Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 01, 2017 | Apr. 18, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | SILICON LABORATORIES INC | |
Entity Central Index Key | 1,038,074 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 1, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 42,358,718 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 01, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 225,399 | $ 141,106 |
Short-term investments | 396,327 | 153,961 |
Accounts receivable, net | 75,852 | 74,401 |
Inventories | 61,308 | 59,578 |
Prepaid expenses and other current assets | 54,360 | 61,805 |
Total current assets | 813,246 | 490,851 |
Long-term investments | 5,257 | 5,196 |
Property and equipment, net | 130,635 | 129,559 |
Goodwill | 288,629 | 276,130 |
Other intangible assets, net | 103,638 | 103,565 |
Other assets, net | 58,021 | 76,543 |
Total assets | 1,399,426 | 1,081,844 |
Current liabilities: | ||
Accounts payable | 43,781 | 39,577 |
Accrued expenses | 47,416 | 50,100 |
Deferred income on shipments to distributors | 49,700 | 45,568 |
Income taxes | 4,396 | 4,450 |
Total current liabilities | 145,293 | 139,695 |
Long-term debt | 72,500 | |
Convertible debt | 332,502 | |
Other non-current liabilities | 42,797 | 42,691 |
Total liabilities | 520,592 | 254,886 |
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; 42,348 and 41,889 shares issued and outstanding at April 1,2017 and Deceber 31, 2016, respectively | 4 | 4 |
Additional paid-in capital | 59,714 | 24,463 |
Retained earnings | 819,641 | 801,999 |
Accumulated other comprehensive income (loss) | (525) | 492 |
Total stockholders' equity | 878,834 | 826,958 |
Total liabilities and stockholders' equity | $ 1,399,426 | $ 1,081,844 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Apr. 01, 2017 | Dec. 31, 2016 |
Condensed Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
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) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000 | 250,000 |
Common stock, shares issued | 42,348 | 41,889 |
Common stock, shares outstanding | 42,348 | 41,889 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Condensed Consolidated Statements of Income | ||
Revenues | $ 179,028 | $ 162,025 |
Cost of revenues | 73,867 | 66,494 |
Gross margin | 105,161 | 95,531 |
Operating expenses: | ||
Research and development | 52,324 | 49,046 |
Selling, general and administrative | 40,155 | 39,637 |
Operating expenses | 92,479 | 88,683 |
Operating income | 12,682 | 6,848 |
Other income (expense): | ||
Interest income | 696 | 271 |
Interest expense | 198 | (655) |
Other, net | (120) | (391) |
Income before income taxes | 13,456 | 6,073 |
Provision (benefit) for income taxes | (1,970) | 265 |
Net income | $ 15,426 | $ 5,808 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.37 | $ 0.14 |
Diluted (in dollars per share) | $ 0.36 | $ 0.14 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 42,096 | 41,629 |
Diluted (in shares) | 43,030 | 42,199 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Condensed Consolidated Statements of Comprehensive Income | ||
Net income | $ 15,426 | $ 5,808 |
Net changes to available-for-sale securities: | ||
Unrealized gain (losses) arising during the period | 245 | (251) |
Net changes to cash flow hedges: | ||
Unrealized losses arising during the period | (286) | |
Reclassification for (gains) losses included in net income | (1,808) | 66 |
Other comprehensive loss, before tax | (1,563) | (471) |
Benefit from income taxes | (546) | (165) |
Other comprehensive loss | (1,017) | (306) |
Comprehensive income | $ 14,409 | $ 5,502 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Operating Activities | ||
Net income | $ 15,426 | $ 5,808 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation of property and equipment | 3,596 | 3,310 |
Amortization of other intangible assets and other assets | 6,752 | 7,980 |
Amortization of debt discount and debt issuance costs | 869 | |
Stock-based compensation expense | 10,486 | 10,344 |
Income tax benefit (shortfall) from stock-based awards | (1,025) | |
Excess income tax benefit from stock-based awards | (6) | |
Deferred income taxes | (4,059) | (38) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,252) | (990) |
Inventories | (1,636) | 4,580 |
Prepaid expenses and other assets | 6,708 | 9,159 |
Accounts payable | 5,565 | 1,559 |
Accrued expenses | (3,889) | 6,260 |
Deferred income on shipments to distributors | 4,038 | 5,558 |
Income taxes | 945 | 494 |
Other non-current liabilities | (1,536) | (10,584) |
Net cash provided by operating activities | 42,013 | 42,409 |
Investing Activities | ||
Purchases of available-for-sale investments | (267,777) | (44,547) |
Sales and maturities of available-for-sale investments | 25,595 | 46,654 |
Purchases of property and equipment | (4,543) | (2,303) |
Purchases of other assets | (1,446) | (1,107) |
Acquisition of business, net of cash acquired | (13,658) | |
Net cash used in investing activities | (261,829) | (1,303) |
Financing Activities | ||
Proceeds from issuance of long-term debt, net | 390,000 | |
Payments on debt | (72,500) | (2,500) |
Repurchases of common stock | (18,484) | |
Payment of taxes withheld for vested stock awards | (13,553) | (7,517) |
Proceeds from the issuance of common stock | 162 | |
Net cash provided by (used in) financing activities | 304,109 | (28,501) |
Increase in cash and cash equivalents | 84,293 | 12,605 |
Cash and cash equivalents at beginning of period | 141,106 | 114,085 |
Cash and cash equivalents at end of period | $ 225,399 | $ 126,690 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Apr. 01, 2017 | |
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 1, 2017 and December 31, 2016, the condensed consolidated results of its operations for the three months ended April 1, 2017 and April 2, 2016, the Condensed Consolidated Statements of Comprehensive Income for the three months ended April 1, 2017 and April 2, 2016, and the Condensed Consolidated Statements of Cash Flows for the three months ended April 1, 2017 and April 2, 2016. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated results of operations for the three months ended April 1, 2017 are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited Condensed Consolidated Financial Statements do not include certain footnotes and financial presentations normally required under U.S. generally accepted accounting principles (GAAP). Therefore, these Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2016, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (SEC) on February 1, 2017. The Company prepares financial statements on a Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to inventories, stock-based compensation, investments in auction-rate securities, acquired intangible assets, goodwill, long-lived assets and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements. 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 products. 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 January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-03 , Accounting Changes and Error Corrections (Topic 250) and Investments—Equity Method and Joint Ventures (Topic 323). Revenue from Contracts with Customers (Topic 606) Leases (Topic 842) Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In January 2017, the FASB issued ASU No. 2017-04 , Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued ASU No. 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business. In August 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic326): Measurement of Credit Losses on Financial Instruments. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. In May 2014, the FASB issued ASU No. 2014-09 , Revenue from Contracts with Customers (Topic 606) Revenue Recognition Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, Compensation—Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Apr. 01, 2017 | |
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 1, April 2, Net income $ 15,426 $ 5,808 Shares used in computing basic earnings per share 42,096 41,629 Effect of dilutive securities: Stock options and other stock-based awards 934 570 Shares used in computing diluted earnings per share 43,030 42,199 Earnings per share: Basic $ 0.37 $ 0.14 Diluted $ 0.36 $ 0.14 For the three months ended April 1, 2017 and April 2, 2016, approximately 0.3 million and 0.8 million shares, respectively, consisting of restricted stock awards (RSUs), market stock awards (MSUs) and stock options, were not included in the diluted earnings per share calculation since the shares were anti-dilutive. The Company intends to settle the principal amount of its convertible senior notes in cash and any excess value in shares in the event of a conversion. Accordingly, shares issuable upon conversion of the principal amount have been excluded from the calculation of diluted earnings per share. If the market value of the notes under certain prescribed conditions exceeds the conversion amount, the excess will be included in the denominator for the computation of diluted earnings per share using the treasury stock method. As of April 1, 2017, no such shares were included in the denominator for the calculation of diluted earnings per share. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Apr. 01, 2017 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 3. Fair Value of Financial Instruments The fair values of the Company’s financial instruments are recorded using a hierarchical 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 Description Quoted Prices in Significant Other Significant Total Assets: Cash equivalents: Money market funds $ 85,090 $ — $ — $ 85,090 Certificates of deposit — 32,183 — 32,183 Commercial paper — 30,582 — 30,582 Municipal bonds — 6,034 — 6,034 Corporate bonds — 1,498 — 1,498 Total cash equivalents $ 85,090 $ 70,297 $ — $ 155,387 Short-term investments: Variable-rate demand notes $ — $ 117,770 $ — $ 117,770 Corporate bonds — 108,828 — 108,828 Municipal bonds — 78,555 — 78,555 U.S. government bonds 50,437 — — 50,437 Asset-backed securities — 25,519 — 25,519 Agency bonds — 7,482 — 7,482 Commercial paper — 6,239 — 6,239 International government bonds — 1,497 — 1,497 Total short-term investments $ 50,437 $ 345,890 $ — $ 396,327 Long-term investments: Auction rate securities $ — $ — $ 5,257 $ 5,257 Total long-term investments $ — $ — $ 5,257 $ 5,257 Total $ 135,527 $ 416,187 $ 5,257 $ 556,971 Liabilities: Other non-current liabilities: Contingent consideration $ — $ — $ 3,829 $ 3,829 Total $ — $ — $ 3,829 $ 3,829 Fair Value Measurements Description Quoted Prices in Significant Other Significant Total Assets: Cash equivalents: Money market funds $ 69,432 $ — $ — $ 69,432 Certificates of deposit — 7,153 — 7,153 Municipal bonds — 3,904 — 3,904 Total cash equivalents $ 69,432 $ 11,057 $ — $ 80,489 Short-term investments: Municipal bonds $ — $ 79,702 $ — $ 79,702 Corporate bonds — 31,036 — 31,036 Variable-rate demand notes — 16,400 — 16,400 U.S. government bonds 12,416 — — 12,416 Asset-backed securities — 8,173 — 8,173 Commercial paper — 5,233 — 5,233 International government bonds — 1,001 — 1,001 Total short-term investments $ 12,416 $ 141,545 $ — $ 153,961 Long-term investments: Auction rate securities $ — $ — $ 5,196 $ 5,196 Total long-term investments $ — $ — $ 5,196 $ 5,196 Other assets, net: Derivative instruments $ — $ 1,808 $ — $ 1,808 Total $ — $ 1,808 $ — $ 1,808 Total $ 81,848 $ 154,410 $ 5,196 $ 241,454 Valuation methodology The Company’s cash equivalents and short-term investments that are 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 probability weighted discounted cash flow model. The assumptions used in preparing the discounted cash flow model include estimates for the outcome if the milestone goal is achieved, the probability of achieving each outcome and discount rates. Available-for-sale investments The Company’s investments typically have original maturities greater than ninety days as of the date of purchase. Investments are reported at fair value, with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive income (loss) in the Consolidated Balance Sheet. The following summarizes the contractual underlying maturities of the Company’s Cost Fair Due in one year or less $ 291,314 $ 291,287 Due after one year through ten years 149,197 149,157 Due after ten years 117,270 116,527 $ 557,781 $ 556,971 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 1, 2017 Fair Gross Fair Gross Fair Gross Corporate bonds $ 45,299 $ (145 ) $ — $ — $ 45,299 $ (145 ) Municipal bonds 38,781 (42 ) — — 38,781 (42 ) U.S. government bonds 28,251 (23 ) — — 28,251 (23 ) Asset-backed securities 17,478 (22 ) — — 17,478 (22 ) Auction rate securities — — 5,257 (742 ) 5,257 (742 ) Agency bonds 3,498 (1 ) — — 3,498 (1 ) International government bonds 1,497 (2 ) — — 1,497 (2 ) $ 134,804 $ (235 ) $ 5,257 $ (742 ) $ 140,061 $ (977 ) Less Than 12 Months 12 Months or Greater Total As of December 31, 2016 Fair Gross Fair Gross Fair Gross Municipal bonds $ 69,379 $ (140 ) $ — $ — $ 69,379 $ (140 ) Corporate bonds 18,561 (128 ) — — 18,561 (128 ) U.S. government bonds 10,364 (16 ) — — 10,364 (16 ) Auction rate securities — — 5,196 (804 ) 5,196 (804 ) Asset-backed securities 3,176 (4 ) — — 3,176 (4 ) $ 101,480 $ (288 ) $ 5,196 $ (804 ) $ 106,676 $ (1,092 ) The gross unrealized losses as of April 1, 2017 and December 31, 2016 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 Company’s auction-rate securities have been illiquid since 2008 when auctions for the securities failed because sell orders exceeded buy orders. These securities have a contractual maturity date of 2046 at April 1, 2017. 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 1, 2017. At April 1, 2017 and December 31, 2016, there were no material unrealized gains associated with the Company’s available-for-sale investments. Level 3 fair value measurements The following summarizes quantitative information about Level 3 fair value measurements. Auction rate securities Fair Value at Valuation Technique Unobservable Input Weighted Average $ 5,257 Discounted cash flow Estimated yield 0.9% Expected holding period 10 years Estimated discount rate 3.56% 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 Weighted Average $ 3,829 Discounted cash flow Expected term 9 months Estimated discount rate 12.0% The Company has followed an established internal control procedure used in valuing contingent consideration. The valuation of contingent consideration for the Zentri acquisition is based on a discounted cash flow 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 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 1, 2017 (in thousands): Assets Auction Rate Securities Three Months Beginning balance $ 5,196 Gain included in other comprehensive loss 61 Balance at April 1, 2017 $ 5,257 Liabilities Contingent Consideration (1) Three Months Beginning balance $ — Issues 3,829 Balance at April 1, 2017 $ 3,829 (1) Fair values of other financial instruments The Company’s debt is recorded at cost, but is measured at fair value for disclosure purposes. The Company’s convertible senior notes are traded in less active markets and are therefore classified as a Level 2 fair value measurement. The fair value of the convertible senior notes at April 1, 2017 was $426.3 million. The Company’s prior debt under the Credit Facility bore interest at the Eurodollar rate plus an applicable margin. Fair value was 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 1, 2017 and December 31, 2016, the fair value of the Company’s debt under the Credit Facility was approximately $0.0 and $72.5 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. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Apr. 01, 2017 | |
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. Interest Rate Swaps The Company is exposed to interest rate fluctuations in the normal course of its business, including through its Credit Facility. The interest payments on the facility are calculated using a variable-rate of interest. The Company entered into an interest rate swap agreement with an original notional value of $72.5 million and, effectively, converted the Eurodollar portion of the variable-rate interest payments to fixed-rate interest payments through July 2020. The Company terminated the swap agreement on March 6, 2017 in connection with the payoff of its Credit Facility. The Company’s interest rate swap agreement was designated and qualified as a cash flow hedge. The effective portion of the gain or loss on the interest rate swap was recorded in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity and was subsequently recognized as interest expense in the Consolidated Statement of Income when the hedged exposure affected earnings. The termination of the swap agreement resulted in the reclassification of $1.8 million of unrealized gains that were previously recorded in accumulated other comprehensive income (loss) into earnings during the three months ended April 1, 2017. The Company did not discontinue any other cash flow hedges in 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 1, December 31, Interest rate swap Other assets, net $ — $ 1,808 The before-tax effect of derivative instruments in cash flow hedging relationships was as follows (in thousands): Gain (Loss) Recognized in Gain (Loss) Reclassified Three Months Ended Location of Loss Three Months Ended April 1, April 2, Reclassified into April 1, April 2, Interest rate swaps $ — $ (286 ) Interest expense $ 1,808 $ (66 ) 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, 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 1, 2017 and April 2, 2016, the Company held one foreign currency forward contract denominated in Norwegian Krone with a notional value of $4.0 million and $4.8 million, respectively. The fair value of the contracts was not material as of April 1, 2017 or April 2, 2016. The contract held as of April 1, 2017 has The before-tax effect of derivative instruments not designated as hedging instruments was as follows (in thousands): Three Months Ended Gain (Loss) Recognized in Income April 1, April 2, Location Foreign currency forward contracts $ (94 ) $ (300 ) Other, net |
Balance Sheet Details
Balance Sheet Details | 3 Months Ended |
Apr. 01, 2017 | |
Balance Sheet Details | |
Balance Sheet Details | 5. Balance Sheet Details The following shows the details of selected Condensed Consolidated Balance Sheet items (in thousands): Inventories April 1, December 31, Work in progress $ 42,493 $ 40,755 Finished goods 18,815 18,823 $ 61,308 $ 59,578 |
Acquisitions
Acquisitions | 3 Months Ended |
Apr. 01, 2017 | |
Acquisitions | |
Acquisitions | 6. Zentri On January 20, 2017, the Company acquired Zentri, Inc., a private company. Zentri is an innovator in low-power, cloud-connected Wi-Fi ® The purchase price was allocated as follows: intangible assets—$6.7 million; goodwill—$12.5 million; and other net liabilities—$1.1 million. T Pro forma information related to this acquisition has not been presented because it would not be materially different from amounts reported. |
Debt
Debt | 3 Months Ended |
Apr. 01, 2017 | |
Debt | |
Debt | 7. Debt 1.375% Convertible Senior Notes On March 6, 2017, the Company completed a private offering of $400 million principal amount convertible senior notes (the “Notes”). The Notes bear interest semi-annually at a rate of 1.375% per year and will mature on March 1, 2022, unless repurchased, redeemed or converted at an earlier date. The Company used $72.5 million of the proceeds to pay off the remaining balance of its Amended Credit Agreement. The Notes are convertible at an initial conversion rate of 10.7744 shares of common stock per $1,000 principal amount of the Notes, which is equivalent to a conversion price of approximately $92.81 per share. The conversion rate is subject to adjustment under certain circumstances. Holders may convert the Notes under the following circumstances: during any calendar quarter after the calendar quarter ending on June 30, 2017 if the closing price of the Company’s common stock for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding calendar quarter is greater than or equal to 130% of the conversion price of the Notes; during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the closing sale price of our common stock and the conversion rate on each such trading day; if specified distributions or corporate events occur; if the Notes are called for redemption; or at any time after December 1, 2021. The Company may redeem all or any portion of the Notes, at its option, on or after March 6, 2020, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period. Upon conversion, the Notes may be settled in cash, shares of the Company’s common stock or a combination of cash and shares, at the Company’s election. The principal balance of the Notes was separated into liability and equity components, and was recorded initially at fair value. The excess of the principal amount of the liability component over its carrying amount represents the debt discount, which is amortized to interest expense over the term of the Notes using the effective interest method. The carrying amount of the liability component was estimated by discounting the contractual cash flows of similar non-convertible debt at an appropriate market rate at the date of issuance. The Company incurred debt issuance costs of approximately $10.6 million, which was allocated to the liability and equity components in proportion to the allocation of the proceeds. The costs allocated to the liability component are being amortized as interest expense over the term of the Notes using the effective interest method. The carrying amount of the Notes consisted of the following (in thousands): April 1, Liability component Principal $ 400,000 Unamortized debt discount (58,561 ) Unamortized debt issuance costs (8,937 ) Net carrying amount $ 332,502 Equity component Net carrying amount $ 57,718 The liability component of the Notes is recorded in long-term debt on the Consolidated Balance Sheet. The equity component of the Notes is recorded in additional paid-in capital. The effective interest rate for the liability component was 4.75%. As of April 1, 2017, the remaining period over which the debt discount and debt issuance costs will be amortized was 4.9 years. Interest expense related to the Notes was comprised of the following (in thousands): Three Months April 1, Contractual interest expense $ 382 Amortization of debt discount 754 Amortization of debt issuance costs 115 $ 1,251 Amended Credit Agreement On July 31, 2012, the Company and certain of its domestic subsidiaries (the “Guarantors”) entered into a $230 million five-year Credit Agreement (the “Credit Agreement”), which consisted of a $100 million Term Loan Facility and a $130 million Revolving Credit Facility. On July 24, 2015, the Company and the Guarantors amended the Credit Agreement (the “Amended Credit Agreement”) in order to, among other things, increase the borrowing capacity under the Revolving Credit Facility to $300 million (the “Credit Facility”), eliminate the Term Loan Facility and extend the maturity date to five years from the closing date. On July 24, 2015, the Company borrowed $82.5 million under the Amended Credit Agreement and paid off the remaining balance of its Term Loan Facility. In connection with the Company’s offering of the Notes, it entered into a second amendment to the Credit Agreement (the “Second Amended Credit Agreement”) and paid off the remaining balance of $72.5 million. The Second Amended Credit Agreement retained the key terms and provisions of the first Amended Credit Agreement, including a $25 million letter of credit sublimit and a $10 million swingline loan sublimit. The Company also has an option to increase the size of the borrowing capacity by up to an aggregate of $200 million in additional commitments, subject to certain conditions. The Revolving Credit Facility, other than swingline loans, will bear interest at the Eurodollar rate plus an applicable margin or, at the option of the Company, a base rate (defined as the highest of the Wells Fargo prime rate, the Federal Funds rate plus 0.50% and the Eurodollar Base Rate 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 Eurodollar rate loans range from 1.25% to 2.00% and for base rate loans range from 0.25% to 1.00%, depending in each case, on the leverage ratio as defined in the Agreement. The Second Amended Credit Agreement contains 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 3.00 to 1 and a minimum fixed charge coverage ratio (EBITDA/interest payments, income taxes and capital expenditures) of no less than 1.25 to 1. As of April 1, 2017, the Company was in compliance with all covenants of the Second |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Apr. 01, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | 8. Stockholders’ Equity Common Stock The Company issued 0.5 million shares of common stock during the three months ended April 1, 2017. Share Repurchase Programs The Board of Directors authorized the following share repurchase programs (in thousands): Program Program Program January 2017 December 2017 $ 100,000 August 2015 December 2016 $ 100,000 These programs allow for repurchases to be made in the open market or in private transactions, including structured or accelerated transactions, subject to applicable legal requirements and market conditions. The Company Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss), net of taxes, were as follows (in thousands): Unrealized Gain Net Unrealized Losses Total Balance at December 31, 2016 $ 1,175 $ (683 ) $ 492 Other comprehensive income (loss) before reclassifications — 158 158 Amount reclassified from accumulated other comprehensive income (loss) (1,175 ) — (1,175 ) Net change for the period (1,175 ) 158 (1,017 ) Balance at April 1, 2017 $ — $ (525 ) $ (525 ) Reclassifications From Accumulated Other Comprehensive Income (Loss) The following table summarizes the effect on net income from reclassifications out of accumulated other comprehensive income (loss) (in thousands): Three Months Ended Reclassification April 1, April 2, Gains (losses) on cash flow hedges to: Interest expense $ 1,808 $ (66 ) Income tax benefit (633 ) 23 Total reclassifications $ 1,175 $ (43 ) |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Apr. 01, 2017 | |
Stock-Based Compensation | |
Stock-Based Compensation | 9. Stock-Based Compensation In fiscal 2009, the stockholders of the Company approved the 2009 Stock Incentive Plan (the “2009 Plan”) and the 2009 Employee Stock Purchase Plan (the “2009 Purchase Plan”). In fiscal 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 awards and stock options and on the date of enrollment for the employee stock purchase plans. The fair values of stock awards (such as RSUs, performance stock units (PSUs) and restricted stock awards (RSAs)) are estimated based on their intrinsic values. The fair values of MSUs are estimated using a Monte Carlo simulation. The fair values of stock options and employee stock purchase plans are estimated using the Black-Scholes option-pricing model. The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Income (in thousands): Three Months Ended April 1, April 2, Cost of revenues $ 258 $ 266 Research and development 5,246 4,910 Selling, general and administrative 4,982 5,168 10,486 10,344 Income tax benefit 5,282 2,236 $ 5,204 $ 8,108 The increase in income tax benefit in the three months ended April 1, 2017 was primarily due to the recognition of excess tax benefits in connection with the Company’s adoption of ASU 2016-09. The Company had approximately $88.8 million of total unrecognized compensation costs related to granted stock options and awards as of April 1, 2017 that are expected to be recognized over a weighted-average period of approximately 2.5 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. 01, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. Commitments and Contingencies Patent Litigation On January 21, 2014, Cresta Technology Corporation (“Cresta Technology”), a Delaware corporation, filed a lawsuit against the Company, Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., LG Electronics Inc. and LG Electronics U.S.A., Inc. in the United States District Court in the District of Delaware, alleging infringement of three United States Patents (the “Cresta Patents”). The Delaware District Court action has been stayed. The Company challenged the validity of the claims of the Cresta Patents through a series of Inter-Partes On August 11, 2016, the PTAB issued its final written decisions in proceedings against a second set of claims in the Cresta Patents and found these claims unpatentable. On October 13, 2016, the patent owner, now known as CF Crespe LLC, filed a notice of appeal with the Federal Circuit. That appeal is currently pending. No hearing date has been set. On March 18, 2016, Cresta Technology filed for chapter 7 bankruptcy in the United States Bankruptcy Court for the Northern District of California. On May 13, 2016, the Bankruptcy Court approved an agreement for DBD Credit Funding LLC (“DBD”) to buy Cresta Technology’s entire IP portfolio and certain related litigation. Following that sale, DBD (through an apparent assignee, CF Crespe LLC) has substituted in the Delaware District Court action and the appeal proceedings at the U.S. Court of Appeals for the Federal Circuit for the second set of IPRs. 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 six United States Patents. The Company is seeking a permanent injunction and an award of damages and attorney fees. As a result of the chapter 7 bankruptcy filing by Cresta Technology, these proceedings were stayed. However, as a result of the May 13, 2016 sale order by the Bankruptcy Court, DBD and CF Crespe LLC were ordered to substitute in as Defendant for Cresta Technology. DBD and CF Crespe LLC have appealed the Bankruptcy Court’s order in that regard. Subject to that appeal, the Company’s patent infringement trial against DBD and CF Crespe LLC is set to begin October 2, 2017. 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. The Company intends to continue to vigorously defend against Cresta Technology’s (now DBD and CF Crespe LLC’s) allegations and to continue to pursue its claims against DBD and CF Crespe LLC and their patents. 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. 01, 2017 | |
Related Party Transactions | |
Related Party Transactions | 11. Related Party Transactions In August 2016, Bill Bock, a member of the Company’s board of directors, joined the board of directors of Spredfast. Spredfast has been a tenant in one of the buildings at the Company’s headquarters in Austin, Texas since May 2013. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 01, 2017 | |
Income Taxes | |
Income Taxes | 12. Income Taxes Provision (benefit) for income taxes includes both domestic and foreign income taxes at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits and other permanent differences. On July 27, 2015, the U.S. Tax Court (the “Court”) issued an opinion in Altera Corp. v. Commissioner related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. A final decision was entered by the Court As of April 1, 2017, the Company had gross unrecognized tax benefits of $3.6 million, of which $2.2 million would affect the effective tax rate if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision (benefit) for income taxes. These amounts were not material for any of the periods presented. Tax years 2012 through 2016 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. The Company believes it is reasonably possible that the gross unrecognized tax benefits will decrease by approximately $1.9 million in the next 12 months due to the lapse of the statute of limitations applicable to tax deductions and tax credits claimed on prior year tax returns. |
Significant Accounting Polici19
Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 01, 2017 | |
Significant Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to inventories, stock-based compensation, investments in auction-rate securities, acquired intangible assets, goodwill, long-lived assets and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements. |
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 products. 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 | Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-03 , Accounting Changes and Error Corrections (Topic 250) and Investments—Equity Method and Joint Ventures (Topic 323). Revenue from Contracts with Customers (Topic 606) Leases (Topic 842) Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In January 2017, the FASB issued ASU No. 2017-04 , Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued ASU No. 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business. In August 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic326): Measurement of Credit Losses on Financial Instruments. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. In May 2014, the FASB issued ASU No. 2014-09 , Revenue from Contracts with Customers (Topic 606) Revenue Recognition Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, Compensation—Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
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 1, April 2, Net income $ 15,426 $ 5,808 Shares used in computing basic earnings per share 42,096 41,629 Effect of dilutive securities: Stock options and other stock-based awards 934 570 Shares used in computing diluted earnings per share 43,030 42,199 Earnings per share: Basic $ 0.37 $ 0.14 Diluted $ 0.36 $ 0.14 |
Fair Value of Financial Instr21
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Fair Value of Financial Instruments | |
Financial assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements Description Quoted Prices in Significant Other Significant Total Assets: Cash equivalents: Money market funds $ 85,090 $ — $ — $ 85,090 Certificates of deposit — 32,183 — 32,183 Commercial paper — 30,582 — 30,582 Municipal bonds — 6,034 — 6,034 Corporate bonds — 1,498 — 1,498 Total cash equivalents $ 85,090 $ 70,297 $ — $ 155,387 Short-term investments: Variable-rate demand notes $ — $ 117,770 $ — $ 117,770 Corporate bonds — 108,828 — 108,828 Municipal bonds — 78,555 — 78,555 U.S. government bonds 50,437 — — 50,437 Asset-backed securities — 25,519 — 25,519 Agency bonds — 7,482 — 7,482 Commercial paper — 6,239 — 6,239 International government bonds — 1,497 — 1,497 Total short-term investments $ 50,437 $ 345,890 $ — $ 396,327 Long-term investments: Auction rate securities $ — $ — $ 5,257 $ 5,257 Total long-term investments $ — $ — $ 5,257 $ 5,257 Total $ 135,527 $ 416,187 $ 5,257 $ 556,971 Liabilities: Other non-current liabilities: Contingent consideration $ — $ — $ 3,829 $ 3,829 Total $ — $ — $ 3,829 $ 3,829 Fair Value Measurements Description Quoted Prices in Significant Other Significant Total Assets: Cash equivalents: Money market funds $ 69,432 $ — $ — $ 69,432 Certificates of deposit — 7,153 — 7,153 Municipal bonds — 3,904 — 3,904 Total cash equivalents $ 69,432 $ 11,057 $ — $ 80,489 Short-term investments: Municipal bonds $ — $ 79,702 $ — $ 79,702 Corporate bonds — 31,036 — 31,036 Variable-rate demand notes — 16,400 — 16,400 U.S. government bonds 12,416 — — 12,416 Asset-backed securities — 8,173 — 8,173 Commercial paper — 5,233 — 5,233 International government bonds — 1,001 — 1,001 Total short-term investments $ 12,416 $ 141,545 $ — $ 153,961 Long-term investments: Auction rate securities $ — $ — $ 5,196 $ 5,196 Total long-term investments $ — $ — $ 5,196 $ 5,196 Other assets, net: Derivative instruments $ — $ 1,808 $ — $ 1,808 Total $ — $ 1,808 $ — $ 1,808 Total $ 81,848 $ 154,410 $ 5,196 $ 241,454 |
Summarization of contractual underlying maturities of available-for-sale investments | The following summarizes the contractual underlying maturities of the Company’s Cost Fair Due in one year or less $ 291,314 $ 291,287 Due after one year through ten years 149,197 149,157 Due after ten years 117,270 116,527 $ 557,781 $ 556,971 |
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 1, 2017 Fair Gross Fair Gross Fair Gross Corporate bonds $ 45,299 $ (145 ) $ — $ — $ 45,299 $ (145 ) Municipal bonds 38,781 (42 ) — — 38,781 (42 ) U.S. government bonds 28,251 (23 ) — — 28,251 (23 ) Asset-backed securities 17,478 (22 ) — — 17,478 (22 ) Auction rate securities — — 5,257 (742 ) 5,257 (742 ) Agency bonds 3,498 (1 ) — — 3,498 (1 ) International government bonds 1,497 (2 ) — — 1,497 (2 ) $ 134,804 $ (235 ) $ 5,257 $ (742 ) $ 140,061 $ (977 ) Less Than 12 Months 12 Months or Greater Total As of December 31, 2016 Fair Gross Fair Gross Fair Gross Municipal bonds $ 69,379 $ (140 ) $ — $ — $ 69,379 $ (140 ) Corporate bonds 18,561 (128 ) — — 18,561 (128 ) U.S. government bonds 10,364 (16 ) — — 10,364 (16 ) Auction rate securities — — 5,196 (804 ) 5,196 (804 ) Asset-backed securities 3,176 (4 ) — — 3,176 (4 ) $ 101,480 $ (288 ) $ 5,196 $ (804 ) $ 106,676 $ (1,092 ) |
Summary of quantitative information about level 3 asset fair value measurements | Auction rate securities Fair Value at Valuation Technique Unobservable Input Weighted Average $ 5,257 Discounted cash flow Estimated yield 0.9% Expected holding period 10 years Estimated discount rate 3.56% Contingent consideration Fair Value at Valuation Technique Unobservable Input Weighted Average $ 3,829 Discounted cash flow Expected term 9 months Estimated discount rate 12.0% |
Summary of activity in Level 3 financial instruments | The following summarizes the activity in Level 3 financial instruments for the three months ended April 1, 2017 (in thousands): Assets Auction Rate Securities Three Months Beginning balance $ 5,196 Gain included in other comprehensive loss 61 Balance at April 1, 2017 $ 5,257 Liabilities Contingent Consideration (1) Three Months Beginning balance $ — Issues 3,829 Balance at April 1, 2017 $ 3,829 (1) |
Derivative Financial Instrume22
Derivative Financial Instruments (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
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 1, December 31, Interest rate swap Other assets, net $ — $ 1,808 |
Schedule of before-tax effect of derivative instruments in cash flow hedging relationships | The before-tax effect of derivative instruments in cash flow hedging relationships was as follows (in thousands): Gain (Loss) Recognized in Gain (Loss) Reclassified Three Months Ended Location of Loss Three Months Ended April 1, April 2, Reclassified into April 1, April 2, Interest rate swaps $ — $ (286 ) Interest expense $ 1,808 $ (66 ) |
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): Three Months Ended Gain (Loss) Recognized in Income April 1, April 2, Location Foreign currency forward contracts $ (94 ) $ (300 ) Other, net |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Balance Sheet Details | |
Inventories | The following shows the details of selected Condensed Consolidated Balance Sheet items (in thousands): Inventories April 1, December 31, Work in progress $ 42,493 $ 40,755 Finished goods 18,815 18,823 $ 61,308 $ 59,578 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Debt | |
Summary of information about the equity and liability components of the convertible senior notes | The carrying amount of the Notes consisted of the following (in thousands): April 1, Liability component Principal $ 400,000 Unamortized debt discount (58,561 ) Unamortized debt issuance costs (8,937 ) Net carrying amount $ 332,502 Equity component Net carrying amount $ 57,718 |
Schedule of components of interest expense | Interest expense related to the Notes was comprised of the following (in thousands): Three Months April 1, Contractual interest expense $ 382 Amortization of debt discount 754 Amortization of debt issuance costs 115 $ 1,251 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Stockholders' Equity | |
Schedule of share repurchase programs | The Board of Directors authorized the following share repurchase programs (in thousands): Program Program Program January 2017 December 2017 $ 100,000 August 2015 December 2016 $ 100,000 |
Schedule of components of accumulated other comprehensive income (loss), net of taxes | The components of accumulated other comprehensive income (loss), net of taxes, were as follows (in thousands): Unrealized Gain Net Unrealized Losses Total Balance at December 31, 2016 $ 1,175 $ (683 ) $ 492 Other comprehensive income (loss) before reclassifications — 158 158 Amount reclassified from accumulated other comprehensive income (loss) (1,175 ) — (1,175 ) Net change for the period (1,175 ) 158 (1,017 ) Balance at April 1, 2017 $ — $ (525 ) $ (525 ) |
Schedule of reclassifications out of accumulated other comprehensive income (loss) | The following table summarizes the effect on net income from reclassifications out of accumulated other comprehensive income (loss) (in thousands): Three Months Ended Reclassification April 1, April 2, Gains (losses) on cash flow hedges to: Interest expense $ 1,808 $ (66 ) Income tax benefit (633 ) 23 Total reclassifications $ 1,175 $ (43 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Stock-Based Compensation | |
Schedule of stock-based compensation costs recognized in the Condensed 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 1, April 2, Cost of revenues $ 258 $ 266 Research and development 5,246 4,910 Selling, general and administrative 4,982 5,168 10,486 10,344 Income tax benefit 5,282 2,236 $ 5,204 $ 8,108 |
Significant Accounting Polici27
Significant Accounting Policies (Details) | 3 Months Ended | 12 Months Ended |
Apr. 01, 2017 | Dec. 31, 2016 | |
Basis of Presentation and Principles of Consolidation | ||
Length of fiscal year | 364 days | 364 days |
Number of days in each fiscal quarter for 52-week fiscal year | 91 days | |
Low end of range | ||
Basis of Presentation and Principles of Consolidation | ||
Length of fiscal year | 364 days | |
High end of range | ||
Basis of Presentation and Principles of Consolidation | ||
Length of fiscal year | 371 days |
Significant Accounting Polici28
Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Recent Accounting Pronouncements | ||
Excess tax benefit | $ (1,970) | $ 265 |
Accounting Standards Update 2016-09 - Compensation-Stock Compensation | Scenario, Adjustment | ||
Recent Accounting Pronouncements | ||
Excess tax benefit | $ (3,300) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Earnings Per Share | ||
Net income | $ 15,426 | $ 5,808 |
Shares used in computing basic earnings per share (in shares) | 42,096 | 41,629 |
Effect of dilutive securities: | ||
Stock options and other stock-based awards (in shares) | 934 | 570 |
Shares used in computing diluted earnings per share (in shares) | 43,030 | 42,199 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.37 | $ 0.14 |
Diluted (in dollars per share) | $ 0.36 | $ 0.14 |
Shares excluded from computation of diluted earning per share (in shares) | 300 | 800 |
Fair Value of Financial Instr30
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Apr. 01, 2017 | Dec. 31, 2016 |
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total short-term investments | $ 396,327 | $ 153,961 |
Total long-term investments | 5,257 | 5,196 |
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 | 85,090 | 69,432 |
Total short-term investments | 50,437 | 12,416 |
Total assets at fair value | 135,527 | 81,848 |
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 | 85,090 | 69,432 |
Assets and liabilities measured at fair value on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government bonds | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total short-term investments | 50,437 | 12,416 |
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 | 70,297 | 11,057 |
Total short-term investments | 345,890 | 141,545 |
Derivative instruments | 1,808 | |
Other assets, net | 1,808 | |
Total assets at fair value | 416,187 | 154,410 |
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 | 32,183 | 7,153 |
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 | 6,034 | 3,904 |
Total short-term investments | 78,555 | 79,702 |
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 | 1,498 | |
Total short-term investments | 108,828 | 31,036 |
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 | 117,770 | 16,400 |
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 | 25,519 | 8,173 |
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Agency bonds | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total short-term investments | 7,482 | |
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 | 30,582 | |
Total short-term investments | 6,239 | 5,233 |
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 | 1,497 | 1,001 |
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 | 5,257 | 5,196 |
Total assets at fair value | 5,257 | 5,196 |
Contingent consideration, noncurrent | 3,829 | |
Total liabilities at fair value | 3,829 | |
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 | 5,257 | 5,196 |
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 | 155,387 | 80,489 |
Total short-term investments | 396,327 | 153,961 |
Total long-term investments | 5,257 | 5,196 |
Derivative instruments | 1,808 | |
Other assets, net | 1,808 | |
Total assets at fair value | 556,971 | 241,454 |
Contingent consideration, noncurrent | 3,829 | |
Total liabilities at fair value | 3,829 | |
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 | 85,090 | 69,432 |
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 | 32,183 | 7,153 |
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 | 6,034 | 3,904 |
Total short-term investments | 78,555 | 79,702 |
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 | 1,498 | |
Total short-term investments | 108,828 | 31,036 |
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 | 117,770 | 16,400 |
Assets and liabilities measured at fair value on recurring basis | Fair Value | U.S. government bonds | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total short-term investments | 50,437 | 12,416 |
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 | 25,519 | 8,173 |
Assets and liabilities measured at fair value on recurring basis | Fair Value | Agency bonds | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total short-term investments | 7,482 | |
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 | 30,582 | |
Total short-term investments | 6,239 | 5,233 |
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 | 1,497 | 1,001 |
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 | $ 5,257 | $ 5,196 |
Fair Value of Financial Instr31
Fair Value of Financial Instruments - Available-for-sale investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2017 | Dec. 31, 2016 | |
Cost | ||
Due in one year or less, Cost | $ 291,314 | |
Due after one year through ten years, Cost | 149,197 | |
Due after ten years, Cost | 117,270 | |
Total Cost | 557,781 | |
Fair Value | ||
Due in one year or less, Fair Value | 291,287 | |
Due after one year through ten years, Fair Value | 149,157 | |
Due after ten years, Fair Value | 116,527 | |
Total Fair Value | 556,971 | |
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 134,804 | $ 101,480 |
Fair value of available-for-sale securities, continuous loss position for twelve months or longer | 5,257 | 5,196 |
Total fair value of available-for-sale securities, continuous loss position | 140,061 | 106,676 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | (235) | (288) |
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses | (742) | (804) |
Available-for-sale securities, total gross unrealized losses | (977) | (1,092) |
Other than temporary impairment losses | ||
Other-than-temporary impairment losses | 0 | |
Corporate bonds | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 45,299 | 18,561 |
Total fair value of available-for-sale securities, continuous loss position | 45,299 | 18,561 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | (145) | (128) |
Available-for-sale securities, total gross unrealized losses | (145) | (128) |
Municipal bonds | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 38,781 | 69,379 |
Total fair value of available-for-sale securities, continuous loss position | 38,781 | 69,379 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | (42) | (140) |
Available-for-sale securities, total gross unrealized losses | (42) | (140) |
U.S. government bonds | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 28,251 | 10,364 |
Total fair value of available-for-sale securities, continuous loss position | 28,251 | 10,364 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | (23) | (16) |
Available-for-sale securities, total gross unrealized losses | (23) | (16) |
Asset-backed securities | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 17,478 | 3,176 |
Total fair value of available-for-sale securities, continuous loss position | 17,478 | 3,176 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | (22) | (4) |
Available-for-sale securities, total gross unrealized losses | (22) | (4) |
Auction rate securities | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for twelve months or longer | 5,257 | 5,196 |
Total fair value of available-for-sale securities, continuous loss position | 5,257 | 5,196 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses | (742) | (804) |
Available-for-sale securities, total gross unrealized losses | (742) | $ (804) |
Agency bonds | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 3,498 | |
Total fair value of available-for-sale securities, continuous loss position | 3,498 | |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | (1) | |
Available-for-sale securities, total gross unrealized losses | (1) | |
International government bonds | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 1,497 | |
Total fair value of available-for-sale securities, continuous loss position | 1,497 | |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | (2) | |
Available-for-sale securities, total gross unrealized losses | $ (2) |
Fair Value of Financial Instr32
Fair Value of Financial Instruments - Auction rate securities and Contingent consideration (Details) - Significant Unobservable Inputs (Level 3) - Weighted Average - Discounted cash flow | 3 Months Ended |
Apr. 01, 2017 | |
Assets and liabilities measured at fair value on recurring basis | |
Quantitative information for Level 3 Fair Value Measurements Assets | |
Expected holding period | 9 months |
Estimated discount rate (as a percent) | 12.00% |
Auction rate securities | |
Quantitative information for Level 3 Fair Value Measurements Assets | |
Estimated yield (as a percent) | 0.90% |
Expected holding period | 10 years |
Estimated discount rate (as a percent) | 3.56% |
Fair Value of Financial Instr33
Fair Value of Financial Instruments - Assets in Level 3 (Details) - Assets and liabilities measured at fair value on recurring basis - Significant Unobservable Inputs (Level 3) - Auction rate securities $ in Thousands | 3 Months Ended |
Apr. 01, 2017USD ($) | |
Fair value assets reconciliation of changes | |
Balance at the beginning of the period | $ 5,196 |
Gain included in other comprehensive loss | 61 |
Balance at the end of the period | $ 5,257 |
Fair Value of Financial Instr34
Fair Value of Financial Instruments - Liabilities in Level 3 (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2017 | Dec. 31, 2016 | |
Fair value liabilities reconciliation of changes | ||
Fair value of debt | $ 0 | $ 72,500 |
Assets and liabilities measured at fair value on recurring basis | Significant Unobservable Inputs (Level 3) | Contingent consideration | ||
Fair value liabilities reconciliation of changes | ||
Issues | 3,829 | |
Balance at the end of the period | 3,829 | |
Convertible Senior Notes | ||
Fair value liabilities reconciliation of changes | ||
Fair value of debt | $ 426,300 |
Derivative Financial Instrume35
Derivative Financial Instruments (Details) $ in Millions | Apr. 01, 2017USD ($) |
Cash flow hedges | Interest rate swaps | |
Notional amount | |
Original notional value | $ 72.5 |
Derivative Financial Instrume36
Derivative Financial Instruments - Financial Instrument (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 01, 2017 | Apr. 02, 2016 | Dec. 31, 2016 | |
Derivative financial instrument | |||
Reclassification for (gains) losses included in net income | $ (1,808) | $ 66 | |
Other assets, net | |||
Derivative financial instrument | |||
Fair value of interest rate swap | $ 1,808 |
Derivative Financial Instrume37
Derivative Financial Instruments - Before-tax Effect (Details) $ in Thousands | 3 Months Ended | |
Apr. 01, 2017USD ($)contract | Apr. 02, 2016USD ($)contract | |
Not Designated as Hedging Instrument | Foreign currency forward contracts | ||
Derivative Instruments, Gain (Loss) | ||
Number of foreign currency forward contract held | contract | 1 | 1 |
Original notional value | $ 4,000 | $ 4,800 |
Not Designated as Hedging Instrument | Foreign currency forward contracts | Other income (expense), net | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Income | (94) | (300) |
Cash flow hedges | Interest rate swaps | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) during period | (286) | |
Original notional value | 72,500 | |
Cash flow hedges | Interest rate swaps | Interest expense | ||
Derivative Instruments, Gain (Loss) | ||
Loss Reclassified from Accumulated OCI into Income (Effective Portion) during period | $ 1,808 | $ (66) |
Balance Sheet Details (Details)
Balance Sheet Details (Details) - USD ($) $ in Thousands | Apr. 01, 2017 | Dec. 31, 2016 |
Inventories | ||
Work in progress | $ 42,493 | $ 40,755 |
Finished goods | 18,815 | 18,823 |
Total inventories | $ 61,308 | $ 59,578 |
Acquisitions (Details)
Acquisitions (Details) - Zentri $ in Millions | Jan. 20, 2017USD ($) |
Acquisition | |
Purchase price of acquisition | $ 18.1 |
Cash consideration | 14.3 |
Earn-Out, fair value | 3.8 |
Potential maximum contingent consideration that could be paid | 10 |
Purchase price allocation | |
Intangible assets | 6.7 |
Goodwill tax deductible | 12.5 |
Other net liabilities | $ 1.1 |
Debt - Convertible Senior Notes
Debt - Convertible Senior Notes (Details) | Mar. 06, 2017USD ($)item$ / shares | Apr. 01, 2017USD ($) |
Amended Credit Agreement | ||
Debt | ||
Repayment of debt | $ 72,500,000 | |
1.375% Convertible Senior Notes | ||
Debt | ||
Principal amount of convertible senior notes sold in private placement | $ 400,000,000 | $ 400,000,000 |
Stated interest rate | 1.375% | |
Conversion rate | 10.7744 | |
Principal amount of notes | $ 1,000 | |
Initial conversion price | $ / shares | $ 92.81 | |
Number of trading days within 30 trading day period | item | 20 | |
Number of consecutive trading days | 30 days | |
Minimum amount the sales price of the Company's stock exceeds the conversion price (as a percent) | 130.00% | |
Number of consecutive business days after the 10 consecutive trading day period | 5 days | |
Number of consecutive trading days before the five consecutive business days | 10 days | |
Maximum amount the sales price of the Company's stock exceeds the conversion price (as a percent) | 98.00% |
Debt - Carrying amount of notes
Debt - Carrying amount of notes and interest expense (Details) - 1.375% Convertible Senior Notes - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2017 | Mar. 06, 2017 | |
Debt | ||
Total Debt issuance costs | $ 10,600 | |
Liability component | ||
Principal | $ 400,000 | $ 400,000 |
Unamortized debt discount | (58,561) | |
Unamortized debt issuance costs | (8,937) | |
Net carrying amount | 332,502 | |
Equity component | ||
Net carrying amount | $ 57,718 | |
Effective interest rate | 4.75% | |
Amortization of debt discount and debt issuance costs | 4 years 10 months 24 days | |
Interest expense related to the Notes | ||
Contractual interest expense | $ 382 | |
Amortization of debt discount | 754 | |
Amortization of debt issuance costs | 115 | |
Interest Expense, Total | $ 1,251 |
Debt - Amended Credit Agreement
Debt - Amended Credit Agreement (Details) $ in Millions | Jul. 24, 2015USD ($) | Jul. 31, 2012USD ($) | Apr. 01, 2017 |
Credit Agreement | |||
Debt | |||
Maximum borrowing capacity | $ 230 | ||
Term of debt instrument | 5 years | ||
Amount borrowed under the Amended Credit Agreement | $ 82.5 | ||
Revolving Credit Facility | |||
Debt | |||
Maximum borrowing capacity | $ 300 | $ 130 | |
Term of debt instrument | 5 years | ||
Sublimit on letters of credit | $ 25 | ||
Sublimit on swingline loan | 10 | ||
Additional increase in borrowing capacity of the line of credit available at the entity's option | 200 | ||
Amended Credit Agreement | |||
Debt | |||
Repayment of credit facility amount | $ 72.5 | ||
Maximum leverage ratio | 3 | ||
Minimum fixed charge coverage ratio | 1.25 | ||
Revolving credit facility, other than swingline loans | Federal Funds | |||
Debt | |||
Interest rate added to the base rate (as a percent) | 0.50% | ||
Revolving credit facility, other than swingline loans | Eurodollar base rate | |||
Debt | |||
Interest rate added to the base rate (as a percent) | 1.00% | ||
Revolving credit facility, other than swingline loans | Eurodollar | Low end of range | |||
Debt | |||
Interest rate added to the base rate (as a percent) | 1.25% | ||
Revolving credit facility, other than swingline loans | Eurodollar | High end of range | |||
Debt | |||
Interest rate added to the base rate (as a percent) | 2.00% | ||
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) | 0.25% | ||
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) | 1.00% | ||
Term Loan Facility | |||
Debt | |||
Maximum borrowing capacity | $ 100 |
Stockholders' Equity - Componen
Stockholders' Equity - Components of AOCI (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | |||
Apr. 01, 2017 | Apr. 02, 2016 | Jan. 31, 2017 | Aug. 31, 2015 | |
Number of shares of common stock issued | 0.5 | |||
Program Amount authorized to repurchase | $ 100,000 | $ 100,000 | ||
Repurchase of common stock (in shares) | 0 | 0.4 | ||
Repurchase of common stock | $ 18,500 | |||
Components of accumulated other comprehensive income (loss), net of taxes | ||||
Balance | $ 826,958 | |||
Other comprehensive loss | (1,017) | $ (306) | ||
Balance | 878,834 | |||
Unrealized Gain on Cash Flow Hedge | ||||
Components of accumulated other comprehensive income (loss), net of taxes | ||||
Balance | 1,175 | |||
Amount reclassified from accumulated other comprehensive income (loss) | (1,175) | |||
Other comprehensive loss | (1,175) | |||
Net Unrealized Losses on Available-For-Sale Securities | ||||
Components of accumulated other comprehensive income (loss), net of taxes | ||||
Balance | (683) | |||
Other comprehensive income (loss) before reclassifications | 158 | |||
Other comprehensive loss | 158 | |||
Balance | (525) | |||
Accumulated Other Comprehensive Loss | ||||
Components of accumulated other comprehensive income (loss), net of taxes | ||||
Balance | 492 | |||
Other comprehensive income (loss) before reclassifications | 158 | |||
Amount reclassified from accumulated other comprehensive income (loss) | (1,175) | |||
Other comprehensive loss | (1,017) | |||
Balance | $ (525) |
Stockholders' Equity - Reclassi
Stockholders' Equity - Reclassified from AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Amounts Reclassified from AOCI | ||
Income tax benefit | $ 1,970 | $ (265) |
Net income | 15,426 | 5,808 |
Reclassifications From Accumulated Other Comprehensive Income (Loss) | ||
Amounts Reclassified from AOCI | ||
Income tax benefit | (633) | 23 |
Net income | 1,175 | (43) |
Unrealized Gain on Cash Flow Hedge | Reclassifications From Accumulated Other Comprehensive Income (Loss) | ||
Amounts Reclassified from AOCI | ||
Interest expense | $ 1,808 | $ (66) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Stock-based compensation costs | ||
Share based compensation cost | $ 10,486 | $ 10,344 |
Income tax benefit | 5,282 | 2,236 |
Share based compensation cost after tax | 5,204 | 8,108 |
Total unrecognized compensation costs related to awards | $ 88,800 | |
Weighted-average period of recognition of unrecognized compensation costs | 2 years 6 months | |
Cost of revenues | ||
Stock-based compensation costs | ||
Share based compensation cost | $ 258 | 266 |
Research and development | ||
Stock-based compensation costs | ||
Share based compensation cost | 5,246 | 4,910 |
Selling, general and administrative | ||
Stock-based compensation costs | ||
Share based compensation cost | $ 4,982 | $ 5,168 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - patent | Jul. 16, 2014 | Jan. 21, 2014 |
Cresta Technology | ||
Patent Litigation | ||
Number of patents allegedly infringed | 6 | 3 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Mr. Bock | ||
Related Party Transaction | ||
Lease payments | $ 0.9 | $ 0.8 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2017 | Apr. 02, 2016 | |
Income Taxes | ||
Income tax benefit | $ 1,970 | $ (265) |
Effective income tax rate reconciliation | ||
Effective income tax rate (as a percent) | (14.60%) | 4.40% |
Components of deferred taxes | ||
Gross unrecognized tax benefits | $ 3,600 | |
Gross unrecognized tax benefits which would affect the effective tax rate if recognized | 2,200 | |
Amount of estimated decrease in unrecognized tax benefits | $ 1,900 |