Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 29, 2013 |
Accounting Policies [Abstract] | ' |
Business | ' |
Business |
InvenSense, Inc. (“the Company”) was incorporated in California in June 2003 and reincorporated in Delaware in January 2004. The Company designs, develops, markets and sells MEMS sensors, such as accelerometers, gyroscopes and microphones for consumer electronics, and is dedicated to bringing the best-in-class size, performance and cost solutions to market. Targeting applications in smartphones and tablets, console and portable video gaming devices, digital still and video cameras, smart TVs (including digital set-top boxes, televisions and multi-media HDDs), navigation devices, toys, and health and fitness accessories, the Company delivers leading solutions based on its advanced multi-axis technology. |
These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto for the fiscal year ended March 31, 2013 included in the Company’s Annual Report on Form 10-K filed on June 14, 2013 with the Securities and Exchange Commission (“SEC”). No material changes have been made to the Company’s significant accounting policies since the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2013. |
Certain Significant Business Risks and Uncertainties | ' |
Certain Significant Business Risks and Uncertainties |
The Company participates in the high-technology industry and believes that adverse changes in any of the following areas could have a material effect on the Company’s future financial position, results of operations, or cash flows: reliance on a limited number of primary customers to support the Company’s revenue generating activities; advances and trends in new technologies and industry standards; market acceptance of the Company’s products; development of sales channels; strategic relationships, including key component suppliers; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; and the Company’s ability to attract and retain employees necessary to support its growth. |
Fiscal Year | ' |
Fiscal Year |
The Company’s fiscal year is a 52 or 53 week period ending on the Sunday closest to March 31. The Company’s most recent completed fiscal year (“Fiscal 2013”) ended on March 31, 2013 (“March 2013”). The third fiscal quarter in each of the two most recent fiscal years ended on December 29, 2013 (“three months ended December 29, 2013” or “December 2013”) and December 30, 2012 (“three months ended December 30, 2012” or “December 2012”), respectively, and each third fiscal quarter period included 13 weeks. |
Basis of Presentation | ' |
Basis of Presentation |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. |
The condensed consolidated balance sheet as of March 31, 2013, included herein was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. The unaudited interim condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary to present fairly the Company’s financial position, results of operations, comprehensive income and cash flows for the interim periods. The results of operations for the period ended December 29, 2013 is not necessarily indicative of the results to be expected for the fiscal year ending March 30, 2014 or for any future year or interim period. |
Basis of Consolidation | ' |
Basis of Consolidation |
All intercompany transactions and balances have been eliminated upon consolidation. The functional currency of each of the Company’s subsidiaries is the U.S. dollar. Foreign currency gains or losses are recorded as “Other income (expense), net” in the condensed consolidated statements of income. |
Use of Estimates | ' |
Use of Estimates |
The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Significant estimates included in the condensed consolidated financial statements and related notes include income taxes, inventory valuation, stock-based compensation, loss contingencies and warranty reserves. These estimates are based upon information available as of the date of the consolidated financial statements, and actual results could differ from those estimates. |
Concentration of Credit Risk | ' |
Concentration of Credit Risk |
At December 29, 2013, three customers each accounted for 25%, 23% and 12% of total accounts receivable. At December 30, 2012, four customers each accounted for 17%, 16%, 14% and 14% of total accounts receivable. |
For the three months ended December 29, 2013, three customers each accounted for 32%, 16% and 10% of total net revenue. For the nine months ended December 29, 2013, one customer accounted for 32% of total net revenue. For the three months ended December 30, 2012, three customers each accounted for 24%, 22% and 10% of total net revenue. For the nine months ended December 30, 2012, three customers each accounted for 23%, 20% and 13% of total net revenue. |
Warranty | ' |
Warranty |
The Company’s warranty agreements are contract and component specific and can be up to three years for selected components. The Company’s accrual for anticipated warranty costs has declined, primarily due to a decline in the historical volume of product returned under the warranty program. The accrual also includes management’s judgment regarding anticipated rates of warranty claims and associated repair costs. The following table summarizes the activity related to the product warranty liability during the nine months ended December 29, 2013 and December 30, 2012: |
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| | Nine months Ended | | | | | | | | | |
| | December 29, 2013 | | | December 30, 2012 | | | | | | | | | |
| | (in thousands) | | | | | | | | | |
Beginning balance | | $ | 123 | | | $ | 361 | | | | | | | | | |
(Decrease) increase in provision for warranty | | | (4 | ) | | | (199 | ) | | | | | | | | |
Less: actual warranty costs | | | (30 | ) | | | (32 | ) | | | | | | | | |
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Ending balance | | $ | 89 | | | $ | 130 | | | | | | | | | |
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Net Income (Loss) Per Share | ' |
Net Income (Loss) Per Share |
Basic net income (loss) per share is computed by dividing net income by the weighted average number of shares outstanding during the period, which excludes dilutive unvested restricted stock. |
Diluted net income (loss) per share is computed by dividing net income by the weighted average number of shares outstanding, including unvested restricted stock, certain warrants to purchase common stock and potential dilutive shares from the dilutive effect of outstanding stock options using the treasury stock method. Diluted net loss per share is equal to basic net loss per share as potentially dilutive securities are anit-dilutive due to the net loss. |
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The following table presents the calculation of basic and diluted net income per share: |
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| | Three Months Ended | | | Nine months Ended | |
| | December 29, 2013 | | | December 30, 2012 | | | December 29, 2013 | | | December 30, 2012 | |
| | (in thousands, except per share data) | |
Numerator: | | | | | | | | |
Basic and Diluted: | | | | | | | | |
Net income (loss) | | $ | (12,179 | ) | | $ | 16,818 | | | $ | 11,751 | | | $ | 38,133 | |
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Denominator: | | | | | | | | |
Basic shares: | | | | | | | | |
Weighted average shares used in computing basic net income (loss) per share | | | 87,047 | | | | 83,218 | | | | 86,145 | | | | 82,280 | |
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Diluted shares: | | | | | | | | |
Weighted average shares used in computing basic net income (loss) per share | | | 87,047 | | | | 83,218 | | | | 86,145 | | | | 82,280 | |
Effect of potentially dilutive securities: | | | | | | | | |
Stock options and unvested restricted stock | | | — | | | | 3,964 | | | | 3,165 | | | | 4,765 | |
Common stock warrants | | | — | | | | 168 | | | | 54 | | | | 187 | |
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Weighted average shares used in computing diluted net income (loss) per share | | | 87,047 | | | | 87,350 | | | | 89,364 | | | | 87,232 | |
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Net income (loss) per share: | | | | | | | | |
Basic | | $ | (0.14 | ) | | $ | 0.2 | | | $ | 0.14 | | | $ | 0.46 | |
Diluted | | $ | (0.14 | ) | | $ | 0.19 | | | $ | 0.13 | | | $ | 0.44 | |
The following summarizes the potentially dilutive securities outstanding at the end of each period that were excluded from the computation of diluted net income (loss) per share for the periods presented as their effect would have been antidilutive: |
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| | Three Months Ended | | | Nine months Ended | |
| | December 29, | | | December 30, | | | December 29, | | | December 30, | |
2013 | 2012 | 2013 | 2012 |
| | (in thousands) | |
Employee stock options | | | 9,016 | | | | 3,423 | | | | 2,922 | | | | 4,004 | |
Unvested restricted stock units | | | 2,369 | | | | 590 | | | | 830 | | | | 152 | |
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Total antidilutive securities | | | 11,385 | | | | 4,013 | | | | 3,752 | | | | 4,156 | |
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Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements |
In July 2013, the FASB issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” that will require the presentation of certain unrecognized tax benefits as reductions to deferred tax assets rather than as liabilities in our Condensed Consolidated Balance Sheets when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This standard is effective for fiscal years beginning on or after December 15, 2013, and for interim periods within those fiscal years which will be the Company’s fiscal year 2015. The Company is currently evaluating the impact of this new standard on its Condensed Consolidated Financial Statements. |
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In February 2013, the FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” which adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. ASU No. 2011-02 became effective for fiscal years, and interim periods within those years, beginning after December 15, 2012, which is the Company’s fiscal interim period ended June 30, 2013 of fiscal year ending March 30, 2014, and the adoption did not impact the Company’s financial condition or results of operations. |
Fair Value Measurements | ' |
The Company applies the provisions of ASC 820-10, “Fair Value Measurements”. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820-10 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The standard describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value. The inputs for the first two levels are considered observable and the last is unobservable and include the following: |
Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; |
Level 2—Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or |
Level 3—Unobservable inputs in which there is little or no market data, and as a result, prices or valuation techniques are employed that require inputs that are significant to the fair value measurement. |
Compensation-Stock Compensation | ' |
The Company applies the provisions of ASC 718-10 “Compensation—Stock Compensation” which establishes the accounting for stock-based awards based on the fair value of the award measured at the grant date. Accordingly, stock-based compensation cost is recognized in the condensed consolidated statements of operations as a component of both cost of revenues and operating expenses over the requisite service period. ASC 718-10 requires tax benefits in excess of compensation cost to be reported as a financing cash flow rather than as a reduction of taxes paid. The determination of the fair value of stock-based payment awards on the date of grant using the Black-Scholes option pricing model is affected by the volatilities of a peer group of companies based on industry, stage of life cycle, size and financial leverage, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. Variables to be determined include expected volatility, estimated term and risk-free interest rate. |