Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Jun. 30, 2014 | Jul. 24, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'NETSCOUT SYSTEMS INC | ' |
Entity Central Index Key | '0001078075 | ' |
Current Fiscal Year End Date | '--03-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2015 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Trading Symbol | 'NTCT | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 41,052,266 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $88,974 | $102,076 |
Marketable securities | 88,890 | 75,234 |
Accounts receivable, net of allowance for doubtful accounts of $263 and $313 at June 30, 2014 and March 31, 2014, respectively | 32,955 | 60,518 |
Inventories | 11,026 | 12,580 |
Prepaid income taxes | 1,207 | 1,012 |
Deferred income taxes | 14,414 | 15,846 |
Prepaid expenses and other current assets | 9,328 | 11,496 |
Total current assets | 246,794 | 278,762 |
Fixed assets, net | 22,742 | 23,098 |
Goodwill | 203,034 | 203,446 |
Intangible assets, net | 56,643 | 58,513 |
Long-term marketable securities | 56,580 | 41,484 |
Other assets | 2,344 | 2,460 |
Total assets | 588,137 | 607,763 |
Current liabilities: | ' | ' |
Accounts payable | 9,888 | 11,541 |
Accrued compensation | 23,749 | 34,901 |
Accrued other | 6,182 | 6,430 |
Income taxes payable | 0 | 791 |
Deferred revenue | 101,871 | 109,301 |
Total current liabilities | 141,690 | 162,964 |
Other long-term liabilities | 2,275 | 2,370 |
Deferred tax liability | 2,747 | 2,757 |
Accrued long-term retirement benefits | 1,582 | 1,581 |
Long-term deferred revenue | 22,848 | 24,639 |
Contingent liabilities, net of current portion | 4,369 | 4,291 |
Total liabilities | 175,511 | 198,602 |
Commitments and contingencies (Note 11) | ' | ' |
Preferred stock, $0.001 par value: | ' | ' |
5,000,000 shares authorized; no shares issued or outstanding at June 30, 2014 and March 31, 2014 | 0 | 0 |
Common stock, $0.001 par value: | ' | ' |
150,000,000 shares authorized; 50,111,676 and 49,922,959 shares issued and 41,042,273 and 41,165,784 shares outstanding at June 30, 2014 and March 31, 2014, respectively | 50 | 50 |
Additional paid-in capital | 278,106 | 273,574 |
Accumulated other comprehensive income | 2,416 | 2,772 |
Treasury stock at cost, 9,069,403 and 8,757,175 shares at June 30, 2014 and March 31, 2014, respectively | -129,989 | -117,802 |
Retained earnings | 262,043 | 250,567 |
Total stockholders’ equity | 412,626 | 409,161 |
Total liabilities and stockholders’ equity | $588,137 | $607,763 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Accounts receivable, allowance for doubtful accounts | $263 | $313 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ' | ' |
Preferred stock, shares outstanding | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 50,111,676 | 49,922,959 |
Common stock, shares outstanding | 41,042,273 | 41,165,784 |
Treasury stock, shares | 9,069,403 | 8,757,175 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Revenue: | ' | ' |
Product | $64,366 | $42,977 |
Service | 43,486 | 38,828 |
Total revenue | 107,852 | 81,805 |
Cost of revenue: | ' | ' |
Product | 13,766 | 9,773 |
Service | 8,830 | 7,149 |
Total cost of revenue | 22,596 | 16,922 |
Gross profit | 85,256 | 64,883 |
Operating expenses: | ' | ' |
Research and development | 18,767 | 15,965 |
Sales and marketing | 37,272 | 32,200 |
General and administrative | 8,753 | 6,981 |
Amortization of acquired intangible assets | 862 | 854 |
Total operating expenses | 65,654 | 56,000 |
Income from operations | 19,602 | 8,883 |
Interest and other income (expense), net: | ' | ' |
Interest income | 104 | 87 |
Interest expense | -194 | -190 |
Other income, net | -41 | 30 |
Total interest and other income (expense), net | -131 | -73 |
Income before income tax expense | 19,471 | 8,810 |
Income tax expense | 7,995 | 3,557 |
Net income | $11,476 | $5,253 |
Basic net income per share (in dollars per share) | $0.28 | $0.13 |
Diluted net income per share (in dollars per share) | $0.27 | $0.12 |
Weighted average common shares outstanding used in computing: | ' | ' |
Net income per share - basic (in shares) | 41,081 | 41,405 |
Net income per share - diluted (in shares) | 41,808 | 42,068 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' |
Net income | $11,476 | $5,253 |
Other comprehensive income: | ' | ' |
Cumulative translation adjustments | -432 | 291 |
Changes in market value of investments: | ' | ' |
Changes in unrealized gains (losses) | 44 | -35 |
Total net change in market value of investments | 44 | -35 |
Changes in market value of derivatives: | ' | ' |
Changes in market value of derivatives, net of taxes (benefit) of $86 and ($82) | 138 | -116 |
Reclassification adjustment for net (losses) gains included in net income, net of (benefits) taxes of ($63) and $39 | -106 | 67 |
Total net change in market value of derivatives | 32 | -49 |
Other comprehensive (loss) income | -356 | 207 |
Comprehensive income | $11,120 | $5,460 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' |
Changes in market value of derivatives, taxes | $86 | ($82) |
Reclassification adjustment for net losses included in net income, benefits | ($63) | $39 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $11,476 | $5,253 |
Adjustments to reconcile net income to cash provided by operating activities, net of the effects of acquisitions: | ' | ' |
Depreciation and amortization | 4,876 | 4,859 |
Loss on disposal of fixed assets | 0 | 24 |
Deal related compensation expense and accretion charges | 38 | 36 |
Share-based compensation expense associated with equity awards | 3,302 | 2,812 |
Net change in fair value of contingent and contractual liabilities | -9 | -264 |
Deferred income taxes | 1,409 | 618 |
Other losses (gains) | 28 | -7 |
Changes in assets and liabilities | ' | ' |
Accounts receivable | 27,551 | 22,988 |
Inventories | 612 | -5,158 |
Prepaid expenses and other assets | 2,053 | 744 |
Accounts payable | -1,558 | 1,970 |
Accrued compensation and other expenses | -11,594 | -11,999 |
Income taxes payable | -791 | -114 |
Deferred revenue | -9,193 | -3,149 |
Net cash provided by operating activities | 28,200 | 18,613 |
Cash flows from investing activities: | ' | ' |
Purchase of marketable securities | -42,506 | -18,081 |
Proceeds from maturity of marketable securities | 13,798 | 12,112 |
Purchase of fixed assets | -1,865 | -2,270 |
Purchase of intangible assets | -71 | -110 |
Decrease (increase) in deposits | 17 | -46 |
Net cash used in investing activities | -30,627 | -8,395 |
Cash flows from financing activities: | ' | ' |
Issuance of common stock under stock plans | 8 | 213 |
Payment of contingent consideration | 0 | -841 |
Treasury stock repurchases | -12,187 | -7,470 |
Excess tax benefit from share-based compensation awards | 1,431 | 727 |
Net cash used in financing activities | -10,748 | -7,371 |
Effect of exchange rate changes on cash and cash equivalents | 73 | -50 |
Net (decrease) increase in cash and cash equivalents | -13,102 | 2,797 |
Cash and cash equivalents, beginning of period | 102,076 | 99,930 |
Cash and cash equivalents, end of period | 88,974 | 102,727 |
Supplemental disclosures: | ' | ' |
Cash paid for income taxes | 6,142 | 3,795 |
Non-cash transactions: | ' | ' |
Transfers of inventory to fixed assets | 940 | 1,781 |
Additions to property, plant and equipment included in accounts payable | 95 | 3 |
Gross decrease in contractual liability relating to fair value adjustment | -49 | -49 |
Gross increase (decrease) in contingent consideration liability relating to fair value adjustment | $40 | ($215) |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
BASIS OF PRESENTATION | ' |
BASIS OF PRESENTATION | |
The accompanying unaudited interim consolidated financial statements have been prepared by NetScout Systems, Inc., or NetScout or the Company. Certain information and footnote disclosures normally included in financial statements prepared under generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company’s financial position, results of operations and cash flows. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results reported in these consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2014. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This new guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016 (April 1, 2017 for the Company); early adoption is not permitted. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance. The Company has not determined the potential effects on the consolidated financial statements. |
CONCENTRATION_OF_CREDIT_RISK_A
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS | 3 Months Ended |
Jun. 30, 2014 | |
Risks and Uncertainties [Abstract] | ' |
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS | ' |
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS | |
Financial instruments that potentially subject us to concentration of credit risk consist primarily of investments, trade accounts receivable and accounts payable. Our cash, cash equivalents, and marketable securities are placed with financial institutions with high credit standings. | |
At June 30, 2014, the Company had no indirect channel partner which accounted for more than 10% of the accounts receivable balance, while one direct customer accounted for more than 10% of the accounts receivable balance. At March 31, 2014, one direct customer accounted for more than 10% of the accounts receivable balance, while no indirect channel partner accounted for more than 10% of the accounts receivable balance. | |
During the three months ended June 30, 2014, two direct customers accounted for more than 10% of our total revenue, while no indirect channel partner accounted for more than 10% of total revenue during the three months ended June 30, 2014. During the three months ended June 30, 2013, one direct customer accounted for more than 10% of our total revenue, while no indirect channel partner accounted for more than 10% of total revenue. | |
Historically, the Company has not experienced any significant failure of its customers to meet their payment obligations nor does the Company anticipate material non-performance by its customers in the future; accordingly, the Company does not require collateral from its customers. However, if the Company’s assumptions are incorrect, there could be an adverse impact on its allowance for doubtful accounts. |
SHAREBASED_COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||
SHARE-BASED COMPENSATION | ' | |||||||
SHARE-BASED COMPENSATION | ||||||||
The following is a summary of share-based compensation expense including restricted stock units and employee stock purchases made under our employee stock purchase plan (ESPP) based on estimated fair values within the applicable cost and expense lines identified below (in thousands): | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Cost of product revenue | $ | 60 | $ | 44 | ||||
Cost of service revenue | 228 | 146 | ||||||
Research and development | 1,026 | 896 | ||||||
Sales and marketing | 963 | 845 | ||||||
General and administrative | 1,025 | 881 | ||||||
$ | 3,302 | $ | 2,812 | |||||
Employee Stock Purchase Plan – The Company maintains an ESPP for all eligible employees as described in the Company’s Annual Report on Form 10-K for the year ended March 31, 2014. Under the ESPP, shares of the Company’s common stock may be purchased on the last day of each bi-annual offering period at 85% of the fair value on the last day of such offering period. The offering periods run from March 1 through August 31 and from September 1 through February 28 of each year. |
CASH_CASH_EQUIVALENTS_AND_MARK
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | 3 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | ' | |||||||||||
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | ||||||||||||
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents and those investments with original maturities greater than three months to be marketable securities. Cash and cash equivalents consisted of money market instruments and cash maintained with various financial institutions at June 30, 2014 and March 31, 2014. | ||||||||||||
Marketable Securities | ||||||||||||
The following is a summary of marketable securities held by NetScout at June 30, 2014 classified as short-term and long-term (in thousands): | ||||||||||||
Amortized | Unrealized | Fair | ||||||||||
Cost | Gains (Losses) | Value | ||||||||||
Type of security: | ||||||||||||
U.S. government and municipal obligations | $ | 61,764 | $ | 37 | $ | 61,801 | ||||||
Commercial paper | 23,881 | 1 | 23,882 | |||||||||
Corporate bonds | 3,205 | 2 | 3,207 | |||||||||
Total short-term marketable securities | 88,850 | 40 | 88,890 | |||||||||
U.S. government and municipal obligations | 53,663 | 30 | 53,693 | |||||||||
Corporate bonds | 2,888 | (1 | ) | 2,887 | ||||||||
Total long-term marketable securities | 56,551 | 29 | 56,580 | |||||||||
Total marketable securities | $ | 145,401 | $ | 69 | $ | 145,470 | ||||||
The following is a summary of marketable securities held by NetScout at March 31, 2014, classified as short-term and long-term (in thousands): | ||||||||||||
Amortized | Unrealized | Fair | ||||||||||
Cost | Gains (Losses) | Value | ||||||||||
Type of security: | ||||||||||||
U.S. government and municipal obligations | $ | 53,854 | $ | 26 | $ | 53,880 | ||||||
Commercial paper | 14,581 | 0 | 14,581 | |||||||||
Corporate bonds | 6,772 | 1 | 6,773 | |||||||||
Total short-term marketable securities | 75,207 | 27 | 75,234 | |||||||||
U.S. government and municipal obligations | 37,875 | 2 | 37,877 | |||||||||
Corporate bonds | 3,611 | (4 | ) | 3,607 | ||||||||
Total long-term marketable securities | 41,486 | (2 | ) | 41,484 | ||||||||
Total marketable securities | $ | 116,693 | $ | 25 | $ | 116,718 | ||||||
Contractual maturities of the Company’s marketable securities held at June 30, 2014 and March 31, 2014 were as follows (in thousands): | ||||||||||||
June 30, | March 31, | |||||||||||
2014 | 2014 | |||||||||||
Available-for-sale securities: | ||||||||||||
Due in 1 year or less | $ | 88,890 | $ | 75,234 | ||||||||
Due after 1 year through 5 years | 56,580 | 41,484 | ||||||||||
$ | 145,470 | $ | 116,718 | |||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||||||||
The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant non-observable inputs. The following tables present the Company’s financial assets and liabilities measured on a recurring basis using the fair value hierarchy as of June 30, 2014 and March 31, 2014 (in thousands). | ||||||||||||||||
Fair Value Measurements at | ||||||||||||||||
June 30, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Cash and cash equivalents | $ | 88,974 | $ | — | $ | — | $ | 88,974 | ||||||||
U.S. government and municipal obligations | 40,929 | 74,565 | — | 115,494 | ||||||||||||
Commercial paper | — | 23,882 | — | 23,882 | ||||||||||||
Corporate bonds | 6,094 | — | — | 6,094 | ||||||||||||
Derivative financial instruments | — | 358 | — | 358 | ||||||||||||
$ | 135,997 | $ | 98,805 | $ | — | $ | 234,802 | |||||||||
LIABILITIES: | ||||||||||||||||
Contingent purchase consideration | $ | — | $ | — | $ | (4,369 | ) | $ | (4,369 | ) | ||||||
Derivative financial instruments | — | (102 | ) | — | (102 | ) | ||||||||||
$ | — | $ | (102 | ) | $ | (4,369 | ) | $ | (4,471 | ) | ||||||
Fair Value Measurements at | ||||||||||||||||
March 31, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Cash and cash equivalents | $ | 82,079 | $ | 19,997 | $ | — | $ | 102,076 | ||||||||
U.S. government and municipal obligations | 21,992 | 69,765 | — | 91,757 | ||||||||||||
Commercial paper | — | 14,581 | — | 14,581 | ||||||||||||
Corporate bonds | 10,380 | — | — | 10,380 | ||||||||||||
Derivative financial instruments | — | 368 | — | 368 | ||||||||||||
$ | 114,451 | $ | 104,711 | $ | — | $ | 219,162 | |||||||||
LIABILITIES: | ||||||||||||||||
Contingent purchase consideration | $ | — | $ | — | $ | (4,291 | ) | $ | (4,291 | ) | ||||||
Contingent contractual non-compliance liability | — | — | (49 | ) | (49 | ) | ||||||||||
Derivative financial instruments | — | (139 | ) | — | (139 | ) | ||||||||||
$ | — | $ | (139 | ) | $ | (4,340 | ) | $ | (4,479 | ) | ||||||
This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, the Company measures certain financial assets and liabilities at fair value, including marketable securities and derivative financial instruments. | ||||||||||||||||
The Company’s Level 1 investments are classified as such because they are valued using quoted market prices or alternative pricing sources with reasonable levels of price transparency. | ||||||||||||||||
The Company’s Level 2 investments are classified as such because fair value is being calculated using data from similar but not identical sources, or a discounted cash flow model using the contractual interest rate as compared to the underlying interest yield curve. The Company's derivative financial instruments consist of forward foreign exchange contracts and are classified as Level 2 because the fair values of these derivatives are determined using models based on market observable inputs, including spot prices for foreign currencies and credit derivatives, as well as an interest rate factor. The Company classifies municipal obligations as level 2 because the fair values are determined using quoted prices from markets the Company considers to be inactive. Commercial paper is classified as Level 2 because the Company uses market information from similar but not identical instruments and discounted cash flow models based on interest rate yield curves to determine fair value. For further information on the Company's derivative instruments refer to Note 8. | ||||||||||||||||
The Company’s contingent purchase consideration at June 30, 2014 and March 31, 2014 was classified as Level 3 in the fair value hierarchy. The contingent contractual non-compliance liability was also classified as Level 3 at March 31, 2014. As of June 30, 2014, the balance is $0. The contingent contractual obligation has been reduced to zero as NetScout has either settled those liabilities or believes that because of the passage of time that the probability of a future negative settlement is essentially zero. These liabilities are valued by probability weighting expected payment scenarios and then applying a discount based on the present value of the future cash flow streams. They are classified as Level 3 because the probability weighting of future payment scenarios is based on assumptions developed by management. | ||||||||||||||||
The following table sets forth a reconciliation of changes in the fair value of the Company’s Level 3 financial liabilities for the three months ended June 30, 2014 (in thousands): | ||||||||||||||||
Contingent | Contingent | |||||||||||||||
Purchase | Contractual | |||||||||||||||
Consideration | Non-compliance | |||||||||||||||
Liability | ||||||||||||||||
Balance at beginning of period | $ | (4,291 | ) | $ | (49 | ) | ||||||||||
(Increase) / decrease in fair value and accretion expense (included within research and development expense) | (78 | ) | 49 | |||||||||||||
Balance at end of period | $ | (4,369 | ) | $ | — | |||||||||||
The Company has updated the probabilities used in the fair value calculation of the contingent liabilities at June 30, 2014 which reduced the liability by $9 thousand and is included as part of earnings for the three months ended June 30, 2014. The fair value of the contingent purchase consideration was estimated by applying a probability based model, which utilizes significant inputs that are unobservable in the market. Key assumptions include a 3.3% discount rate, and a percent weighted-probability of the settlement of the contingent contractual non-compliance liability. Deal related compensation expense, accretion charges and changes related to settlements of contractual non-compliance liabilities for the three months ended June 30, 2014 was $38 thousand and was included as part of earnings. |
INVENTORIES
INVENTORIES | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
INVENTORIES | ' | |||||||
INVENTORIES | ||||||||
Inventories are stated at the lower of actual cost or net realizable value. Cost is determined by using the first in, first out (FIFO) method. Inventories consist of the following (in thousands): | ||||||||
June 30, | March 31, | |||||||
2014 | 2014 | |||||||
Raw materials | $ | 6,346 | $ | 6,025 | ||||
Work in process | 367 | 161 | ||||||
Finished goods | 4,313 | 6,394 | ||||||
$ | 11,026 | $ | 12,580 | |||||
GOODWILL_AND_INTANGIBLE_ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||
GOODWILL AND INTANGIBLE ASSETS | ' | |||||||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||||||||
Goodwill | ||||||||||||
The Company has two reporting units: (1) Unified Service Delivery and (2) Test Optimization. As of June 30, 2014 and March 31, 2014, goodwill attributable to the Unified Service Delivery reporting unit was $200.6 million and $201.0 million, respectively. Goodwill attributable to the Test Optimization reporting unit was $2.4 million as of June 30, 2014 and March 31, 2014. Goodwill is tested for impairment at a reporting unit level at least annually, or on an interim basis if an event occurs or circumstances change that would, more likely than not, reduce the fair value of the reporting unit below its carrying value. | ||||||||||||
The change in the carrying amount of goodwill for the three months ended June 30, 2014 is due to the impact of foreign currency translation adjustments related to asset balances that are recorded in currencies other than the U.S. Dollar. | ||||||||||||
The changes in the carrying amount of goodwill for the three months ended June 30, 2014 are as follows (in thousands): | ||||||||||||
Three Months Ended | ||||||||||||
June 30, 2014 | ||||||||||||
Balance at March 31, 2014 | $ | 203,446 | ||||||||||
Foreign currency translation impact | (412 | ) | ||||||||||
Balance as of June 30, 2014 | $ | 203,034 | ||||||||||
Intangible Assets | ||||||||||||
The net carrying amounts of intangible assets were $56.6 million and $58.5 million as of June 30, 2014 and March 31, 2014, respectively. Intangible assets acquired in a business combination are recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition. The Company amortizes intangible assets over their estimated useful lives, except for the acquired trade name which resulted from the Network General Central Corporation (Network General) acquisition, which has an indefinite life and thus is not amortized. The carrying value of the indefinite lived trade name is evaluated for potential impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. | ||||||||||||
During the fiscal year ended March 31, 2014, the Company acquired certain rights to Accanto Systems, S.r.l. (Accanto) software not previously purchased as part of the acquisition transaction in fiscal year 2013 for $500 thousand. This amount is included within developed technology and is being amortized using the economic benefit period over 6.3 years. | ||||||||||||
During the fiscal year ended March 31, 2014, the Company made an agreement to acquire a technology license for $300 thousand. This amount is included within developed technology as of March 31, 2014 and is being amortized using the economic benefit period over 3 years. | ||||||||||||
Intangible assets include an indefinite lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets as of June 30, 2014 (in thousands): | ||||||||||||
Cost | Accumulated | Net | ||||||||||
Amortization | ||||||||||||
Developed technology | $ | 31,872 | $ | (24,143 | ) | $ | 7,729 | |||||
Customer relationships | 38,780 | (14,789 | ) | 23,991 | ||||||||
Distributor relationships | 1,984 | (642 | ) | 1,342 | ||||||||
Core technology | 7,541 | (2,980 | ) | 4,561 | ||||||||
Non-compete agreements | 350 | (320 | ) | 30 | ||||||||
Other | 840 | (450 | ) | 390 | ||||||||
$ | 81,367 | $ | (43,324 | ) | $ | 38,043 | ||||||
Intangible assets include an indefinite lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets as of March 31, 2014 (in thousands): | ||||||||||||
Cost | Accumulated | Net | ||||||||||
Amortization | ||||||||||||
Developed technology | $ | 31,946 | $ | (23,524 | ) | $ | 8,422 | |||||
Customer relationships | 38,801 | (14,046 | ) | 24,755 | ||||||||
Distributor relationships | 2,014 | (568 | ) | 1,446 | ||||||||
Core technology | 7,572 | (2,701 | ) | 4,871 | ||||||||
Non-compete agreements | 355 | (295 | ) | 60 | ||||||||
Other | 769 | (410 | ) | 359 | ||||||||
$ | 81,457 | $ | (41,544 | ) | $ | 39,913 | ||||||
Amortization of software and core technology included as cost of product revenue was $934 thousand and $819 thousand for the three months ended June 30, 2014 and 2013, respectively. Amortization of other intangible assets included as operating expense was $901 thousand and $854 thousand for the three months ended June 30, 2014 and 2013, respectively. | ||||||||||||
The following is the expected future amortization expense as of June 30, 2014 for the years ended March 31 (in thousands): | ||||||||||||
2015 (remaining nine months) | $ | 5,319 | ||||||||||
2016 | 6,644 | |||||||||||
2017 | 6,031 | |||||||||||
2018 | 5,134 | |||||||||||
2019 | 4,112 | |||||||||||
Thereafter | 10,803 | |||||||||||
$ | 38,043 | |||||||||||
The weighted average amortization period of developed technology and core technology is 6.7 years. The weighted average amortization period for customer and distributor relationships is 13.3 years. The weighted average amortization period for amortizing all intangible assets is 10.1 years. |
DERIVATIVE_INSTRUMENTS_AND_HED
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended | |||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||||||||||||||||||||||||
NetScout operates internationally and, in the normal course of business, is exposed to fluctuations in foreign currency exchange rates. The exposures result from costs that are denominated in currencies other than the U.S. Dollar, primarily the Euro, British Pound, Canadian Dollar, and Indian Rupee. The Company manages its foreign cash flow risk by hedging forecasted cash flows for operating expenses denominated in foreign currencies for up to twelve months, within specified guidelines through the use of forward contracts. The Company enters into foreign currency exchange contracts to hedge cash flow exposures from costs that are denominated in currencies other than the U.S. Dollar. These hedges are designated as cash flow hedges at inception. | ||||||||||||||||||||||||||||
All of the Company’s derivative instruments are utilized for risk management purposes, and the Company does not use derivatives for speculative trading purposes. These contracts will mature over the next twelve months and are expected to impact earnings on or before maturity. | ||||||||||||||||||||||||||||
The notional amounts and fair values of derivative instruments in the consolidated balance sheets as of June 30, 2014 and March 31, 2014 were as follows (in thousands): | ||||||||||||||||||||||||||||
Notional Amounts (a) | Other Current Assets | Accrued Other Liabilities | ||||||||||||||||||||||||||
June 30, | March 31, | June 30, | March 31, | June 30, | March 31, | |||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2014 | 2014 | |||||||||||||||||||||||
Derivatives Designated as Hedging Instruments: | ||||||||||||||||||||||||||||
Forward contracts | $ | 16,624 | $ | 17,483 | $ | 358 | $ | 368 | $ | 102 | $ | 139 | ||||||||||||||||
(a) | Notional amounts represent the gross contract/notional amount of the derivatives outstanding. | |||||||||||||||||||||||||||
The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the three months ended June 30, 2014 and 2013 (in thousands): | ||||||||||||||||||||||||||||
Derivatives in Cash | Effective Portion | Ineffective Portion | ||||||||||||||||||||||||||
Flow Hedging | ||||||||||||||||||||||||||||
Relationships | Gain (Loss) Recognized in | Gain (Loss) Reclassified from | Gain (Loss) Recognized in Income (Amount | |||||||||||||||||||||||||
OCI on Derivative | Accumulated OCI into Income | Excluded from Effectiveness Testing) | ||||||||||||||||||||||||||
(a) | (b) | (c) | ||||||||||||||||||||||||||
June 30, 2014 | June 30, 2013 | Location | June 30, 2014 | June 30, 2013 | Location | June 30, 2014 | June 30, 2013 | |||||||||||||||||||||
Forward contracts | $ | (224 | ) | $ | (198 | ) | Research and | $ | 10 | $ | (16 | ) | Research and | $ | 63 | $ | 68 | |||||||||||
development | development | |||||||||||||||||||||||||||
Sales and | 159 | (90 | ) | Sales and | 4 | 1 | ||||||||||||||||||||||
marketing | marketing | |||||||||||||||||||||||||||
$ | (224 | ) | $ | (198 | ) | $ | 169 | $ | (106 | ) | $ | 67 | $ | 69 | ||||||||||||||
(a) | The amount represents the change in fair value of derivative contracts due to changes in spot rates. | |||||||||||||||||||||||||||
(b) | The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. | |||||||||||||||||||||||||||
(c) | The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
LONGTERM_DEBT
LONG-TERM DEBT | 3 Months Ended |
Jun. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
LONG-TERM DEBT | ' |
LONG-TERM DEBT | |
On November 22, 2011, the Company entered into a credit facility (the Credit Agreement) with a syndicate of lenders led by KeyBank National Association (KeyBank) providing the Company with a $250 million revolving credit facility, which may be increased to $300 million at any time up to 90 days before maturity. The revolving credit facility includes a swing line loan sub-facility of up to $10 million and a letter of credit sub-facility of up to $10 million. The credit facility under the Credit Agreement matures on November 21, 2016. As of June 30, 2014, there were no amounts outstanding under this credit facility. | |
At the Company’s election, revolving loans under the Credit Agreement bear interest at either (a) a rate per annum equal to the highest of (1) KeyBank’s prime rate, (2) 0.50% in excess of the federal funds effective rate, or (3) one hundred (100.00) basis points in excess of the London Interbank Offered Rate (LIBOR) for one-month interest periods, or the Base Rate; or (b) the one-, two-, three-, or six-month per annum LIBOR, as selected by the Company, multiplied by the statutory reserve adjustment, or collectively, the Eurodollar Rate, in each case plus an applicable margin. Swing line loans will bear interest at the Base Rate plus the applicable Base Rate margin. The applicable margin depends on the Company’s leverage ratio, ranging from 100 basis points for Base Rate loans and 200 basis points for Eurodollar Rate loans if the Company’s consolidated leverage ratio is 2.50 to 1.00 or higher, down to 25 basis points for Base Rate loans and 125 basis points for Eurodollar Rate loans if the Company’s consolidated leverage ratio is 1.00 to 1.00 or less. | |
The Company may prepay loans under the Credit Agreement at any time, without penalty, subject to certain notice requirements. Debt is recorded at the amount drawn on the revolving credit facility plus interest based on floating rates reflective of changes in the market which approximates fair value. | |
The loans are guaranteed by each of the Company’s domestic subsidiaries and are collateralized by all of the assets of the Company and its domestic subsidiaries, as well as 65% of the capital stock of the Company’s foreign subsidiaries directly owned by the Company and its domestic subsidiaries. The Credit Agreement generally prohibits any other liens on the assets of the Company and its subsidiaries, subject to certain exceptions as described in the Credit Agreement. The Credit Agreement contains certain covenants applicable to the Company and its subsidiaries, including, without limitation, limitations on additional indebtedness, liens, various fundamental changes (including material mergers and dispositions of assets), dividends and distributions, capital expenditures, investments (including material acquisitions and investments in foreign subsidiaries), transactions with affiliates, sale-leaseback transactions, hedge agreements, payment of junior financing, material changes in business, and other limitations customary in senior secured credit facilities. In addition, the Company is required to maintain certain consolidated leverage and interest coverage ratios as well as a minimum liquidity amount. As of June 30, 2014, the Company was in compliance with all of these covenants. |
RESTRUCTURING_CHARGES
RESTRUCTURING CHARGES | 3 Months Ended | |||
Jun. 30, 2014 | ||||
Restructuring and Related Activities [Abstract] | ' | |||
RESTRUCTURING CHARGES | ' | |||
RESTRUCTURING CHARGES | ||||
During the fiscal year ended March 31, 2013, the Company restructured part of its international sales organization related to an overlap of personnel acquired as part of the Accanto acquisition. The Company recorded $1.2 million of restructuring charges related to severance costs. | ||||
The following table provides a summary of the activity related to these restructuring plans and the related liability included as accrued compensation on the Company's consolidated balance sheet (in thousands): | ||||
Three Months Ended | ||||
Employee Severance: | 30-Jun-14 | |||
Balance at beginning of period | $ | 71 | ||
Other adjustments | — | |||
Cash payments | — | |||
Balance as of June 30, 2014 | $ | 71 | ||
The balance is expected to be paid in full by December 31, 2014. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
COMMITMENTS AND CONTINGENCIES | |
Acquisition related – The Company recorded two contingent liabilities related to the acquisition of Simena, LLC (Simena), one relates to future consideration to be paid to the former owner which had an initial fair value of $8.0 million at the time of acquisition and another relates to contractual non-compliance liabilities incurred by Simena with an initial fair value of $1.6 million at the time of acquisition. At June 30, 2014, the present value of the future consideration was $4.4 million and the contractual non-compliance liability was $0. The contingent contractual obligation has been reduced to zero as NetScout has either settled those liabilities or believes that because of the passage of time that the probability of a future negative settlement is essentially zero. | |
Legal – From time to time, NetScout is subject to legal proceedings and claims in the ordinary course of business. In the opinion of management, the amount of ultimate expense with respect to any current legal proceedings and claims, if determined adversely, will not have a significant adverse effect on the Company’s financial condition, results of operations or cash flows. |
TREASURY_STOCK
TREASURY STOCK | 3 Months Ended |
Jun. 30, 2014 | |
Equity [Abstract] | ' |
TREASURY STOCK | ' |
TREASURY STOCK | |
On September 17, 2001, the Company announced an open market stock repurchase program to purchase up to one million shares of outstanding Company common stock, subject to market conditions and other factors. Any purchases under the Company’s stock repurchase program may be made from time to time without prior notice. On July 26, 2006, the Company announced that it had expanded the existing open market stock repurchase program to enable the Company to purchase up to an additional three million shares of the Company’s outstanding common stock, bringing the total number of shares authorized for repurchase to four million shares. Through June 30, 2014, the Company had repurchased a total of 4,000,000 shares of common stock through the open market stock repurchase program. The Company repurchased 243,300 shares for $9.4 million under this program during the three months ended June 30, 2014. As of June 30, 2014, all authorized shares under this stock repurchase program have been repurchased. | |
On April 22, 2014, the Company's board of directors approved an additional stock repurchase program. This program authorizes management to make additional repurchases of NetScout outstanding common stock of up to $100 million. The share repurchase authorization does not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations, cash requirements for acquisitions, economic and market conditions, stock price and legal and regulatory requirements. Through June 30, 2014, the Company has repurchased 6,700 shares totaling $272 thousand in the open market under this stock repurchase plan. At June 30, 2014, $99.7 million of common stock remained available to be purchased under the plan. | |
In connection with the vesting and release of the restriction on previously vested shares of restricted stock units, the Company repurchased 62,228 shares for $2.5 million related to minimum statutory tax withholding requirements on these restricted stock units during the three months ended June 30, 2014. These repurchase transactions do not fall under the repurchase program described above, and therefore do not reduce the amount that is available for repurchase under that program. |
NET_INCOME_PER_SHARE
NET INCOME PER SHARE | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
NET INCOME PER SHARE | ' | |||||||
NET INCOME PER SHARE | ||||||||
Calculations of the basic and diluted net income per share and potential common shares are as follows (in thousands, except for per share data): | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Numerator: | ||||||||
Net income | $ | 11,476 | $ | 5,253 | ||||
Denominator: | ||||||||
Denominator for basic net income per share - weighted average common shares outstanding | 41,081 | 41,405 | ||||||
Dilutive common equivalent shares: | ||||||||
Weighted average stock options | 17 | 85 | ||||||
Weighted average restricted stock units | 710 | 578 | ||||||
Denominator for diluted net income per share - weighted average shares outstanding | 41,808 | 42,068 | ||||||
Net income per share: | ||||||||
Basic net income per share | $ | 0.28 | $ | 0.13 | ||||
Diluted net income per share | $ | 0.27 | $ | 0.12 | ||||
The following table sets forth restricted stock units excluded from the calculation of diluted net income per share, since their inclusion would be antidilutive (in thousands): | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Restricted stock units | — | 560 | ||||||
Basic EPS is calculated by dividing net income by the weighted average number of shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered outstanding for purposes of calculating basic earnings per share. Diluted EPS is calculated by dividing net income by the weighted average number of shares outstanding plus the dilutive effect, if any, of outstanding stock options, restricted shares and restricted stock units using the treasury stock method. The calculation of the dilutive effect of outstanding equity awards under the treasury stock method includes consideration of proceeds from the assumed exercise of stock options, unrecognized compensation expense and any tax benefits as additional proceeds. |
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
INCOME TAXES | ' |
INCOME TAXES | |
Our effective income tax rates were 41.1% and 36.9% for the three months ended June 30, 2014 and the fiscal year ended March 31, 2014, respectively. Generally, the effective tax rates differ from statutory rates due to the impact of the domestic production activities deduction, research and development credits if enacted, the impact of state taxes, income generated in jurisdictions that have a different tax rate than the U.S. statutory rate, and losses not benefited in certain foreign jurisdictions. The effective tax rate for the three months ended June 30, 2014 is higher than the effective rate for our fiscal year ended March 31, 2014 primarily due to the expiration of the federal research and development credit and the interim accounting treatment of certain foreign losses for which no benefit can be recognized. | |
Our effective tax rates were 41.1% and 40.4% for the three months ended June 30, 2014 and 2013, respectively. At this time, the effective tax rate is higher than the comparable year primarily due to the expiration of the federal research and development credit and the exclusion of certain foreign losses for which a benefit cannot be realized, offset by decreases to the state tax rate. |
SEGMENT_AND_GEOGRAPHIC_INFORMA
SEGMENT AND GEOGRAPHIC INFORMATION | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
SEGMENT AND GEOGRAPHIC INFORMATION | ' | |||||||
SEGMENT AND GEOGRAPHIC INFORMATION | ||||||||
The Company reports revenues and income under one reportable segment. The consolidated financial information is used by the chief operating decision maker in deciding how to allocate resources and in assessing performance. | ||||||||
The Company manages its business in the following geographic areas: United States, Europe, Asia and the rest of the world. In accordance with United States export control regulations, the Company does not sell or do business with countries subject to economic sanctions and export controls. | ||||||||
Total revenue by geography is as follows (in thousands): | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
United States | $ | 86,018 | $ | 62,772 | ||||
Europe | 9,046 | 8,939 | ||||||
Asia | 6,717 | 3,903 | ||||||
Rest of the world | 6,071 | 6,191 | ||||||
$ | 107,852 | $ | 81,805 | |||||
The United States revenue includes sales to resellers in the United States. These resellers fulfill customer orders and may subsequently ship the Company’s products to international locations. The Company reports these shipments as United States revenue since the Company ships the products to a United States location. A majority of revenue attributable to locations outside of the United States is a result of export sales. Substantially all of the Company’s identifiable assets are located in the United States. |
BASIS_OF_PRESENTATION_Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This new guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016 (April 1, 2017 for the Company); early adoption is not permitted. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance. The Company has not determined the potential effects on the consolidated financial statements. |
SHAREBASED_COMPENSATION_Tables
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||
Components Of Share-Based Compensation Expense | ' | |||||||
The following is a summary of share-based compensation expense including restricted stock units and employee stock purchases made under our employee stock purchase plan (ESPP) based on estimated fair values within the applicable cost and expense lines identified below (in thousands): | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Cost of product revenue | $ | 60 | $ | 44 | ||||
Cost of service revenue | 228 | 146 | ||||||
Research and development | 1,026 | 896 | ||||||
Sales and marketing | 963 | 845 | ||||||
General and administrative | 1,025 | 881 | ||||||
$ | 3,302 | $ | 2,812 | |||||
CASH_CASH_EQUIVALENTS_AND_MARK1
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Tables) | 3 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||
Components Of Marketable Securities | ' | |||||||||||
The following is a summary of marketable securities held by NetScout at June 30, 2014 classified as short-term and long-term (in thousands): | ||||||||||||
Amortized | Unrealized | Fair | ||||||||||
Cost | Gains (Losses) | Value | ||||||||||
Type of security: | ||||||||||||
U.S. government and municipal obligations | $ | 61,764 | $ | 37 | $ | 61,801 | ||||||
Commercial paper | 23,881 | 1 | 23,882 | |||||||||
Corporate bonds | 3,205 | 2 | 3,207 | |||||||||
Total short-term marketable securities | 88,850 | 40 | 88,890 | |||||||||
U.S. government and municipal obligations | 53,663 | 30 | 53,693 | |||||||||
Corporate bonds | 2,888 | (1 | ) | 2,887 | ||||||||
Total long-term marketable securities | 56,551 | 29 | 56,580 | |||||||||
Total marketable securities | $ | 145,401 | $ | 69 | $ | 145,470 | ||||||
The following is a summary of marketable securities held by NetScout at March 31, 2014, classified as short-term and long-term (in thousands): | ||||||||||||
Amortized | Unrealized | Fair | ||||||||||
Cost | Gains (Losses) | Value | ||||||||||
Type of security: | ||||||||||||
U.S. government and municipal obligations | $ | 53,854 | $ | 26 | $ | 53,880 | ||||||
Commercial paper | 14,581 | 0 | 14,581 | |||||||||
Corporate bonds | 6,772 | 1 | 6,773 | |||||||||
Total short-term marketable securities | 75,207 | 27 | 75,234 | |||||||||
U.S. government and municipal obligations | 37,875 | 2 | 37,877 | |||||||||
Corporate bonds | 3,611 | (4 | ) | 3,607 | ||||||||
Total long-term marketable securities | 41,486 | (2 | ) | 41,484 | ||||||||
Total marketable securities | $ | 116,693 | $ | 25 | $ | 116,718 | ||||||
Contractual Maturities Of Marketable Securities | ' | |||||||||||
Contractual maturities of the Company’s marketable securities held at June 30, 2014 and March 31, 2014 were as follows (in thousands): | ||||||||||||
June 30, | March 31, | |||||||||||
2014 | 2014 | |||||||||||
Available-for-sale securities: | ||||||||||||
Due in 1 year or less | $ | 88,890 | $ | 75,234 | ||||||||
Due after 1 year through 5 years | 56,580 | 41,484 | ||||||||||
$ | 145,470 | $ | 116,718 | |||||||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Schedule Of Financial Assets And Liabilities | ' | |||||||||||||||
The following tables present the Company’s financial assets and liabilities measured on a recurring basis using the fair value hierarchy as of June 30, 2014 and March 31, 2014 (in thousands). | ||||||||||||||||
Fair Value Measurements at | ||||||||||||||||
June 30, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Cash and cash equivalents | $ | 88,974 | $ | — | $ | — | $ | 88,974 | ||||||||
U.S. government and municipal obligations | 40,929 | 74,565 | — | 115,494 | ||||||||||||
Commercial paper | — | 23,882 | — | 23,882 | ||||||||||||
Corporate bonds | 6,094 | — | — | 6,094 | ||||||||||||
Derivative financial instruments | — | 358 | — | 358 | ||||||||||||
$ | 135,997 | $ | 98,805 | $ | — | $ | 234,802 | |||||||||
LIABILITIES: | ||||||||||||||||
Contingent purchase consideration | $ | — | $ | — | $ | (4,369 | ) | $ | (4,369 | ) | ||||||
Derivative financial instruments | — | (102 | ) | — | (102 | ) | ||||||||||
$ | — | $ | (102 | ) | $ | (4,369 | ) | $ | (4,471 | ) | ||||||
Fair Value Measurements at | ||||||||||||||||
March 31, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
ASSETS: | ||||||||||||||||
Cash and cash equivalents | $ | 82,079 | $ | 19,997 | $ | — | $ | 102,076 | ||||||||
U.S. government and municipal obligations | 21,992 | 69,765 | — | 91,757 | ||||||||||||
Commercial paper | — | 14,581 | — | 14,581 | ||||||||||||
Corporate bonds | 10,380 | — | — | 10,380 | ||||||||||||
Derivative financial instruments | — | 368 | — | 368 | ||||||||||||
$ | 114,451 | $ | 104,711 | $ | — | $ | 219,162 | |||||||||
LIABILITIES: | ||||||||||||||||
Contingent purchase consideration | $ | — | $ | — | $ | (4,291 | ) | $ | (4,291 | ) | ||||||
Contingent contractual non-compliance liability | — | — | (49 | ) | (49 | ) | ||||||||||
Derivative financial instruments | — | (139 | ) | — | (139 | ) | ||||||||||
$ | — | $ | (139 | ) | $ | (4,340 | ) | $ | (4,479 | ) | ||||||
Reconciliation Of Changes In Fair Value Of Level III Financial Assets | ' | |||||||||||||||
The following table sets forth a reconciliation of changes in the fair value of the Company’s Level 3 financial liabilities for the three months ended June 30, 2014 (in thousands): | ||||||||||||||||
Contingent | Contingent | |||||||||||||||
Purchase | Contractual | |||||||||||||||
Consideration | Non-compliance | |||||||||||||||
Liability | ||||||||||||||||
Balance at beginning of period | $ | (4,291 | ) | $ | (49 | ) | ||||||||||
(Increase) / decrease in fair value and accretion expense (included within research and development expense) | (78 | ) | 49 | |||||||||||||
Balance at end of period | $ | (4,369 | ) | $ | — | |||||||||||
INVENTORIES_Tables
INVENTORIES (Tables) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Components Of Inventories | ' | |||||||
Inventories consist of the following (in thousands): | ||||||||
June 30, | March 31, | |||||||
2014 | 2014 | |||||||
Raw materials | $ | 6,346 | $ | 6,025 | ||||
Work in process | 367 | 161 | ||||||
Finished goods | 4,313 | 6,394 | ||||||
$ | 11,026 | $ | 12,580 | |||||
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||
Schedule Of Changes In The Carrying Amount Of Goodwill | ' | |||||||||||
The changes in the carrying amount of goodwill for the three months ended June 30, 2014 are as follows (in thousands): | ||||||||||||
Three Months Ended | ||||||||||||
June 30, 2014 | ||||||||||||
Balance at March 31, 2014 | $ | 203,446 | ||||||||||
Foreign currency translation impact | (412 | ) | ||||||||||
Balance as of June 30, 2014 | $ | 203,034 | ||||||||||
Schedule Of Acquired Intangible Assets | ' | |||||||||||
Intangible assets include an indefinite lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets as of June 30, 2014 (in thousands): | ||||||||||||
Cost | Accumulated | Net | ||||||||||
Amortization | ||||||||||||
Developed technology | $ | 31,872 | $ | (24,143 | ) | $ | 7,729 | |||||
Customer relationships | 38,780 | (14,789 | ) | 23,991 | ||||||||
Distributor relationships | 1,984 | (642 | ) | 1,342 | ||||||||
Core technology | 7,541 | (2,980 | ) | 4,561 | ||||||||
Non-compete agreements | 350 | (320 | ) | 30 | ||||||||
Other | 840 | (450 | ) | 390 | ||||||||
$ | 81,367 | $ | (43,324 | ) | $ | 38,043 | ||||||
Intangible assets include an indefinite lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets as of March 31, 2014 (in thousands): | ||||||||||||
Cost | Accumulated | Net | ||||||||||
Amortization | ||||||||||||
Developed technology | $ | 31,946 | $ | (23,524 | ) | $ | 8,422 | |||||
Customer relationships | 38,801 | (14,046 | ) | 24,755 | ||||||||
Distributor relationships | 2,014 | (568 | ) | 1,446 | ||||||||
Core technology | 7,572 | (2,701 | ) | 4,871 | ||||||||
Non-compete agreements | 355 | (295 | ) | 60 | ||||||||
Other | 769 | (410 | ) | 359 | ||||||||
$ | 81,457 | $ | (41,544 | ) | $ | 39,913 | ||||||
Schedule Of Expected Future Amortization Expense | ' | |||||||||||
The following is the expected future amortization expense as of June 30, 2014 for the years ended March 31 (in thousands): | ||||||||||||
2015 (remaining nine months) | $ | 5,319 | ||||||||||
2016 | 6,644 | |||||||||||
2017 | 6,031 | |||||||||||
2018 | 5,134 | |||||||||||
2019 | 4,112 | |||||||||||
Thereafter | 10,803 | |||||||||||
$ | 38,043 | |||||||||||
DERIVATIVE_INSTRUMENTS_AND_HED1
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended | |||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||||||||||||||
Summary Of Notional Amounts And Fair Values Of Derivative Instruments On Consolidated Balance Sheet | ' | |||||||||||||||||||||||||||
The notional amounts and fair values of derivative instruments in the consolidated balance sheets as of June 30, 2014 and March 31, 2014 were as follows (in thousands): | ||||||||||||||||||||||||||||
Notional Amounts (a) | Other Current Assets | Accrued Other Liabilities | ||||||||||||||||||||||||||
June 30, | March 31, | June 30, | March 31, | June 30, | March 31, | |||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2014 | 2014 | |||||||||||||||||||||||
Derivatives Designated as Hedging Instruments: | ||||||||||||||||||||||||||||
Forward contracts | $ | 16,624 | $ | 17,483 | $ | 358 | $ | 368 | $ | 102 | $ | 139 | ||||||||||||||||
(a) | Notional amounts represent the gross contract/notional amount of the derivatives outstanding. | |||||||||||||||||||||||||||
Effect Of Foreign Exchange Forward Contracts On OCI And Results Of Operations | ' | |||||||||||||||||||||||||||
The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the three months ended June 30, 2014 and 2013 (in thousands): | ||||||||||||||||||||||||||||
Derivatives in Cash | Effective Portion | Ineffective Portion | ||||||||||||||||||||||||||
Flow Hedging | ||||||||||||||||||||||||||||
Relationships | Gain (Loss) Recognized in | Gain (Loss) Reclassified from | Gain (Loss) Recognized in Income (Amount | |||||||||||||||||||||||||
OCI on Derivative | Accumulated OCI into Income | Excluded from Effectiveness Testing) | ||||||||||||||||||||||||||
(a) | (b) | (c) | ||||||||||||||||||||||||||
June 30, 2014 | June 30, 2013 | Location | June 30, 2014 | June 30, 2013 | Location | June 30, 2014 | June 30, 2013 | |||||||||||||||||||||
Forward contracts | $ | (224 | ) | $ | (198 | ) | Research and | $ | 10 | $ | (16 | ) | Research and | $ | 63 | $ | 68 | |||||||||||
development | development | |||||||||||||||||||||||||||
Sales and | 159 | (90 | ) | Sales and | 4 | 1 | ||||||||||||||||||||||
marketing | marketing | |||||||||||||||||||||||||||
$ | (224 | ) | $ | (198 | ) | $ | 169 | $ | (106 | ) | $ | 67 | $ | 69 | ||||||||||||||
(a) | The amount represents the change in fair value of derivative contracts due to changes in spot rates. | |||||||||||||||||||||||||||
(b) | The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. | |||||||||||||||||||||||||||
(c) | The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
RESTRUCTURING_CHARGES_Tables
RESTRUCTURING CHARGES (Tables) | 3 Months Ended | |||
Jun. 30, 2014 | ||||
Restructuring and Related Activities [Abstract] | ' | |||
Schedule Of Restructuring Liability | ' | |||
The following table provides a summary of the activity related to these restructuring plans and the related liability included as accrued compensation on the Company's consolidated balance sheet (in thousands): | ||||
Three Months Ended | ||||
Employee Severance: | 30-Jun-14 | |||
Balance at beginning of period | $ | 71 | ||
Other adjustments | — | |||
Cash payments | — | |||
Balance as of June 30, 2014 | $ | 71 | ||
NET_INCOME_PER_SHARE_Tables
NET INCOME PER SHARE (Tables) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Calculations of the Basic and Diluted Net Income Per Share and Potential Common Shares | ' | |||||||
Calculations of the basic and diluted net income per share and potential common shares are as follows (in thousands, except for per share data): | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Numerator: | ||||||||
Net income | $ | 11,476 | $ | 5,253 | ||||
Denominator: | ||||||||
Denominator for basic net income per share - weighted average common shares outstanding | 41,081 | 41,405 | ||||||
Dilutive common equivalent shares: | ||||||||
Weighted average stock options | 17 | 85 | ||||||
Weighted average restricted stock units | 710 | 578 | ||||||
Denominator for diluted net income per share - weighted average shares outstanding | 41,808 | 42,068 | ||||||
Net income per share: | ||||||||
Basic net income per share | $ | 0.28 | $ | 0.13 | ||||
Diluted net income per share | $ | 0.27 | $ | 0.12 | ||||
Antidilutive Securities Excluded from Computation of Diluted EPS | ' | |||||||
The following table sets forth restricted stock units excluded from the calculation of diluted net income per share, since their inclusion would be antidilutive (in thousands): | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
Restricted stock units | — | 560 | ||||||
SEGMENT_AND_GEOGRAPHIC_INFORMA1
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
Total Revenue By Geography | ' | |||||||
Total revenue by geography is as follows (in thousands): | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2014 | 2013 | |||||||
United States | $ | 86,018 | $ | 62,772 | ||||
Europe | 9,046 | 8,939 | ||||||
Asia | 6,717 | 3,903 | ||||||
Rest of the world | 6,071 | 6,191 | ||||||
$ | 107,852 | $ | 81,805 | |||||
CONCENTRATION_OF_CREDIT_RISK_A1
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS - Additional Information (Detail) (Customer concentration risk) | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2013 |
Indirect Customer | Indirect Customer | Indirect Customer | Indirect Customer | Direct Customer | Direct Customer | Direct Customer | Direct Customer | |
Accounts receivable | Accounts receivable | Revenue | Revenue | Accounts receivable | Accounts receivable | Revenue | Revenue | |
Customer | Customer | Customer | Customer | Customer | Customer | Customer | Customer | |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Number of customers contributing to more than 10% of accounts receivable | 0 | 0 | ' | ' | 1 | 1 | ' | ' |
Number of customers contributing to more than 10% of total revenue | ' | ' | 0 | 0 | ' | ' | 2 | 1 |
SHAREBASED_COMPENSATION_Compon
SHARE-BASED COMPENSATION - Components of Share-Based Compensation Expense (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Share-based compensation expense | $3,302 | $2,812 |
Cost of product revenue | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Share-based compensation expense | 60 | 44 |
Cost of service revenue | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Share-based compensation expense | 228 | 146 |
Research and development | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Share-based compensation expense | 1,026 | 896 |
Sales and marketing | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Share-based compensation expense | 963 | 845 |
General and administrative | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Share-based compensation expense | $1,025 | $881 |
SHAREBASED_COMPENSATION_Additi
SHARE-BASED COMPENSATION - Additional Information (Detail) | 3 Months Ended |
Jun. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Percentage of common stock price for employees | 85.00% |
CASH_CASH_EQUIVALENTS_AND_MARK2
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - Components of Marketable Securities (Detail) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | $145,401 | $116,693 |
Unrealized Gains (Losses) | 69 | 25 |
Fair Value | 145,470 | 116,718 |
U.S. government and municipal obligations | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Value | 115,494 | 91,757 |
Commercial paper | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Value | 23,882 | 14,581 |
Corporate bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Value | 6,094 | 10,380 |
Short-term marketable securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 88,850 | 75,207 |
Unrealized Gains (Losses) | 40 | 27 |
Fair Value | 88,890 | 75,234 |
Short-term marketable securities | U.S. government and municipal obligations | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 61,764 | 53,854 |
Unrealized Gains (Losses) | 37 | 26 |
Fair Value | 61,801 | 53,880 |
Short-term marketable securities | Commercial paper | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 23,881 | 14,581 |
Unrealized Gains (Losses) | 1 | 0 |
Fair Value | 23,882 | 14,581 |
Short-term marketable securities | Corporate bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 3,205 | 6,772 |
Unrealized Gains (Losses) | 2 | 1 |
Fair Value | 3,207 | 6,773 |
Long-term marketable securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 56,551 | 41,486 |
Unrealized Gains (Losses) | 29 | -2 |
Fair Value | 56,580 | 41,484 |
Long-term marketable securities | U.S. government and municipal obligations | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 53,663 | 37,875 |
Unrealized Gains (Losses) | 30 | 2 |
Fair Value | 53,693 | 37,877 |
Long-term marketable securities | Corporate bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 2,888 | 3,611 |
Unrealized Gains (Losses) | -1 | -4 |
Fair Value | $2,887 | $3,607 |
CASH_CASH_EQUIVALENTS_AND_MARK3
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - Contractual Maturities of Marketable Securities (Detail) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Available-for-sale securities: | ' | ' |
Due in 1 year or less | $88,890 | $75,234 |
Due after 1 year through 5 years | 56,580 | 41,484 |
Fair Value | $145,470 | $116,718 |
FAIR_VALUE_MEASUREMENTS_Schedu
FAIR VALUE MEASUREMENTS - Schedule of Financial Assets and Liabilities (Detail) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
ASSETS: | ' | ' |
Cash and cash equivalents | $88,974,000 | $102,076,000 |
Marketable securities | 145,470,000 | 116,718,000 |
Derivative financial instruments | 358,000 | 368,000 |
Total assets | 234,802,000 | 219,162,000 |
LIABILITIES: | ' | ' |
Contingent purchase consideration | -4,369,000 | -4,291,000 |
Contingent contractual non-compliance liability | ' | -49,000 |
Derivative financial instruments | -102,000 | -139,000 |
Total liabilities | -4,471,000 | -4,479,000 |
U.S. government and municipal obligations | ' | ' |
ASSETS: | ' | ' |
Marketable securities | 115,494,000 | 91,757,000 |
Commercial paper | ' | ' |
ASSETS: | ' | ' |
Marketable securities | 23,882,000 | 14,581,000 |
Corporate bonds | ' | ' |
ASSETS: | ' | ' |
Marketable securities | 6,094,000 | 10,380,000 |
Level 1 | ' | ' |
ASSETS: | ' | ' |
Cash and cash equivalents | 88,974,000 | 82,079,000 |
Derivative financial instruments | 0 | 0 |
Total assets | 135,997,000 | 114,451,000 |
LIABILITIES: | ' | ' |
Contingent purchase consideration | 0 | 0 |
Contingent contractual non-compliance liability | ' | 0 |
Derivative financial instruments | 0 | 0 |
Total liabilities | 0 | 0 |
Level 1 | U.S. government and municipal obligations | ' | ' |
ASSETS: | ' | ' |
Marketable securities | 40,929,000 | 21,992,000 |
Level 1 | Commercial paper | ' | ' |
ASSETS: | ' | ' |
Marketable securities | 0 | 0 |
Level 1 | Corporate bonds | ' | ' |
ASSETS: | ' | ' |
Marketable securities | 6,094,000 | 10,380,000 |
Level 2 | ' | ' |
ASSETS: | ' | ' |
Cash and cash equivalents | 0 | 19,997,000 |
Derivative financial instruments | 358,000 | 368,000 |
Total assets | 98,805,000 | 104,711,000 |
LIABILITIES: | ' | ' |
Contingent purchase consideration | 0 | 0 |
Contingent contractual non-compliance liability | ' | 0 |
Derivative financial instruments | -102,000 | -139,000 |
Total liabilities | -102,000 | -139,000 |
Level 2 | U.S. government and municipal obligations | ' | ' |
ASSETS: | ' | ' |
Marketable securities | 74,565,000 | 69,765,000 |
Level 2 | Commercial paper | ' | ' |
ASSETS: | ' | ' |
Marketable securities | 23,882,000 | 14,581,000 |
Level 2 | Corporate bonds | ' | ' |
ASSETS: | ' | ' |
Marketable securities | 0 | 0 |
Level 3 | ' | ' |
ASSETS: | ' | ' |
Cash and cash equivalents | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Total assets | 0 | 0 |
LIABILITIES: | ' | ' |
Contingent purchase consideration | -4,369,000 | -4,291,000 |
Contingent contractual non-compliance liability | 0 | -49,000 |
Derivative financial instruments | 0 | 0 |
Total liabilities | -4,369,000 | -4,340,000 |
Level 3 | U.S. government and municipal obligations | ' | ' |
ASSETS: | ' | ' |
Marketable securities | 0 | 0 |
Level 3 | Commercial paper | ' | ' |
ASSETS: | ' | ' |
Marketable securities | 0 | 0 |
Level 3 | Corporate bonds | ' | ' |
ASSETS: | ' | ' |
Marketable securities | $0 | $0 |
FAIR_VALUE_MEASUREMENTS_Reconc
FAIR VALUE MEASUREMENTS - Reconciliation of Changes in Fair Value of Level Three Financial Assets (Detail) (Fair value, measurements, recurring, USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Contingent Purchase Consideration | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' |
Balance at beginning of period | ($4,291) |
(Increase) / decrease in fair value and accretion expense (included within research and development expense) | -78 |
Balance at end of period | -4,369 |
Contingent Contractual Non-compliance Liability | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' |
Balance at beginning of period | -49 |
(Increase) / decrease in fair value and accretion expense (included within research and development expense) | 49 |
Balance at end of period | $0 |
FAIR_VALUE_MEASUREMENTS_Additi
FAIR VALUE MEASUREMENTS - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Contingent contractual non-compliance liability | ' | ' | $49,000 |
Recognized adjustment earnings | 9,000 | ' | ' |
Fair value assumption, discount rate | 3.30% | ' | ' |
Deal related compensation expense and accretion charges | 38,000 | 36,000 | ' |
Level 3 | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Contingent contractual non-compliance liability | $0 | ' | $49,000 |
INVENTORIES_Components_of_Inve
INVENTORIES - Components of Inventories (Detail) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Raw materials | $6,346 | $6,025 |
Work in process | 367 | 161 |
Finished goods | 4,313 | 6,394 |
Total inventories | $11,026 | $12,580 |
GOODWILL_AND_INTANGIBLE_ASSETS2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Goodwill (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Goodwill [Roll Forward] | ' |
Balance at March 31, 2014 | $203,446 |
Foreign currency translation impact | -412 |
Balance as of June 30, 2014 | $203,034 |
GOODWILL_AND_INTANGIBLE_ASSETS3
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Detail) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | $81,367 | $81,457 |
Accumulated Amortization | -43,324 | -41,544 |
Net | 38,043 | 39,913 |
Developed technology | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 31,872 | 31,946 |
Accumulated Amortization | -24,143 | -23,524 |
Net | 7,729 | 8,422 |
Customer relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 38,780 | 38,801 |
Accumulated Amortization | -14,789 | -14,046 |
Net | 23,991 | 24,755 |
Distributor relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 1,984 | 2,014 |
Accumulated Amortization | -642 | -568 |
Net | 1,342 | 1,446 |
Core technology | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 7,541 | 7,572 |
Accumulated Amortization | -2,980 | -2,701 |
Net | 4,561 | 4,871 |
Non-compete agreements | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 350 | 355 |
Accumulated Amortization | -320 | -295 |
Net | 30 | 60 |
Other | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 840 | 769 |
Accumulated Amortization | -450 | -410 |
Net | $390 | $359 |
GOODWILL_AND_INTANGIBLE_ASSETS4
GOODWILL AND INTANGIBLE ASSETS - Schedule of Expected Future Amortization Expense (Detail) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ' |
2015 (remaining nine months) | $5,319 |
2016 | 6,644 |
2017 | 6,031 |
2018 | 5,134 |
2019 | 4,112 |
Thereafter | 10,803 |
Total | $38,043 |
GOODWILL_AND_INTANGIBLE_ASSETS5
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | ||||||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | |
Trade name | Trade name | Developed Technology, Accanto Systems | Developed technology | Acquired software and core technology | Acquired software and core technology | Acquired software and core technology | Other acquired intangible assets | Other acquired intangible assets | Customer relationships | Unified Service Delivery | Unified Service Delivery | Test Optimization | Test Optimization | ||||
Included as cost of product revenue | Included as cost of product revenue | Included as operating expense | Included as operating expense | ||||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | $203,034,000 | ' | $203,446,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $200,600,000 | $201,000,000 | $2,400,000 | $2,400,000 |
Carrying value of intangible assets | 56,643,000 | ' | 58,513,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments to acquire software rights | 71,000 | 110,000 | ' | ' | ' | 500,000 | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average useful life of acquired intangible assets | '10 years 1 month 6 days | ' | ' | ' | ' | '6 years 3 months 18 days | '3 years | '6 years 8 months 12 days | ' | ' | ' | ' | '13 years 3 months 18 days | ' | ' | ' | ' |
Indefinite-lived intangible assets | ' | ' | ' | 18,600,000 | 18,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expenses | $862,000 | $854,000 | ' | ' | ' | ' | ' | ' | $934,000 | $819,000 | $901,000 | $854,000 | ' | ' | ' | ' | ' |
DERIVATIVE_INSTRUMENTS_AND_HED2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Additional Information (Detail) | 3 Months Ended |
Jun. 30, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' |
Hedging forecasted cash flows for operating expenses denominated in foreign currencies managed in months | '12 months |
Contract maturing over next months | '12 months |
DERIVATIVE_INSTRUMENTS_AND_HED3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Notional Amounts and Fair Values of Derivative Instruments on Consolidated Balance Sheet (Detail) (Forward contracts, USD $) | Jun. 30, 2014 | Mar. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Notional Amounts | $16,624 | [1] | $17,483 | [1] |
Other Current Assets | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Liability derivatives fair value | 358 | 368 | ||
Accrued Other Liabilities | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Asset derivatives fair value | $102 | $139 | ||
[1] | Notional amounts represent the gross contract/notional amount of the derivatives outstanding. |
DERIVATIVE_INSTRUMENTS_AND_HED4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Effect of Foreign Exchange Forward Contracts on Other Comprehensive Income And Results Of Operations (Detail) (Forward contracts, USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | ||
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ||
Gain (Loss) Recognized in OCI on Derivative | ($224) | [1] | ($198) | [1] |
Gain (Loss) Reclassified from Accumulated OCI into Income | 169 | [2] | -106 | [2] |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | 67 | [3] | 69 | [3] |
Research and development | ' | ' | ||
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ||
Gain (Loss) Reclassified from Accumulated OCI into Income | 10 | [2] | -16 | [2] |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | 63 | [3] | 68 | [3] |
Sales and marketing | ' | ' | ||
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ||
Gain (Loss) Reclassified from Accumulated OCI into Income | 159 | [2] | -90 | [2] |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | $4 | [3] | $1 | [3] |
[1] | The amount represents the change in fair value of derivative contracts due to changes in spot rates. | |||
[2] | The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. | |||
[3] | The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
LONGTERM_DEBT_Additional_Infor
LONG-TERM DEBT - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended |
Nov. 22, 2011 | Jun. 30, 2014 | |
Debt Instrument [Line Items] | ' | ' |
Revolving credit facility outstanding amount | $250,000,000 | $0 |
Increase in revolving credit facility outstanding amount | 300,000,000 | ' |
Term for increase in revolving credit facility before maturity date, days | '90 days | ' |
Line of credit facility, maturity | 21-Nov-16 | ' |
Percentage of capital stock of foreign subsidiaries used as guarantee | ' | 65.00% |
Federal funds effective rate | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Interest rate in excess of effective rate | 0.50% | ' |
LIBOR | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Margin over applicable interest rate | 1.00% | ' |
Maximum | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Leverage ratio | 1 | ' |
Maximum | Base rate loans | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Margin over applicable interest rate | 1.00% | ' |
Maximum | Eurodollar rate loans | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Margin over applicable interest rate | 2.00% | ' |
Minimum | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Leverage ratio | 2.5 | ' |
Minimum | Base rate loans | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Margin over applicable interest rate | 0.25% | ' |
Minimum | Eurodollar rate loans | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Margin over applicable interest rate | 1.25% | ' |
Swing line loan sub-facility | Maximum | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Revolving credit facility outstanding amount | 10,000,000 | ' |
Letter of credit sub-facility | Maximum | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Revolving credit facility outstanding amount | $10,000,000 | ' |
RESTRUCTURING_CHARGES_Addition
RESTRUCTURING CHARGES - Additional Information (Detail) (Severance, USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2013 |
Severance | ' |
Restructuring Cost and Reserve [Line Items] | ' |
Restructuring charges | $1.20 |
RESTRUCTURING_CHARGES_Schedule
RESTRUCTURING CHARGES - Schedule of Restructuring Liability (Detail) (Severance, USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Severance | ' |
Employee Severance: | ' |
Balance at beginning of period | $71 |
Other adjustments | 0 |
Cash payments | 0 |
Balance as of June 30, 2014 | $71 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
Commitments and Contingencies Disclosure [Line Items] | ' | ' |
Fair value of contingent liability | $4,369,000 | $4,291,000 |
Contractual non-compliance liabilities incurred by Simena | ' | 49,000 |
Simena LLC | ' | ' |
Commitments and Contingencies Disclosure [Line Items] | ' | ' |
Number of contingent liabilities recorded | 2 | ' |
Fair value of contingent liability | 8,000,000 | ' |
Contractual non-compliance liabilities incurred by Simena | 1,600,000 | ' |
Simena LLC | Present value of future consideration | ' | ' |
Commitments and Contingencies Disclosure [Line Items] | ' | ' |
Fair value of contingent liability | 4,400,000 | ' |
Contractual non-compliance liabilities incurred by Simena | $0 | ' |
TREASURY_STOCK_Additional_Info
TREASURY STOCK - Additional Information (Detail) (USD $) | 3 Months Ended | 3 Months Ended | 153 Months Ended | 0 Months Ended | 2 Months Ended | 3 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2013 | Jul. 26, 2006 | Sep. 17, 2001 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Apr. 22, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Open market stock repurchase program | Open market stock repurchase program | Share Repurchase Program, April 2014 | Share Repurchase Program, April 2014 | Share Repurchase Program, April 2014 | Restricted stock units | |||||
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock authorized to repurchase under stock repurchase program (in shares) | ' | ' | 4,000,000 | 1,000,000 | ' | ' | ' | ' | ' | ' |
Additional stock authorized to repurchase under stock repurchase program (in shares) | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' |
Shares repurchased during the period (in shares) | ' | ' | ' | ' | 243,300 | 4,000,000 | ' | ' | 6,700 | 62,228 |
Shares repurchased during the period, value | $12,187,000 | $7,470,000 | ' | ' | $9,400,000 | ' | ' | ' | $272,000 | $2,500,000 |
Stock repurchase program, authorized amount | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' |
Remaining stock authorized to repurchase under stock repurchase program | ' | ' | ' | ' | ' | ' | $99,700,000 | ' | ' | ' |
NET_INCOME_PER_SHARE_Calculati
NET INCOME PER SHARE - Calculations of Basic and Diluted Net Income Per Share and Potential Common Shares (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Numerator: | ' | ' |
Net income | $11,476 | $5,253 |
Denominator: | ' | ' |
Denominator for basic net income per share - weighted average common shares outstanding | 41,081 | 41,405 |
Dilutive common equivalent shares: | ' | ' |
Weighted average stock options (in shares) | 17 | 85 |
Weighted average restricted stock units (in shares) | 710 | 578 |
Denominator for diluted net income per share - weighted average shares outstanding (in shares) | 41,808 | 42,068 |
Net income per share: | ' | ' |
Basic net income per share (in dollars per share) | $0.28 | $0.13 |
Diluted net income per share (in dollars per share) | $0.27 | $0.12 |
NET_INCOME_PER_SHARE_Antidilut
NET INCOME PER SHARE - Antidilutive Securities Excluded from Computation of Diluted EPS (Detail) (Restricted stock units) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Restricted stock units | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Anti-dilutive securities excluded from calculation of diluted net income per share (in shares) | 0 | 560 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ' | ' | ' |
Estimated annual effective tax rate | 41.10% | 40.40% | 36.90% |
SEGMENT_AND_GEOGRAPHIC_INFORMA2
SEGMENT AND GEOGRAPHIC INFORMATION - Additional Information (Detail) | 3 Months Ended |
Jun. 30, 2014 | |
Segment | |
Segment Reporting [Abstract] | ' |
Number of reportable segments | 1 |
SEGMENT_AND_GEOGRAPHIC_INFORMA3
SEGMENT AND GEOGRAPHIC INFORMATION - Total Revenue by Geography (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Segment Reporting Information [Line Items] | ' | ' |
Total revenue | $107,852 | $81,805 |
United States | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total revenue | 86,018 | 62,772 |
Europe | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total revenue | 9,046 | 8,939 |
Asia | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total revenue | 6,717 | 3,903 |
Rest of the world | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total revenue | $6,071 | $6,191 |