Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Mar. 31, 2015 | Apr. 29, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | EXTREME NETWORKS INC | |
Entity Central Index Key | 1078271 | |
Current Fiscal Year End Date | -24 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | FALSE | |
Entity Common Stock, Shares Outstanding | 100,053,435 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $74,067 | $73,190 |
Short-term investments | 1,506 | 32,692 |
Accounts receivable, net of allowances of $4,344 at March 31, 2015 and $3,618 at June 30, 2014 | 78,727 | 124,664 |
Inventories | 66,811 | 57,109 |
Deferred income taxes | 797 | 1,058 |
Prepaid expenses and other current assets | 10,069 | 14,143 |
Total current assets | 231,977 | 302,856 |
Property and equipment, net | 42,399 | 46,554 |
Intangible assets, net | 61,096 | 87,459 |
Goodwill | 70,877 | 70,877 |
Other assets | 25,029 | 18,686 |
Total assets | 431,378 | 526,432 |
Current liabilities: | ||
Current portion of long-term debt | 9,750 | 29,688 |
Accounts payable | 46,378 | 37,308 |
Accrued compensation and benefits | 20,502 | 26,677 |
Accrued warranty | 7,879 | 7,551 |
Deferred revenue, net | 73,206 | 74,735 |
Deferred distributors revenue, net of cost of sales to distributors | 35,687 | 31,992 |
Other accrued liabilities | 29,820 | 38,357 |
Total current liabilities | 223,222 | 246,308 |
Deferred revenue, less current portion | 23,141 | 22,942 |
Long-term debt, less current portion | 58,750 | 91,875 |
Deferred income taxes | 2,572 | 0 |
Other long-term liabilities | 7,934 | 8,595 |
Commitments and contingencies (Note 8) | ||
Stockholders’ equity: | ||
Convertible preferred stock, $.001 par value, issuable in series, 2,000,000 shares authorized; none issued | 0 | 0 |
Common stock, $.001 par value, 750,000,000 shares authorized; 100,050,411 shares issued and outstanding at March 31, 2015 and 96,980,214 shares issued and outstanding at June 30, 2014 | 100 | 97 |
Additional paid-in-capital | 861,653 | 845,267 |
Accumulated other comprehensive loss | -1,798 | -439 |
Accumulated deficit | -744,196 | -688,213 |
Total stockholders’ equity | 115,759 | 156,712 |
Total liabilities and stockholders’ equity | $431,378 | $526,432 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parentheticals) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Current assets: | ||
Allowance for doubtful accounts | $4,344 | $3,618 |
Stockholders’ equity: | ||
Convertible preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Convertible preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Convertible preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 100,050,411 | 96,980,214 |
Common stock, shares outstanding | 100,050,411 | 96,980,214 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Net revenues: | ||||
Product | $86,527 | $109,891 | $301,700 | $290,001 |
Service | 33,063 | 31,871 | 101,372 | 74,260 |
Total net revenues | 119,590 | 141,762 | 403,072 | 364,261 |
Cost of revenues: | ||||
Product | 49,761 | 58,703 | 164,282 | 153,112 |
Service | 12,105 | 12,204 | 35,377 | 26,742 |
Total cost of revenues | 61,866 | 70,907 | 199,659 | 179,854 |
Gross profit: | ||||
Product | 36,766 | 51,188 | 137,418 | 136,889 |
Service | 20,958 | 19,667 | 65,995 | 47,518 |
Total gross profit | 57,724 | 70,855 | 203,413 | 184,407 |
Operating expenses: | ||||
Research and development | 23,858 | 24,265 | 71,205 | 53,098 |
Sales and marketing | 39,226 | 44,703 | 127,976 | 108,033 |
General and administrative | 9,711 | 11,178 | 31,091 | 29,301 |
Acquisition and integration costs | 1,725 | 6,443 | 9,283 | 18,826 |
Restructuring charge, net of reversals | 0 | -6 | 0 | 499 |
Amortization of intangibles | 4,467 | 7,666 | 13,402 | 11,444 |
Total operating expenses | 78,987 | 94,249 | 252,957 | 221,201 |
Operating loss | -21,263 | -23,394 | -49,544 | -36,794 |
Interest income | 129 | 156 | 471 | 603 |
Interest expense | -758 | -764 | -2,419 | -1,288 |
Other expense, net | -535 | -146 | -1,033 | -1,338 |
Loss before income taxes | -22,427 | -24,148 | -52,525 | -38,817 |
Provision for income taxes | 1,121 | 910 | 3,458 | 2,262 |
Net loss | ($23,548) | ($25,058) | ($55,983) | ($41,079) |
Basic and diluted net income per share: | ||||
Net loss per share - basic (in dollars per share) | ($0.24) | ($0.26) | ($0.57) | ($0.43) |
Net loss per share - diluted (in dollars per share) | ($0.24) | ($0.26) | ($0.57) | ($0.43) |
Shares used in per share calculation - basic (in shares) | 99,783 | 96,069 | 98,591 | 95,116 |
Shares used in per share calculation – diluted (in shares) | 99,783 | 96,069 | 98,591 | 95,116 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | ($23,548) | ($25,058) | ($55,983) | ($41,079) |
Available for sale securities: | ||||
Change in unrealized (losses) gains on available for sale securities, net of taxes | -1 | -95 | -26 | 138 |
Reclassification of adjustment for realized net gains on available for sale securities included in net loss | 0 | 10 | 0 | 158 |
Net change in unrealized (losses) gains on available for sale securities, net of taxes | -1 | -85 | -26 | 296 |
Net change in foreign currency translation adjustments | 87 | 48 | -1,333 | 1,005 |
Other comprehensive (loss) income | 86 | -37 | -1,359 | 1,301 |
Total comprehensive loss | ($23,462) | ($25,095) | ($57,342) | ($39,778) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net loss | ($55,983) | ($41,079) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation | 9,652 | 7,767 |
Amortization of intangible assets | 26,977 | 18,937 |
Provision for doubtful accounts and allowance for sales returns | 4,317 | 898 |
Stock-based compensation | 13,935 | 9,874 |
Other non-cash charges | 628 | 2,267 |
Changes in operating assets and liabilities, net | ||
Accounts receivable | 41,620 | -24,171 |
Inventories | -9,702 | -13,313 |
Prepaid expenses and other assets | 806 | -1,354 |
Accounts payable | 9,070 | -5,404 |
Accrued compensation and benefits | -6,176 | -1,764 |
Deferred revenue | -1,331 | 10,796 |
Deferred distributor revenue, net of cost of sales to distributors | 3,696 | 6,829 |
Other current and long term liabilities | -3,945 | -900 |
Net cash provided by (used in) operating activities | 33,564 | -30,617 |
Cash flows from investing activities: | ||
Capital expenditures | -5,610 | -17,384 |
Acquisition, net of cash acquired | 0 | -180,000 |
Purchases of investments | 0 | -9,045 |
Purchases of non-marketable equity investments | -3,000 | 0 |
Proceeds from maturities of investments and marketable securities | 21,815 | 26,722 |
Proceeds from sales of investments and marketable securities | 9,051 | 56,594 |
Purchases of intangible assets | -569 | 0 |
Net cash provided by (used in) investing activities | 21,687 | -123,113 |
Cash flows from financing activities: | ||
Borrowings under Revolving Facility | 24,000 | 59,000 |
Issuance of Term Loan | 0 | 65,000 |
Repayment of debt | -77,062 | -1,625 |
Proceeds from issuance of common stock | 2,455 | 6,296 |
Net cash (used in) provided by financing activities | -50,607 | 128,671 |
Foreign currency effect on cash | -3,767 | 611 |
Net increase (decrease) in cash and cash equivalents | 877 | -24,448 |
Cash and cash equivalents at beginning of period | 73,190 | 95,803 |
Cash and cash equivalents at end of period | $74,067 | $71,355 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation |
The unaudited condensed consolidated financial statements of Extreme Networks, Inc. (referred to as the “Company” or “Extreme Networks”) included herein have been prepared under the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted under such rules and regulations. The condensed consolidated balance sheet at June 30, 2014 was derived from audited financial statements as of that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements. These interim financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2014. | |
The unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations and cash flows for the interim periods presented and the financial condition of Extreme Networks at March 31, 2015. | |
The results of operations for the three and nine months ended March 31, 2015 are not necessarily indicative of the results that may be expected for fiscal 2015 or any future periods. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies |
For a description of significant accounting policies, see Note 3, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Company's Annual report on Form 10-K for the fiscal year ended June 30, 2014. There have been no material changes to the Company's significant accounting policies since the filing of the Annual report on Form 10-K. |
Recently_Issued_Accounting_Pro
Recently Issued Accounting Pronouncements | 9 Months Ended |
Mar. 31, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements |
In May 2014, the FASB, jointly with the International Accounting Standards Board, issued Accounting Standard Update No. 2014-09 (Topic 606) - Revenue from Contracts with Customers ("ASU 2014-09"). This ASU's core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying this new guidance to contracts within its scope, an entity will: (1) identify the contract(s) with a customer, (2) identify the performance obligation in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Additionally, this new guidance will require significantly expanded disclosures about revenue recognition. ASU 2014-09 is effective for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2016. In April 2015, the FASB approved a one-year deferral of the effective date of the new standard. The new standard will be effective for the Company’s fiscal 2019, with early adoption permitted. | |
Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this ASU. The Company is currently evaluating the potential effect on its consolidated financial statements from adoption of this standard. | |
In November 2014, the FASB has issued ASU 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements and provide certain disclosures when there is substantial doubt about the entity’s ability to continue as a going concern. This guidance applies to all entities and is effective for annual periods beginning after December 15, 2015, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the potential effect on its consolidated financial statements from adoption of this standard. | |
In January 2015, the FASB issued ASU 2015-01 which provides guidance on the elimination of the concept of extraordinary items under GAAP. This ASU is effective for annual periods ending after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the potential effect on its consolidated financial statements from adoption of this standard. | |
In February 2015, the FASB issued ASU 2015-02 which provides consolidation guidance and changes the way reporting enterprises evaluate consolidation for limited partnerships, investment companies and similar entities, as well as variable interest entities. The ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2015. The Company is currently evaluating the potential effect on its consolidated financial statements from adoption of this standard. | |
In April 2015, the FASB issued ASU 2015-03 – Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 requires retrospective adoption and will be effective for annual and interim periods in fiscal years beginning after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the potential effect on its consolidated financial statements from adoption of this standard. |
Business_combinations
Business combinations | 9 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Business Combinations [Abstract] | |||||||||||||
Business combinations | Business combinations | ||||||||||||
On October 31, 2013, (the “Acquisition Date”), the Company completed the acquisition of Enterasys Networks, Inc. ("Enterasys"), a privately held provider of wired and wireless network infrastructure and security solutions, for $180.0 million, net of cash acquired. The Company also assumed outstanding options and restricted stock units of Enterasys at the Acquisition Date, all of which were unvested. | |||||||||||||
The acquisition was accounted for using the acquisition method of accounting. The preliminary and final purchase price allocation as of the date of the acquisition is set forth in the table below and reflects various fair value estimates. | |||||||||||||
The following table summarizes the final allocation as of September 30, 2014, of the tangible and identifiable intangible assets acquired and liabilities assumed as compared to the allocation as of December 31, 2013, the quarter in which the transaction was completed (in thousands): | |||||||||||||
Preliminary Allocation as of December 31, 2013 (Initial allocation) | Change during the measurement period | Final Allocation as of September 30, 2014 | |||||||||||
Cash | $ | 4,969 | $ | 2,428 | a | $ | 7,397 | ||||||
Receivables | 25,699 | (2,428 | ) | a | 23,271 | ||||||||
Inventory | 33,662 | — | 33,662 | ||||||||||
Other current assets | 8,888 | (1,514 | ) | b | 7,374 | ||||||||
Property and equipment | 23,122 | (1,829 | ) | c | 21,293 | ||||||||
Identifiable intangible assets | 108,900 | — | d | 108,900 | |||||||||
In-process research and development | 3,000 | — | 3,000 | ||||||||||
Deferred tax assets | 9 | — | 9 | ||||||||||
Other assets | 7,343 | — | 7,343 | ||||||||||
Goodwill | 57,922 | 12,955 | 70,877 | ||||||||||
Current liabilities | (75,394 | ) | (6,141 | ) | c,e,f | (81,535 | ) | ||||||
Other long-term liabilities | (13,151 | ) | (1,043 | ) | c | (14,194 | ) | ||||||
Total purchase price allocation | $ | 184,969 | $ | 2,428 | $ | 187,397 | |||||||
Less: Cash acquired from acquisition | (4,969 | ) | (2,428 | ) | a | (7,397 | ) | ||||||
Total purchase price consideration, net of cash acquired | $ | 180,000 | $ | — | $ | 180,000 | |||||||
a. | The Company finalized the working capital adjustment as of September 30, 2014, which led to a decrease of $2.4 million in receivables and a corresponding increase in cash. As a result of this adjustment, the total cash acquired from the acquisition also increased by the same amount. The net effect of this adjustment is an increase in goodwill of $2.4 million. | ||||||||||||
b. | The Company obtained new information regarding the existence of prepaid assets as of the acquisition date which led to a decrease in the fair value of current assets of $1.5 million, and a corresponding increase in goodwill. The change in the amortization of prepaid assets due to the change in fair value of current assets was immaterial. | ||||||||||||
c. | The Company updated its preliminary estimate of the fair value of property and equipment which led to a decrease of $3.0 million in property and equipment with a corresponding increase in goodwill. The Company also updated the fair values of the asset retirement obligations and the related asset retirement assets which led to an increase in the fair value of property and equipment of $1.2 million and a corresponding increase in current liabilities and other long-term liabilities of $0.2 million and $1.0 million, respectively. The decrease in depreciation expense due to the change in fair value of property and equipment was immaterial. | ||||||||||||
d. | During the nine months ended September 30, 2014, there were no changes to the fair value of the identifiable intangible assets acquired. However, the Company revised the estimated useful life of Order backlog from 1.5 years to 1 year. | ||||||||||||
e. | The Company obtained new information regarding accruals for litigation and statutory tax assessment as of the acquisition date which led to an increase in the fair value of current liabilities of $5.4 million and a corresponding increase in goodwill. | ||||||||||||
f. | The Company obtained new information regarding the existence of accrued liabilities as of the acquisition date which led to a net increase in the fair value of accrued liabilities by $0.5 million with a corresponding increase in goodwill. |
Balance_Sheet_Accounts
Balance Sheet Accounts | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||
Balance Sheet Accounts | Balance Sheet Accounts | |||||||||||||||
Cash, Cash Equivalents, Short-Term Investments | ||||||||||||||||
Summary of Cash and Available-for-Sale Securities (in thousands) | ||||||||||||||||
March 31, 2015 | June 30, 2014 | |||||||||||||||
Cash | $ | 54,288 | $ | 72,623 | ||||||||||||
Cash equivalents | 19,779 | 567 | ||||||||||||||
Short-term investments | 1,506 | 32,692 | ||||||||||||||
Total available-for-sale | $ | 21,285 | $ | 33,259 | ||||||||||||
Total cash, cash equivalents and available-for-sale securities | $ | 75,573 | $ | 105,882 | ||||||||||||
Available-for-Sale Securities | ||||||||||||||||
The following is a summary of available-for-sale securities (in thousands): | ||||||||||||||||
Amortized | Fair Value | Unrealized | Unrealized | |||||||||||||
Cost | Holding | Holding | ||||||||||||||
Gains | Losses | |||||||||||||||
March 31, 2015 | ||||||||||||||||
Money market funds | $ | 19,779 | $ | 19,779 | $ | — | $ | — | ||||||||
U.S. corporate debt securities | 1,506 | 1,506 | — | |||||||||||||
$ | 21,285 | $ | 21,285 | $ | — | $ | — | |||||||||
Classified as: | ||||||||||||||||
Cash equivalents | $ | 19,779 | $ | 19,779 | $ | — | $ | — | ||||||||
Short-term investments | 1,506 | 1,506 | — | |||||||||||||
$ | 21,285 | $ | 21,285 | $ | — | $ | — | |||||||||
June 30, 2014 | ||||||||||||||||
Money market funds | $ | 567 | $ | 567 | $ | — | $ | — | ||||||||
U.S. corporate debt securities | 32,578 | 32,692 | 114 | — | ||||||||||||
$ | 33,145 | $ | 33,259 | $ | 114 | $ | — | |||||||||
Classified as: | ||||||||||||||||
Cash equivalents | $ | 567 | $ | 567 | $ | — | $ | — | ||||||||
Short-term investments | 32,578 | 32,692 | 114 | — | ||||||||||||
$ | 33,145 | $ | 33,259 | $ | 114 | $ | — | |||||||||
The amortized cost and estimated fair value of available-for-sale investments in debt securities at March 31, 2015, by contractual maturity, were as follows (in thousands): | ||||||||||||||||
Amortized | Fair | |||||||||||||||
Cost | Value | |||||||||||||||
Due in 1 year or less | $ | 21,285 | $ | 21,285 | ||||||||||||
Total investments in available-for-sale debt securities | $ | 21,285 | $ | 21,285 | ||||||||||||
The Company considers highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Investments with original maturities of greater than three months, but less than one year at the balance sheet date are classified as Short-term investments. | ||||||||||||||||
The Company accumulates unrealized gains and losses on the Company's available-for-sale debt securities, net of tax, in accumulated other comprehensive income (loss) in the stockholders' equity section of its balance sheets. If the fair value of an available-for-sale debt instrument is less than its amortized cost basis, an other-than-temporary impairment is triggered in circumstances where (1) the Company intends to sell the instrument, (2) it is more likely than not that the Company will be required to sell the instrument before recovery of its amortized cost basis, or (3) the Company does not expect to recover the entire amortized cost basis of the instrument (that is, a credit loss exists). | ||||||||||||||||
The Company determines the basis of the cost of a security sold or the amount reclassified out of accumulated other comprehensive income (loss) into earnings using the specific identification method. The Company recorded an other-than temporary impairment loss of $148,000 during the nine months ended March 31, 2014. | ||||||||||||||||
Deferred Revenue, Net | ||||||||||||||||
Deferred revenue, net represents amounts for (i) deferred services revenue (support arrangements, professional services and training), and (ii) deferred product revenue net of the related cost of revenue when the revenue recognition criteria have not been met. The following table summarizes deferred revenue, net (in thousands): | ||||||||||||||||
March 31, 2015 | June 30, 2014 | |||||||||||||||
Deferred services | $ | 88,737 | $ | 89,657 | ||||||||||||
Deferred product and other revenue | 7,610 | 8,020 | ||||||||||||||
Total deferred revenue | 96,347 | 97,677 | ||||||||||||||
Less: current portion | 73,206 | 74,735 | ||||||||||||||
Non-current deferred revenue, net | $ | 23,141 | $ | 22,942 | ||||||||||||
The Company offers for sale to its customers, renewable support arrangements that range from one to five years. Deferred support revenue is included within deferred revenue, net within the services category above. The change in the Company’s deferred support revenue balance in relation to these arrangements was as follows (in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, 2015 | March 31, 2014 | March 31, 2015 | March 31, 2014 | |||||||||||||
Balance beginning of period | $ | 91,373 | $ | 81,485 | $ | 89,657 | $ | 38,003 | ||||||||
Assumed from acquisition | — | — | — | 35,879 | ||||||||||||
New support arrangements | 27,198 | 30,986 | 91,254 | 77,475 | ||||||||||||
Recognition of support revenue | (29,834 | ) | (28,265 | ) | (92,174 | ) | (67,151 | ) | ||||||||
Balance end of period | 88,737 | 84,206 | 88,737 | 84,206 | ||||||||||||
Less: current portion | 65,596 | 64,539 | 65,596 | 64,539 | ||||||||||||
Non-current deferred revenue | $ | 23,141 | $ | 19,667 | $ | 23,141 | $ | 19,667 | ||||||||
Deferred Distributors Revenue, Net of Cost of Sales to Distributors | ||||||||||||||||
The Company records revenue from its distributors on a sell-through basis, recording deferred revenue and deferred cost of sales associated with all sales transactions to its distributors in “Deferred distributor' revenue, net of cost of sales to distributors” in the liability section of its condensed consolidated balance sheet. The amount shown as “Deferred distributors revenue, net of cost of sales to distributors” represents the deferred gross profit on sales to distributors based on contractual pricing. | ||||||||||||||||
The following table summarizes deferred distributors revenue, net of cost of sales to distributors (in thousands): | ||||||||||||||||
March 31, 2015 | June 30, 2014 | |||||||||||||||
Deferred distributors' revenue | $ | 46,230 | $ | 40,715 | ||||||||||||
Deferred cost of sales to distributors | (10,543 | ) | (8,723 | ) | ||||||||||||
Deferred distributors revenue, net of cost of sales to distributors | $ | 35,687 | $ | 31,992 | ||||||||||||
Debt | ||||||||||||||||
The Company's debt is comprised of the following (in thousands): | ||||||||||||||||
March 31, 2015 | June 30, 2014 | |||||||||||||||
Current portion of long-term debt: | ||||||||||||||||
Term Loan | $ | 9,750 | $ | 5,688 | ||||||||||||
Revolving Facility | — | 24,000 | ||||||||||||||
Current portion of long-term debt | $ | 9,750 | $ | 29,688 | ||||||||||||
Long-term debt, less current portion: | ||||||||||||||||
Term Loan | $ | 48,750 | $ | 56,875 | ||||||||||||
Revolving Facility | 10,000 | 35,000 | ||||||||||||||
Total long-term debt, less current portion | 58,750 | 91,875 | ||||||||||||||
Total debt | $ | 68,500 | $ | 121,563 | ||||||||||||
On October 31, 2013, the Company entered into a Credit Agreement (the “Credit Agreement”) which provides for a five-year revolving credit facility for up to $60.0 million (the “Revolving Facility”) and a $65.0 million five-year term loan (the “Term Loan”) and together with the Revolving Facility (the “Senior Secured Credit Facilities”). The Company drew $24.0 million in the first quarter of fiscal 2015 to fund working capital requirements. During the three months ended December 31, 2014, the Company amended the Credit Agreement and among other things modified certain financial covenants governing quick and leverage ratios. The Company repaid $30.0 million and $19.0 million of the Revolving Facility during the second and third fiscal quarters of 2015, respectively. | ||||||||||||||||
The Credit Agreement contains, among others, certain financial covenants that require the Company to maintain defined minimum financial ratios which limit the Company’s availability to borrowings under the Revolving Facility. As of March 31, 2015, the Company had $8.6 million of additional availability under the Revolving Facility, due to these financial covenants. | ||||||||||||||||
The Company had $1.0 million of outstanding letters of credit as of March 31, 2015. | ||||||||||||||||
Guarantees and Product Warranties | ||||||||||||||||
Upon issuance of a standard product warranty, the Company discloses and recognizes a liability for the obligation it assumes under the warranty. The Company’s standard hardware warranty period is typically 12 months from the date of shipment to end-users and 90 days for software. For certain products, the Company offers a limited lifetime hardware warranty commencing on the date of shipment from the Company and ending five (5) years following the Company’s announcement of the end of sale of such product. The following table summarizes the activity related to the Company’s product warranty liability during the three and nine months ended March 31, 2015 and 2014, (in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, 2015 | March 31, 2014 | March 31, 2015 | March 31, 2014 | |||||||||||||
Balance beginning of period | $ | 7,845 | $ | 7,479 | $ | 7,551 | $ | 3,296 | ||||||||
Assumed from acquisition | — | — | — | 3,732 | ||||||||||||
New warranties issued | 1,751 | 1,824 | 5,699 | 4,782 | ||||||||||||
Warranty expenditures | (1,717 | ) | (1,478 | ) | (5,371 | ) | (3,985 | ) | ||||||||
Balance end of period | $ | 7,879 | $ | 7,825 | $ | 7,879 | $ | 7,825 | ||||||||
The Company has agreed to hold the customer harmless against losses arising from a breach of intellectual property infringement or other claims made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not estimable. We have not recorded a liability related to these indemnification and guarantee provisions and our guarantee and indemnification arrangements have not had any significant impact on our consolidated financial statements to date. | ||||||||||||||||
Concentrations | ||||||||||||||||
The Company may be subject to concentration of credit risk as a result of certain financial instruments consisting principally of marketable investments and accounts receivable. The Company has placed its investments with high-credit quality issuers. The Company does not invest an amount exceeding 10% of its combined cash, cash equivalents, short-term investments and marketable securities in the securities of any one obligor or maker, except for obligations of the United States government, obligations of United States government agencies and money market accounts. | ||||||||||||||||
The following table sets forth major customers accounting for 10% or more of our net revenue for the periods indicated: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
31-Mar-15 | March 31, 2014 | 31-Mar-15 | 31-Mar-14 | |||||||||||||
Westcon Group, Inc. | 16% | 14% | 14% | 13% | ||||||||||||
ScanSource, Inc. | 13% | * | * | * | ||||||||||||
Tech Data Corporation | * | 16% | 14% | 12% | ||||||||||||
* Less than 10% of net revenue |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value Measurements | Fair Value Measurements | |||||||||||||||
A three-tier fair value hierarchy is utilized to prioritize the inputs used in measuring fair value. The hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels are defined as follows: | ||||||||||||||||
• | Level 1 Inputs - unadjusted quoted prices in active markets for identical assets or liabilities; | |||||||||||||||
• | Level 2 Inputs - quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and | |||||||||||||||
• | Level 3 Inputs - unobservable inputs reflecting the Company's own assumptions in measuring the asset or liability at fair value. | |||||||||||||||
The Company uses forward foreign currency contracts to hedge market risks relating to possible adverse changes in foreign exchange rates. | ||||||||||||||||
The following table presents the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis (in thousands): | ||||||||||||||||
March 31, 2015 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Investments: | ||||||||||||||||
Money market funds | $ | 19,779 | $ | — | $ | — | $ | 19,779 | ||||||||
Corporate notes/bonds | — | 1,506 | — | 1,506 | ||||||||||||
Non-marketable equity investment | — | — | 3,000 | 3,000 | ||||||||||||
Total | $ | 19,779 | $ | 1,506 | $ | 3,000 | $ | 24,285 | ||||||||
June 30, 2014 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Investments: | ||||||||||||||||
Money market funds | $ | 567 | $ | — | $ | — | $ | 567 | ||||||||
Corporate notes/bonds | — | 32,692 | — | 32,692 | ||||||||||||
Foreign currency forward contracts | — | 21 | — | 21 | ||||||||||||
Total | $ | 567 | $ | 32,713 | $ | — | $ | 33,280 | ||||||||
Level 2 investment valuations are based on inputs such as quoted market prices of similar instruments, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, and state, municipal and provincial obligations. There were no transfers of assets or liabilities between Level 1 and Level 2 during the three and nine months ended March 31, 2015. | ||||||||||||||||
During the quarter, the Company obtained a $3.0 million equity interest in a Company that operates in the enterprise software platform industry. The Company has not entered into any other transactions with the entity that are considered significant to the Company’s consolidated financial statements during the three and nine months ended March 31, 2015. | ||||||||||||||||
The Company reflects a non-marketable equity investment as Level 3 in the fair value hierarchy as it is based on unobservable inputs that market participants would use in pricing this asset due to the absence of recent comparable market transactions and inherent lack of liquidity. Significant inputs and assumptions are management’s estimate of the enterprise value used to calculate the present value of the asset. Significant changes in any Level 3 input or assumption would result in increases or decreases to fair value measurements for this asset. | ||||||||||||||||
There were no liabilities as of March 31, 2015 that were being measured using fair value on a recurring basis. The fair values of accounts receivable, accounts payable, and accrued liabilities, due within one year approximates their carrying values due to their short-term nature. | ||||||||||||||||
The Company does not have any assets or liabilities measured at fair value on a non-recurring basis as of March 31, 2015, and June 30, 2014. |
Sharebased_Compensation
Share-based Compensation | 9 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Share-based Compensation [Abstract] | ||||||||||||||||||||||||
Share-based Compensation | Share-based Compensation | |||||||||||||||||||||||
As of March 31, 2015, the Company had 15,578,378 shares available for issuance, of which 12,000,000 shares are available under the 2014 Employee Stock Purchase Plan ("ESPP"), which was approved by the shareholders on November 12, 2014. There are 66,382 shares available under the 1999 ESPP and 3,511,996 shares available under the 2013 Stock Plan. | ||||||||||||||||||||||||
Share-based compensation expense recognized in the condensed consolidated financial statements by line item caption is as follows (in thousands): | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
March 31, | March 31, | March 31, | March 31, | |||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
Cost of product revenue | $ | 265 | $ | 268 | $ | 823 | $ | 568 | ||||||||||||||||
Cost of service revenue | 254 | 420 | 816 | 623 | ||||||||||||||||||||
Research and development | 1,423 | 1,419 | 4,611 | 2,559 | ||||||||||||||||||||
Sales and marketing | 1,291 | 1,765 | 4,414 | 3,614 | ||||||||||||||||||||
General and administrative | 1,139 | 970 | 3,271 | 2,510 | ||||||||||||||||||||
Total share-based compensation expense | $ | 4,372 | $ | 4,842 | $ | 13,935 | $ | 9,874 | ||||||||||||||||
The Company did not capitalize any stock-based compensation expense in inventory, as the amounts were immaterial during the three and nine months ended March 31, 2015 and 2014, respectively. | ||||||||||||||||||||||||
Stock Awards | ||||||||||||||||||||||||
Stock awards may be granted under the 2013 Plan on terms approved by the Board of Directors. Stock awards generally provide for the issuance of restricted stock which vests over a fixed period. | ||||||||||||||||||||||||
During the three months ended March 31, 2015, the Company began expensing market-performance based restricted stock units to senior executive officers that had been granted during the second quarter of fiscal 2015. | ||||||||||||||||||||||||
The following table summarizes stock award activity for the nine months ended March 31, 2015: | ||||||||||||||||||||||||
Number of | Weighted- | Aggregate Fair Market Value ($000's) | ||||||||||||||||||||||
Shares | Average Grant- | |||||||||||||||||||||||
(000’s) | Date Fair Value | |||||||||||||||||||||||
Non-vested stock outstanding at June 30, 2014 | 6,000 | $ | 4.98 | |||||||||||||||||||||
Granted | 1,305 | $ | 3.45 | |||||||||||||||||||||
Vested | (2,216 | ) | $ | 5.09 | $ | 7,985 | ||||||||||||||||||
Cancelled | (409 | ) | $ | 4.42 | ||||||||||||||||||||
Non-vested stock outstanding at March 31, 2015 | 4,680 | $ | 4.55 | |||||||||||||||||||||
Stock Options | ||||||||||||||||||||||||
The following table summarizes stock option activity under all plans for the nine months ended March 31, 2015. | ||||||||||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | |||||||||||||||||||||
Shares | Average | Average | Intrinsic Value | |||||||||||||||||||||
(000’s) | Exercise Price | Remaining | (000’s) | |||||||||||||||||||||
Per Share | Contractual | |||||||||||||||||||||||
Term (years) | ||||||||||||||||||||||||
Options outstanding at June 30, 2014 | 11,732 | $ | 4.26 | 5.13 | $ | 6,846 | ||||||||||||||||||
Granted | 1,153 | $ | 4.11 | |||||||||||||||||||||
Exercised | (425 | ) | $ | 3.17 | $ | 381 | ||||||||||||||||||
Cancelled | (1,245 | ) | $ | 5.12 | ||||||||||||||||||||
Options outstanding at March 31, 2015 | 11,215 | $ | 4.19 | 4.73 | $ | 493 | ||||||||||||||||||
Exercisable at March 31, 2015 | 6,047 | $ | 3.95 | 3.94 | $ | 473 | ||||||||||||||||||
Vested and expected to vest at March 31, 2015 | 10,441 | $ | 4.17 | 4.66 | $ | 489 | ||||||||||||||||||
The weighted-average grant-date per share fair value of options granted was $1.34 and $2.71 during the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||||||||||||||
The weighted-average grant-date per share fair value of options granted was $1.91 and $2.39 during the nine months ended March 31, 2015 and 2014, respectively. | ||||||||||||||||||||||||
The Company uses the Monte-Carlo simulation model to determine the fair value and the derived service period o performance-based option awards, with market conditions, on the date of the grant. | ||||||||||||||||||||||||
ESPP | ||||||||||||||||||||||||
The weighted-average estimated per share fair value of shares purchased under the Company’s ESPP was $0.59 and $1.62 during the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||||||||||||||
The weighted-average estimated per share fair value of shares purchased under the Company’s ESPP was $1.02 and $1.44 during the nine months ended March 31, 2015 and 2014, respectively. | ||||||||||||||||||||||||
Excluding the options assumed as part of the Enterasys acquisition, the fair value of each option award and share purchase option under the Company's ESPP is estimated on the date of grant using the Black-Scholes-Merton option valuation model with the weighted average assumptions noted in the following table. | ||||||||||||||||||||||||
Stock Option Plan | Employee Stock Purchase Plan | Stock Option Plan | Employee Stock Purchase Plan | |||||||||||||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||||||||||
March 31, | March 31, | March 31, | March 31, | March 31, | March 31, | March 31, | March 31, | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Expected life | 4.6 years | 5.0 years | 0.50 years | 0.25 years | 4.7 years | 4.0 years | 0.33 years | 0.25 years | ||||||||||||||||
Risk-free interest rate | 1.49 | % | 1.41 | % | 0.07 | % | 0.09 | % | 1.6 | % | 1.23 | % | 0.04 | % | 0.1 | % | ||||||||
Volatility | 54 | % | 57 | % | 58 | % | 57 | % | 54 | % | 56 | % | 58 | % | 51 | % | ||||||||
Dividend yield | — | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies |
Purchase Commitments | |
The Company currently has arrangements with contract manufacturers and suppliers for the manufacture of its products. The arrangements allow them to procure long lead-time component inventory based upon a rolling production forecast provided by the Company. The Company is obligated to the purchase of long lead-time component inventory that its contract manufacturer procures in accordance with the forecast, unless the Company gives notice of order cancellation outside of applicable component lead-times. The Company had non-cancelable commitments to purchase $100.7 million of such inventory as of March 31, 2015. | |
Legal Proceedings | |
The Company may from time to time be party to litigation arising in the course of its business, including, without limitation, allegations relating to commercial transactions, business relationships or intellectual property rights. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources. Litigation in general and intellectual property and securities litigation in particular, can be expensive and disruptive to normal business operations. Moreover, the results of legal proceedings are difficult to predict. | |
In accordance with applicable accounting guidance, the Company records accruals for certain of its outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. The Company evaluates, at least on a quarterly basis, developments in legal proceedings, investigations or claims that could affect the amount of any accrual, as well as any developments that would result in a loss contingency to become both probable and reasonably estimable. When a loss contingency is not both probable and reasonably estimable, the Company does not record a loss accrual. However, if the loss (or an additional loss in excess of any prior accrual) is at least a reasonable possibility and material, then the Company would disclose an estimate of the possible loss or range of loss, if such estimate can be made, or disclose that an estimate cannot be made. The assessment whether a loss is probable or a reasonable possibility, and whether the loss or a range of loss is estimable, involves a series of complex judgments about future events. Even if a loss is reasonably possible, the Company may not be able to estimate a range of possible loss, particularly where (i) the damages sought are substantial or indeterminate, (ii) the proceedings are in the early stages, or (iii) the matters involve novel or unsettled legal theories or a large number of parties. In such cases, there is considerable uncertainty regarding the ultimate resolution of such matters, including the amount of any possible loss, fine or penalty. Accordingly, for current proceedings, except as noted below, the Company is currently unable to estimate any reasonably possible loss or range of possible loss. However, an adverse resolution of one or more of such matters could have a material adverse effect on the Company's results of operations in a particular quarter or fiscal year. | |
Litigation | |
Commonwealth of Kentucky | |
On or about February 3, 2014, a class action lawsuit was filed in the Commonwealth of Kentucky against Enterasys Networks, Inc. and two other defendants. The complaint alleges that Enterasys and its subcontractor, TJL Information Technologies, Inc., d.b.a. Unbridled Information Technologies (“Subcontractor”), violated Kentucky’s wage and hour laws and failed to pay the prevailing wage in violation of the Kentucky State Prevailing Wage Act (the “Act”) on various public works projects for a number of Kentucky government agencies since January 2010. Plaintiffs also allege common law actions for quantum merit and unjust enrichment and they seek monetary damages, costs, expenses and attorney fees, although there was no quantified amount identified. One of the defendants, Integrated Facility Systems, LLC (“IFS”), has also filed a cross-claim against Enterasys. The Company denies the claims and filed answers to both the complaint and cross-claim on April 16, 2014. In addition, the Company filed a cross-claim for indemnity against IFS. | |
Plaintiffs filed a first amended complaint on September 26, 2014, in which they named Commonwealth of Kentucky’s Office of Technology under the State’s Finance and Administration Cabinet (“COT”) as a defendant. The Company filed an answer to the Plaintiffs’ first amended complaint on October 10, 2014. COT then filed a motion to dismiss COT as a defendant in this lawsuit and the court granted COT’s motion. Plaintiffs filed a motion for Summary Judgment/Adjudication on the issue of whether the work performed by the defendants constitutes “construction” under the Act, which was denied on February 26, 2015. Given the preliminary nature of the lawsuit, it is premature to assess the likelihood of a particular outcome. | |
ICMS Tax Assessment Matters | |
The State of Sao Paolo (Brazil) denied Enterasys Networks do Brazil Ltda. the use of certain credits derived from the State of Espirito Santo under the terms of the FUNDAP scheme for the tax years of 2002 through 2009. Enterasys’ application to resolve the ICMS Tax Assessments at the administrative level of the Sao Paolo Tax Department under the amnesty relief program (Reference No 3.056.963-1) was denied in March, 2014, by the Sao Paolo Tax Administration. The value of the ICMS tax credits that were disallowed by the Sao Paolo Tax Administration is approximately BR 3,443,914 (or approximately US $1.5 million), plus interest and penalties (that are currently estimated to be approximately US $9.0 million). On January 10, 2014, Enterasys filed a lawsuit to overturn or reduce the assessment, which lawsuit remains on-going. As part of this lawsuit, Enterasys made a request for a stay of execution, so that no tax foreclosure can be filed until a final ruling is made and no guarantee needs to be presented. On or about October 6, 2014, the preliminary injunction was granted with regard to the stay of execution, and in response to an appeal on the guarantee requirement, the appellant court further ruled on or about January 28, 2015 that no cash deposit (or guarantee) need be made by Enterasys. | |
Given the preliminary nature of the lawsuit, it is premature to assess the likelihood of a particular final outcome. Based on the currently available information, the Company believes the ultimate outcome of this audit will not have material adverse effect on the Company's financial position or overall trends in results of operations. The range of the potential total tax liability related to these matters is estimated to be from US $0 million to US $9.0 million, of which the Company believes US $4.3 million is the best estimate within the range and has recorded an accrual as of the acquisition date of Enterasys as such matter relates to the period before the acquisition. | |
Unify U.S. Holdings, Inc. (formerly known as Enterprise Networks Holdings, Inc.). | |
On or about April 8, 2015, Company filed a lawsuit against Unify U.S. Holdings, Inc. (formerly known as Enterprise Networks Holdings, Inc.) (“Seller”) for breach of, and indemnification by Seller under, the purchase agreement, between Seller and Company, for Company’s purchase of Enterasys Networks, Inc. and its subsidiaries (the “Purchase Agreement”). The complaint alleges numerous claims for indemnification resulting from Seller’s violations of certain clauses in the Purchase Agreement and Seller’s failure to make accurate and proper disclosures as required by the Purchase Agreement. The Company was compelled to file this action to perfect and preserve the Company’s right to indemnification by Seller under the Purchase Agreement. Although the Company’s complaint has not quantified the amount being sought, the complaint seeks, among other things, monetary damages, costs, expenses and attorney fees in connection with each of the claims. Given the preliminary nature of the lawsuit, it is premature to assess the likelihood of a particular or final outcome. | |
Wetro LAN LLC | |
On Mar 23, 2015, Wetro LAN LLC (Wetro), a non-practicing entity, filed a complaint against Extreme in the Eastern District of Texas asserting infringement of United States Patent No. 6,795,918 (the “ ‘918 Patent”). Wetro alleges that Extreme “makes, uses, provides, offers for sale, and sells their product entitled Extreme Networks- Altitude 4700 Series Access Points and similarly situated wireless routers” and thereby has infringed the 918 Patent. Wetro sued a number of other technology companies in January and February 2015 for the same patent. Indications at the USPTO are that the 918 Patent has expired, limiting potential damages including all future damages in the case. Wetro seeks monetary damages, although the complaint seeks no quantified amount. Given the preliminary nature of the lawsuit, it is premature to assess the likelihood of a particular or final outcome. |
Income_Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes |
The Company recorded an income tax provision of $1.1 million and $3.5 million, for the three and nine months ended March 31, 2015, respectively. The Company recorded an income tax provision of $0.9 million and $2.3 million for the three and nine months ended March 31, 2014, respectively. | |
The income tax provisions for the three and nine months ended March 31, 2015 and 2014, consisted primarily of taxes on the income of our foreign subsidiaries as well as tax expense associated with the establishment of a U.S. deferred tax liability for amortizable goodwill resulting from the acquisition of Enterasys Networks, Inc. The income tax provisions for both fiscal years were calculated based on the actual results of operations for the three and nine months ended March 31, 2015 and 2014, and therefore may not reflect the annual effective tax rate. | |
The Company has provided a full valuation allowance against all of its U.S. federal and state deferred tax assets as well as substantially all of the acquired Enterasys foreign entities’ deferred tax assets. No valuation allowance has been established against the non-U.S. deferred tax assets of the legacy Extreme Networks, Inc. foreign subsidiaries. A valuation allowance is determined by assessing both negative and positive evidence to determine whether it is “more likely than not” that the deferred tax assets are recoverable; such assessment is required on a jurisdiction by jurisdiction basis. The Company's inconsistent earnings in recent periods, coupled with the Company's inability to forecast greater than one quarter in advance and the cyclical nature of its business represent sufficient negative evidence to require a full valuation allowance against its U.S. federal and state net deferred tax assets as well as the above mentioned foreign jurisdictions. This valuation allowance will be evaluated periodically and can be reversed partially or in whole if business results and the economic environment have sufficiently improved to support realization of some or all of the Company's deferred tax assets. | |
The acquisition of Enterasys included a U.S. parent company as well as its wholly-owned domestic and foreign subsidiaries. The Company has elected to treat this stock acquisition as an asset purchase by filing the required election forms under IRC Sec 338(h)(10). The Company has estimated the value of the intangible assets from this transaction and is amortizing the amount over 15 years for tax purposes. The Company deducted $1.1 million and $3.4 million, during the three and nine months ended March 31, 2015, respectively of tax amortization expense related to capitalized goodwill. The Company recorded a deferred tax liability of $2.4 million related to this amortization which is not considered a future source of taxable income in evaluating the need for a valuation allowance against our deferred tax assets as of March 31, 2015. | |
The Company had $11.3 million of unrecognized tax benefits as of March 31, 2015. The future impact of the unrecognized tax benefit of $11.3 million, if recognized, would result in adjustments to deferred tax assets and corresponding adjustments to the valuation allowance. The Company does not anticipate any events to occur during the next twelve months that would reduce the unrealized tax benefit as currently stated in the Company’s balance sheet. | |
Estimated interest and penalties related to the underpayment of income taxes are classified as a component of tax expense in the Condensed Consolidated Statements of Operations and were immaterial for the three and nine months ended March 31, 2015 and 2014. Accrued interest and penalties were $42,000 as of March 31, 2014, and have been fully reversed as of March 31, 2015. | |
In general, the Company's U.S. federal income tax returns are subject to examination by tax authorities for fiscal years 2001 forward due to net operating losses and the Company's state income tax returns are subject to examination for fiscal years 2003 forward due to net operating losses. |
Net_Loss_Per_Share
Net Loss Per Share | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
Net Loss Per Share | Net Loss Per Share | |||||||||||||||
Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Dilutive earnings per share is calculated by dividing net earnings by the weighted average number of common shares used in the basic earnings per share calculation plus the dilutive effect of shares subject to repurchase, options, warrants and unvested restricted stock. | ||||||||||||||||
The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, | March 31, | March 31, | March 31, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net loss | $ | (23,548 | ) | $ | (25,058 | ) | $ | (55,983 | ) | $ | (41,079 | ) | ||||
Weighted-average shares used in per share calculation – basic and diluted | 99,783 | 96,069 | 98,591 | 95,116 | ||||||||||||
Net loss per share – basic and diluted | $ | (0.24 | ) | $ | (0.26 | ) | $ | (0.57 | ) | $ | (0.43 | ) | ||||
The following securities were excluded from the computation of diluted net loss per share of common stock for the periods presented as their effect would have been anti-dilutive (in thousands): | ||||||||||||||||
March 31, | March 31, | |||||||||||||||
2015 | 2014 | |||||||||||||||
Options to purchase common stock | 9,839 | 7,171 | ||||||||||||||
Restricted stock units | 1,694 | 1,038 | ||||||||||||||
Foreign_Exchange_Forward_Contr
Foreign Exchange Forward Contracts | 9 Months Ended |
Mar. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Foreign Exchange Forward Contracts | Foreign Exchange Forward Contracts |
The Company uses derivative financial instruments to manage exposures to foreign currency. The Company’s objective for holding derivatives is to use the most effective methods to minimize the impact of these exposures. The Company does not enter into derivatives for speculative or trading purposes. The Company records all derivatives on the balance sheet as "Other assets" at fair value. Changes in the fair value of derivatives are recognized in earnings as Other Income (Expense). The Company from time to time enters into foreign exchange forward contracts to mitigate the effect of gains and losses generated by the foreign currency forecast transactions related to certain operating expenses and re-measurement of certain assets and liabilities denominated in foreign currencies. These derivatives do not qualify as hedges. As of March 31, 2015, the Company did not have any foreign currency contracts. | |
Foreign currency transaction gains and losses from operations was a loss of $0.5 million and $0.1 million for the three months ended March 31, 2015 and 2014, respectively. Foreign currency transaction gains and losses from operations were a loss of $0.9 million and $1.2 million for the nine months ended March 31, 2015 and 2014, respectively. |
Disclosure_about_Segments_of_a
Disclosure about Segments of an Enterprise and Geographic Areas | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Disclosure about Segments of an Enterprise and Geographic Areas | Disclosure about Segments of an Enterprise and Geographic Areas | |||||||||||||||
The Company operates in one segment, the development and marketing of network infrastructure equipment. The Company conducts business globally and is managed geographically. Revenue is attributed to a geographical area based on the location of its customers. The Company operates in three geographical areas: Americas; which includes the United States, Canada, Mexico, Central America and South America; Europe, the Middle East and Africa ("EMEA"); which includes Europe, Russia, the Middle East and Africa; and APAC; which includes Asia Pacific, South Asia, India, Australia and Japan. | ||||||||||||||||
The Company attributes revenues to geographic regions primarily based on the customer's ship-to location. Information regarding geographic areas is as follows (in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
Net Revenues: | March 31, | March 31, | March 31, | March 31, | ||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Americas: | ||||||||||||||||
United States | $ | 49,353 | $ | 59,896 | $ | 166,001 | $ | 141,576 | ||||||||
Other | 7,073 | 12,082 | 26,990 | 37,816 | ||||||||||||
Total Americas | 56,426 | 71,978 | 192,991 | 179,392 | ||||||||||||
EMEA | 50,006 | 54,113 | 166,515 | 146,175 | ||||||||||||
APAC | 13,158 | 15,671 | 43,566 | 38,694 | ||||||||||||
Total net revenues | $ | 119,590 | $ | 141,762 | $ | 403,072 | $ | 364,261 | ||||||||
Long Lived Assets: | March 31, 2015 | 30-Jun-14 | ||||||||||||||
Americas | $ | 93,185 | $ | 104,387 | ||||||||||||
EMEA | 32,773 | 45,191 | ||||||||||||||
APAC | 3,312 | 3,121 | ||||||||||||||
Total long lived assets | $ | 129,270 | $ | 152,699 | ||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Investments | The Company considers highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Investments with original maturities of greater than three months, but less than one year at the balance sheet date are classified as Short-term investments. |
The Company accumulates unrealized gains and losses on the Company's available-for-sale debt securities, net of tax, in accumulated other comprehensive income (loss) in the stockholders' equity section of its balance sheets. If the fair value of an available-for-sale debt instrument is less than its amortized cost basis, an other-than-temporary impairment is triggered in circumstances where (1) the Company intends to sell the instrument, (2) it is more likely than not that the Company will be required to sell the instrument before recovery of its amortized cost basis, or (3) the Company does not expect to recover the entire amortized cost basis of the instrument (that is, a credit loss exists). | |
The Company determines the basis of the cost of a security sold or the amount reclassified out of accumulated other comprehensive income (loss) into earnings using the specific identification method. | |
Deferred Revenue | Deferred Distributors Revenue, Net of Cost of Sales to Distributors |
The Company records revenue from its distributors on a sell-through basis, recording deferred revenue and deferred cost of sales associated with all sales transactions to its distributors in “Deferred distributor' revenue, net of cost of sales to distributors” in the liability section of its condensed consolidated balance sheet. The amount shown as “Deferred distributors revenue, net of cost of sales to distributors” represents the deferred gross profit on sales to distributors based on contractual pricing. | |
The Company offers for sale to its customers, renewable support arrangements that range from one to five years. Deferred support revenue is included within deferred revenue, net within the services category above. | |
Deferred Revenue, Net | |
Deferred revenue, net represents amounts for (i) deferred services revenue (support arrangements, professional services and training), and (ii) deferred product revenue net of the related cost of revenue when the revenue recognition criteria have not been met. | |
Guarantees and Product Warranties | Guarantees and Product Warranties |
Upon issuance of a standard product warranty, the Company discloses and recognizes a liability for the obligation it assumes under the warranty. | |
The Company has agreed to hold the customer harmless against losses arising from a breach of intellectual property infringement or other claims made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not estimable. We have not recorded a liability related to these indemnification and guarantee provisions and our guarantee and indemnification arrangements have not had any significant impact on our consolidated financial statements to date. | |
Fair Value Measurements | Level 2 investment valuations are based on inputs such as quoted market prices of similar instruments, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, and state, municipal and provincial obligations. |
Earnings Per Share | Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Dilutive earnings per share is calculated by dividing net earnings by the weighted average number of common shares used in the basic earnings per share calculation plus the dilutive effect of shares subject to repurchase, options, warrants and unvested restricted stock. |
Business_combinations_Tables
Business combinations (Tables) | 9 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Business Combinations [Abstract] | |||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the final allocation as of September 30, 2014, of the tangible and identifiable intangible assets acquired and liabilities assumed as compared to the allocation as of December 31, 2013, the quarter in which the transaction was completed (in thousands): | ||||||||||||
Preliminary Allocation as of December 31, 2013 (Initial allocation) | Change during the measurement period | Final Allocation as of September 30, 2014 | |||||||||||
Cash | $ | 4,969 | $ | 2,428 | a | $ | 7,397 | ||||||
Receivables | 25,699 | (2,428 | ) | a | 23,271 | ||||||||
Inventory | 33,662 | — | 33,662 | ||||||||||
Other current assets | 8,888 | (1,514 | ) | b | 7,374 | ||||||||
Property and equipment | 23,122 | (1,829 | ) | c | 21,293 | ||||||||
Identifiable intangible assets | 108,900 | — | d | 108,900 | |||||||||
In-process research and development | 3,000 | — | 3,000 | ||||||||||
Deferred tax assets | 9 | — | 9 | ||||||||||
Other assets | 7,343 | — | 7,343 | ||||||||||
Goodwill | 57,922 | 12,955 | 70,877 | ||||||||||
Current liabilities | (75,394 | ) | (6,141 | ) | c,e,f | (81,535 | ) | ||||||
Other long-term liabilities | (13,151 | ) | (1,043 | ) | c | (14,194 | ) | ||||||
Total purchase price allocation | $ | 184,969 | $ | 2,428 | $ | 187,397 | |||||||
Less: Cash acquired from acquisition | (4,969 | ) | (2,428 | ) | a | (7,397 | ) | ||||||
Total purchase price consideration, net of cash acquired | $ | 180,000 | $ | — | $ | 180,000 | |||||||
a. | The Company finalized the working capital adjustment as of September 30, 2014, which led to a decrease of $2.4 million in receivables and a corresponding increase in cash. As a result of this adjustment, the total cash acquired from the acquisition also increased by the same amount. The net effect of this adjustment is an increase in goodwill of $2.4 million. | ||||||||||||
b. | The Company obtained new information regarding the existence of prepaid assets as of the acquisition date which led to a decrease in the fair value of current assets of $1.5 million, and a corresponding increase in goodwill. The change in the amortization of prepaid assets due to the change in fair value of current assets was immaterial. | ||||||||||||
c. | The Company updated its preliminary estimate of the fair value of property and equipment which led to a decrease of $3.0 million in property and equipment with a corresponding increase in goodwill. The Company also updated the fair values of the asset retirement obligations and the related asset retirement assets which led to an increase in the fair value of property and equipment of $1.2 million and a corresponding increase in current liabilities and other long-term liabilities of $0.2 million and $1.0 million, respectively. The decrease in depreciation expense due to the change in fair value of property and equipment was immaterial. | ||||||||||||
d. | During the nine months ended September 30, 2014, there were no changes to the fair value of the identifiable intangible assets acquired. However, the Company revised the estimated useful life of Order backlog from 1.5 years to 1 year. | ||||||||||||
e. | The Company obtained new information regarding accruals for litigation and statutory tax assessment as of the acquisition date which led to an increase in the fair value of current liabilities of $5.4 million and a corresponding increase in goodwill. | ||||||||||||
f. | The Company obtained new information regarding the existence of accrued liabilities as of the acquisition date which led to a net increase in the fair value of accrued liabilities by $0.5 million with a corresponding increase in goodwill. |
Balance_Sheet_Accounts_Tables
Balance Sheet Accounts (Tables) | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||
Cash, Cash Equivalents, Short-Term Investments and Marketable Securities | Summary of Cash and Available-for-Sale Securities (in thousands) | |||||||||||||||
March 31, 2015 | June 30, 2014 | |||||||||||||||
Cash | $ | 54,288 | $ | 72,623 | ||||||||||||
Cash equivalents | 19,779 | 567 | ||||||||||||||
Short-term investments | 1,506 | 32,692 | ||||||||||||||
Total available-for-sale | $ | 21,285 | $ | 33,259 | ||||||||||||
Total cash, cash equivalents and available-for-sale securities | $ | 75,573 | $ | 105,882 | ||||||||||||
Available-for-sale Securities | The following is a summary of available-for-sale securities (in thousands): | |||||||||||||||
Amortized | Fair Value | Unrealized | Unrealized | |||||||||||||
Cost | Holding | Holding | ||||||||||||||
Gains | Losses | |||||||||||||||
March 31, 2015 | ||||||||||||||||
Money market funds | $ | 19,779 | $ | 19,779 | $ | — | $ | — | ||||||||
U.S. corporate debt securities | 1,506 | 1,506 | — | |||||||||||||
$ | 21,285 | $ | 21,285 | $ | — | $ | — | |||||||||
Classified as: | ||||||||||||||||
Cash equivalents | $ | 19,779 | $ | 19,779 | $ | — | $ | — | ||||||||
Short-term investments | 1,506 | 1,506 | — | |||||||||||||
$ | 21,285 | $ | 21,285 | $ | — | $ | — | |||||||||
June 30, 2014 | ||||||||||||||||
Money market funds | $ | 567 | $ | 567 | $ | — | $ | — | ||||||||
U.S. corporate debt securities | 32,578 | 32,692 | 114 | — | ||||||||||||
$ | 33,145 | $ | 33,259 | $ | 114 | $ | — | |||||||||
Classified as: | ||||||||||||||||
Cash equivalents | $ | 567 | $ | 567 | $ | — | $ | — | ||||||||
Short-term investments | 32,578 | 32,692 | 114 | — | ||||||||||||
$ | 33,145 | $ | 33,259 | $ | 114 | $ | — | |||||||||
The amortized cost and estimated fair value of available-for-sale investments in debt securities at March 31, 2015, by contractual maturity, were as follows (in thousands): | ||||||||||||||||
Amortized | Fair | |||||||||||||||
Cost | Value | |||||||||||||||
Due in 1 year or less | $ | 21,285 | $ | 21,285 | ||||||||||||
Total investments in available-for-sale debt securities | $ | 21,285 | $ | 21,285 | ||||||||||||
Schedule of Deferred Revenue, Net | The following table summarizes deferred revenue, net (in thousands): | |||||||||||||||
March 31, 2015 | June 30, 2014 | |||||||||||||||
Deferred services | $ | 88,737 | $ | 89,657 | ||||||||||||
Deferred product and other revenue | 7,610 | 8,020 | ||||||||||||||
Total deferred revenue | 96,347 | 97,677 | ||||||||||||||
Less: current portion | 73,206 | 74,735 | ||||||||||||||
Non-current deferred revenue, net | $ | 23,141 | $ | 22,942 | ||||||||||||
Change in Deferred Support Revenue | The change in the Company’s deferred support revenue balance in relation to these arrangements was as follows (in thousands): | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, 2015 | March 31, 2014 | March 31, 2015 | March 31, 2014 | |||||||||||||
Balance beginning of period | $ | 91,373 | $ | 81,485 | $ | 89,657 | $ | 38,003 | ||||||||
Assumed from acquisition | — | — | — | 35,879 | ||||||||||||
New support arrangements | 27,198 | 30,986 | 91,254 | 77,475 | ||||||||||||
Recognition of support revenue | (29,834 | ) | (28,265 | ) | (92,174 | ) | (67,151 | ) | ||||||||
Balance end of period | 88,737 | 84,206 | 88,737 | 84,206 | ||||||||||||
Less: current portion | 65,596 | 64,539 | 65,596 | 64,539 | ||||||||||||
Non-current deferred revenue | $ | 23,141 | $ | 19,667 | $ | 23,141 | $ | 19,667 | ||||||||
Schedule of Deferred Distributors Revenue | The following table summarizes deferred distributors revenue, net of cost of sales to distributors (in thousands): | |||||||||||||||
March 31, 2015 | June 30, 2014 | |||||||||||||||
Deferred distributors' revenue | $ | 46,230 | $ | 40,715 | ||||||||||||
Deferred cost of sales to distributors | (10,543 | ) | (8,723 | ) | ||||||||||||
Deferred distributors revenue, net of cost of sales to distributors | $ | 35,687 | $ | 31,992 | ||||||||||||
Schedule of Debt | The Company's debt is comprised of the following (in thousands): | |||||||||||||||
March 31, 2015 | June 30, 2014 | |||||||||||||||
Current portion of long-term debt: | ||||||||||||||||
Term Loan | $ | 9,750 | $ | 5,688 | ||||||||||||
Revolving Facility | — | 24,000 | ||||||||||||||
Current portion of long-term debt | $ | 9,750 | $ | 29,688 | ||||||||||||
Long-term debt, less current portion: | ||||||||||||||||
Term Loan | $ | 48,750 | $ | 56,875 | ||||||||||||
Revolving Facility | 10,000 | 35,000 | ||||||||||||||
Total long-term debt, less current portion | 58,750 | 91,875 | ||||||||||||||
Total debt | $ | 68,500 | $ | 121,563 | ||||||||||||
Schedule of Product Warranty Liability | The following table summarizes the activity related to the Company’s product warranty liability during the three and nine months ended March 31, 2015 and 2014, (in thousands): | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, 2015 | March 31, 2014 | March 31, 2015 | March 31, 2014 | |||||||||||||
Balance beginning of period | $ | 7,845 | $ | 7,479 | $ | 7,551 | $ | 3,296 | ||||||||
Assumed from acquisition | — | — | — | 3,732 | ||||||||||||
New warranties issued | 1,751 | 1,824 | 5,699 | 4,782 | ||||||||||||
Warranty expenditures | (1,717 | ) | (1,478 | ) | (5,371 | ) | (3,985 | ) | ||||||||
Balance end of period | $ | 7,879 | $ | 7,825 | $ | 7,879 | $ | 7,825 | ||||||||
Schedule of Major Customers | The following table sets forth major customers accounting for 10% or more of our net revenue for the periods indicated: | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
31-Mar-15 | March 31, 2014 | 31-Mar-15 | 31-Mar-14 | |||||||||||||
Westcon Group, Inc. | 16% | 14% | 14% | 13% | ||||||||||||
ScanSource, Inc. | 13% | * | * | * | ||||||||||||
Tech Data Corporation | * | 16% | 14% | 12% | ||||||||||||
* Less than 10% of net revenue |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis (in thousands): | |||||||||||||||
March 31, 2015 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Investments: | ||||||||||||||||
Money market funds | $ | 19,779 | $ | — | $ | — | $ | 19,779 | ||||||||
Corporate notes/bonds | — | 1,506 | — | 1,506 | ||||||||||||
Non-marketable equity investment | — | — | 3,000 | 3,000 | ||||||||||||
Total | $ | 19,779 | $ | 1,506 | $ | 3,000 | $ | 24,285 | ||||||||
June 30, 2014 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Investments: | ||||||||||||||||
Money market funds | $ | 567 | $ | — | $ | — | $ | 567 | ||||||||
Corporate notes/bonds | — | 32,692 | — | 32,692 | ||||||||||||
Foreign currency forward contracts | — | 21 | — | 21 | ||||||||||||
Total | $ | 567 | $ | 32,713 | $ | — | $ | 33,280 | ||||||||
Sharebased_Compensation_Tables
Share-based Compensation (Tables) | 9 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Share-based Compensation [Abstract] | ||||||||||||||||||||||||
Schedule of Recognized Share-based Compensation Expense | Share-based compensation expense recognized in the condensed consolidated financial statements by line item caption is as follows (in thousands): | |||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
March 31, | March 31, | March 31, | March 31, | |||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
Cost of product revenue | $ | 265 | $ | 268 | $ | 823 | $ | 568 | ||||||||||||||||
Cost of service revenue | 254 | 420 | 816 | 623 | ||||||||||||||||||||
Research and development | 1,423 | 1,419 | 4,611 | 2,559 | ||||||||||||||||||||
Sales and marketing | 1,291 | 1,765 | 4,414 | 3,614 | ||||||||||||||||||||
General and administrative | 1,139 | 970 | 3,271 | 2,510 | ||||||||||||||||||||
Total share-based compensation expense | $ | 4,372 | $ | 4,842 | $ | 13,935 | $ | 9,874 | ||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock Units Activity | The following table summarizes stock award activity for the nine months ended March 31, 2015: | |||||||||||||||||||||||
Number of | Weighted- | Aggregate Fair Market Value ($000's) | ||||||||||||||||||||||
Shares | Average Grant- | |||||||||||||||||||||||
(000’s) | Date Fair Value | |||||||||||||||||||||||
Non-vested stock outstanding at June 30, 2014 | 6,000 | $ | 4.98 | |||||||||||||||||||||
Granted | 1,305 | $ | 3.45 | |||||||||||||||||||||
Vested | (2,216 | ) | $ | 5.09 | $ | 7,985 | ||||||||||||||||||
Cancelled | (409 | ) | $ | 4.42 | ||||||||||||||||||||
Non-vested stock outstanding at March 31, 2015 | 4,680 | $ | 4.55 | |||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes stock option activity under all plans for the nine months ended March 31, 2015. | |||||||||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | |||||||||||||||||||||
Shares | Average | Average | Intrinsic Value | |||||||||||||||||||||
(000’s) | Exercise Price | Remaining | (000’s) | |||||||||||||||||||||
Per Share | Contractual | |||||||||||||||||||||||
Term (years) | ||||||||||||||||||||||||
Options outstanding at June 30, 2014 | 11,732 | $ | 4.26 | 5.13 | $ | 6,846 | ||||||||||||||||||
Granted | 1,153 | $ | 4.11 | |||||||||||||||||||||
Exercised | (425 | ) | $ | 3.17 | $ | 381 | ||||||||||||||||||
Cancelled | (1,245 | ) | $ | 5.12 | ||||||||||||||||||||
Options outstanding at March 31, 2015 | 11,215 | $ | 4.19 | 4.73 | $ | 493 | ||||||||||||||||||
Exercisable at March 31, 2015 | 6,047 | $ | 3.95 | 3.94 | $ | 473 | ||||||||||||||||||
Vested and expected to vest at March 31, 2015 | 10,441 | $ | 4.17 | 4.66 | $ | 489 | ||||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | ||||||||||||||||||||||||
Stock Option Plan | Employee Stock Purchase Plan | Stock Option Plan | Employee Stock Purchase Plan | |||||||||||||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||||||||||
March 31, | March 31, | March 31, | March 31, | March 31, | March 31, | March 31, | March 31, | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Expected life | 4.6 years | 5.0 years | 0.50 years | 0.25 years | 4.7 years | 4.0 years | 0.33 years | 0.25 years | ||||||||||||||||
Risk-free interest rate | 1.49 | % | 1.41 | % | 0.07 | % | 0.09 | % | 1.6 | % | 1.23 | % | 0.04 | % | 0.1 | % | ||||||||
Volatility | 54 | % | 57 | % | 58 | % | 57 | % | 54 | % | 56 | % | 58 | % | 51 | % | ||||||||
Dividend yield | — | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % |
Net_Loss_Per_Share_Tables
Net Loss Per Share (Tables) | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data): | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, | March 31, | March 31, | March 31, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net loss | $ | (23,548 | ) | $ | (25,058 | ) | $ | (55,983 | ) | $ | (41,079 | ) | ||||
Weighted-average shares used in per share calculation – basic and diluted | 99,783 | 96,069 | 98,591 | 95,116 | ||||||||||||
Net loss per share – basic and diluted | $ | (0.24 | ) | $ | (0.26 | ) | $ | (0.57 | ) | $ | (0.43 | ) | ||||
Schedule of Antidilutive Securities Excluded from Earnings Per Share Calculation | The following securities were excluded from the computation of diluted net loss per share of common stock for the periods presented as their effect would have been anti-dilutive (in thousands): | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2015 | 2014 | |||||||||||||||
Options to purchase common stock | 9,839 | 7,171 | ||||||||||||||
Restricted stock units | 1,694 | 1,038 | ||||||||||||||
Disclosure_about_Segments_of_a1
Disclosure about Segments of an Enterprise and Geographic Areas (Tables) | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area | The Company attributes revenues to geographic regions primarily based on the customer's ship-to location. Information regarding geographic areas is as follows (in thousands): | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
Net Revenues: | March 31, | March 31, | March 31, | March 31, | ||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Americas: | ||||||||||||||||
United States | $ | 49,353 | $ | 59,896 | $ | 166,001 | $ | 141,576 | ||||||||
Other | 7,073 | 12,082 | 26,990 | 37,816 | ||||||||||||
Total Americas | 56,426 | 71,978 | 192,991 | 179,392 | ||||||||||||
EMEA | 50,006 | 54,113 | 166,515 | 146,175 | ||||||||||||
APAC | 13,158 | 15,671 | 43,566 | 38,694 | ||||||||||||
Total net revenues | $ | 119,590 | $ | 141,762 | $ | 403,072 | $ | 364,261 | ||||||||
Schedule of Long Lived Assets by Segment | ||||||||||||||||
Long Lived Assets: | March 31, 2015 | 30-Jun-14 | ||||||||||||||
Americas | $ | 93,185 | $ | 104,387 | ||||||||||||
EMEA | 32,773 | 45,191 | ||||||||||||||
APAC | 3,312 | 3,121 | ||||||||||||||
Total long lived assets | $ | 129,270 | $ | 152,699 | ||||||||||||
Business_combinations_Narrativ
Business combinations (Narrative) (Details) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 31, 2013 | Sep. 30, 2014 | ||
Business Acquisition [Line Items] | |||||||
Purchase price paid in acquisition | $0 | $180,000,000 | |||||
Enterasys Networks, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price paid in acquisition | 180,000,000 | 180,000,000 | 180,000,000 | ||||
Change during the period, Receivables | 2,428,000 | [1] | |||||
Goodwill, increase (decrease) | 2,400,000 | ||||||
Change during the period, other current assets | 1,514,000 | [2] | |||||
Change during the period, Property and equipment | -1,829,000 | [3] | |||||
Increase (decrease) in current liabilities for litigation and statutory tax assessments | 5,400,000 | ||||||
Increase (decrease) for accrued liabilities | 500,000 | ||||||
Enterasys Networks, Inc. | Order backlog | |||||||
Business Acquisition [Line Items] | |||||||
Finite-lived intangible asset useful lives | 1 year | 1 year 6 months | |||||
Enterasys Networks, Inc. | Goodwill | |||||||
Business Acquisition [Line Items] | |||||||
Change during the period, Property and equipment | 3,000,000 | ||||||
Enterasys Networks, Inc. | Property, Plant and Equipment | |||||||
Business Acquisition [Line Items] | |||||||
Change during the period, Property and equipment | 1,200,000 | ||||||
Enterasys Networks, Inc. | Other Current Liabilities | |||||||
Business Acquisition [Line Items] | |||||||
Change during the period, Property and equipment | 200,000 | ||||||
Enterasys Networks, Inc. | Other Noncurrent Liabilities | |||||||
Business Acquisition [Line Items] | |||||||
Change during the period, Property and equipment | $1,000,000 | ||||||
[1] | The Company finalized the working capital adjustment as of September 30, 2014, which led to a decrease of $2.4 million in receivables and a corresponding increase in cash. As a result of this adjustment, the total cash acquired from the acquisition also increased by the same amount. The net effect of this adjustment is an increase in goodwill of $2.4 million. | ||||||
[2] | The Company obtained new information regarding the existence of prepaid assets as of the acquisition date which led to a decrease in the fair value of current assets of $1.5 million, and a corresponding increase in goodwill. The change in the amortization of prepaid assets due to the change in fair value of current assets was immaterial. | ||||||
[3] | The Company updated its preliminary estimate of the fair value of property and equipment which led to a decrease of $3.0 million in property and equipment with a corresponding increase in goodwill. The Company also updated the fair values of the asset retirement obligations and the related asset retirement assets which led to an increase in the fair value of property and equipment of $1.2 million and a corresponding increase in current liabilities and other long-term liabilities of $0.2 million and $1.0 million, respectively. The decrease in depreciation expense due to the change in fair value of property and equipment was immaterial. |
Business_combinations_Estimate
Business combinations (Estimated Purchase Price) (Details) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||||
Mar. 31, 2015 | Mar. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 31, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | ||
Business Acquisition [Line Items] | ||||||||
Goodwill | $70,877,000 | $70,877,000 | ||||||
Total purchase price consideration, net of cash acquired | 0 | 180,000,000 | ||||||
Enterasys Networks, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash | 7,397,000 | 4,969,000 | 7,397,000 | |||||
Receivables | 23,271,000 | 25,699,000 | 23,271,000 | |||||
Inventory | 33,662,000 | 33,662,000 | 33,662,000 | |||||
Other current assets | 7,374,000 | 8,888,000 | 7,374,000 | |||||
Property and equipment | 21,293,000 | 23,122,000 | 21,293,000 | |||||
Identifiable intangible assets | 108,900,000 | 108,900,000 | 108,900,000 | |||||
In-process research and development | 3,000,000 | 3,000,000 | 3,000,000 | |||||
Deferred tax assets | 9,000 | 9,000 | 9,000 | |||||
Other assets | 7,343,000 | 7,343,000 | 7,343,000 | |||||
Goodwill | 70,877,000 | 57,922,000 | 70,877,000 | |||||
Current liabilities | -81,535,000 | -75,394,000 | -81,535,000 | |||||
Other long-term liabilities | -14,194,000 | -13,151,000 | -14,194,000 | |||||
Total purchase price allocation | 187,397,000 | 184,969,000 | 187,397,000 | |||||
Less: Cash acquired from acquisition | -7,397,000 | -4,969,000 | ||||||
Total purchase price consideration, net of cash acquired | 180,000,000 | 180,000,000 | 180,000,000 | |||||
Change during the period, Cash | 2,428,000 | [1] | ||||||
Change during the period, Receivables | -2,428,000 | [1] | ||||||
Change during the period, other current assets | -1,514,000 | [2] | ||||||
Change during the period, Property and equipment | -1,829,000 | [3] | ||||||
Change during period, Identifiable intangible assets | 0 | [4] | ||||||
Change during the period, Goodwill | 12,955,000 | |||||||
Change during the period, Current Liabilities | -6,141,000 | [3],[5],[6] | ||||||
Change during the period, Other long-term liabilities | -1,043,000 | [3] | ||||||
Change during the period, Total purchase price allocation | 2,428,000 | |||||||
Change during the period, Cash acquired from acquisition | -2,428,000 | [1] | ||||||
Goodwill, increase (decrease) | 2,400,000 | |||||||
Increase (decrease) in current liabilities for litigation and statutory tax assessments | 5,400,000 | |||||||
Increase (decrease) for accrued liabilities | 500,000 | |||||||
Enterasys Networks, Inc. | Order backlog | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible asset useful lives | 1 year | 1 year 6 months | ||||||
Enterasys Networks, Inc. | Goodwill | ||||||||
Business Acquisition [Line Items] | ||||||||
Change during the period, Property and equipment | 3,000,000 | |||||||
Enterasys Networks, Inc. | Property, Plant and Equipment | ||||||||
Business Acquisition [Line Items] | ||||||||
Change during the period, Property and equipment | 1,200,000 | |||||||
Enterasys Networks, Inc. | Other Current Liabilities | ||||||||
Business Acquisition [Line Items] | ||||||||
Change during the period, Property and equipment | 200,000 | |||||||
Enterasys Networks, Inc. | Other Noncurrent Liabilities | ||||||||
Business Acquisition [Line Items] | ||||||||
Change during the period, Property and equipment | $1,000,000 | |||||||
[1] | The Company finalized the working capital adjustment as of September 30, 2014, which led to a decrease of $2.4 million in receivables and a corresponding increase in cash. As a result of this adjustment, the total cash acquired from the acquisition also increased by the same amount. The net effect of this adjustment is an increase in goodwill of $2.4 million. | |||||||
[2] | The Company obtained new information regarding the existence of prepaid assets as of the acquisition date which led to a decrease in the fair value of current assets of $1.5 million, and a corresponding increase in goodwill. The change in the amortization of prepaid assets due to the change in fair value of current assets was immaterial. | |||||||
[3] | The Company updated its preliminary estimate of the fair value of property and equipment which led to a decrease of $3.0 million in property and equipment with a corresponding increase in goodwill. The Company also updated the fair values of the asset retirement obligations and the related asset retirement assets which led to an increase in the fair value of property and equipment of $1.2 million and a corresponding increase in current liabilities and other long-term liabilities of $0.2 million and $1.0 million, respectively. The decrease in depreciation expense due to the change in fair value of property and equipment was immaterial. | |||||||
[4] | During the nine months ended September 30, 2014, there were no changes to the fair value of the identifiable intangible assets acquired. However, the Company revised the estimated useful life of Order backlog from 1.5 years to 1 year. | |||||||
[5] | The Company obtained new information regarding the existence of accrued liabilities as of the acquisition date which led to a net increase in the fair value of accrued liabilities by $0.5 million with a corresponding increase in goodwill. | |||||||
[6] | The Company obtained new information regarding accruals for litigation and statutory tax assessment as of the acquisition date which led to an increase in the fair value of current liabilities of $5.4 million and a corresponding increase in goodwill. |
Balance_Sheet_Accounts_Schedul
Balance Sheet Accounts (Schedule of Cash and Available-For-Sale Securities) (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash | $54,288 | $72,623 |
Cash equivalents | 19,779 | 567 |
Short-term investments | 1,506 | 32,692 |
Total available-for-sale | 21,285 | 33,259 |
Total cash, cash equivalents and available for sale securities | $75,573 | $105,882 |
Balance_Sheet_Accounts_Schedul1
Balance Sheet Accounts (Schedule of Available-for-sale Securities) (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $21,285 | $33,145 |
Fair Value | 21,285 | 33,259 |
Unrealized Holding Gains | 0 | 114 |
Unrealized Holding Losses | 0 | 0 |
Cash equivalents | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 19,779 | 567 |
Fair Value | 19,779 | 567 |
Unrealized Holding Gains | 0 | 0 |
Unrealized Holding Losses | 0 | 0 |
Short-term investments | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,506 | 32,578 |
Fair Value | 1,506 | 32,692 |
Unrealized Holding Gains | 114 | |
Unrealized Holding Losses | 0 | 0 |
Money market funds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 19,779 | 567 |
Fair Value | 19,779 | 567 |
Unrealized Holding Gains | 0 | 0 |
Unrealized Holding Losses | 0 | 0 |
U.S. corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,506 | 32,578 |
Fair Value | 1,506 | 32,692 |
Unrealized Holding Gains | 114 | |
Unrealized Holding Losses | $0 | $0 |
Balance_Sheet_Accounts_Schedul2
Balance Sheet Accounts (Schedule of Available-for-sale Investments by Contractual Maturity) (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Amortized Cost | |
Due in 1 year or less | $21,285 |
Total investments in available for sale debt securities | 21,285 |
Fair Value | |
Due in 1 year or less | 21,285 |
Total investments in available for sale debt securities | $21,285 |
Balance_Sheet_Accounts_Schedul3
Balance Sheet Accounts (Schedule of Deferred Revenue, Net) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Deferred revenue, current and noncurrent | $96,347 | $97,677 | ||||
Less: current portion | 73,206 | 74,735 | ||||
Non-current deferred revenue, net | 23,141 | 22,942 | ||||
Services | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Deferred revenue, current and noncurrent | 88,737 | 91,373 | 89,657 | 84,206 | 81,485 | 38,003 |
Less: current portion | 65,596 | 64,539 | ||||
Non-current deferred revenue, net | 23,141 | 19,667 | ||||
Product | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Deferred revenue, current and noncurrent | $7,610 | $8,020 |
Balance_Sheet_Accounts_Change_
Balance Sheet Accounts (Change in Deferred Support Revenue) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2014 |
Movement in Deferred Revenue [Roll Forward] | |||||
Balance beginning of period | $97,677 | ||||
Balance end of period | 96,347 | 96,347 | 97,677 | ||
Less: current portion | 73,206 | 73,206 | 74,735 | ||
Non-current deferred revenue | 23,141 | 23,141 | 22,942 | ||
Renewable Support Arrangements | |||||
Movement in Deferred Revenue [Roll Forward] | |||||
Balance beginning of period | 91,373 | 81,485 | 89,657 | 38,003 | |
Assumed from acquisition | 0 | 0 | 0 | 35,879 | |
New support arrangements | 27,198 | 30,986 | 91,254 | 77,475 | |
Recognition of support revenue | -29,834 | -28,265 | -92,174 | -67,151 | |
Balance end of period | 88,737 | 84,206 | 88,737 | 84,206 | |
Less: current portion | 65,596 | 64,539 | 65,596 | 64,539 | |
Non-current deferred revenue | $23,141 | $19,667 | $23,141 | $19,667 |
Balance_Sheet_Accounts_Schedul4
Balance Sheet Accounts (Schedule of Deferred Distributors Revenue) (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred distributors revenue | $96,347 | $97,677 |
Total deferred distributors revenue, net of cost of sales to distributors | 35,687 | 31,992 |
Distributors | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred distributors revenue | 46,230 | 40,715 |
Deferred cost of sales to distributors | -10,543 | -8,723 |
Total deferred distributors revenue, net of cost of sales to distributors | $35,687 | $31,992 |
Balance_Sheet_Accounts_Schedul5
Balance Sheet Accounts (Schedule of Debt) (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Line of Credit Facility [Line Items] | ||
Current portion of long-term debt | $9,750 | $29,688 |
Long-term debt, less current portion | 58,750 | 91,875 |
Total debt | 68,500 | 121,563 |
Term Loan | ||
Line of Credit Facility [Line Items] | ||
Current portion of long-term debt | 5,688 | |
Long-term debt, less current portion | 48,750 | 56,875 |
Revolving Facility | ||
Line of Credit Facility [Line Items] | ||
Current portion of long-term debt | 0 | 24,000 |
Long-term debt, less current portion | $10,000 | $35,000 |
Balance_Sheet_Accounts_Schedul6
Balance Sheet Accounts (Schedule of Product Warranty Liability Activity) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance beginning of period | $7,845 | $7,479 | $7,551 | $3,296 |
Assumed from acquisition | 0 | 0 | 0 | 3,732 |
New warranties issued | 1,751 | 1,824 | 5,699 | 4,782 |
Warranty expenditures | -1,717 | -1,478 | -5,371 | -3,985 |
Balance end of period | $7,879 | $7,825 | $7,879 | $7,825 |
Balance_Sheet_Accounts_Schedul7
Balance Sheet Accounts (Schedule of Concentration of Risk) (Details) (Customer Concentration Risk, Net Revenue) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Westcon Group Inc. | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 16.00% | 14.00% | 14.00% | 13.00% |
Scansource Inc. | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 13.00% | |||
Tech Data | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 16.00% | 14.00% | 12.00% |
Balance_Sheet_Accounts_Narrati
Balance Sheet Accounts (Narratives) (Details) (USD $) | 9 Months Ended | 0 Months Ended | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Oct. 31, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |
Balance Sheet Accounts [Line Items] | ||||||
Other than temporary impairment loss | $148,000 | |||||
Borrowings under Revolving Facility | 24,000,000 | 59,000,000 | ||||
Letters for credit outstanding | 1,000,000 | 1,000,000 | ||||
Standard hardware warranty period | 12 months | |||||
Standard software warranty period | 90 days | |||||
Limited lifetime hardware warranty maximum period after end of sale of product | 5 years | |||||
Maximum investment in one obligor or maker (percent) | 10.00% | |||||
Revolving Facility | ||||||
Balance Sheet Accounts [Line Items] | ||||||
Term of agreement | 5 years | |||||
Borrowing capacity | 60,000,000 | |||||
Borrowings under Revolving Facility | 24,000,000 | |||||
Repayments under Revolving Facility | 19,000,000 | 30,000,000 | ||||
Remaining borrowing capacity | 8,600,000 | 8,600,000 | ||||
Term Loan | ||||||
Balance Sheet Accounts [Line Items] | ||||||
Term of agreement | 5 years | |||||
Borrowing capacity | $65,000,000 | |||||
Minimum | ||||||
Balance Sheet Accounts [Line Items] | ||||||
Extended warranty period | 1 year | |||||
Minimum | Net Revenue | Customer Concentration Risk | ||||||
Balance Sheet Accounts [Line Items] | ||||||
Concentration risk | 10.00% | |||||
Maximum | ||||||
Balance Sheet Accounts [Line Items] | ||||||
Extended warranty period | 5 years | |||||
Cash equivalents | Maximum | ||||||
Balance Sheet Accounts [Line Items] | ||||||
Maturity period for investments | 3 months | |||||
Short-term investments | Minimum | ||||||
Balance Sheet Accounts [Line Items] | ||||||
Maturity period for investments | 3 months | |||||
Short-term investments | Maximum | ||||||
Balance Sheet Accounts [Line Items] | ||||||
Maturity period for investments | 1 year | |||||
Marketable securities | Minimum | ||||||
Balance Sheet Accounts [Line Items] | ||||||
Maturity period for investments | 1 year |
Fair_Value_Measurements_Schedu
Fair Value Measurements (Schedule of Fair Value for Financial Assets and Liabilities Measure on Recurring Basis) (Details) (Recurring, USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Assets | ||
Total | $24,285 | $33,280 |
Foreign currency forward contracts | ||
Assets | ||
Foreign currency forward contracts | 21 | |
Money market funds | ||
Assets | ||
Investments | 19,779 | 567 |
Corporate notes/bonds | ||
Assets | ||
Investments | 1,506 | 32,692 |
Non-marketable equity investment | ||
Assets | ||
Investments | 3,000 | |
Level 1 | ||
Assets | ||
Total | 19,779 | 567 |
Level 1 | Foreign currency forward contracts | ||
Assets | ||
Foreign currency forward contracts | 0 | |
Level 1 | Money market funds | ||
Assets | ||
Investments | 19,779 | 567 |
Level 1 | Corporate notes/bonds | ||
Assets | ||
Investments | 0 | 0 |
Level 1 | Non-marketable equity investment | ||
Assets | ||
Investments | 0 | |
Level 2 | ||
Assets | ||
Total | 1,506 | 32,713 |
Level 2 | Foreign currency forward contracts | ||
Assets | ||
Foreign currency forward contracts | 21 | |
Level 2 | Money market funds | ||
Assets | ||
Investments | 0 | 0 |
Level 2 | Corporate notes/bonds | ||
Assets | ||
Investments | 1,506 | 32,692 |
Level 2 | Non-marketable equity investment | ||
Assets | ||
Investments | 0 | |
Level 3 | ||
Assets | ||
Total | 3,000 | 0 |
Level 3 | Foreign currency forward contracts | ||
Assets | ||
Foreign currency forward contracts | 0 | |
Level 3 | Money market funds | ||
Assets | ||
Investments | 0 | 0 |
Level 3 | Corporate notes/bonds | ||
Assets | ||
Investments | 0 | 0 |
Level 3 | Non-marketable equity investment | ||
Assets | ||
Investments | $3,000 |
Sharebased_Compensation_Schedu
Share-based Compensation (Schedule of Recognized Share-based Compensation Expense) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | $4,372 | $4,842 | $13,935 | $9,874 |
Cost of Product Revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | 265 | 268 | 823 | 568 |
Cost of Service Revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | 254 | 420 | 816 | 623 |
Research and Development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | 1,423 | 1,419 | 4,611 | 2,559 |
Sales and Marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | 1,291 | 1,765 | 4,414 | 3,614 |
General and Administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | $1,139 | $970 | $3,271 | $2,510 |
Sharebased_Compensation_Schedu1
Share-based Compensation (Schedule of Stock Award Activity) (Details) (USD $) | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 |
Number of Shares | |
Non-vested stock outstanding, beginning balance (in shares) | 6,000 |
Granted (in shares) | 1,305 |
Vested (in shares) | -2,216 |
Cancelled (in shares) | -409 |
Non-vested stock outstanding, ending balance (in shares) | 4,680 |
Weighted-Average Grant Date Fair Value | |
Non-vested stock outstanding, beginning of period (in dollars per share) | $4.98 |
Granted (in dollars per share) | $3.45 |
Vested (in dollars per share) | $5.09 |
Cancelled (in dollars per share) | $4.42 |
Non-vested stock outstanding, end of period (in dollars per share) | $4.55 |
Aggregate Fair Market Value | |
Vested | $7,985 |
Sharebased_Compensation_Schedu2
Share-based Compensation (Schedule of Stock Option Activity) (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Jun. 30, 2014 |
Number of Shares | ||
Options outstanding, beginning balance (in shares) | 11,732 | |
Granted (in shares) | 1,153 | |
Exercised (in shares) | -425 | |
Canceled (in shares) | -1,245 | |
Options outstanding, ending balance (in shares) | 11,215 | 11,732 |
Exercisable at period end (in shares) | 6,047 | |
Vested and expected to vest at period end (in shares) | 10,441 | |
Weighted-Average Exercise Price Per Share | ||
Options outstanding, beginning balance (in dollars per share) | $4.26 | |
Granted (in dollars per share) | $4.11 | |
Exercised (in dollars per share) | $3.17 | |
Canceled (in dollars per share) | $5.12 | |
Options outstanding, ending balance (in dollars per share) | $4.19 | $4.26 |
Exercisable (in dollars per share) | $3.95 | |
Vested and expected to vest (in dollars per share) | $4.17 | |
Weighted-Average Remaining Contractual Term | ||
Options outstanding | 4 years 8 months 23 days | 5 years 1 month 17 days |
Exercisable | 3 years 11 months 9 days | |
Vested and expected to vest | 4 years 7 months 28 days | |
Aggregate Intrinsic Value | ||
Exercised | $381 | |
Options outstanding | 493 | 6,846 |
Exercisable | 473 | |
Vested and expected to vest | $489 |
Sharebased_Compensation_Schedu3
Share-based Compensation (Schedule of Fair Value Assumptions for Stock Options and Employee Stock Purchase Plan Awards) (Details) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Stock Option Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected life | 4 years 7 months 6 days | 5 years | 4 years 8 months 12 days | 4 years |
Risk-free interest rate (percent) | 1.49% | 1.41% | 1.60% | 1.23% |
Volatility (percent) | 54.00% | 57.00% | 54.00% | 56.00% |
Dividend yield (percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected life | 6 months | 3 months | 3 months 29 days | 3 months |
Risk-free interest rate (percent) | 0.07% | 0.09% | 0.04% | 0.10% |
Volatility (percent) | 58.00% | 57.00% | 58.00% | 51.00% |
Dividend yield (percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Sharebased_Compensation_Narrat
Share-based Compensation (Narratives) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for issuance | 15,578,378 | 15,578,378 | ||
Weighted-average grant-date fair value of options granted (in dollars per share) | $1.34 | $2.71 | $1.91 | $2.39 |
2014 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for issuance | 12,000,000 | 12,000,000 | ||
1999 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for issuance | 66,382 | 66,382 | ||
Weighted-average grant-date fair value of options granted (in dollars per share) | $0.59 | $1.62 | $1.02 | $1.44 |
2013 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for issuance | 3,511,996 | 3,511,996 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Feb. 03, 2014 |
USD ($) | Foreign | Foreign | Foreign | Minimum | Maximum | Commonwealth of Kentucky | |
USD ($) | USD ($) | BRL | Foreign | Foreign | Pending Litigation | ||
USD ($) | USD ($) | defendant | |||||
Loss Contingencies [Line Items] | |||||||
Non-cancelable purchase commitments | $100,700,000 | ||||||
Number of co-defendants | 2 | ||||||
Value of tax credits disallowed | 1,500,000 | 3,443,914 | |||||
Estimated interest in penalties | 9,000,000 | ||||||
Potential total tax liability | $4,300,000 | $0 | $9,000,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | ||||
Provision for income taxes | $1,121,000 | $910,000 | $3,458,000 | $2,262,000 |
Tax amortization deduction for capitalized goodwill | 1,100,000 | 3,400,000 | ||
Deferred tax liability, goodwill | 2,400,000 | 2,400,000 | ||
Unrecognized tax benefits | 11,300,000 | 11,300,000 | ||
Accrued penalties and interest for unrecognized income tax benefits | $42,000 | $42,000 | ||
Enterasys Networks, Inc. | ||||
Operating Loss Carryforwards [Line Items] | ||||
Amortization period for tax purposes | 15 years |
Net_Loss_Per_Share_Schedule_of
Net Loss Per Share (Schedule of Earnings Per Share, Basic and Diluted) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ||||
Net loss | ($23,548) | ($25,058) | ($55,983) | ($41,079) |
Weighted-average shares used in per share calculation - basic and diluted (in shares) | 99,783 | 96,069 | 98,591 | 95,116 |
Net (loss) income per share - basic and diluted (in dollars per share) | ($0.24) | ($0.26) | ($0.57) | ($0.43) |
Net_Loss_Per_Share_Schedule_of1
Net Loss Per Share (Schedule of Anti-Dilutive Shares Excluded from Earnings Per Share Calculation (Details) | 9 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Shares | 9,839 | 7,171 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Shares | 1,694 | 1,038 |
Foreign_Exchange_Forward_Contr1
Foreign Exchange Forward Contracts (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Foreign currency transaction realized (loss) gain | ($0.50) | ($0.10) | ($0.90) | ($1.20) |
Disclosure_about_Segments_of_a2
Disclosure about Segments of an Enterprise and Geographic Areas (Narratives) (Details) | 9 Months Ended |
Mar. 31, 2015 | |
Geographic_Area | |
Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Number of geographic regions | 3 |
Disclosure_about_Segments_of_a3
Disclosure about Segments of an Enterprise and Geographic Areas (Schedule of Revenues by Geographic Regions) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Segment Reporting Information [Line Items] | ||||
Net Revenues | $119,590 | $141,762 | $403,072 | $364,261 |
Total Americas | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | 56,426 | 71,978 | 192,991 | 179,392 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | 49,353 | 59,896 | 166,001 | 141,576 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | 7,073 | 12,082 | 26,990 | 37,816 |
EMEA | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | 50,006 | 54,113 | 166,515 | 146,175 |
APAC | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | $13,158 | $15,671 | $43,566 | $38,694 |
Disclosure_about_Segments_of_a4
Disclosure about Segments of an Enterprise and Geographic Areas (Schedule of Long Lived Assets by Segment) (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | $129,270 | $152,699 |
Americas | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | 93,185 | 104,387 |
EMEA | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | 32,773 | 45,191 |
APAC | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | $3,312 | $3,121 |