Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 28, 2019 | Oct. 15, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | SILICON LABORATORIES INC. | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 28, 2019 | |
Entity File Number | 000-29823 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 74-2793174 | |
Entity Address, Address Line One | 400 West Cesar Chavez | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78701 | |
City Area Code | 512 | |
Local Phone Number | 416-8500 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | SLAB | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 43,373,269 | |
Entity Central Index Key | 0001038074 | |
Current Fiscal Year End Date | --12-28 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 237,056 | $ 197,043 |
Short-term investments | 457,879 | 416,779 |
Accounts receivable, net | 76,169 | 73,194 |
Inventories | 71,453 | 74,972 |
Prepaid expenses and other current assets | 52,609 | 64,650 |
Total current assets | 895,166 | 826,638 |
Property and equipment, net | 136,601 | 139,049 |
Goodwill | 397,344 | 397,344 |
Other intangible assets, net | 140,941 | 170,832 |
Other assets, net | 67,126 | 90,491 |
Total assets | 1,637,178 | 1,624,354 |
Current liabilities: | ||
Accounts payable | 38,724 | 41,171 |
Deferred revenue and returns liability | 21,827 | 22,494 |
Other current liabilities | 71,485 | 81,180 |
Total current liabilities | 132,036 | 144,845 |
Convertible debt | 364,802 | 354,771 |
Other non-current liabilities | 56,586 | 57,448 |
Total liabilities | 553,424 | 557,064 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock - $0.0001 par value; 10,000 shares authorized; no shares issued | ||
Common stock - $0.0001 par value; 250,000 shares authorized; 00 and 43,088 shares issued and outstanding at September 28, 2019 and December 29, 2018, respectively | 4 | 4 |
Additional paid-in capital | 112,251 | 107,517 |
Retained earnings | 970,893 | 961,343 |
Accumulated other comprehensive income (loss) | 606 | (1,574) |
Total stockholders' equity | 1,083,754 | 1,067,290 |
Total liabilities and stockholders' equity | $ 1,637,178 | $ 1,624,354 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
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 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000 | 250,000 |
Common stock, shares issued | 43,373 | 43,088 |
Common stock, shares outstanding | 43,373 | 43,088 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Condensed Consolidated Statements of Income | ||||
Revenues | $ 223,294 | $ 230,243 | $ 618,116 | $ 652,733 |
Costs of revenues | 89,204 | 94,616 | 241,103 | 261,577 |
Gross profit | 134,090 | 135,627 | 377,013 | 391,156 |
Operating expenses: | ||||
Research and development | 62,552 | 61,091 | 187,974 | 175,414 |
Selling, general and administrative | 47,718 | 49,406 | 145,571 | 148,896 |
Operating expenses | 110,270 | 110,497 | 333,545 | 324,310 |
Operating income | 23,820 | 25,130 | 43,468 | 66,846 |
Other income (expense): | ||||
Interest income and other, net | 3,172 | 2,109 | 9,691 | 6,920 |
Interest expense | (5,126) | (4,932) | (15,128) | (14,703) |
Income before income taxes | 21,866 | 22,307 | 38,031 | 59,063 |
Provision (benefit) for income taxes | 1,685 | (5,454) | 28,481 | (9,383) |
Net income | $ 20,181 | $ 27,761 | $ 9,550 | $ 68,446 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.47 | $ 0.64 | $ 0.22 | $ 1.59 |
Diluted (in dollars per share) | $ 0.45 | $ 0.63 | $ 0.22 | $ 1.55 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 43,358 | 43,256 | 43,311 | 43,177 |
Diluted (in shares) | 44,634 | 44,194 | 44,120 | 44,135 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Net income | $ 20,181 | $ 27,761 | $ 9,550 | $ 68,446 |
Net changes to available-for-sale securities | ||||
Unrealized gain (losses) arising during the period | 106 | 237 | 2,738 | (126) |
Reclassification for (gains) losses included in net income | (188) | (188) | 49 | |
Net changes to cash flow hedges | ||||
Unrealized gains (losses) arising during the period | (451) | 3 | (395) | (418) |
Reclassification for losses included in net income | 174 | 131 | 605 | 164 |
Other comprehensive income (loss), before tax | (359) | 371 | 2,760 | (331) |
Provision (benefit) for income taxes | (75) | 78 | 580 | (71) |
Other comprehensive income (loss) | (284) | 293 | 2,180 | (260) |
Comprehensive income | $ 19,897 | $ 28,054 | $ 11,730 | $ 68,186 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Dec. 30, 2017 | $ 4 | $ 102,862 | $ 851,307 | $ (1,157) | $ 953,016 |
Balance (in shares) at Dec. 30, 2017 | 42,707 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Cumulative effect of adoption of accounting standard | 26,448 | (250) | 26,198 | ||
Net income | 68,446 | 68,446 | |||
Other comprehensive income (loss) | (260) | (260) | |||
Stock issuances, net of shares withheld for taxes | (12,342) | (12,342) | |||
Stock issuances, net of shares withheld for taxes (in shares) | 697 | ||||
Repurchases of common stock | (24,272) | (24,272) | |||
Repurchases of common stock (in shares) | (257) | ||||
Stock-based compensation | 36,921 | 36,921 | |||
Balance at Sep. 29, 2018 | $ 4 | 103,169 | 946,201 | (1,667) | 1,047,707 |
Balance (in shares) at Sep. 29, 2018 | 43,147 | ||||
Balance at Jun. 30, 2018 | $ 4 | 111,984 | 918,440 | (1,960) | 1,028,468 |
Balance (in shares) at Jun. 30, 2018 | 43,350 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 27,761 | 27,761 | |||
Other comprehensive income (loss) | 293 | 293 | |||
Stock issuances, net of shares withheld for taxes | (518) | (518) | |||
Stock issuances, net of shares withheld for taxes (in shares) | 18 | ||||
Repurchases of common stock | (20,876) | (20,876) | |||
Repurchases of common stock (in shares) | (221) | ||||
Stock-based compensation | 12,579 | 12,579 | |||
Balance at Sep. 29, 2018 | $ 4 | 103,169 | 946,201 | (1,667) | 1,047,707 |
Balance (in shares) at Sep. 29, 2018 | 43,147 | ||||
Balance at Dec. 29, 2018 | $ 4 | 107,517 | 961,343 | (1,574) | $ 1,067,290 |
Balance (in shares) at Dec. 29, 2018 | 43,088 | 43,088 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 9,550 | $ 9,550 | |||
Other comprehensive income (loss) | 2,180 | 2,180 | |||
Stock issuances, net of shares withheld for taxes | (8,585) | (8,585) | |||
Stock issuances, net of shares withheld for taxes (in shares) | 586 | ||||
Repurchases of common stock | (26,716) | (26,716) | |||
Repurchases of common stock (in shares) | (301) | ||||
Stock-based compensation | 40,035 | 40,035 | |||
Balance at Sep. 28, 2019 | $ 4 | 112,251 | 970,893 | 606 | $ 1,083,754 |
Balance (in shares) at Sep. 28, 2019 | 43,373 | 43,373 | |||
Balance at Jun. 29, 2019 | $ 4 | 99,665 | 950,712 | 890 | $ 1,051,271 |
Balance (in shares) at Jun. 29, 2019 | 43,344 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 20,181 | 20,181 | |||
Other comprehensive income (loss) | (284) | (284) | |||
Stock issuances, net of shares withheld for taxes | (1,185) | (1,185) | |||
Stock issuances, net of shares withheld for taxes (in shares) | 29 | ||||
Stock-based compensation | 13,771 | 13,771 | |||
Balance at Sep. 28, 2019 | $ 4 | $ 112,251 | $ 970,893 | $ 606 | $ 1,083,754 |
Balance (in shares) at Sep. 28, 2019 | 43,373 | 43,373 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Operating Activities | ||
Net income | $ 9,550 | $ 68,446 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation of property and equipment | 12,675 | 11,781 |
Amortization of other intangible assets and other assets | 29,891 | 33,322 |
Amortization of debt discount and debt issuance costs | 10,031 | 9,578 |
Stock-based compensation expense | 40,042 | 36,893 |
Deferred income taxes | 24,531 | (2,994) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,975) | 2,518 |
Inventories | 3,512 | 5,066 |
Prepaid expenses and other assets | 23,401 | 6,349 |
Accounts payable | 6,419 | 8,675 |
Other current liabilities and income taxes | (15,602) | (23,814) |
Deferred income, deferred revenue and returns liability | (667) | (2,816) |
Other non-current liabilities | (5,957) | (7,878) |
Net cash provided by operating activities | 134,851 | 145,126 |
Investing Activities | ||
Purchases of available-for-sale investments | (306,645) | (253,973) |
Sales and maturities of available-for-sale investments | 268,140 | 371,885 |
Purchases of property and equipment | (12,773) | (18,267) |
Purchases of other assets | (7,132) | (9,088) |
Acquisition of business, net of cash acquired | (239,729) | |
Net cash used in investing activities | (58,410) | (149,172) |
Financing Activities | ||
Payment of debt issuance costs | (1,127) | |
Repurchases of common stock | (26,716) | (24,272) |
Payment of taxes withheld for vested stock awards | (15,693) | (18,927) |
Proceeds from the issuance of common stock | 7,108 | 6,585 |
Payment of acquisition-related contingent consideration | (3,380) | |
Net cash used in financing activities | (36,428) | (39,994) |
Increase (decrease) in cash and cash equivalents | 40,013 | (44,040) |
Cash and cash equivalents at beginning of period | 197,043 | 269,366 |
Cash and cash equivalents at end of period | $ 237,056 | $ 225,326 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 28, 2019 | |
Significant Accounting Policies | |
Significant Accounting Policies | 1. Significant Accounting Policies Basis of Presentation and Principles of Consolidation The Condensed Consolidated Financial Statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments which, in the opinion of management, are necessary to present fairly the condensed consolidated financial position of Silicon Laboratories Inc. and its subsidiaries (collectively, the “Company”) at September 28, 2019 and December 29, 2018, the condensed consolidated results of its operations for the three and nine months ended September 28, 2019 and September 29, 2018, the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 28, 2019 and September 29, 2018, the Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 28, 2019 and September 29, 2018, and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 28, 2019 and September 29, 2018. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated results of operations for the three and nine months ended September 28, 2019 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 29, 2018, included in the Company’s Form 10-K/A filed with the Securities and Exchange Commission (SEC) on May 3, 2019. The Company prepares financial statements on a 52- or 53-week fiscal year that ends on the Saturday closest to December 31. Fiscal 2019 will have 52 weeks and fiscal 2018 had 52 weeks. In a 52-week year, each fiscal quarter consists of 13 weeks. 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, goodwill, acquired intangible assets, other long-lived assets, revenue recognition, stock-based compensation and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements. Adoption of New Lease Accounting Standard The Company adopted Accounting Standards Codification (ASC) Topic 842, Leases, on December 30, 2018, the first day of its fiscal year ending December 28, 2019. We elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to not reassess historical lease classifications, initial direct costs of existing leases or whether any expired or existing contracts were or contained leases. The Company elected the retrospective method of adoption at the beginning of the period of adoption through a cumulative-effect adjustment. Prior periods have not been adjusted. The following reflects the material changes recorded in connection with the cumulative-effect adjustment (in thousands): Financial Statement Line Item Increase Prepaid expenses and other current assets $ (481) Other assets, net $ 18,166 Other current liabilities $ 3,516 Other non-current liabilities $ 14,169 The primary impact of the Company’s adoption of ASC 842 resulted from the recognition of right-of-use assets and operating lease liabilities. The adoption had no significant impact to the Condensed Consolidated Statements of Income or to cash provided by or used in net operating, investing or financing activities in the Condensed Consolidated Statements of Cash Flows. Leases At the commencement date of a lease, the Company recognizes a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. The lease liability is measured at the present value of lease payments over the lease term. As its leases typically do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date taking into consideration necessary adjustments for collateral, depending on the facts and circumstances of the lessee and the leased asset, and term to match the lease term. The right-of-use (“ROU”) asset is measured at cost, which includes the initial measurement of the lease liability and initial direct costs incurred by the Company and excludes lease incentives. Lease liabilities are recorded in other current liabilities and other non-current liabilities. ROU assets are recorded in other assets, net. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease costs are recognized on a straight-line basis over the lease term. Lease agreements that contain both lease and non-lease components are generally accounted for separately. Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Substantially all of the Company’s contracts with customers contain a single performance obligation, the sale of mixed-signal integrated circuit (IC) products. This performance obligation is satisfied when control of the product is transferred to the customer, which typically occurs upon delivery. Unsatisfied performance obligations primarily represent contracts for products with future delivery dates and with an original expected duration of one year or less. As allowed under ASC 606, the Company has opted to not disclose the amount of unsatisfied performance obligations as these contracts have original expected durations of less than one year. The transaction price reflects the Company’s expectations about the consideration it will be entitled to receive from the customer and may include fixed or variable amounts. Variable consideration primarily includes sales made to distributors under agreements allowing certain rights of return, referred to as stock rotation, and credits issued to the distributor due to price protection. The Company applies a constraint to its variable consideration estimate which considers both the likelihood of a return and the amount of a potential price concession. Variable consideration that does not meet revenue recognition criteria is deferred. Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-04 , Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share | |
Earnings Per Share | 2. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Net income $ 20,181 $ 27,761 $ 9,550 $ 68,446 Shares used in computing basic earnings per share 43,358 43,256 43,311 43,177 Effect of dilutive securities: Stock-based awards and convertible debt 1,276 938 809 958 Shares used in computing diluted earnings per share 44,634 44,194 44,120 44,135 Earnings per share: Basic $ 0.47 $ 0.64 $ 0.22 $ 1.59 Diluted $ 0.45 $ 0.63 $ 0.22 $ 1.55 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 is included in the denominator for the computation of diluted earnings per share using the treasury stock method. For the three months ended September 28, 2019 and September 29, 2018 and the nine months ended September 28, 2019 and September 29, 2018, approximately 0.6 million, 0.2 million, 0.3 million and 0.2 million shares, respectively, were included in the denominator for the calculation of diluted earnings per share. See Note 7, Debt |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 28, 2019 | |
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 at September 28, 2019 Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Description (Level 1) (Level 2) (Level 3) Total Assets: Cash equivalents: Money market funds $ 128,072 $ — $ — $ 128,072 Corporate debt securities — 5,291 — 5,291 Total cash equivalents $ 128,072 $ 5,291 $ — $ 133,363 Short-term investments: Government debt securities $ 80,686 $ 78,739 $ — $ 159,425 Corporate debt securities — 298,454 — 298,454 Total short-term investments $ 80,686 $ 377,193 $ — $ 457,879 Other assets, net: Auction rate securities $ — $ — $ 5,715 $ 5,715 Total $ — $ — $ 5,715 $ 5,715 Total $ 208,758 $ 382,484 $ 5,715 $ 596,957 Fair Value Measurements at December 29, 2018 Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Description (Level 1) (Level 2) (Level 3) Total Assets: Cash equivalents: Money market funds $ 74,990 $ — $ — $ 74,990 Corporate debt securities — 18,820 — 18,820 Government debt securities 9,338 — — 9,338 Total cash equivalents $ 84,328 $ 18,820 $ — $ 103,148 Short-term investments: Government debt securities $ 48,141 $ 99,211 $ — $ 147,352 Corporate debt securities — 269,427 — 269,427 Total short-term investments $ 48,141 $ 368,638 $ — $ 416,779 Other assets, net: Auction rate securities $ — $ — $ 5,759 $ 5,759 Total $ — $ — $ 5,759 $ 5,759 Total $ 132,469 $ 387,458 $ 5,759 $ 525,686 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 foreign exchange rates, forward and spot prices for currencies, and market observable data of similar instruments. Available-for-sale investments The Company’s 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 available-for-sale investments at September 28, 2019 (in thousands): Fair Cost Value Due in one year or less $ 408,664 $ 409,445 Due after one year through ten years 176,798 177,497 Due after ten years 10,300 10,015 $ 595,762 $ 596,957 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 Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized As of September 28, 2019 Value Losses Value Losses Value Losses Government debt securities $ 23,804 $ (30) $ 20,922 $ (35) $ 44,726 $ (65) Corporate debt securities 56,374 (100) 8,555 (2) 64,929 (102) Auction rate securities — — 5,715 (285) 5,715 (285) $ 80,178 $ (130) $ 35,192 $ (322) $ 115,370 $ (452) Less Than 12 Months 12 Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized As of December 29, 2018 Value Losses Value Losses Value Losses Government debt securities $ 13,278 $ (10) $ 88,696 $ (583) $ 101,974 $ (593) Corporate debt securities 112,699 (273) 76,310 (448) 189,009 (721) Auction rate securities — — 5,759 (241) 5,759 (241) $ 125,977 $ (283) $ 170,765 $ (1,272) $ 296,742 $ (1,555) The gross unrealized losses as of September 28, 2019 and December 29, 2018 were due primarily to changes in market interest rates and the illiquidity of the Company’s auction-rate securities. 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. The Company is unable to predict if these funds will become available before their maturity date. The Company considers the declines in market value of its marketable securities investment portfolio to be temporary in nature. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, the Company’s intent to sell or the likelihood that it would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. As of September 28, 2019, the Company has determined that no other-than-temporary impairment losses existed. At September 28, 2019 and December 29, 2018, 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 September 28, 2019 (000s) Valuation Technique Unobservable Input Weighted Average $ 5,715 Discounted cash flow Estimated yield 3.59% Expected holding period 10 years Estimated discount rate 2.67% 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. The following summarizes the activity in Level 3 financial instruments for the three and nine months ended September 28, 2019 (in thousands): Assets Three Months Nine Months Auction Rate Securities Ended Ended Beginning balance $ 5,647 $ 5,759 Gain (loss) included in other comprehensive income (loss) 68 (44) Balance at September 28, 2019 $ 5,715 $ 5,715 Fair values of other financial instruments The Company’s debt is recorded at cost, but is measured at fair value for disclosure purposes. The fair value of the Company’s convertible senior notes is determined using observable market prices. The notes are traded in less active markets and are therefore classified as a Level 2 fair value measurement. As of September 28, 2019 and December 29, 2018, the fair value of the convertible senior notes was $518.7 million and $419.0 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 | 9 Months Ended |
Sep. 28, 2019 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 4. Derivative Financial Instruments The Company uses derivative financial instruments to manage certain exposures to the variability of 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. Cash Flow Hedges Foreign Currency Forward Contracts The Company uses foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on operating expenses denominated in currencies other than the U.S. dollar. Changes in the fair value of the contracts are recorded in accumulated other comprehensive income (loss) in the Consolidated Balance Sheet and subsequently reclassified into earnings in the period during which the hedged transaction is recognized. The reclassified amount is reported in the same financial statement line item as the hedged item. If the foreign currency forward contracts are terminated or can no longer qualify as hedging instruments prior to maturity, the fair value of the contracts recorded in accumulated other comprehensive income (loss) may be recognized in the Consolidated Statement of Income based on an assessment of the contracts at the time of termination. The Company has entered into foreign currency forward contracts for a portion of its forecasted operating expenses denominated in the Norwegian Krone. As of September 28, 2019, the contracts had maturities of one to eleven months and an aggregate notional value of $7.2 million. Losses expected to be reclassified into earnings in the next 12 months were not material. The fair value of the contracts, contract losses recognized in other comprehensive income (loss) and amounts reclassified from accumulated other comprehensive income (loss) into earnings were not material for any of the periods presented. Non-designated Hedges Foreign Currency Forward Contracts The Company uses foreign currency forward contracts 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 interest income and 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 these foreign currency forward contracts. As of September 28, 2019, the Company held one foreign currency forward contract denominated in Singapore Dollars with a notional value of $5.7 million. The fair value of the contract and contract losses recognized in income were not material for any of the periods presented. |
Balance Sheet Details
Balance Sheet Details | 9 Months Ended |
Sep. 28, 2019 | |
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 September 28, December 29, 2019 2018 Work in progress $ 49,490 $ 50,983 Finished goods 21,963 23,989 $ 71,453 $ 74,972 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 28, 2019 | |
Acquisitions | |
Acquisitions | 6. Acquisitions Z-Wave On April 18, 2018, the Company completed the acquisition of the Z-Wave business from Sigma Designs, Inc. for $243 million in cash. Z-Wave is an Internet of Things (IoT) technology for smart home solutions. This strategic acquisition expanded the Company's IoT connectivity portfolio in the connected home and security market, while further scaling the Company's engineering team. |
Debt
Debt | 9 Months Ended |
Sep. 28, 2019 | |
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 then remaining balance under its 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, or approximately 4.3 million shares of common stock, 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 ended 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): September 28, December 29, 2019 2018 Liability component Principal $ 400,000 $ 400,000 Unamortized debt discount (30,582) (39,298) Unamortized debt issuance costs (4,616) (5,931) Net carrying amount $ 364,802 $ 354,771 Equity component Net carrying amount $ 57,735 $ 57,735 The liability component of the Notes is recorded in convertible 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 September 28, 2019, the remaining period over which the debt discount and debt issuance costs will be amortized was 2.4 years. Interest expense related to the Notes was comprised of the following (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Contractual interest expense $ 1,360 $ 1,360 $ 4,110 $ 4,125 Amortization of debt discount 2,930 2,801 8,716 8,322 Amortization of debt issuance costs 442 423 1,315 1,256 $ 4,732 $ 4,584 $ 14,141 $ 13,703 Credit Facility On August 7, 2019, the Company and certain of its domestic subsidiaries (the “Guarantors”) amended its existing credit agreement. The amended agreement (the “Credit Facility”) consists of a $400 million revolving credit facility with a maturity date of August 7, 2024. The Credit Facility includes 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 the greater of an aggregate of $250 million and 100% of EBITDA, plus an amount that would not cause a secured leverage ratio (funded debt secured by assets/EBITDA) to exceed 3.25 to 1.00, 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 1.00% to 1.75% and for base rate loans range from 0.00% to 0.75%, depending in each case, on the leverage ratio as defined in the Credit Facility. The Credit Facility 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 4.25 to 1, a secured leverage ratio of no more than 3.50 to 1, and a minimum interest coverage ratio (EBITDA/interest payments) of no less than 2.50 to 1. As of September 28, 2019, the Company was in compliance with all covenants of the Credit Facility. The Company’s obligations under the Credit Facility are guaranteed by the Guarantors and are secured by a security interest in substantially all assets of the Company and the Guarantors. |
Leases
Leases | 9 Months Ended |
Sep. 28, 2019 | |
Leases | |
Leases | 8. Leases The Company leases certain facilities under operating lease agreements that expire at various dates through 2027. Some of these arrangements contain renewal options and require the Company to pay taxes, insurance and maintenance costs. Lease costs under operating leases were $1.4 million and $4.4 million during the three and nine months ended September 28, 2019, respectively. Supplemental Lease Information September 28, Balance Sheet Information (in thousands) 2019 Operating lease right-of-use assets $ 17,276 Operating lease liabilities $ 18,465 Nine Months Ended September 28, Cash Flow Information (in thousands) 2019 Cash paid for operating lease liabilities $ 4,563 Right-of-use assets obtained in exchange for operating lease obligations $ 2,488 September 28, Operating Lease Information 2019 Weighted-average remaining lease term 4.7 years Weighted-average discount rate 5.25% The maturities of operating lease liabilities as of September 28, 2019 were as follows (in thousands): Fiscal Year 2019 $ 1,457 2020 5,419 2021 4,368 2022 3,668 2023 3,042 Thereafter 3,770 Total lease payments 21,724 Less imputed interest (3,259) Total lease liabilities $ 18,465 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 28, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies Legal Proceedings The Company is involved in various legal proceedings that have arisen in the normal course of business. While the ultimate results cannot be predicted with certainty, the Company does not expect them to have a material adverse effect on its Consolidated Financial Statements. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 28, 2019 | |
Stockholders' Equity | |
Stockholders' Equity | 10. Stockholders’ Equity Common Stock The Company issued 0.6 million shares of common stock during the nine months ended September 28, 2019. Share Repurchase Program The Company's existing share repurchase program has an authorization amount of $200 million and a termination date of December 2019. In October 2019, the Board of Directors extended the termination date of the program to December 2020. This program allows 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 0.3 million shares and 0.3 million shares of its common stock for $26.7 million and $24.3 million during the nine months ended September 28, 2019 and September 29, 2018, respectively. These shares were retired upon repurchase. Reclassifications From Accumulated Other Comprehensive Income (Loss) The following table summarizes the effect on net income from reclassifications out of accumulated other comprehensive loss (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Reclassification 2019 2018 2019 2018 Gains (losses) on available-for-sales securities to: Interest income and other, net $ 188 $ — $ 188 $ (49) Losses on cash flow hedges to: Operating expenses (174) (131) (605) (164) 14 (131) (417) (213) Income tax expense (benefit) (3) 28 88 45 Total reclassifications $ 11 $ (103) $ (329) $ (168) |
Revenues
Revenues | 9 Months Ended |
Sep. 28, 2019 | |
Revenues | |
Revenues | 11. Revenues The Company groups its revenues into four categories, based on the markets and applications in which its products may be used. The following disaggregates the Company's revenue by product category (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Internet of Things $ 129,403 $ 125,390 $ 360,488 $ 344,504 Infrastructure 45,150 52,554 134,824 153,494 Broadcast 34,100 36,081 86,695 106,318 Access 14,641 16,218 36,109 48,417 $ 223,294 $ 230,243 $ 618,116 $ 652,733 A portion of the Company's sales are made to distributors under agreements allowing certain rights of return and/or price protection related to the final selling price to the end customers. These factors impact the timing and uncertainty of revenues and cash flows. During the three months ended September 28, 2019 and September 29, 2018 and the nine months ended September 28, 2019 and September 29, 2018, the Company recognized revenue of $14.1 million, $15.5 million, $16.9 million and $23.9 million, respectively, from performance obligations that were satisfied in previous reporting periods. The following disaggregates the Company's revenue by sales channel (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Distributors $ 163,556 $ 166,082 $ 448,864 $ 470,385 Direct customers 59,738 64,161 169,252 182,348 $ 223,294 $ 230,243 $ 618,116 $ 652,733 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 28, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | 12. 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 2017, the stockholders of the Company approved amendments to both the 2009 Plan and the 2009 Purchase Plan. These 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. 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 restricted stock units (RSUs), performance stock units (PSUs) and restricted stock awards (RSAs)) are estimated based on their intrinsic values. The fair values of market stock awards (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 Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Cost of revenues $ 344 $ 324 $ 989 $ 914 Research and development 6,474 6,016 19,030 17,454 Selling, general and administrative 6,970 6,242 20,023 18,525 13,788 12,582 40,042 36,893 Income tax benefit 817 619 1,951 7,515 $ 12,971 $ 11,963 $ 38,091 $ 29,378 The decrease in income tax benefit during the nine months ended September 28, 2019 was primarily due to a change in our position related to the treatment of stock-based compensation within our intercompany cost-sharing arrangement. See Note 13, Income Taxes |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 28, 2019 | |
Income Taxes | |
Income Taxes | 13. 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. Income tax expense (benefit) was $1.7 million and $(5.5) million for the three months ended September 28, 2019 and September 29, 2018, resulting in effective tax rates of 7.7% and (24.4)%, respectively. Income tax expense (benefit) was $28.5 million and $(9.4) million for the nine months ended September 28, 2019 and September 29, 2018, resulting in effective tax rates of 74.9% and (15.9)%, respectively. The effective tax rate for the three months ended September 28, 2019 increased from the prior period as a result of a discrete benefit recorded under Staff Accounting Bulletin (“SAB”) No. 118 in the prior period revising the Company’s initial estimate of Transition Tax as a result of the Tax Cuts and Jobs Act. The effective tax rate for the nine months ended September 28, 2019 increased from the prior period primarily due to a change in the Company’s financial statement position related to the treatment of stock-based compensation within its intercompany cost-sharing arrangement. On July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. v. Commissioner which concluded that related parties in an intercompany cost-sharing arrangement are not required to share costs related to stock-based compensation. In February 2016, the U.S. Internal Revenue Service appealed the decision to the U.S Court of Appeals for the Ninth Circuit (the “Ninth Circuit”). On June 7, 2019, the Ninth Circuit reversed the 2015 decision of the U.S. Tax Court. As a result of this decision, the Company no longer reflects a tax benefit within its financial statements related to the removal of stock-based compensation from its intercompany cost-sharing arrangement. During the three months ended June 29, 2019, the Company removed the deferred tax assets and a deferred tax liability associated with this matter from its financial statements, resulting in a discrete income tax expense of $28.1 million. The Company will continue to monitor ongoing developments in this matter and potential impacts to its financial statements. Uncertain Tax Positions As of September 28, 2019, the Company had gross unrecognized tax benefits, inclusive of interest, of $2.4 million of which $1.9 million would affect the effective tax rate if recognized. During the nine months ended September 28, 2019, the Company released $0.2 million of unrecognized tax benefits. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. These amounts were not material for any of the periods presented. Following the completion of the Norwegian Tax Administration (“NTA”) examination of the Company’s Norwegian subsidiary for income tax matters relating to fiscal years 2013, 2014, 2015 and 2016, the Company received an assessment from the NTA in December 2017 concerning an adjustment to its 2013 taxable income related to the pricing of an intercompany transaction. The Company is currently appealing the assessment. The adjustment to the pricing of the intercompany transaction results in approximately $15.6 million additional Norwegian income tax. The Company disagrees with the NTA’s assessment and believes the Company’s position on this matter is more likely than not to be sustained. The Company plans to exhaust all available administrative remedies, and if unable to resolve this matter through administrative remedies with the NTA, the Company plans to pursue judicial remedies. The Company believes that it has accrued adequate reserves related to all matters contained in tax periods open to examination. Should the Company experience an unfavorable outcome in the NTA matter, however, such an outcome could have a material impact on its financial statements. Tax years 2015 through 2019 remain open to examination by the major taxing jurisdictions in which the Company operates. The Company is not currently under audit in any major taxing jurisdiction. The Company does not believe gross unrecognized tax benefits will decrease in the next 12 months. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 28, 2019 | |
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, goodwill, acquired intangible assets, other long-lived assets, revenue recognition, stock-based compensation and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements. |
Adoption of New Lease Accounting Standard | Adoption of New Lease Accounting Standard The Company adopted Accounting Standards Codification (ASC) Topic 842, Leases, on December 30, 2018, the first day of its fiscal year ending December 28, 2019. We elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to not reassess historical lease classifications, initial direct costs of existing leases or whether any expired or existing contracts were or contained leases. The Company elected the retrospective method of adoption at the beginning of the period of adoption through a cumulative-effect adjustment. Prior periods have not been adjusted. The following reflects the material changes recorded in connection with the cumulative-effect adjustment (in thousands): Financial Statement Line Item Increase Prepaid expenses and other current assets $ (481) Other assets, net $ 18,166 Other current liabilities $ 3,516 Other non-current liabilities $ 14,169 The primary impact of the Company’s adoption of ASC 842 resulted from the recognition of right-of-use assets and operating lease liabilities. The adoption had no significant impact to the Condensed Consolidated Statements of Income or to cash provided by or used in net operating, investing or financing activities in the Condensed Consolidated Statements of Cash Flows. |
Leases | Leases At the commencement date of a lease, the Company recognizes a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. The lease liability is measured at the present value of lease payments over the lease term. As its leases typically do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date taking into consideration necessary adjustments for collateral, depending on the facts and circumstances of the lessee and the leased asset, and term to match the lease term. The right-of-use (“ROU”) asset is measured at cost, which includes the initial measurement of the lease liability and initial direct costs incurred by the Company and excludes lease incentives. Lease liabilities are recorded in other current liabilities and other non-current liabilities. ROU assets are recorded in other assets, net. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease costs are recognized on a straight-line basis over the lease term. Lease agreements that contain both lease and non-lease components are generally accounted for separately. |
Revenue Recognition | Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Substantially all of the Company’s contracts with customers contain a single performance obligation, the sale of mixed-signal integrated circuit (IC) products. This performance obligation is satisfied when control of the product is transferred to the customer, which typically occurs upon delivery. Unsatisfied performance obligations primarily represent contracts for products with future delivery dates and with an original expected duration of one year or less. As allowed under ASC 606, the Company has opted to not disclose the amount of unsatisfied performance obligations as these contracts have original expected durations of less than one year. The transaction price reflects the Company’s expectations about the consideration it will be entitled to receive from the customer and may include fixed or variable amounts. Variable consideration primarily includes sales made to distributors under agreements allowing certain rights of return, referred to as stock rotation, and credits issued to the distributor due to price protection. The Company applies a constraint to its variable consideration estimate which considers both the likelihood of a return and the amount of a potential price concession. Variable consideration that does not meet revenue recognition criteria is deferred. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-04 , Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Significant Accounting Policies | |
Schedule of changes recorded in connection with the cumulative-effect adjustment | The following reflects the material changes recorded in connection with the cumulative-effect adjustment (in thousands): Financial Statement Line Item Increase Prepaid expenses and other current assets $ (481) Other assets, net $ 18,166 Other current liabilities $ 3,516 Other non-current liabilities $ 14,169 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share | |
Schedule of computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Net income $ 20,181 $ 27,761 $ 9,550 $ 68,446 Shares used in computing basic earnings per share 43,358 43,256 43,311 43,177 Effect of dilutive securities: Stock-based awards and convertible debt 1,276 938 809 958 Shares used in computing diluted earnings per share 44,634 44,194 44,120 44,135 Earnings per share: Basic $ 0.47 $ 0.64 $ 0.22 $ 1.59 Diluted $ 0.45 $ 0.63 $ 0.22 $ 1.55 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value of Financial Instruments | |
Summary of valuation of the financial instruments | The following summarizes the valuation of the Company’s financial instruments (in thousands). The tables do not include either cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value. Fair Value Measurements at September 28, 2019 Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Description (Level 1) (Level 2) (Level 3) Total Assets: Cash equivalents: Money market funds $ 128,072 $ — $ — $ 128,072 Corporate debt securities — 5,291 — 5,291 Total cash equivalents $ 128,072 $ 5,291 $ — $ 133,363 Short-term investments: Government debt securities $ 80,686 $ 78,739 $ — $ 159,425 Corporate debt securities — 298,454 — 298,454 Total short-term investments $ 80,686 $ 377,193 $ — $ 457,879 Other assets, net: Auction rate securities $ — $ — $ 5,715 $ 5,715 Total $ — $ — $ 5,715 $ 5,715 Total $ 208,758 $ 382,484 $ 5,715 $ 596,957 Fair Value Measurements at December 29, 2018 Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Description (Level 1) (Level 2) (Level 3) Total Assets: Cash equivalents: Money market funds $ 74,990 $ — $ — $ 74,990 Corporate debt securities — 18,820 — 18,820 Government debt securities 9,338 — — 9,338 Total cash equivalents $ 84,328 $ 18,820 $ — $ 103,148 Short-term investments: Government debt securities $ 48,141 $ 99,211 $ — $ 147,352 Corporate debt securities — 269,427 — 269,427 Total short-term investments $ 48,141 $ 368,638 $ — $ 416,779 Other assets, net: Auction rate securities $ — $ — $ 5,759 $ 5,759 Total $ — $ — $ 5,759 $ 5,759 Total $ 132,469 $ 387,458 $ 5,759 $ 525,686 |
Schedule of maturities of the Company's available-for-sale investments | The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at September 28, 2019 (in thousands): Fair Cost Value Due in one year or less $ 408,664 $ 409,445 Due after one year through ten years 176,798 177,497 Due after ten years 10,300 10,015 $ 595,762 $ 596,957 |
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 Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized As of September 28, 2019 Value Losses Value Losses Value Losses Government debt securities $ 23,804 $ (30) $ 20,922 $ (35) $ 44,726 $ (65) Corporate debt securities 56,374 (100) 8,555 (2) 64,929 (102) Auction rate securities — — 5,715 (285) 5,715 (285) $ 80,178 $ (130) $ 35,192 $ (322) $ 115,370 $ (452) Less Than 12 Months 12 Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized As of December 29, 2018 Value Losses Value Losses Value Losses Government debt securities $ 13,278 $ (10) $ 88,696 $ (583) $ 101,974 $ (593) Corporate debt securities 112,699 (273) 76,310 (448) 189,009 (721) Auction rate securities — — 5,759 (241) 5,759 (241) $ 125,977 $ (283) $ 170,765 $ (1,272) $ 296,742 $ (1,555) |
Summary of quantitative information about level 3 fair value measurements | Auction rate securities Fair Value at September 28, 2019 (000s) Valuation Technique Unobservable Input Weighted Average $ 5,715 Discounted cash flow Estimated yield 3.59% Expected holding period 10 years Estimated discount rate 2.67% |
Summary of activity in Level 3 financial instruments | The following summarizes the activity in Level 3 financial instruments for the three and nine months ended September 28, 2019 (in thousands): Assets Three Months Nine Months Auction Rate Securities Ended Ended Beginning balance $ 5,647 $ 5,759 Gain (loss) included in other comprehensive income (loss) 68 (44) Balance at September 28, 2019 $ 5,715 $ 5,715 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Balance Sheet Details | |
Schedule of Inventories | The following shows the details of selected Condensed Consolidated Balance Sheet items (in thousands): Inventories September 28, December 29, 2019 2018 Work in progress $ 49,490 $ 50,983 Finished goods 21,963 23,989 $ 71,453 $ 74,972 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Debt | |
Summary of information about the equity and liability components of convertible debt | The carrying amount of the Notes consisted of the following (in thousands): September 28, December 29, 2019 2018 Liability component Principal $ 400,000 $ 400,000 Unamortized debt discount (30,582) (39,298) Unamortized debt issuance costs (4,616) (5,931) Net carrying amount $ 364,802 $ 354,771 Equity component Net carrying amount $ 57,735 $ 57,735 |
Schedule of components of interest expense | Interest expense related to the Notes was comprised of the following (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Contractual interest expense $ 1,360 $ 1,360 $ 4,110 $ 4,125 Amortization of debt discount 2,930 2,801 8,716 8,322 Amortization of debt issuance costs 442 423 1,315 1,256 $ 4,732 $ 4,584 $ 14,141 $ 13,703 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Leases | |
Summary of supplemental lease information | Supplemental Lease Information September 28, Balance Sheet Information (in thousands) 2019 Operating lease right-of-use assets $ 17,276 Operating lease liabilities $ 18,465 Nine Months Ended September 28, Cash Flow Information (in thousands) 2019 Cash paid for operating lease liabilities $ 4,563 Right-of-use assets obtained in exchange for operating lease obligations $ 2,488 September 28, Operating Lease Information 2019 Weighted-average remaining lease term 4.7 years Weighted-average discount rate 5.25% |
Schedule of maturities of operating lease liabilities | The maturities of operating lease liabilities as of September 28, 2019 were as follows (in thousands): Fiscal Year 2019 $ 1,457 2020 5,419 2021 4,368 2022 3,668 2023 3,042 Thereafter 3,770 Total lease payments 21,724 Less imputed interest (3,259) Total lease liabilities $ 18,465 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Stockholders' Equity | |
Schedule of reclassifications out of accumulated other comprehensive loss | The following table summarizes the effect on net income from reclassifications out of accumulated other comprehensive loss (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Reclassification 2019 2018 2019 2018 Gains (losses) on available-for-sales securities to: Interest income and other, net $ 188 $ — $ 188 $ (49) Losses on cash flow hedges to: Operating expenses (174) (131) (605) (164) 14 (131) (417) (213) Income tax expense (benefit) (3) 28 88 45 Total reclassifications $ 11 $ (103) $ (329) $ (168) |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Revenues | |
Schedule of disaggregation of revenue by product category | The Company groups its revenues into four categories, based on the markets and applications in which its products may be used. The following disaggregates the Company's revenue by product category (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Internet of Things $ 129,403 $ 125,390 $ 360,488 $ 344,504 Infrastructure 45,150 52,554 134,824 153,494 Broadcast 34,100 36,081 86,695 106,318 Access 14,641 16,218 36,109 48,417 $ 223,294 $ 230,243 $ 618,116 $ 652,733 |
Schedule of disaggregation of revenue by sales channel | The following disaggregates the Company's revenue by sales channel (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Distributors $ 163,556 $ 166,082 $ 448,864 $ 470,385 Direct customers 59,738 64,161 169,252 182,348 $ 223,294 $ 230,243 $ 618,116 $ 652,733 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
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 Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Cost of revenues $ 344 $ 324 $ 989 $ 914 Research and development 6,474 6,016 19,030 17,454 Selling, general and administrative 6,970 6,242 20,023 18,525 13,788 12,582 40,042 36,893 Income tax benefit 817 619 1,951 7,515 $ 12,971 $ 11,963 $ 38,091 $ 29,378 |
Significant Accounting Polici_4
Significant Accounting Policies - Basis of Presentation and Principles of Consolidation (Details) | 9 Months Ended | 12 Months Ended |
Sep. 28, 2019 | Dec. 29, 2018 | |
Significant Accounting Policies | ||
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 | ||
Significant Accounting Policies | ||
Length of fiscal year | 364 days | |
High end of range | ||
Significant Accounting Policies | ||
Length of fiscal year | 371 days |
Significant Accounting Polici_5
Significant Accounting Policies - Adoption of New Accounting Standards (Details) - USD ($) $ in Thousands | Dec. 30, 2018 | Sep. 28, 2019 | Dec. 29, 2018 |
Adoption of New Lease Accounting Standard | |||
Operating lease right-of-use assets, Statement of Financial Position | us-gaap:OtherAssetsNoncurrent | ||
Operating lease liabilities, Statement of Financial Position | us-gaap:OtherLiabilitiesCurrent us-gaap:LiabilitiesOtherThanLongtermDebtNoncurrent | ||
Financial Statement Line Item | |||
Prepaid expenses and other current assets | $ 52,609 | $ 64,650 | |
Other current liabilities | $ 71,485 | $ 81,180 | |
ASU 2016-02 - Leases | |||
Adoption of New Lease Accounting Standard | |||
Election of practical expedients package, leases | true | ||
ASU 2016-02 - Leases | Cumulative effect adjustment | |||
Financial Statement Line Item | |||
Prepaid expenses and other current assets | $ (481) | ||
Other assets, net | 18,166 | ||
Other current liabilities | 3,516 | ||
Other non-current liabilities | $ 14,169 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Earnings Per Share | ||||
Net income | $ 20,181 | $ 27,761 | $ 9,550 | $ 68,446 |
Shares used in computing basic earnings per share | 43,358 | 43,256 | 43,311 | 43,177 |
Effect of dilutive securities: | ||||
Stock-based awards and convertible debt | 1,276 | 938 | 809 | 958 |
Shares used in computing diluted earnings (loss) per share | 44,634 | 44,194 | 44,120 | 44,135 |
Earnings (loss) per share: | ||||
Basic (in dollars per share) | $ 0.47 | $ 0.64 | $ 0.22 | $ 1.59 |
Diluted (in dollars per share) | $ 0.45 | $ 0.63 | $ 0.22 | $ 1.55 |
Shares attributable to dilutive effect of conversion of debt securities | 600 | 200 | 300 | 200 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of financial instruments (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total short-term investments | $ 457,879 | $ 416,779 |
Recurring | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total cash equivalents | 133,363 | 103,148 |
Total short-term investments | 457,879 | 416,779 |
Other assets, net | 5,715 | 5,759 |
Total assets at fair value | 596,957 | 525,686 |
Recurring | Money market funds | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total cash equivalents | 128,072 | 74,990 |
Recurring | Corporate debt securities | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total cash equivalents | 5,291 | 18,820 |
Total short-term investments | 298,454 | 269,427 |
Recurring | Government debt securities | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total cash equivalents | 9,338 | |
Total short-term investments | 159,425 | 147,352 |
Recurring | Auction rate securities | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Other assets, net | 5,715 | 5,759 |
Recurring | 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 | 128,072 | 84,328 |
Total short-term investments | 80,686 | 48,141 |
Total assets at fair value | 208,758 | 132,469 |
Recurring | 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 | 128,072 | 74,990 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Government debt securities | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total cash equivalents | 9,338 | |
Total short-term investments | 80,686 | 48,141 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total cash equivalents | 5,291 | 18,820 |
Total short-term investments | 377,193 | 368,638 |
Total assets at fair value | 382,484 | 387,458 |
Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total cash equivalents | 5,291 | 18,820 |
Total short-term investments | 298,454 | 269,427 |
Recurring | Significant Other Observable Inputs (Level 2) | Government debt securities | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total short-term investments | 78,739 | 99,211 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Other assets, net | 5,715 | 5,759 |
Total assets at fair value | 5,715 | 5,759 |
Recurring | Significant Unobservable Inputs (Level 3) | Auction rate securities | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Other assets, net | $ 5,715 | $ 5,759 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Available-for-sale investments (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Dec. 29, 2018 | |
Cost | ||
Due in one year or less, Cost | $ 408,664 | |
Due after one year through ten years, Cost | 176,798 | |
Due after ten years, Cost | 10,300 | |
Total Cost | 595,762 | |
Fair Value | ||
Due in one year or less, Fair Value | 409,445 | |
Due after one year through ten years, Fair Value | 177,497 | |
Due after ten years, Fair Value | 10,015 | |
Total Fair Value | 596,957 | |
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 80,178 | $ 125,977 |
Fair value of available-for-sale securities, continuous loss position for twelve months or greater | 35,192 | 170,765 |
Total fair value of available-for-sale securities, continuous loss position | 115,370 | 296,742 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | (130) | (283) |
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses | (322) | (1,272) |
Available-for-sale securities, total gross unrealized losses | (452) | (1,555) |
Other than temporary impairment losses | ||
Other-than-temporary impairment losses | 0 | |
Government debt securities | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 23,804 | 13,278 |
Fair value of available-for-sale securities, continuous loss position for twelve months or greater | 20,922 | 88,696 |
Total fair value of available-for-sale securities, continuous loss position | 44,726 | 101,974 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | (30) | (10) |
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses | (35) | (583) |
Available-for-sale securities, total gross unrealized losses | (65) | (593) |
Corporate debt securities | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for less than twelve months | 56,374 | 112,699 |
Fair value of available-for-sale securities, continuous loss position for twelve months or greater | 8,555 | 76,310 |
Total fair value of available-for-sale securities, continuous loss position | 64,929 | 189,009 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses | (100) | (273) |
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses | (2) | (448) |
Available-for-sale securities, total gross unrealized losses | (102) | (721) |
Auction rate securities | ||
Continuous unrealized loss position, Fair Value | ||
Fair value of available-for-sale securities, continuous loss position for twelve months or greater | 5,715 | 5,759 |
Total fair value of available-for-sale securities, continuous loss position | 5,715 | 5,759 |
Continuous unrealized loss position, Gross Unrealized Losses | ||
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses | (285) | (241) |
Available-for-sale securities, total gross unrealized losses | $ (285) | $ (241) |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Auction rate securities (Details) - Auction rate securities - Significant Unobservable Inputs (Level 3) $ in Thousands | Sep. 28, 2019USD ($)itemY | Jun. 29, 2019USD ($) | Dec. 29, 2018USD ($) |
Weighted Average | Estimated yield | Discounted cash flow | |||
Quantitative information for Level 3 Fair Value Measurements Assets | |||
Unobservable Input | 0.0359 | ||
Weighted Average | Expected holding period | Discounted cash flow | |||
Quantitative information for Level 3 Fair Value Measurements Assets | |||
Unobservable Input | Y | 10 | ||
Weighted Average | Estimated discount rate | Discounted cash flow | |||
Quantitative information for Level 3 Fair Value Measurements Assets | |||
Unobservable Input | 0.0267 | ||
Recurring | |||
Quantitative information for Level 3 Fair Value Measurements Assets | |||
Fair value balance at the end of the period | $ | $ 5,715 | $ 5,647 | $ 5,759 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Activity in Level 3 financial instruments (Details) - Significant Unobservable Inputs (Level 3) - Recurring - Auction rate securities - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019 | Sep. 28, 2019 | |
Fair value assets reconciliation of changes | ||
Balance at the beginning of the period | $ 5,647 | $ 5,759 |
Gain (loss) included in other comprehensive income (loss) | 68 | (44) |
Balance at the end of the period | $ 5,715 | $ 5,715 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Fair Values of Other Financial Instruments (Details) - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 29, 2018 |
Convertible Senior Notes | ||
Fair values of other financial instruments | ||
Fair value of debt | $ 518.7 | $ 419 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Details) - Foreign currency forward contracts $ in Millions | 9 Months Ended |
Sep. 28, 2019USD ($)contract | |
Non-designated Hedges | |
Derivative Financial Instruments | |
Number of foreign currency forward contracts held | contract | 1 |
Derivative, Notional Amount | $ 5.7 |
Cash flow hedges | |
Derivative Financial Instruments | |
Derivative, Notional Amount | $ 7.2 |
Cash flow hedges | Low end of range | |
Derivative Financial Instruments | |
Maturity of contracts | 1 month |
Cash flow hedges | High end of range | |
Derivative Financial Instruments | |
Maturity of contracts | 11 months |
Balance Sheet Details (Details)
Balance Sheet Details (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Inventories | ||
Work in progress | $ 49,490 | $ 50,983 |
Finished goods | 21,963 | 23,989 |
Inventories | $ 71,453 | $ 74,972 |
Acquisitions - Z-Wave (Details)
Acquisitions - Z-Wave (Details) $ in Millions | Apr. 18, 2018USD ($) |
Z-Wave | |
Acquisitions | |
Cash consideration | $ 243 |
Debt - Convertible Senior Notes
Debt - Convertible Senior Notes (Details) $ / shares in Units, shares in Millions, $ in Millions | Mar. 06, 2017USD ($)D$ / sharesshares |
1.375% Convertible Senior Notes | |
Debt | |
Principal amount | $ | $ 400 |
Semi-annual interest rate | 1.375% |
Conversion rate, shares per $1,000 principal | 10.7744 |
Number of shares of common stock | shares | 4.3 |
Initial conversion price | $ / shares | $ 92.81 |
Debt issuance costs | $ | $ 10.6 |
1.375% Convertible Senior Notes | Conversion of Notes, Holders | |
Debt | |
Number of trading days within 30 trading day period | 20 |
Number of consecutive trading days | 30 |
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 |
Number of consecutive trading days before the five consecutive business days | 10 |
Maximum amount the sales price of the Company's stock exceeds the conversion price (as a percent) | 98.00% |
1.375% Convertible Senior Notes | Conversion of Notes, Company | |
Debt | |
Number of trading days within 30 trading day period | 20 |
Number of consecutive trading days | 30 |
Minimum amount the sales price of the Company's stock exceeds the conversion price (as a percent) | 130.00% |
Amended Credit Agreement | Credit Facility | |
Debt | |
Repayments of Lines of Credit | $ | $ 72.5 |
Debt - Carrying amount of Notes
Debt - Carrying amount of Notes (Details) - 1.375% Convertible Senior Notes - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Dec. 29, 2018 | |
Liability component | ||
Principal | $ 400,000 | $ 400,000 |
Unamortized debt discount | (30,582) | (39,298) |
Unamortized debt issuance costs | (4,616) | (5,931) |
Net carrying amount | 364,802 | 354,771 |
Equity component | ||
Net carrying amount | $ 57,735 | $ 57,735 |
Effective interest rate | 4.75% | |
Amortization period of debt discount and debt issuance costs | 2 years 4 months 24 days |
Debt - Interest expense (Detail
Debt - Interest expense (Details) - 1.375% Convertible Senior Notes - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Interest expense related to the Notes | ||||
Contractual interest expense | $ 1,360 | $ 1,360 | $ 4,110 | $ 4,125 |
Amortization of debt discount | 2,930 | 2,801 | 8,716 | 8,322 |
Amortization of debt issuance costs | 442 | 423 | 1,315 | 1,256 |
Interest Expense, Total | $ 4,732 | $ 4,584 | $ 14,141 | $ 13,703 |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) - USD ($) $ in Millions | Aug. 07, 2019 | Sep. 28, 2019 |
Revolving credit facility, other than swingline loans | Federal Funds | ||
Debt | ||
Interest rate margin (as a percent) | 0.50% | |
Revolving credit facility, other than swingline loans | Eurodollar Base Rate | ||
Debt | ||
Interest rate margin (as a percent) | 1.00% | |
Revolving credit facility, other than swingline loans | Eurodollar Base Rate | Low end of range | ||
Debt | ||
Interest rate margin (as a percent) | 1.00% | |
Revolving credit facility, other than swingline loans | Eurodollar Base Rate | High end of range | ||
Debt | ||
Interest rate margin (as a percent) | 1.75% | |
Revolving credit facility, other than swingline loans | Base Rate | Low end of range | ||
Debt | ||
Interest rate margin (as a percent) | 0.00% | |
Revolving credit facility, other than swingline loans | Base Rate | High end of range | ||
Debt | ||
Interest rate margin (as a percent) | 0.75% | |
Amended Credit Agreement | Credit Facility | Scenario: Company's option to increase borrowing capacity | ||
Debt | ||
Additional increase in borrowing capacity of the line of credit available at the entity's option | $ 250 | |
Additional increase in borrowing capacity based on EBITDA (as a percent) | 100.00% | |
Maximum secured leverage ratio | 3.25 | |
Amended Credit Agreement | Credit Facility | Scenario: Credit facility debt covenants | ||
Debt | ||
Maximum leverage ratio | 4.25 | |
Maximum secured leverage ratio | 3.50 | |
Minimum interest coverage ratio | 2.50 | |
Amended Credit Agreement | Revolving Credit Facility | ||
Debt | ||
Maximum borrowing capacity | $ 400 | |
Amended Credit Agreement | Letter of Credit | ||
Debt | ||
Maximum borrowing capacity | 25 | |
Amended Credit Agreement | Swingline Loans | ||
Debt | ||
Maximum borrowing capacity | $ 10 |
Leases - Supplemental Lease Inf
Leases - Supplemental Lease Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019USD ($) | Sep. 28, 2019USD ($) | |
Leases | ||
Operating lease costs | $ 1,400 | $ 4,400 |
Balance Sheet Information | ||
Operating lease right-of-use assets | 17,276 | 17,276 |
Operating lease liabilities | $ 18,465 | 18,465 |
Cash Flow Information | ||
Cash paid for operating lease liabilities | 4,563 | |
Right-of-use assets obtained in exchange for operating lease obligations | $ 2,488 | |
Operating Lease Information | ||
Weighted-average remaining lease term | 4 years 8 months 12 days | 4 years 8 months 12 days |
Weighted-average discount rate | 5.25% | 5.25% |
Leases - Maturities of operatin
Leases - Maturities of operating lease liabilities (Details) $ in Thousands | Sep. 28, 2019USD ($) |
Maturities of operating lease liabilities | |
2019 | $ 1,457 |
2020 | 5,419 |
2021 | 4,368 |
2022 | 3,668 |
2023 | 3,042 |
Thereafter | 3,770 |
Total lease payments | 21,724 |
Less imputed interest | (3,259) |
Total lease liabilities | $ 18,465 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock and Share Repurchase Program (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Oct. 31, 2018 | |
Share Repurchase Programs | ||||
Value of shares repurchased and retired | $ 20,876 | $ 26,716 | $ 24,272 | |
Common Stock | ||||
Common Stock | ||||
Number of shares issued during the period | 600 | |||
Share Repurchase Programs | ||||
Number of shares repurchased and retired | 221 | 301 | 257 | |
Program Authorization Date October 2017 | ||||
Share Repurchase Programs | ||||
Program amount authorized to repurchase | $ 200,000 | |||
Program Authorization Date October 2017 | Common Stock | ||||
Share Repurchase Programs | ||||
Number of shares repurchased and retired | 300 | 300 | ||
Value of shares repurchased and retired | $ 26,700 | $ 24,300 |
Stockholders' Equity - Reclassi
Stockholders' Equity - Reclassified from AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Amounts Reclassified from AOCI | ||||
Operating expenses | $ (110,270) | $ (110,497) | $ (333,545) | $ (324,310) |
Income before income taxes | 21,866 | 22,307 | 38,031 | 59,063 |
Income tax expense (benefit) | 1,685 | (5,454) | 28,481 | (9,383) |
Net income | 20,181 | 27,761 | 9,550 | 68,446 |
Reclassifications From Accumulated Other Comprehensive Income (Loss) | ||||
Amounts Reclassified from AOCI | ||||
Income before income taxes | 14 | (131) | (417) | (213) |
Income tax expense (benefit) | 3 | (28) | (88) | (45) |
Net income | 11 | (103) | (329) | (168) |
Reclassifications From Accumulated Other Comprehensive Income (Loss) | Gains (losses) on available-for-sales securities | ||||
Amounts Reclassified from AOCI | ||||
Interest income and other, net | 188 | 188 | (49) | |
Reclassifications From Accumulated Other Comprehensive Income (Loss) | Losses on cash flow hedges | ||||
Amounts Reclassified from AOCI | ||||
Operating expenses | $ (174) | $ (131) | $ (605) | $ (164) |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Revenues | ||||
Revenues | $ 223,294 | $ 230,243 | $ 618,116 | $ 652,733 |
Revenue from performance obligations | 14,100 | 15,500 | 16,900 | 23,900 |
Distributors | ||||
Revenues | ||||
Revenues | 163,556 | 166,082 | 448,864 | 470,385 |
Direct customers | ||||
Revenues | ||||
Revenues | 59,738 | 64,161 | 169,252 | 182,348 |
Internet of Things | ||||
Revenues | ||||
Revenues | 129,403 | 125,390 | 360,488 | 344,504 |
Infrastructure | ||||
Revenues | ||||
Revenues | 45,150 | 52,554 | 134,824 | 153,494 |
Broadcast | ||||
Revenues | ||||
Revenues | 34,100 | 36,081 | 86,695 | 106,318 |
Access | ||||
Revenues | ||||
Revenues | $ 14,641 | $ 16,218 | $ 36,109 | $ 48,417 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Stock-based compensation costs | ||||
Stock based compensation costs | $ 13,788 | $ 12,582 | $ 40,042 | $ 36,893 |
Income tax benefit | 817 | 619 | 1,951 | 7,515 |
Share based compensation costs after tax | 12,971 | 11,963 | 38,091 | 29,378 |
Total unrecognized compensation costs related to awards | 69,100 | $ 69,100 | ||
Weighted-average period of recognition of unrecognized compensation costs | 2 years 2 months 12 days | |||
Cost of revenues | ||||
Stock-based compensation costs | ||||
Stock based compensation costs | 344 | 324 | $ 989 | 914 |
Research and development | ||||
Stock-based compensation costs | ||||
Stock based compensation costs | 6,474 | 6,016 | 19,030 | 17,454 |
Selling, general and administrative | ||||
Stock-based compensation costs | ||||
Stock based compensation costs | $ 6,970 | $ 6,242 | $ 20,023 | $ 18,525 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Income Taxes | ||||
Provision (benefit) for income taxes | $ 1,685 | $ (5,454) | $ 28,481 | $ (9,383) |
Effective income tax rate (as a percent) | 7.70% | (24.40%) | 74.90% | (15.90%) |
Discrete income tax expense | $ 28,100 | |||
Gross unrecognized tax benefits | 2,400 | $ 2,400 | ||
Gross unrecognized tax benefits which would affect the effective tax rate if recognized | $ 1,900 | 1,900 | ||
Unrecognized tax benefits as a result of a lapse in the statute of limitations | 200 | |||
Norwegian | 2013 | ||||
Income Taxes | ||||
Adjustment to the pricing of the intercompany transaction | $ 15,600 |