Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2015 | Oct. 29, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NETSCOUT SYSTEMS INC | |
Entity Central Index Key | 1,078,075 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | NTCT | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 99,131,910 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 215,539 | $ 104,893 |
Marketable securities | 103,138 | 101,392 |
Accounts receivable and unbilled costs, net of allowance for doubtful accounts of $8,984 and $173 at September 30, 2015 and March 31, 2015, respectively | 165,092 | 82,226 |
Inventories | 71,066 | 12,130 |
Prepaid income taxes | 40,694 | 1,393 |
Deferred income taxes | 29,796 | 21,755 |
Prepaid expenses and other current assets (related party balances of $53,702 and $0, respectively) | 72,218 | 13,495 |
Total current assets | 697,543 | 337,284 |
Fixed assets, net | 60,398 | 23,864 |
Goodwill | 1,702,705 | 197,445 |
Intangible assets, net | 1,102,717 | 50,180 |
Deferred income taxes | 412 | 0 |
Long-term marketable securities | 32,708 | 58,572 |
Other assets | 7,588 | 1,704 |
Total assets | 3,604,071 | 669,049 |
Current liabilities: | ||
Accounts payable (related party balances of $7,513 and $0, respectively) | 37,425 | 13,077 |
Accrued compensation | 73,482 | 36,553 |
Accrued other | 27,660 | 14,474 |
Income taxes payable | 0 | 107 |
Deferred tax liability | 2,252 | 0 |
Deferred revenue and customer deposits | 233,405 | 123,422 |
Total current liabilities | 374,224 | 187,633 |
Other long-term liabilities | 5,445 | 1,995 |
Deferred tax liability | 328,010 | 10,639 |
Accrued long-term retirement benefits | 28,988 | 1,587 |
Long-term deferred revenue and customer deposits | 39,224 | 26,961 |
Long-term debt | 250,000 | 0 |
Contingent liabilities, net of current portion | 4,560 | 4,484 |
Total liabilities | $ 1,030,451 | $ 233,299 |
Commitments and contingencies (Note 11) | ||
Preferred stock, $0.001 par value: | ||
5,000,000 shares authorized; no shares issued or outstanding at September 30, 2015 and March 31, 2015 | $ 0 | $ 0 |
Common stock, $0.001 par value: | ||
150,000,000 shares authorized; 113,858,772 and 50,812,548 shares issued and 99,131,910 and 40,807,805 shares outstanding at September 30, 2015 and March 31, 2015, respectively | 114 | 51 |
Additional paid-in capital | 2,619,418 | 298,101 |
Accumulated other comprehensive loss | (2,914) | (4,645) |
Treasury stock at cost, 14,726,862 and 10,004,743 shares at September 30, 2015 and March 31, 2015, respectively | (354,511) | (169,516) |
Retained earnings | 311,513 | 311,759 |
Total stockholders’ equity | 2,573,620 | 435,750 |
Total liabilities and stockholders’ equity | $ 3,604,071 | $ 669,049 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Related Party Transaction [Line Items] | ||
Accounts receivable, allowance for doubtful accounts | $ 8,984 | $ 173 |
Related party prepaid expenses and other current assets | 72,218 | 13,495 |
Related party accounts payable | $ 37,425 | $ 13,077 |
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | ||
Preferred stock, shares outstanding (in shares) | ||
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 113,858,772 | 50,812,548 |
Common stock, shares outstanding (in shares) | 99,131,910 | 40,807,805 |
Treasury stock, shares (in shares) | 14,726,862 | 10,004,743 |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Related party prepaid expenses and other current assets | $ 53,702 | $ 0 |
Related party accounts payable | $ 7,513 | $ 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue: | ||||
Product | $ 174,899 | $ 57,953 | $ 228,492 | $ 122,319 |
Service | 86,211 | 45,646 | 133,361 | 89,132 |
Total revenue | 261,110 | 103,599 | 361,853 | 211,451 |
Cost of revenue: | ||||
Product (related party balances of $7,728, $0, $7,728 and $0, respectively) | 75,421 | 12,939 | 87,919 | 26,705 |
Service (related party balances of $2,492, $0, $2,492 and $0, respectively) | 24,766 | 8,656 | 33,564 | 17,486 |
Total cost of revenue | 100,187 | 21,595 | 121,483 | 44,191 |
Gross profit | 160,923 | 82,004 | 240,370 | 167,260 |
Operating expenses: | ||||
Research and development (related party balances of $10,814, $0, $10,814 and $0, respectively) | 65,896 | 19,241 | 83,954 | 38,008 |
Sales and marketing (related party balances of $9,078, $0, $9,078 and $0, respectively) | 79,153 | 32,196 | 117,245 | 69,468 |
General and administrative (related party balances of $7,063, $0, $7,063 and $0, respectively) | 41,301 | 11,067 | 51,400 | 19,820 |
Amortization of acquired intangible assets | 9,843 | 856 | 10,652 | 1,718 |
Total operating expenses | 196,193 | 63,360 | 263,251 | 129,014 |
Income (loss) from operations | (35,270) | 18,644 | (22,881) | 38,246 |
Interest and other income (expense), net: | ||||
Interest income | 172 | 98 | 330 | 202 |
Interest expense | (1,786) | (196) | (1,978) | (390) |
Other income (expense), net (related party balances of $383, $0, $383 and $0, respectively) | 786 | (445) | 674 | (486) |
Total interest and other expense, net | (828) | (543) | (974) | (674) |
Income (loss) before income tax expense (benefit) | (36,098) | 18,101 | (23,855) | 37,572 |
Income tax expense (benefit) | (28,183) | 6,868 | (23,609) | 14,863 |
Net income (loss) | $ (7,915) | $ 11,233 | $ (246) | $ 22,709 |
Basic net income (loss) per share (in USD per share) | $ (0.09) | $ 0.27 | $ 0 | $ 0.55 |
Diluted net income (loss) per share (in USD per share) | $ (0.09) | $ 0.27 | $ 0 | $ 0.54 |
Weighted average common shares outstanding used in computing: | ||||
Net income per share - basic (in shares) | 91,410 | 41,060 | 66,232 | 41,071 |
Net income per share - diluted (in shares) | 91,410 | 41,652 | 66,232 | 41,732 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Related Party Transaction [Line Items] | ||||
Related party product | $ 75,421 | $ 12,939 | $ 87,919 | $ 26,705 |
Related party service | 24,766 | 8,656 | 33,564 | 17,486 |
Related party research and development | 65,896 | 19,241 | 83,954 | 38,008 |
Related party selling and marketing | 79,153 | 32,196 | 117,245 | 69,468 |
Related party general and administrative expense | 41,301 | 11,067 | 51,400 | 19,820 |
Related party other income (expense), net | 786 | (445) | 674 | (486) |
Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party product | 7,728 | 0 | 7,728 | 0 |
Related party service | 2,492 | 0 | 2,492 | 0 |
Related party research and development | 10,814 | 0 | 10,814 | 0 |
Related party selling and marketing | 9,078 | 0 | 9,078 | 0 |
Related party general and administrative expense | 7,063 | 0 | 7,063 | 0 |
Related party other income (expense), net | $ 383 | $ 0 | $ 383 | $ 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (7,915) | $ 11,233 | $ (246) | $ 22,709 |
Other comprehensive income: | ||||
Cumulative translation adjustments | (124) | (1,675) | 853 | (2,107) |
Changes in market value of investments: | ||||
Changes in unrealized (losses) gains | 117 | (23) | 58 | 21 |
Total net change in market value of investments | 117 | (23) | 58 | 21 |
Changes in market value of derivatives: | ||||
Changes in market value of derivatives, net of benefits of ($187), ($360), ($204) and ($272) | (340) | (603) | (313) | (467) |
Reclassification adjustment for net gains (losses) included in net income, net of taxes (benefits) of $177, $51, $657 and ($14) | 291 | 81 | 1,133 | (23) |
Total net change in market value of derivatives | (49) | (522) | 820 | (490) |
Other comprehensive income (loss) | (56) | (2,220) | 1,731 | (2,576) |
Total comprehensive income (loss) | $ (7,971) | $ 9,013 | $ 1,485 | $ 20,133 |
Consolidated Statements of Com7
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Changes in market value of derivatives, taxes | $ (187) | $ (360) | $ (204) | $ (272) |
Reclassification adjustment for net losses included in net income, benefits | $ 177 | $ 51 | $ 657 | $ (14) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common stock | Additional Paid In Capital | Accumulated Other Comprehensive Income (Loss) | Treasury stock | Retained Earnings |
Beginning Balance at Mar. 31, 2014 | $ 409,161 | $ 50 | $ 273,574 | $ 2,772 | $ (117,802) | $ 250,567 |
Beginning Balance (in shares) at Mar. 31, 2014 | 49,922,959 | 8,757,175 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 22,709 | 22,709 | ||||
Unrealized net investment gains | 21 | 21 | ||||
Unrealized net gains on derivative financial instruments | (490) | (490) | ||||
Cumulative translation adjustments | (2,107) | (2,107) | ||||
Issuance of common stock pursuant to exercise of options | 66 | $ 0 | 66 | |||
Issuance of common stock pursuant to exercise of options (in shares) | 11,850 | |||||
Issuance of common stock pursuant to vesting of restricted stock units | 1 | $ 1 | ||||
Issuance of common stock pursuant to vesting of restricted stock units (in shares) | 670,521 | |||||
Stock-based compensation expense for restricted stock units granted to employees | 7,362 | 7,362 | ||||
Issuance of common stock under employee stock purchase plan | 2,760 | 2,760 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 59,897 | |||||
Repurchase of treasury stock | (30,894) | $ (30,894) | ||||
Repurchase of treasury stock (in shares) | 726,526 | |||||
Tax benefits of disqualifying dispositions of incentive stock options | 4,033 | 4,033 | ||||
Ending Balance at Sep. 30, 2014 | 412,622 | $ 51 | 287,795 | 196 | $ (148,696) | 273,276 |
Ending Balance (in shares) at Sep. 30, 2014 | 50,665,227 | 9,483,701 | ||||
Beginning Balance at Mar. 31, 2015 | 435,750 | $ 51 | 298,101 | (4,645) | $ (169,516) | 311,759 |
Beginning Balance (in shares) at Mar. 31, 2015 | 50,812,548 | 10,004,743 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (246) | (246) | ||||
Unrealized net investment gains | 58 | 58 | ||||
Unrealized net gains on derivative financial instruments | 820 | 820 | ||||
Cumulative translation adjustments | 853 | 853 | ||||
Issuance of common stock pursuant to vesting of restricted stock units | 1 | $ 1 | ||||
Issuance of common stock pursuant to vesting of restricted stock units (in shares) | 463,744 | |||||
Stock-based compensation expense for restricted stock units granted to employees | 11,041 | 11,041 | ||||
Issuance of common stock under employee stock purchase plan | $ 3,028 | 3,028 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 82,836 | 82,836 | ||||
Repurchase of treasury stock | $ (184,995) | $ (184,995) | ||||
Repurchase of treasury stock (in shares) | 4,722,119 | |||||
Issuance of shares related to the acquisition of the Communications Business of Danaher | 2,305,611 | $ 62 | 2,305,549 | |||
Issuance of shares related to the acquisition of the Communication business of Danaher (in shares) | 62,499,644 | |||||
Tax benefits of disqualifying dispositions of incentive stock options | 1,699 | 1,699 | ||||
Ending Balance at Sep. 30, 2015 | $ 2,573,620 | $ 114 | $ 2,619,418 | $ (2,914) | $ (354,511) | $ 311,513 |
Ending Balance (in shares) at Sep. 30, 2015 | 113,858,772 | 14,726,862 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (246) | $ 22,709 |
Adjustments to reconcile net income (loss) to cash provided by operating activities, net of the effects of acquisitions: | ||
Depreciation and amortization | 51,797 | 9,753 |
Loss on disposal of fixed assets | 222 | 0 |
Deal related compensation expense and accretion charges | 6,652 | 76 |
Share-based compensation expense associated with equity awards | 12,098 | 7,797 |
Net change in fair value of contingent and contractual liabilities | 0 | (9) |
Deferred income taxes | 4,166 | 1,760 |
Other losses | 61 | 85 |
Changes in assets and liabilities | ||
Accounts receivable | 52,695 | 10,684 |
Due from related party | (28,878) | 0 |
Inventories | 7,168 | (2,871) |
Prepaid expenses and other assets | (36,751) | (3,367) |
Accounts payable | (5,012) | (1,226) |
Accrued compensation and other expenses | 11,855 | 672 |
Due to related party | 7,513 | 0 |
Income taxes payable | (107) | (791) |
Deferred revenue | (76,290) | (16,282) |
Net cash provided by operating activities | 6,943 | 28,990 |
Cash flows from investing activities: | ||
Purchase of marketable securities | (41,544) | (57,790) |
Proceeds from maturity of marketable securities | 65,720 | 36,204 |
Purchase of fixed assets | (9,113) | (4,016) |
Purchase of intangible assets | (152) | (92) |
(Increase) decrease in deposits | (1) | 101 |
Acquisition of businesses, net of cash acquired | 27,748 | 0 |
Net cash provided by (used in) investing activities | 42,658 | (25,593) |
Cash flows from financing activities: | ||
Issuance of common stock under stock plans | 1 | 67 |
Treasury stock repurchases | (184,995) | (30,894) |
Proceeds from issuance of long-term debt, net of issuance costs | 244,623 | 0 |
Excess tax benefit from share-based compensation awards | 1,699 | 4,033 |
Net cash provided by (used in) financing activities | 61,328 | (26,794) |
Effect of exchange rate changes on cash and cash equivalents | (283) | 307 |
Net increase (decrease) in cash and cash equivalents | 110,646 | (23,090) |
Cash and cash equivalents, beginning of period | 104,893 | 102,076 |
Cash and cash equivalents, end of period | 215,539 | 78,986 |
Non-cash transactions: | ||
Transfers of inventory to fixed assets | 1,688 | 940 |
Additions to property, plant and equipment included in accounts payable | 31 | 120 |
Debt issuance costs settled through the issuance of additional debt | 5,377 | 0 |
Gross decrease in contractual liability relating to fair value adjustment | 0 | (49) |
Gross increase in contingent consideration liability relating to fair value adjustment | 0 | 40 |
Issuance of common stock under employee stock plans | 3,028 | 2,760 |
Purchase consideration | ||
Non-cash transactions: | ||
Noncash business transaction | 2,279,910 | 0 |
Contingently Returnable Consideration | ||
Non-cash transactions: | ||
Noncash business transaction | $ 25,701 | $ 0 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Sep. 30, 2015 | |
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. All significant intercompany accounts and transactions are eliminated in consolidation. The accompanying unaudited interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. On July 14, 2015, we completed the acquisition of the Communications Business (the Communications Business) of Danaher Corporation (Danaher) which is more fully described in Note 7 below. This transaction was recorded using the purchase method of accounting; accordingly, the financial results of the acquisition are included in the accompanying unaudited consolidated financial statements for the periods subsequent to the acquisition. 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, 2015 . Fiscal Year End NetScout's fiscal year ends on March 31st and the quarters end on the last calendar day of the months of June, September and December. The entities acquired as part of the Communications Business acquisition follow a 52/53 fiscal reporting calendar except for the third quarter, which ends on December 31st. The remaining fiscal periods end on every thirteenth Friday, except for its first fiscal quarter which may end on the fourteenth Friday following December 31st. The acquired entities Fiscal 2016 year will end on April 1, 2016. The Company does not adjust for the difference in fiscal periods between the acquired entities and itself, as such difference would be less than 93 days, pursuant to Regulation S-X Rule 3A-02. References herein to Fiscal 2016, 2015 and 2014 refer to the fiscal years ended March 31, 2016, 2015 and 2014, respectively. Recent Accounting Pronouncements In August 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2015-15,"Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-Of-Credit Arrangements and Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting" (ASU 2015-15). The guidance in the previously issued ASU 2015-03, "Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted this standard in the second quarter of Fiscal 2016 as early adoption was permitted. In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, (ASU 2015-16), which eliminates the requirement to restate prior financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment be recognized in the reporting period in which the adjustment is identified. The Company adopted this standard in the second quarter of Fiscal 2016 as early adoption was permitted. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. This ASU will be effective for the Company in the first quarter of its fiscal year 2019. Early adoption is not permitted. This ASU allows for either full retrospective or modified retrospective adoption. The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements. |
CONCENTRATION OF CREDIT RISK AN
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS | 6 Months Ended |
Sep. 30, 2015 | |
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. The Company's cash, cash equivalents, and marketable securities are placed with financial institutions with high credit standings. At September 30, 2015 , one direct customer accounted for more than 10% of the accounts receivable balance, while no indirect channel partners accounted for more than 10% of the accounts receivable balance. At March 31, 2015, 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 and six months ended September 30, 2015 , one direct customer accounted for more than 10% of the Company's total revenue, while no indirect channel partner accounted for more than 10% of total revenue. During the three months ended September 30, 2014 , no direct customer or indirect channel partner accounted for more than 10% of the Company's total revenue. During the six months ended September 30, 2014, two direct customers each accounted for more than 10% of the Company's total revenue, while no indirect channel partner accounted for more than 10% of total revenue. As disclosed parenthetically within the financial statements, the Company has a receivable from Danaher in the amount of $53.7 million that represents a concentration of credit risk at September 30, 2015. 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. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Sep. 30, 2015 | |
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 the Company's 2011 Employee Stock Purchase Plan (ESPP) based on estimated fair values within the applicable cost and expense lines identified below (in thousands): Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 Cost of product revenue $ 167 $ 93 $ 269 $ 153 Cost of service revenue 754 314 1,127 542 Research and development 2,572 1,490 4,062 2,516 Sales and marketing 2,240 1,235 3,643 2,198 General and administrative 1,770 1,363 2,997 2,388 $ 7,503 $ 4,495 $ 12,098 $ 7,797 Employee Stock Purchase Plan – The Company maintains the ESPP for all eligible employees as described in the Company’s Annual Report on Form 10-K for the year ended March 31, 2015 . 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 1st through August 31st and from September 1st through February 28th of each year. During the six months ended September 30, 2015, employees purchased 82,836 shares under the ESPP and the value per share was $36.55 . |
CASH, CASH EQUIVALENTS AND MARK
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | 6 Months Ended |
Sep. 30, 2015 | |
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 September 30, 2015 and March 31, 2015 . Marketable Securities The following is a summary of marketable securities held by NetScout at September 30, 2015 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Gains Fair Value Type of security: U.S. government and municipal obligations $ 93,507 $ 25 $ 93,532 Commercial paper 2,990 — 2,990 Corporate bonds 6,614 2 6,616 Total short-term marketable securities 103,111 27 103,138 U.S. government and municipal obligations 32,664 44 32,708 Total long-term marketable securities 32,664 44 32,708 Total marketable securities $ 135,775 $ 71 $ 135,846 The following is a summary of marketable securities held by NetScout at March 31, 2015 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Gains (Losses) Fair Value Type of security: U.S. government and municipal obligations $ 88,651 $ 3 $ 88,654 Commercial paper 5,093 2 5,095 Corporate bonds 7,644 (1 ) 7,643 Total short-term marketable securities 101,388 4 101,392 U.S. government and municipal obligations 56,683 8 56,691 Corporate bonds 1,880 1 1,881 Total long-term marketable securities 58,563 9 58,572 Total marketable securities $ 159,951 $ 13 $ 159,964 Contractual maturities of the Company’s marketable securities held at September 30, 2015 and March 31, 2015 were as follows (in thousands): September 30, March 31, Available-for-sale securities: Due in 1 year or less $ 103,138 $ 101,392 Due after 1 year through 5 years 32,708 58,572 $ 135,846 $ 159,964 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Sep. 30, 2015 | |
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 at September 30, 2015 and March 31, 2015 (in thousands): Fair Value Measurements at September 30, 2015 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 215,539 $ — $ — $ 215,539 U.S. government and municipal obligations 34,084 92,156 — 126,240 Commercial paper — 2,990 — 2,990 Corporate bonds 6,616 — — 6,616 Derivative financial instruments — 34 — 34 Contingently returnable consideration $ — $ — $ 19,125 $ 19,125 $ 256,239 $ 95,180 $ 19,125 $ 370,544 LIABILITIES: Contingent purchase consideration $ — $ — $ (4,560 ) $ (4,560 ) Derivative financial instruments — (416 ) — (416 ) $ — $ (416 ) $ (4,560 ) $ (4,976 ) Fair Value Measurements at March 31, 2015 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 104,893 $ — $ — $ 104,893 U.S. government and municipal obligations 46,564 98,781 — 145,345 Commercial paper — 5,095 — 5,095 Corporate bonds 9,524 — — 9,524 Derivative financial instruments — 15 — 15 $ 160,981 $ 103,891 $ — $ 264,872 LIABILITIES: Contingent purchase consideration $ — $ — $ (4,484 ) $ (4,484 ) Derivative financial instruments — (1,664 ) — (1,664 ) $ — $ (1,664 ) $ (4,484 ) $ (6,148 ) 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 9. The Company's Level 3 asset and liability consist of contingently returnable consideration and contingent purchase consideration, respectively. The Company's contingently returnable consideration represents a contingent right of return from Danaher to reimburse NetScout for cash awards to be paid by NetScout to employees of the Communications Business for post-combination services on various dates through August 4, 2016 as part of the acquisition of the Communications Business. The contingently returnable consideration is classified as Level 3 because the fair value of the asset was determined using assumptions developed by management in determining the estimated cash award expected to be paid on August 4, 2016 after applying an assumed forfeiture rate. The contingently returnable consideration of $19.1 million , net of taxes as of September 30, 2015 is included as prepaid expenses and other current assets in Company’s consolidated balance sheet. For additional information, see Note 7 of the Company's Notes to Consolidated Financial Statements. The following table sets forth a reconciliation of changes in the fair value of the Company’s Level 3 financial assets and liabilities for the six months ended September 30, 2015 (in thousands): Contingent Purchase Consideration Contingently Returnable Consideration Balance at beginning of period $ (4,484 ) $ — Increase in fair value and accretion expense (included within research and development expense) (76 ) Contingently returnable consideration 19,125 Balance at end of period $ (4,560 ) $ 19,125 Deal related compensation expense and accretion charges related to the contingent consideration for the six months ended September 30, 2015 was $76 thousand and was included as part of earnings. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Sep. 30, 2015 | |
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): September 30, March 31, Raw materials $ 18,868 $ 6,134 Work in process 1,551 17 Finished goods 50,647 5,979 $ 71,066 $ 12,130 The Company reviews the components of its inventory on a periodic basis for excess, obsolete or impaired inventory, and records a reserve for such identified items. The inventory reserve was $16.9 million and $4.1 million at September 30, 2015 and March 31, 2015 , respectively. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS On July 14, 2015 (Closing Date), the Company completed the acquisition of the Communications Business, which included certain assets, liabilities, technology and employees within Tektronix Communications, VSS Monitoring, Arbor Networks and certain portions of the Fluke Networks Enterprise business, which excluded Danaher's data communications cable installation business and its communication service provider business. The acquisition was structured as a Reverse Morris Trust transaction (the Transaction) whereby Danaher Corporation contributed its Communications Business to a new subsidiary, Potomac Holding LLC (Newco). The total equity consideration was $2.3 billion based on issuing approximately 62.5 million new shares of NetScout common stock to the existing common unit holders of Potomac Holding LLC (Newco), based on the July 13, 2015 NetScout common stock closing share price of $36.89 per share. The Transaction is being accounted for under the acquisition method of accounting with the operations of the Communications Business included in the Company’s operating results from the date of acquisition. The acquisition method of accounting requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The preliminary determination of the fair value of assets acquired and liabilities assumed has been recognized based on management's estimates and assumptions using the information about facts and circumstances that existed at the acquisition date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed on the acquisition date, its estimates and assumptions are subject to refinement. Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company's results of operations. The finalization of the purchase accounting assessment will result in a change in the valuation of assets acquired and liabilities assumed and may have a material impact on the Company's results of operations and financial position. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill to reflect additional information received about facts and circumstances which existed at the date of acquisition. The Company records adjustments to the assets acquired and liabilities assumed subsequent to the purchase price allocation period in the Company’s operating results in the period in which the adjustments were determined. The size and breadth of the Transaction will necessitate the use of this measurement period to adequately analyze and assess a number of the factors used in establishing the fair value of certain tangible and intangible assets acquired and liabilities assumed as of the acquisition date and the related tax impacts of any changes made. Any potential adjustments made could be material in relation to the preliminary values presented below. In connection with the Transaction, under the Employee Matters Agreement dated July 14, 2015 by and among the Company, Danaher and Newco, Danaher will fund certain contracts under which employees will provide post-combination services to the Company. 1) For any outstanding Danaher restricted stock units or stock options held by employees of the Communications Business transferred to Newco (Newco Employees) that vested from July 14, 2015 through August 4, 2015, the awards continued to vest in Danaher shares. These awards met the definition of a derivative under ASC 815 and as such, the Company determined the fair value of these awards on July 14, 2015 and recorded them separate from the business combination as prepaid compensation. The derivative was amortized into compensation expense through August 4, 2015, the post combination requisite settlement date. The total amount of compensation expense for post combination services recorded for the three and six months ended September 30, 2015 was $6.5 million . 2) All outstanding Danaher restricted stock units or stock options held by Newco Employees that were due to vest after August 4, 2015 were cancelled and replaced by NetScout with a cash retention award equal to one half of the value of the employee’s cancelled Danaher equity award and up to $15 million of restricted stock units relating to shares of NetScout common stock equal to the remaining one half of the value of the employee’s cancelled Danaher equity award. The restricted stock units issued are considered new share-based payment awards granted by NetScout to the former employees of Danaher. NetScout accounted for these new awards separately from the business combination. The Company recognized share-based compensation net of an estimated forfeiture rate and only recognized compensation cost for those shares expected to vest on a straight-line basis over the requisite service period of the award. The cash retention award will become payable on the August 4, 2016, subject to the employee’s continued employment with NetScout through the applicable vesting date of August 4, 2016. Danaher will reimburse NetScout for the amount of the cash retention payments (net of any applicable employment taxes and deductions). The cash retention award liability will be accounted for separately from the business combination as the cash retention award is automatically forfeited upon termination of employment. NetScout will record the cash retention award liability over the period it is earned as compensation expense for post combination services. The reimbursement by Danaher to NetScout of the estimated cash retention award payment represents contingently returnable consideration, which will be accounted for separately from the business combination on the date of the acquisition. At September 30, 2015, the Company has recorded a receivable from Danaher in the amount of $8.4 million , net of tax and is included as prepaid expenses and other current assets in Company’s consolidated balance sheet. At September 30, 2015, the Company has recorded a cash retention award liability of $2.6 million and is included as accrued compensation in Company’s consolidated balance sheet. For the three and six months ended September 30, 2015, $2.6 million has been recorded as compensation expense for post combination services. 3) Newco Employees that were entitled to receive an incentive bonus under the Danaher annual bonus plan will receive a cash incentive bonus payment subject to the employee’s continued employment with NetScout through December 31, 2015. The cash incentive bonus liability will be accounted for separately from the business combination as the cash incentive bonus is automatically forfeited upon termination of employment. NetScout will record the liability over the period it is earned as compensation expense for post combination services. The payment of the cash retention award will be reimbursed by Danaher to NetScout, which will be accounted for separately from the business combination on the date of the acquisition. At September 30, 2015, the Company has recorded a receivable due from Danaher in the amount of $5.8 million , net of tax and is included as prepaid expenses and other current assets in Company’s consolidated balance sheet. At September 30, 2015, the Company has recorded a cash incentive bonus liability of $4.1 million and is included as accrued compensation in the Company’s consolidated balance sheet. For the three and six months ended September 30, 2015, $4.1 million has been recorded as compensation expense for post combination services. 4) Certain Newco Employees will receive cash retention payments subject to the employee’s continued employment with NetScout through October 16, 2015, ninety ( 90 ) days after the close of the acquisition. The cash retention payment liability will be accounted for separately from the business combination as the cash retention payment is automatically forfeited upon termination of employment. NetScout will record the liability over the period it is earned as compensation expense for post combination services. The payment of the cash retention award will be reimbursed by Danaher to NetScout, which will be accounted for separately from the business combination on the date of the acquisition. At September 30, 2015, the Company has recorded a receivable due from Danaher in the amount of $5.0 million , net of tax and is included as prepaid expenses and other current assets in Company’s consolidated balance sheet. At September 30, 2015, the Company has recorded a cash retention payment liability of $6.7 million and is included as accrued compensation in Company’s consolidated balance sheet. For the three and six months ended September 30, 2015, $6.7 million has been recorded as compensation expense for post combination services. The following table summarizes the allocation of the purchase price (in thousands): Purchase Price allocation: Total equity consideration $ 2,305,611 (1) Less: Equity consideration for replacement awards (25,701 ) (2) Less: Delayed close entities (5,700 ) (3) Estimated Purchase Price 2,274,210 Estimated fair value of assets acquired and liabilities assumed: Cash 27,748 Accounts receivable 135,322 Inventories 80,320 Prepaid expenses and other assets 7,220 Property, plant and equipment 36,539 Deferred income taxes 13,067 Intangible assets 1,080,700 Other assets 897 Accounts payable (21,819 ) Accrued compensation (27,861 ) Accrued other (13,977 ) Deferred revenue (198,265 ) Other long-term liabilities (3,572 ) Accrued retirement benefits (26,758 ) Deferred tax liabilities (319,612 ) Goodwill $ 1,504,261 (1) Represents approximately 62.5 million new shares (plus cash in lieu of fractional shares) of NetScout common stock issued to the existing common unit holders of Newco based on the July 13, 2015 NetScout common stock closing share price of $36.89 per share. (2) Represents the value of certain outstanding Danaher equity awards held by Newco Employees for which continuing employees will receive value after the Closing Date. A portion of this amount relates to awards that will continue to vest in Danaher shares after the Closing Date. These future compensation amounts will be settled in shares other than shares of the acquired business. The balance of this amount also represents future compensation expense and relates to a cash award to be paid by NetScout to acquired Newco employees on August 4, 2016. The cash payment by NetScout will be reimbursed by Danaher. These items are further described in the Employee Matters Agreement dated July 14, 2015 by and among NetScout Systems, Inc., Danaher Corporation and Potomac Holding LLC and have been accounted for separately from the Communications Business Acquisition. (3) Represents the fair value attributable to the foreign entities that the Company did not obtain control over on July 14, 2015 due to regulatory and other compliance requirements. The Company expects to gain control over these entities in the next twelve months. The Transaction is expected to extend the Company's reach into growth-oriented adjacent markets, including cyber security, with a broader range of market-leading products and capabilities, strengthen the Company's go-to-market resources to better support a larger, more diverse and more global customer base, and increase scale and elevate the Company's strategic position within key accounts. Goodwill was recognized for the excess purchase price over the fair value of the assets acquired. Goodwill of $1.5 billion from the acquisition will be included within the following operating segments: $534.7 million in Arbor Networks, $792.9 million in Tektronix Communications, $57.0 million in VSS, and $119.7 million in FNET. All reporting units resulting from the Transaction will be included in the Company’s annual goodwill impairment review. Goodwill and intangible assets recorded as part of the acquisition are not deductible for tax purposes. The fair values of intangible assets were based on valuations using an income approach. These assumptions include estimates of future revenues associated with the technology purchased as part of the acquisition and the migration of the current technology to more advanced version of the software. This fair value measurement was based on significant inputs not observable in the market and thus represents Level 3 fair value measurements. The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives (in thousands): Fair Value Useful Life (Years) Developed technology $ 221,900 9 - 13 Customer relationships 794,100 13 - 18 Backlog 18,200 1 - 3 Definite lived trademark and tradenames 43,900 3 - 9 Leasehold interest 2,600 4 - 6 $ 1,080,700 The weighted average useful life of identifiable intangible assets acquired in the transaction is 14.7 years . Developed technology is amortized using an accelerated amortization method and has a weighted average useful life of 11.7 years . Customer relationships are amortized using an accelerated amortization method and have a weighted average useful life of 16.3 years . Backlog is amortized using an accelerated amortization method and has a weighted average useful life of 2.0 years . Trademarks and tradenames are amortized using an accelerated amortization method and has a weighted average useful life of 8.5 years . Leasehold interests are amortized on a straight-line basis and has a weighted average useful life of 5.6 years . The Company incurred approximately $17.9 million of acquisition-related costs related to the transaction which are included in general and administrative expense during the six months ended September 30, 2015. During the six months ended September 30, 2015, the Company has recorded $168.8 million of revenue and a net loss of $19.5 million directly attributable to the Transaction within its consolidated financial statements. The following table presents unaudited pro forma results of the historical Consolidated Statements of Operations of the Company and the Communications Business of Danaher for the three and six months ended September 30, 2015 and 2014, giving effect to the mergers as if they occurred on April 1, 2014 (in thousands, except per share data): Three Months Ended September 30, (unaudited) Six Months Ended September 30, (unaudited) 2015 2014 2015 2014 Pro forma revenue $ 267,754 $ 268,897 $ 538,060 $ 559,009 Pro forma net income (loss) $ (11,773 ) $ (18,019 ) $ (30,683 ) $ (21,969 ) Pro forma income (loss) per share: Basic $ (0.12 ) $ (0.17 ) $ (0.30 ) $ (0.21 ) Diluted $ (0.12 ) $ (0.17 ) $ (0.30 ) $ (0.21 ) Pro forma shares outstanding Basic 100,242 103,560 101,750 103,570 Diluted 100,242 103,560 101,750 103,570 The pro forma results for the three and six months ended September 30, 2015 and 2014 primarily include adjustments for amortization of intangibles. This pro forma information does not purport to indicate the results that would have actually been obtained had the acquisitions been completed on the assumed date, or which may be realized in the future. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill The Company has five operating segments: (1) legacy NetScout, (2) Arbor Networks, (3) Tektronix Communications, (4) VSS and (5) FNET. At September 30, 2015 and March 31, 2015 , goodwill attributable to the legacy NetScout reporting unit was $198.0 million and $197.4 million , respectively. Goodwill attributable to the newly acquired Arbor Networks, Tektronix Communications, VSS and FNET operating segments were $534.7 million , $793.3 million , $57.0 million , and $119.7 million , respectively. 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 six months ended September 30, 2015 is due to the acquisition of the Communications Business of Danaher, and 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 six months ended September 30, 2015 are as follows (in thousands): Balance at March 31, 2015 $ 197,445 Goodwill acquired during period 1,504,261 Foreign currency translation impact for the six months ended September 30, 2015 999 Balance at September 30, 2015 $ 1,702,705 Intangible Assets The net carrying amounts of intangible assets were $1.1 billion and $ 50.2 million at September 30, 2015 and March 31, 2015 , 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. Intangible assets include the indefinite lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at September 30, 2015 (in thousands): Cost Accumulated Amortization Net Developed technology $ 252,869 $ (40,682 ) $ 212,187 Customer relationships 832,628 (25,034 ) 807,594 Distributor relationships 1,626 (1,626 ) — Definite lived trademark and trade name 43,900 (1,655 ) 42,245 Core technology 7,162 (4,167 ) 2,995 Net beneficial leases 336 (336 ) — Non-compete agreements 287 (287 ) — Leasehold interest 2,600 (125 ) 2,475 Backlog 18,200 (2,028 ) 16,172 Other 1,095 (646 ) 449 $ 1,160,703 $ (76,586 ) $ 1,084,117 Intangible assets include the indefinite lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at March 31, 2015 (in thousands): Cost Accumulated Amortization Net Developed technology $ 30,865 $ (25,561 ) $ 5,304 Customer relationships 38,498 (16,935 ) 21,563 Distributor relationships 1,585 (711 ) 874 Core technology 7,118 (3,660 ) 3,458 Non-compete agreements 280 (280 ) — Other 943 (562 ) 381 $ 79,289 $ (47,709 ) $ 31,580 Amortization of software and core technology included as cost of product revenue was $14.8 million and $15.6 million for the three and six months ended September 30, 2015 , respectively. Amortization of other intangible assets included as operating expense was $9.8 million and $10.7 million for the three and six months ended September 30, 2015 , respectively. Amortization of software and core technology included as cost of product revenue was $923 thousand and $1.9 million for the three and six months ended September 30, 2014 , respectively. Amortization of other intangible assets included as operating expense was $856 thousand and $1.7 million for the three and six months ended September 30, 2014 , respectively. The following is the expected future amortization expense at September 30, 2015 for the years ending March 31 (in thousands): 2016 (remaining six months) $ 55,306 2017 123,195 2018 109,157 2019 103,629 2020 96,114 Thereafter 596,716 $ 1,084,117 The weighted average amortization period of developed technology and core technology is 11.5 years . The weighted average amortization period for customer and distributor relationships is 16.1 years . The weighted average amortization period for trademarks and tradenames is 8.5 years . The weighted average amortization period for leasehold interests is 5.6 years . The weighted average amortization period for backlog is 2.0 years . The weighted average amortization period for amortizing all intangible assets is 14.6 years . |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 6 Months Ended |
Sep. 30, 2015 | |
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 at September 30, 2015 and March 31, 2015 were as follows (in thousands): Notional Amounts (a) Prepaid Expenses and Other Current Assets Accrued Other September 30, March 31, September 30, March 31, September 30, March 31, Derivatives Designated as Hedging Instruments: Forward contracts $ 19,159 $ 20,203 $ 34 $ 15 $ 416 $ 1,664 (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 September 30, 2015 and 2014 (in thousands): Derivatives in Cash Flow Hedging Relationships Effective Portion Ineffective Portion Gain (Loss) Recognized in OCI on Derivative (a) Gain (Loss) Reclassified from Accumulated OCI into Income (b) Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) (c) September 30, 2015 September 30, 2014 Location September 30, 2015 September 30, 2014 Location September 30, 2015 September 30, 2014 Forward contracts $ (527 ) $ (963 ) Research and development $ 38 $ 11 Research and development $ 29 $ 38 Sales and marketing 430 (143 ) Sales and marketing (7 ) 12 $ (527 ) $ (963 ) $ 468 $ (132 ) $ 22 $ 50 (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. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT On July 14, 2015, the Company entered into a certain credit facility with a syndicate of lenders pursuant to a Credit Agreement (Credit Agreement), dated as of July 14, 2015, by and among: the Company; JPMorgan Chase Bank, N.A. (JPMorgan), as administrative agent and collateral agent; J.P. Morgan Securities LLC, KeyBanc Capital Markets, Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets and Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners; Santander Bank, N.A., SunTrust Bank, N.A. and U.S. Bank National Association, as co-documentation agents; and the lenders party thereto. The Credit Agreement provides for a five-year $800,000,000 senior secured revolving credit facility, including a letter of credit sub-facility of up to $50,000,000 . The Company may elect to use the new credit facility for working capital purposes or repurchase of up to 20 million shares of common stock under the Company's common stock repurchase plan. The commitments under the Credit Agreement will expire on July 14, 2020, and any outstanding loans will be due on that date. Subsequent to entering into the Credit Agreement, the Company drew down $250 million to support general working capital requirements as well as to help finance the repurchase of the Company's common stock under its authorized 20 million share common stock repurchase plan. At September 30, 2015, $250 million was outstanding under this credit facility. At the Company’s election, revolving loans under the Credit Agreement bear interest at either (a) a Alternate Base Rate per annum equal to the greatest of (1) JPMorgan’s prime rate, (2) 0.50% in excess of the Federal Funds effective rate, or (3) an adjusted LIBO rate plus 1% ; or (b) such adjusted LIBO rate (for the interest period selected by the Company), in each case plus an applicable margin. For the initial period until the Company has delivered financial statements for the quarter ended March 31, 2016, the applicable margin will be 1.75% per annum for LIBOR loans and 0.75% per annum for Alternate Base Rate loans, and thereafter the applicable margin will vary depending on the Company’s leverage ratio, ranging from 1.00% per annum for Base Rate loans and 2.00% per annum for LIBOR loans if the Company’s consolidated leverage ratio is greater than 2.50 to 1.00, down to 0.25% per annum for Alternate Base Rate loans and 1.25% per annum for LIBOR loans if the Company’s consolidated leverage ratio is equal to or less than 1.00 to 1.00. The Company’s consolidated leverage ratio is the ratio of its total funded debt compared to its consolidated adjusted EBITDA. Consolidated adjusted EBITDA includes certain adjustments, including, without limitation, adjustments relating to extraordinary, unusual or non-recurring charges, certain restructuring charges, non-cash charges, certain transaction costs and expenses and certain pro forma adjustments in connection with material acquisitions and dispositions, all as set forth in detail in the definition of Consolidated EBITDA in the Credit Agreement. Commitment fees will accrue on the daily unused amount of the credit facility. For the initial period until the Company has delivered financial statements for the quarter ended March 31, 2016, the commitment fee will be 0.30% per annum, and thereafter the commitment fee will vary depending on the Company’s consolidated leverage ratio, ranging from 0.35% per annum if the Company’s consolidated leverage ratio is greater than 2.50 to 1.00, down to 0.20% per annum if the Company’s consolidated leverage ratio is equal to or less than 1.00 to 1.00. Letter of credit participation fees are payable to each lender on the amount of such lender’s letter of credit exposure, during the period from the closing date of the Credit Agreement to but excluding the date which is the later of (i) the date on which such lender’s commitment terminates or (ii) the date on which such lender ceases to have any letter of credit exposure, at a rate per annum equal to the applicable margin for LIBOR loans. Additionally, the Company will pay a fronting fee to each issuing bank in amounts to be agreed to between the Company and the applicable issuing bank. Interest on Alternate Base Rate loans is payable at the end of each calendar quarter. Interest on LIBOR loans is payable at the end of each interest rate period or at the end of each three -month interval within an interest rate period if the period is longer than three months. The Company may also 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 and other obligations under the credit facility are (a) guaranteed by each of the Company’s wholly-owned material domestic restricted subsidiaries, subject to certain exceptions, and (b) are secured by substantially all of the assets of the Company and the subsidiary guarantors, including a pledge of all the capital stock of material subsidiaries held directly by the Company and the subsidiary guarantors (which pledge, in the case of any foreign subsidiary, is limited to 65% of the voting stock), subject to certain customary exceptions and limitations. The Credit Agreement generally prohibits any other liens on the assets of the Company and its restricted subsidiaries, subject to certain exceptions as described in the Credit Agreement. The Credit Agreement contains certain covenants applicable to the Company and its restricted subsidiaries, including, without limitation, limitations on additional indebtedness, liens, various fundamental changes, dividends and distributions, investments (including acquisitions), transactions with affiliates, asset sales, including sale-leaseback transactions, speculative hedge agreements, payment of junior financing, 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. These covenants and limitations are more fully described in the Credit Agreement. At September 30, 2015 , the Company was in compliance with all of these covenants. The Credit Agreement provides that events of default will exist in certain circumstances, including failure to make payment of principal or interest on the loans when required, failure to perform certain obligations under the Credit Agreement and related documents, defaults under certain other indebtedness, certain insolvency events, certain events arising under ERISA, a change of control and certain other events. Upon an event of default, the administrative agent with the consent of, or at the request of, the holders of more than 50% in principal amount of the loans and commitments may terminate the commitments and accelerate the maturity of the loans and enforce certain other remedies under the Credit Agreement and the other loan documents. In connection with the Company’s new revolving credit facility described above, effective as of the Closing Date, the Company terminated its existing term loan and revolving credit facility pursuant to the Credit and Security Agreement, dated as of November 22, 2011, by and among the Company, KeyBank National Association, as joint lead arranger, sole book runner and administrative agent, Wells Fargo Bank, National Association, as joint lead arranger and co-syndication agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arranger, Bank of America, N.A., as co-syndication agent, and Silicon Valley Bank and Comerica Bank, as co-documentation agents, and the Lenders party thereto. The Company capitalized $6.6 million of debt issuance costs associated with the origination of the Credit Agreement, which are being amortized over the life of the revolving credit facility. The unamortized balance was $6.4 million as of September 30, 2015. The balance of $1.3 million is included as prepaid expenses and other current assets and a balance of $5.1 million was included as other assets in Company’s consolidated balance sheet. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Acquisition related – The Company has one contingent liability related to the acquisition of Simena, LLC (Simena) in November 2011 for future consideration to be paid to the former seller which had an initial fair value of $8.0 million at the time of acquisition. At September 30, 2015 , the present value of the future consideration was $4.5 million . 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. |
PENSION BENEFIT PLANS
PENSION BENEFIT PLANS | 6 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
PENSION BENEFIT PLANS | PENSION BENEFIT PLANS Certain of the Company's non-U.S. employees participate in certain noncontributory defined benefit pension plans acquired in the acquisition. None of the Company's employees in the U.S. participate in any noncontributory defined benefit pension plans. In general, these plans are funded based on considerations relating to legal requirements, underlying asset returns, the plan’s funded status, the anticipated deductibility of the contribution, local practices, market conditions, interest rates and other factors. The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the three and six months ended September 30, 2015 (in thousands): Three months ended Six months ended September 30, September 30, 2015 2014 2015 2014 Service cost $ 49 $ — $ 49 $ — Interest cost 75 — 75 — Amortization of net loss 80 — 80 — Net periodic pension cost $ 204 $ — $ 204 $ — Expected Contributions During the six months ended September 30, 2015, the Company did no t make any contributions to its defined benefit pension plans. During the fiscal year ending March 31, 2016, the Company's cash contribution requirements for its defined benefit pension plans are expected to be less than $1.0 million . As the participants within the Company's plans are all active employees, the benefit payments are not expected to be material in the foreseeable future. Other Matters Substantially all employees not covered by defined benefit plans are covered by defined contribution plans, which generally provide for company funding based on a percentage of compensation. Expense for all defined benefit pension and defined contribution plans amounted to $1.5 million and $2.8 million for the three and six months ended September 30, 2015, respectively. |
TREASURY STOCK
TREASURY STOCK | 6 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
TREASURY STOCK | TREASURY STOCK On April 22, 2014, the Company's board of directors approved a stock repurchase program. This program authorized management to make additional repurchases of NetScout outstanding common stock of up to $100 million . Through September 30, 2015 , the Company had repurchased 824,452 shares totaling $34.3 million in the open market under this stock repurchase plan. The Company repurchased 67,752 shares for $2.8 million under this program during the six months ended September 30, 2015. At September 30, 2015 , there were no shares of common stock that remained available to be purchased under this plan due to the approval of a new share repurchase program approved on May 19, 2015. On May 19, 2015, the Company’s board of directors approved a new share repurchase program, conditional upon the completion of the Company's planned acquisition of Danaher Corporation's (Danaher) Communications Business. This new program enables the Company to repurchase up to 20 million shares of its common stock. This plan became effective on July 14, 2015 upon the completion of the Transaction and replaced the Company's previously existing open market stock repurchase program described above. For additional information regarding the acquisition of the Communications Business, see Note 7 above. Through September 30, 2015, the Company has repurchased 4,496,596 shares totaling $176.3 million in the open market under this stock repurchase plan. At September 30, 2015, 15,503,404 shares 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 withheld 157,771 shares for $5.9 million related to minimum statutory tax withholding requirements on these restricted stock units during the six months ended September 30, 2015 . These withholding 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 | 6 Months Ended |
Sep. 30, 2015 | |
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 Six Months Ended September 30, September 30, 2015 2014 2015 2014 Numerator: Net income (loss) $ (7,915 ) $ 11,233 $ (246 ) $ 22,709 Denominator: Denominator for basic net income per share - weighted average common shares outstanding 91,410 41,060 66,232 41,071 Dilutive common equivalent shares: Weighted average stock options — 11 — 14 Weighted average restricted stock units — 581 — 647 Denominator for diluted net income per share - weighted average shares outstanding 91,410 41,652 66,232 41,732 Net income per share: Basic net income (loss) per share $ (0.09 ) $ 0.27 $ — $ 0.55 Diluted net income (loss) per share $ (0.09 ) $ 0.27 $ — $ 0.54 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 Six Months Ended September 30, September 30, 2015 2014 2015 2014 Restricted stock units 557 — 579 — Basic net income (loss) per share 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 net income (loss) per share 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 | 6 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's effective income tax rates were 78.1% and 37.9% for the three months ended September 30, 2015 and 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 and income generated in jurisdictions that have a different tax rate than the U.S. statutory rate. The effective tax rate for the three months ended September 30, 2015 is higher than the effective rate for the three months ended September 30, 2014 primarily related to a decrease in profit before taxes due to Transaction related expenses recorded in the quarter and a change in the jurisdictional mix of earnings resulting from the Transaction. Our effective tax rates were 99.0% and 39.6% for the six months ended September 30, 2015 and 2014, respectively. The effective tax rate is higher than the comparable period in the prior year primarily due to the decrease in profit before taxes due to Transaction related expenses recorded in the first six months of Fiscal 2016 and a change in the jurisdictional mix of earnings resulting from the Transaction. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 6 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION The Company reports revenues and income under five operating segments that aggregate 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 Six Months Ended September 30, September 30, 2015 2014 2015 2014 United States $ 195,169 $ 79,337 $ 273,442 $ 165,355 Europe 35,631 11,005 48,238 20,051 Asia 14,180 4,672 17,712 11,389 Rest of the world 16,130 8,585 22,461 14,656 $ 261,110 $ 103,599 $ 361,853 $ 211,451 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS A member of the Company’s Board of Directors also serves as an executive officer (under Section 16 of the Securities Exchange Act of 1934, as amended (the Exchange Act) of Danaher. As part of the split off of Danaher’s Communications Business and the Company’s subsequent acquisition of that business from Newco's shareholders, NetScout has entered into multiple transactions with Danaher which include: transitions services agreements, lease agreements, closing agreements, and compensation for post combination services provisions within the separation and distribution agreement. The Company has disclosed these transactions parenthetically within the financial statements. A member of the Company’s Board of Directors also serves as a member of the board of directors for EMC, Corp. (EMC) and therefore, the Company considers sales to EMC to be a related party transaction. The Company recognized $346 thousand in revenue from EMC during the six months ended September 30, 2015 in the ordinary course of business. Another member of the Company’s Board of Directors also serves as a Section 16 officer of State Street Corporation (State Street) and therefore, the Company considers sales to State Street to be a related party transaction. The Company recognized $122 thousand in revenue from State Street during the six months ended September 30, 2015 in the ordinary course of business. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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. All significant intercompany accounts and transactions are eliminated in consolidation. The accompanying unaudited interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. On July 14, 2015, we completed the acquisition of the Communications Business (the Communications Business) of Danaher Corporation (Danaher) which is more fully described in Note 7 below. This transaction was recorded using the purchase method of accounting; accordingly, the financial results of the acquisition are included in the accompanying unaudited consolidated financial statements for the periods subsequent to the acquisition. 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, 2015 . |
Fiscal Year End | NetScout's fiscal year ends on March 31st and the quarters end on the last calendar day of the months of June, September and December. The entities acquired as part of the Communications Business acquisition follow a 52/53 fiscal reporting calendar except for the third quarter, which ends on December 31st. The remaining fiscal periods end on every thirteenth Friday, except for its first fiscal quarter which may end on the fourteenth Friday following December 31st. The acquired entities Fiscal 2016 year will end on April 1, 2016. The Company does not adjust for the difference in fiscal periods between the acquired entities and itself, as such difference would be less than 93 days, pursuant to Regulation S-X Rule 3A-02. References herein to Fiscal 2016, 2015 and 2014 refer to the fiscal years ended March 31, 2016, 2015 and 2014, respectively. |
Recent Accounting Pronouncements | In August 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2015-15,"Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-Of-Credit Arrangements and Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting" (ASU 2015-15). The guidance in the previously issued ASU 2015-03, "Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted this standard in the second quarter of Fiscal 2016 as early adoption was permitted. In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, (ASU 2015-16), which eliminates the requirement to restate prior financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment be recognized in the reporting period in which the adjustment is identified. The Company adopted this standard in the second quarter of Fiscal 2016 as early adoption was permitted. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. This ASU will be effective for the Company in the first quarter of its fiscal year 2019. Early adoption is not permitted. This ASU allows for either full retrospective or modified retrospective adoption. The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary 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 the Company's 2011 Employee Stock Purchase Plan (ESPP) based on estimated fair values within the applicable cost and expense lines identified below (in thousands): Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 Cost of product revenue $ 167 $ 93 $ 269 $ 153 Cost of service revenue 754 314 1,127 542 Research and development 2,572 1,490 4,062 2,516 Sales and marketing 2,240 1,235 3,643 2,198 General and administrative 1,770 1,363 2,997 2,388 $ 7,503 $ 4,495 $ 12,098 $ 7,797 |
CASH, CASH EQUIVALENTS AND MA29
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Marketable Securities | The following is a summary of marketable securities held by NetScout at September 30, 2015 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Gains Fair Value Type of security: U.S. government and municipal obligations $ 93,507 $ 25 $ 93,532 Commercial paper 2,990 — 2,990 Corporate bonds 6,614 2 6,616 Total short-term marketable securities 103,111 27 103,138 U.S. government and municipal obligations 32,664 44 32,708 Total long-term marketable securities 32,664 44 32,708 Total marketable securities $ 135,775 $ 71 $ 135,846 The following is a summary of marketable securities held by NetScout at March 31, 2015 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Gains (Losses) Fair Value Type of security: U.S. government and municipal obligations $ 88,651 $ 3 $ 88,654 Commercial paper 5,093 2 5,095 Corporate bonds 7,644 (1 ) 7,643 Total short-term marketable securities 101,388 4 101,392 U.S. government and municipal obligations 56,683 8 56,691 Corporate bonds 1,880 1 1,881 Total long-term marketable securities 58,563 9 58,572 Total marketable securities $ 159,951 $ 13 $ 159,964 |
Summary of Contractual Maturities of Marketable Securities | Contractual maturities of the Company’s marketable securities held at September 30, 2015 and March 31, 2015 were as follows (in thousands): September 30, March 31, Available-for-sale securities: Due in 1 year or less $ 103,138 $ 101,392 Due after 1 year through 5 years 32,708 58,572 $ 135,846 $ 159,964 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
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 at September 30, 2015 and March 31, 2015 (in thousands): Fair Value Measurements at September 30, 2015 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 215,539 $ — $ — $ 215,539 U.S. government and municipal obligations 34,084 92,156 — 126,240 Commercial paper — 2,990 — 2,990 Corporate bonds 6,616 — — 6,616 Derivative financial instruments — 34 — 34 Contingently returnable consideration $ — $ — $ 19,125 $ 19,125 $ 256,239 $ 95,180 $ 19,125 $ 370,544 LIABILITIES: Contingent purchase consideration $ — $ — $ (4,560 ) $ (4,560 ) Derivative financial instruments — (416 ) — (416 ) $ — $ (416 ) $ (4,560 ) $ (4,976 ) Fair Value Measurements at March 31, 2015 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 104,893 $ — $ — $ 104,893 U.S. government and municipal obligations 46,564 98,781 — 145,345 Commercial paper — 5,095 — 5,095 Corporate bonds 9,524 — — 9,524 Derivative financial instruments — 15 — 15 $ 160,981 $ 103,891 $ — $ 264,872 LIABILITIES: Contingent purchase consideration $ — $ — $ (4,484 ) $ (4,484 ) Derivative financial instruments — (1,664 ) — (1,664 ) $ — $ (1,664 ) $ (4,484 ) $ (6,148 ) |
Schedule of 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 assets and liabilities for the six months ended September 30, 2015 (in thousands): Contingent Purchase Consideration Contingently Returnable Consideration Balance at beginning of period $ (4,484 ) $ — Increase in fair value and accretion expense (included within research and development expense) (76 ) Contingently returnable consideration 19,125 Balance at end of period $ (4,560 ) $ 19,125 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following (in thousands): September 30, March 31, Raw materials $ 18,868 $ 6,134 Work in process 1,551 17 Finished goods 50,647 5,979 $ 71,066 $ 12,130 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Summary of Purchase Price Allocation | The following table summarizes the allocation of the purchase price (in thousands): Purchase Price allocation: Total equity consideration $ 2,305,611 (1) Less: Equity consideration for replacement awards (25,701 ) (2) Less: Delayed close entities (5,700 ) (3) Estimated Purchase Price 2,274,210 Estimated fair value of assets acquired and liabilities assumed: Cash 27,748 Accounts receivable 135,322 Inventories 80,320 Prepaid expenses and other assets 7,220 Property, plant and equipment 36,539 Deferred income taxes 13,067 Intangible assets 1,080,700 Other assets 897 Accounts payable (21,819 ) Accrued compensation (27,861 ) Accrued other (13,977 ) Deferred revenue (198,265 ) Other long-term liabilities (3,572 ) Accrued retirement benefits (26,758 ) Deferred tax liabilities (319,612 ) Goodwill $ 1,504,261 (1) Represents approximately 62.5 million new shares (plus cash in lieu of fractional shares) of NetScout common stock issued to the existing common unit holders of Newco based on the July 13, 2015 NetScout common stock closing share price of $36.89 per share. (2) Represents the value of certain outstanding Danaher equity awards held by Newco Employees for which continuing employees will receive value after the Closing Date. A portion of this amount relates to awards that will continue to vest in Danaher shares after the Closing Date. These future compensation amounts will be settled in shares other than shares of the acquired business. The balance of this amount also represents future compensation expense and relates to a cash award to be paid by NetScout to acquired Newco employees on August 4, 2016. The cash payment by NetScout will be reimbursed by Danaher. These items are further described in the Employee Matters Agreement dated July 14, 2015 by and among NetScout Systems, Inc., Danaher Corporation and Potomac Holding LLC and have been accounted for separately from the Communications Business Acquisition. (3) Represents the fair value attributable to the foreign entities that the Company did not obtain control over on July 14, 2015 due to regulatory and other compliance requirements. The Company expects to gain control over these entities in the next twelve months. |
Schedule of Fair value of Acquired Identifiable Intangible Assets and Related Estimates of Useful Lives | The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives (in thousands): Fair Value Useful Life (Years) Developed technology $ 221,900 9 - 13 Customer relationships 794,100 13 - 18 Backlog 18,200 1 - 3 Definite lived trademark and tradenames 43,900 3 - 9 Leasehold interest 2,600 4 - 6 $ 1,080,700 |
Schedule of Pro Forma Results of Consolidated Statement of Operations | The following table presents unaudited pro forma results of the historical Consolidated Statements of Operations of the Company and the Communications Business of Danaher for the three and six months ended September 30, 2015 and 2014, giving effect to the mergers as if they occurred on April 1, 2014 (in thousands, except per share data): Three Months Ended September 30, (unaudited) Six Months Ended September 30, (unaudited) 2015 2014 2015 2014 Pro forma revenue $ 267,754 $ 268,897 $ 538,060 $ 559,009 Pro forma net income (loss) $ (11,773 ) $ (18,019 ) $ (30,683 ) $ (21,969 ) Pro forma income (loss) per share: Basic $ (0.12 ) $ (0.17 ) $ (0.30 ) $ (0.21 ) Diluted $ (0.12 ) $ (0.17 ) $ (0.30 ) $ (0.21 ) Pro forma shares outstanding Basic 100,242 103,560 101,750 103,570 Diluted 100,242 103,560 101,750 103,570 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the six months ended September 30, 2015 are as follows (in thousands): Balance at March 31, 2015 $ 197,445 Goodwill acquired during period 1,504,261 Foreign currency translation impact for the six months ended September 30, 2015 999 Balance at September 30, 2015 $ 1,702,705 |
Schedule of Intangible Assets | Intangible assets include the indefinite lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at September 30, 2015 (in thousands): Cost Accumulated Amortization Net Developed technology $ 252,869 $ (40,682 ) $ 212,187 Customer relationships 832,628 (25,034 ) 807,594 Distributor relationships 1,626 (1,626 ) — Definite lived trademark and trade name 43,900 (1,655 ) 42,245 Core technology 7,162 (4,167 ) 2,995 Net beneficial leases 336 (336 ) — Non-compete agreements 287 (287 ) — Leasehold interest 2,600 (125 ) 2,475 Backlog 18,200 (2,028 ) 16,172 Other 1,095 (646 ) 449 $ 1,160,703 $ (76,586 ) $ 1,084,117 Intangible assets include the indefinite lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at March 31, 2015 (in thousands): Cost Accumulated Amortization Net Developed technology $ 30,865 $ (25,561 ) $ 5,304 Customer relationships 38,498 (16,935 ) 21,563 Distributor relationships 1,585 (711 ) 874 Core technology 7,118 (3,660 ) 3,458 Non-compete agreements 280 (280 ) — Other 943 (562 ) 381 $ 79,289 $ (47,709 ) $ 31,580 |
Schedule of Expected Future Amortization Expense | e following is the expected future amortization expense at September 30, 2015 for the years ending March 31 (in thousands): 2016 (remaining six months) $ 55,306 2017 123,195 2018 109,157 2019 103,629 2020 96,114 Thereafter 596,716 $ 1,084,117 |
DERIVATIVE INSTRUMENTS AND HE34
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
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 at September 30, 2015 and March 31, 2015 were as follows (in thousands): Notional Amounts (a) Prepaid Expenses and Other Current Assets Accrued Other September 30, March 31, September 30, March 31, September 30, March 31, Derivatives Designated as Hedging Instruments: Forward contracts $ 19,159 $ 20,203 $ 34 $ 15 $ 416 $ 1,664 (a) Notional amounts represent the gross contract/notional amount of the derivatives outstanding. |
Summary of 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 September 30, 2015 and 2014 (in thousands): Derivatives in Cash Flow Hedging Relationships Effective Portion Ineffective Portion Gain (Loss) Recognized in OCI on Derivative (a) Gain (Loss) Reclassified from Accumulated OCI into Income (b) Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) (c) September 30, 2015 September 30, 2014 Location September 30, 2015 September 30, 2014 Location September 30, 2015 September 30, 2014 Forward contracts $ (527 ) $ (963 ) Research and development $ 38 $ 11 Research and development $ 29 $ 38 Sales and marketing 430 (143 ) Sales and marketing (7 ) 12 $ (527 ) $ (963 ) $ 468 $ (132 ) $ 22 $ 50 (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. |
PENSION BENEFIT PLANS (Tables)
PENSION BENEFIT PLANS (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Periodic Pension Costs of Noncontributory Defined Benefit Pension Plans | The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the three and six months ended September 30, 2015 (in thousands): Three months ended Six months ended September 30, September 30, 2015 2014 2015 2014 Service cost $ 49 $ — $ 49 $ — Interest cost 75 — 75 — Amortization of net loss 80 — 80 — Net periodic pension cost $ 204 $ — $ 204 $ — |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of 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 Six Months Ended September 30, September 30, 2015 2014 2015 2014 Numerator: Net income (loss) $ (7,915 ) $ 11,233 $ (246 ) $ 22,709 Denominator: Denominator for basic net income per share - weighted average common shares outstanding 91,410 41,060 66,232 41,071 Dilutive common equivalent shares: Weighted average stock options — 11 — 14 Weighted average restricted stock units — 581 — 647 Denominator for diluted net income per share - weighted average shares outstanding 91,410 41,652 66,232 41,732 Net income per share: Basic net income (loss) per share $ (0.09 ) $ 0.27 $ — $ 0.55 Diluted net income (loss) per share $ (0.09 ) $ 0.27 $ — $ 0.54 |
Summary of 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 Six Months Ended September 30, September 30, 2015 2014 2015 2014 Restricted stock units 557 — 579 — |
SEGMENT AND GEOGRAPHIC INFORM37
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Summary of Total Revenue by Geography | Total revenue by geography is as follows (in thousands): Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 United States $ 195,169 $ 79,337 $ 273,442 $ 165,355 Europe 35,631 11,005 48,238 20,051 Asia 14,180 4,672 17,712 11,389 Rest of the world 16,130 8,585 22,461 14,656 $ 261,110 $ 103,599 $ 361,853 $ 211,451 |
CONCENTRATION OF CREDIT RISK 38
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2015USD ($)Customer | Sep. 30, 2014Customer | Sep. 30, 2015USD ($)Customer | Sep. 30, 2014Customer | Mar. 31, 2015USD ($)Customer | |
Concentration Risk [Line Items] | |||||
Related party prepaid expenses and other current assets | $ | $ 72,218 | $ 72,218 | $ 13,495 | ||
Affiliated Entity | |||||
Concentration Risk [Line Items] | |||||
Related party prepaid expenses and other current assets | $ | $ 53,702 | $ 53,702 | $ 0 | ||
Customer Concentration Risk | Indirect Customer | Accounts receivable | |||||
Concentration Risk [Line Items] | |||||
Number of customers contributing to more than 10% | 0 | 0 | |||
Customer Concentration Risk | Indirect Customer | Sales Revenue | |||||
Concentration Risk [Line Items] | |||||
Number of customers contributing to more than 10% | 0 | 0 | 0 | 0 | |
Customer Concentration Risk | Direct Customer | Accounts receivable | |||||
Concentration Risk [Line Items] | |||||
Number of customers contributing to more than 10% | 1 | 1 | |||
Customer Concentration Risk | Direct Customer | Sales Revenue | |||||
Concentration Risk [Line Items] | |||||
Number of customers contributing to more than 10% | 1 | 0 | 1 | 2 | |
Customer Concentration Risk | Minimum | Indirect Customer | Accounts receivable | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 10.00% | 10.00% | |||
Customer Concentration Risk | Minimum | Indirect Customer | Sales Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 10.00% | 10.00% | 10.00% | 10.00% | |
Customer Concentration Risk | Minimum | Direct Customer | Accounts receivable | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 10.00% | 10.00% | |||
Customer Concentration Risk | Minimum | Direct Customer | Sales Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 10.00% | 10.00% | 10.00% | 10.00% | |
Credit Concentration Risk | Danaher | Affiliated Entity | |||||
Concentration Risk [Line Items] | |||||
Related party prepaid expenses and other current assets | $ | $ 53,700 | $ 53,700 |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 7,503 | $ 4,495 | $ 12,098 | $ 7,797 |
Cost of product revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 167 | 93 | 269 | 153 |
Cost of service revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 754 | 314 | 1,127 | 542 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 2,572 | 1,490 | 4,062 | 2,516 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 2,240 | 1,235 | 3,643 | 2,198 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 1,770 | $ 1,363 | $ 2,997 | $ 2,388 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) | 6 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Percentage of common stock price for employees | 85.00% |
Issuance of common stock under employee stock purchase plan (in shares) | shares | 82,836 |
Share price (in dollars per share) | $ 36.55 |
CASH, CASH EQUIVALENTS AND MA41
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - Summary of Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 135,775 | $ 159,951 |
Unrealized Gains (Losses) | 71 | 13 |
Fair Value | 135,846 | 159,964 |
U.S. government and municipal obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 126,240 | 145,345 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 2,990 | 5,095 |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 6,616 | 9,524 |
Short-term marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 103,111 | 101,388 |
Unrealized Gains (Losses) | 27 | 4 |
Fair Value | 103,138 | 101,392 |
Short-term marketable securities | U.S. government and municipal obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 93,507 | 88,651 |
Unrealized Gains (Losses) | 25 | 3 |
Fair Value | 93,532 | 88,654 |
Short-term marketable securities | Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,990 | 5,093 |
Unrealized Gains (Losses) | 0 | 2 |
Fair Value | 2,990 | 5,095 |
Short-term marketable securities | Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 6,614 | 7,644 |
Unrealized Gains (Losses) | 2 | (1) |
Fair Value | 6,616 | 7,643 |
Long-term marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 32,664 | 58,563 |
Unrealized Gains (Losses) | 44 | 9 |
Fair Value | 32,708 | 58,572 |
Long-term marketable securities | U.S. government and municipal obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 32,664 | 56,683 |
Unrealized Gains (Losses) | 44 | 8 |
Fair Value | $ 32,708 | 56,691 |
Long-term marketable securities | Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,880 | |
Unrealized Gains (Losses) | 1 | |
Fair Value | $ 1,881 |
CASH, CASH EQUIVALENTS AND MA42
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - Summary of Contractual Maturities of Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Available-for-sale securities: | ||
Due in 1 year or less | $ 103,138 | $ 101,392 |
Due after 1 year through 5 years | 32,708 | 58,572 |
Fair Value | $ 135,846 | $ 159,964 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
ASSETS: | ||
Cash and cash equivalents | $ 215,539 | $ 104,893 |
Marketable securities | 135,846 | 159,964 |
Derivative financial instruments | 34 | 15 |
Contingently returnable consideration | 19,125 | |
Total assets | 370,544 | 264,872 |
LIABILITIES: | ||
Contingent purchase consideration | (4,560) | (4,484) |
Derivative financial instruments | (416) | (1,664) |
Total liabilities | (4,976) | (6,148) |
U.S. government and municipal obligations | ||
ASSETS: | ||
Marketable securities | 126,240 | 145,345 |
Commercial paper | ||
ASSETS: | ||
Marketable securities | 2,990 | 5,095 |
Corporate bonds | ||
ASSETS: | ||
Marketable securities | 6,616 | 9,524 |
Level 1 | ||
ASSETS: | ||
Cash and cash equivalents | 215,539 | 104,893 |
Derivative financial instruments | 0 | 0 |
Contingently returnable consideration | 0 | |
Total assets | 256,239 | 160,981 |
LIABILITIES: | ||
Contingent purchase consideration | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Total liabilities | 0 | 0 |
Level 1 | U.S. government and municipal obligations | ||
ASSETS: | ||
Marketable securities | 34,084 | 46,564 |
Level 1 | Commercial paper | ||
ASSETS: | ||
Marketable securities | 0 | 0 |
Level 1 | Corporate bonds | ||
ASSETS: | ||
Marketable securities | 6,616 | 9,524 |
Level 2 | ||
ASSETS: | ||
Cash and cash equivalents | 0 | 0 |
Derivative financial instruments | 34 | 15 |
Contingently returnable consideration | 0 | |
Total assets | 95,180 | 103,891 |
LIABILITIES: | ||
Contingent purchase consideration | 0 | 0 |
Derivative financial instruments | (416) | (1,664) |
Total liabilities | (416) | (1,664) |
Level 2 | U.S. government and municipal obligations | ||
ASSETS: | ||
Marketable securities | 92,156 | 98,781 |
Level 2 | Commercial paper | ||
ASSETS: | ||
Marketable securities | 2,990 | 5,095 |
Level 2 | Corporate bonds | ||
ASSETS: | ||
Marketable securities | 0 | 0 |
Level 3 | ||
ASSETS: | ||
Cash and cash equivalents | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Contingently returnable consideration | 19,125 | |
Total assets | 19,125 | 0 |
LIABILITIES: | ||
Contingent purchase consideration | (4,560) | (4,484) |
Derivative financial instruments | 0 | 0 |
Total liabilities | (4,560) | (4,484) |
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 - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) $ in Thousands | 6 Months Ended |
Sep. 30, 2015USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Contingently returnable consideration | $ 19,125 |
Fair value, measurements, recurring | Contingent Purchase Consideration | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Deal related compensation expense, accretion charges and changes related to settlements of contractual non-compliance liabilities | 76 |
Level 3 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Contingently returnable consideration | 19,125 |
Level 3 | Prepaid expenses and other current assets | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Contingently returnable consideration | $ 19,100 |
FAIR VALUE MEASUREMENTS - Sch45
FAIR VALUE MEASUREMENTS - Schedule of Reconciliation of Changes in Fair Value of Level III Financial Assets (Details) - Fair value, measurements, recurring $ in Thousands | 6 Months Ended |
Sep. 30, 2015USD ($) | |
Contingent Purchase Consideration | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of period | $ (4,484) |
Increase in fair value and accretion expense (included within research and development expense) | (76) |
Balance at end of period | (4,560) |
Contingently Returnable Consideration | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of period | 0 |
Contingently returnable consideration | 19,125 |
Balance at end of period | $ 19,125 |
INVENTORIES - Schedule of Inven
INVENTORIES - Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 18,868 | $ 6,134 |
Work in process | 1,551 | 17 |
Finished goods | 50,647 | 5,979 |
Total inventories | $ 71,066 | $ 12,130 |
INVENTORIES - Narrative (Detail
INVENTORIES - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Mar. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Inventory reserve | $ 16.9 | $ 4.1 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Jul. 14, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | Jul. 13, 2015 | Mar. 31, 2015 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 1,702,705 | $ 1,702,705 | $ 197,445 | ||
Weighted average useful life of acquired intangible assets | 14 years 7 months | ||||
Backlog | |||||
Business Acquisition [Line Items] | |||||
Weighted average useful life of acquired intangible assets | 2 years | ||||
Trademarks and trade names | |||||
Business Acquisition [Line Items] | |||||
Weighted average useful life of acquired intangible assets | 8 years 6 months | ||||
Leasehold interest | |||||
Business Acquisition [Line Items] | |||||
Weighted average useful life of acquired intangible assets | 5 years 7 months 6 days | ||||
Arbor Networks | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 534,700 | $ 534,700 | |||
Tektronix Communications | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 793,300 | 793,300 | |||
VSS | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 57,000 | 57,000 | |||
FNET | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 119,700 | $ 119,700 | |||
Cash retention award | Vesting after August 4, 2015 | |||||
Business Acquisition [Line Items] | |||||
Percent of cancelled Danaher equity awards replaced | 50.00% | 50.00% | |||
Restricted stock units | Vesting after August 4, 2015 | |||||
Business Acquisition [Line Items] | |||||
Percent of cancelled Danaher equity awards replaced | 50.00% | 50.00% | |||
Post combination compensation expense, Danaher equity awards | Vesting July 14, 2015 through August 4, 2015 | |||||
Business Acquisition [Line Items] | |||||
Post combination compensation expense | $ 6,500 | $ 6,500 | |||
Post combination compensation expense, Danaher equity awards | Vesting after August 4, 2015 | |||||
Business Acquisition [Line Items] | |||||
Post combination compensation expense | 2,600 | 2,600 | |||
Contingently returnable consideration, cash retention award | Prepaid expenses and other current assets | |||||
Business Acquisition [Line Items] | |||||
Receivable from Danaher | 5,000 | 5,000 | |||
Contingently returnable consideration, cash retention award | Vesting after August 4, 2015 | Prepaid expenses and other current assets | |||||
Business Acquisition [Line Items] | |||||
Receivable from Danaher | 8,400 | 8,400 | |||
Cash retention award | Accrued compensation | |||||
Business Acquisition [Line Items] | |||||
Cash liability | 6,700 | 6,700 | |||
Cash retention award | Vesting after August 4, 2015 | Accrued compensation | |||||
Business Acquisition [Line Items] | |||||
Cash liability | 2,600 | 2,600 | |||
Contingently returnable consideration, cash incentive bonus | Prepaid expenses and other current assets | |||||
Business Acquisition [Line Items] | |||||
Receivable from Danaher | 5,800 | 5,800 | |||
Cash incentive bonus | Accrued compensation | |||||
Business Acquisition [Line Items] | |||||
Cash liability | 4,100 | 4,100 | |||
Post combination compensation expense, Danaher bonus | |||||
Business Acquisition [Line Items] | |||||
Post combination compensation expense | 4,100 | 4,100 | |||
Post combination compensation expense, Danaher retention | |||||
Business Acquisition [Line Items] | |||||
Post combination compensation expense | $ 6,700 | $ 6,700 | |||
Communications Business | |||||
Business Acquisition [Line Items] | |||||
Total equity consideration | $ 2,305,611 | ||||
Goodwill | 1,504,261 | ||||
Weighted average useful life of acquired intangible assets | 14 years 8 months | ||||
Revenues | $ 168,800 | ||||
Net loss | 19,500 | ||||
Communications Business | General and administrative | |||||
Business Acquisition [Line Items] | |||||
Acquisition related costs | $ 17,900 | ||||
Communications Business | Developed technology | |||||
Business Acquisition [Line Items] | |||||
Weighted average useful life of acquired intangible assets | 11 years 8 months 12 days | ||||
Communications Business | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Weighted average useful life of acquired intangible assets | 16 years 3 months 18 days | ||||
Communications Business | Trademarks and trade names | |||||
Business Acquisition [Line Items] | |||||
Weighted average useful life of acquired intangible assets | 8 years 6 months | ||||
Communications Business | Arbor Networks | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 534,700 | ||||
Communications Business | Tektronix Communications | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 792,900 | ||||
Communications Business | VSS | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 57,000 | ||||
Communications Business | FNET | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 119,700 | ||||
Common stock | |||||
Business Acquisition [Line Items] | |||||
Share price (in dollars per share) | $ 36.89 | ||||
Common stock | Newco | Communications Business | |||||
Business Acquisition [Line Items] | |||||
Shares issued in business acquisition (in shares) | 62.5 |
ACQUISITIONS - Summary of Purch
ACQUISITIONS - Summary of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jul. 14, 2015 | Sep. 30, 2015 | Mar. 31, 2015 |
Estimated fair value of assets acquired and liabilities assumed: | |||
Goodwill | $ 1,702,705 | $ 197,445 | |
Communications Business | |||
Business Acquisition [Line Items] | |||
Equity consideration | $ 2,305,611 | ||
Less: Delayed close entities | (5,700) | ||
Estimated Purchase Price | 2,274,210 | ||
Estimated fair value of assets acquired and liabilities assumed: | |||
Cash | 27,748 | ||
Accounts receivable | 135,322 | ||
Inventories | 80,320 | ||
Prepaid expenses and other assets | 7,220 | ||
Property, plant and equipment | 36,539 | ||
Deferred income taxes | 13,067 | ||
Intangible assets | 1,080,700 | ||
Other assets | 897 | ||
Accounts payable | (21,819) | ||
Accrued compensation | (27,861) | ||
Accrued other | (13,977) | ||
Deferred revenue | (198,265) | ||
Other long-term liabilities | (3,572) | ||
Accrued retirement benefits | (26,758) | ||
Deferred tax liabilities | (319,612) | ||
Goodwill | 1,504,261 | ||
Communications Business | Replacement Awards | |||
Business Acquisition [Line Items] | |||
Equity consideration | $ (25,701) |
ACQUISITIONS - Summary of Pur50
ACQUISITIONS - Summary of Purchase Price Allocation (Footnote) (Details) - Common stock - $ / shares shares in Millions | Jul. 14, 2015 | Jul. 13, 2015 |
Business Acquisition [Line Items] | ||
Share price (in dollars per share) | $ 36.89 | |
Newco | Communications Business | ||
Business Acquisition [Line Items] | ||
Shares issued in business acquisition (in shares) | 62.5 |
ACQUISITIONS - Schedule of Fair
ACQUISITIONS - Schedule of Fair value of Acquired Identifiable Intangible Assets and Related Estimates of Useful Lives (Details) - Communications Business $ in Thousands | 6 Months Ended |
Sep. 30, 2015USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value of finite-lived intangible assets | $ 1,080,700 |
Developed technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value of finite-lived intangible assets | $ 221,900 |
Developed technology | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life of identifiable finite-lived intangible assets | 9 years |
Developed technology | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life of identifiable finite-lived intangible assets | 13 years |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value of finite-lived intangible assets | $ 794,100 |
Customer relationships | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life of identifiable finite-lived intangible assets | 13 years |
Customer relationships | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life of identifiable finite-lived intangible assets | 18 years |
Backlog | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value of finite-lived intangible assets | $ 18,200 |
Backlog | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life of identifiable finite-lived intangible assets | 1 year |
Backlog | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life of identifiable finite-lived intangible assets | 3 years |
Definite lived trademark and trade name | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value of finite-lived intangible assets | $ 43,900 |
Definite lived trademark and trade name | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life of identifiable finite-lived intangible assets | 3 years |
Definite lived trademark and trade name | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life of identifiable finite-lived intangible assets | 9 years |
Leasehold interest | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value of finite-lived intangible assets | $ 2,600 |
Leasehold interest | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life of identifiable finite-lived intangible assets | 4 years |
Leasehold interest | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life of identifiable finite-lived intangible assets | 6 years |
ACQUISITIONS - Schedule of Pro
ACQUISITIONS - Schedule of Pro Forma Results of Consolidated Statement of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Acquisition, Pro Forma Information [Abstract] | ||||
Pro forma revenue | $ 267,754 | $ 268,897 | $ 538,060 | $ 559,009 |
Pro forma net income (loss) | $ (11,773) | $ (18,019) | $ (30,683) | $ (21,969) |
Pro forma income (loss) per share: | ||||
Basic (in dollars per share) | $ (0.12) | $ (0.17) | $ (0.30) | $ (0.21) |
Diluted (in dollars per share) | $ (0.12) | $ (0.17) | $ (0.30) | $ (0.21) |
Pro forma shares outstanding | ||||
Basic (in shares) | 100,242 | 103,560 | 101,750 | 103,570 |
Diluted (in shares) | 100,242 | 103,560 | 101,750 | 103,570 |
GOODWILL AND INTANGIBLE ASSET53
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)Segment | Sep. 30, 2014USD ($) | Mar. 31, 2015USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Number of operating segments | Segment | 5 | ||||
Goodwill | $ 1,702,705 | $ 1,702,705 | $ 197,445 | ||
Carrying value of intangible assets | 1,102,717 | 1,102,717 | 50,180 | ||
Amortization expenses | 9,843 | $ 856 | $ 10,652 | $ 1,718 | |
Weighted average useful life of acquired intangible assets | 14 years 7 months | ||||
Acquired software and core technology | Included as cost of product revenue | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expenses | 14,800 | 923 | $ 15,600 | 1,900 | |
Other acquired intangible assets | Included as operating expense | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expenses | 9,800 | $ 856 | $ 10,700 | $ 1,700 | |
Developed and core technology | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average useful life of acquired intangible assets | 11 years 6 months | ||||
Customer relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average useful life of acquired intangible assets | 16 years 1 month | ||||
Trademarks and trade names | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average useful life of acquired intangible assets | 8 years 6 months | ||||
Leasehold interest | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average useful life of acquired intangible assets | 5 years 7 months 6 days | ||||
Backlog | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average useful life of acquired intangible assets | 2 years | ||||
Trade name | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets | 18,600 | $ 18,600 | 18,600 | ||
Legacy | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 198,000 | 198,000 | $ 197,400 | ||
Arbor Networks | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 534,700 | 534,700 | |||
Tektronix Communications | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 793,300 | 793,300 | |||
VSS | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 57,000 | 57,000 | |||
FNET | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 119,700 | $ 119,700 |
GOODWILL AND INTANGIBLE ASSET54
GOODWILL AND INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 6 Months Ended |
Sep. 30, 2015USD ($) | |
Goodwill [Roll Forward] | |
Balance at March 31, 2015 | $ 197,445 |
Goodwill acquired during period | 1,504,261 |
Foreign currency translation impact for the six months ended September 30, 2015 | 999 |
Balance at September 30, 2015 | $ 1,702,705 |
GOODWILL AND INTANGIBLE ASSET55
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 1,160,703 | $ 79,289 |
Accumulated Amortization | (76,586) | (47,709) |
Net | 1,084,117 | 31,580 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 252,869 | 30,865 |
Accumulated Amortization | (40,682) | (25,561) |
Net | 212,187 | 5,304 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 832,628 | 38,498 |
Accumulated Amortization | (25,034) | (16,935) |
Net | 807,594 | 21,563 |
Distributor relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,626 | 1,585 |
Accumulated Amortization | (1,626) | (711) |
Net | 0 | 874 |
Definite lived trademark and trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 43,900 | |
Accumulated Amortization | (1,655) | |
Net | 42,245 | |
Core technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 7,162 | 7,118 |
Accumulated Amortization | (4,167) | (3,660) |
Net | 2,995 | 3,458 |
Net beneficial leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 336 | |
Accumulated Amortization | (336) | |
Net | 0 | |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 287 | 280 |
Accumulated Amortization | (287) | (280) |
Net | 0 | 0 |
Leasehold interest | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 2,600 | |
Accumulated Amortization | (125) | |
Net | 2,475 | |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 18,200 | |
Accumulated Amortization | (2,028) | |
Net | 16,172 | |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,095 | 943 |
Accumulated Amortization | (646) | (562) |
Net | $ 449 | $ 381 |
GOODWILL AND INTANGIBLE ASSET56
GOODWILL AND INTANGIBLE ASSETS - Schedule of Expected Future Amortization Expense (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2016 (remaining six months) | $ 55,306 |
2,017 | 123,195 |
2,018 | 109,157 |
2,019 | 103,629 |
2,020 | 96,114 |
Thereafter | 596,716 |
Total | $ 1,084,117 |
DERIVATIVE INSTRUMENTS AND HE57
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) | 6 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Managing period of hedging forecasted cash flows for operating expenses denominated in foreign currencies | 12 months |
Contract maturity period | 12 months |
DERIVATIVE INSTRUMENTS AND HE58
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Notional Amounts and Fair Values of Derivative Instruments on Consolidated Balance Sheet (Details) - Forward contracts - Cash flow hedges - Designated as hedging instrument - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 | |
Derivatives, Fair Value [Line Items] | |||
Notional Amounts | [1] | $ 19,159 | $ 20,203 |
Prepaid Expenses and Other Current Assets | |||
Derivatives, Fair Value [Line Items] | |||
Prepaid Expenses and Other Current Assets | 34 | 15 | |
Accrued Other | |||
Derivatives, Fair Value [Line Items] | |||
Accrued Other | $ 416 | $ 1,664 | |
[1] | Notional amounts represent the gross contract/notional amount of the derivatives outstanding. |
DERIVATIVE INSTRUMENTS AND HE59
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Effect of Foreign Exchange Forward Contracts on Other Comprehensive Income and Results of Operations (Details) - Forward contracts - Cash flow hedges - Designated as hedging instrument - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in OCI on Derivative | [1] | $ (527) | $ (963) |
Gain (Loss) Reclassified from Accumulated OCI into Income | [2] | 468 | (132) |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | [3] | 22 | 50 |
Research and development | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Reclassified from Accumulated OCI into Income | [2] | 38 | 11 |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | [3] | 29 | 38 |
Sales and marketing | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Reclassified from Accumulated OCI into Income | [2] | 430 | (143) |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | [3] | $ (7) | $ 12 |
[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. |
DERIVATIVE INSTRUMENTS AND HE60
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Effect of Foreign Exchange Forward Contracts on Other Comprehensive Income and Results of Operations (Footnote) (Details) | 3 Months Ended |
Sep. 30, 2015USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Reclassified gain (loss) as a result of discontinuance of cash flow hedges | $ 0 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) | Apr. 01, 2016 | Jul. 14, 2015USD ($)shares | Sep. 30, 2015USD ($) |
Maximum | |||
Debt Instrument [Line Items] | |||
Leverage ratio | 2.50 | ||
Maximum | Forecast | |||
Debt Instrument [Line Items] | |||
Leverage ratio | 2.50 | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Leverage ratio | 1 | ||
Minimum | Forecast | |||
Debt Instrument [Line Items] | |||
Leverage ratio | 1 | ||
Common Stock Repurchase Plan | |||
Debt Instrument [Line Items] | |||
Stock authorized to repurchase under stock repurchase program (in shares) | shares | 20,000,000 | ||
Senior secured revolving credit facility | Line of credit | |||
Debt Instrument [Line Items] | |||
Credit facility | $ 800,000,000 | ||
Amount drawn against credit facility | $ 250,000,000 | ||
Amount outstanding under credit facility | $ 250,000,000 | ||
Commitment fee percentage | 0.30% | ||
Debt default, acceleration clause, required consent percentage | 50.00% | ||
Unamortized debt issuance costs | $ 6,600,000 | 6,400,000 | |
Senior secured revolving credit facility | Line of credit | Prepaid expenses and other current assets | |||
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | 1,300,000 | ||
Senior secured revolving credit facility | Line of credit | Other assets | |||
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | $ 5,100,000 | ||
Senior secured revolving credit facility | Line of credit | Maximum | Foreign Subsidiaries | |||
Debt Instrument [Line Items] | |||
Voting stock pledge limit for any foreign subsidiary | 65.00% | ||
Senior secured revolving credit facility | Line of credit | Maximum | Forecast | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.35% | ||
Senior secured revolving credit facility | Line of credit | Minimum | Forecast | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.20% | ||
Senior secured revolving credit facility | Line of credit | LIBOR | |||
Debt Instrument [Line Items] | |||
Interest rate in excess of effective rate | 1.00% | ||
Senior secured revolving credit facility | Line of credit | LIBOR | LIBOR loans | |||
Debt Instrument [Line Items] | |||
Interest rate in excess of effective rate | 1.75% | ||
Senior secured revolving credit facility | Line of credit | LIBOR | LIBOR loans | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate in excess of effective rate | 2.00% | ||
Senior secured revolving credit facility | Line of credit | LIBOR | LIBOR loans | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate in excess of effective rate | 1.25% | ||
Senior secured revolving credit facility | Line of credit | Base rate | Base rate loans | |||
Debt Instrument [Line Items] | |||
Interest rate in excess of effective rate | 0.75% | ||
Senior secured revolving credit facility | Line of credit | Base rate | Base rate loans | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate in excess of effective rate | 1.00% | ||
Senior secured revolving credit facility | Line of credit | Base rate | Base rate loans | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate in excess of effective rate | 0.25% | ||
Senior secured revolving credit facility | Line of credit | Federal funds effective rate | |||
Debt Instrument [Line Items] | |||
Interest rate in excess of effective rate | 0.50% | ||
Letter of credit sub-facility | Line of credit | |||
Debt Instrument [Line Items] | |||
Credit facility | $ 50,000,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands | Sep. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Nov. 30, 2011USD ($)liability |
Commitments and Contingencies Disclosure [Line Items] | |||
Fair value of contingent liability | $ 4,560 | $ 4,484 | |
Simena LLC | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Number of contingent liabilities recorded | liability | 1 | ||
Fair value of contingent liability | $ 8,000 | ||
Simena LLC | Present value of future consideration | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Fair value of contingent liability | $ 4,500 |
PENSION BENEFIT PLANS - Narrati
PENSION BENEFIT PLANS - Narrative (Details) | 3 Months Ended | 6 Months Ended |
Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($)Employee | |
Defined Benefit Plan Disclosure [Line Items] | ||
Expense for all defined benefit pension and defined contribution plans | $ 1,500,000 | $ 2,800,000 |
Noncontributory Plan | Danaher | United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Number of employees participating in noncontributory defined benefit pension plans | Employee | 0 | |
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions to defined benefit pension plans | $ 0 | |
Expected cash contribution requirements for defined benefit pension plans, less than | $ 1,000,000 |
PENSION BENEFIT PLANS - Schedul
PENSION BENEFIT PLANS - Schedule of Net Periodic Pension Costs of Noncontributory Defined Benefit Pension Plans (Details) - Pension Plan - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 49 | $ 0 | $ 49 | $ 0 |
Interest cost | 75 | 0 | 75 | 0 |
Amortization of net loss | 80 | 0 | 80 | 0 |
Net periodic pension cost | $ 204 | $ 0 | $ 204 | $ 0 |
TREASURY STOCK - Narrative (Det
TREASURY STOCK - Narrative (Details) - USD ($) | 4 Months Ended | 6 Months Ended | 17 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | May. 19, 2015 | Apr. 22, 2014 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Shares repurchased during the period, value | $ 184,995,000 | $ 30,894,000 | ||||
Share Repurchase Program, April 2014 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchase program, authorized amount up to | $ 100,000,000 | |||||
Shares repurchased during the period (in shares) | 67,752 | 824,452 | ||||
Shares repurchased during the period, value | $ 2,800,000 | $ 34,300,000 | ||||
Restricted stock units | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Shares repurchased during the period (in shares) | 157,771 | |||||
Shares repurchased during the period, value | $ 5,900,000 | |||||
Share Repurchase Program, May 2015 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Shares repurchased during the period (in shares) | 4,496,596 | |||||
Shares repurchased during the period, value | $ 176,300,000 | |||||
Remaining stock authorized to repurchase under stock repurchase program | $ 15,503,404 | $ 15,503,404 | $ 15,503,404 | |||
Stock authorized to repurchase under stock repurchase program (in shares) | 20,000,000 |
NET INCOME PER SHARE - Schedule
NET INCOME PER SHARE - Schedule of Calculations of Basic and Diluted Net Income Per Share and Potential Common Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator: | ||||
Net income (loss) | $ (7,915) | $ 11,233 | $ (246) | $ 22,709 |
Denominator: | ||||
Denominator for basic net income per share - weighted average common shares outstanding (in shares) | 91,410 | 41,060 | 66,232 | 41,071 |
Dilutive common equivalent shares: | ||||
Weighted average stock options (in shares) | 0 | 11 | 0 | 14 |
Weighted average restricted stock units (in shares) | 0 | 581 | 0 | 647 |
Denominator for diluted net income per share - weighted average shares outstanding (in shares) | 91,410 | 41,652 | 66,232 | 41,732 |
Net income per share: | ||||
Basic net income (loss) per share (in USD per share) | $ (0.09) | $ 0.27 | $ 0 | $ 0.55 |
Diluted net income (loss) per share (in USD per share) | $ (0.09) | $ 0.27 | $ 0 | $ 0.54 |
NET INCOME PER SHARE - Summary
NET INCOME PER SHARE - Summary of Antidilutive Securities Excluded from Computation of Diluted EPS (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Restricted stock units (in shares) | 557 | 0 | 579 | 0 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 78.10% | 37.90% | 99.00% | 39.60% |
SEGMENT AND GEOGRAPHIC INFORM69
SEGMENT AND GEOGRAPHIC INFORMATION - Narrative (Details) | 6 Months Ended |
Sep. 30, 2015Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 5 |
Number of reportable segments | 1 |
SEGMENT AND GEOGRAPHIC INFORM70
SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Total Revenue by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 261,110 | $ 103,599 | $ 361,853 | $ 211,451 |
Reportable Geographical Components | United States | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 195,169 | 79,337 | 273,442 | 165,355 |
Reportable Geographical Components | Europe | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 35,631 | 11,005 | 48,238 | 20,051 |
Reportable Geographical Components | Asia | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 14,180 | 4,672 | 17,712 | 11,389 |
Reportable Geographical Components | Rest of the world | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 16,130 | $ 8,585 | $ 22,461 | $ 14,656 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - Member of board of directors $ in Thousands | 6 Months Ended |
Sep. 30, 2015USD ($) | |
EMC, Corp. | |
Related Party Transaction [Line Items] | |
Revenue from related parties | $ 346 |
State Street | |
Related Party Transaction [Line Items] | |
Revenue from related parties | $ 122 |