Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 27, 2014 | Oct. 14, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'SILICON LABORATORIES INC | ' |
Entity Central Index Key | '0001038074 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 27-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--01-03 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 42,381,139 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 27, 2014 | Dec. 28, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $111,705 | $95,800 |
Short-term investments | 216,973 | 179,593 |
Accounts receivable, net of allowances for doubtful accounts of $784 at September 27, 2014 and $797 at December 28, 2013 | 71,355 | 72,124 |
Inventories | 47,015 | 45,271 |
Deferred income taxes | 18,064 | 18,878 |
Prepaid expenses and other current assets | 39,756 | 47,651 |
Total current assets | 504,868 | 459,317 |
Long-term investments | 11,505 | 10,632 |
Property and equipment, net | 128,433 | 132,445 |
Goodwill | 228,781 | 228,781 |
Other intangible assets, net | 119,854 | 131,593 |
Other assets, net | 21,476 | 28,382 |
Total assets | 1,014,917 | 991,150 |
Current liabilities: | ' | ' |
Accounts payable | 28,361 | 22,126 |
Current portion of long-term debt | 11,250 | 7,500 |
Accrued expenses | 74,732 | 45,975 |
Deferred income on shipments to distributors | 37,068 | 30,853 |
Income taxes | 1,319 | 2,693 |
Total current liabilities | 152,730 | 109,147 |
Long-term debt | 80,000 | 87,500 |
Other non-current liabilities | 32,217 | 55,941 |
Total liabilities | 264,947 | 252,588 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock - $0.0001 par value; 10,000 shares authorized; no shares issued and outstanding | ' | ' |
Common stock - $0.0001 par value; 250,000 shares authorized; 42,490 and 42,779 shares issued and outstanding at September 27, 2014 and December 28, 2013, respectively | 4 | 4 |
Additional paid-in capital | 31,467 | 48,630 |
Retained earnings | 718,609 | 690,612 |
Accumulated other comprehensive loss | -110 | -684 |
Total stockholders' equity | 749,970 | 738,562 |
Total liabilities and stockholders' equity | $1,014,917 | $991,150 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 27, 2014 | Dec. 28, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Condensed Consolidated Balance Sheets | ' | ' |
Accounts receivable, allowances for doubtful accounts (in dollars) | $784 | $797 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 250,000 | 250,000 |
Common stock, shares issued | 42,490 | 42,779 |
Common stock, shares outstanding | 42,490 | 42,779 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 27, 2014 | Sep. 28, 2013 | Sep. 27, 2014 | Sep. 28, 2013 |
Condensed Consolidated Statements of Income | ' | ' | ' | ' |
Revenues | $158,144 | $146,933 | $458,753 | $433,851 |
Cost of revenues | 62,033 | 58,772 | 176,874 | 169,545 |
Gross margin | 96,111 | 88,161 | 281,879 | 264,306 |
Operating expenses: | ' | ' | ' | ' |
Research and development | 42,517 | 40,662 | 126,846 | 115,631 |
Selling, general and administrative | 43,990 | 37,009 | 114,618 | 98,519 |
Operating expenses | 86,507 | 77,671 | 241,464 | 214,150 |
Operating income | 9,604 | 10,490 | 40,415 | 50,156 |
Other income (expense): | ' | ' | ' | ' |
Interest income | 231 | 129 | 733 | 616 |
Interest expense | -768 | -813 | -2,346 | -2,486 |
Other income (expense), net | 42 | -23 | 103 | 39 |
Income before income taxes | 9,109 | 9,783 | 38,905 | 48,325 |
Provision for income taxes | 3,501 | 3,252 | 10,908 | 9,148 |
Net income | $5,608 | $6,531 | $27,997 | $39,177 |
Earnings per share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.13 | $0.15 | $0.65 | $0.92 |
Diluted (in dollars per share) | $0.13 | $0.15 | $0.64 | $0.90 |
Weighted-average common shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 43,112 | 42,684 | 43,218 | 42,477 |
Diluted (in shares) | 43,815 | 43,922 | 44,030 | 43,437 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 27, 2014 | Sep. 28, 2013 | Sep. 27, 2014 | Sep. 28, 2013 |
Condensed Consolidated Statements of Comprehensive Income | ' | ' | ' | ' |
Net income | $5,608 | $6,531 | $27,997 | $39,177 |
Net changes to available-for-sale securities: | ' | ' | ' | ' |
Unrealized gains (losses) arising during the period | 417 | 653 | 889 | -554 |
Reclassification for gains included in net income | ' | ' | ' | -232 |
Net changes to cash flow hedges: | ' | ' | ' | ' |
Unrealized gains (losses) arising during the period | 193 | -522 | -434 | 622 |
Reclassification for losses included in net income | 142 | 96 | 428 | 418 |
Other comprehensive income, before tax | 752 | 227 | 883 | 254 |
Provision for income taxes | 263 | 79 | 309 | 89 |
Other comprehensive income | 489 | 148 | 574 | 165 |
Comprehensive income | $6,097 | $6,679 | $28,571 | $39,342 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 27, 2014 | Sep. 28, 2013 |
Operating Activities | ' | ' |
Net income | $27,997 | $39,177 |
Adjustments to reconcile net income to cash provided by operating activities: | ' | ' |
Depreciation of property and equipment | 9,512 | 10,050 |
Amortization of other intangible assets and other assets | 13,090 | 11,051 |
Stock-based compensation expense | 28,173 | 22,304 |
Income tax benefit (shortfall) from stock-based awards | 413 | -621 |
Excess income tax benefit from stock-based awards | -654 | -284 |
Deferred income taxes | 3,894 | 6,790 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 769 | 12,599 |
Inventories | -1,591 | 6,213 |
Prepaid expenses and other assets | 12,627 | -1,606 |
Accounts payable | 5,074 | -3,017 |
Accrued expenses | 6,966 | -2,864 |
Deferred income on shipments to distributors | 6,215 | -3,169 |
Income taxes | -4,898 | -1,429 |
Net cash provided by operating activities | 107,587 | 95,194 |
Investing Activities | ' | ' |
Purchases of available-for-sale investments | -137,373 | -164,317 |
Proceeds from sales and maturities of available-for-sale investments | 100,009 | 186,936 |
Purchases of property and equipment | -5,500 | -8,984 |
Purchases of other assets | -3,339 | -3,499 |
Acquisitions of businesses, net of cash acquired | ' | -86,441 |
Net cash used in investing activities | -46,203 | -76,305 |
Financing Activities | ' | ' |
Proceeds from issuance of common stock, net of shares withheld for taxes | 8,559 | 11,900 |
Excess income tax benefit from stock-based awards | 654 | 284 |
Repurchases of common stock | -50,942 | -7,776 |
Payments on debt | -3,750 | -12,184 |
Net cash used in financing activities | -45,479 | -7,776 |
Increase (decrease) in cash and cash equivalents | 15,905 | 11,113 |
Cash and cash equivalents at beginning of period | 95,800 | 105,426 |
Cash and cash equivalents at end of period | $111,705 | $116,539 |
Significant_Accounting_Policie
Significant Accounting Policies | 9 Months Ended |
Sep. 27, 2014 | |
Significant Accounting Policies | ' |
Significant Accounting Policies | ' |
1. Significant Accounting Policies | |
Basis of Presentation and Principles of Consolidation | |
The Condensed Consolidated Financial Statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments which, in the opinion of management, are necessary to present fairly the condensed consolidated financial position of Silicon Laboratories Inc. and its subsidiaries (collectively, the “Company”) at September 27, 2014 and December 28, 2013, the condensed consolidated results of its operations for the three and nine months ended September 27, 2014 and September 28, 2013, the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 27, 2014 and September 28, 2013, and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 27, 2014 and September 28, 2013. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated results of operations for the three and nine months ended September 27, 2014 are not necessarily indicative of the results to be expected for the full year. | |
The accompanying unaudited Condensed Consolidated Financial Statements do not include certain footnotes and financial presentations normally required under U.S. generally accepted accounting principles (GAAP). Therefore, these Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 28, 2013, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (SEC) on January 31, 2014. | |
The Company prepares financial statements on a 52-53 week year that ends on the Saturday closest to December 31. Fiscal 2014 will have 53 weeks with the extra week occurring in the fourth quarter of the year. Fiscal 2013 had 52 weeks. In a 52-week year, each fiscal quarter consists of 13 weeks. | |
Revenue Recognition | |
Revenues are generated predominately by sales of the Company’s integrated circuits (ICs). The Company recognizes revenue when all of the following criteria are met: 1) there is persuasive evidence that an arrangement exists, 2) delivery of goods has occurred, 3) the sales price is fixed or determinable, and 4) collectibility is reasonably assured. Generally, revenue from product sales to direct customers and contract manufacturers is recognized upon shipment. | |
A portion of the Company’s sales are made to distributors under agreements allowing certain rights of return and price protection related to the final selling price to the end customers. Accordingly, the Company defers revenue and cost of revenue on such sales until the distributors sell the product to the end customers. The net balance of deferred revenue less deferred cost of revenue associated with inventory shipped to a distributor but not yet sold to an end customer is recorded in the deferred income on shipments to distributors liability on the Consolidated Balance Sheet. Such net deferred income balance reflects the Company’s estimate of the impact of rights of return and price protection. | |
A small portion of the Company’s revenues is derived from the sale of patents. The above revenue recognition criteria for patent sales are generally met upon the execution of the patent sale agreement. | |
Recent Accounting Pronouncements | |
In June 2014, the Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Update (ASU) No. 2014-12, Compensation — Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The amendments in this update require that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. ASU 2014-12 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Company is currently evaluating the effect that the adoption of this ASU will have on its financial statements. | |
In May 2014, the FASB issued FASB ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. The core principle of ASU 2014-09 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 guidance provides a five-step process to achieve that core principle. ASU 2014-09 requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, using one of two retrospective application methods. Early application is not permitted. The Company is currently evaluating the effect that the adoption of this ASU will have on its financial statements. | |
In April 2014, the FASB issued FASB ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in this update require a disposal of a component of an entity or a group of components of an entity to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. ASU 2014-08 expands disclosure requirements about discontinued operations and adds new disclosures for individually significant dispositions that do not qualify as discontinued operations. ASU 2014-08 is effective prospectively for annual periods beginning on or after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015. Early adoption is permitted, but only for disposals that have not been reported in financial statements previously issued. The adoption of this ASU is not expected to have a material impact on the Company’s financial statements. | |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | |||||||||||||
Sep. 27, 2014 | ||||||||||||||
Earnings Per Share | ' | |||||||||||||
Earnings Per Share | ' | |||||||||||||
2. Earnings Per Share | ||||||||||||||
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net income | $ | 5,608 | $ | 6,531 | $ | 27,997 | $ | 39,177 | ||||||
Shares used in computing basic earnings per share | 43,112 | 42,684 | 43,218 | 42,477 | ||||||||||
Effect of dilutive securities: | ||||||||||||||
Stock options and other stock-based awards | 703 | 1,238 | 812 | 960 | ||||||||||
Shares used in computing diluted earnings per share | 43,815 | 43,922 | 44,030 | 43,437 | ||||||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.13 | $ | 0.15 | $ | 0.65 | $ | 0.92 | ||||||
Diluted | $ | 0.13 | $ | 0.15 | $ | 0.64 | $ | 0.90 | ||||||
For the three months ended September 27, 2014 and September 28, 2013 and the nine months ended September 27, 2014 and September 28, 2013, approximately 0.1 million, 0.5 million, 0.1 million and 0.4 million shares, respectively, were not included in the diluted earnings per share calculation since the shares were anti-dilutive. | ||||||||||||||
Cash_Cash_Equivalents_and_Inve
Cash, Cash Equivalents and Investments | 9 Months Ended | |||||||||||||||||||
Sep. 27, 2014 | ||||||||||||||||||||
Cash, Cash Equivalents and Investments | ' | |||||||||||||||||||
Cash, Cash Equivalents and Investments | ' | |||||||||||||||||||
3. Cash, Cash Equivalents and Investments | ||||||||||||||||||||
The Company’s cash equivalents and short-term investments as of September 27, 2014 consisted of municipal bonds, corporate bonds, money market funds, commercial paper, variable-rate demand notes, certificates of deposit, asset-backed securities, international government bonds, U.S. government bonds and U.S. government agency. The Company’s long-term investments consisted of auction-rate securities. In fiscal 2008, auctions for many of the Company’s auction-rate securities failed because sell orders exceeded buy orders. As of September 27, 2014, the Company held $12.4 million par value auction-rate securities, all of which have experienced failed auctions. The underlying assets of the securities consisted of student loans and municipal bonds, of which $10.4 million were guaranteed by the U.S. government and the remaining $2.0 million were privately insured. As of September 27, 2014, $6.0 million had credit ratings of AA, $2.0 million had a credit rating of A and $4.4 million of the auction-rate securities had credit ratings of BBB. These securities have contractual maturity dates ranging from 2033 to 2046 at September 27, 2014. The Company is receiving the underlying cash flows on all of its auction-rate securities. The principal amounts associated with failed auctions are not expected to be accessible until a successful auction occurs, the issuer redeems the securities, a buyer is found outside of the auction process or the underlying securities mature. The Company is unable to predict if these funds will become available before their maturity dates. | ||||||||||||||||||||
The Company does not expect to need access to the capital represented by any of its auction-rate securities prior to their maturities. The Company does not intend to sell, and believes it is not more likely than not that it will be required to sell, its auction-rate securities before their anticipated recovery in market value or final settlement at the underlying par value. The Company believes that the credit ratings and credit support of the security issuers indicate that they have the ability to settle the securities at par value. As such, the Company has determined that no other-than-temporary impairment losses existed as of September 27, 2014. | ||||||||||||||||||||
The Company’s cash, cash equivalents and investments consist of the following (in thousands): | ||||||||||||||||||||
September 27, 2014 | ||||||||||||||||||||
Cost | Gross | Gross | Fair Value | |||||||||||||||||
Unrealized | Unrealized | |||||||||||||||||||
Losses | Gains | |||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||
Cash on hand | $ | 63,284 | $ | — | $ | — | $ | 63,284 | ||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Money market funds | 28,036 | — | — | 28,036 | ||||||||||||||||
Commercial paper | 14,147 | — | — | 14,147 | ||||||||||||||||
Certificates of deposit | 5,331 | — | — | 5,331 | ||||||||||||||||
Municipal bonds | 907 | — | — | 907 | ||||||||||||||||
Total available-for-sale securities | 48,421 | — | — | 48,421 | ||||||||||||||||
Total cash and cash equivalents | $ | 111,705 | $ | — | $ | — | $ | 111,705 | ||||||||||||
Short-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Municipal bonds | $ | 143,212 | $ | (3 | ) | $ | 240 | $ | 143,449 | |||||||||||
Corporate bonds | 36,000 | (33 | ) | 47 | 36,014 | |||||||||||||||
Variable-rate demand notes | 15,755 | — | — | 15,755 | ||||||||||||||||
Commercial paper | 11,439 | — | — | 11,439 | ||||||||||||||||
Asset-backed securities | 5,689 | (3 | ) | 1 | 5,687 | |||||||||||||||
International government bonds | 2,533 | (5 | ) | — | 2,528 | |||||||||||||||
Certificates of deposit | 850 | — | — | 850 | ||||||||||||||||
U.S. government bonds | 650 | — | — | 650 | ||||||||||||||||
U.S. government agency | 601 | — | — | 601 | ||||||||||||||||
Total short-term investments | $ | 216,729 | $ | (44 | ) | $ | 288 | $ | 216,973 | |||||||||||
Long-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Auction rate securities | $ | 12,425 | $ | (920 | ) | $ | — | $ | 11,505 | |||||||||||
Total long-term investments | $ | 12,425 | $ | (920 | ) | $ | — | $ | 11,505 | |||||||||||
December 28, 2013 | ||||||||||||||||||||
Cost | Gross | Gross | Fair Value | |||||||||||||||||
Unrealized | Unrealized | |||||||||||||||||||
Losses | Gains | |||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||
Cash on hand | $ | 45,544 | $ | — | $ | — | $ | 45,544 | ||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Money market funds | 39,538 | — | — | 39,538 | ||||||||||||||||
Certificates of deposit | 7,768 | — | — | 7,768 | ||||||||||||||||
Commercial paper | 2,499 | — | — | 2,499 | ||||||||||||||||
Municipal bonds | 451 | — | — | 451 | ||||||||||||||||
Total available-for-sale securities | 50,256 | — | — | 50,256 | ||||||||||||||||
Total cash and cash equivalents | $ | 95,800 | $ | — | $ | — | $ | 95,800 | ||||||||||||
Short-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Municipal bonds | $ | 119,289 | $ | (11 | ) | $ | 182 | $ | 119,460 | |||||||||||
Variable-rate demand notes | 38,025 | — | — | 38,025 | ||||||||||||||||
Corporate bonds | 17,788 | (4 | ) | 60 | 17,844 | |||||||||||||||
Commercial paper | 3,748 | — | — | 3,748 | ||||||||||||||||
Asset-backed securities | 515 | — | 1 | 516 | ||||||||||||||||
Total short-term investments | $ | 179,365 | $ | (15 | ) | $ | 243 | $ | 179,593 | |||||||||||
Long-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Auction rate securities | $ | 12,425 | $ | (1,793 | ) | $ | — | $ | 10,632 | |||||||||||
Total long-term investments | $ | 12,425 | $ | (1,793 | ) | $ | — | $ | 10,632 | |||||||||||
The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands): | ||||||||||||||||||||
Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||
As of September 27, 2014 | Fair | Gross | Fair | Gross | Fair | Gross | ||||||||||||||
Value | Unrealized | Value | Unrealized | Value | Unrealized | |||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||
Corporate bonds | $ | 16,564 | $ | (33 | ) | $ | — | $ | — | $ | 16,564 | $ | (33 | ) | ||||||
Auction rate securities | — | — | 11,505 | (920 | ) | 11,505 | (920 | ) | ||||||||||||
Municipal bonds | 7,893 | (3 | ) | — | — | 7,893 | (3 | ) | ||||||||||||
Asset-backed securities | 5,102 | (3 | ) | — | — | 5,102 | (3 | ) | ||||||||||||
International government bond | 2,527 | (5 | ) | — | — | 2,527 | (5 | ) | ||||||||||||
$ | 32,086 | $ | (44 | ) | $ | 11,505 | $ | (920 | ) | $ | 43,591 | $ | (964 | ) | ||||||
Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||
As of December 28, 2013 | Fair | Gross | Fair | Gross | Fair | Gross | ||||||||||||||
Value | Unrealized | Value | Unrealized | Value | Unrealized | |||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||
Municipal bonds | $ | 11,079 | $ | (11 | ) | $ | — | $ | — | $ | 11,079 | $ | (11 | ) | ||||||
Auction rate securities | — | — | 10,632 | (1,793 | ) | 10,632 | (1,793 | ) | ||||||||||||
Corporate bonds | 2,605 | (4 | ) | — | — | 2,605 | (4 | ) | ||||||||||||
$ | 13,684 | $ | (15 | ) | $ | 10,632 | $ | (1,793 | ) | $ | 24,316 | $ | (1,808 | ) | ||||||
The gross unrealized losses as of September 27, 2014 and December 28, 2013 were due primarily to the illiquidity of the Company’s auction-rate securities and, to a lesser extent, to changes in market interest rates. | ||||||||||||||||||||
The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at September 27, 2014 (in thousands): | ||||||||||||||||||||
Cost | Fair | |||||||||||||||||||
Value | ||||||||||||||||||||
Due in one year or less | $ | 155,375 | $ | 155,485 | ||||||||||||||||
Due after one year through ten years | 97,195 | 97,329 | ||||||||||||||||||
Due after ten years | 25,005 | 24,085 | ||||||||||||||||||
$ | 277,575 | $ | 276,899 | |||||||||||||||||
Derivative_Financial_Instrumen
Derivative Financial Instruments | 9 Months Ended | |||||||||||||||
Sep. 27, 2014 | ||||||||||||||||
Derivative Financial Instruments | ' | |||||||||||||||
Derivative Financial Instruments | ' | |||||||||||||||
4. Derivative Financial Instruments | ||||||||||||||||
The Company is exposed to interest rate fluctuations in the normal course of its business, including through its Credit Facilities. The interest payments on the facility are calculated using a variable-rate of interest. The Company has entered into an interest rate swap agreement with an original notional value of $100 million (equal to the full amount borrowed under the Term Loan Facility) and, effectively, converted the LIBOR portion of the variable-rate interest payments to fixed-rate interest payments through July 2017 (the maturity date of the Term Loan Facility). The Company’s objective is to offset increases and decreases in expenses resulting from changes in interest rates with gains and losses on the derivative contract, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative purposes. | ||||||||||||||||
The Company’s interest rate swap agreement is designated and qualifies as a cash flow hedge. The effective portion of the gain or loss on the interest rate swap is recorded in accumulated other comprehensive loss as a separate component of stockholders’ equity and is subsequently recognized in earnings when the hedged exposure affects earnings. Cash flows from derivatives are classified according to the nature of the cash receipt or payment in the Consolidated Statement of Cash Flows. | ||||||||||||||||
The Company estimates the fair values of derivatives based on quoted prices and market observable data of similar instruments. If the Term Loan Facility or the interest rate swap agreement is terminated prior to maturity, the fair value of the interest rate swap recorded in accumulated other comprehensive loss may be recognized in the Consolidated Statement of Income based on an assessment of the agreements at the time of termination. The Company did not discontinue any cash flow hedges in any of the periods presented. | ||||||||||||||||
The Company measures the effectiveness of its cash flow hedge by comparing the change in fair value of the hedged variable interest payments with the change in fair value of the interest rate swap. The Company recognizes ineffective portions of the hedge, as well as amounts not included in the assessment of effectiveness, in the Consolidated Statement of Income. As of September 27, 2014, no portion of the gains or losses from the Company’s hedging instrument was excluded from the assessment of effectiveness. Hedge ineffectiveness was not material for any of the periods presented. | ||||||||||||||||
The Company’s derivative financial instrument consisted of the following (in thousands): | ||||||||||||||||
Fair Value | ||||||||||||||||
Balance Sheet Location | September 27, | December 28, | ||||||||||||||
2014 | 2013 | |||||||||||||||
Interest rate swap | Other assets, net | $ | 507 | $ | 513 | |||||||||||
The before-tax effect of derivative instruments in cash flow hedging relationships was as follows (in thousands): | ||||||||||||||||
Gain (Loss) Recognized in | Location of Loss | Loss Reclassified | ||||||||||||||
OCI on Derivatives | Reclassified into | from Accumulated | ||||||||||||||
(Effective Portion) | Income | OCI into Income | ||||||||||||||
during the: | (Effective Portion) | |||||||||||||||
during the: | ||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest rate swaps | $ | 193 | $ | (522 | ) | Interest expense | $ | (142 | ) | $ | (96 | ) | ||||
Nine Months Ended | Nine Months Ended | |||||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest rate swaps | $ | (434 | ) | $ | 622 | Interest expense | $ | (428 | ) | $ | (418 | ) | ||||
The Company expects to reclassify $0.5 million of its interest rate swap losses included in accumulated other comprehensive loss as of September 27, 2014 into earnings in the next 12 months, which would be offset by lower interest payments. | ||||||||||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | |||||||||||||
Sep. 27, 2014 | ||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||
5. Fair Value of Financial Instruments | ||||||||||||||
The fair values of the Company’s financial instruments are recorded using a hierarchal disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities. The three levels are described below: | ||||||||||||||
Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. | ||||||||||||||
Level 2 - Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. | ||||||||||||||
Level 3 - Inputs are unobservable for the asset or liability and are developed based on the best information available in the circumstances, which might include the Company’s own data. | ||||||||||||||
The following summarizes the valuation of the Company’s financial instruments (in thousands). The tables do not include either cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value. | ||||||||||||||
Fair Value Measurements | ||||||||||||||
at September 27, 2014 Using | ||||||||||||||
Description | Quoted Prices in | Significant Other | Significant | Total | ||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | ||||||||||||||
Cash Equivalents: | ||||||||||||||
Money market funds | $ | 28,036 | $ | — | $ | — | $ | 28,036 | ||||||
Commercial paper | — | 14,147 | — | 14,147 | ||||||||||
Certificates of deposit | — | 5,331 | — | 5,331 | ||||||||||
Municipal bonds | — | 907 | — | 907 | ||||||||||
Total cash equivalents | $ | 28,036 | $ | 20,385 | $ | — | $ | 48,421 | ||||||
Short-term Investments: | ||||||||||||||
Municipal bonds | $ | — | $ | 143,449 | $ | — | $ | 143,449 | ||||||
Corporate bonds | — | 36,014 | — | 36,014 | ||||||||||
Variable-rate demand notes | — | 15,755 | — | 15,755 | ||||||||||
Commercial paper | — | 11,439 | — | 11,439 | ||||||||||
Asset-backed securities | — | 5,687 | — | 5,687 | ||||||||||
International government bonds | — | 2,528 | — | 2,528 | ||||||||||
Certificates of deposit | — | 850 | — | 850 | ||||||||||
U.S. government bond | 650 | — | — | 650 | ||||||||||
U.S. government agency | — | 601 | — | 601 | ||||||||||
Total short-term investments | $ | 650 | $ | 216,323 | $ | — | $ | 216,973 | ||||||
Long-term Investments: | ||||||||||||||
Auction rate securities | $ | — | $ | — | $ | 11,505 | $ | 11,505 | ||||||
Total long-term investments | $ | — | $ | — | $ | 11,505 | $ | 11,505 | ||||||
Other assets, net: | ||||||||||||||
Derivative instruments | $ | — | $ | 507 | $ | — | $ | 507 | ||||||
Total | $ | — | $ | 507 | $ | — | $ | 507 | ||||||
Total | $ | 28,686 | $ | 237,215 | $ | 11,505 | $ | 277,406 | ||||||
Liabilities: | ||||||||||||||
Accrued expenses: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 6,279 | $ | 6,279 | ||||||
Other non-current liabilities: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 11,680 | $ | 11,680 | ||||||
Total | $ | — | $ | — | $ | 17,959 | $ | 17,959 | ||||||
Fair Value Measurements | ||||||||||||||
at December 28, 2013 Using | ||||||||||||||
Description | Quoted Prices in | Significant Other | Significant | Total | ||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | ||||||||||||||
Cash Equivalents: | ||||||||||||||
Money market funds | $ | 39,538 | $ | — | $ | — | $ | 39,538 | ||||||
Certificates of deposit | — | 7,768 | — | 7,768 | ||||||||||
Commercial paper | — | 2,499 | — | 2,499 | ||||||||||
Municipal bonds | — | 451 | — | 451 | ||||||||||
Total cash equivalents | $ | 39,538 | $ | 10,718 | $ | — | $ | 50,256 | ||||||
Short-term Investments: | ||||||||||||||
Municipal bonds | $ | — | $ | 119,460 | $ | — | $ | 119,460 | ||||||
Variable-rate demand notes | — | 38,025 | — | 38,025 | ||||||||||
Corporate bonds | — | 17,844 | — | 17,844 | ||||||||||
Commercial paper | — | 3,748 | — | 3,748 | ||||||||||
Asset-backed securities | — | 516 | — | 516 | ||||||||||
Total short-term investments | $ | — | $ | 179,593 | $ | — | $ | 179,593 | ||||||
Long-term Investments: | ||||||||||||||
Auction rate securities | $ | — | $ | — | $ | 10,632 | $ | 10,632 | ||||||
Total long-term investments | $ | — | $ | — | $ | 10,632 | $ | 10,632 | ||||||
Other assets, net: | ||||||||||||||
Derivative instruments | $ | — | $ | 513 | $ | — | $ | 513 | ||||||
Total | $ | — | $ | 513 | $ | — | $ | 513 | ||||||
Total | $ | 39,538 | $ | 190,824 | $ | 10,632 | $ | 240,994 | ||||||
Liabilities: | ||||||||||||||
Other non-current liabilities: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 12,919 | $ | 12,919 | ||||||
Total | $ | — | $ | — | $ | 12,919 | $ | 12,919 | ||||||
The Company’s cash equivalents and short-term investments that are classified as Level 1 are valued using quoted prices and other relevant information generated by market transactions involving identical assets. Cash equivalents and short-term investments classified as Level 2 are valued using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments in active markets; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. Investments classified as Level 3 are valued using a discounted cash flow model. The assumptions used in preparing the discounted cash flow model include estimates for interest rates, amount of cash flows, expected holding periods of the securities and a discount to reflect the Company’s inability to liquidate the securities. The Company’s derivative instruments are valued using a discounted cash flow model. The assumptions used in preparing the discounted cash flow model include quoted interest swap rates and market observable data of similar instruments. | ||||||||||||||
The Company’s contingent consideration is valued using a Monte Carlo simulation model or a probability weighted discounted cash flow model. The assumptions used in preparing the Monte Carlo simulation model include estimates for revenue growth rates, revenue volatility, contractual terms and discount rates. The assumptions used in preparing the discounted cash flow model include estimates for outcomes if milestone goals are achieved, the probability of achieving each outcome and discount rates. | ||||||||||||||
The following summarizes quantitative information about Level 3 fair value measurements. | ||||||||||||||
Auction rate securities | ||||||||||||||
Fair Value at | Valuation Technique | Unobservable Input | Weighted Average | |||||||||||
September 27, 2014 | ||||||||||||||
(000s) | ||||||||||||||
$ | 11,505 | Discounted cash flow | Estimated yield | 1.15% | ||||||||||
Expected holding period | 10 years | |||||||||||||
Estimated discount rate | 3.50% | |||||||||||||
The Company has followed an established internal control procedure used in valuing auction rate securities. The procedure involves the analysis of valuation techniques and evaluation of unobservable inputs commonly used by market participants to price similar instruments, and which have been demonstrated to provide reasonable estimates of prices obtained in actual market transactions. Outputs from the valuation process are assessed against various market sources when they are available, including marketplace quotes, recent trades of similar illiquid securities, benchmark indices and independent pricing services. The technique and unobservable input parameters may be recalibrated periodically to achieve an appropriate estimation of the fair value of the securities. | ||||||||||||||
Significant changes in any of the unobservable inputs used in the fair value measurement of auction rate securities in isolation could result in a significantly lower or higher fair value measurement. An increase in expected yield would result in a higher fair value measurement, whereas an increase in expected holding period or estimated discount rate would result in a lower fair value measurement. Generally, a change in the assumptions used for expected holding period is accompanied by a directionally similar change in the assumptions used for estimated yield and discount rate. | ||||||||||||||
Contingent consideration | ||||||||||||||
Fair Value at | Valuation Technique | Unobservable Input | Range | |||||||||||
September 27, 2014 | ||||||||||||||
(000s) | ||||||||||||||
$ | 17,959 | Monte Carlo simulation | Expected revenue growth rate | 35.6% – 69.1% | ||||||||||
Expected revenue volatility | 20.00% | |||||||||||||
Expected term | 0.3 years – 4.3 years | |||||||||||||
Estimated discount rate | 0.1% – 1.8% | |||||||||||||
The Company has followed an established internal control procedure used in valuing contingent consideration. The valuation of contingent consideration for the Energy Micro acquisition is based on a Monte Carlo simulation model. The fair value of this valuation is estimated on a quarterly basis through a collaborative effort by the Company’s sales, marketing and finance departments. | ||||||||||||||
Significant changes in any of the unobservable inputs used in the fair value measurement of contingent consideration in isolation could result in a significantly lower or higher fair value. A change in projected revenue growth rates would be accompanied by a directionally similar change in fair value. A change in discount rate would be accompanied by a directionally opposite change in fair value. | ||||||||||||||
The following summarizes the activity in Level 3 financial instruments for the three and nine months ended September 27, 2014 (in thousands): | ||||||||||||||
Assets | ||||||||||||||
Auction Rate Securities | Three Months | Nine Months | ||||||||||||
Ended | Ended | |||||||||||||
Beginning balance | $ | 10,993 | $ | 10,632 | ||||||||||
Gain included in other comprehensive income | 512 | 873 | ||||||||||||
Balance at September 27, 2014 | $ | 11,505 | $ | 11,505 | ||||||||||
Liabilities | ||||||||||||||
Contingent Consideration (1) | Three Months | Nine Months | ||||||||||||
Ended | Ended | |||||||||||||
Beginning balance | $ | 11,955 | $ | 12,919 | ||||||||||
Loss recognized in earnings (2) | 6,004 | 5,040 | ||||||||||||
Balance at September 27, 2014 | $ | 17,959 | $ | 17,959 | ||||||||||
Net loss for the period included in earnings attributable to contingent consideration held at the end of the period: | $ | (6,004 | ) | $ | (5,040 | ) | ||||||||
(1)In connection with the acquisition of Energy Micro, the Company recorded contingent consideration based upon the expected achievement of certain milestone goals. Changes to the fair value of contingent consideration due to changes in assumptions used in preparing the valuation model are recorded in selling, general and administrative expenses in the Consolidated Statement of Income. | ||||||||||||||
(2)The Company increased the estimated fair value of contingent consideration because the Company now expects a higher level of earn-out achievement. | ||||||||||||||
Fair values of other financial instruments | ||||||||||||||
The Company’s Term Loan Facility bears interest at LIBOR plus an applicable margin. The Term Loan Facility is recorded at cost, but is measured at fair value for disclosure purposes. Fair value is estimated based on Level 2 inputs, using a discounted cash flow analysis of future principal payments and projected interest based on current market rates. As of September 27, 2014 and December 28, 2013, the fair value of the Company’s debt was approximately $91.2 million and $94.8 million, respectively. | ||||||||||||||
The Company’s other financial instruments, including cash, accounts receivable and accounts payable, are recorded at amounts that approximate their fair values due to their short maturities. | ||||||||||||||
Balance_Sheet_Details
Balance Sheet Details | 9 Months Ended | |||||||
Sep. 27, 2014 | ||||||||
Balance Sheet Details | ' | |||||||
Balance Sheet Details | ' | |||||||
6. Balance Sheet Details | ||||||||
The following shows the details of selected Condensed Consolidated Balance Sheet items (in thousands): | ||||||||
Inventories | ||||||||
September 27, | December 28, | |||||||
2014 | 2013 | |||||||
Work in progress | $ | 35,505 | $ | 34,503 | ||||
Finished goods | 11,510 | 10,768 | ||||||
$ | 47,015 | $ | 45,271 | |||||
Debt
Debt | 9 Months Ended | ||||
Sep. 27, 2014 | |||||
Debt | ' | ||||
Debt | ' | ||||
7. Debt | |||||
On July 31, 2012, the Company and certain of its domestic subsidiaries (the “Guarantors”) entered into a $230 million five-year Credit Agreement (the “Agreement”). The Agreement consists of a $100 million Term Loan Facility and a $130 million Revolving Credit Facility (collectively, the “Credit Facilities”). | |||||
The Term Loan Facility provides for quarterly principal amortization (equal to 5% of the principal in each of the first two years and 10% of the principal in each of the next three years) with the remaining balance payable upon the maturity date. The Revolving Credit Facility includes a $25 million letter of credit sublimit and a $10 million swingline loan sublimit. The Company has an option to increase the size of the Revolving Credit Facility by up to an aggregate of $50 million in additional commitments, subject to certain conditions. On September 27, 2012, the Company borrowed $100 million under the Term Loan Facility. To date, the Company has not borrowed under the Revolving Credit Facility. | |||||
The Term Loan Facility and Revolving Credit Facility, other than swingline loans, will bear interest at LIBOR plus an applicable margin or, at the option of the Company, a base rate (defined as the highest of the Bank of America prime rate, the Federal Funds rate plus 0.50% and a daily rate equal to one-month LIBOR plus 1.00%) plus an applicable margin. Swingline loans accrue interest at the base rate plus the applicable margin for base rate loans. The applicable margins for the LIBOR rate loans range from 1.50% to 2.50% and for base rate loans range from 0.50% to 1.50%, depending in each case, on the leverage ratio as defined in the Agreement. The Company also pays a commitment fee on the unused amount of the Revolving Credit Facility. | |||||
In connection with the closing of the Credit Agreement, the Company entered into a security and pledge agreement. Under the security and pledge agreement, the Company pledged equity securities of certain of its subsidiaries, subject to exceptions and limitations. The Credit Facilities contain various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default, including financial covenants that the Company must maintain a leverage ratio (funded debt/EBITDA) of no more than 2.5 to 1 and a minimum fixed charge coverage ratio (EBITDA/debt payments, income taxes and capital expenditures) of no less than 1.50 to 1. As of September 27, 2014, the Company was in compliance with all covenants of the Credit Facilities. | |||||
As of September 27, 2014, the remaining contractual maturities of the Term Loan Facility were as follows (in thousands): | |||||
Fiscal Year | |||||
2014 | $ | 3,750 | |||
2015 | 10,000 | ||||
2016 | 10,000 | ||||
2017 | 67,500 | ||||
Total | $ | 91,250 | |||
Interest Rate Swap Agreement | |||||
In connection with the $100 million borrowed under the Term Loan Facility, the Company entered into an interest rate swap agreement as a hedge against the LIBOR portion of such variable interest payments. Under the terms of the swap agreement, the Company effectively converted the LIBOR portion of the interest on the Term Loan Facility to a fixed interest rate of 0.764% through the maturity date. As of September 27, 2014, the combined interest rate on the Term Loan Facility (which includes an applicable margin) was 2.514%. See Note 4, Derivative Financial Instruments, for additional information. | |||||
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | |||||||||||||
Sep. 27, 2014 | ||||||||||||||
Stockholders' Equity | ' | |||||||||||||
Stockholders' Equity | ' | |||||||||||||
8. Stockholders’ Equity | ||||||||||||||
Common Stock | ||||||||||||||
The Company issued 1.0 million shares of common stock during the nine months ended September 27, 2014. | ||||||||||||||
Share Repurchase Programs | ||||||||||||||
The Board of Directors authorized the following share repurchase programs (in thousands): | ||||||||||||||
Program Authorization Date | Program | Program | ||||||||||||
Termination Date | Amount | |||||||||||||
Oct-14 | December 2015 | $ | 100,000 | |||||||||||
January 2014 | October 2014 | $ | 100,000 | |||||||||||
January 2013 | January 2014 | $ | 50,000 | |||||||||||
April 2012 | January 2013 | $ | 100,000 | |||||||||||
These programs allow for repurchases to be made in the open market or in private transactions, including structured or accelerated transactions, subject to applicable legal requirements and market conditions. The Company repurchased 1.3 million shares of its common stock for $53.9 million during the nine months ended September 27, 2014. The Company repurchased 0.2 million shares of its common stock for $7.8 million during the nine months ended September 28, 2013. These shares were retired upon repurchase. In October 2014, the Board of Directors authorized a program to repurchase up to $100 million of the Company’s common stock through December 2015 (and terminated the $35.6 million remaining authorization under the previously announced share repurchase program). | ||||||||||||||
Accumulated Other Comprehensive Loss | ||||||||||||||
The components of accumulated other comprehensive loss, net of taxes, were as follows (in thousands): | ||||||||||||||
Unrealized Gain | Net Unrealized Losses | Total | ||||||||||||
on Cash Flow | on Available-For-Sale | |||||||||||||
Hedge | Securities | |||||||||||||
Balance at December 28, 2013 | $ | 333 | $ | (1,017 | ) | $ | (684 | ) | ||||||
Other comprehensive income (loss) before reclassifications | (282 | ) | 578 | 296 | ||||||||||
Amount reclassified from accumulated other comprehensive loss | 278 | — | 278 | |||||||||||
Net change for the period | (4 | ) | 578 | 574 | ||||||||||
Balance at September 27, 2014 | $ | 329 | $ | (439 | ) | $ | (110 | ) | ||||||
Reclassifications From Accumulated Other Comprehensive Loss | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
Reclassification (in thousands) | September 27, | September 28, | September 27, | September 28, | ||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Losses on cash flow hedges to: | ||||||||||||||
Interest expense | $ | (142 | ) | $ | (96 | ) | $ | (428 | ) | $ | (418 | ) | ||
Gains on available-for-sales securities to: | ||||||||||||||
Interest income | — | — | — | 232 | ||||||||||
(142 | ) | (96 | ) | (428 | ) | (186 | ) | |||||||
Income tax benefit | 50 | 33 | 150 | 65 | ||||||||||
Total reclassifications | $ | (92 | ) | $ | (63 | ) | $ | (278 | ) | $ | (121 | ) | ||
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | |||||||||||||
Sep. 27, 2014 | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Stock-Based Compensation | ' | |||||||||||||
9. Stock-Based Compensation | ||||||||||||||
In fiscal 2009, the stockholders of the Company approved the 2009 Stock Incentive Plan (the “2009 Plan”) and the 2009 Employee Stock Purchase Plan (the “2009 Purchase Plan”). On April 15, 2014, the stockholders of the Company approved amendments to both the 2009 Plan and the 2009 Purchase Plan. The amendments authorized additional shares of common stock for issuance, to comply with changes in applicable law, improve the Company’s corporate governance and to implement other best practices. The amended plans are currently effective. | ||||||||||||||
Stock-based compensation costs are based on the fair values on the date of grant for stock options and on the date of enrollment for the employee stock purchase plans, estimated by using the Black-Scholes option-pricing model. The fair values of stock awards and restricted stock units (RSUs) equal their intrinsic value on the date of grant. The fair values of market stock units (MSUs) generally are estimated using a Monte Carlo simulation based on the date of grant. | ||||||||||||||
The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Income (in thousands): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Cost of revenues | $ | 201 | $ | 269 | $ | 574 | $ | 785 | ||||||
Research and development | 4,713 | 3,729 | 13,282 | 10,551 | ||||||||||
Selling, general and administrative | 4,700 | 4,622 | 14,317 | 10,968 | ||||||||||
9,614 | 8,620 | 28,173 | 22,304 | |||||||||||
Income tax benefit | 1,158 | 904 | 3,056 | 1,822 | ||||||||||
$ | 8,456 | $ | 7,716 | $ | 25,117 | $ | 20,482 | |||||||
The increase in stock-based compensation costs in the recent three and nine month periods was principally due to increased headcount. The Company had approximately $60.3 million of total unrecognized compensation costs related to granted stock awards as of September 27, 2014 that are expected to be recognized over a weighted-average period of approximately 2.1 years. There were no significant stock-based compensation costs capitalized into assets in any of the periods presented. | ||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 27, 2014 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
10. Commitments and Contingencies | |
Patent Litigation | |
On January 21, 2014, Cresta Technology Corporation (“Cresta Technology”), a Delaware corporation, filed a lawsuit against the Company, Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., LG Electronics Inc. and LG Electronics U.S.A., Inc. in the United States District Court in the District of Delaware, alleging infringement of United States Patent Nos. 7,075,585, 7,265,792 and 7,251,466. The lawsuit relates to the Company’s family of television tuner products. Cresta Technology seeks unspecified compensatory and enhanced damages, attorney fees and a permanent injunction. On January 28, 2014, Cresta Technology also filed a complaint with the United States International Trade Commission (“ITC”) alleging infringement of the same patents against the Company, Samsung and LG Electronics and seeking to prevent the importation and sale of allegedly infringing products in the United States. The ITC instituted an investigation based on Cresta Technology’s complaint on February 27, 2014. The Delaware District Court action has been stayed pending completion of the proceedings in the ITC. The Company intends to vigorously defend against these allegations. | |
On April 11, 2014, the Company filed a lawsuit against Cresta Technology in the United States District Court in the Western District of Texas, Austin Division, alleging infringement of United States Patent Nos. 6,308,055, 6,965,761 and 7,353,011. On July 14, 2014, the Court dismissed the lawsuit without prejudice due to the lack of commercial activity by Cresta Technology in the Western District of Texas. On July 16, 2014, the Company refiled its claims for the ‘055, ‘761 and ‘011 patents in a lawsuit in the United States District Court in the Northern District of California. In addition, the Company added additional claims alleging infringement of United States Patent Nos. 6,304,146, 6,137,372 and 6,233,441. The Company is seeking a permanent injunction stopping the sale of all allegedly infringing Cresta Technology products and an award of damages and attorney fees. | |
On May 6, 2014, the Company filed a complaint with the ITC alleging infringement of United States Patent Nos. 6,137,372 and 6,233,441 against Cresta Technology, Hauppauge Digital, Inc., Hauppague Computer Works, Inc., PCTV Systems, S.a.r.l., Luxembourg and PCTV Systems S.a.r.l., seeking to prevent the importation and sale of allegedly infringing products in the United States. On June 6, 2014, the ITC instituted an investigation based on the Company’s complaint. On June 13, 2014, Cresta Technology proposed a consent order whereby Cresta Technology will not sell for importation, import or sell in the United States television tuners that infringe the patent claims asserted by the Company. On July 1, 2014, the Administrative Law Judge accepted the proposed consent order. Accordingly, this ITC investigation has been terminated in its entirety. Under the consent order, Cresta Technology is prohibited from selling for importation, importing or selling in the United States television tuners that infringe the Company’s United States Patent Nos. 6,137,372 and 6,233,441. | |
As is customary in the semiconductor industry, the Company provides indemnification protection to its customers for intellectual property claims related to the Company’s products. The Company has not accrued any material liability on its consolidated balance sheet related to such indemnification obligations in connection with the Cresta Technology litigation. | |
At this time, the Company cannot predict the outcome of these matters or the resulting financial impact to it, if any. | |
Other | |
The Company is involved in various other legal proceedings that have arisen in the normal course of business. While the ultimate results of these matters cannot be predicted with certainty, the Company does not expect them to have a material adverse effect on its consolidated financial statements. | |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 27, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
11. Income Taxes | |
Provision for income taxes includes both domestic and foreign income taxes at the applicable statutory rates adjusted for non-deductible expenses, research and development tax credits and other permanent differences. Income tax expense was $3.5 million and $3.3 million for the three months ended September 27, 2014 and September 28, 2013, resulting in effective tax rates of 38.4% and 33.2%, respectively. Income tax expense was $10.9 million and $9.1 million for the nine months ended September 27, 2014 and September 28, 2013, respectively, resulting in effective tax rates of 28.0% and 18.9%, respectively. The effective tax rate for the three months ended September 27, 2014 increased from the prior period, primarily due to the non-renewal of the 2014 federal research and development tax credit in the current period, as well as an increase in nondeductible costs related to the Energy Micro acquisition. This increase was partially offset by an increase in the foreign rate benefit in the current period. The effective tax rate for the nine months ended September 27, 2014 increased from the prior period, primarily due to the prior period recognition of the 2012 federal research and development tax credit due to the enactment of the American Taxpayer Relief Act of 2012 on January 2, 2013, as well as the non-renewal of the 2014 federal research and development tax credit in the current period. This increase was partially offset by the release in the current period of prior year unrecognized tax benefits due to the lapse of the statute of limitations applicable to a tax deduction claimed on a prior year foreign tax return. | |
At September 27, 2014, the Company had gross unrecognized tax benefits of $3.6 million, $3.5 million of which would affect the effective tax rate if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company had a gross decrease of $1.5 million to its prior year unrecognized tax benefits related to the lapse of the statute of limitations applicable to an uncertain tax position during the nine months ended September 27, 2014, a portion of which represented a foreign currency remeasurement adjustment and was recognized in other income (expense), net. | |
The tax years 2009 through 2014 remain open to examination by the major taxing jurisdictions to which the Company is subject. The Company is not currently under audit in any major taxing jurisdiction. | |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 27, 2014 | |
Significant Accounting Policies | ' |
Revenue Recognition | ' |
Revenue Recognition | |
Revenues are generated predominately by sales of the Company’s integrated circuits (ICs). The Company recognizes revenue when all of the following criteria are met: 1) there is persuasive evidence that an arrangement exists, 2) delivery of goods has occurred, 3) the sales price is fixed or determinable, and 4) collectibility is reasonably assured. Generally, revenue from product sales to direct customers and contract manufacturers is recognized upon shipment. | |
A portion of the Company’s sales are made to distributors under agreements allowing certain rights of return and price protection related to the final selling price to the end customers. Accordingly, the Company defers revenue and cost of revenue on such sales until the distributors sell the product to the end customers. The net balance of deferred revenue less deferred cost of revenue associated with inventory shipped to a distributor but not yet sold to an end customer is recorded in the deferred income on shipments to distributors liability on the Consolidated Balance Sheet. Such net deferred income balance reflects the Company’s estimate of the impact of rights of return and price protection. | |
A small portion of the Company’s revenues is derived from the sale of patents. The above revenue recognition criteria for patent sales are generally met upon the execution of the patent sale agreement. | |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | |||||||||||||
Sep. 27, 2014 | ||||||||||||||
Earnings Per Share | ' | |||||||||||||
Schedule of computation of basic and diluted earnings per share | ' | |||||||||||||
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net income | $ | 5,608 | $ | 6,531 | $ | 27,997 | $ | 39,177 | ||||||
Shares used in computing basic earnings per share | 43,112 | 42,684 | 43,218 | 42,477 | ||||||||||
Effect of dilutive securities: | ||||||||||||||
Stock options and other stock-based awards | 703 | 1,238 | 812 | 960 | ||||||||||
Shares used in computing diluted earnings per share | 43,815 | 43,922 | 44,030 | 43,437 | ||||||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.13 | $ | 0.15 | $ | 0.65 | $ | 0.92 | ||||||
Diluted | $ | 0.13 | $ | 0.15 | $ | 0.64 | $ | 0.90 | ||||||
Cash_Cash_Equivalents_and_Inve1
Cash, Cash Equivalents and Investments (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 27, 2014 | ||||||||||||||||||||
Cash, Cash Equivalents and Investments | ' | |||||||||||||||||||
Schedule of cash, cash equivalents, and investments | ' | |||||||||||||||||||
The Company’s cash, cash equivalents and investments consist of the following (in thousands): | ||||||||||||||||||||
September 27, 2014 | ||||||||||||||||||||
Cost | Gross | Gross | Fair Value | |||||||||||||||||
Unrealized | Unrealized | |||||||||||||||||||
Losses | Gains | |||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||
Cash on hand | $ | 63,284 | $ | — | $ | — | $ | 63,284 | ||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Money market funds | 28,036 | — | — | 28,036 | ||||||||||||||||
Commercial paper | 14,147 | — | — | 14,147 | ||||||||||||||||
Certificates of deposit | 5,331 | — | — | 5,331 | ||||||||||||||||
Municipal bonds | 907 | — | — | 907 | ||||||||||||||||
Total available-for-sale securities | 48,421 | — | — | 48,421 | ||||||||||||||||
Total cash and cash equivalents | $ | 111,705 | $ | — | $ | — | $ | 111,705 | ||||||||||||
Short-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Municipal bonds | $ | 143,212 | $ | (3 | ) | $ | 240 | $ | 143,449 | |||||||||||
Corporate bonds | 36,000 | (33 | ) | 47 | 36,014 | |||||||||||||||
Variable-rate demand notes | 15,755 | — | — | 15,755 | ||||||||||||||||
Commercial paper | 11,439 | — | — | 11,439 | ||||||||||||||||
Asset-backed securities | 5,689 | (3 | ) | 1 | 5,687 | |||||||||||||||
International government bonds | 2,533 | (5 | ) | — | 2,528 | |||||||||||||||
Certificates of deposit | 850 | — | — | 850 | ||||||||||||||||
U.S. government bonds | 650 | — | — | 650 | ||||||||||||||||
U.S. government agency | 601 | — | — | 601 | ||||||||||||||||
Total short-term investments | $ | 216,729 | $ | (44 | ) | $ | 288 | $ | 216,973 | |||||||||||
Long-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Auction rate securities | $ | 12,425 | $ | (920 | ) | $ | — | $ | 11,505 | |||||||||||
Total long-term investments | $ | 12,425 | $ | (920 | ) | $ | — | $ | 11,505 | |||||||||||
December 28, 2013 | ||||||||||||||||||||
Cost | Gross | Gross | Fair Value | |||||||||||||||||
Unrealized | Unrealized | |||||||||||||||||||
Losses | Gains | |||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||
Cash on hand | $ | 45,544 | $ | — | $ | — | $ | 45,544 | ||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Money market funds | 39,538 | — | — | 39,538 | ||||||||||||||||
Certificates of deposit | 7,768 | — | — | 7,768 | ||||||||||||||||
Commercial paper | 2,499 | — | — | 2,499 | ||||||||||||||||
Municipal bonds | 451 | — | — | 451 | ||||||||||||||||
Total available-for-sale securities | 50,256 | — | — | 50,256 | ||||||||||||||||
Total cash and cash equivalents | $ | 95,800 | $ | — | $ | — | $ | 95,800 | ||||||||||||
Short-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Municipal bonds | $ | 119,289 | $ | (11 | ) | $ | 182 | $ | 119,460 | |||||||||||
Variable-rate demand notes | 38,025 | — | — | 38,025 | ||||||||||||||||
Corporate bonds | 17,788 | (4 | ) | 60 | 17,844 | |||||||||||||||
Commercial paper | 3,748 | — | — | 3,748 | ||||||||||||||||
Asset-backed securities | 515 | — | 1 | 516 | ||||||||||||||||
Total short-term investments | $ | 179,365 | $ | (15 | ) | $ | 243 | $ | 179,593 | |||||||||||
Long-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Auction rate securities | $ | 12,425 | $ | (1,793 | ) | $ | — | $ | 10,632 | |||||||||||
Total long-term investments | $ | 12,425 | $ | (1,793 | ) | $ | — | $ | 10,632 | |||||||||||
Schedule of available-for-sale investments in continuous unrealized loss position by length of time | ' | |||||||||||||||||||
The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands): | ||||||||||||||||||||
Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||
As of September 27, 2014 | Fair | Gross | Fair | Gross | Fair | Gross | ||||||||||||||
Value | Unrealized | Value | Unrealized | Value | Unrealized | |||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||
Corporate bonds | $ | 16,564 | $ | (33 | ) | $ | — | $ | — | $ | 16,564 | $ | (33 | ) | ||||||
Auction rate securities | — | — | 11,505 | (920 | ) | 11,505 | (920 | ) | ||||||||||||
Municipal bonds | 7,893 | (3 | ) | — | — | 7,893 | (3 | ) | ||||||||||||
Asset-backed securities | 5,102 | (3 | ) | — | — | 5,102 | (3 | ) | ||||||||||||
International government bond | 2,527 | (5 | ) | — | — | 2,527 | (5 | ) | ||||||||||||
$ | 32,086 | $ | (44 | ) | $ | 11,505 | $ | (920 | ) | $ | 43,591 | $ | (964 | ) | ||||||
Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||
As of December 28, 2013 | Fair | Gross | Fair | Gross | Fair | Gross | ||||||||||||||
Value | Unrealized | Value | Unrealized | Value | Unrealized | |||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||
Municipal bonds | $ | 11,079 | $ | (11 | ) | $ | — | $ | — | $ | 11,079 | $ | (11 | ) | ||||||
Auction rate securities | — | — | 10,632 | (1,793 | ) | 10,632 | (1,793 | ) | ||||||||||||
Corporate bonds | 2,605 | (4 | ) | — | — | 2,605 | (4 | ) | ||||||||||||
$ | 13,684 | $ | (15 | ) | $ | 10,632 | $ | (1,793 | ) | $ | 24,316 | $ | (1,808 | ) | ||||||
Summarization of contractual underlying maturities of available-for-sale investments | ' | |||||||||||||||||||
The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at September 27, 2014 (in thousands): | ||||||||||||||||||||
Cost | Fair | |||||||||||||||||||
Value | ||||||||||||||||||||
Due in one year or less | $ | 155,375 | $ | 155,485 | ||||||||||||||||
Due after one year through ten years | 97,195 | 97,329 | ||||||||||||||||||
Due after ten years | 25,005 | 24,085 | ||||||||||||||||||
$ | 277,575 | $ | 276,899 | |||||||||||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 9 Months Ended | |||||||||||||||
Sep. 27, 2014 | ||||||||||||||||
Derivative Financial Instruments | ' | |||||||||||||||
Schedule of derivative financial instrument | ' | |||||||||||||||
The Company’s derivative financial instrument consisted of the following (in thousands): | ||||||||||||||||
Fair Value | ||||||||||||||||
Balance Sheet Location | September 27, | December 28, | ||||||||||||||
2014 | 2013 | |||||||||||||||
Interest rate swap | Other assets, net | $ | 507 | $ | 513 | |||||||||||
Schedule of before-tax effect of derivative instruments in cash flow hedging relationships | ' | |||||||||||||||
The before-tax effect of derivative instruments in cash flow hedging relationships was as follows (in thousands): | ||||||||||||||||
Gain (Loss) Recognized in | Location of Loss | Loss Reclassified | ||||||||||||||
OCI on Derivatives | Reclassified into | from Accumulated | ||||||||||||||
(Effective Portion) | Income | OCI into Income | ||||||||||||||
during the: | (Effective Portion) | |||||||||||||||
during the: | ||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest rate swaps | $ | 193 | $ | (522 | ) | Interest expense | $ | (142 | ) | $ | (96 | ) | ||||
Nine Months Ended | Nine Months Ended | |||||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest rate swaps | $ | (434 | ) | $ | 622 | Interest expense | $ | (428 | ) | $ | (418 | ) | ||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 9 Months Ended | |||||||||||||
Sep. 27, 2014 | ||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis | ' | |||||||||||||
The following summarizes the valuation of the Company’s financial instruments (in thousands): | ||||||||||||||
Fair Value Measurements | ||||||||||||||
at September 27, 2014 Using | ||||||||||||||
Description | Quoted Prices in | Significant Other | Significant | Total | ||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | ||||||||||||||
Cash Equivalents: | ||||||||||||||
Money market funds | $ | 28,036 | $ | — | $ | — | $ | 28,036 | ||||||
Commercial paper | — | 14,147 | — | 14,147 | ||||||||||
Certificates of deposit | — | 5,331 | — | 5,331 | ||||||||||
Municipal bonds | — | 907 | — | 907 | ||||||||||
Total cash equivalents | $ | 28,036 | $ | 20,385 | $ | — | $ | 48,421 | ||||||
Short-term Investments: | ||||||||||||||
Municipal bonds | $ | — | $ | 143,449 | $ | — | $ | 143,449 | ||||||
Corporate bonds | — | 36,014 | — | 36,014 | ||||||||||
Variable-rate demand notes | — | 15,755 | — | 15,755 | ||||||||||
Commercial paper | — | 11,439 | — | 11,439 | ||||||||||
Asset-backed securities | — | 5,687 | — | 5,687 | ||||||||||
International government bonds | — | 2,528 | — | 2,528 | ||||||||||
Certificates of deposit | — | 850 | — | 850 | ||||||||||
U.S. government bond | 650 | — | — | 650 | ||||||||||
U.S. government agency | — | 601 | — | 601 | ||||||||||
Total short-term investments | $ | 650 | $ | 216,323 | $ | — | $ | 216,973 | ||||||
Long-term Investments: | ||||||||||||||
Auction rate securities | $ | — | $ | — | $ | 11,505 | $ | 11,505 | ||||||
Total long-term investments | $ | — | $ | — | $ | 11,505 | $ | 11,505 | ||||||
Other assets, net: | ||||||||||||||
Derivative instruments | $ | — | $ | 507 | $ | — | $ | 507 | ||||||
Total | $ | — | $ | 507 | $ | — | $ | 507 | ||||||
Total | $ | 28,686 | $ | 237,215 | $ | 11,505 | $ | 277,406 | ||||||
Liabilities: | ||||||||||||||
Accrued expenses: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 6,279 | $ | 6,279 | ||||||
Other non-current liabilities: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 11,680 | $ | 11,680 | ||||||
Total | $ | — | $ | — | $ | 17,959 | $ | 17,959 | ||||||
Fair Value Measurements | ||||||||||||||
at December 28, 2013 Using | ||||||||||||||
Description | Quoted Prices in | Significant Other | Significant | Total | ||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | ||||||||||||||
Cash Equivalents: | ||||||||||||||
Money market funds | $ | 39,538 | $ | — | $ | — | $ | 39,538 | ||||||
Certificates of deposit | — | 7,768 | — | 7,768 | ||||||||||
Commercial paper | — | 2,499 | — | 2,499 | ||||||||||
Municipal bonds | — | 451 | — | 451 | ||||||||||
Total cash equivalents | $ | 39,538 | $ | 10,718 | $ | — | $ | 50,256 | ||||||
Short-term Investments: | ||||||||||||||
Municipal bonds | $ | — | $ | 119,460 | $ | — | $ | 119,460 | ||||||
Variable-rate demand notes | — | 38,025 | — | 38,025 | ||||||||||
Corporate bonds | — | 17,844 | — | 17,844 | ||||||||||
Commercial paper | — | 3,748 | — | 3,748 | ||||||||||
Asset-backed securities | — | 516 | — | 516 | ||||||||||
Total short-term investments | $ | — | $ | 179,593 | $ | — | $ | 179,593 | ||||||
Long-term Investments: | ||||||||||||||
Auction rate securities | $ | — | $ | — | $ | 10,632 | $ | 10,632 | ||||||
Total long-term investments | $ | — | $ | — | $ | 10,632 | $ | 10,632 | ||||||
Other assets, net: | ||||||||||||||
Derivative instruments | $ | — | $ | 513 | $ | — | $ | 513 | ||||||
Total | $ | — | $ | 513 | $ | — | $ | 513 | ||||||
Total | $ | 39,538 | $ | 190,824 | $ | 10,632 | $ | 240,994 | ||||||
Liabilities: | ||||||||||||||
Other non-current liabilities: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 12,919 | $ | 12,919 | ||||||
Total | $ | — | $ | — | $ | 12,919 | $ | 12,919 | ||||||
Summary of quantitative information about level 3 asset fair value measurements | ' | |||||||||||||
Fair Value at | Valuation Technique | Unobservable Input | Weighted Average | |||||||||||
September 27, 2014 | ||||||||||||||
(000s) | ||||||||||||||
$ | 11,505 | Discounted cash flow | Estimated yield | 1.15% | ||||||||||
Expected holding period | 10 years | |||||||||||||
Estimated discount rate | 3.50% | |||||||||||||
Summary of quantitative information about level 3 liability fair value measurements | ' | |||||||||||||
Fair Value at | Valuation Technique | Unobservable Input | Range | |||||||||||
September 27, 2014 | ||||||||||||||
(000s) | ||||||||||||||
$ | 17,959 | Monte Carlo simulation | Expected revenue growth rate | 35.6% – 69.1% | ||||||||||
Expected revenue volatility | 20.00% | |||||||||||||
Expected term | 0.3 years – 4.3 years | |||||||||||||
Estimated discount rate | 0.1% – 1.8% | |||||||||||||
Summary of activity in Level 3 financial instruments | ' | |||||||||||||
The following summarizes the activity in Level 3 financial instruments for the three and nine months ended September 27, 2014 (in thousands): | ||||||||||||||
Assets | ||||||||||||||
Auction Rate Securities | Three Months | Nine Months | ||||||||||||
Ended | Ended | |||||||||||||
Beginning balance | $ | 10,993 | $ | 10,632 | ||||||||||
Gain included in other comprehensive income | 512 | 873 | ||||||||||||
Balance at September 27, 2014 | $ | 11,505 | $ | 11,505 | ||||||||||
Liabilities | ||||||||||||||
Contingent Consideration (1) | Three Months | Nine Months | ||||||||||||
Ended | Ended | |||||||||||||
Beginning balance | $ | 11,955 | $ | 12,919 | ||||||||||
Loss recognized in earnings (2) | 6,004 | 5,040 | ||||||||||||
Balance at September 27, 2014 | $ | 17,959 | $ | 17,959 | ||||||||||
Net loss for the period included in earnings attributable to contingent consideration held at the end of the period: | $ | (6,004 | ) | $ | (5,040 | ) | ||||||||
(1)In connection with the acquisition of Energy Micro, the Company recorded contingent consideration based upon the expected achievement of certain milestone goals. Changes to the fair value of contingent consideration due to changes in assumptions used in preparing the valuation model are recorded in selling, general and administrative expenses in the Consolidated Statement of Income. | ||||||||||||||
(2)The Company increased the estimated fair value of contingent consideration because the Company now expects a higher level of earn-out achievement. | ||||||||||||||
Balance_Sheet_Details_Tables
Balance Sheet Details (Tables) | 9 Months Ended | |||||||
Sep. 27, 2014 | ||||||||
Balance Sheet Details | ' | |||||||
Inventories | ' | |||||||
The following shows the details of selected Condensed Consolidated Balance Sheet items (in thousands): | ||||||||
Inventories | ||||||||
September 27, | December 28, | |||||||
2014 | 2013 | |||||||
Work in progress | $ | 35,505 | $ | 34,503 | ||||
Finished goods | 11,510 | 10,768 | ||||||
$ | 47,015 | $ | 45,271 | |||||
Debt_Tables
Debt (Tables) | 9 Months Ended | ||||
Sep. 27, 2014 | |||||
Debt | ' | ||||
Schedule of remaining contractual maturities of the Term Loan Facility | ' | ||||
As of September 27, 2014, the remaining contractual maturities of the Term Loan Facility were as follows (in thousands): | |||||
Fiscal Year | |||||
2014 | $ | 3,750 | |||
2015 | 10,000 | ||||
2016 | 10,000 | ||||
2017 | 67,500 | ||||
Total | $ | 91,250 | |||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 9 Months Ended | |||||||||||||
Sep. 27, 2014 | ||||||||||||||
Stockholders' Equity | ' | |||||||||||||
Schedule of share repurchase programs | ' | |||||||||||||
The Board of Directors authorized the following share repurchase programs (in thousands): | ||||||||||||||
Program Authorization Date | Program | Program | ||||||||||||
Termination Date | Amount | |||||||||||||
Oct-14 | December 2015 | $ | 100,000 | |||||||||||
January 2014 | October 2014 | $ | 100,000 | |||||||||||
January 2013 | January 2014 | $ | 50,000 | |||||||||||
April 2012 | January 2013 | $ | 100,000 | |||||||||||
Schedule of components of accumulated other comprehensive loss, net of taxes | ' | |||||||||||||
The components of accumulated other comprehensive loss, net of taxes, were as follows (in thousands): | ||||||||||||||
Unrealized Gain | Net Unrealized Losses | Total | ||||||||||||
on Cash Flow | on Available-For-Sale | |||||||||||||
Hedge | Securities | |||||||||||||
Balance at December 28, 2013 | $ | 333 | $ | (1,017 | ) | $ | (684 | ) | ||||||
Other comprehensive income (loss) before reclassifications | (282 | ) | 578 | 296 | ||||||||||
Amount reclassified from accumulated other comprehensive loss | 278 | — | 278 | |||||||||||
Net change for the period | (4 | ) | 578 | 574 | ||||||||||
Balance at September 27, 2014 | $ | 329 | $ | (439 | ) | $ | (110 | ) | ||||||
Schedule of Reclassifications From Accumulated Other Comprehensive Loss | ' | |||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
Reclassification (in thousands) | September 27, | September 28, | September 27, | September 28, | ||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Losses on cash flow hedges to: | ||||||||||||||
Interest expense | $ | (142 | ) | $ | (96 | ) | $ | (428 | ) | $ | (418 | ) | ||
Gains on available-for-sales securities to: | ||||||||||||||
Interest income | — | — | — | 232 | ||||||||||
(142 | ) | (96 | ) | (428 | ) | (186 | ) | |||||||
Income tax benefit | 50 | 33 | 150 | 65 | ||||||||||
Total reclassifications | $ | (92 | ) | $ | (63 | ) | $ | (278 | ) | $ | (121 | ) | ||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 27, 2014 | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Schedule of stock-based compensation costs recognized in the Consolidated Statements of Income | ' | |||||||||||||
The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Income (in thousands): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Cost of revenues | $ | 201 | $ | 269 | $ | 574 | $ | 785 | ||||||
Research and development | 4,713 | 3,729 | 13,282 | 10,551 | ||||||||||
Selling, general and administrative | 4,700 | 4,622 | 14,317 | 10,968 | ||||||||||
9,614 | 8,620 | 28,173 | 22,304 | |||||||||||
Income tax benefit | 1,158 | 904 | 3,056 | 1,822 | ||||||||||
$ | 8,456 | $ | 7,716 | $ | 25,117 | $ | 20,482 | |||||||
Significant_Accounting_Policie2
Significant Accounting Policies (Details) | 9 Months Ended | 12 Months Ended |
Sep. 27, 2014 | Dec. 28, 2013 | |
Basis of Presentation and Principles of Consolidation | ' | ' |
Length of fiscal year | '371 days | '364 days |
Number of days in each fiscal quarter for 52-week fiscal year | '91 days | ' |
Low end of range | ' | ' |
Basis of Presentation and Principles of Consolidation | ' | ' |
Length of fiscal year | '364 days | ' |
High end of range | ' | ' |
Basis of Presentation and Principles of Consolidation | ' | ' |
Length of fiscal year | '371 days | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 27, 2014 | Sep. 28, 2013 | Sep. 27, 2014 | Sep. 28, 2013 |
Earnings Per Share | ' | ' | ' | ' |
Net income | $5,608 | $6,531 | $27,997 | $39,177 |
Shares used in computing basic earnings per share | 43,112,000 | 42,684,000 | 43,218,000 | 42,477,000 |
Effect of dilutive securities: | ' | ' | ' | ' |
Stock options and other stock-based awards (in shares) | 703,000 | 1,238,000 | 812,000 | 960,000 |
Shares used in computing diluted earnings per share | 43,815,000 | 43,922,000 | 44,030,000 | 43,437,000 |
Earnings per share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.13 | $0.15 | $0.65 | $0.92 |
Diluted (in dollars per share) | $0.13 | $0.15 | $0.64 | $0.90 |
Shares excluded from computation of diluted earning per share | 100,000 | 500,000 | 100,000 | 400,000 |
Cash_Cash_Equivalents_and_Inve2
Cash, Cash Equivalents and Investments (Details) (USD $) | 9 Months Ended | |
Sep. 27, 2014 | Dec. 28, 2013 | |
Cash, Cash Equivalents and Investments | ' | ' |
Auction-rate securities guaranteed by the U.S. government | $10,400,000 | ' |
Auction-rate securities privately insured | 2,000,000 | ' |
Auction-rate securities having credit rating 'AA' | 6,000,000 | ' |
Auction-rate securities having credit rating 'A' | 2,000,000 | ' |
Auction-rate securities having credit rating 'BBB' | 4,400,000 | ' |
Other-than-temporary impairment losses | 0 | ' |
Cash on hand, Cost | 63,284,000 | 45,544,000 |
Cash on hand, Fair Value | 63,284,000 | 45,544,000 |
Cash and cash equivalents, Cost | 111,705,000 | 95,800,000 |
Cash and cash equivalents, Fair Value | 111,705,000 | 95,800,000 |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 277,575,000 | ' |
Cash Equivalents: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 48,421,000 | 50,256,000 |
Available-for-sale securities, Fair Value | 48,421,000 | 50,256,000 |
Short-term Investments: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 216,729,000 | 179,365,000 |
Available-for-sale securities, Gross Unrealized Losses | -44,000 | -15,000 |
Available-for-sale securities, Gross Unrealized Gains | 288,000 | 243,000 |
Available-for-sale securities, Fair Value | 216,973,000 | 179,593,000 |
Long-term Investments: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 12,425,000 | 12,425,000 |
Available-for-sale securities, Gross Unrealized Losses | -920,000 | -1,793,000 |
Available-for-sale securities, Fair Value | 11,505,000 | 10,632,000 |
Money market funds | Cash Equivalents: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 28,036,000 | 39,538,000 |
Available-for-sale securities, Fair Value | 28,036,000 | 39,538,000 |
Commercial paper | Cash Equivalents: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 14,147,000 | 2,499,000 |
Available-for-sale securities, Fair Value | 14,147,000 | 2,499,000 |
Commercial paper | Short-term Investments: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 11,439,000 | 3,748,000 |
Available-for-sale securities, Fair Value | 11,439,000 | 3,748,000 |
Certificates of deposit | Cash Equivalents: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 5,331,000 | 7,768,000 |
Available-for-sale securities, Fair Value | 5,331,000 | 7,768,000 |
Certificates of deposit | Short-term Investments: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 850,000 | ' |
Available-for-sale securities, Fair Value | 850,000 | ' |
Municipal bonds | Cash Equivalents: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 907,000 | 451,000 |
Available-for-sale securities, Fair Value | 907,000 | 451,000 |
Municipal bonds | Short-term Investments: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 143,212,000 | 119,289,000 |
Available-for-sale securities, Gross Unrealized Losses | -3,000 | -11,000 |
Available-for-sale securities, Gross Unrealized Gains | 240,000 | 182,000 |
Available-for-sale securities, Fair Value | 143,449,000 | 119,460,000 |
Corporate bonds | Short-term Investments: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 36,000,000 | 17,788,000 |
Available-for-sale securities, Gross Unrealized Losses | -33,000 | -4,000 |
Available-for-sale securities, Gross Unrealized Gains | 47,000 | 60,000 |
Available-for-sale securities, Fair Value | 36,014,000 | 17,844,000 |
Variable-rate demand notes | Short-term Investments: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 15,755,000 | 38,025,000 |
Available-for-sale securities, Fair Value | 15,755,000 | 38,025,000 |
Asset-backed securities | Short-term Investments: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 5,689,000 | 515,000 |
Available-for-sale securities, Gross Unrealized Losses | -3,000 | ' |
Available-for-sale securities, Gross Unrealized Gains | 1,000 | 1,000 |
Available-for-sale securities, Fair Value | 5,687,000 | 516,000 |
International government bonds | Short-term Investments: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 2,533,000 | ' |
Available-for-sale securities, Gross Unrealized Losses | -5,000 | ' |
Available-for-sale securities, Fair Value | 2,528,000 | ' |
U.S. government bonds | Short-term Investments: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 650,000 | ' |
Available-for-sale securities, Fair Value | 650,000 | ' |
US government agency | Short-term Investments: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 601,000 | ' |
Available-for-sale securities, Fair Value | 601,000 | ' |
Auction rate securities | Long-term Investments: | ' | ' |
Available-for-sale securities | ' | ' |
Available-for-sale securities, Cost | 12,425,000 | 12,425,000 |
Available-for-sale securities, Gross Unrealized Losses | -920,000 | -1,793,000 |
Available-for-sale securities, Fair Value | $11,505,000 | $10,632,000 |
Cash_Cash_Equivalents_and_Inve3
Cash, Cash Equivalents and Investments (Details 2) (USD $) | Sep. 27, 2014 | Dec. 28, 2013 |
In Thousands, unless otherwise specified | ||
Continuous unrealized loss position, Fair Value | ' | ' |
Fair value of available-for-sale securities, continuous loss position for less than twelve months | $32,086 | $13,684 |
Fair value of available-for-sale securities, continuous loss position for twelve months or longer | 11,505 | 10,632 |
Total fair value of available-for-sale securities, continuous loss position | 43,591 | 24,316 |
Continuous unrealized loss position, Gross Unrealized Losses | ' | ' |
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | -44 | -15 |
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses | -920 | -1,793 |
Available-for-sale securities, total gross unrealized losses | -964 | -1,808 |
Cost | ' | ' |
Due in one year or less, Cost | 155,375 | ' |
Due after one year through ten years, Cost | 97,195 | ' |
Due after ten years, Cost | 25,005 | ' |
Total Cost | 277,575 | ' |
Fair Value | ' | ' |
Due in one year or less, Fair Value | 155,485 | ' |
Due after one year through ten years, Fair Value | 97,329 | ' |
Due after ten years, Fair Value | 24,085 | ' |
Total Fair Value | 276,899 | ' |
Corporate bonds | ' | ' |
Continuous unrealized loss position, Fair Value | ' | ' |
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 16,564 | 2,605 |
Total fair value of available-for-sale securities, continuous loss position | 16,564 | 2,605 |
Continuous unrealized loss position, Gross Unrealized Losses | ' | ' |
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | -33 | -4 |
Available-for-sale securities, total gross unrealized losses | -33 | -4 |
Auction rate securities | ' | ' |
Continuous unrealized loss position, Fair Value | ' | ' |
Fair value of available-for-sale securities, continuous loss position for twelve months or longer | 11,505 | 10,632 |
Total fair value of available-for-sale securities, continuous loss position | 11,505 | 10,632 |
Continuous unrealized loss position, Gross Unrealized Losses | ' | ' |
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses | -920 | -1,793 |
Available-for-sale securities, total gross unrealized losses | -920 | -1,793 |
Municipal bonds | ' | ' |
Continuous unrealized loss position, Fair Value | ' | ' |
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 7,893 | 11,079 |
Total fair value of available-for-sale securities, continuous loss position | 7,893 | 11,079 |
Continuous unrealized loss position, Gross Unrealized Losses | ' | ' |
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | -3 | -11 |
Available-for-sale securities, total gross unrealized losses | -3 | -11 |
Asset-backed securities | ' | ' |
Continuous unrealized loss position, Fair Value | ' | ' |
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 5,102 | ' |
Total fair value of available-for-sale securities, continuous loss position | 5,102 | ' |
Continuous unrealized loss position, Gross Unrealized Losses | ' | ' |
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | -3 | ' |
Available-for-sale securities, total gross unrealized losses | -3 | ' |
International government bonds | ' | ' |
Continuous unrealized loss position, Fair Value | ' | ' |
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 2,527 | ' |
Total fair value of available-for-sale securities, continuous loss position | 2,527 | ' |
Continuous unrealized loss position, Gross Unrealized Losses | ' | ' |
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | -5 | ' |
Available-for-sale securities, total gross unrealized losses | ($5) | ' |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (Cash flow hedges, Interest rate swaps, USD $) | Sep. 27, 2014 |
In Millions, unless otherwise specified | |
Cash flow hedges | Interest rate swaps | ' |
Notional amount | ' |
Original notional value | $100 |
Derivative_Financial_Instrumen3
Derivative Financial Instruments (Details 2) (USD $) | 9 Months Ended | ||
Sep. 27, 2014 | Sep. 27, 2014 | Dec. 28, 2013 | |
Other assets, net | Other assets, net | ||
Derivative Financial Instruments | ' | ' | ' |
Gains or losses from the hedging instrument which was excluded from the assessment of effectiveness | $0 | ' | ' |
Derivative financial instrument | ' | ' | ' |
Fair value of interest rate swap | ' | $507,000 | $513,000 |
Derivative_Financial_Instrumen4
Derivative Financial Instruments (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2014 | Sep. 28, 2013 | Sep. 27, 2014 | Sep. 28, 2013 | |
Derivative Instruments, Gain (Loss) | ' | ' | ' | ' |
Reclassification of interest rate swap losses included in accumulated other comprehensive loss into earnings in the next 12 months | $500,000 | ' | $500,000 | ' |
Cash flow hedges | Interest rate swaps | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' | ' |
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) during period | 193,000 | -522,000 | -434,000 | 622,000 |
Cash flow hedges | Interest rate swaps | Interest expense | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' | ' |
Loss Reclassified from Accumulated OCI into Income (Effective Portion), included in rent and interest expense during period | ($142,000) | ($96,000) | ($428,000) | ($418,000) |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Sep. 27, 2014 | Dec. 28, 2013 |
In Thousands, unless otherwise specified | ||
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total cash equivalents | $111,705 | $95,800 |
Total short-term investments | 216,973 | 179,593 |
Total long-term investments | 11,505 | 10,632 |
Assets and liabilities measured at fair value on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total cash equivalents | 28,036 | 39,538 |
Total short-term investments | 650 | ' |
Total assets at fair value | 28,686 | 39,538 |
Assets and liabilities measured at fair value on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total cash equivalents | 28,036 | 39,538 |
Assets and liabilities measured at fair value on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government bonds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total short-term investments | 650 | ' |
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total cash equivalents | 20,385 | 10,718 |
Total short-term investments | 216,323 | 179,593 |
Derivative instruments | 507 | 513 |
Other assets, net | 507 | 513 |
Total assets at fair value | 237,215 | 190,824 |
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Commercial paper | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total cash equivalents | 14,147 | 2,499 |
Total short-term investments | 11,439 | 3,748 |
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Certificates of deposit | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total cash equivalents | 5,331 | 7,768 |
Total short-term investments | 850 | ' |
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Municipal bonds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total cash equivalents | 907 | 451 |
Total short-term investments | 143,449 | 119,460 |
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Corporate bonds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total short-term investments | 36,014 | 17,844 |
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Variable-rate demand notes | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total short-term investments | 15,755 | 38,025 |
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Asset-backed securities | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total short-term investments | 5,687 | 516 |
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | International government bonds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total short-term investments | 2,528 | ' |
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | US government agency | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total short-term investments | 601 | ' |
Assets and liabilities measured at fair value on recurring basis | Significant Unobservable Inputs (Level 3) | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total long-term investments | 11,505 | 10,632 |
Total assets at fair value | 11,505 | 10,632 |
Total liabilities at fair value | 17,959 | 12,919 |
Assets and liabilities measured at fair value on recurring basis | Significant Unobservable Inputs (Level 3) | Accrued expenses: | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Contingent consideration | 6,279 | ' |
Assets and liabilities measured at fair value on recurring basis | Significant Unobservable Inputs (Level 3) | Other non-current liabilities: | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Contingent consideration | 11,680 | 12,919 |
Assets and liabilities measured at fair value on recurring basis | Significant Unobservable Inputs (Level 3) | Auction rate securities | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total long-term investments | 11,505 | 10,632 |
Assets and liabilities measured at fair value on recurring basis | Fair Value | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total cash equivalents | 48,421 | 50,256 |
Total short-term investments | 216,973 | 179,593 |
Total long-term investments | 11,505 | 10,632 |
Derivative instruments | 507 | 513 |
Other assets, net | 507 | 513 |
Total assets at fair value | 277,406 | 240,994 |
Total liabilities at fair value | 17,959 | 12,919 |
Assets and liabilities measured at fair value on recurring basis | Fair Value | Accrued expenses: | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Contingent consideration | 6,279 | ' |
Assets and liabilities measured at fair value on recurring basis | Fair Value | Other non-current liabilities: | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Contingent consideration | 11,680 | 12,919 |
Assets and liabilities measured at fair value on recurring basis | Fair Value | Money market funds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total cash equivalents | 28,036 | 39,538 |
Assets and liabilities measured at fair value on recurring basis | Fair Value | Commercial paper | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total cash equivalents | 14,147 | 2,499 |
Total short-term investments | 11,439 | 3,748 |
Assets and liabilities measured at fair value on recurring basis | Fair Value | Certificates of deposit | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total cash equivalents | 5,331 | 7,768 |
Total short-term investments | 850 | ' |
Assets and liabilities measured at fair value on recurring basis | Fair Value | Municipal bonds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total cash equivalents | 907 | 451 |
Total short-term investments | 143,449 | 119,460 |
Assets and liabilities measured at fair value on recurring basis | Fair Value | Corporate bonds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total short-term investments | 36,014 | 17,844 |
Assets and liabilities measured at fair value on recurring basis | Fair Value | Variable-rate demand notes | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total short-term investments | 15,755 | 38,025 |
Assets and liabilities measured at fair value on recurring basis | Fair Value | Asset-backed securities | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total short-term investments | 5,687 | 516 |
Assets and liabilities measured at fair value on recurring basis | Fair Value | International government bonds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total short-term investments | 2,528 | ' |
Assets and liabilities measured at fair value on recurring basis | Fair Value | U.S. government bonds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total short-term investments | 650 | ' |
Assets and liabilities measured at fair value on recurring basis | Fair Value | US government agency | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total short-term investments | 601 | ' |
Assets and liabilities measured at fair value on recurring basis | Fair Value | Auction rate securities | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total long-term investments | $11,505 | $10,632 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments (Details 2) (Auction rate securities, Weighted Average, Discounted cash flow) | 9 Months Ended |
Sep. 27, 2014 | |
Auction rate securities | Weighted Average | Discounted cash flow | ' |
Quantitative information for Level 3 Fair Value Measurements Assets | ' |
Estimated yield (as a percent) | 1.15% |
Expected holding period | '10 years |
Estimated discount rate (as a percent) | 3.50% |
Fair_Value_of_Financial_Instru4
Fair Value of Financial Instruments (Details 3) (Contingent consideration, Monte Carlo simulation) | 9 Months Ended |
Sep. 27, 2014 | |
Quantitative information for Level 3 fair value measurements liabilities | ' |
Expected revenue volatility (as a percent) | 20.00% |
Low end of range | ' |
Quantitative information for Level 3 fair value measurements liabilities | ' |
Expected revenue growth rate (as a percent) | 35.60% |
Expected term | '3 months 18 days |
Estimated discount rate (as a percent) | 0.10% |
High end of range | ' |
Quantitative information for Level 3 fair value measurements liabilities | ' |
Expected revenue growth rate (as a percent) | 69.10% |
Expected term | '4 years 3 months 18 days |
Estimated discount rate (as a percent) | 1.80% |
Fair_Value_of_Financial_Instru5
Fair Value of Financial Instruments (Details 4) (Assets and liabilities measured at fair value on recurring basis, Auction rate securities, USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 27, 2014 | Sep. 27, 2014 |
Assets and liabilities measured at fair value on recurring basis | Auction rate securities | ' | ' |
Fair value assets reconciliation of changes | ' | ' |
Balance at the beginning of the period | $10,993 | $10,632 |
Gain included in other comprehensive income | 512 | 873 |
Balance at the end of the period | $11,505 | $11,505 |
Fair_Value_of_Financial_Instru6
Fair Value of Financial Instruments (Details 5) (USD $) | Sep. 27, 2014 | Dec. 28, 2013 | Sep. 27, 2014 | Sep. 27, 2014 |
Term Loan Facility | Term Loan Facility | Assets and liabilities measured at fair value on recurring basis | Assets and liabilities measured at fair value on recurring basis | |
Contingent consideration | Contingent consideration | |||
Fair value liabilities reconciliation of changes | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | $11,955,000 | $12,919,000 |
Loss recognized in earnings | ' | ' | 6,004,000 | 5,040,000 |
Balance at the end of the period | ' | ' | 17,959,000 | 17,959,000 |
Net loss for the period included in earnings attributable to contingent consideration held at the end of the period: | ' | ' | -6,004,000 | -5,040,000 |
Fair value of debt | $91,200,000 | $94,800,000 | ' | ' |
Balance_Sheet_Details_Details
Balance Sheet Details (Details) (USD $) | Sep. 27, 2014 | Dec. 28, 2013 |
In Thousands, unless otherwise specified | ||
Inventories | ' | ' |
Work in progress | $35,505 | $34,503 |
Finished goods | 11,510 | 10,768 |
Total inventories | $47,015 | $45,271 |
Debt_Details
Debt (Details) (USD $) | 1 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | ||||||||
Jul. 31, 2012 | Sep. 27, 2014 | Sep. 27, 2012 | Jul. 31, 2012 | Sep. 27, 2014 | Jul. 31, 2012 | Sep. 27, 2014 | Sep. 27, 2014 | Sep. 27, 2014 | Sep. 27, 2014 | Sep. 27, 2014 | Sep. 27, 2014 | |
Term Loan Facility | Term Loan Facility | Term Loan Facility | Agreement | Agreement | Revolving Credit Facility | Term loan facility and revolving credit facility, other than swingline loans | Term loan facility and revolving credit facility, other than swingline loans | Term loan facility and revolving credit facility, other than swingline loans | Term loan facility and revolving credit facility, other than swingline loans | Term loan facility, revolving credit facility, swingline and other loans | Term loan facility, revolving credit facility, swingline and other loans | |
LIBOR | LIBOR | Federal Funds | one-month LIBOR | Base rate | Base rate | |||||||
Low end of range | High end of range | Low end of range | High end of range | |||||||||
Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | $100,000,000 | ' | ' | $230,000,000 | ' | $130,000,000 | ' | ' | ' | ' | ' | ' |
Term of debt instrument | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of principal amortization in each of the first two years | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of years for which the percentage of principal amortization is five percent | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of principal amortization in each of the next three years | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of years for which the percentage of principal amortization is ten percent | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sublimit on letters of credit | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' |
Sublimit on swingline loan | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' |
Additional increase in borrowing capacity of the line of credit available at the entity's option | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | ' |
Amount borrowed under the term loan facility | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate added to the base rate (as a percent) | ' | ' | ' | ' | ' | ' | 1.50% | 2.50% | 0.50% | 1.00% | 0.50% | 1.50% |
Maximum leverage ratio | ' | ' | ' | ' | 2.5 | ' | ' | ' | ' | ' | ' | ' |
Minimum fixed charge coverage ratio | ' | ' | ' | ' | 1.5 | ' | ' | ' | ' | ' | ' | ' |
Fixed interest rate percentage | ' | 0.76% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Combined interest rate percentage | ' | 2.51% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term Loan Facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | ' | 3,750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | ' | 67,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total debt | ' | $91,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | ||||||||
Share data in Millions, unless otherwise specified | Sep. 27, 2014 | Sep. 28, 2013 | Sep. 27, 2014 | Sep. 28, 2013 | Oct. 23, 2014 | Sep. 27, 2014 | Sep. 27, 2014 | Oct. 31, 2014 | Oct. 23, 2014 | Jan. 31, 2014 | Jan. 31, 2013 | Apr. 30, 2012 |
Unrealized Gain on Cash Flow Hedge | Net Unrealized Losses on Available-For-Sale Securities | High end of range | High end of range | High end of range | High end of range | High end of range | ||||||
Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock issued | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Program Amount authorized to repurchase | ' | ' | ' | ' | ' | ' | ' | ' | $100,000,000 | $100,000,000 | $50,000,000 | $100,000,000 |
Components of accumulated other comprehensive loss, net of taxes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at beginning of the period | ' | ' | -684,000 | ' | ' | 333,000 | -1,017,000 | ' | ' | ' | ' | ' |
Other comprehensive income (loss) before reclassifications | ' | ' | 296,000 | ' | ' | -282,000 | 578,000 | ' | ' | ' | ' | ' |
Amounts reclassified from accumulated other comprehensive loss | ' | ' | 278,000 | ' | ' | 278,000 | ' | ' | ' | ' | ' | ' |
Other comprehensive income | 489,000 | 148,000 | 574,000 | 165,000 | ' | -4,000 | 578,000 | ' | ' | ' | ' | ' |
Balance at end of the period | -110,000 | ' | -110,000 | ' | ' | 329,000 | -439,000 | ' | ' | ' | ' | ' |
Repurchase of common stock (in shares) | ' | ' | 1.3 | 0.2 | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchase of common stock | ' | ' | 53,900,000 | 7,800,000 | ' | ' | ' | 100,000,000 | ' | ' | ' | ' |
Termination of remaining authorized share repurchase program | ' | ' | ' | ' | $35,600,000 | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 27, 2014 | Sep. 28, 2013 | Sep. 27, 2014 | Sep. 28, 2013 |
Amounts Reclassified from AOCI | ' | ' | ' | ' |
Interest expense | ($768) | ($813) | ($2,346) | ($2,486) |
Interest income | 231 | 129 | 733 | 616 |
Income before income taxes | 9,109 | 9,783 | 38,905 | 48,325 |
Income tax benefit | -3,501 | -3,252 | -10,908 | -9,148 |
Net income | 5,608 | 6,531 | 27,997 | 39,177 |
Reclassifications From Accumulated Other Comprehensive Loss | ' | ' | ' | ' |
Amounts Reclassified from AOCI | ' | ' | ' | ' |
Income before income taxes | -142 | -96 | -428 | -186 |
Income tax benefit | 50 | 33 | 150 | 65 |
Net income | -92 | -63 | -278 | -121 |
Unrealized Gain on Cash Flow Hedge | Reclassifications From Accumulated Other Comprehensive Loss | ' | ' | ' | ' |
Amounts Reclassified from AOCI | ' | ' | ' | ' |
Interest expense | -142 | -96 | -428 | -418 |
Net Unrealized Losses on Available-For-Sale Securities | Reclassifications From Accumulated Other Comprehensive Loss | ' | ' | ' | ' |
Amounts Reclassified from AOCI | ' | ' | ' | ' |
Interest income | ' | ' | ' | $232 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2014 | Sep. 28, 2013 | Sep. 27, 2014 | Sep. 28, 2013 | |
Stock-based compensation costs | ' | ' | ' | ' |
Share based compensation cost before tax | $9,614,000 | $8,620,000 | $28,173,000 | $22,304,000 |
Income tax benefit | 1,158,000 | 904,000 | 3,056,000 | 1,822,000 |
Share based compensation cost after tax | 8,456,000 | 7,716,000 | 25,117,000 | 20,482,000 |
Total unrecognized compensation costs related to awards | 60,300,000 | ' | 60,300,000 | ' |
Weighted-average period of recognition of unrecognized compensation costs | ' | ' | '2 years 1 month 6 days | ' |
Cost of revenues | ' | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' | ' |
Share based compensation cost before tax | 201,000 | 269,000 | 574,000 | 785,000 |
Research and development | ' | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' | ' |
Share based compensation cost before tax | 4,713,000 | 3,729,000 | 13,282,000 | 10,551,000 |
Selling, general and administrative | ' | ' | ' | ' |
Stock-based compensation costs | ' | ' | ' | ' |
Share based compensation cost before tax | $4,700,000 | $4,622,000 | $14,317,000 | $10,968,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2014 | Sep. 28, 2013 | Sep. 27, 2014 | Sep. 28, 2013 | |
Income Taxes | ' | ' | ' | ' |
Income tax expense | $3,501,000 | $3,252,000 | $10,908,000 | $9,148,000 |
Effective income tax rate (as a percent) | 38.40% | 33.20% | 28.00% | 18.90% |
Gross unrecognized tax benefits | 3,600,000 | ' | 3,600,000 | ' |
Gross unrecognized tax benefits which would affect the effective tax rate if recognized | 3,500,000 | ' | 3,500,000 | ' |
Decrease in gross unrecognized tax benefits related the lapse of the statute of limitations applicable to an uncertain tax position | ' | ' | $1,500,000 | ' |