Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jul. 31, 2013 | Oct. 14, 2013 | Jan. 26, 2013 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Jul-13 | ||
Document Fiscal Year Focus | 2013 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SCMR | ||
Entity Registrant Name | SYCAMORE NETWORKS INC | ||
Entity Central Index Key | 1092367 | ||
Current Fiscal Year End Date | -24 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 28,882,093 | ||
Entity Public Float | $46,419,444 |
Consolidated_Balance_Sheets_Go
Consolidated Balance Sheets (Going Concern Basis) (USD $) | Jul. 31, 2012 |
In Thousands, unless otherwise specified | |
Current assets: | |
Cash and cash equivalents | $136,654 |
Short-term investments | 234,965 |
Accounts receivable, net of allowance for doubtful accounts of $42 at July 31, 2012 | 7,785 |
Inventories, net | 8,469 |
Prepaid expenses and other current assets | 1,589 |
Total current assets | 389,462 |
Property and equipment, net | 4,276 |
Long-term investments | 67,774 |
Other assets | 422 |
Total assets | 461,934 |
Current liabilities: | |
Accounts payable | 1,432 |
Accrued compensation | 2,836 |
Accrued warranty | 1,072 |
Accrued expenses | 2,248 |
Deferred revenue | 7,871 |
Other current liabilities | 813 |
Total current liabilities | 16,272 |
Long-term deferred revenue | 1,469 |
Long-term liabilities | 1,962 |
Total liabilities | 19,703 |
Commitments and contingencies (Notes 6 and 13) | |
Stockholders' equity: | |
Preferred stock, $.01 par value; 5,000 shares authorized, none issued and outstanding at July 31, 2012 | |
Common stock, $.001 par value; 250,000 shares authorized, 28,879 shares issued and outstanding at July 31, 2012 | 29 |
Additional paid-in capital | 1,589,357 |
Accumulated deficit | -1,146,882 |
Accumulated other comprehensive loss | -273 |
Total stockholders' equity | 442,231 |
Total liabilities and stockholders' equity | $461,934 |
Consolidated_Balance_Sheets_Go1
Consolidated Balance Sheets (Going Concern Basis) (Parenthetical) (USD $) | Jul. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | |
Accounts receivable, allowance for doubtful accounts | $42 |
Preferred stock, par value | $0.01 |
Preferred stock, shares authorized | 5,000 |
Preferred stock, issued | |
Preferred stock, outstanding | |
Common stock, par value | $0.00 |
Common stock, shares authorized | 250,000 |
Common stock, shares issued | 28,879 |
Common stock, shares outstanding | 28,879 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (Going Concern Basis) (USD $) | 8 Months Ended | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 23, 2013 | Jul. 31, 2012 |
Revenue | ||
Cost of revenue | 193 | 225 |
Gross profit (loss) | -193 | -225 |
Operating expenses: | ||
Research and development | 4,806 | 14,068 |
Sales and marketing | 1,808 | 3,094 |
General and administrative | 3,015 | 5,916 |
Asset impairment | 790 | |
Restructuring | 2,946 | |
Total operating expenses | 12,575 | 23,868 |
Loss from continuing operations | -12,768 | -24,093 |
Interest and other income, net | 189 | 1,098 |
Loss before income taxes | -12,579 | -22,995 |
Income tax benefit | -4,356 | -3,784 |
Net loss from continuing operations | -8,223 | -19,211 |
Discontinued operations: | ||
Net income (loss) from discontinued operations, net of tax | -2,373 | 6,287 |
Gain on sale of discontinued operations, net of tax | 7,084 | |
Gain from discontinued operations | 4,711 | 6,287 |
Net loss | ($3,512) | ($12,924) |
Basic and diluted net income (loss) per share: | ||
Continuing operations | ($0.28) | ($0.67) |
Discontinued operations | $0.16 | $0.22 |
Net income (loss) per share | ($0.12) | ($0.45) |
Basic and diluted weighted average shares outstanding | 28,882 | 28,807 |
Cash distributions paid per common share | $14.31 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (Going Concern Basis) (USD $) | 8 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 23, 2013 | Jul. 31, 2012 |
Net loss | ($3,512) | ($12,924) |
Changes in unrealized gain (loss) on investments and other | -273 | 165 |
Comprehensive loss | ($3,785) | ($12,759) |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (Going Concern Basis) (USD $) | Total | Common stock | Additional paid-in capital | Accumulated Deficit | Accumulated other comprehensive income (loss) |
In Thousands | |||||
Beginning Balance at Jul. 31, 2011 | $448,757 | $29 | $1,583,124 | ($1,133,958) | ($438) |
Beginning Balance (in shares) at Jul. 31, 2011 | 28,739 | ||||
Net loss | -12,924 | -12,924 | |||
Unrealized gain on investments and other | 165 | 165 | |||
Issuance of common stock under employee and director stock plans (in shares) | 140 | ||||
Issuance of common stock under employee and director stock plans | 2,444 | 2,444 | |||
Share-based compensation expense | 3,789 | 3,789 | |||
Ending Balance at Jul. 31, 2012 | 442,231 | 29 | 1,589,357 | -1,146,882 | -273 |
Ending Balance (in shares) at Jul. 31, 2012 | 28,879 | ||||
Beginning Balance at Mar. 23, 2012 | |||||
Net loss | -3,512 | -3,512 | |||
Unrealized gain on investments and other | 276 | 3 | 273 | ||
Issuance of common stock under employee and director stock plans (in shares) | 3 | ||||
Issuance of common stock under employee and director stock plans | 38 | 38 | |||
Cash distribution | -413,302 | -413,302 | |||
Share-based compensation expense | 1,275 | 1,275 | |||
Ending Balance at Mar. 23, 2013 | $27,006 | $29 | $1,177,371 | ($1,150,394) | |
Ending Balance (in shares) at Mar. 23, 2013 | 28,882 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Going Concern Basis) (USD $) | 8 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 23, 2013 | Jul. 31, 2012 |
Cash flows from operating activities: | ||
Net loss | ($3,512) | ($12,924) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Gain on sale of discontinued operations | -7,084 | |
Tax benefit on sale of discontinued operations | -4,387 | |
Depreciation and amortization | 991 | 2,755 |
Share-based compensation | 1,275 | 3,789 |
Asset impairments | 790 | |
Adjustments to provision for excess and obsolete inventory | 144 | 596 |
Adjustments to allowance for doubtful accounts | -30 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | -146 | 1,009 |
Inventories | -864 | 2,284 |
Prepaids and other assets | -420 | 49 |
Deferred revenue | -2,103 | -1,613 |
Accounts payable | -594 | -232 |
Accrued expenses and other liabilities | -3,768 | 862 |
Accrued restructuring costs | 296 | -294 |
Net cash used in operating activities | -20,172 | -2,959 |
Cash flows from investing activities: | ||
Purchases of property and equipment | -1 | -1,655 |
Proceeds from sale of discontinued operations | 19,015 | |
Purchases of investments | -308,872 | |
Proceeds from sales of investments | 196,872 | 16,819 |
Proceeds from maturities of investments | 100,720 | 370,112 |
Net cash provided by investing activities | 316,606 | 76,404 |
Cash flows from financing activities: | ||
Payment of cash distributions to common stockholders | -413,302 | |
Proceeds from issuance of common stock | 38 | 2,444 |
Net cash (used in) provided by financing activities | -413,264 | 2,444 |
Net increase (decrease) in cash and cash equivalents | -116,830 | 75,889 |
Cash and cash equivalents, beginning of period | 136,654 | 60,765 |
Cash and cash equivalents, end of period | 19,824 | 136,654 |
Supplemental cash flow information: | ||
Cash paid for income taxes | $1,176 | $257 |
Description_of_Business
Description of Business | 12 Months Ended | |
Jul. 31, 2013 | ||
Description of Business | 1 | Description of Business |
Prior to February 1, 2013, the Company developed and marketed Intelligent Bandwidth Management solutions for fixed line and mobile network operators worldwide and provided services associated with such products (the “Intelligent Bandwidth Management Business”), and, prior to November 1, 2012, the Company also developed and marketed a mobile broadband optimization solution (the “IQstream Business”). As used in these Notes to the Consolidated Financial Statements, “Sycamore,” “we,” “us,” or “our” refers collectively to Sycamore Networks, Inc. and its subsidiaries. | ||
On October 23, 2012, the Company entered into an Asset Purchase and Sale Agreement (the “Asset Sale Agreement”) with Sunrise Acquisition Corp. (now known as Coriant America Inc.), a portfolio company of Marlin Equity Partners (“Buyer”), pursuant to which Buyer agreed to acquire substantially all of the assets (the “Asset Sale”) primarily related to the Intelligent Bandwidth Management Business, including inventory, fixed assets, accounts receivable, intellectual property rights (other than patents and patent applications), contracts, certain real estate leases, the Company’s subsidiaries in Shanghai, the Netherlands and Japan, and certain shared facilities and assets for $18.75 million in cash, subject to a working capital adjustment, and the assumption by Buyer of certain liabilities. The Company’s stockholders authorized the Asset Sale at a Special Meeting of Stockholders held on January 29, 2013 (the “Special Meeting”), and the Asset Sale was completed on January 31, 2013 (the transfer of the Company’s equity interests in its Shanghai subsidiary, which was subject to the receipt of government approval, occurred on March 25, 2013). Upon the closing of the Asset Sale, Buyer acquired substantially all of the Company’s operating assets relating to the Intelligent Bandwidth Management Business, including the Company’s accounts receivable, inventories and prepaid and other assets, and assumed most of the Company’s remaining current liabilities, including substantially all of the Company’s deferred revenue and accrued warranty obligations. On April 22, 2013, the Company commenced litigation against Buyer and certain of its affiliates with respect to certain amounts due under the Asset Sale Agreement. In connection with such litigation, on May 28, 2013, the Company and such parties reached an agreement pursuant to which (1) the Company agreed to dismiss the pending litigation without prejudice, (2) Buyer paid certain undisputed amounts owed to the Company and (3) the parties agreed to submit the remaining issues relating to amounts in dispute of approximately $1.4 million to arbitration for resolution by a neutral accountant. Following receipt of the aforementioned undisputed amounts, the Company dismissed the pending lawsuit without prejudice. The matter remains pending before the neutral accountant. For additional information concerning this matter, see Note 13. “Commitments and Contingencies.” | ||
In conjunction with the approval of the Asset Sale Agreement, the Company’s Board of Directors (the “Board”) also approved the liquidation and dissolution of the Company (the “Dissolution”) pursuant to a Plan of Complete Liquidation and Dissolution (the “Plan of Dissolution”) following the completion of the Asset Sale. The Plan of Dissolution was also approved by the stockholders at the Special Meeting and, following a review of the Company’s strategic alternatives for all of the Company’s assets and available options for providing value to the Company’s stockholders, the Company filed a certificate of dissolution with the Secretary of State of the State of Delaware (the “Certificate of Dissolution”) on March 7, 2013. For additional information regarding the Dissolution, please see the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on December 28, 2012 and its Current Report on Form 8-K filed with the SEC on March 8, 2013. | ||
In connection with the filing of the Certificate of Dissolution, on March 7, 2013 the Company closed its stock transfer books and discontinued recording transfers of its common stock, $0.001 par value per share (the “Common Stock”). The Common Stock, and stock certificates evidencing the shares of Common Stock, are no longer assignable or transferable on the Company’s books, other than transfers by will, intestate succession or operation of law. The Company also submitted a request to The NASDAQ Stock Market (“NASDAQ”) to suspend trading of the Common Stock on The NASDAQ Global Select Market effective as of the close of trading on March 7, 2013 and, on March 15, 2013, the Company filed a Form 25 with the SEC to delist its Common Stock, which became effective prior to the opening of trading on March 25, 2013. Since the suspension of trading of the Common Stock on The NASDAQ Global Select Market, shares of our Common Stock held in street name with brokers have been trading in the over-the-counter market on the Pink Sheets, an electronic bulletin board established for unlisted securities. | ||
As a result of the completion of the Asset Sale and the Company’s previously announced halting of further development and marketing in connection with the IQstream Business, the Company no longer has any operating assets or revenue. Since the filing of the Certificate of Dissolution, the Company has been operating in accordance with the Plan of Dissolution, which contemplates an orderly wind down of the Company’s business, including the disposition of the IQstream Business, the sale or monetization of the Company’s other remaining non-cash assets, and the satisfaction or settlement of its liabilities and obligations, including contingent liabilities and claims. As of July 31, 2013, the Company had three remaining employees. | ||
The Company’s primary non-cash assets consist of its intellectual property and other assets relating to the IQstream Business, patents and patent applications related to or used in the Intelligent Bandwidth Management Business, our real estate holdings in Tyngsborough, Massachusetts, our investments in private companies and certain other assets that were not sold to Buyer in the Asset Sale. On March 27, 2013, in light of the Board’s views as to the prospects for the IQstream Business, the Board determined to terminate all of the remaining IQstream Employees, effective April 1, 2013. The Company continues to pursue available options with respect to the assets of the IQstream Business, including a possible sale of the intellectual property, equipment and other assets of the IQstream Business, either together or separately. | ||
On September 5, 2013, the Company terminated an agreement to sell approximately 102 acres of undeveloped land located in Tyngsborough, Massachusetts to Tynsborough Commons, LLC (“Tyngsborough Commons”) for a total purchase price of $3.5 million due to Tyngsborough Commons’ failure to either close the sale on or before August 30, 2013 or pay to the Company the $100,000 additional deposit required to exercise the right to extend the period for closing the sale by 45 days, as provided in the agreement. As a result of the termination, and pursuant to the terms of the agreement, the Company retained as liquidated damages $125,000 in deposits previously paid by Tyngsborough Commons. The Company intends to continue to pursue available options with respect to the land, but there can be no assurance as to the amount of consideration the Company may be able to obtain for the land or as to any time frame within which a potential sale might occur. | ||
As of October 18, 2013, the Company had received 43 United States patents and had pending 7 United States patent applications. Of the United States patents that have been issued, the earliest any will expire is February 2019. Forty of these patents and two patent applications, in each case relating to or used in the Intelligent Bandwidth Management Business, were licensed to Buyer in connection with the Asset Sale. The Company is currently considering available options with respect to its patent portfolio. | ||
During the Dissolution period, the Company will continue to pursue the liquidation to cash of its remaining non-cash assets for possible distribution to our stockholders. Subject to uncertainties inherent in the winding up of the Company’s business, we expect to make one or more additional liquidating distributions as promptly as practicable following the liquidation to cash of our non-cash assets and after payment of, or provision for, outstanding claims in accordance with Delaware law. However, the Dissolution process and the payment of any distribution to stockholders involve substantial risks and uncertainties. Accordingly, it is not possible to predict the timing or aggregate amount which will ultimately be distributed to stockholders, and no assurance can be given that the distributions will equal or exceed our estimate of net assets presented in the Statement of Net Assets included in this Annual Report on Form 10-K. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies | 2 | Summary of Significant Accounting Policies | |||||||||||||||
The accompanying financial statements reflect the application of certain significant accounting policies as described below. The Company believes these accounting policies are significant because they affect judgments, assumptions and estimates we used in preparing our consolidated financial statements. Changes in these estimates can materially affect our net assets, changes in net assets, results of operations and discontinued operations. | |||||||||||||||||
Basis of Consolidation and Presentation | |||||||||||||||||
The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. As part of the Asset Sale, the Company sold its subsidiaries in Shanghai, the Netherlands and Japan. In conjunction with the Dissolution, the Company merged its Delaware and Massachusetts subsidiaries into Sycamore Networks, Inc. | |||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. | |||||||||||||||||
The condensed consolidated financial statements for the eight month period ended March 23, 2013 and for the twelve months ended July 31, 2012 were prepared on the going concern basis of accounting, which contemplates realization of assets and satisfaction of liabilities in the normal course of business. Following the Company’s filing of the Certificate of Dissolution, on March 24, 2013 the Company adopted the liquidation basis of accounting. See “Liquidation Basis of Accounting” below for further information regarding the Company’s adoption of the liquidation basis of accounting. | |||||||||||||||||
Cash Distributions | |||||||||||||||||
The Company paid a total of $413.3 million in cash distributions to stockholders in fiscal 2013. As a result of having an accumulated deficit, the cash distributions were recorded as reductions to additional paid-in capital. | |||||||||||||||||
Liquidation Basis of Accounting | |||||||||||||||||
On March 24, 2013, the beginning of the fiscal month following the filing of the Certificate of Dissolution, the Company began reporting on a liquidation basis of accounting. Under the liquidation basis of accounting, assets are stated at their estimated net realizable values and liabilities are stated at their estimated settlement amounts. Recorded liabilities include estimates of expected costs associated with carrying out the Plan of Dissolution. These estimates will be reviewed periodically and adjusted as appropriate. | |||||||||||||||||
The valuation of assets at their net realizable value and liabilities at their anticipated settlement amounts represent estimates, based on present facts and circumstances, of the net realizable value of the assets and the costs associated with carrying out the Plan of Dissolution. The actual values and costs associated with carrying out the Plan of Dissolution may differ from amounts reflected in the financial statements because of the inherent uncertainty in estimating future events. These differences may be material. In particular, the estimates of costs will vary with the length of time necessary to complete the Dissolution process and to resolve any claims. Accordingly, it is not possible to predict the timing or aggregate amount which will ultimately be distributed to stockholders, and no assurance can be given that the distributions will equal or exceed the estimate of net assets presented in the accompanying Statement of Net Assets. | |||||||||||||||||
Upon transition to the liquidation basis of accounting on March 24, 2013, the Company recorded the following adjustments to record assets at their estimated net realizable values: | |||||||||||||||||
Initial adjustment of assets to estimated net realizable value | Amount | ||||||||||||||||
Write up of assets | $ | 3,393 | |||||||||||||||
Write down of assets | (510 | ) | |||||||||||||||
$ | 2,883 | ||||||||||||||||
The Company’s initial write up of assets related to certain non-cash assets of Sycamore, including intellectual property and other assets relating to the IQstream Business, patents and patent applications related to or used in the Intelligent Bandwidth Management Business, our real estate holdings in Tyngsborough, Massachusetts, our investments in private companies and certain other fixed assets. | |||||||||||||||||
The write down of assets related to certain prepaid expenses and other assets that have no future net realizable value. | |||||||||||||||||
Subsequent to the initial adjustments on March 24, 2013, the Company recorded adjustments to reduce our estimate of the net realizable value for our land in Tyngsborough, Massachusetts and for our other assets. The reduction in our estimate of net realizable value for the Tyngsborough land is a result of the termination of the Restated Purchase and Sale Agreement with Tyngsborough Commons. For additional information concerning the termination of this agreement, see Note 1. “Business”. The reduction in our estimate of net realizable value for our other assets primarily relates to a reduction in the net realizable value of our patent portfolio. Based on recent negotiations and discussions with prospective purchasers of the patents, we have determined that we cannot reasonably provide an estimate of the net realizable value of the patents at this time and, accordingly, have assigned no value to the patents for the purposes of the Statement of Net Assets. The adjustments are based on our current best estimate of the net realizable value of these assets, which is subject to substantial risk and uncertainties. | |||||||||||||||||
On April 22, 2013, the Company commenced litigation against Buyer and certain of its affiliates with respect to certain amounts due under the Asset Sale Agreement. In connection with such litigation, on May 28, 2013, the Company and such parties reached an agreement pursuant to which (1) the Company agreed to dismiss the pending litigation without prejudice, (2) Buyer paid certain undisputed amounts owed to the Company and (3) the parties agreed to submit the remaining issues relating to amounts in dispute of approximately $1.4 million to arbitration for resolution by a neutral accountant. Following receipt of the aforementioned undisputed amounts, the Company dismissed the pending lawsuit without prejudice. The matter remains pending before the neutral accountant. Because of the unpredictability of any settlement amount or ruling in favor of the Company by a neutral accountant, the Company is currently unable to estimate the net realizable value of any proceeds in connection with this matter. Accordingly, the Company has not recorded any receivables for the amount at issue. If the Company is successful in its efforts to recover all or any portion of the $1.4 million from Buyer, the Company will record the amount of any settlement, decision or order by the neutral accountant at the time thereof, which may result in an aggregate increase to net assets. For additional information concerning this matter, see Note 13. “Commitments and Contingencies.” | |||||||||||||||||
The Company also accrued estimated costs expected to be incurred in carrying out the Plan of Dissolution. Under the DGCL, the Dissolution period will last for a minimum of three years. The Company was required to make certain estimates and exercise judgment in determining the accrued costs of liquidation as of March 24, 2013. Upon transition to the liquidation basis of accounting, the Company accrued the following costs expected to be incurred in the Dissolution: | |||||||||||||||||
Accrued costs of liquidation | Amount | ||||||||||||||||
Restructuring | $ | 3,309 | |||||||||||||||
Compensation | 3,539 | ||||||||||||||||
Professional fees | 3,672 | ||||||||||||||||
Other expenses associated with wind down activities | 2,725 | ||||||||||||||||
Insurance | 1,500 | ||||||||||||||||
$ | 14,745 | ||||||||||||||||
The accrued costs of liquidation do not include an estimate of the amount that the Company may be required to pay under the Asset Sale Agreement to satisfy our indemnification obligations, if any, to Buyer and its related parties, or any other amount we may be required to pay to Buyer under the Asset Sale Agreement. The Company’s aggregate indemnification liability for breaches of representations and warranties is limited to approximately $2.8 million. The Company’s indemnification obligations for breaches of representations and warranties expire no later than twelve months following the closing date of the Asset Sale, which was January 31, 2013. In the event Buyer is able to successfully assert indemnification claims against the Company, the Company will record the amount of any such liability at the time thereof, resulting in a decrease to net assets. | |||||||||||||||||
Subsequent to the initial accrual for estimated costs during the Dissolution period upon transition to the liquidation basis of accounting, the Company reduced its accrual for estimated costs of liquidation by $1.6 million. The reduction reflects our updated estimate of costs related to compensation, professional fees, other expenses and insurance. These estimated costs will continue to be reviewed periodically and adjusted as appropriate. The table below summarizes the reserve for estimated costs during the Dissolution period as of July 31, 2013: | |||||||||||||||||
Amount | |||||||||||||||||
Compensation | $ | 2,396 | |||||||||||||||
Professional fees | 2,637 | ||||||||||||||||
Other expenses associated with wind down activities | 1,970 | ||||||||||||||||
Insurance | 1,333 | ||||||||||||||||
$ | 8,336 | ||||||||||||||||
Cash Equivalents and Investments | |||||||||||||||||
Cash equivalents are short-term, highly liquid investments with original or remaining maturity dates of three months or less at the date of acquisition. Cash equivalents are carried at cost plus accrued interest, which approximates fair market value. The Company’s investments are classified as available-for-sale and are recorded at fair value with any unrealized gain or loss recorded as an element of stockholders’ equity. The fair value of investments is determined based on quoted market prices at the reporting date for those investments. The Company would recognize an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the length of time and extent to which the fair value has been less than the Company’s cost basis, the financial condition and near-term prospects of the investee, and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. As of July 31, 2013 and 2012, aggregate cash and cash equivalents and short and long term investments consisted of (in thousands): | |||||||||||||||||
July 31, 2013: | Amortized | Gross | Gross | Fair Market | |||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||
Gains | Losses | ||||||||||||||||
Cash and cash equivalents | $ | 21,041 | $ | — | $ | — | $ | 21,041 | |||||||||
Total | $ | 21,041 | $ | — | $ | — | $ | 21,041 | |||||||||
July 31, 2012: | Amortized | Gross | Gross | Fair Market | |||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||
Gains | Losses | ||||||||||||||||
Cash and cash equivalents | $ | 136,654 | $ | — | $ | — | $ | 136,654 | |||||||||
Government securities | 302,695 | 66 | (22 | ) | 302,739 | ||||||||||||
Total | $ | 439,349 | $ | 66 | $ | (22 | ) | $ | 439,393 | ||||||||
Inventories | |||||||||||||||||
Prior to the Asset Sale, inventories were stated at the lower of cost (first-in, first-out basis) or market (net realizable value). | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
Prior to the Asset Sale, the Company sold primarily bundled hardware and software products that function together to deliver the tangible products’ essential functionality (referred to herein collectively as “hardware” products), as well as services related to those hardware products. Services included maintenance arrangements for the products with terms typically of one year, as well as to a lesser extent, professional services and training services. The Company sold a limited amount of stand-alone software products. | |||||||||||||||||
The Company recognized revenue when all of the following criteria were met: | |||||||||||||||||
• | Persuasive evidence of an arrangement existed. Evidence of an arrangement generally consisted of sales contracts or agreements and customer purchase orders; | ||||||||||||||||
• | Delivery occurred. Delivery occurred when title and risk of loss were transferred to the customer or the Company received written evidence of customer acceptance, when applicable, to verify delivery or performance; | ||||||||||||||||
• | Sales price was fixed or determinable. The Company assessed whether the sales price was fixed or determinable based on payment terms and whether the sales price was subject to refund or adjustment; and | ||||||||||||||||
• | Collectability was reasonably assured. Collectability was assessed based on the creditworthiness of the customer as determined by credit checks and the customer’s payment history with the Company. | ||||||||||||||||
The Company adopted Accounting Standards Update (“ASU”) No. 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements (“ASU 2009-13”) and ASU No. 2009-14, Software (Topic 985): Certain Revenue Arrangements That Include Software Elements (“ASU 2009-14”) on a prospective basis as of the beginning of fiscal 2011 for new and materially modified arrangements originating on or after August 1, 2010. ASU 2009-14 amends industry-specific revenue accounting guidance for software and software-related transactions to exclude from its scope tangible products containing software components and non-software components that function together to deliver the product’s essential functionality. As a result of adopting the new guidance, nearly all of the Company’s products and related services were no longer accounted for under the software revenue recognition rules, Accounting Standards Codification (“ASC”) Topic 985. | |||||||||||||||||
Pursuant to the guidance of ASU 2009-13, when a sales arrangement contains multiple elements, particularly hardware products and related services, revenue is allocated to each element based on a selling price hierarchy, using a relative selling price allocation approach. The selling price for a deliverable was based on our vendor-specific objective evidence (“VSOE”), if available, third-party evidence (“TPE”) if VSOE was not available, or best estimate of selling price (“BESP”) if neither VSOE nor TPE was available. The Company established VSOE for its services based on the price charged for each service element when sold separately. The Company was typically not able to determine TPE for its hardware products or services because the Company’s various product and service offerings contained a significant level of differentiation and, therefore, comparable pricing of competitors’ products and services with similar functionality could not be obtained. The Company determined BESP for products and services based on an assessment of multiple factors, including, but not limited to, pricing practices, customer classes and distribution channels. We then recognized revenue allocated to each deliverable in accordance with the four criteria identified above. Our multiple element arrangements typically included both products and services, with maintenance being the most common service element. Maintenance services were delivered over the contractual support period which varied in length, but typically was twelve months. In those limited instances where both hardware and stand-alone software products were included in a multiple element arrangement, the hardware and related services and the software and related services were separated and then allocated a pro rata portion of the total transaction value based upon BESP of each of the hardware and software groups, using a relative selling price allocation approach. The hardware group was then accounted for under the ASC Topic 605 guidance described above and the software group was accounted for under the ASC Topic 985 guidance. | |||||||||||||||||
Service revenues included revenue from maintenance, training, and installation services. Revenue from maintenance service contracts was deferred and recognized ratably over the contractual support period. Revenue from training and installation services was recognized as the services were completed or ratably over the service period. | |||||||||||||||||
Share-Based Compensation | |||||||||||||||||
Upon effectiveness of the Dissolution, the Company cancelled all outstanding stock option awards under the Company’s stock plans. During the period when the Company had stock-based compensation programs, the Company accounted for share-based compensation expense for all share-based payment awards made to employees and directors based on estimated fair values. The Company estimated the fair value of share-based options on the date of grant using the Black Scholes pricing model, which was affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables included our expected stock price volatility over the term of the awards, actual and projected employee option exercise behaviors, risk free interest rate and expected dividends. The Company was also required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differed from those estimates. | |||||||||||||||||
Impairment of Long-Lived Assets | |||||||||||||||||
Under the going concern basis of accounting, the Company evaluated the recoverability of long-lived assets whenever events or changes in circumstances indicated that the carrying amount of an asset may not be fully recoverable. This periodic review may have resulted in an adjustment of estimated depreciable lives or asset impairment. When indicators of impairment were present, the carrying values of the asset were evaluated in relation to the operating performance and future undiscounted cash flows of the underlying business. If the future undiscounted cash flows were less than the book value, impairment existed. The impairment was measured as the difference between the book value and the fair value of the underlying asset. Fair values were based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk. | |||||||||||||||||
Property and Equipment | |||||||||||||||||
Under the liquidation basis of accounting, property and equipment are stated at their estimated net realizable values. Under the going concern basis of accounting, property and equipment were stated at cost and depreciated over the estimated useful lives of the assets using the straight-line method, based upon the following asset lives: | |||||||||||||||||
Computer and telecommunications equipment | 2 to 3 years | ||||||||||||||||
Computer software | 3 years | ||||||||||||||||
Furniture and office equipment | 5 years | ||||||||||||||||
Leasehold improvements | Shorter of lease term or useful life of asset | ||||||||||||||||
The cost of significant additions and improvements were capitalized and depreciated while expenditures for maintenance and repairs were charged to expense as incurred. Costs related to internal use software were capitalized. Upon retirement or sale of an asset, the cost and related accumulated depreciation of the assets were removed from the accounts and any resulting gain or loss is reflected in the determination of net income or loss. See Note 5. “Property and Equipment.” | |||||||||||||||||
Research and Development and Software Development Costs | |||||||||||||||||
Under the going concern basis of accounting, the Company’s research and development costs were expensed as incurred. Software development costs incurred prior to the establishment of technological feasibility were charged to expense. Technological feasibility was demonstrated by the completion of a working model. Software development costs incurred subsequent to the establishment of technological feasibility were capitalized until the product was available for general release to customers and amortized based on the greater of (i) the ratio that current gross revenue for a product bears to the total of current and anticipated future gross revenue for that product or (ii) the straight-line method over the remaining estimated life of the product. The period between achieving technological feasibility and the general availability of the related products was short and software development costs qualifying for capitalization were not material. Accordingly, the Company did not capitalize any software development costs. | |||||||||||||||||
Income Taxes | |||||||||||||||||
Income taxes are accounted for under the liability method. Under this method, deferred tax assets and liabilities are recorded based on temporary differences between the financial statement amounts and the tax bases of assets and liabilities measured using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company periodically evaluates the realization of its net deferred tax assets and records a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. | |||||||||||||||||
We account for uncertain tax positions by prescribing the minimum recognition threshold a tax position must meet before being recognized in the Company’s financial statements. Generally, recognition is limited to situations where, based solely on the technical merits of the tax position, the Company has determined that the tax position is more likely than not to be sustained on audit. | |||||||||||||||||
Concentration of Credit Risks | |||||||||||||||||
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash equivalents and investments. The Company invests its excess cash primarily in deposits with commercial banks, high-quality corporate securities and U.S. government securities. | |||||||||||||||||
Allowance for Doubtful Accounts | |||||||||||||||||
Prior to the Asset Sale, the Company evaluated its outstanding accounts receivable balances on an ongoing basis to determine whether an allowance for doubtful accounts should be recorded. Activity in the Company’s allowance for doubtful accounts is summarized as follows (in thousands): | |||||||||||||||||
Year Ended July 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Beginning balance | $ | 42 | $ | 72 | |||||||||||||
Adjustment | (42 | ) | (30 | ) | |||||||||||||
Write off | — | — | |||||||||||||||
Ending balance | $ | — | $ | 42 | |||||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||||||
Under the going concern basis of accounting, the unrealized gain or loss on investments was included in accumulated other comprehensive loss for all operating periods presented. For foreign subsidiaries where the functional currency was the local currency, assets and liabilities were translated into U.S. dollars at the current exchange rate on the balance sheet date. Revenue and expenses were translated at average rates of exchange prevailing during each period. Translation adjustments for these subsidiaries, which are immaterial for all periods presented, are included in accumulated other comprehensive income (loss). | |||||||||||||||||
Net Loss Per Share | |||||||||||||||||
Under the going concern basis of accounting, basic and diluted net loss per share was computed by dividing the net loss for the period by the weighted average number of common shares outstanding during the period less unvested restricted stock. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): | |||||||||||||||||
Eight Months Ended | Year Ended | ||||||||||||||||
March 23, | July 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Net loss | $ | (3,512 | ) | $ | (12,924 | ) | |||||||||||
Denominator: | |||||||||||||||||
Weighted-average shares of common stock outstanding | 28,882 | 28,807 | |||||||||||||||
Weighted-average shares subject to repurchase | — | — | |||||||||||||||
Shares used in per-share calculation—basic | 28,882 | 28,807 | |||||||||||||||
Weighted-average shares of common stock outstanding | 28,882 | 28,807 | |||||||||||||||
Weighted common stock equivalents | — | — | |||||||||||||||
Shares used in per-share calculation—diluted | 28,882 | 28,807 | |||||||||||||||
Net loss per share: | |||||||||||||||||
Basic | $ | (0.12 | ) | $ | (0.45 | ) | |||||||||||
Diluted | $ | (0.12 | ) | $ | (0.45 | ) | |||||||||||
Employee stock options to purchase 9.6 million shares of common stock were not included in the computation of diluted net loss per share for the eight months ended March 23, 2013 because their effect would have been antidilutive. Employee stock options to purchase 10.9 million shares of common stock were not included in the computation of diluted net loss per share for the year ended July 31, 2012 because their effect would have been antidilutive. | |||||||||||||||||
Segment Information | |||||||||||||||||
The Company’s chief operating decision maker was its former President and Chief Executive Officer. Decisions regarding resource allocation and assessing performance were made at the Company level, as one segment. Prior to the Asset Sale, for the eight months ended March 23, 2013, the geographical distribution of revenue was as follows: United States – 80%, Korea – 5%, and all other countries – 15%. For the year ended July 31, 2012, the geographical distribution of revenue was as follows: United States – 79%, United Kingdom – 6%, and all other countries – 15%. | |||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
On June 16, 2011, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”), which revises the manner in which entities present comprehensive income in their financial statements. The new guidance requires companies to report components of comprehensive income in either: (1) a continuous statement of comprehensive income; or (2) two separate consecutive statements. ASU 2011-05 does not change the items that must be reported in other comprehensive income. The Company adopted ASU 2011-05 in the first quarter of fiscal 2013 by reporting a separate statement of comprehensive income (loss). | |||||||||||||||||
In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting. The new standard addresses when and how an entity should apply the liquidation basis of accounting. The new guidance is effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013 and interim reporting periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption is permitted. The Company adopted ASU No. 2013-07 in the third quarter of fiscal 2013. The adoption did not have a material impact on the Company’s application of the liquidation basis of accounting. | |||||||||||||||||
In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters. The new standard addresses a parent’s accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or group of assets within a foreign entity or of an investment in a foreign entity. The objective of the update is to resolve the diversity in practice about the appropriate guidance to apply to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or a business within a foreign entity. The update provides that the entire amount of the cumulative translation adjustment associated with the foreign entity would be released when there has been a sale of a subsidiary or group of net assets within a foreign entity and the sale represents the substantially complete liquidation of the investment in the foreign entity. This update is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. Early adoption is permitted. The Company adopted ASU No. 2013-05 in the third quarter of fiscal 2013. The adoption did not have a material impact on the Company. |
Discontinued_Operations
Discontinued Operations | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Discontinued Operations | 3 | Discontinued Operations | |||||||
On January 31, 2013, the Company completed the Asset Sale for a total purchase price of $18.75 million in cash and the assumption by Buyer of certain related liabilities. The transfer of the equity interests of the Company’s subsidiary in Shanghai occurred on March 25, 2013. | |||||||||
The financial results of the Intelligent Bandwidth Management Business have been classified as discontinued operations for all periods presented. | |||||||||
Eight months ended | Twelve months ended | ||||||||
March 23, | July 31, | ||||||||
2013 | 2012 | ||||||||
Revenue | $ | 22,266 | $ | 57,285 | |||||
Cost of revenue | 8,802 | 24,106 | |||||||
Operating expenses | 14,452 | 23,044 | |||||||
Income tax expense | 1,385 | 3,848 | |||||||
Net income (loss) from discontinued operations, net of tax | (2,373 | ) | 6,287 | ||||||
Gain on sale of discontinued operations, net of tax | 7,084 | — | |||||||
Total discontinued operations | $ | 4,711 | $ | 6,287 | |||||
Inventories
Inventories | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Inventories | 4. Inventories | ||||
Inventories consisted of the following at July 31, 2012 (in thousands): | |||||
2012 | |||||
Raw materials | $ | 3,462 | |||
Work in process | 1,082 | ||||
Finished goods | 3,925 | ||||
Total | $ | 8,469 | |||
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Property and Equipment | 5 | Property and Equipment | |||
Property and equipment consisted of the following at July 31, 2012 (in thousands): | |||||
2012 | |||||
Computer software and equipment | $ | 69,517 | |||
Land | 3,000 | ||||
Furniture and office equipment | 775 | ||||
Leasehold improvements | 5,204 | ||||
78,496 | |||||
Less accumulated depreciation | (74,220 | ) | |||
Total | $ | 4,276 | |||
Depreciation expense was $0.9 million for the eight months ended March 23, 2013 and $2.6 million for the year ended July 31, 2012. | |||||
Under the going concern basis of accounting, the Company was required to test the recoverability of certain long-lived assets when indicators of impairment were present. In connection with the Company’s pursuit of strategic alternatives, the Company conducted an assessment for recoverability of its long-lived assets in the fourth quarter of fiscal 2012. The Company utilized the cost approach which was supplemented and supported by market research to determine fair value. This approach incorporated the use of historical costs, published trends, market supported depreciation curves and adjustments, including level of asset customization, to estimate fair value. The Company concluded that the net book value of its property and equipment exceeded its estimated fair value. As a result, the Company recorded an asset impairment charge of $0.8 million. | |||||
The Company owns approximately 102 acres of land in Tyngsborough, Massachusetts. This land was recorded at its estimated net realizable value of $2.9 million as of July 31, 2013. For information on our efforts to sell this land, please see Note 1. “Description of Business.” |
Commitments
Commitments | 12 Months Ended |
Jul. 31, 2013 | |
Commitments | 6. Commitments |
Operating Leases | |
Following the completion of the Asset Sale and the filing of the Certificate of Dissolution, the Company no longer has any material commitments relating to operating leases. Office space is currently provided to the Company by Buyer pursuant to a transition services agreement. Under the going concern basis of accounting, rent expense under operating leases was $1.1 million for the eight months ended March 23, 2013 and $2.0 million for the year ended July 31, 2012. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Income Taxes | 7 | Income Taxes | |||||||
Income tax expense for the eight months ended March 23, 2013 is $1.4 million. Income tax expense for the twelve months ended July 31, 2012 is $0.1 million. The tax expense is allocated between components of continuing operations, discontinued operations and gain on sale of discontinued operations in accordance with the provisions of Accounting Standards Codification (“ASC”) 740: | |||||||||
Eight months ended | Twelve months ended | ||||||||
March 23, | July 31, | ||||||||
2013 | 2012 | ||||||||
Tax benefit included in continuing operations | $ | (4,356 | ) | $ | (3,784 | ) | |||
Tax expense included in discontinued operations | 1,385 | 3,848 | |||||||
Tax expense included in gain on sale of discontinued operations | 4,387 | — | |||||||
Total tax expense continuing and discontinued operations | $ | 1,416 | $ | 64 | |||||
The approximately $4.4 million and $3.8 million of tax benefits from continuing operations for the eight months ended March 23, 2013 and twelve months ended July 31, 2012, respectively, are attributable to the intraperiod allocation of losses from continuing operations to income generated from discontinued operations, for which the losses would not have otherwise been benefitted under ASC 740. | |||||||||
The following table presents the components of our provision for income taxes (in thousands): | |||||||||
Eight Months Ended | Twelve Months Ended | ||||||||
March 23, | July 31, | ||||||||
2013 | 2012 | ||||||||
Current: | |||||||||
Federal | $ | 79 | $ | (30 | ) | ||||
State | 14 | 4 | |||||||
Foreign | 1,122 | 231 | |||||||
1,215 | 205 | ||||||||
Deferred: | |||||||||
Federal | — | — | |||||||
State | — | — | |||||||
Foreign | 201 | (141 | ) | ||||||
201 | (141 | ) | |||||||
Total tax provision (benefit) | $ | 1,416 | $ | 64 | |||||
A reconciliation between the statutory federal income tax and the Company’s actual tax provision follows (in thousands): | |||||||||
Eight Months Ended | Twelve Months Ended | ||||||||
March 23, | July 31, | ||||||||
2013 | 2012 | ||||||||
Statutory federal income tax benefit | $ | (734 | ) | $ | (4,500 | ) | |||
State taxes, net of federal benefit | 38 | (407 | ) | ||||||
Valuation allowance | 2,040 | 4,545 | |||||||
Other | 72 | 426 | |||||||
Tax provision (benefit) | $ | 1,416 | $ | 64 | |||||
The components of the Company’s net deferred tax assets at July 31, 2013 and 2012 are as follows (in thousands): | |||||||||
July 31, | |||||||||
2013 | 2012 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carryforwards | $ | 302,503 | $ | 288,381 | |||||
Credit carryforwards | 21,520 | 21,457 | |||||||
Restructuring and related accruals | 3,554 | 4,442 | |||||||
Accrued expenses | — | 810 | |||||||
Share based compensation expense | — | 5,035 | |||||||
Capital loss carryforwards | 1,181 | 783 | |||||||
Depreciation | 977 | 5,646 | |||||||
Other, net | 695 | 6,411 | |||||||
Total net deferred tax assets | 330,430 | 332,965 | |||||||
Valuation allowance | (330,430 | ) | (332,748 | ) | |||||
Net deferred tax assets | $ | — | $ | 217 | |||||
Substantially all of the loss before income taxes as shown in the Consolidated Statement of Operations for the eight months ended March 23, 2013 and the year ended July 31, 2012 was derived in the United States. Certain foreign wholly owned subsidiary companies were compensated on a cost plus basis resulting in the recognition of foreign taxable income and tax expense. | |||||||||
The Company did not record a current tax benefit for the net operating losses due to the Company’s substantial losses. | |||||||||
The Company is currently open to audit under statutes of limitation by the Internal Revenue Service, various foreign jurisdictions, and state jurisdictions for the fiscal years ended July 31, 2007 through July 31, 2013. However, limited adjustments can be made to federal and state tax returns in earlier years in order to reduce net operating loss carryforwards. | |||||||||
As of July 31, 2013, the Company had federal and state net operating loss (“NOL”) carryforwards of approximately $855.1 million and $180.3 million, respectively. The federal and state net operating loss carryforwards will expire at various dates through 2033. The Company also has federal and state research and development credit carryforwards of approximately $11.3 million and $10.2 million, respectively, which begin to expire in 2020 and 2015, respectively. | |||||||||
The occurrence of ownership changes, as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), is not controlled by the Company, and could significantly limit the amount of net operating loss carryforwards and research and development credits that can be utilized annually to offset future taxable income. The Company completed an updated Section 382 study through July 31, 2011 and the results of this study showed that no ownership change within the meaning of the Code had occurred through July 31, 2011 that would limit the annual utilization of available tax attributes. | |||||||||
The Company has evaluated the positive and negative evidence bearing upon the realization of its deferred tax assets and has established a valuation allowance of $330.4 million and $332.7 million as of July 31, 2013 and July 31, 2012, respectively, for such assets, which are comprised principally of net operating loss carryforwards, research and development credits and stock based compensation. | |||||||||
Included in the net operating loss carryforwards are stock option deductions of approximately $125.0 million. The benefits of these stock option deductions approximate $47.8 million. As of July 31, 2013, the Company had net operating loss carryforwards of approximately $7.1 million related to the exercise of stock options subsequent to the adoption of fair value accounting. This amount represents the excess benefit and has not been included in the gross deferred tax asset reflected for net operating losses. | |||||||||
As of July 31, 2013, the total amount of unrecognized tax benefit is $1.7 million. If recognized, the entire amount would impact the Company’s effective tax rate. | |||||||||
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands): | |||||||||
2013 | 2012 | ||||||||
Beginning balance | $ | 1,673 | $ | 1,702 | |||||
Increase for current year | 99 | 137 | |||||||
Reductions related to expiration of statute of limitations | (30 | ) | (166 | ) | |||||
Ending balance | $ | 1,742 | $ | 1,673 | |||||
As of July 31, 2013 and July 31, 2012, the total amount of accrued interest and penalties related to uncertain tax positions is $0.5 million for each such fiscal year. The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for federal, international, and state income taxes. |
Common_Stock
Common Stock | 12 Months Ended |
Jul. 31, 2013 | |
Common Stock | 8. Common Stock |
Prior to the Dissolution, the Company was authorized to issue up to 250,000,000 shares of the Common Stock. The holders of the Common Stock are entitled to one vote for each share held. In connection with the filing of the Certificate of Dissolution, effective as of 5:00 p.m. Eastern Time on March 7, 2013, the Company closed its stock transfer books and discontinued recording transfers of the Common Stock. The Common Stock, and stock certificates evidencing the shares of Common Stock, are no longer assignable or transferable on the Company’s books, other than transfers by will, intestate succession or operation of law, and represent only the right to receive distributions in connection with the Dissolution, if any. The Board will determine, in its sole discretion and in accordance with the Plan of Dissolution and applicable law, the timing, amount and kind of all distributions to be made to stockholders. |
ShareBased_Compensation
Share-Based Compensation | 12 Months Ended | ||||||||||||
Jul. 31, 2013 | |||||||||||||
Share-Based Compensation | 9 | Share-Based Compensation | |||||||||||
The Company previously had outstanding equity awards issued under several equity compensation plans, including the 1999 Stock Incentive Plan, the 2009 Stock Incentive Plan, the 2009 Non-employee Director Stock Option Plan and the 1999 Non-employee Director Stock Option Plan. Upon effectiveness of the Dissolution, the Company terminated its equity compensation plans and all outstanding stock-based awards under the plans were cancelled. | |||||||||||||
Prior to the termination of the equity compensation plans, the Company estimated the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options included the exercise price of the award, the expected option term, the expected volatility of the Company’s stock over the option’s expected term, the risk-free interest rate over the option’s expected term, and the Company’s expected annual dividend yield. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions were appropriate in calculating the fair values of the Company’s stock options granted in fiscal 2012. The Company did not grant any stock options during the eight months ended March 23, 2013. The fair value of each option grant was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions: | |||||||||||||
Year Ended | |||||||||||||
July 31, | |||||||||||||
2012 | |||||||||||||
Expected option term(1) | 5.8 years | ||||||||||||
Expected volatility factor (2) | 46.9 | % | |||||||||||
Risk-free interest rate (3) | 1.3 | % | |||||||||||
Expected annual dividend yield (4) | 0 | % | |||||||||||
-1 | Historical data on exercise patterns was the basis for estimating the expected life of an option. | ||||||||||||
-2 | The stock volatility for each grant was measured using the weighted average of historical daily price changes of the Company’s common stock over the most recent period equal to the expected option life of the grant, adjusted for activity which was not expected to occur in the future. | ||||||||||||
-3 | The risk-free interest rate for periods equal to the expected term of the share option was based on the U.S. Treasury yield curve in effect at the time of grant. | ||||||||||||
-4 | Excludes cash distributions that reduced additional paid in capital. | ||||||||||||
The following table presents share-based compensation expense included in the Company’s consolidated statements of operations for the eight months ended March 23, 2013 and for the year ended July 31, 2012 (in thousands): | |||||||||||||
Eight Months Ended | Year Ended | ||||||||||||
March 23, | July 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Cost of product revenue | $ | — | $ | — | |||||||||
Cost of service revenue | — | — | |||||||||||
Research and development | 312 | 1,151 | |||||||||||
Sales and marketing | 126 | 259 | |||||||||||
General and administrative | 312 | 721 | |||||||||||
Discontinued operations | 525 | 1,658 | |||||||||||
Share-based compensation expense | $ | 1,275 | $ | 3,789 | |||||||||
Stock Option Activity | |||||||||||||
Stock option activity under all of the Company’s stock plans during fiscal year 2013 is summarized as follows: | |||||||||||||
Number of | Weighted | Weighted | |||||||||||
Shares | Average | Average | |||||||||||
Exercise | Contractual | ||||||||||||
Price | Term | ||||||||||||
(Years) | |||||||||||||
Outstanding at July 31, 2012 | 10,756,844 | $ | 3.97 | 6.03 | |||||||||
Options granted | — | — | |||||||||||
Options exercised | (2,800 | ) | 13.22 | ||||||||||
Options canceled | (10,754,044 | ) | 3.97 | ||||||||||
Outstanding at July 31, 2013 | — | $ | 0 | — | |||||||||
Options vested and expected to vest | — | $ | 0 | — | |||||||||
Options exercisable at end of period | — | $ | 0 | — | |||||||||
As a result of the termination of the Company’s equity compensation plans and cancellation of all unexercised option awards issued thereunder upon the effectiveness of the Dissolution, there were no stock options outstanding or exercisable at July 31, 2013. | |||||||||||||
The weighted average fair value of stock options granted on dates of grant was $8.21 during fiscal year 2012. | |||||||||||||
The intrinsic value of stock options exercised, calculated as the difference between the market value of the shares on the exercise date and the exercise price of the option, was $5 thousand and $0.3 million for fiscal years 2013 and 2012, respectively. | |||||||||||||
The total cash received from employees as a result of employee stock option exercises during fiscal years 2013 and 2012 was $38 thousand and $2.4 million, respectively. |
Employee_Benefit_Plan
Employee Benefit Plan | 12 Months Ended |
Jul. 31, 2013 | |
Employee Benefit Plan | 10. Employee Benefit Plan |
The Company maintained a defined contribution plan under Section 401(k) of the Internal Revenue Code (the “401(k) plan”) until it was terminated in February 2013. Prior to its termination, the 401(k) plan covered substantially all of the Company’s domestic employees. Eligible employees were permitted to contribute to the 401(k) plan through payroll deductions within statutory and plan limits. |
Restructuring_Charges
Restructuring Charges | 12 Months Ended | ||||||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||||||
Restructuring Charges | 11 | Restructuring Charges | |||||||||||||||||||
During the first quarter of fiscal 2013, the Company implemented cost-reduction actions associated with the IQstream Business, including workforce reductions and other cost containment measures. The Company recorded a workforce reduction restructuring charge of $1.6 million primarily related to employee separation packages, which included severance pay, benefits continuation and outplacement costs. The Company also recorded a restructuring charge of $0.4 million related to certain purchase commitments for the IQstream Business that have no future benefit. | |||||||||||||||||||||
During the second quarter of fiscal 2013, the Company halted further development and marketing of the IQstream Business. The Company took further cost reduction actions associated with the IQstream Business and recorded a workforce reduction restructuring charge of $0.3 million primarily related to employee separation packages and change in control agreements, which included severance pay, benefits continuation and outplacement costs. | |||||||||||||||||||||
During the third quarter of fiscal 2013, the Company continued its cost reduction actions associated with the IQstream Business and terminated all of its remaining IQstream employees. The Company also implemented certain cost reduction actions with respect to its general and administrative functions. In connection with these actions, the Company recorded a workforce reduction restructuring charge of $4.0 million primarily related to employee separation packages, which included severance pay, benefits continuation and outplacement costs. | |||||||||||||||||||||
The Company has completed its cash restructuring payments. A roll-forward of the restructuring accrual since July 31, 2011 is summarized below (in thousands): | |||||||||||||||||||||
Accrual | Additions | Adjustments | Payments | Accrual | |||||||||||||||||
Balance at | Balance at | ||||||||||||||||||||
July 31, | July 31, 2013 | ||||||||||||||||||||
2012 | |||||||||||||||||||||
Workforce reduction | $ | — | $ | 5,844 | $ | (94 | ) | $ | 5,750 | $ | — | ||||||||||
Contract termination costs | — | 411 | (67 | ) | 344 | — | |||||||||||||||
Total | $ | — | $ | 6,255 | $ | (161 | ) | $ | 6,094 | $ | — | ||||||||||
Accrual | Adjustments | Payments | Accrual | ||||||||||||||||||
Balance at | Balance at | ||||||||||||||||||||
July 31, | July 31, | ||||||||||||||||||||
2011 | 2012 | ||||||||||||||||||||
Workforce reduction | $ | 67 | $ | — | $ | 67 | $ | — | |||||||||||||
Facility consolidations | 227 | (227 | ) | — | — | ||||||||||||||||
Total | $ | 294 | $ | (227 | ) | $ | 67 | $ | — | ||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Fair Value Measurements | 12 | Fair Value Measurements | |||||||||||||||
The fair value measurement rules establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: | |||||||||||||||||
Level 1 | Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset and liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. | ||||||||||||||||
Level 2 | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||||
Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||||
Assets and liabilities of the Company measured at fair value on a recurring basis as of July 31, 2013, are summarized as follows (in thousands): | |||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Description | July 31, 2013 | Quoted Prices in | Significant Other | Significant | |||||||||||||
Active Markets | Observable Inputs | Unobservable Inputs | |||||||||||||||
for Identical | (Level 2) | (Level 3) | |||||||||||||||
Assets (Level 1) | |||||||||||||||||
Assets | |||||||||||||||||
Cash and Cash Equivalents | $ | 21,041 | $ | 21,041 | $ | — | $ | — | |||||||||
Total assets | $ | 21,041 | $ | 21,041 | $ | — | $ | — | |||||||||
Cash and Cash Equivalents | |||||||||||||||||
Cash and cash equivalents of $21.0 million consisting of money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. | |||||||||||||||||
Assets and liabilities of the Company measured at fair value on a recurring basis as of July 31, 2012, are summarized as follows (in thousands): | |||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Description | July 31, 2012 | Quoted Prices in | Significant Other | Significant | |||||||||||||
Active Markets | Observable Inputs | Unobservable Inputs | |||||||||||||||
for Identical | (Level 2) | (Level 3) | |||||||||||||||
Assets (Level 1) | |||||||||||||||||
Assets | |||||||||||||||||
Cash and Cash Equivalents | $ | 136,654 | $ | 136,654 | $ | — | $ | — | |||||||||
Government Obligations | 302,739 | 302,739 | — | — | |||||||||||||
Total assets | $ | 439,393 | $ | 439,393 | $ | — | $ | — | |||||||||
Cash and Cash Equivalents | |||||||||||||||||
Cash and cash equivalents of $136.7 million consisting of money market funds and U.S. government agency obligations are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. | |||||||||||||||||
Government Obligations | |||||||||||||||||
Available-for-sale securities of $302.7 million consisting of U.S. government agency obligations are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Commitments and Contingencies | 13 | Commitments and Contingencies | |||||||
Litigation | |||||||||
On April 22, 2013, the Company filed a complaint in the Complex Commercial Litigation Division of the Superior Court of the State of Delaware against Buyer, Marlin Executive Fund III, L.P. and Marlin Equity III, L.P. (collectively with Buyer, the “Marlin Parties”) in connection with the Asset Sale. The complaint asserted claims for breach of contract against the Marlin Parties and for declaratory judgment against Buyer for certain amounts due to the Company under the Asset Sale Agreement and certain agreements related thereto. | |||||||||
The complaint sought (1) judgment in favor of the Company in the amount of $894,598, together with interest accrued, with respect to reimbursement for the Company’s operation of Sycamore Networks (Shanghai) Co. Ltd. (“Sycamore Shanghai”) for the benefit of Buyer during the period from the Asset Sale until the receipt of regulatory approval for the transfer of Sycamore Shanghai to Buyer, (2) declaratory judgment that cash in the amount of $345,932 remaining in the accounts of subsidiaries of the Company transferred to Buyer in the Asset Sale are excluded assets under terms of the Asset Sale Agreement and, accordingly, belong to the Company and (3) declaratory judgment that Buyer’s assertion that a $1.1 million decrease in the calculation of net working capital is necessary was untimely because it was made after the expiration of the forty-five day time period set forth in the Asset Sale Agreement. The complaint alleged that, among other things, in communications between the Company and Buyer, Buyer had acknowledged that the $894,598 reimbursement in respect of Sycamore Shanghai was then due and owing to the Company, but, despite repeated requests, Buyer had refused to remit such amount to the Company. | |||||||||
On May 28, 2013, the Company and the Marlin Parties entered into an agreement pursuant to which Buyer paid the Company an aggregate amount of approximately $1.7 million, comprising (i) the undisputed amount with respect to reimbursement for the Company’s operation of Sycamore Shanghai during the period between the closing of the Asset Sale and the transfer of Sycamore Shanghai to Buyer and (ii) the undisputed portion of the working capital adjustment. Following receipt of those undisputed amounts, the Company dismissed the pending lawsuit against the Marlin Parties without prejudice. In connection with such agreement, the Company and the Marlin Parties have jointly selected McGladrey LLP as the Neutral Accountant (as defined in the Asset Sale Agreement) to determine in arbitration whether the cash that remained, immediately prior to closing of the Asset Sale, in the accounts of subsidiaries transferred to Buyer in the Asset Sale is ultimately for the account of the Company or Buyer and whether the value of inventory for purposes of the working capital adjustment should be as proposed by the Company or as proposed by Buyer, or some value in between. The Company and the Marlin Parties have submitted their initial submissions to the Neutral Accountant and the matter remains pending before the Neutral Accountant. The Company has agreed to file a notice of dismissal with prejudice (or otherwise appropriately document dismissal with prejudice) with respect to the litigation as soon as the arbitration is completed, provided the Neutral Accountant has determined both aforementioned issues. | |||||||||
The Company intends to vigorously pursue all amounts owed to the Company by the Marlin Parties pursuant to the Asset Sale Agreement and related agreements. | |||||||||
Guarantees | |||||||||
As of July 31, 2013, the Company’s guarantees requiring disclosure consist of its warranty obligations, indemnification obligations as set forth in the Asset Sale Agreement, indemnification for intellectual property infringement claims and indemnification for officers and directors. | |||||||||
In connection with the closing of the Asset Sale and as set forth in the Asset Sale Agreement, the Company has agreed to indemnify Buyer and certain of its related parties for any damages arising out of any breach of any of our representations or warranties or failure to perform any of our covenants or agreements in the Asset Sale Agreement, our failure to fully or timely pay, satisfy or perform any retained liabilities or our failure to pay any taxes associated with the assets and subsidiaries being sold for periods prior to the closing date of the Asset Sale, including any capital gain or corporate income taxes resulting from the transfer of our China subsidiary. The Company’s aggregate indemnification liability for breaches of representations or warranties is limited to $2,812,500. The Company’s indemnification obligations for breaches of representations or warranties expire no later than twelve months following the closing date of the Asset Sale. The Company has not recorded a liability for this agreement. | |||||||||
Prior to the Asset Sale and the Dissolution, in the normal course of business, the Company also agreed to indemnify other parties, including customers, lessors and parties to other transactions with the Company with respect to certain matters. The Company agreed to hold these other parties harmless against losses arising from a breach of representations or covenants, 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. Although the Company does not believe that there exists any basis for any such claims, it is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on the Company’s operating results or financial position. Accordingly, the Company has not recorded a liability for these agreements as of July 31, 2013 or July 31, 2012, as the Company believes the exposure for any related payments is not material. | |||||||||
We have entered into our standard form of indemnification agreement with each of our directors and executive officers, which is in addition to the indemnification provided for in our amended and restated certificate of incorporation, as amended. The Plan of Dissolution also provides that we continue to indemnify our directors and executive officers in accordance with such agreements and our amended and restated certificate of incorporation, as amended. The indemnification agreements, among other things, provide for indemnification of our directors and executive officers for a number of expenses, including attorneys’ fees and other related expenses, as well as certain judgments, fines, penalties and settlement amounts incurred by any such person in any action, suit or proceeding, including any action by or in the right of the Company, arising out of such person’s services as a director or executive officer of the Company or any other company or enterprise to which the person provided services at our request. The Company did not incur any expense under these arrangements during fiscal year 2013 or fiscal year 2012. Due to the Company’s inability to estimate liabilities in connection with these agreements, if and when they might be incurred, the Company has not recorded any liability for these agreements as of July 31, 2013 or July 31, 2012. During the Dissolution period, we intend to continue to indemnify each of our current and former directors and executive officers to the extent permitted under Delaware law, our amended and restated certificate of incorporation, as amended, and the indemnification agreements. The Company has also continued to maintain directors’ and officers’ coverage since the filing of the Certificate of Dissolution, and intends to obtain runoff coverage for our director and officers during the Dissolution period. | |||||||||
Warranty Liability | |||||||||
Prior to the Asset Sale, the Company recorded a warranty liability for parts and labor on its products at the time revenue was recognized. Warranty periods were generally three years from installation date. The estimate of the warranty liability was based primarily on the Company’s historical experience in product failure rates and the expected material and labor costs to provide warranty services. | |||||||||
The following table summarizes the activity related to the product warranty liability (in thousands): | |||||||||
Eight Months Ended | Twelve months ended | ||||||||
March 23, | July 31, | ||||||||
2013 | 2012 | ||||||||
Beginning balance | $ | 1,072 | $ | 1,140 | |||||
Accruals for warranties during the period | 82 | 238 | |||||||
Settlements | (81 | ) | (306 | ) | |||||
Reversal upon Asset Sale | (1,073 | ) | — | ||||||
Ending balance | $ | — | $ | 1,072 | |||||
Fourth_Quarter_Financial_Data
Fourth Quarter Financial Data | 12 Months Ended |
Jul. 31, 2013 | |
Fourth Quarter Financial Data | 14. Fourth Quarter Financial Data |
The Company has adopted the liquidation basis of accounting. There are no fourth quarter results of operations. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Jul. 31, 2013 | |
Subsequent Events | 15. Subsequent Events |
On September 5, 2013, the Company terminated the Restated Purchase and Sale Agreement (the “Purchase Agreement”) with Tyngsborough Commons, LLC (“Tyngsborough Commons”) entered into on May 24, 2013 in connection with the liquidation of Sycamore’s property and assets in accordance with the Plan of Dissolution. The Purchase Agreement provided for the sale by the Company of a certain parcel of undeveloped land located in Tyngsborough, Massachusetts to Tyngsborough Commons for a total purchase price of $3.5 million. The Company terminated the Purchase Agreement due to Tyngsborough Commons’ failure to either close the sale on or before August 30, 2013 or pay the $100,000 additional deposit required to exercise the right to extend the period for closing the sale by 45 days, as provided in the Purchase Agreement. As a result of the termination, and pursuant to the terms of the Purchase Agreement, the Company retained as liquidated damages the $125,000 in deposits previously paid by Tyngsborough Commons. The Company intends to continue to pursue available options with respect to the land, but there can be no assurance as to the amount of consideration the Company may be able to obtain for the land or as to any time frame within which a potential sale might occur. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Basis of Consolidation and Presentation | Basis of Consolidation and Presentation | ||||||||||||||||
The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. As part of the Asset Sale, the Company sold its subsidiaries in Shanghai, the Netherlands and Japan. In conjunction with the Dissolution, the Company merged its Delaware and Massachusetts subsidiaries into Sycamore Networks, Inc. | |||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. | |||||||||||||||||
The condensed consolidated financial statements for the eight month period ended March 23, 2013 and for the twelve months ended July 31, 2012 were prepared on the going concern basis of accounting, which contemplates realization of assets and satisfaction of liabilities in the normal course of business. Following the Company’s filing of the Certificate of Dissolution, on March 24, 2013 the Company adopted the liquidation basis of accounting. See “Liquidation Basis of Accounting” below for further information regarding the Company’s adoption of the liquidation basis of accounting. | |||||||||||||||||
Cash Distributions | Cash Distributions | ||||||||||||||||
The Company paid a total of $413.3 million in cash distributions to stockholders in fiscal 2013. As a result of having an accumulated deficit, the cash distributions were recorded as reductions to additional paid-in capital. | |||||||||||||||||
Liquidation Basis of Accounting | Liquidation Basis of Accounting | ||||||||||||||||
On March 24, 2013, the beginning of the fiscal month following the filing of the Certificate of Dissolution, the Company began reporting on a liquidation basis of accounting. Under the liquidation basis of accounting, assets are stated at their estimated net realizable values and liabilities are stated at their estimated settlement amounts. Recorded liabilities include estimates of expected costs associated with carrying out the Plan of Dissolution. These estimates will be reviewed periodically and adjusted as appropriate. | |||||||||||||||||
The valuation of assets at their net realizable value and liabilities at their anticipated settlement amounts represent estimates, based on present facts and circumstances, of the net realizable value of the assets and the costs associated with carrying out the Plan of Dissolution. The actual values and costs associated with carrying out the Plan of Dissolution may differ from amounts reflected in the financial statements because of the inherent uncertainty in estimating future events. These differences may be material. In particular, the estimates of costs will vary with the length of time necessary to complete the Dissolution process and to resolve any claims. Accordingly, it is not possible to predict the timing or aggregate amount which will ultimately be distributed to stockholders, and no assurance can be given that the distributions will equal or exceed the estimate of net assets presented in the accompanying Statement of Net Assets. | |||||||||||||||||
Upon transition to the liquidation basis of accounting on March 24, 2013, the Company recorded the following adjustments to record assets at their estimated net realizable values: | |||||||||||||||||
Initial adjustment of assets to estimated net realizable value | Amount | ||||||||||||||||
Write up of assets | $ | 3,393 | |||||||||||||||
Write down of assets | (510 | ) | |||||||||||||||
$ | 2,883 | ||||||||||||||||
The Company’s initial write up of assets related to certain non-cash assets of Sycamore, including intellectual property and other assets relating to the IQstream Business, patents and patent applications related to or used in the Intelligent Bandwidth Management Business, our real estate holdings in Tyngsborough, Massachusetts, our investments in private companies and certain other fixed assets. | |||||||||||||||||
The write down of assets related to certain prepaid expenses and other assets that have no future net realizable value. | |||||||||||||||||
Subsequent to the initial adjustments on March 24, 2013, the Company recorded adjustments to reduce our estimate of the net realizable value for our land in Tyngsborough, Massachusetts and for our other assets. The reduction in our estimate of net realizable value for the Tyngsborough land is a result of the termination of the Restated Purchase and Sale Agreement with Tyngsborough Commons. For additional information concerning the termination of this agreement, see Note 1. “Business”. The reduction in our estimate of net realizable value for our other assets primarily relates to a reduction in the net realizable value of our patent portfolio. Based on recent negotiations and discussions with prospective purchasers of the patents, we have determined that we cannot reasonably provide an estimate of the net realizable value of the patents at this time and, accordingly, have assigned no value to the patents for the purposes of the Statement of Net Assets. The adjustments are based on our current best estimate of the net realizable value of these assets, which is subject to substantial risk and uncertainties. | |||||||||||||||||
On April 22, 2013, the Company commenced litigation against Buyer and certain of its affiliates with respect to certain amounts due under the Asset Sale Agreement. In connection with such litigation, on May 28, 2013, the Company and such parties reached an agreement pursuant to which (1) the Company agreed to dismiss the pending litigation without prejudice, (2) Buyer paid certain undisputed amounts owed to the Company and (3) the parties agreed to submit the remaining issues relating to amounts in dispute of approximately $1.4 million to arbitration for resolution by a neutral accountant. Following receipt of the aforementioned undisputed amounts, the Company dismissed the pending lawsuit without prejudice. The matter remains pending before the neutral accountant. Because of the unpredictability of any settlement amount or ruling in favor of the Company by a neutral accountant, the Company is currently unable to estimate the net realizable value of any proceeds in connection with this matter. Accordingly, the Company has not recorded any receivables for the amount at issue. If the Company is successful in its efforts to recover all or any portion of the $1.4 million from Buyer, the Company will record the amount of any settlement, decision or order by the neutral accountant at the time thereof, which may result in an aggregate increase to net assets. For additional information concerning this matter, see Note 13. “Commitments and Contingencies.” | |||||||||||||||||
The Company also accrued estimated costs expected to be incurred in carrying out the Plan of Dissolution. Under the DGCL, the Dissolution period will last for a minimum of three years. The Company was required to make certain estimates and exercise judgment in determining the accrued costs of liquidation as of March 24, 2013. Upon transition to the liquidation basis of accounting, the Company accrued the following costs expected to be incurred in the Dissolution: | |||||||||||||||||
Accrued costs of liquidation | Amount | ||||||||||||||||
Restructuring | $ | 3,309 | |||||||||||||||
Compensation | 3,539 | ||||||||||||||||
Professional fees | 3,672 | ||||||||||||||||
Other expenses associated with wind down activities | 2,725 | ||||||||||||||||
Insurance | 1,500 | ||||||||||||||||
$ | 14,745 | ||||||||||||||||
The accrued costs of liquidation do not include an estimate of the amount that the Company may be required to pay under the Asset Sale Agreement to satisfy our indemnification obligations, if any, to Buyer and its related parties, or any other amount we may be required to pay to Buyer under the Asset Sale Agreement. The Company’s aggregate indemnification liability for breaches of representations and warranties is limited to approximately $2.8 million. The Company’s indemnification obligations for breaches of representations and warranties expire no later than twelve months following the closing date of the Asset Sale, which was January 31, 2013. In the event Buyer is able to successfully assert indemnification claims against the Company, the Company will record the amount of any such liability at the time thereof, resulting in a decrease to net assets. | |||||||||||||||||
Subsequent to the initial accrual for estimated costs during the Dissolution period upon transition to the liquidation basis of accounting, the Company reduced its accrual for estimated costs of liquidation by $1.6 million. The reduction reflects our updated estimate of costs related to compensation, professional fees, other expenses and insurance. These estimated costs will continue to be reviewed periodically and adjusted as appropriate. The table below summarizes the reserve for estimated costs during the Dissolution period as of July 31, 2013: | |||||||||||||||||
Amount | |||||||||||||||||
Compensation | $ | 2,396 | |||||||||||||||
Professional fees | 2,637 | ||||||||||||||||
Other expenses associated with wind down activities | 1,970 | ||||||||||||||||
Insurance | 1,333 | ||||||||||||||||
$ | 8,336 | ||||||||||||||||
Cash Equivalents and Investments | Cash Equivalents and Investments | ||||||||||||||||
Cash equivalents are short-term, highly liquid investments with original or remaining maturity dates of three months or less at the date of acquisition. Cash equivalents are carried at cost plus accrued interest, which approximates fair market value. The Company’s investments are classified as available-for-sale and are recorded at fair value with any unrealized gain or loss recorded as an element of stockholders’ equity. The fair value of investments is determined based on quoted market prices at the reporting date for those investments. The Company would recognize an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the length of time and extent to which the fair value has been less than the Company’s cost basis, the financial condition and near-term prospects of the investee, and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. As of July 31, 2013 and 2012, aggregate cash and cash equivalents and short and long term investments consisted of (in thousands): | |||||||||||||||||
July 31, 2013: | Amortized | Gross | Gross | Fair Market | |||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||
Gains | Losses | ||||||||||||||||
Cash and cash equivalents | $ | 21,041 | $ | — | $ | — | $ | 21,041 | |||||||||
Total | $ | 21,041 | $ | — | $ | — | $ | 21,041 | |||||||||
July 31, 2012: | Amortized | Gross | Gross | Fair Market | |||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||
Gains | Losses | ||||||||||||||||
Cash and cash equivalents | $ | 136,654 | $ | — | $ | — | $ | 136,654 | |||||||||
Government securities | 302,695 | 66 | (22 | ) | 302,739 | ||||||||||||
Total | $ | 439,349 | $ | 66 | $ | (22 | ) | $ | 439,393 | ||||||||
Inventories | Inventories | ||||||||||||||||
Prior to the Asset Sale, inventories were stated at the lower of cost (first-in, first-out basis) or market (net realizable value). | |||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||
Prior to the Asset Sale, the Company sold primarily bundled hardware and software products that function together to deliver the tangible products’ essential functionality (referred to herein collectively as “hardware” products), as well as services related to those hardware products. Services included maintenance arrangements for the products with terms typically of one year, as well as to a lesser extent, professional services and training services. The Company sold a limited amount of stand-alone software products. | |||||||||||||||||
The Company recognized revenue when all of the following criteria were met: | |||||||||||||||||
• | Persuasive evidence of an arrangement existed. Evidence of an arrangement generally consisted of sales contracts or agreements and customer purchase orders; | ||||||||||||||||
• | Delivery occurred. Delivery occurred when title and risk of loss were transferred to the customer or the Company received written evidence of customer acceptance, when applicable, to verify delivery or performance; | ||||||||||||||||
• | Sales price was fixed or determinable. The Company assessed whether the sales price was fixed or determinable based on payment terms and whether the sales price was subject to refund or adjustment; and | ||||||||||||||||
• | Collectability was reasonably assured. Collectability was assessed based on the creditworthiness of the customer as determined by credit checks and the customer’s payment history with the Company. | ||||||||||||||||
The Company adopted Accounting Standards Update (“ASU”) No. 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements (“ASU 2009-13”) and ASU No. 2009-14, Software (Topic 985): Certain Revenue Arrangements That Include Software Elements (“ASU 2009-14”) on a prospective basis as of the beginning of fiscal 2011 for new and materially modified arrangements originating on or after August 1, 2010. ASU 2009-14 amends industry-specific revenue accounting guidance for software and software-related transactions to exclude from its scope tangible products containing software components and non-software components that function together to deliver the product’s essential functionality. As a result of adopting the new guidance, nearly all of the Company’s products and related services were no longer accounted for under the software revenue recognition rules, Accounting Standards Codification (“ASC”) Topic 985. | |||||||||||||||||
Pursuant to the guidance of ASU 2009-13, when a sales arrangement contains multiple elements, particularly hardware products and related services, revenue is allocated to each element based on a selling price hierarchy, using a relative selling price allocation approach. The selling price for a deliverable was based on our vendor-specific objective evidence (“VSOE”), if available, third-party evidence (“TPE”) if VSOE was not available, or best estimate of selling price (“BESP”) if neither VSOE nor TPE was available. The Company established VSOE for its services based on the price charged for each service element when sold separately. The Company was typically not able to determine TPE for its hardware products or services because the Company’s various product and service offerings contained a significant level of differentiation and, therefore, comparable pricing of competitors’ products and services with similar functionality could not be obtained. The Company determined BESP for products and services based on an assessment of multiple factors, including, but not limited to, pricing practices, customer classes and distribution channels. We then recognized revenue allocated to each deliverable in accordance with the four criteria identified above. Our multiple element arrangements typically included both products and services, with maintenance being the most common service element. Maintenance services were delivered over the contractual support period which varied in length, but typically was twelve months. In those limited instances where both hardware and stand-alone software products were included in a multiple element arrangement, the hardware and related services and the software and related services were separated and then allocated a pro rata portion of the total transaction value based upon BESP of each of the hardware and software groups, using a relative selling price allocation approach. The hardware group was then accounted for under the ASC Topic 605 guidance described above and the software group was accounted for under the ASC Topic 985 guidance. | |||||||||||||||||
Service revenues included revenue from maintenance, training, and installation services. Revenue from maintenance service contracts was deferred and recognized ratably over the contractual support period. Revenue from training and installation services was recognized as the services were completed or ratably over the service period. | |||||||||||||||||
Share-Based Compensation | Share-Based Compensation | ||||||||||||||||
Upon effectiveness of the Dissolution, the Company cancelled all outstanding stock option awards under the Company’s stock plans. During the period when the Company had stock-based compensation programs, the Company accounted for share-based compensation expense for all share-based payment awards made to employees and directors based on estimated fair values. The Company estimated the fair value of share-based options on the date of grant using the Black Scholes pricing model, which was affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables included our expected stock price volatility over the term of the awards, actual and projected employee option exercise behaviors, risk free interest rate and expected dividends. The Company was also required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differed from those estimates. | |||||||||||||||||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | ||||||||||||||||
Under the going concern basis of accounting, the Company evaluated the recoverability of long-lived assets whenever events or changes in circumstances indicated that the carrying amount of an asset may not be fully recoverable. This periodic review may have resulted in an adjustment of estimated depreciable lives or asset impairment. When indicators of impairment were present, the carrying values of the asset were evaluated in relation to the operating performance and future undiscounted cash flows of the underlying business. If the future undiscounted cash flows were less than the book value, impairment existed. The impairment was measured as the difference between the book value and the fair value of the underlying asset. Fair values were based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk. | |||||||||||||||||
Property and Equipment | Property and Equipment | ||||||||||||||||
Under the liquidation basis of accounting, property and equipment are stated at their estimated net realizable values. Under the going concern basis of accounting, property and equipment were stated at cost and depreciated over the estimated useful lives of the assets using the straight-line method, based upon the following asset lives: | |||||||||||||||||
Computer and telecommunications equipment | 2 to 3 years | ||||||||||||||||
Computer software | 3 years | ||||||||||||||||
Furniture and office equipment | 5 years | ||||||||||||||||
Leasehold improvements | Shorter of lease term or useful life of asset | ||||||||||||||||
The cost of significant additions and improvements were capitalized and depreciated while expenditures for maintenance and repairs were charged to expense as incurred. Costs related to internal use software were capitalized. Upon retirement or sale of an asset, the cost and related accumulated depreciation of the assets were removed from the accounts and any resulting gain or loss is reflected in the determination of net income or loss. See Note 5. “Property and Equipment.” | |||||||||||||||||
Research and Development and Software Development Costs | Research and Development and Software Development Costs | ||||||||||||||||
Under the going concern basis of accounting, the Company’s research and development costs were expensed as incurred. Software development costs incurred prior to the establishment of technological feasibility were charged to expense. Technological feasibility was demonstrated by the completion of a working model. Software development costs incurred subsequent to the establishment of technological feasibility were capitalized until the product was available for general release to customers and amortized based on the greater of (i) the ratio that current gross revenue for a product bears to the total of current and anticipated future gross revenue for that product or (ii) the straight-line method over the remaining estimated life of the product. The period between achieving technological feasibility and the general availability of the related products was short and software development costs qualifying for capitalization were not material. Accordingly, the Company did not capitalize any software development costs. | |||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||
Income taxes are accounted for under the liability method. Under this method, deferred tax assets and liabilities are recorded based on temporary differences between the financial statement amounts and the tax bases of assets and liabilities measured using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company periodically evaluates the realization of its net deferred tax assets and records a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. | |||||||||||||||||
We account for uncertain tax positions by prescribing the minimum recognition threshold a tax position must meet before being recognized in the Company’s financial statements. Generally, recognition is limited to situations where, based solely on the technical merits of the tax position, the Company has determined that the tax position is more likely than not to be sustained on audit. | |||||||||||||||||
Concentrations and Significant Customer Information | Concentration of Credit Risks | ||||||||||||||||
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash equivalents and investments. The Company invests its excess cash primarily in deposits with commercial banks, high-quality corporate securities and U.S. government securities. | |||||||||||||||||
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts | ||||||||||||||||
Prior to the Asset Sale, the Company evaluated its outstanding accounts receivable balances on an ongoing basis to determine whether an allowance for doubtful accounts should be recorded. Activity in the Company’s allowance for doubtful accounts is summarized as follows (in thousands): | |||||||||||||||||
Year Ended July 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Beginning balance | $ | 42 | $ | 72 | |||||||||||||
Adjustment | (42 | ) | (30 | ) | |||||||||||||
Write off | — | — | |||||||||||||||
Ending balance | $ | — | $ | 42 | |||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | ||||||||||||||||
Under the going concern basis of accounting, the unrealized gain or loss on investments was included in accumulated other comprehensive loss for all operating periods presented. For foreign subsidiaries where the functional currency was the local currency, assets and liabilities were translated into U.S. dollars at the current exchange rate on the balance sheet date. Revenue and expenses were translated at average rates of exchange prevailing during each period. Translation adjustments for these subsidiaries, which are immaterial for all periods presented, are included in accumulated other comprehensive income (loss). | |||||||||||||||||
Net Loss Per Share | Net Loss Per Share | ||||||||||||||||
Under the going concern basis of accounting, basic and diluted net loss per share was computed by dividing the net loss for the period by the weighted average number of common shares outstanding during the period less unvested restricted stock. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): | |||||||||||||||||
Eight Months Ended | Year Ended | ||||||||||||||||
March 23, | July 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Net loss | $ | (3,512 | ) | $ | (12,924 | ) | |||||||||||
Denominator: | |||||||||||||||||
Weighted-average shares of common stock outstanding | 28,882 | 28,807 | |||||||||||||||
Weighted-average shares subject to repurchase | — | — | |||||||||||||||
Shares used in per-share calculation—basic | 28,882 | 28,807 | |||||||||||||||
Weighted-average shares of common stock outstanding | 28,882 | 28,807 | |||||||||||||||
Weighted common stock equivalents | — | — | |||||||||||||||
Shares used in per-share calculation—diluted | 28,882 | 28,807 | |||||||||||||||
Net loss per share: | |||||||||||||||||
Basic | $ | (0.12 | ) | $ | (0.45 | ) | |||||||||||
Diluted | $ | (0.12 | ) | $ | (0.45 | ) | |||||||||||
Employee stock options to purchase 9.6 million shares of common stock were not included in the computation of diluted net loss per share for the eight months ended March 23, 2013 because their effect would have been antidilutive. Employee stock options to purchase 10.9 million shares of common stock were not included in the computation of diluted net loss per share for the year ended July 31, 2012 because their effect would have been antidilutive. | |||||||||||||||||
Segment Information | Segment Information | ||||||||||||||||
The Company’s chief operating decision maker was its former President and Chief Executive Officer. Decisions regarding resource allocation and assessing performance were made at the Company level, as one segment. Prior to the Asset Sale, for the eight months ended March 23, 2013, the geographical distribution of revenue was as follows: United States – 80%, Korea – 5%, and all other countries – 15%. For the year ended July 31, 2012, the geographical distribution of revenue was as follows: United States – 79%, United Kingdom – 6%, and all other countries – 15%. | |||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||||||||
On June 16, 2011, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”), which revises the manner in which entities present comprehensive income in their financial statements. The new guidance requires companies to report components of comprehensive income in either: (1) a continuous statement of comprehensive income; or (2) two separate consecutive statements. ASU 2011-05 does not change the items that must be reported in other comprehensive income. The Company adopted ASU 2011-05 in the first quarter of fiscal 2013 by reporting a separate statement of comprehensive income (loss). | |||||||||||||||||
In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting. The new standard addresses when and how an entity should apply the liquidation basis of accounting. The new guidance is effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013 and interim reporting periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption is permitted. The Company adopted ASU No. 2013-07 in the third quarter of fiscal 2013. The adoption did not have a material impact on the Company’s application of the liquidation basis of accounting. | |||||||||||||||||
In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters. The new standard addresses a parent’s accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or group of assets within a foreign entity or of an investment in a foreign entity. The objective of the update is to resolve the diversity in practice about the appropriate guidance to apply to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or a business within a foreign entity. The update provides that the entire amount of the cumulative translation adjustment associated with the foreign entity would be released when there has been a sale of a subsidiary or group of net assets within a foreign entity and the sale represents the substantially complete liquidation of the investment in the foreign entity. This update is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. Early adoption is permitted. The Company adopted ASU No. 2013-05 in the third quarter of fiscal 2013. The adoption did not have a material impact on the Company. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Adjustments to record assets at their estimated net realizable values | Upon transition to the liquidation basis of accounting on March 24, 2013, the Company recorded the following adjustments to record assets at their estimated net realizable values: | ||||||||||||||||
Initial adjustment of assets to estimated net realizable value | Amount | ||||||||||||||||
Write up of assets | $ | 3,393 | |||||||||||||||
Write down of assets | (510 | ) | |||||||||||||||
$ | 2,883 | ||||||||||||||||
Accrued Costs Expected to be Incurred in Liquidation | Upon transition to the liquidation basis of accounting, the Company accrued the following costs expected to be incurred in the Dissolution: | ||||||||||||||||
Accrued costs of liquidation | Amount | ||||||||||||||||
Restructuring | $ | 3,309 | |||||||||||||||
Compensation | 3,539 | ||||||||||||||||
Professional fees | 3,672 | ||||||||||||||||
Other expenses associated with wind down activities | 2,725 | ||||||||||||||||
Insurance | 1,500 | ||||||||||||||||
$ | 14,745 | ||||||||||||||||
Reserve for Estimated Costs | The table below summarizes the reserve for estimated costs during the Dissolution period as of July 31, 2013: | ||||||||||||||||
Amount | |||||||||||||||||
Compensation | $ | 2,396 | |||||||||||||||
Professional fees | 2,637 | ||||||||||||||||
Other expenses associated with wind down activities | 1,970 | ||||||||||||||||
Insurance | 1,333 | ||||||||||||||||
$ | 8,336 | ||||||||||||||||
Aggregate Cash and Cash Equivalents, Short and Long Term Investments | As of July 31, 2013 and 2012, aggregate cash and cash equivalents and short and long term investments consisted of (in thousands): | ||||||||||||||||
July 31, 2013: | Amortized | Gross | Gross | Fair Market | |||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||
Gains | Losses | ||||||||||||||||
Cash and cash equivalents | $ | 21,041 | $ | — | $ | — | $ | 21,041 | |||||||||
Total | $ | 21,041 | $ | — | $ | — | $ | 21,041 | |||||||||
July 31, 2012: | Amortized | Gross | Gross | Fair Market | |||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||
Gains | Losses | ||||||||||||||||
Cash and cash equivalents | $ | 136,654 | $ | — | $ | — | $ | 136,654 | |||||||||
Government securities | 302,695 | 66 | (22 | ) | 302,739 | ||||||||||||
Total | $ | 439,349 | $ | 66 | $ | (22 | ) | $ | 439,393 | ||||||||
Estimated Useful Lives of Assets | property and equipment were stated at cost and depreciated over the estimated useful lives of the assets using the straight-line method, based upon the following asset lives: | ||||||||||||||||
Computer and telecommunications equipment | 2 to 3 years | ||||||||||||||||
Computer software | 3 years | ||||||||||||||||
Furniture and office equipment | 5 years | ||||||||||||||||
Leasehold improvements | Shorter of lease term or useful life of asset | ||||||||||||||||
Summary of Allowance for Doubtful Accounts | Activity in the Company’s allowance for doubtful accounts is summarized as follows (in thousands): | ||||||||||||||||
Year Ended July 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Beginning balance | $ | 42 | $ | 72 | |||||||||||||
Adjustment | (42 | ) | (30 | ) | |||||||||||||
Write off | — | — | |||||||||||||||
Ending balance | $ | — | $ | 42 | |||||||||||||
Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): | ||||||||||||||||
Eight Months Ended | Year Ended | ||||||||||||||||
March 23, | July 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Net loss | $ | (3,512 | ) | $ | (12,924 | ) | |||||||||||
Denominator: | |||||||||||||||||
Weighted-average shares of common stock outstanding | 28,882 | 28,807 | |||||||||||||||
Weighted-average shares subject to repurchase | — | — | |||||||||||||||
Shares used in per-share calculation—basic | 28,882 | 28,807 | |||||||||||||||
Weighted-average shares of common stock outstanding | 28,882 | 28,807 | |||||||||||||||
Weighted common stock equivalents | — | — | |||||||||||||||
Shares used in per-share calculation—diluted | 28,882 | 28,807 | |||||||||||||||
Net loss per share: | |||||||||||||||||
Basic | $ | (0.12 | ) | $ | (0.45 | ) | |||||||||||
Diluted | $ | (0.12 | ) | $ | (0.45 | ) | |||||||||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Financial Results of Discontinued Operation | The financial results of the Intelligent Bandwidth Management Business have been classified as discontinued operations for all periods presented. | ||||||||
Eight months ended | Twelve months ended | ||||||||
March 23, | July 31, | ||||||||
2013 | 2012 | ||||||||
Revenue | $ | 22,266 | $ | 57,285 | |||||
Cost of revenue | 8,802 | 24,106 | |||||||
Operating expenses | 14,452 | 23,044 | |||||||
Income tax expense | 1,385 | 3,848 | |||||||
Net income (loss) from discontinued operations, net of tax | (2,373 | ) | 6,287 | ||||||
Gain on sale of discontinued operations, net of tax | 7,084 | — | |||||||
Total discontinued operations | $ | 4,711 | $ | 6,287 | |||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Inventories | Inventories consisted of the following at July 31, 2012 (in thousands): | ||||
2012 | |||||
Raw materials | $ | 3,462 | |||
Work in process | 1,082 | ||||
Finished goods | 3,925 | ||||
Total | $ | 8,469 | |||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Property and Equipment | Property and equipment consisted of the following at July 31, 2012 (in thousands): | ||||
2012 | |||||
Computer software and equipment | $ | 69,517 | |||
Land | 3,000 | ||||
Furniture and office equipment | 775 | ||||
Leasehold improvements | 5,204 | ||||
78,496 | |||||
Less accumulated depreciation | (74,220 | ) | |||
Total | $ | 4,276 | |||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Components of Provision for Income Taxes | The tax expense is allocated between components of continuing operations, discontinued operations and gain on sale of discontinued operations in accordance with the provisions of Accounting Standards Codification (“ASC”) 740: | ||||||||
Eight months ended | Twelve months ended | ||||||||
March 23, | July 31, | ||||||||
2013 | 2012 | ||||||||
Tax benefit included in continuing operations | $ | (4,356 | ) | $ | (3,784 | ) | |||
Tax expense included in discontinued operations | 1,385 | 3,848 | |||||||
Tax expense included in gain on sale of discontinued operations | 4,387 | — | |||||||
Total tax expense continuing and discontinued operations | $ | 1,416 | $ | 64 | |||||
Reconciliation of the Company's Statutory Federal Income Tax and the Company's Actual Tax Provision | A reconciliation between the statutory federal income tax and the Company’s actual tax provision follows (in thousands): | ||||||||
Eight Months | Twelve | ||||||||
Ended March | Months Ended | ||||||||
23, 2013 | July 31, 2012 | ||||||||
Statutory federal income tax benefit | $ | (734 | ) | $ | (4,500 | ) | |||
State taxes, net of federal benefit | 38 | (407 | ) | ||||||
Valuation allowance | 2,040 | 4,545 | |||||||
Other | 72 | 426 | |||||||
Tax provision (benefit) | $ | 1,416 | $ | 64 | |||||
Net Deferred Tax Assets | The components of the Company’s net deferred tax assets at July 31, 2013 and 2012 are as follows (in thousands): | ||||||||
July 31, | |||||||||
2013 | 2012 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carryforwards | $ | 302,503 | $ | 288,381 | |||||
Credit carryforwards | 21,520 | 21,457 | |||||||
Restructuring and related accruals | 3,554 | 4,442 | |||||||
Accrued expenses | — | 810 | |||||||
Share based compensation expense | — | 5,035 | |||||||
Capital loss carryforwards | 1,181 | 783 | |||||||
Depreciation | 977 | 5,646 | |||||||
Other, net | 695 | 6,411 | |||||||
Total net deferred tax assets | 330,430 | 332,965 | |||||||
Valuation allowance | (330,430 | ) | (332,748 | ) | |||||
Net deferred tax assets | $ | — | $ | 217 | |||||
Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands): | ||||||||
2013 | 2012 | ||||||||
Beginning balance | $ | 1,673 | $ | 1,702 | |||||
Increase for current year | 99 | 137 | |||||||
Reductions related to expiration of statute of limitations | (30 | ) | (166 | ) | |||||
Ending balance | $ | 1,742 | $ | 1,673 | |||||
Provision For Income Taxes | |||||||||
Components of Provision for Income Taxes | The following table presents the components of our provision for income taxes (in thousands): | ||||||||
Eight Months Ended | Twelve Months Ended | ||||||||
March 23, | July 31, | ||||||||
2013 | 2012 | ||||||||
Current: | |||||||||
Federal | $ | 79 | $ | (30 | ) | ||||
State | 14 | 4 | |||||||
Foreign | 1,122 | 231 | |||||||
1,215 | 205 | ||||||||
Deferred: | |||||||||
Federal | — | — | |||||||
State | — | — | |||||||
Foreign | 201 | (141 | ) | ||||||
201 | (141 | ) | |||||||
Total tax provision (benefit) | $ | 1,416 | $ | 64 | |||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 12 Months Ended | ||||||||||||
Jul. 31, 2013 | |||||||||||||
The Fair Value of Each Option Grant | The fair value of each option grant was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions: | ||||||||||||
Year Ended | |||||||||||||
July 31, | |||||||||||||
2012 | |||||||||||||
Expected option term(1) | 5.8 years | ||||||||||||
Expected volatility factor (2) | 46.9 | % | |||||||||||
Risk-free interest rate (3) | 1.3 | % | |||||||||||
Expected annual dividend yield (4) | 0 | % | |||||||||||
-1 | Historical data on exercise patterns was the basis for estimating the expected life of an option. | ||||||||||||
-2 | The stock volatility for each grant was measured using the weighted average of historical daily price changes of the Company’s common stock over the most recent period equal to the expected option life of the grant, adjusted for activity which was not expected to occur in the future. | ||||||||||||
-3 | The risk-free interest rate for periods equal to the expected term of the share option was based on the U.S. Treasury yield curve in effect at the time of grant. | ||||||||||||
-4 | Excludes cash distributions that reduced additional paid in capital. | ||||||||||||
Share-Based Compensation Expense | The following table presents share-based compensation expense included in the Company’s consolidated statements of operations for the eight months ended March 23, 2013 and for the year ended July 31, 2012 (in thousands): | ||||||||||||
Eight Months Ended | Year Ended | ||||||||||||
March 23, | July 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Cost of product revenue | $ | — | $ | — | |||||||||
Cost of service revenue | — | — | |||||||||||
Research and development | 312 | 1,151 | |||||||||||
Sales and marketing | 126 | 259 | |||||||||||
General and administrative | 312 | 721 | |||||||||||
Discontinued operations | 525 | 1,658 | |||||||||||
Share-based compensation expense | $ | 1,275 | $ | 3,789 | |||||||||
Stock Option Activity | Stock option activity under all of the Company’s stock plans during fiscal year 2013 is summarized as follows: | ||||||||||||
Number of | Weighted | Weighted | |||||||||||
Shares | Average | Average | |||||||||||
Exercise | Contractual | ||||||||||||
Price | Term | ||||||||||||
(Years) | |||||||||||||
Outstanding at July 31, 2012 | 10,756,844 | $ | 3.97 | 6.03 | |||||||||
Options granted | — | — | |||||||||||
Options exercised | (2,800 | ) | 13.22 | ||||||||||
Options canceled | (10,754,044 | ) | 3.97 | ||||||||||
Outstanding at July 31, 2013 | — | $ | 0 | — | |||||||||
Options vested and expected to vest | — | $ | 0 | — | |||||||||
Options exercisable at end of period | — | $ | 0 | — | |||||||||
Restructuring_Charges_Tables
Restructuring Charges (Tables) | 12 Months Ended | ||||||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||||||
Roll-forward of Restructuring Accrual | The Company has completed its cash restructuring payments. A roll-forward of the restructuring accrual since July 31, 2011 is summarized below (in thousands): | ||||||||||||||||||||
Accrual | Additions | Adjustments | Payments | Accrual | |||||||||||||||||
Balance at | Balance at | ||||||||||||||||||||
July 31, | July 31, 2013 | ||||||||||||||||||||
2012 | |||||||||||||||||||||
Workforce reduction | $ | — | $ | 5,844 | $ | (94 | ) | $ | 5,750 | $ | — | ||||||||||
Contract termination costs | — | 411 | (67 | ) | 344 | — | |||||||||||||||
Total | $ | — | $ | 6,255 | $ | (161 | ) | $ | 6,094 | $ | — | ||||||||||
Accrual | Adjustments | Payments | Accrual | ||||||||||||||||||
Balance at | Balance at | ||||||||||||||||||||
July 31, | July 31, | ||||||||||||||||||||
2011 | 2012 | ||||||||||||||||||||
Workforce reduction | $ | 67 | $ | — | $ | 67 | $ | — | |||||||||||||
Facility consolidations | 227 | (227 | ) | — | — | ||||||||||||||||
Total | $ | 294 | $ | (227 | ) | $ | 67 | $ | — | ||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Assets and Liabilities Fair Value Measurements on Recurring Basis | Assets and liabilities of the Company measured at fair value on a recurring basis as of July 31, 2013, are summarized as follows (in thousands): | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Description | July 31, 2013 | Quoted Prices in | Significant Other | Significant | |||||||||||||
Active Markets | Observable Inputs | Unobservable Inputs | |||||||||||||||
for Identical | (Level 2) | (Level 3) | |||||||||||||||
Assets (Level 1) | |||||||||||||||||
Assets | |||||||||||||||||
Cash and Cash Equivalents | $ | 21,041 | $ | 21,041 | $ | — | $ | — | |||||||||
Total assets | $ | 21,041 | $ | 21,041 | $ | — | $ | — | |||||||||
Assets and liabilities of the Company measured at fair value on a recurring basis as of July 31, 2012, are summarized as follows (in thousands): | |||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Description | July 31, 2012 | Quoted Prices in | Significant Other | Significant | |||||||||||||
Active Markets | Observable Inputs | Unobservable Inputs | |||||||||||||||
for Identical | (Level 2) | (Level 3) | |||||||||||||||
Assets (Level 1) | |||||||||||||||||
Assets | |||||||||||||||||
Cash and Cash Equivalents | $ | 136,654 | $ | 136,654 | $ | — | $ | — | |||||||||
Government Obligations | 302,739 | 302,739 | — | — | |||||||||||||
Total assets | $ | 439,393 | $ | 439,393 | $ | — | $ | — | |||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Activity Related to Product Warranty Liability | The following table summarizes the activity related to the product warranty liability (in thousands): | ||||||||
Eight Months Ended | Twelve months ended | ||||||||
March 23, | July 31, | ||||||||
2013 | 2012 | ||||||||
Beginning balance | $ | 1,072 | $ | 1,140 | |||||
Accruals for warranties during the period | 82 | 238 | |||||||
Settlements | (81 | ) | (306 | ) | |||||
Reversal upon Asset Sale | (1,073 | ) | — | ||||||
Ending balance | $ | — | $ | 1,072 | |||||
Consolidated_Statement_of_Net_
Consolidated Statement of Net Assets (Liquidation Basis) (Detail) (USD $) | Jul. 31, 2013 | Mar. 23, 2013 | Jul. 31, 2012 | Jul. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Assets | ||||
Cash and cash equivalents | $19,824 | $136,654 | $60,765 | |
Liabilities and Net Assets | ||||
Reserve for estimated costs during the Dissolution period | 8,336 | 14,745 | ||
Corporate Liquidity | ||||
Assets | ||||
Cash and cash equivalents | 21,041 | |||
Land | 2,948 | |||
Other assets | 100 | |||
Total assets | 24,089 | |||
Liabilities and Net Assets | ||||
Accrued expenses | 133 | |||
Reserve for estimated costs during the Dissolution period | 8,336 | |||
Other liabilities | 1,983 | |||
Total liabilities | 10,452 | |||
Net assets in liquidation | $13,637 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Net Assets (Liquidation Basis) (Detail) (USD $) | Mar. 23, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 |
In Thousands, unless otherwise specified | Corporate Liquidity | Corporate Liquidity | Corporate Liquidity | Corporate Liquidity | Corporate Liquidity | |||
Land | Reduction in estimated net realizable value for other assets | Forfeited deposit | Reduction in estimated costs during the Dissolution period | |||||
Stockholders' equity as of March 23, 2013 | ($27,006) | ($442,231) | ($448,757) | $27,006 | ||||
Effects of adopting the liquidation basis of accounting as of March 24, 2013: | ||||||||
Initial adjustment of assets to estimated net realizable value | 2,883 | |||||||
Initial adjustment of liabilities to estimated settlement amounts | -14,745 | |||||||
Net assets in liquidation as of March 24, 2013 | 15,144 | |||||||
Change in estimated net realizable value of assets and liabilities | -552 | -2,700 | 125 | 1,620 | ||||
Net assets in liquidation as of July 31, 2013 | $13,637 |
Description_of_Business_Additi
Description of Business - Additional Information (Detail) (USD $) | Jul. 31, 2013 | Mar. 07, 2013 | Jul. 31, 2012 | Apr. 22, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 |
Patent | Asset Sale Agreement | Tyngsborough Massachusetts | Tyngsborough Massachusetts | Assets (the "Asset Sale") primarily related to the Intelligent Bandwidth Management Business | |||
acre | Termination of Restated Purchase and Sale Agreement with Tyngsborough Commons, LLC | Asset Sale Agreement | |||||
acre | |||||||
Entity Information [Line Items] | |||||||
Sale of facilities and assets, value | $3,500,000 | $18,750,000 | |||||
Total dispute amount under asset sale agreement | 1,400,000 | ||||||
Common stock, par value | $0.00 | $0.00 | |||||
Ownership of land | 102 | 102 | |||||
Undeveloped land, expected date to complete sale | 30-Aug-13 | ||||||
Undeveloped land, additional deposit payment for extension to complete sale | 100,000 | ||||||
Undeveloped land, expected period of extension to complete sale | 45 days | ||||||
Undeveloped land, retained as liquidated damages | $125,000 | ||||||
Number of United States patents received | 43 | ||||||
Number of pending United States patent applications | 7 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 8 Months Ended | 12 Months Ended | 8 Months Ended | 12 Months Ended | 8 Months Ended | 12 Months Ended | 8 Months Ended | 12 Months Ended | ||||
Share data in Millions, unless otherwise specified | Mar. 23, 2013 | Jul. 31, 2013 | Mar. 23, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | Mar. 23, 2013 | Jul. 31, 2012 | Mar. 23, 2013 | Jul. 31, 2012 | Mar. 23, 2013 | Jul. 31, 2012 | Apr. 22, 2013 |
U S | U S | Korea | U K | All Other Countries | All Other Countries | Asset Sale Agreement | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Cash distribution to stockholders | $413,300,000 | $413,302,000 | ||||||||||
Total dispute amount under asset sale agreement | 1,400,000 | |||||||||||
Accrued warranty costs | 2,800,000 | 1,072,000 | 1,140,000 | |||||||||
Reduction in accrual for estimated costs | $1,600,000 | |||||||||||
Options to purchase, shares | 9.6 | 10.9 | ||||||||||
Percentage of Company revenue | 80.00% | 79.00% | 5.00% | 6.00% | 15.00% | 15.00% |
Initial_Adjustment_of_Assets_t
Initial Adjustment of Assets to Estimated Net Realizable Value (Detail) (USD $) | 4 Months Ended |
In Thousands, unless otherwise specified | Jul. 31, 2013 |
Adjustments For Change In Accounting Principle [Line Items] | |
Write up (down) of assets | $2,883 |
Adjustments To Fair Value | |
Adjustments For Change In Accounting Principle [Line Items] | |
Write up (down) of assets | 3,393 |
Asset Write Down | |
Adjustments For Change In Accounting Principle [Line Items] | |
Write up (down) of assets | ($510) |
Accrued_Costs_Expected_to_be_I
Accrued Costs Expected to be Incurred in Liquidation (Detail) (USD $) | Jul. 31, 2013 | Mar. 23, 2013 | Jul. 31, 2011 |
In Thousands, unless otherwise specified | |||
Accrued Expenses [Line Items] | |||
Restructuring | $3,309 | $294 | |
Compensation | 2,396 | 3,539 | |
Professional fees | 2,637 | 3,672 | |
Other expenses associated with wind down activities | 1,970 | 2,725 | |
Insurance | 1,333 | 1,500 | |
Reserve for estimated costs during the Dissolution period | $8,336 | $14,745 |
Reserve_for_Estimated_Costs_De
Reserve for Estimated Costs (Detail) (USD $) | Jul. 31, 2013 | Mar. 23, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Expenses [Line Items] | ||
Compensation | $2,396 | $3,539 |
Professional fees | 2,637 | 3,672 |
Other expenses associated with wind down activities | 1,970 | 2,725 |
Insurance | 1,333 | 1,500 |
Reserve for estimated costs during the Dissolution period | $8,336 | $14,745 |
Aggregate_Cash_and_Cash_Equiva
Aggregate Cash and Cash Equivalents, Short and Long Term Investments (Detail) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $21,041 | $439,349 |
Gross Unrealized Gains | 66 | |
Gross Unrealized Losses | -22 | |
Fair Market Value | 21,041 | 439,393 |
Cash and cash equivalents | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 21,041 | 136,654 |
Fair Market Value | 21,041 | 136,654 |
Government securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 302,695 | |
Gross Unrealized Gains | 66 | |
Gross Unrealized Losses | -22 | |
Fair Market Value | $302,739 |
Estimated_Useful_Lives_of_Asse
Estimated Useful Lives of Assets (Detail) | 12 Months Ended |
Jul. 31, 2013 | |
Computer And Telecommunications Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property Plant and Equipment Useful Life | 2 years |
Computer And Telecommunications Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property Plant and Equipment Useful Life | 3 years |
Computer Software | |
Property, Plant and Equipment [Line Items] | |
Property Plant and Equipment Useful Life | 3 years |
Furniture And Office Equipment | |
Property, Plant and Equipment [Line Items] | |
Property Plant and Equipment Useful Life | 5 years |
Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Leasehold improvements | Shorter of lease term or useful life of asset |
Summary_of_Allowance_for_Doubt
Summary of Allowance for Doubtful Accounts (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Jul. 31, 2013 | Jul. 31, 2012 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning balance | $42 | $72 |
Adjustment | -42 | -30 |
Write off | ||
Ending balance | $42 |
Computation_of_Basic_and_Dilut
Computation of Basic and Diluted Net loss Per Share - Additional Information (Detail) (USD $) | 8 Months Ended | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 23, 2013 | Mar. 23, 2013 | Jul. 31, 2012 |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net loss | ($3,512) | ($3,512) | ($12,924) |
Denominator: | |||
Weighted-average shares of common stock outstanding | 28,882 | 28,807 | |
Weighted-average shares subject to repurchase | |||
Shares used in per-share calculation-basic | 28,882 | 28,807 | |
Weighted-average shares of common stock outstanding | 28,882 | 28,807 | |
Weighted common stock equivalents | |||
Shares used in per-share calculation-diluted | 28,882 | 28,807 | |
Net loss per share: | |||
Basic | ($0.12) | ($0.45) | |
Diluted | ($0.12) | ($0.45) |
Discontinued_Operations_Additi
Discontinued Operations - Additional Information (Detail) (USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Jan. 31, 2013 |
Discontinued Operations [Line Items] | |
Sale of facilities and assets, value | $18.75 |
Financial_Results_of_Discontin
Financial Results of Discontinued Operation (Detail) (USD $) | 8 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 23, 2013 | Jul. 31, 2012 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenue | $22,266 | $57,285 |
Cost of revenue | 8,802 | 24,106 |
Operating expenses | 14,452 | 23,044 |
Income tax expense | 1,385 | 3,848 |
Net income (loss) from discontinued operations, net of tax | -2,373 | 6,287 |
Gain on sale of discontinued operations, net of tax | 7,084 | |
Total discontinued operations | $4,711 | $6,287 |
Inventories_Detail
Inventories (Detail) (USD $) | Jul. 31, 2012 |
In Thousands, unless otherwise specified | |
Schedule Of Inventory [Line Items] | |
Raw materials | $3,462 |
Work in process | 1,082 |
Finished goods | 3,925 |
Total | $8,469 |
Property_and_Equipment_Detail
Property and Equipment (Detail) (USD $) | Jul. 31, 2012 |
In Thousands, unless otherwise specified | |
Property, Plant and Equipment [Line Items] | |
Property Plant and Equipment | $78,496 |
Less accumulated depreciation | -74,220 |
Total | 4,276 |
Computer Software And Equipment | |
Property, Plant and Equipment [Line Items] | |
Property Plant and Equipment | 69,517 |
Land | |
Property, Plant and Equipment [Line Items] | |
Property Plant and Equipment | 3,000 |
Furniture and Office Equipment | |
Property, Plant and Equipment [Line Items] | |
Property Plant and Equipment | 775 |
Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Property Plant and Equipment | $5,204 |
Property_Plant_and_Equipment_A
Property Plant and Equipment - Additional Information (Detail) (USD $) | 8 Months Ended | 12 Months Ended | 12 Months Ended | ||
Mar. 23, 2013 | Jul. 31, 2012 | Jul. 31, 2012 | Jul. 31, 2013 | Jul. 31, 2013 | |
Land | Tyngsborough Massachusetts | Tyngsborough Massachusetts | |||
acre | Land | ||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation expense | $900,000 | $2,600,000 | |||
Asset impairment charge | 790,000 | ||||
Ownership of land | 102 | ||||
Property Plant and Equipment | $78,496,000 | $3,000,000 | $2,900,000 |
Commitments_Additional_Informa
Commitments - Additional Information (Detail) (USD $) | 8 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Mar. 23, 2013 | Jul. 31, 2012 |
Commitments [Line Items] | ||
Rent expense under operating leases | $1.10 | $2 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 8 Months Ended | 12 Months Ended | ||
Mar. 23, 2013 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | |
Schedule Of Income Taxes [Line Items] | ||||
Income tax expense | $1,416,000 | $64,000 | ||
Tax benefit included in continuing operations | 4,356,000 | 3,784,000 | ||
Deferred tax assets, valuation allowance | 330,430,000 | 332,748,000 | ||
Net operating loss carry forwards, stock option deductions | 125,000,000 | |||
Benefits of stock option deductions | 47,800,000 | |||
Net operating loss carry forwards related to exercise of stock option | 7,100,000 | |||
Total unrecognized tax benefit | 1,742,000 | 1,673,000 | 1,702,000 | |
Unrecognized tax benefit uncertain tax position | 500,000 | 500,000 | ||
Federal | ||||
Schedule Of Income Taxes [Line Items] | ||||
Net operating loss carry forwards | 855,100,000 | |||
Operating Loss Carry forwards Expiration Year | 2033 | |||
Research and development credit carry forwards | 11,300,000 | |||
Research and Development Credit Carry forwards Expiration Year | 2020 | |||
State and Local Jurisdiction | ||||
Schedule Of Income Taxes [Line Items] | ||||
Net operating loss carry forwards | 180,300,000 | |||
Operating Loss Carry forwards Expiration Year | 2033 | |||
Research and development credit carry forwards | $10,200,000 | |||
Research and Development Credit Carry forwards Expiration Year | 2015 |
Income_Taxes_Detail
Income Taxes (Detail) (USD $) | 8 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 23, 2013 | Jul. 31, 2012 |
Schedule Of Income Taxes [Line Items] | ||
Tax benefit included in continuing operations | ($4,356) | ($3,784) |
Tax expense included in discontinued operations | 1,385 | 3,848 |
Tax expense included in gain on sale of discontinued operations | 4,387 | |
Tax provision (benefit) | $1,416 | $64 |
Components_of_Provision_for_In
Components of Provision for Income Taxes (Detail) (USD $) | 8 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 23, 2013 | Jul. 31, 2012 |
Current: | ||
Federal | $79 | ($30) |
State | 14 | 4 |
Foreign | 1,122 | 231 |
Total current provision (benefit) | 1,215 | 205 |
Deferred: | ||
Federal | ||
State | ||
Foreign | 201 | -141 |
Total deferred provision (benefit) | 201 | -141 |
Tax provision (benefit) | $1,416 | $64 |
Reconciliation_of_Statutory_Fe
Reconciliation of Statutory Federal Income Tax and Actual Tax Provision (Detail) (USD $) | 8 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 23, 2013 | Jul. 31, 2012 |
Income Tax Reconciliation [Line Items] | ||
Statutory federal income tax benefit | ($734) | ($4,500) |
State taxes, net of federal benefit | 38 | -407 |
Valuation allowance | 2,040 | 4,545 |
Other | 72 | 426 |
Tax provision (benefit) | $1,416 | $64 |
Net_Deferred_Tax_Assets_Detail
Net Deferred Tax Assets (Detail) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Net operating loss carryforwards | $302,503 | $288,381 |
Credit carryforwards | 21,520 | 21,457 |
Restructuring and related accruals | 3,554 | 4,442 |
Accrued expenses | 810 | |
Share based compensation expense | 5,035 | |
Capital loss carryforwards | 1,181 | 783 |
Depreciation | 977 | 5,646 |
Other, net | 695 | 6,411 |
Total net deferred tax assets | 330,430 | 332,965 |
Valuation allowance | -330,430 | -332,748 |
Net deferred tax assets | $217 |
Reconciliation_of_Beginning_an
Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Jul. 31, 2013 | Jul. 31, 2012 |
Schedule Of Income Taxes [Line Items] | ||
Beginning balance | $1,673 | $1,702 |
Increase for current year | 99 | 137 |
Reductions related to expiration of statute of limitations | -30 | -166 |
Ending balance | $1,742 | $1,673 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) | 12 Months Ended | |
In Thousands, unless otherwise specified | Jul. 31, 2013 | Jul. 31, 2012 |
Class of Stock [Line Items] | ||
Common stock, shares authorized | 250,000,000 | 250,000 |
Common stock, voting rights | One vote for each share held |
Fair_Value_of_Option_Grant_Est
Fair Value of Option Grant Estimated on Grant Date Using Black-Scholes Option-Pricing Model (Detail) | 12 Months Ended | |
Jul. 31, 2012 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected option term | 5 years 9 months 18 days | [1] |
Expected volatility factor | 46.90% | [2] |
Risk-free interest rate | 1.30% | [3] |
Expected annual dividend yield | 0.00% | [4] |
[1] | Historical data on exercise patterns was the basis for estimating the expected life of an option. | |
[2] | The stock volatility for each grant was measured using the weighted average of historical daily price changes of the Company's common stock over the most recent period equal to the expected option life of the grant, adjusted for activity which was not expected to occur in the future. | |
[3] | The risk-free interest rate for periods equal to the expected term of the share option was based on the U.S. Treasury yield curve in effect at the time of grant. | |
[4] | Excludes cash distributions that reduced additional paid in capital. |
ShareBased_Compensation_Expens
Share-Based Compensation Expense (Detail) (USD $) | 8 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 23, 2013 | Jul. 31, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $1,275 | $3,789 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 312 | 1,151 |
Sales and marketing | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 126 | 259 |
General and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 312 | 721 |
Discontinued Operation | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $525 | $1,658 |
Stock_Option_Activity_Detail
Stock Option Activity (Detail) (USD $) | 12 Months Ended |
Jul. 31, 2013 | |
Number of Shares | |
Beginning balance, Number of Shares | 10,756,844 |
Options granted, Number of Shares | |
Options exercised, Number of Shares | -2,800 |
Options cancelled, Number of Shares | -10,754,044 |
Options vested and expected to vest | |
Options exercisable as of March 23, 2013 | |
Weighted-Average Exercise Price | |
Beginning balance, Weighted Average Exercise Price | $3.97 |
Options granted, Weighted Average Exercise Price | |
Options exercised, Weighted Average Exercise Price | $13.22 |
Options cancelled, Weighted Average Exercise Price | $3.97 |
Ending balance, Weighted Average Exercise Price | $0 |
Options vested and expected to vest, Weighted Average Exercise Price | $0 |
Options exercisable as of March 23, 2013 | $0 |
Weighted-Average Remaining Contractual Term (years) | |
Options Outstanding at July 31, 2012, Weighted Average Contractual Term (Years) | 6 years 11 days |
ShareBased_Compensation_Additi
Share-Based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value of stock options granted on dates of grant | 8.21 | |
Intrinsic value of stock options exercised | $5,000 | $300,000 |
Total cash received from employees as a result of employee stock option exercises | $38,000 | $2,400,000 |
Restructuring_Charges_Addition
Restructuring Charges - Additional Information (Detail) (USD $) | 8 Months Ended | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 23, 2013 | Apr. 27, 2013 | Jan. 26, 2013 | Oct. 27, 2012 | Oct. 27, 2012 |
Workforce reduction | Workforce reduction | Workforce reduction | Contract termination costs | ||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $2,946 | $4,000 | $300 | $1,600 | $400 |
Rollforward_of_Restructuring_A
Roll-forward of Restructuring Accrual (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jul. 31, 2013 | Jul. 31, 2012 | Mar. 23, 2013 |
Restructuring Cost and Reserve [Line Items] | |||
Accrual Balance, Beginning | $294 | $3,309 | |
Additions | 6,255 | ||
Adjustments | -161 | -227 | |
Payments | 6,094 | 67 | |
Accrual Balance, Ending | |||
Workforce reduction | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrual Balance, Beginning | 67 | ||
Additions | 5,844 | ||
Adjustments | -94 | ||
Payments | 5,750 | 67 | |
Accrual Balance, Ending | |||
Contract termination costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Additions | 411 | ||
Adjustments | -67 | ||
Payments | 344 | ||
Accrual Balance, Ending | |||
Facility consolidations | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrual Balance, Beginning | 227 | ||
Adjustments | -227 | ||
Accrual Balance, Ending |
Assets_and_Liabilities_Fair_Va
Assets and Liabilities Fair Value Measurements on Recurring Basis (Detail) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Measurements, Recurring | ||
Assets | ||
Cash and Cash Equivalents | $21,041 | $136,654 |
Government Obligations | 302,739 | |
Total assets | 21,041 | 439,393 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash and Cash Equivalents | 21,041 | 136,654 |
Government Obligations | 302,739 | 302,739 |
Total assets | $21,041 | $439,393 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (Quoted Prices in Active Markets for Identical Assets (Level 1), USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
In Thousands, unless otherwise specified | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | $21,041 | $136,654 |
Government Obligations | $302,739 | $302,739 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended |
31-May-13 | Jul. 31, 2013 | |
Commitment And Contingencies [Line Items] | ||
Damages sought by the plaintiff | $894,598 | |
Cash amount to be excluded from assets Sale under the terms of the agreement | 345,932 | |
Decrease in the calculation of net working capital | 1,100,000 | |
Asset purchase and sale agreement expiration period | 45 days | |
Collection from Marlin Parties with respect to subsidiary in Sycamore Shanghai's operation and working capital | 1,700,000 | |
Asset sale agreement, maximum indemnification liability | $2,812,500 |
Activity_Related_to_Product_Wa
Activity Related to Product Warranty Liability (Detail) (USD $) | 8 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 23, 2013 | Jul. 31, 2012 | Jul. 31, 2013 |
Product Warranty [Line Items] | |||
Beginning balance | $1,072 | $1,140 | $2,800 |
Accruals for warranties during the period | 82 | 238 | |
Settlements | -81 | -306 | |
Reversal upon Asset Sale | -1,073 | ||
Ending balance | $1,072 | $2,800 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (Tyngsborough Massachusetts, Termination of Restated Purchase and Sale Agreement with Tyngsborough Commons, LLC, USD $) | 12 Months Ended | 1 Months Ended |
Jul. 31, 2013 | Sep. 05, 2013 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Sale of facilities and assets, value | $3,500,000 | $3.50 |
Undeveloped land, expected date to complete sale | 30-Aug-13 | 30-Aug-13 |
Undeveloped land, expected period of extension to complete sale | 45 days | 45 days |
Undeveloped land, additional deposit payment for extension to complete sale | 100,000 | 100,000 |
Undeveloped land, retained as liquidated damages | $125,000 | $125,000 |