | 31,027 |
(in thousands) | Total | |||
Year ending December 31, | ||||
2016 (remaining 9 months) | $ | 5,670 | ||
2017 | 6,797 | |||
2018 | 6,404 | |||
2019 | 5,894 | |||
2020 | 3,771 | |||
Thereafter | 870 | |||
$ | 29,406 |
(in thousands) | March 31, 2016 | December 31, 2015 | |||||
Accrued payables | $ | 58,937 | $ | 64,831 | |||
Excess purchase order commitments | 27,878 | 38,477 | |||||
Accrued sales incentive | 16,206 | 29,298 | |||||
Employee related liabilities | 15,904 | 26,491 | |||||
Warranty liability | 7,807 | 10,400 | |||||
Customer deposits | 6,456 | 8,877 | |||||
Income taxes payable | 8,711 | 7,536 | |||||
Other | 6,410 | 6,536 | |||||
Accrued liabilities | $ | 148,309 | $ | 192,446 |
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Options outstanding | ||||||||||||
(shares in thousands) | Shares | Weighted- average exercise price | Weighted- average remaining contractual term (in years) | Aggregate intrinsic value (in thousands) | ||||||||
Outstanding at December 31, 2015: | 13,081 | $ | 11.82 | 6.70 | $ | 108,846 | ||||||
Granted | 2,054 | 10.73 | ||||||||||
Exercised | (795 | ) | 1.10 | |||||||||
Forfeited/Cancelled | (440 | ) | 20.66 | |||||||||
Outstanding at March 31, 2016: | 13,900 | $ | 11.99 | 6.64 | $ | 58,742 | ||||||
Exercisable at March 31, 2016 | 8,191 | 7.67 | 5.67 | $ | 55,808 | |||||||
Vested and expected to vest at March 31, 2016 | 13,578 | $ | 11.86 | 6.60 | $ | 58,533 |
(shares in thousands) | Shares | Weighted- average grant date fair value | ||||
Non-vested shares at December 31, 2015 | 4,638 | $ | 32.15 | |||
Granted | 4,028 | 11.88 | ||||
Vested | (386 | ) | 21.53 | |||
Forfeited | (645 | ) | 22.97 | |||
Non-vested shares at March 31, 2016 | 7,635 | $ | 22.77 |
Three months ended | |||||||
(in thousands) | March 31, 2016 | March 31, 2015 | |||||
Cost of revenue | $ | 357 | $ | 283 | |||
Research and development | 6,010 | 3,535 | |||||
Sales and marketing | 3,204 | 3,066 | |||||
General and administrative | 6,160 | 19,617 | |||||
Total stock-based compensation expense, before income taxes | 15,731 | 26,501 | |||||
Total tax benefit recognized | (2,002 | ) | (9,304 | ) | |||
Total stock-based compensation expense, net of income taxes | $ | 13,729 | $ | 17,197 |
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Three months ended | |||||||
(dollars in thousands) | March 31, 2016 | March 31, 2015 | |||||
Income tax expense (benefit) | $ | (14,283 | ) | $ | 3,272 | ||
Effective tax rate | 11.7 | % | 16.3 | % |
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Three months ended | |||||||
(in thousands) | March 31, 2016 | March 31, 2015 | |||||
Beginning balances | $ | 10,856 | $ | 6,405 | |||
Charged to cost of revenue | 2,670 | 6,044 | |||||
Settlements of warranty claims | (5,515 | ) | (3,480 | ) | |||
Ending balances | $ | 8,011 | $ | 8,969 |
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March 31, 2016 | December 31, 2015 | ||
Customer A | 36% | 40% | |
Customer B | 23% | * | |
Customer C | 14% | * | |
Customer D | * | 18% |
Three months ended | |||||||
(in thousands) | March 31, 2016 | March 31, 2015 | |||||
Accounts receivable sold | $ | 20,653 | $ | 35,299 | |||
Factoring fees | 142 | 291 |
Three months ended | |||
March 31, 2016 | March 31, 2015 | ||
Customer B | 15% | 12% | |
Customer A | 13% | * |
Three months ended | |||||||
(in thousands) | March 31, 2016 | March 31, 2015 | |||||
Americas | $ | 85,305 | $ | 180,093 | |||
Europe, Middle East and Africa (EMEA) | 60,278 | 139,079 | |||||
Asia and Pacific area countries (APAC) | 37,953 | 43,937 | |||||
$ | 183,536 | $ | 363,109 |
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Standard | Description | Date of adoption | Effect on the financial statements or other significant matters | |||
Standards that are not yet adopted | ||||||
Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) | This standard is based on principles that govern the recognition of revenue at an amount to which an entity expects to be entitled when products and services are transferred to customers. In August 2015, the FASB deferred the effective date by one year while providing the option to adopt the standard on the original effective date of January 1, 2017. In March 2016, the FASB issued additional guidance regarding principal versus agent considerations in the accounting of revenue. The standard may be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. | January 1, 2018 | The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements and related disclosures. | |||
ASU No. 2016-02, Leases (Topic 842) | This standard requires lessees to put most leases on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. Lessees would recognize a right-to-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The new standard should be applied on a modified retrospective basis. | January 1, 2019 | The Company is beginning to evaluate the impact that the adoption of this standard will have on its consolidated financial statements. | |||
ASU No. 2016-09, Stock Compensation (Topic 718) | This standard requires income tax effects of awards to be recognized in the income statement when the awards vest or are settled, allowing an employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, and to make a policy election to account for forfeitures as they occur. Early adoption is permitted for an entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. | January 1, 2017 | The Company is beginning to evaluate the impact that the adoption of this standard will have on its consolidated financial statements. | |||
Standards that were adopted | ||||||
ASU No. 2015-03 and ASU 2015-15, Interest - Imputation of Interest (Subtopic 835-30) | ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. ASU 2015-15 was issued to provide clarification to ASU 2015-03 in that fees related to line-of-credit arrangements should continue to be presented as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement. | January 1, 2016 | The adoption of this standard did not have a material impact on the consolidated financial statements. At March 31, 2016, the Company presented debt issuance costs of $3.3 million related to its secured revolving credit facility as an asset on its consolidated balance sheet. |
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March 31, 2016 | December 31, 2015 | |||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | ||||||||||||||||||
Cash equivalents (1): | ||||||||||||||||||||||||
Money market funds | $ | 56,821 | $ | — | $ | 56,821 | $ | 51,059 | $ | — | $ | 51,059 | ||||||||||||
Total cash equivalents | $ | 56,821 | $ | — | $ | 56,821 | $ | 51,059 | $ | — | $ | 51,059 | ||||||||||||
Marketable securities: | ||||||||||||||||||||||||
U.S. agency securities | $ | — | $ | 14,440 | $ | 14,440 | $ | — | $ | 14,451 | $ | 14,451 | ||||||||||||
Commercial paper | — | 1,200 | 1,200 | — | 2,197 | 2,197 | ||||||||||||||||||
Corporate debt securities | — | 112,459 | 112,459 | — | 165,825 | 165,825 | ||||||||||||||||||
Municipal securities | — | 11,852 | 11,852 | — | 11,913 | 11,913 | ||||||||||||||||||
Total marketable securities | $ | — | $ | 139,951 | $ | 139,951 | $ | — | $ | 194,386 | $ | 194,386 |
(in thousands) | March 31, 2016 | December 31, 2015 | ||||||
Less than one year | $ | 83,678 | $ | 122,199 | ||||
Greater than one year but less than two years | 56,273 | 72,187 | ||||||
Total | $ | 139,951 | $ | 194,386 |
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(in thousands) | March 31, 2016 | December 31, 2015 | |||||
Components | $ | 8,319 | $ | 9,476 | |||
Finished goods | 131,417 | 178,756 | |||||
Total inventory | $ | 139,736 | $ | 188,232 |
(dollars in thousands) | Useful life (in years) | March 31, 2016 | December 31, 2015 | ||||||
Leasehold improvements | 3–10 | $ | 40,860 | $ | 40,841 | ||||
Production, engineering and other equipment | 4 | 25,969 | 25,174 | ||||||
Tooling | 1–2 | 19,844 | 19,537 | ||||||
Computers and software | 2 | 14,931 | 14,581 | ||||||
Furniture and office equipment | 3 | 11,444 | 11,389 | ||||||
Construction in progress | 5,368 | 4,632 | |||||||
Tradeshow equipment and other | 2-5 | 6,217 | 4,136 | ||||||
Gross property and equipment | 124,633 | 120,290 | |||||||
Less: Accumulated depreciation and amortization | (56,908 | ) | (50,240) | ||||||
Property and equipment, net | $ | 67,725 | $ | 70,050 |
March 31, 2016 | |||||||||||
(in thousands) | Gross carrying value | Accumulated amortization | Net carrying value | ||||||||
Purchased technology and other amortizable assets | $ | 39,451 | $ | (10,045 | ) | $ | 29,406 | ||||
In-process research and development (IPR&D) | 7,375 | — | 7,375 | ||||||||
Total intangible assets | $ | 46,826 | $ | (10,045 | ) | $ | 36,781 |
December 31, 2015 | |||||||||||
(in thousands) | Gross carrying value | Accumulated amortization | Net carrying value | ||||||||
Purchased technology and other amortizable assets | $ | 32,952 | $ | (8,540 | ) | $ | 24,412 | ||||
IPR&D | 6,615 | — | 6,615 | ||||||||
Total intangible assets | $ | 39,567 | $ | (8,540 | ) | $ | 31,027 |
(in thousands) | Total | |||
Year ending December 31, | ||||
2016 (remaining 9 months) | $ | 5,670 | ||
2017 | 6,797 | |||
2018 | 6,404 | |||
2019 | 5,894 | |||
2020 | 3,771 | |||
Thereafter | 870 | |||
$ | 29,406 |
(in thousands) | March 31, 2016 | December 31, 2015 | |||||
Accrued payables | $ | 58,937 | $ | 64,831 | |||
Excess purchase order commitments | 27,878 | 38,477 | |||||
Accrued sales incentive | 16,206 | 29,298 | |||||
Employee related liabilities | 15,904 | 26,491 | |||||
Warranty liability | 7,807 | 10,400 | |||||
Customer deposits | 6,456 | 8,877 | |||||
Income taxes payable | 8,711 | 7,536 | |||||
Other | 6,410 | 6,536 | |||||
Accrued liabilities | $ | 148,309 | $ | 192,446 |
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Options outstanding | ||||||||||||
(shares in thousands) | Shares | Weighted- average exercise price | Weighted- average remaining contractual term (in years) | Aggregate intrinsic value (in thousands) | ||||||||
Outstanding at December 31, 2015: | 13,081 | $ | 11.82 | 6.70 | $ | 108,846 | ||||||
Granted | 2,054 | 10.73 | ||||||||||
Exercised | (795 | ) | 1.10 | |||||||||
Forfeited/Cancelled | (440 | ) | 20.66 | |||||||||
Outstanding at March 31, 2016: | 13,900 | $ | 11.99 | 6.64 | $ | 58,742 | ||||||
Exercisable at March 31, 2016 | 8,191 | 7.67 | 5.67 | $ | 55,808 | |||||||
Vested and expected to vest at March 31, 2016 | 13,578 | $ | 11.86 | 6.60 | $ | 58,533 |
(shares in thousands) | Shares | Weighted- average grant date fair value | ||||
Non-vested shares at December 31, 2015 | 4,638 | $ | 32.15 | |||
Granted | 4,028 | 11.88 | ||||
Vested | (386 | ) | 21.53 | |||
Forfeited | (645 | ) | 22.97 | |||
Non-vested shares at March 31, 2016 | 7,635 | $ | 22.77 |
Three months ended | |||||||
(in thousands) | March 31, 2016 | March 31, 2015 | |||||
Cost of revenue | $ | 357 | $ | 283 | |||
Research and development | 6,010 | 3,535 | |||||
Sales and marketing | 3,204 | 3,066 | |||||
General and administrative | 6,160 | 19,617 | |||||
Total stock-based compensation expense, before income taxes | 15,731 | 26,501 | |||||
Total tax benefit recognized | (2,002 | ) | (9,304 | ) | |||
Total stock-based compensation expense, net of income taxes | $ | 13,729 | $ | 17,197 |
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Three months ended | |||||||
(dollars in thousands) | March 31, 2016 | March 31, 2015 | |||||
Income tax expense (benefit) | $ | (14,283 | ) | $ | 3,272 | ||
Effective tax rate | 11.7 | % | 16.3 | % |
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Three months ended | |||||||
(in thousands) | March 31, 2016 | March 31, 2015 | |||||
Beginning balances | $ | 10,856 | $ | 6,405 | |||
Charged to cost of revenue | 2,670 | 6,044 | |||||
Settlements of warranty claims | (5,515 | ) | (3,480 | ) | |||
Ending balances | $ | 8,011 | $ | 8,969 |
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Three months ended | |||||||
(in thousands) | March 31, 2016 | March 31, 2015 | |||||
Accounts receivable sold | $ | 20,653 | $ | 35,299 | |||
Factoring fees | 142 | 291 |
Three months ended | |||||||
(in thousands) | March 31, 2016 | March 31, 2015 | |||||
Americas | $ | 85,305 | $ | 180,093 | |||
Europe, Middle East and Africa (EMEA) | 60,278 | 139,079 | |||||
Asia and Pacific area countries (APAC) | 37,953 | 43,937 | |||||
$ | 183,536 | $ | 363,109 |
March 31, 2016 | December 31, 2015 | ||
Customer A | 36% | 40% | |
Customer B | 23% | * | |
Customer C | 14% | * | |
Customer D | * | 18% |
Three months ended | |||
March 31, 2016 | March 31, 2015 | ||
Customer B | 15% | 12% | |
Customer A | 13% | * |
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