Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Apr. 04, 2015 | Apr. 21, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | SILICON LABORATORIES INC | |
Entity Central Index Key | 1038074 | |
Document Type | 10-Q | |
Document Period End Date | 4-Apr-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -1 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 42,710,601 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Apr. 04, 2015 | Jan. 03, 2015 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $112,710 | $141,706 |
Short-term investments | 148,795 | 193,489 |
Accounts receivable, net of allowances for doubtful accounts of $785 at April 4, 2015 and $786 at January 3, 2015 | 66,563 | 70,367 |
Inventories | 61,078 | 52,631 |
Deferred income taxes | 17,364 | 21,173 |
Prepaid expenses and other current assets | 51,301 | 49,171 |
Total current assets | 457,811 | 528,537 |
Long-term investments | 7,401 | 7,419 |
Property and equipment, net | 131,313 | 132,820 |
Goodwill | 264,687 | 228,781 |
Other intangible assets, net | 135,049 | 115,021 |
Other assets, net | 24,965 | 29,983 |
Total assets | 1,021,226 | 1,042,561 |
Current liabilities: | ||
Accounts payable | 39,295 | 38,922 |
Current portion of long-term debt | 10,000 | 10,000 |
Accrued expenses | 45,391 | 73,646 |
Deferred income on shipments to distributors | 38,796 | 38,662 |
Income taxes | 1,340 | 2,084 |
Total current liabilities | 134,822 | 163,314 |
Long-term debt | 77,150 | 77,500 |
Other non-current liabilities | 45,817 | 43,691 |
Total liabilities | 257,789 | 284,505 |
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; 42,689 and 42,225 shares issued and outstanding at April 4, 2015 and January 3, 2015, respectively | 4 | 4 |
Additional paid-in capital | 28,833 | 29,501 |
Retained earnings | 735,011 | 728,633 |
Accumulated other comprehensive loss | -411 | -82 |
Total stockholders' equity | 763,437 | 758,056 |
Total liabilities and stockholders' equity | $1,021,226 | $1,042,561 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Apr. 04, 2015 | Jan. 03, 2015 |
In Thousands, except Per Share data, unless otherwise specified | ||
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowances for doubtful accounts (in dollars) | $785 | $786 |
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 | 42,689 | 42,225 |
Common stock, shares outstanding | 42,689 | 42,225 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Condensed Consolidated Statements of Income | ||
Revenues | $163,705 | $145,691 |
Cost of revenues | 67,336 | 58,586 |
Gross margin | 96,369 | 87,105 |
Operating expenses: | ||
Research and development | 46,857 | 42,485 |
Selling, general and administrative | 42,300 | 34,611 |
Operating expenses | 89,157 | 77,096 |
Operating income | 7,212 | 10,009 |
Other income (expense): | ||
Interest income | 192 | 302 |
Interest expense | -745 | -798 |
Other income (expense), net | 408 | 67 |
Income before income taxes | 7,067 | 9,580 |
Provision for income taxes | 689 | 1,470 |
Net income | $6,378 | $8,110 |
Earnings per share: | ||
Basic (in dollars per share) | $0.15 | $0.19 |
Diluted (in dollars per share) | $0.15 | $0.18 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 42,412 | 43,081 |
Diluted (in shares) | 43,149 | 44,056 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Condensed Consolidated Statements of Comprehensive Income | ||
Net income | $6,378 | $8,110 |
Net changes to available-for-sale securities: | ||
Unrealized gains (losses) arising during the period | -20 | 413 |
Reclassification for losses included in net income | 10 | |
Net changes to cash flow hedges: | ||
Unrealized losses arising during the period | -626 | -141 |
Reclassification for losses included in net income | 130 | 143 |
Other comprehensive income (loss), before tax | -506 | 415 |
Provision (benefit) for income taxes | -177 | 145 |
Other comprehensive income (loss) | -329 | 270 |
Comprehensive income | $6,049 | $8,380 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Operating Activities | ||
Net income | $6,378 | $8,110 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation of property and equipment | 2,987 | 3,290 |
Amortization of other intangible assets and other assets | 6,521 | 4,491 |
Stock-based compensation expense | 10,519 | 9,277 |
Income tax benefit (shortfall) from stock-based awards | 1,773 | 45 |
Excess income tax benefit from stock-based awards | -1,785 | -235 |
Deferred income taxes | 6,844 | 6,784 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 6,564 | 7,452 |
Inventories | -6,424 | 1,083 |
Prepaid expenses and other assets | 8,584 | 14,266 |
Accounts payable | 447 | 1,195 |
Accrued expenses | -5,046 | 21,367 |
Deferred income on shipments to distributors | -1,049 | 1,736 |
Income taxes | -8,409 | -8,324 |
Other non-current liabilities | -3,816 | -23,585 |
Net cash provided by operating activities | 24,088 | 46,952 |
Investing Activities | ||
Purchases of available-for-sale investments | -13,037 | -43,366 |
Proceeds from sales and maturities of available-for-sale investments | 57,739 | 28,242 |
Purchases of property and equipment | -1,991 | -1,673 |
Purchases of other assets | -935 | -2,113 |
Acquisition of business, net of cash acquired | -76,899 | |
Net cash used in investing activities | -35,123 | -18,910 |
Financing Activities | ||
Proceeds from issuance of common stock, net of cash paid for withheld taxes | -2,561 | 5,496 |
Excess income tax benefit from stock-based awards | 1,785 | 235 |
Repurchases of common stock | -10,138 | |
Payment of acquisition-related contingent consideration | -4,464 | |
Payments on debt | -2,583 | -1,250 |
Net cash provided by (used in) financing activities | -17,961 | 4,481 |
Increase (decrease) in cash and cash equivalents | -28,996 | 32,523 |
Cash and cash equivalents at beginning of period | 141,706 | 95,800 |
Cash and cash equivalents at end of period | $112,710 | $128,323 |
Significant_Accounting_Policie
Significant Accounting Policies | 3 Months Ended |
Apr. 04, 2015 | |
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 April 4, 2015 and January 3, 2015, the condensed consolidated results of its operations for the three months ended April 4, 2015 and March 29, 2014, the Condensed Consolidated Statements of Comprehensive Income for the three months ended April 4, 2015 and March 29, 2014, and the Condensed Consolidated Statements of Cash Flows for the three months ended April 4, 2015 and March 29, 2014. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated results of operations for the three months ended April 4, 2015 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 January 3, 2015, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (SEC) on February 6, 2015. | |
The Company prepares financial statements on a 52-53 week year that ends on the Saturday closest to December 31. Fiscal 2015 will have 52 weeks. Fiscal 2014 had 53 weeks with the extra week occurring in the fourth quarter of the year. In a 52-week year, each fiscal quarter consists of 13 weeks. | |
Reclassifications | |
Certain reclassifications have been made to prior year financial statements to conform to current year presentation. | |
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 April 2015, the Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Update (ASU) No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-03 is to be applied retrospectively and represents a change in accounting principle. This ASU is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. Earlier adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the effect that the adoption of this ASU will have on its financial statements. | |
In June 2014, the FASB issued FASB 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. | |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||||||
Apr. 04, 2015 | ||||||||
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 | ||||||||
April 4, | March 29, | |||||||
2015 | 2014 | |||||||
Net income | $ | 6,378 | $ | 8,110 | ||||
Shares used in computing basic earnings per share | 42,412 | 43,081 | ||||||
Effect of dilutive securities: | ||||||||
Stock options and other stock-based awards | 737 | 975 | ||||||
Shares used in computing diluted earnings per share | 43,149 | 44,056 | ||||||
Earnings per share: | ||||||||
Basic | $ | 0.15 | $ | 0.19 | ||||
Diluted | $ | 0.15 | $ | 0.18 | ||||
For the three months ended April 4, 2015 and March 29, 2014, approximately 0.1 million and 0.2 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 | 3 Months Ended | |||||||||||||||||||
Apr. 04, 2015 | ||||||||||||||||||||
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 April 4, 2015 consisted of municipal bonds, money market funds, corporate bonds, variable-rate demand notes, certificates of deposit, commercial paper and international government bonds. 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 April 4, 2015, the Company held $8.0 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 $6.0 million were guaranteed by the U.S. government and the remaining $2.0 million were privately insured. As of April 4, 2015, $6.0 million of the auction-rate securities had credit ratings of AA and $2.0 million had a credit rating of A. These securities have contractual maturity dates ranging from 2033 to 2046 at April 4, 2015. 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 April 4, 2015. | ||||||||||||||||||||
The Company’s cash, cash equivalents and investments consisted of the following (in thousands): | ||||||||||||||||||||
April 4, 2015 | ||||||||||||||||||||
Cost | Gross | Gross | Fair Value | |||||||||||||||||
Unrealized | Unrealized | |||||||||||||||||||
Losses | Gains | |||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||
Cash on hand | $ | 48,302 | $ | — | $ | — | $ | 48,302 | ||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Money market funds | 58,808 | — | — | 58,808 | ||||||||||||||||
Certificates of deposit | 5,148 | — | — | 5,148 | ||||||||||||||||
Municipal bonds | 452 | — | — | 452 | ||||||||||||||||
Total available-for-sale securities | 64,408 | — | — | 64,408 | ||||||||||||||||
Total cash and cash equivalents | $ | 112,710 | $ | — | $ | — | $ | 112,710 | ||||||||||||
Short-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Municipal bonds | $ | 122,794 | $ | (19 | ) | $ | 142 | $ | 122,917 | |||||||||||
Corporate bonds | 10,109 | (2 | ) | 10 | 10,117 | |||||||||||||||
Variable-rate demand notes | 8,615 | — | — | 8,615 | ||||||||||||||||
Commercial paper | 4,898 | — | — | 4,898 | ||||||||||||||||
International government bonds | 2,247 | — | 1 | 2,248 | ||||||||||||||||
Total short-term investments | $ | 148,663 | $ | (21 | ) | $ | 153 | $ | 148,795 | |||||||||||
Long-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Auction rate securities | $ | 8,000 | $ | (599 | ) | $ | — | $ | 7,401 | |||||||||||
Total long-term investments | $ | 8,000 | $ | (599 | ) | $ | — | $ | 7,401 | |||||||||||
January 3, 2015 | ||||||||||||||||||||
Cost | Gross | Gross | Fair Value | |||||||||||||||||
Unrealized | Unrealized | |||||||||||||||||||
Losses | Gains | |||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||
Cash on hand | $ | 52,144 | $ | — | $ | — | $ | 52,144 | ||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Money market funds | 71,415 | — | — | 71,415 | ||||||||||||||||
Certificates of deposit | 7,739 | — | — | 7,739 | ||||||||||||||||
Commercial paper | 5,348 | — | — | 5,348 | ||||||||||||||||
Municipal bonds | 1,756 | — | 1 | 1,757 | ||||||||||||||||
U.S. government agency | 1,202 | — | — | 1,202 | ||||||||||||||||
Corporate bonds | 1,101 | — | — | 1,101 | ||||||||||||||||
U.S. government bonds | 1,000 | — | — | 1,000 | ||||||||||||||||
Total available-for-sale securities | 89,561 | — | 1 | 89,562 | ||||||||||||||||
Total cash and cash equivalents | $ | 141,705 | $ | — | $ | 1 | $ | 141,706 | ||||||||||||
Short-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Municipal bonds | $ | 129,005 | $ | (25 | ) | $ | 172 | $ | 129,152 | |||||||||||
Corporate bonds | 33,043 | (35 | ) | 25 | 33,033 | |||||||||||||||
Variable-rate demand notes | 12,915 | — | — | 12,915 | ||||||||||||||||
Commercial paper | 8,995 | — | — | 8,995 | ||||||||||||||||
Asset-backed securities | 5,380 | (3 | ) | — | 5,377 | |||||||||||||||
International government bonds | 2,526 | (10 | ) | — | 2,516 | |||||||||||||||
U.S. government bonds | 650 | — | — | 650 | ||||||||||||||||
U.S. government agency | 601 | — | — | 601 | ||||||||||||||||
Certificates of deposit | 250 | — | — | 250 | ||||||||||||||||
Total short-term investments | $ | 193,365 | $ | (73 | ) | $ | 197 | $ | 193,489 | |||||||||||
Long-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Auction rate securities | $ | 8,000 | $ | (581 | ) | $ | — | $ | 7,419 | |||||||||||
Total long-term investments | $ | 8,000 | $ | (581 | ) | $ | — | $ | 7,419 | |||||||||||
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 April 4, 2015 | Fair | Gross | Fair | Gross | Fair | Gross | ||||||||||||||
Value | Unrealized | Value | Unrealized | Value | Unrealized | |||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||
Municipal bonds | $ | 22,285 | $ | (19 | ) | $ | — | $ | — | $ | 22,285 | $ | (19 | ) | ||||||
Auction rate securities | — | — | 7,401 | (599 | ) | 7,401 | (599 | ) | ||||||||||||
Corporate bonds | 5,348 | (2 | ) | — | — | 5,348 | (2 | ) | ||||||||||||
$ | 27,633 | $ | (21 | ) | $ | 7,401 | $ | (599 | ) | $ | 35,034 | $ | (620 | ) | ||||||
Silicon Laboratories Inc. | ||||||||||||||||||||
Notes to Condensed Consolidated Financial Statements (Continued) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||
As of January 3, 2015 | Fair | Gross | Fair | Gross | Fair | Gross | ||||||||||||||
Value | Unrealized | Value | Unrealized | Value | Unrealized | |||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||
Municipal bonds | $ | 23,735 | $ | (25 | ) | $ | — | $ | — | $ | 23,735 | $ | (25 | ) | ||||||
Corporate bonds | 20,327 | (35 | ) | — | — | 20,327 | (35 | ) | ||||||||||||
Auction rate securities | — | — | 7,419 | (581 | ) | 7,419 | (581 | ) | ||||||||||||
Asset-backed securities | 5,080 | (3 | ) | — | — | 5,080 | (3 | ) | ||||||||||||
International government bond | 2,516 | (10 | ) | — | — | 2,516 | (10 | ) | ||||||||||||
$ | 51,658 | $ | (73 | ) | $ | 7,419 | $ | (581 | ) | $ | 59,077 | $ | (654 | ) | ||||||
The gross unrealized losses as of April 4, 2015 and January 3, 2015 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 April 4, 2015 (in thousands): | ||||||||||||||||||||
Cost | Fair | |||||||||||||||||||
Value | ||||||||||||||||||||
Due in one year or less | $ | 165,332 | $ | 165,434 | ||||||||||||||||
Due after one year through ten years | 39,624 | 39,654 | ||||||||||||||||||
Due after ten years | 16,115 | 15,516 | ||||||||||||||||||
$ | 221,071 | $ | 220,604 | |||||||||||||||||
Derivative_Financial_Instrumen
Derivative Financial Instruments | 3 Months Ended | |||||||||||||||
Apr. 04, 2015 | ||||||||||||||||
Derivative Financial Instruments | ||||||||||||||||
Derivative Financial Instruments | ||||||||||||||||
4. Derivative Financial Instruments | ||||||||||||||||
The Company uses derivative financial instruments to manage certain exposures to the variability of interest rates and foreign currency exchange rates. The Company’s objective is to offset increases and decreases in expenses resulting from these exposures with gains and losses on the derivative contracts, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative or trading purposes. The Company recognizes derivatives, on a gross basis, in the Consolidated Balance Sheet at fair value. Cash flows from derivatives are classified according to the nature of the cash receipt or payment in the Consolidated Statement of Cash Flows. | ||||||||||||||||
Interest Rate Swaps | ||||||||||||||||
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 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 as interest expense in the Consolidated Statement of Income when the hedged exposure affects earnings. | ||||||||||||||||
The Company estimates the fair values of interest rate swaps 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 April 4, 2015, 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 in cash flow hedging relationships consisted of the following (in thousands): | ||||||||||||||||
Fair Value | ||||||||||||||||
Balance Sheet Location | April 4, | January 3, | ||||||||||||||
2015 | 2015 | |||||||||||||||
Interest rate swap | Other assets, net | $ | — | $ | 331 | |||||||||||
Other non-current liabilities | 165 | — | ||||||||||||||
The before-tax effect of derivative instruments in cash flow hedging relationships was as follows (in thousands): | ||||||||||||||||
Loss Recognized in | Loss Reclassified | |||||||||||||||
OCI on Derivatives | from Accumulated | |||||||||||||||
(Effective Portion) | OCI into Income | |||||||||||||||
during the: | (Effective Portion) | |||||||||||||||
during the: | ||||||||||||||||
Three Months Ended | Location of Loss | Three Months Ended | ||||||||||||||
April 4, | March 29, | Reclassified into | April 4, | March 29, | ||||||||||||
2015 | 2014 | Income | 2015 | 2014 | ||||||||||||
Interest rate swaps | $ | (626 | ) | $ | (141 | ) | Interest expense | $ | (130 | ) | $ | (143 | ) | |||
The Company expects to reclassify $0.4 million of its interest rate swap losses included in accumulated other comprehensive loss as of April 4, 2015 into earnings in the next 12 months, which would be offset by lower interest payments. | ||||||||||||||||
Foreign Currency Forward Contracts | ||||||||||||||||
The Company uses foreign currency forward contracts to manage exposure to foreign exchange risk. These instruments are used to reduce the earnings impact that exchange rate fluctuations have on non-U.S. dollar balance sheet exposures. The Company recognizes gains and losses on the foreign currency forward contracts in other income (expense), net in the Consolidated Statement of Income in the same period as the remeasurement loss and gain of the related foreign currency denominated asset or liability. The Company does not apply hedge accounting to its foreign currency derivative instruments. | ||||||||||||||||
As of April 4, 2015, the Company held one foreign currency forward contract denominated in Norwegian Krone with a notional value of $6.8 million. The fair value of the contract was not material as of April 4, 2015. The contract has a maturity date of July 1, 2015 and it was not designated as a hedging instrument. The Company held no foreign currency forward contracts during the three months ended March 29, 2014. | ||||||||||||||||
The before-tax effect of derivative instruments not designated as hedging instruments was as follows (in thousands): | ||||||||||||||||
Gain Recognized in Income | Three Months | Location | ||||||||||||||
Ended | ||||||||||||||||
April 4, 2015 | ||||||||||||||||
Foreign currency forward contracts | $ | 550 | Other income (expense), net | |||||||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended | |||||||||||||
Apr. 04, 2015 | ||||||||||||||
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 April 4, 2015 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 | $ | 58,808 | $ | — | $ | — | $ | 58,808 | ||||||
Certificates of deposit | — | 5,148 | — | 5,148 | ||||||||||
Municipal bonds | — | 452 | — | 452 | ||||||||||
Total cash equivalents | $ | 58,808 | $ | 5,600 | $ | — | $ | 64,408 | ||||||
Short-term Investments: | ||||||||||||||
Municipal bonds | $ | — | $ | 122,917 | $ | — | $ | 122,917 | ||||||
Corporate bonds | — | 10,117 | — | 10,117 | ||||||||||
Variable-rate demand notes | — | 8,615 | — | 8,615 | ||||||||||
Commercial paper | — | 4,898 | — | 4,898 | ||||||||||
International government bonds | — | 2,248 | — | 2,248 | ||||||||||
Total short-term investments | $ | — | $ | 148,795 | $ | — | $ | 148,795 | ||||||
Long-term Investments: | ||||||||||||||
Auction rate securities | $ | — | $ | — | $ | 7,401 | $ | 7,401 | ||||||
Total long-term investments | $ | — | $ | — | $ | 7,401 | $ | 7,401 | ||||||
Total | $ | 58,808 | $ | 154,395 | $ | 7,401 | $ | 220,604 | ||||||
Liabilities: | ||||||||||||||
Accrued expenses: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 3,225 | $ | 3,225 | ||||||
Other non-current liabilities: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 11,579 | $ | 11,579 | ||||||
Derivative instruments | — | 165 | — | 165 | ||||||||||
$ | — | $ | 165 | $ | 11,579 | $ | 11,744 | |||||||
Total | $ | — | $ | 165 | $ | 14,804 | $ | 14,969 | ||||||
Fair Value Measurements | ||||||||||||||
at January 3, 2015 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 | $ | 71,415 | $ | — | $ | — | $ | 71,415 | ||||||
Certificates of deposit | — | 7,739 | — | 7,739 | ||||||||||
Commercial paper | — | 5,348 | — | 5,348 | ||||||||||
Municipal bonds | — | 1,757 | — | 1,757 | ||||||||||
U.S. government agency | — | 1,202 | — | 1,202 | ||||||||||
Corporate bonds | — | 1,101 | — | 1,101 | ||||||||||
U.S. government bonds | 1,000 | — | — | 1,000 | ||||||||||
Total cash equivalents | $ | 72,415 | $ | 17,147 | $ | — | $ | 89,562 | ||||||
Short-term Investments: | ||||||||||||||
Municipal bonds | $ | — | $ | 129,152 | $ | — | $ | 129,152 | ||||||
Corporate bonds | — | 33,033 | — | 33,033 | ||||||||||
Variable-rate demand notes | — | 12,915 | — | 12,915 | ||||||||||
Commercial paper | — | 8,995 | — | 8,995 | ||||||||||
Asset-backed securities | — | 5,377 | — | 5,377 | ||||||||||
International government bonds | — | 2,516 | — | 2,516 | ||||||||||
U.S. government bond | 650 | — | — | 650 | ||||||||||
U.S. government agency | — | 601 | — | 601 | ||||||||||
Certificates of deposit | — | 250 | — | 250 | ||||||||||
Total short-term investments | $ | 650 | $ | 192,839 | $ | — | $ | 193,489 | ||||||
Long-term Investments: | ||||||||||||||
Auction rate securities | $ | — | $ | — | $ | 7,419 | $ | 7,419 | ||||||
Total long-term investments | $ | — | $ | — | $ | 7,419 | $ | 7,419 | ||||||
Other assets, net: | ||||||||||||||
Derivative instruments | $ | — | $ | 331 | $ | — | $ | 331 | ||||||
Total | $ | — | $ | 331 | $ | — | $ | 331 | ||||||
Total | $ | 73,065 | $ | 210,317 | $ | 7,419 | $ | 290,801 | ||||||
Liabilities: | ||||||||||||||
Accrued expenses: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 4,288 | $ | 4,288 | ||||||
Other non-current liabilities: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 14,150 | $ | 14,150 | ||||||
Total | $ | — | $ | — | $ | 18,438 | $ | 18,438 | ||||||
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 discounted cash flow models. The assumptions used in preparing the valuation models include quoted interest swap rates, foreign exchange rates, forward and spot prices for currencies, 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 | |||||||||||
April 4, 2015 | ||||||||||||||
(000s) | ||||||||||||||
$ | 7,401 | Discounted cash flow | Estimated yield | 0.97 | % | |||||||||
Expected holding period | 10 years | |||||||||||||
Estimated discount rate | 2.96 | % | ||||||||||||
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 | |||||||||||
April 4, 2015 | ||||||||||||||
(000s) | ||||||||||||||
$ | 14,804 | Monte Carlo simulation | Expected revenue growth rate | 35.6% — 69.1% | ||||||||||
Expected revenue volatility | 20.00% | |||||||||||||
Expected term | 0.8 years — 3.8 years | |||||||||||||
Estimated discount rate | 0.23% — 1.58% | |||||||||||||
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. | ||||||||||||||
The following summarizes the activity in Level 3 financial instruments for the three months ended April 4, 2015 (in thousands): | ||||||||||||||
Assets | ||||||||||||||
Auction Rate Securities | Three Months | |||||||||||||
Ended | ||||||||||||||
Beginning balance | $ | 7,419 | ||||||||||||
Loss included in other comprehensive income (loss) | (18 | ) | ||||||||||||
Balance at April 4, 2015 | $ | 7,401 | ||||||||||||
Liabilities | ||||||||||||||
Contingent Consideration (1) | Three Months | |||||||||||||
Ended | ||||||||||||||
Beginning balance | $ | 18,438 | ||||||||||||
Settlements | (4,464 | ) | ||||||||||||
Loss recognized in earnings (2) | 830 | |||||||||||||
Balance at April 4, 2015 | $ | 14,804 | ||||||||||||
Net loss for the period included in earnings attributable to contingent consideration held at the end of the period: | $ | (830 | ) | |||||||||||
-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 | Changes to the estimated fair value of contingent consideration were primarily due to revisions to the Company’s expectations 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 April 4, 2015 and January 3, 2015, the fair value of the Company’s debt under the Term Loan Facility was approximately $84.9 million and $87.4 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 | 3 Months Ended | |||||||
Apr. 04, 2015 | ||||||||
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 | ||||||||
April 4, | January 3, | |||||||
2015 | 2015 | |||||||
Work in progress | $ | 45,822 | $ | 40,640 | ||||
Finished goods | 15,256 | 11,991 | ||||||
$ | 61,078 | $ | 52,631 | |||||
Acquisitions
Acquisitions | 3 Months Ended | ||||||
Apr. 04, 2015 | |||||||
Acquisitions | |||||||
Acquisitions | |||||||
7. Acquisitions | |||||||
Bluegiga | |||||||
On January 30, 2015, the Company acquired Bluegiga Technologies Oy, a private company based in Finland. Bluegiga is a provider of Bluetooth® Smart, Bluetooth Classic and Wi-Fi® modules and software stacks for a multitude of applications in the Internet of Things (IoT), industrial automation, consumer electronics, automotive, retail, residential, and health and fitness markets. | |||||||
The Company acquired Bluegiga for cash consideration of approximately $58.0 million. Approximately $9.4 million of the initial consideration was held in escrow as security for breaches of representations and warranties and certain other expressly enumerated matters. The Company recorded the purchase of Bluegiga using the acquisition method of accounting and accordingly, recognized the assets acquired and liabilities assumed at their fair values as of the date of the acquisition. The results of Bluegiga’s operations are included in the Company’s consolidated results of operations beginning on the date of the acquisition. | |||||||
The Company believes that this strategic acquisition will accelerate its entry into the wireless module market. This factor contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. The goodwill is not deductible for tax purposes. The purchase price was allocated as follows (in thousands): | |||||||
Amount | Weighted-Average | ||||||
Amortization Period | |||||||
(Years) | |||||||
Intangible assets: | |||||||
In-process research and development | $ | 5,710 | Not amortized | ||||
Developed technology | 12,190 | 8 | |||||
Customer relationships | 6,670 | 4 | |||||
Trademarks | 880 | 3 | |||||
25,450 | |||||||
Cash and cash equivalents | 1,132 | ||||||
Other current assets | 6,156 | ||||||
Goodwill | 35,906 | ||||||
Other non-current assets | 208 | ||||||
Current liabilities | (3,289 | ) | |||||
Non-current deferred tax liabilities, net | (5,090 | ) | |||||
Long-term debt | (2,232 | ) | |||||
Other non-current liabilities | (219 | ) | |||||
Total purchase price | $ | 58,022 | |||||
The allocation of the purchase price is preliminary and subject to change, primarily for the valuation of certain assets and accruals and the finalization of income tax matters. Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date. | |||||||
In-process research and development (IPR&D) represents acquired technology that had not achieved technological feasibility as of the acquisition date and had no alternative future use. The IPR&D recorded in connection with the acquisition of Bluegiga consisted primarily of Bluetooth Smart Ready and Bluetooth Smart modules and software stacks. The fair value of these technologies was determined using the income approach. The discount rate applicable to the cash flows was 16.1%. The significant risks associated with the projects include the Company’s potential inability to produce working models and the final products gaining customer acceptance. | |||||||
Pro forma information related to this acquisition has not been presented because it would not be materially different from amounts reported. The Company recorded approximately $1.2 million of acquisition-related costs in selling, general and administrative expenses during the three months ended April 4, 2015. | |||||||
Energy Micro | |||||||
On July 1, 2013, the Company acquired Energy Micro AS for approximately $140.6 million, including: 1) Initial consideration of $107.4 million; 2) Deferred consideration with an estimated fair value of $19.2 million at the date of acquisition; and 3) Contingent consideration (the “Earn-Out”) with an estimated fair value of $14.0 million at the date of acquisition. The Earn-Out is payable on an annual basis over a five-year period from fiscal 2014 through 2018 (the “Earn-Out Period”) and in no event shall exceed $6,666,666 per year, unless revenue from the Earn-Out Products exceeds $400 million in a single fiscal year during the Earn-Out Period (in which case, the entire Earn-Out amount less any amounts previously paid will become payable). Approximately $20.3 million of the initial consideration was withheld by the Company as security for breaches of representations and warranties and certain other expressly enumerated matters (the “Holdback”). | |||||||
A portion of the Earn-Out (28.76%) is contingent on the continued employment of certain key employees for the three years following the acquisition date (the “Departure Percentage”). The Departure Percentage was accounted for as a transaction separate from the business combination based on its economic substance and will be recorded as post-combination compensation expense in the Company’s financial statements during the Earn-Out period. | |||||||
In the first quarter of 2015, the Company made the following payments in connection with the acquisition: (a) approximately $20.0 million was paid for the release of the Holdback; and (b) approximately $6.3 million was paid for the first annual period of the Earn-out. Approximately $1.8 million of the Earn-out payment represented the Departure Percentage portion and was recorded as compensation expense during fiscal 2014. The remaining approximately $4.5 million of the Earn-out payment represented additional consideration. | |||||||
Debt
Debt | 3 Months Ended | ||||
Apr. 04, 2015 | |||||
Debt | |||||
Debt | |||||
8. 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 April 4, 2015, the Company was in compliance with all covenants of the Credit Facilities. | |||||
As of April 4, 2015, the remaining contractual maturities of the Term Loan Facility were as follows (in thousands): | |||||
Fiscal Year | |||||
2015 | $ | 7,500 | |||
2016 | 10,000 | ||||
2017 | 67,500 | ||||
Total | $ | 85,000 | |||
The Company assumed $2.2 million of debt in connection with its acquisition of Bluegiga. The debt instruments bear interest at rates between 1.0% and 3.0%. The contractual maturities of a portion of the debt are based on certain financial metrics of the acquired company. The Company estimates that the debt will mature between March 2016 and August 2020. | |||||
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 April 4, 2015, 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 | 3 Months Ended | ||||||||||
Apr. 04, 2015 | |||||||||||
Stockholders' Equity | |||||||||||
Stockholders' Equity | |||||||||||
9. Stockholders’ Equity | |||||||||||
Common Stock | |||||||||||
The Company issued 0.7 million shares of common stock during the three months ended April 4, 2015. | |||||||||||
Share Repurchase Programs | |||||||||||
The Board of Directors authorized the following share repurchase programs (in thousands): | |||||||||||
Program | Program | Program | |||||||||
Authorization Date | Termination Date | Amount | |||||||||
October 2014 | December 2015 | $ | 100,000 | ||||||||
January 2014 | January 2015 | $ | 100,000 | ||||||||
January 2013 | January 2014 | $ | 50,000 | ||||||||
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 0.2 million shares of its common stock for $10.1 million during the three months ended April 4, 2015. These shares were retired upon repurchase. The Company did not repurchase any shares of its common stock during the three months ended March 29, 2014. | |||||||||||
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 | |||||||||
(Loss) on Cash | on Available-For-Sale | ||||||||||
Flow Hedge | Securities | ||||||||||
Balance at January 3, 2015 | $ | 215 | $ | (297 | ) | $ | (82 | ) | |||
Other comprehensive income (loss) before reclassifications | (407 | ) | (13 | ) | (420 | ) | |||||
Amount reclassified from accumulated other comprehensive loss | 85 | 6 | 91 | ||||||||
Net change for the period | (322 | ) | (7 | ) | (329 | ) | |||||
Balance at April 4, 2015 | $ | (107 | ) | $ | (304 | ) | $ | (411 | ) | ||
Reclassifications From Accumulated Other Comprehensive Loss | |||||||||||
Three Months Ended | |||||||||||
Reclassification (in thousands) | April 4, | March 29, | |||||||||
2015 | 2014 | ||||||||||
Losses on cash flow hedges to: | |||||||||||
Interest expense | $ | (130 | ) | $ | (143 | ) | |||||
Losses on available-for-sale securities to: | |||||||||||
Interest income | (10 | ) | — | ||||||||
(140 | ) | (143 | ) | ||||||||
Income tax benefit | 49 | 50 | |||||||||
Total reclassifications | $ | (91 | ) | $ | (93 | ) | |||||
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | |||||||
Apr. 04, 2015 | ||||||||
Stock-Based Compensation | ||||||||
Stock-Based Compensation | ||||||||
10. 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 | ||||||||
April 4, | March 29, | |||||||
2015 | 2014 | |||||||
Cost of revenues | $ | 230 | $ | 195 | ||||
Research and development | 4,795 | 4,241 | ||||||
Selling, general and administrative | 5,494 | 4,841 | ||||||
10,519 | 9,277 | |||||||
Income tax benefit | 1,304 | 1,311 | ||||||
$ | 9,215 | $ | 7,966 | |||||
The Company had approximately $76.7 million of total unrecognized compensation costs related to granted stock awards as of April 4, 2015 that are expected to be recognized over a weighted-average period of approximately 2.4 years. There were no significant stock-based compensation costs capitalized into assets in any of the periods presented. | ||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 04, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | |
11. 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. | |
An evidentiary hearing in this ITC Investigation concluded on December 5, 2014. The ITC Administrative Law Judge (“ALJ”) issued an Initial Determination on February 27, 2015, finding that all the patent claims asserted against the Company’s products were either invalid or not infringed. The ALJ also found that Cresta Technology failed to establish the ITC’s domestic industry requirement. Accordingly, the ALJ found no violation by the Company. The Final Determination by the ITC is scheduled to issue on June 29, 2015. 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 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 July 1, 2014, the Administrative Law Judge accepted a consent order whereby Cresta Technology will not sell for importation, import or sell in the United States television tuners that infringe the Company’s United States Patent Nos. 6,137,372 and 6,233,441. Accordingly, this ITC investigation has been terminated in its entirety. | |
On July 16, 2014, the Company filed a lawsuit against Cresta Technology in the United States District Court in the Northern District of California alleging infringement of United States Patent Nos. 6,308,055, 6,304,146, 6,137,372, 6,233,441, 6,965,761 and 7,353,011. 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. | |
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. | |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Apr. 04, 2015 | |
Related Party Transactions | |
Related Party Transactions | |
12. Related Party Transactions | |
On July 1, 2013, Geir Førre joined the Company as senior vice president. Mr. Førre was chief executive officer of Energy Micro, until it was acquired by the Company. Mr. Førre was the beneficial owner of approximately 30% of the Energy Micro equity and accordingly received approximately $35 million at closing. In the first quarter of 2015, Mr. Førre received approximately $6.1 million of the $20.0 million paid for the holdback related to potential indemnification claims and approximately $1.9 million of the $6.3 million paid for the fiscal 2014 earn-out. Mr. Førre may receive up to approximately $8.1 million of the remaining potential $26.7 million earn-out for fiscal 2015 through 2018. | |
On October 17, 2013, the Company appointed Alf-Egil Bogen to its board of directors. Mr. Bogen was chief marketing officer of Energy Micro, until it was acquired by the Company. Mr. Bogen was the beneficial owner of approximately 2% of the Energy Micro equity and accordingly received approximately $0.9 million at closing. In the first quarter of 2015, Mr. Bogen received approximately $0.4 million of the $20.0 million paid for the holdback related to potential indemnification claims and approximately $0.1 million of the $6.3 million paid for the fiscal 2014 earn-out. Mr. Bogen may receive up to approximately $0.5 million of the remaining potential $26.7 million earn-out for fiscal 2015 through 2018. Mr. Bogen had invested approximately $0.8 million in Energy Micro prior to the acquisition. | |
Income_Taxes
Income Taxes | 3 Months Ended |
Apr. 04, 2015 | |
Income Taxes | |
Income Taxes | |
13. 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 $0.7 million and $1.5 million for the three months ended April 4, 2015 and March 29, 2014, resulting in effective tax rates of 9.7% and 15.3%, respectively. The effective tax rate for the three months ended April 4, 2015 decreased from the prior period, primarily due to an increase in the foreign tax rate benefit in the current period resulting from the completion of payments related to an intercompany licensing transaction. This decrease in the effective tax rate was partially offset by the release during the prior period of unrecognized tax benefits related to an uncertain tax position that was closed by statute. | |
At April 4, 2015, the Company had gross unrecognized tax benefits of $3.8 million, all 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 believes it is reasonably possible that the gross unrecognized tax benefits will decrease by approximately $0.6 million in the next 12 months due to the lapse of the statute of limitations applicable to a tax deduction claimed on a prior year foreign tax return. | |
The tax years 2010 through 2015 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) | 3 Months Ended |
Apr. 04, 2015 | |
Significant Accounting Policies | |
Reclassifications | |
Reclassifications | |
Certain reclassifications have been made to prior year financial statements to conform to current year presentation. | |
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) | 3 Months Ended | |||||||
Apr. 04, 2015 | ||||||||
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 | ||||||||
April 4, | March 29, | |||||||
2015 | 2014 | |||||||
Net income | $ | 6,378 | $ | 8,110 | ||||
Shares used in computing basic earnings per share | 42,412 | 43,081 | ||||||
Effect of dilutive securities: | ||||||||
Stock options and other stock-based awards | 737 | 975 | ||||||
Shares used in computing diluted earnings per share | 43,149 | 44,056 | ||||||
Earnings per share: | ||||||||
Basic | $ | 0.15 | $ | 0.19 | ||||
Diluted | $ | 0.15 | $ | 0.18 | ||||
Cash_Cash_Equivalents_and_Inve1
Cash, Cash Equivalents and Investments (Tables) | 3 Months Ended | |||||||||||||||||||
Apr. 04, 2015 | ||||||||||||||||||||
Cash, Cash Equivalents and Investments | ||||||||||||||||||||
Schedule of cash, cash equivalents, and investments | ||||||||||||||||||||
The Company’s cash, cash equivalents and investments consisted of the following (in thousands): | ||||||||||||||||||||
April 4, 2015 | ||||||||||||||||||||
Cost | Gross | Gross | Fair Value | |||||||||||||||||
Unrealized | Unrealized | |||||||||||||||||||
Losses | Gains | |||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||
Cash on hand | $ | 48,302 | $ | — | $ | — | $ | 48,302 | ||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Money market funds | 58,808 | — | — | 58,808 | ||||||||||||||||
Certificates of deposit | 5,148 | — | — | 5,148 | ||||||||||||||||
Municipal bonds | 452 | — | — | 452 | ||||||||||||||||
Total available-for-sale securities | 64,408 | — | — | 64,408 | ||||||||||||||||
Total cash and cash equivalents | $ | 112,710 | $ | — | $ | — | $ | 112,710 | ||||||||||||
Short-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Municipal bonds | $ | 122,794 | $ | (19 | ) | $ | 142 | $ | 122,917 | |||||||||||
Corporate bonds | 10,109 | (2 | ) | 10 | 10,117 | |||||||||||||||
Variable-rate demand notes | 8,615 | — | — | 8,615 | ||||||||||||||||
Commercial paper | 4,898 | — | — | 4,898 | ||||||||||||||||
International government bonds | 2,247 | — | 1 | 2,248 | ||||||||||||||||
Total short-term investments | $ | 148,663 | $ | (21 | ) | $ | 153 | $ | 148,795 | |||||||||||
Long-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Auction rate securities | $ | 8,000 | $ | (599 | ) | $ | — | $ | 7,401 | |||||||||||
Total long-term investments | $ | 8,000 | $ | (599 | ) | $ | — | $ | 7,401 | |||||||||||
January 3, 2015 | ||||||||||||||||||||
Cost | Gross | Gross | Fair Value | |||||||||||||||||
Unrealized | Unrealized | |||||||||||||||||||
Losses | Gains | |||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||
Cash on hand | $ | 52,144 | $ | — | $ | — | $ | 52,144 | ||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Money market funds | 71,415 | — | — | 71,415 | ||||||||||||||||
Certificates of deposit | 7,739 | — | — | 7,739 | ||||||||||||||||
Commercial paper | 5,348 | — | — | 5,348 | ||||||||||||||||
Municipal bonds | 1,756 | — | 1 | 1,757 | ||||||||||||||||
U.S. government agency | 1,202 | — | — | 1,202 | ||||||||||||||||
Corporate bonds | 1,101 | — | — | 1,101 | ||||||||||||||||
U.S. government bonds | 1,000 | — | — | 1,000 | ||||||||||||||||
Total available-for-sale securities | 89,561 | — | 1 | 89,562 | ||||||||||||||||
Total cash and cash equivalents | $ | 141,705 | $ | — | $ | 1 | $ | 141,706 | ||||||||||||
Short-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Municipal bonds | $ | 129,005 | $ | (25 | ) | $ | 172 | $ | 129,152 | |||||||||||
Corporate bonds | 33,043 | (35 | ) | 25 | 33,033 | |||||||||||||||
Variable-rate demand notes | 12,915 | — | — | 12,915 | ||||||||||||||||
Commercial paper | 8,995 | — | — | 8,995 | ||||||||||||||||
Asset-backed securities | 5,380 | (3 | ) | — | 5,377 | |||||||||||||||
International government bonds | 2,526 | (10 | ) | — | 2,516 | |||||||||||||||
U.S. government bonds | 650 | — | — | 650 | ||||||||||||||||
U.S. government agency | 601 | — | — | 601 | ||||||||||||||||
Certificates of deposit | 250 | — | — | 250 | ||||||||||||||||
Total short-term investments | $ | 193,365 | $ | (73 | ) | $ | 197 | $ | 193,489 | |||||||||||
Long-term Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Auction rate securities | $ | 8,000 | $ | (581 | ) | $ | — | $ | 7,419 | |||||||||||
Total long-term investments | $ | 8,000 | $ | (581 | ) | $ | — | $ | 7,419 | |||||||||||
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 April 4, 2015 | Fair | Gross | Fair | Gross | Fair | Gross | ||||||||||||||
Value | Unrealized | Value | Unrealized | Value | Unrealized | |||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||
Municipal bonds | $ | 22,285 | $ | (19 | ) | $ | — | $ | — | $ | 22,285 | $ | (19 | ) | ||||||
Auction rate securities | — | — | 7,401 | (599 | ) | 7,401 | (599 | ) | ||||||||||||
Corporate bonds | 5,348 | (2 | ) | — | — | 5,348 | (2 | ) | ||||||||||||
$ | 27,633 | $ | (21 | ) | $ | 7,401 | $ | (599 | ) | $ | 35,034 | $ | (620 | ) | ||||||
Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||
As of January 3, 2015 | Fair | Gross | Fair | Gross | Fair | Gross | ||||||||||||||
Value | Unrealized | Value | Unrealized | Value | Unrealized | |||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||
Municipal bonds | $ | 23,735 | $ | (25 | ) | $ | — | $ | — | $ | 23,735 | $ | (25 | ) | ||||||
Corporate bonds | 20,327 | (35 | ) | — | — | 20,327 | (35 | ) | ||||||||||||
Auction rate securities | — | — | 7,419 | (581 | ) | 7,419 | (581 | ) | ||||||||||||
Asset-backed securities | 5,080 | (3 | ) | — | — | 5,080 | (3 | ) | ||||||||||||
International government bond | 2,516 | (10 | ) | — | — | 2,516 | (10 | ) | ||||||||||||
$ | 51,658 | $ | (73 | ) | $ | 7,419 | $ | (581 | ) | $ | 59,077 | $ | (654 | ) | ||||||
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 April 4, 2015 (in thousands): | ||||||||||||||||||||
Cost | Fair | |||||||||||||||||||
Value | ||||||||||||||||||||
Due in one year or less | $ | 165,332 | $ | 165,434 | ||||||||||||||||
Due after one year through ten years | 39,624 | 39,654 | ||||||||||||||||||
Due after ten years | 16,115 | 15,516 | ||||||||||||||||||
$ | 221,071 | $ | 220,604 | |||||||||||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 3 Months Ended | |||||||||||||||
Apr. 04, 2015 | ||||||||||||||||
Derivative Financial Instruments | ||||||||||||||||
Schedule of derivative financial instrument | ||||||||||||||||
The Company’s derivative financial instrument in cash flow hedging relationships consisted of the following (in thousands): | ||||||||||||||||
Fair Value | ||||||||||||||||
Balance Sheet Location | April 4, | January 3, | ||||||||||||||
2015 | 2015 | |||||||||||||||
Interest rate swap | Other assets, net | $ | — | $ | 331 | |||||||||||
Other non-current liabilities | 165 | — | ||||||||||||||
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): | ||||||||||||||||
Loss Recognized in | Loss Reclassified | |||||||||||||||
OCI on Derivatives | from Accumulated | |||||||||||||||
(Effective Portion) | OCI into Income | |||||||||||||||
during the: | (Effective Portion) | |||||||||||||||
during the: | ||||||||||||||||
Three Months Ended | Location of Loss | Three Months Ended | ||||||||||||||
April 4, | March 29, | Reclassified into | April 4, | March 29, | ||||||||||||
2015 | 2014 | Income | 2015 | 2014 | ||||||||||||
Interest rate swaps | $ | (626 | ) | $ | (141 | ) | Interest expense | $ | (130 | ) | $ | (143 | ) | |||
Schedule of before-tax effect of derivative instruments not designated as hedging instruments | ||||||||||||||||
The before-tax effect of derivative instruments not designated as hedging instruments was as follows (in thousands): | ||||||||||||||||
Gain Recognized in Income | Three Months | Location | ||||||||||||||
Ended | ||||||||||||||||
April 4, 2015 | ||||||||||||||||
Foreign currency forward contracts | $ | 550 | Other income (expense), net | |||||||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 3 Months Ended | |||||||||||||
Apr. 04, 2015 | ||||||||||||||
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 April 4, 2015 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 | $ | 58,808 | $ | — | $ | — | $ | 58,808 | ||||||
Certificates of deposit | — | 5,148 | — | 5,148 | ||||||||||
Municipal bonds | — | 452 | — | 452 | ||||||||||
Total cash equivalents | $ | 58,808 | $ | 5,600 | $ | — | $ | 64,408 | ||||||
Short-term Investments: | ||||||||||||||
Municipal bonds | $ | — | $ | 122,917 | $ | — | $ | 122,917 | ||||||
Corporate bonds | — | 10,117 | — | 10,117 | ||||||||||
Variable-rate demand notes | — | 8,615 | — | 8,615 | ||||||||||
Commercial paper | — | 4,898 | — | 4,898 | ||||||||||
International government bonds | — | 2,248 | — | 2,248 | ||||||||||
Total short-term investments | $ | — | $ | 148,795 | $ | — | $ | 148,795 | ||||||
Long-term Investments: | ||||||||||||||
Auction rate securities | $ | — | $ | — | $ | 7,401 | $ | 7,401 | ||||||
Total long-term investments | $ | — | $ | — | $ | 7,401 | $ | 7,401 | ||||||
Total | $ | 58,808 | $ | 154,395 | $ | 7,401 | $ | 220,604 | ||||||
Liabilities: | ||||||||||||||
Accrued expenses: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 3,225 | $ | 3,225 | ||||||
Other non-current liabilities: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 11,579 | $ | 11,579 | ||||||
Derivative instruments | — | 165 | — | 165 | ||||||||||
$ | — | $ | 165 | $ | 11,579 | $ | 11,744 | |||||||
Total | $ | — | $ | 165 | $ | 14,804 | $ | 14,969 | ||||||
Fair Value Measurements | ||||||||||||||
at January 3, 2015 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 | $ | 71,415 | $ | — | $ | — | $ | 71,415 | ||||||
Certificates of deposit | — | 7,739 | — | 7,739 | ||||||||||
Commercial paper | — | 5,348 | — | 5,348 | ||||||||||
Municipal bonds | — | 1,757 | — | 1,757 | ||||||||||
U.S. government agency | — | 1,202 | — | 1,202 | ||||||||||
Corporate bonds | — | 1,101 | — | 1,101 | ||||||||||
U.S. government bonds | 1,000 | — | — | 1,000 | ||||||||||
Total cash equivalents | $ | 72,415 | $ | 17,147 | $ | — | $ | 89,562 | ||||||
Short-term Investments: | ||||||||||||||
Municipal bonds | $ | — | $ | 129,152 | $ | — | $ | 129,152 | ||||||
Corporate bonds | — | 33,033 | — | 33,033 | ||||||||||
Variable-rate demand notes | — | 12,915 | — | 12,915 | ||||||||||
Commercial paper | — | 8,995 | — | 8,995 | ||||||||||
Asset-backed securities | — | 5,377 | — | 5,377 | ||||||||||
International government bonds | — | 2,516 | — | 2,516 | ||||||||||
U.S. government bond | 650 | — | — | 650 | ||||||||||
U.S. government agency | — | 601 | — | 601 | ||||||||||
Certificates of deposit | — | 250 | — | 250 | ||||||||||
Total short-term investments | $ | 650 | $ | 192,839 | $ | — | $ | 193,489 | ||||||
Long-term Investments: | ||||||||||||||
Auction rate securities | $ | — | $ | — | $ | 7,419 | $ | 7,419 | ||||||
Total long-term investments | $ | — | $ | — | $ | 7,419 | $ | 7,419 | ||||||
Other assets, net: | ||||||||||||||
Derivative instruments | $ | — | $ | 331 | $ | — | $ | 331 | ||||||
Total | $ | — | $ | 331 | $ | — | $ | 331 | ||||||
Total | $ | 73,065 | $ | 210,317 | $ | 7,419 | $ | 290,801 | ||||||
Liabilities: | ||||||||||||||
Accrued expenses: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 4,288 | $ | 4,288 | ||||||
Other non-current liabilities: | ||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 14,150 | $ | 14,150 | ||||||
Total | $ | — | $ | — | $ | 18,438 | $ | 18,438 | ||||||
Summary of quantitative information about level 3 asset fair value measurements | ||||||||||||||
Fair Value at | Valuation Technique | Unobservable Input | Weighted Average | |||||||||||
April 4, 2015 | ||||||||||||||
(000s) | ||||||||||||||
$ | 7,401 | Discounted cash flow | Estimated yield | 0.97 | % | |||||||||
Expected holding period | 10 years | |||||||||||||
Estimated discount rate | 2.96 | % | ||||||||||||
Summary of quantitative information about level 3 liability fair value measurements | ||||||||||||||
Fair Value at | Valuation Technique | Unobservable Input | Range | |||||||||||
April 4, 2015 | ||||||||||||||
(000s) | ||||||||||||||
$ | 14,804 | Monte Carlo simulation | Expected revenue growth rate | 35.6% — 69.1% | ||||||||||
Expected revenue volatility | 20.00% | |||||||||||||
Expected term | 0.8 years — 3.8 years | |||||||||||||
Estimated discount rate | 0.23% — 1.58% | |||||||||||||
Summary of activity in Level 3 financial instruments | ||||||||||||||
The following summarizes the activity in Level 3 financial instruments for the three months ended April 4, 2015 (in thousands): | ||||||||||||||
Assets | ||||||||||||||
Auction Rate Securities | Three Months | |||||||||||||
Ended | ||||||||||||||
Beginning balance | $ | 7,419 | ||||||||||||
Loss included in other comprehensive income (loss) | (18 | ) | ||||||||||||
Balance at April 4, 2015 | $ | 7,401 | ||||||||||||
Liabilities | ||||||||||||||
Contingent Consideration (1) | Three Months | |||||||||||||
Ended | ||||||||||||||
Beginning balance | $ | 18,438 | ||||||||||||
Settlements | (4,464 | ) | ||||||||||||
Loss recognized in earnings (2) | 830 | |||||||||||||
Balance at April 4, 2015 | $ | 14,804 | ||||||||||||
Net loss for the period included in earnings attributable to contingent consideration held at the end of the period: | $ | (830 | ) | |||||||||||
-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 | Changes to the estimated fair value of contingent consideration were primarily due to revisions to the Company’s expectations of earn-out achievement. | |||||||||||||
Balance_Sheet_Details_Tables
Balance Sheet Details (Tables) | 3 Months Ended | |||||||
Apr. 04, 2015 | ||||||||
Balance Sheet Details | ||||||||
Inventories | ||||||||
The following shows the details of selected Condensed Consolidated Balance Sheet items (in thousands): | ||||||||
Inventories | ||||||||
April 4, | January 3, | |||||||
2015 | 2015 | |||||||
Work in progress | $ | 45,822 | $ | 40,640 | ||||
Finished goods | 15,256 | 11,991 | ||||||
$ | 61,078 | $ | 52,631 | |||||
Acquisitions_Tables
Acquisitions (Tables) | 3 Months Ended | ||||||
Apr. 04, 2015 | |||||||
Acquisitions | |||||||
Schedule of purchase price allocation | The purchase price was allocated as follows (in thousands): | ||||||
Amount | Weighted-Average | ||||||
Amortization Period | |||||||
(Years) | |||||||
Intangible assets: | |||||||
In-process research and development | $ | 5,710 | Not amortized | ||||
Developed technology | 12,190 | 8 | |||||
Customer relationships | 6,670 | 4 | |||||
Trademarks | 880 | 3 | |||||
25,450 | |||||||
Cash and cash equivalents | 1,132 | ||||||
Other current assets | 6,156 | ||||||
Goodwill | 35,906 | ||||||
Other non-current assets | 208 | ||||||
Current liabilities | (3,289 | ) | |||||
Non-current deferred tax liabilities, net | (5,090 | ) | |||||
Long-term debt | (2,232 | ) | |||||
Other non-current liabilities | (219 | ) | |||||
Total purchase price | $ | 58,022 | |||||
Debt_Tables
Debt (Tables) | 3 Months Ended | ||||
Apr. 04, 2015 | |||||
Debt | |||||
Schedule of remaining contractual maturities of the Term Loan Facility | |||||
As of April 4, 2015, the remaining contractual maturities of the Term Loan Facility were as follows (in thousands): | |||||
Fiscal Year | |||||
2015 | $ | 7,500 | |||
2016 | 10,000 | ||||
2017 | 67,500 | ||||
Total | $ | 85,000 | |||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||
Apr. 04, 2015 | |||||||||||
Stockholders' Equity | |||||||||||
Schedule of share repurchase programs | |||||||||||
The Board of Directors authorized the following share repurchase programs (in thousands): | |||||||||||
Program | Program | Program | |||||||||
Authorization Date | Termination Date | Amount | |||||||||
October 2014 | December 2015 | $ | 100,000 | ||||||||
January 2014 | January 2015 | $ | 100,000 | ||||||||
January 2013 | January 2014 | $ | 50,000 | ||||||||
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 | |||||||||
(Loss) on Cash | on Available-For-Sale | ||||||||||
Flow Hedge | Securities | ||||||||||
Balance at January 3, 2015 | $ | 215 | $ | (297 | ) | $ | (82 | ) | |||
Other comprehensive income (loss) before reclassifications | (407 | ) | (13 | ) | (420 | ) | |||||
Amount reclassified from accumulated other comprehensive loss | 85 | 6 | 91 | ||||||||
Net change for the period | (322 | ) | (7 | ) | (329 | ) | |||||
Balance at April 4, 2015 | $ | (107 | ) | $ | (304 | ) | $ | (411 | ) | ||
Schedule of Reclassifications From Accumulated Other Comprehensive Loss | |||||||||||
Three Months Ended | |||||||||||
Reclassification (in thousands) | April 4, | March 29, | |||||||||
2015 | 2014 | ||||||||||
Losses on cash flow hedges to: | |||||||||||
Interest expense | $ | (130 | ) | $ | (143 | ) | |||||
Losses on available-for-sale securities to: | |||||||||||
Interest income | (10 | ) | — | ||||||||
(140 | ) | (143 | ) | ||||||||
Income tax benefit | 49 | 50 | |||||||||
Total reclassifications | $ | (91 | ) | $ | (93 | ) | |||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | |||||||
Apr. 04, 2015 | ||||||||
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 | ||||||||
April 4, | March 29, | |||||||
2015 | 2014 | |||||||
Cost of revenues | $ | 230 | $ | 195 | ||||
Research and development | 4,795 | 4,241 | ||||||
Selling, general and administrative | 5,494 | 4,841 | ||||||
10,519 | 9,277 | |||||||
Income tax benefit | 1,304 | 1,311 | ||||||
$ | 9,215 | $ | 7,966 | |||||
Significant_Accounting_Policie2
Significant Accounting Policies (Details) | 3 Months Ended | 12 Months Ended |
Apr. 04, 2015 | Jan. 03, 2015 | |
Basis of Presentation and Principles of Consolidation | ||
Length of fiscal year | 364 days | 371 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 | |
In Thousands, except Share data, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Earnings Per Share | ||
Net income | $6,378 | $8,110 |
Shares used in computing basic earnings per share | 42,412,000 | 43,081,000 |
Effect of dilutive securities: | ||
Stock options and other stock-based awards (in shares) | 737,000 | 975,000 |
Shares used in computing diluted earnings per share | 43,149,000 | 44,056,000 |
Earnings per share: | ||
Basic (in dollars per share) | $0.15 | $0.19 |
Diluted (in dollars per share) | $0.15 | $0.18 |
Shares excluded from computation of diluted earning per share | 100,000 | 200,000 |
Cash_Cash_Equivalents_and_Inve2
Cash, Cash Equivalents and Investments (Details) (USD $) | 3 Months Ended | |
Apr. 04, 2015 | Jan. 03, 2015 | |
Cash, Cash Equivalents and Investments | ||
Auction-rate securities guaranteed by the U.S. government | $6,000,000 | |
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 | |
Other-than-temporary impairment losses | 0 | |
Cash on hand, Cost | 48,302,000 | 52,144,000 |
Cash on hand, Fair Value | 48,302,000 | 52,144,000 |
Cash and cash equivalents, Cost | 112,710,000 | 141,705,000 |
Cash and cash equivalents, Gross Unrealized Gains | 1,000 | |
Cash and cash equivalents, Fair Value | 112,710,000 | 141,706,000 |
Available-for-sale securities | ||
Available-for-sale securities, Cost | 221,071,000 | |
Cash Equivalents: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 64,408,000 | 89,561,000 |
Available-for-sale securities, Gross Unrealized Gains | 1,000 | |
Available-for-sale securities, Fair Value | 64,408,000 | 89,562,000 |
Short-term Investments: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 148,663,000 | 193,365,000 |
Available-for-sale securities, Gross Unrealized Losses | -21,000 | -73,000 |
Available-for-sale securities, Gross Unrealized Gains | 153,000 | 197,000 |
Available-for-sale securities, Fair Value | 148,795,000 | 193,489,000 |
Long-term Investments: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 8,000,000 | 8,000,000 |
Available-for-sale securities, Gross Unrealized Losses | -599,000 | -581,000 |
Available-for-sale securities, Fair Value | 7,401,000 | 7,419,000 |
Money market funds | Cash Equivalents: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 58,808,000 | 71,415,000 |
Available-for-sale securities, Fair Value | 58,808,000 | 71,415,000 |
Certificates of deposit | Cash Equivalents: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 5,148,000 | 7,739,000 |
Available-for-sale securities, Fair Value | 5,148,000 | 7,739,000 |
Certificates of deposit | Short-term Investments: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 250,000 | |
Available-for-sale securities, Fair Value | 250,000 | |
Commercial paper | Cash Equivalents: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 5,348,000 | |
Available-for-sale securities, Fair Value | 5,348,000 | |
Commercial paper | Short-term Investments: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 4,898,000 | 8,995,000 |
Available-for-sale securities, Fair Value | 4,898,000 | 8,995,000 |
Municipal bonds | Cash Equivalents: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 452,000 | 1,756,000 |
Available-for-sale securities, Gross Unrealized Gains | 1,000 | |
Available-for-sale securities, Fair Value | 452,000 | 1,757,000 |
Municipal bonds | Short-term Investments: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 122,794,000 | 129,005,000 |
Available-for-sale securities, Gross Unrealized Losses | -19,000 | -25,000 |
Available-for-sale securities, Gross Unrealized Gains | 142,000 | 172,000 |
Available-for-sale securities, Fair Value | 122,917,000 | 129,152,000 |
US government agency | Cash Equivalents: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 1,202,000 | |
Available-for-sale securities, Fair Value | 1,202,000 | |
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 | |
Corporate bonds | Cash Equivalents: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 1,101,000 | |
Available-for-sale securities, Fair Value | 1,101,000 | |
Corporate bonds | Short-term Investments: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 10,109,000 | 33,043,000 |
Available-for-sale securities, Gross Unrealized Losses | -2,000 | -35,000 |
Available-for-sale securities, Gross Unrealized Gains | 10,000 | 25,000 |
Available-for-sale securities, Fair Value | 10,117,000 | 33,033,000 |
U.S. government bonds | Cash Equivalents: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 1,000,000 | |
Available-for-sale securities, Fair Value | 1,000,000 | |
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 | |
Variable-rate demand notes | Short-term Investments: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 8,615,000 | 12,915,000 |
Available-for-sale securities, Fair Value | 8,615,000 | 12,915,000 |
Asset-backed securities | Short-term Investments: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 5,380,000 | |
Available-for-sale securities, Gross Unrealized Losses | -3,000 | |
Available-for-sale securities, Fair Value | 5,377,000 | |
International government bonds | Short-term Investments: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 2,247,000 | 2,526,000 |
Available-for-sale securities, Gross Unrealized Losses | -10,000 | |
Available-for-sale securities, Gross Unrealized Gains | 1,000 | |
Available-for-sale securities, Fair Value | 2,248,000 | 2,516,000 |
Auction rate securities | Long-term Investments: | ||
Available-for-sale securities | ||
Available-for-sale securities, Cost | 8,000,000 | 8,000,000 |
Available-for-sale securities, Gross Unrealized Losses | -599,000 | -581,000 |
Available-for-sale securities, Fair Value | $7,401,000 | $7,419,000 |
Cash_Cash_Equivalents_and_Inve3
Cash, Cash Equivalents and Investments (Details 2) (USD $) | Apr. 04, 2015 | Jan. 03, 2015 |
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 | $27,633 | $51,658 |
Fair value of available-for-sale securities, continuous loss position for twelve months or longer | 7,401 | 7,419 |
Total fair value of available-for-sale securities, continuous loss position | 35,034 | 59,077 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | -21 | -73 |
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses | -599 | -581 |
Available-for-sale securities, total gross unrealized losses | -620 | -654 |
Cost | ||
Due in one year or less, Cost | 165,332 | |
Due after one year through ten years, Cost | 39,624 | |
Due after ten years, Cost | 16,115 | |
Total Cost | 221,071 | |
Fair Value | ||
Due in one year or less, Fair Value | 165,434 | |
Due after one year through ten years, Fair Value | 39,654 | |
Due after ten years, Fair Value | 15,516 | |
Total Fair Value | 220,604 | |
Municipal bonds | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 22,285 | 23,735 |
Total fair value of available-for-sale securities, continuous loss position | 22,285 | 23,735 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | -19 | -25 |
Available-for-sale securities, total gross unrealized losses | -19 | -25 |
Corporate bonds | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 5,348 | 20,327 |
Total fair value of available-for-sale securities, continuous loss position | 5,348 | 20,327 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | -2 | -35 |
Available-for-sale securities, total gross unrealized losses | -2 | -35 |
Auction rate securities | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for twelve months or longer | 7,401 | 7,419 |
Total fair value of available-for-sale securities, continuous loss position | 7,401 | 7,419 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses | -599 | -581 |
Available-for-sale securities, total gross unrealized losses | -599 | -581 |
Asset-backed securities | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 5,080 | |
Total fair value of available-for-sale securities, continuous loss position | 5,080 | |
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 | 2,516 | |
Total fair value of available-for-sale securities, continuous loss position | 2,516 | |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | -10 | |
Available-for-sale securities, total gross unrealized losses | ($10) |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (Cash flow hedges, Interest rate swaps, USD $) | Apr. 04, 2015 |
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 $) | 3 Months Ended | |
Apr. 04, 2015 | Jan. 03, 2015 | |
Derivative Financial Instruments | ||
Gains or losses from the hedging instrument which was excluded from the assessment of effectiveness | $0 | |
Other assets, net | ||
Derivative financial instrument | ||
Fair value of interest rate swap | 331,000 | |
Other non-current liabilities: | ||
Derivative financial instrument | ||
Fair value of interest rate swap | $165,000 |
Derivative_Financial_Instrumen4
Derivative Financial Instruments (Details 3) (USD $) | 3 Months Ended | |
Apr. 04, 2015 | Mar. 29, 2014 | |
Derivative Instruments, Gain (Loss) | ||
Reclassification of interest rate swap losses included in accumulated other comprehensive loss into earnings in the next 12 months | $400,000 | |
Not Designated as Hedging Instrument | Foreign currency forward contracts | ||
Derivative Instruments, Gain (Loss) | ||
Number of foreign currency forward contract held | 1 | 0 |
Original notional value | 6,800,000 | |
Not Designated as Hedging Instrument | Foreign currency forward contracts | Other income (expense), net | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Income | 550,000 | |
Cash flow hedges | Interest rate swaps | ||
Derivative Instruments, Gain (Loss) | ||
Loss Recognized in OCI on Derivatives (Effective Portion) during period | -626,000 | -141,000 |
Original notional value | 100,000,000 | |
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 | ($130,000) | ($143,000) |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Apr. 04, 2015 | Jan. 03, 2015 |
In Thousands, unless otherwise specified | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total cash equivalents | $112,710 | $141,706 |
Total short-term investments | 148,795 | 193,489 |
Total long-term investments | 7,401 | 7,419 |
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 | 58,808 | 72,415 |
Total short-term investments | 650 | |
Total assets at fair value | 58,808 | 73,065 |
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 | 58,808 | 71,415 |
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 cash equivalents | 1,000 | |
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 | 5,600 | 17,147 |
Total short-term investments | 148,795 | 192,839 |
Derivative instruments | 331 | |
Other assets, net | 331 | |
Total assets at fair value | 154,395 | 210,317 |
Total liabilities at fair value | 165 | |
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Other non-current liabilities: | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Derivative instruments | 165 | |
Total liabilities at fair value | 165 | |
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 | 5,148 | 7,739 |
Total short-term investments | 250 | |
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 | 5,348 | |
Total short-term investments | 4,898 | 8,995 |
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 | 452 | 1,757 |
Total short-term investments | 122,917 | 129,152 |
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 | 8,615 | 12,915 |
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 | 5,377 | |
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 | 2,248 | 2,516 |
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 cash equivalents | 1,202 | |
Total short-term investments | 601 | |
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 cash equivalents | 1,101 | |
Total short-term investments | 10,117 | 33,033 |
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 | 7,401 | 7,419 |
Total assets at fair value | 7,401 | 7,419 |
Total liabilities at fair value | 14,804 | 18,438 |
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 | 3,225 | 4,288 |
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 | 11,579 | 14,150 |
Total liabilities at fair value | 11,579 | |
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 | 7,401 | 7,419 |
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 | 64,408 | 89,562 |
Total short-term investments | 148,795 | 193,489 |
Total long-term investments | 7,401 | 7,419 |
Derivative instruments | 331 | |
Other assets, net | 331 | |
Total assets at fair value | 220,604 | 290,801 |
Total liabilities at fair value | 14,969 | 18,438 |
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 | 3,225 | 4,288 |
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 | 11,579 | 14,150 |
Derivative instruments | 165 | |
Total liabilities at fair value | 11,744 | |
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 | 58,808 | 71,415 |
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 | 5,148 | 7,739 |
Total short-term investments | 250 | |
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 | 5,348 | |
Total short-term investments | 4,898 | 8,995 |
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 | 452 | 1,757 |
Total short-term investments | 122,917 | 129,152 |
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 | 8,615 | 12,915 |
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 | 5,377 | |
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 | 2,248 | 2,516 |
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 cash equivalents | 1,202 | |
Total short-term investments | 601 | |
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 cash equivalents | 1,101 | |
Total short-term investments | 10,117 | 33,033 |
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 cash equivalents | 1,000 | |
Total short-term investments | 650 | |
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 | $7,401 | $7,419 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments (Details 2) (Auction rate securities, Weighted Average, Discounted cash flow) | 3 Months Ended |
Apr. 04, 2015 | |
Auction rate securities | Weighted Average | Discounted cash flow | |
Quantitative information for Level 3 Fair Value Measurements Assets | |
Estimated yield (as a percent) | 0.97% |
Expected holding period | 10 years |
Estimated discount rate (as a percent) | 2.96% |
Fair_Value_of_Financial_Instru4
Fair Value of Financial Instruments (Details 3) (Contingent consideration, Monte Carlo simulation) | 3 Months Ended |
Apr. 04, 2015 | |
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 | 9 months 18 days |
Estimated discount rate (as a percent) | 0.23% |
High end of range | |
Quantitative information for Level 3 fair value measurements liabilities | |
Expected revenue growth rate (as a percent) | 69.10% |
Expected term | 3 years 9 months 18 days |
Estimated discount rate (as a percent) | 1.58% |
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 |
In Thousands, unless otherwise specified | Apr. 04, 2015 |
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 | $7,419 |
Loss included in other comprehensive income (loss) | -18 |
Balance at the end of the period | $7,401 |
Fair_Value_of_Financial_Instru6
Fair Value of Financial Instruments (Details 5) (USD $) | 3 Months Ended | |
Apr. 04, 2015 | Jan. 03, 2015 | |
Term Loan Facility | ||
Fair value liabilities reconciliation of changes | ||
Fair value of debt | $84,900,000 | $87,400,000 |
Assets and liabilities measured at fair value on recurring basis | Contingent consideration | ||
Fair value liabilities reconciliation of changes | ||
Balance at the beginning of the period | 18,438,000 | |
Settlements | -4,464,000 | |
Loss recognized in earnings | 830,000 | |
Balance at the end of the period | 14,804,000 | |
Net loss for the period included in earnings attributable to contingent consideration held at the end of the period: | ($830,000) |
Balance_Sheet_Details_Details
Balance Sheet Details (Details) (USD $) | Apr. 04, 2015 | Jan. 03, 2015 |
In Thousands, unless otherwise specified | ||
Inventories | ||
Work in progress | $45,822 | $40,640 |
Finished goods | 15,256 | 11,991 |
Total inventories | $61,078 | $52,631 |
Acquisitions_Details
Acquisitions (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||
Apr. 04, 2015 | Jan. 30, 2015 | Jul. 01, 2013 | Jan. 03, 2015 | |
Acquisition | ||||
Payment of earn-out for the first annual period | $4,464,000 | |||
Purchase price allocation | ||||
Goodwill | 264,687,000 | 228,781,000 | ||
Bluegiga | ||||
Acquisition | ||||
Cash consideration | 58,000,000 | |||
Amount of initial consideration held in escrow by the company as security for breaches of representations and warranties and certain other expressly enumerated matters | 9,400,000 | |||
Purchase price allocation | ||||
Intangible assets | 25,450,000 | |||
Cash and cash equivalents | 1,132,000 | |||
Other current assets | 6,156,000 | |||
Goodwill | 35,906,000 | |||
Other non-current assets | 208,000 | |||
Current liabilities | -3,289,000 | |||
Non-current deferred tax liabilities, net | -5,090,000 | |||
Long-term debt | -2,232,000 | |||
Other non-current liabilities | -219,000 | |||
Total purchase price | 58,022,000 | |||
Acquisition-related costs recorded in selling, general and administrative expenses | 1,200,000 | |||
Discount rate applicable to the cash flows (as a percent) | 16.10% | |||
Bluegiga | Developed technology | ||||
Purchase price allocation | ||||
Intangible assets | 12,190,000 | |||
Weighted-Average Amortization Period | 8 years | |||
Bluegiga | Customer relationships | ||||
Purchase price allocation | ||||
Intangible assets | 6,670,000 | |||
Weighted-Average Amortization Period | 4 years | |||
Bluegiga | Trademarks | ||||
Purchase price allocation | ||||
Intangible assets | 880,000 | |||
Weighted-Average Amortization Period | 3 years | |||
Bluegiga | In-process research and development | ||||
Purchase price allocation | ||||
Intangible assets | 5,710,000 | |||
Energy Micro | ||||
Acquisition | ||||
Cash consideration | 20,000,000 | |||
Purchase price of acquisition | 140,600,000 | |||
Initial consideration | 107,400,000 | |||
Deferred consideration in the form of a promissory note, fair value | 19,200,000 | |||
Earn-Out, fair value | 14,000,000 | |||
Earn out period | 5 years | |||
Maximum annual Earn-Out payment | 6,666,666 | |||
Minimum revenue in single fiscal year from Earn-Out products required to make the entire Earn-Out amount payable | 400,000,000 | |||
Amount of initial consideration held in escrow by the company as security for breaches of representations and warranties and certain other expressly enumerated matters | 20,300,000 | |||
Percentage of Earn-Out contingent on the continued employment of certain key employees | 28.76% | |||
Period of continued employment of key employees for calculating Earn-out portion following acquisition date | 3 years | |||
Payment of earn-out for the first annual period | 6,300,000 | |||
Earn-out payment representing the Departure Percentage portion and recorded as compensation expense | 1,800,000 | |||
Remaining Earn-out payment representing additional consideration | $4,500,000 |
Debt_Details
Debt (Details) (USD $) | 3 Months Ended | 1 Months Ended | ||
Apr. 04, 2015 | Jul. 31, 2012 | Jan. 30, 2015 | Sep. 27, 2012 | |
Bluegiga | ||||
Debt | ||||
Debt in connection with acquisition | $2,232,000 | |||
Debt instrument, interest rate, minimum | 1.00% | |||
Debt instrument, interest rate, maximum | 3.00% | |||
Term Loan Facility | ||||
Debt | ||||
Maximum borrowing capacity | 100,000,000 | |||
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 | |||
Amount borrowed under the term loan facility | 100,000,000 | |||
Fixed interest rate percentage | 0.76% | |||
Combined interest rate percentage | 2.51% | |||
Term Loan Facility | ||||
2015 | 7,500,000 | |||
2016 | 10,000,000 | |||
2017 | 67,500,000 | |||
Total debt | 85,000,000 | |||
Agreement | ||||
Debt | ||||
Maximum borrowing capacity | 230,000,000 | |||
Term of debt instrument | 5 years | |||
Maximum leverage ratio | 2.5 | |||
Minimum fixed charge coverage ratio | 1.5 | |||
Revolving Credit Facility | ||||
Debt | ||||
Maximum borrowing capacity | 130,000,000 | |||
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 | |||
Term loan facility and revolving credit facility, other than swingline loans | LIBOR | Low end of range | ||||
Debt | ||||
Interest rate added to the base rate (as a percent) | 1.50% | |||
Term loan facility and revolving credit facility, other than swingline loans | LIBOR | High end of range | ||||
Debt | ||||
Interest rate added to the base rate (as a percent) | 2.50% | |||
Term loan facility and revolving credit facility, other than swingline loans | Federal Funds | ||||
Debt | ||||
Interest rate added to the base rate (as a percent) | 0.50% | |||
Term loan facility and revolving credit facility, other than swingline loans | one-month LIBOR | ||||
Debt | ||||
Interest rate added to the base rate (as a percent) | 1.00% | |||
Term loan facility, revolving credit facility, swingline and other loans | Base rate | Low end of range | ||||
Debt | ||||
Interest rate added to the base rate (as a percent) | 0.50% | |||
Term loan facility, revolving credit facility, swingline and other loans | Base rate | High end of range | ||||
Debt | ||||
Interest rate added to the base rate (as a percent) | 1.50% |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 3 Months Ended | ||||
Share data in Millions, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 | Oct. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2013 |
Stockholders' Equity | |||||
Number of shares of common stock issued | 0.7 | ||||
Components of accumulated other comprehensive loss, net of taxes | |||||
Balance at beginning of the period | ($82,000) | ||||
Other comprehensive income (loss) before reclassifications | -420,000 | ||||
Amounts reclassified from accumulated other comprehensive loss | 91,000 | ||||
Other comprehensive income (loss) | -329,000 | 270,000 | |||
Balance at end of the period | -411,000 | ||||
Repurchase of common stock (in shares) | 0.2 | ||||
Repurchase of common stock | 10,100,000 | ||||
Unrealized Gain on Cash Flow Hedge | |||||
Components of accumulated other comprehensive loss, net of taxes | |||||
Balance at beginning of the period | 215,000 | ||||
Other comprehensive income (loss) before reclassifications | -407,000 | ||||
Amounts reclassified from accumulated other comprehensive loss | 85,000 | ||||
Other comprehensive income (loss) | -322,000 | ||||
Balance at end of the period | -107,000 | ||||
Net Unrealized Losses on Available-For-Sale Securities | |||||
Components of accumulated other comprehensive loss, net of taxes | |||||
Balance at beginning of the period | -297,000 | ||||
Other comprehensive income (loss) before reclassifications | -13,000 | ||||
Amounts reclassified from accumulated other comprehensive loss | 6,000 | ||||
Other comprehensive income (loss) | -7,000 | ||||
Balance at end of the period | -304,000 | ||||
High end of range | |||||
Stockholders' Equity | |||||
Program Amount authorized to repurchase | $100,000,000 | $100,000,000 | $50,000,000 |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Amounts Reclassified from AOCI | ||
Interest expense | ($745) | ($798) |
Interest income | 192 | 302 |
Income before income taxes | 7,067 | 9,580 |
Income tax benefit | -689 | -1,470 |
Net income | 6,378 | 8,110 |
Reclassifications From Accumulated Other Comprehensive Loss | ||
Amounts Reclassified from AOCI | ||
Income before income taxes | -140 | -143 |
Income tax benefit | 49 | 50 |
Net income | -91 | -93 |
Unrealized Gain on Cash Flow Hedge | Reclassifications From Accumulated Other Comprehensive Loss | ||
Amounts Reclassified from AOCI | ||
Interest expense | -130 | -143 |
Net Unrealized Losses on Available-For-Sale Securities | Reclassifications From Accumulated Other Comprehensive Loss | ||
Amounts Reclassified from AOCI | ||
Interest income | ($10) |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | |
Apr. 04, 2015 | Mar. 29, 2014 | |
Stock-based compensation costs | ||
Share based compensation cost before tax | $10,519,000 | $9,277,000 |
Income tax benefit | 1,304,000 | 1,311,000 |
Share based compensation cost after tax | 9,215,000 | 7,966,000 |
Total unrecognized compensation costs related to awards | 76,700,000 | |
Weighted-average period of recognition of unrecognized compensation costs | 2 years 4 months 24 days | |
Cost of revenues | ||
Stock-based compensation costs | ||
Share based compensation cost before tax | 230,000 | 195,000 |
Research and development | ||
Stock-based compensation costs | ||
Share based compensation cost before tax | 4,795,000 | 4,241,000 |
Selling, general and administrative | ||
Stock-based compensation costs | ||
Share based compensation cost before tax | $5,494,000 | $4,841,000 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 0 Months Ended | 3 Months Ended |
Jul. 01, 2013 | Apr. 04, 2015 | |
Related Party Transaction | ||
Payment of the fiscal 2014 earn-out | $4,464,000 | |
Energy Micro | ||
Related Party Transaction | ||
Cash consideration | 20,000,000 | |
Payment of the fiscal 2014 earn-out | 6,300,000 | |
Contingent consideration | 26,700,000 | |
Mr. Forre | Energy Micro | ||
Related Party Transaction | ||
Beneficial ownership percentage | 30.00% | |
Cash consideration | 35,000,000 | 6,100,000 |
Payment of the fiscal 2014 earn-out | 1,900,000 | |
Contingent consideration | 8,100,000 | |
Mr. Bogen | Energy Micro | ||
Related Party Transaction | ||
Beneficial ownership percentage | 2.00% | |
Cash consideration | 900,000 | 400,000 |
Payment of the fiscal 2014 earn-out | 100,000 | |
Contingent consideration | 500,000 | |
Investment in acquired entity by related party prior to the acquisition | $800,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
Apr. 04, 2015 | Mar. 29, 2014 | |
Income Taxes | ||
Income tax expense | $689,000 | $1,470,000 |
Effective income tax rate (as a percent) | 9.70% | 15.30% |
Gross unrecognized tax benefits | 3,800,000 | |
Amount of estimated decrease in unrecognized tax benefits | $600,000 |