Balance Sheet Information | 9 Months Ended |
Nov. 30, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Information | 2. Balance Sheet Information |
Cash, Cash Equivalents and Marketable Securities |
The following table summarizes our cash, cash equivalents and marketable securities (in thousands): |
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| | November 30, | | | February 28, | | | | | | | | | |
2014 | 2014 | | | | | | | | |
Cash and cash equivalents: | | | | | | | | | | | | | | | | |
Cash | | $ | 76,446 | | | $ | 41,331 | | | | | | | | | |
Money market funds | | | 83,449 | | | | 94,548 | | | | | | | | | |
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| | $ | 159,895 | | | $ | 135,879 | | | | | | | | | |
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Marketable securities: | | | | | | | | | | | | | | | | |
Asset-backed securities | | $ | 3,660 | | | $ | — | | | | | | | | | |
Corporate debt securities | | | 5,179 | | | | — | | | | | | | | | |
Foreign government bonds | | | 201 | | | | — | | | | | | | | | |
Mortgage-backed securities | | | 2,420 | | | | — | | | | | | | | | |
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Total | | $ | 11,460 | | | $ | — | | | | | | | | | |
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The gross unrealized gains or losses on our marketable securities as of November 30, 2014 were not significant. In addition, there were no securities in a continuous loss position for 12 months or longer as of November 30, 2014. |
We periodically review our marketable securities for other-than-temporary impairment. We consider factors such as the near-term prospects of the investment in relation to the duration, severity and reason for the decline in value, the potential recovery period and our intent to sell. For marketable debt securities, we also consider whether (i) it is more likely than not that we will be required to sell the securities before recovery of their amortized cost bases and (ii) the amortized cost bases cannot be recovered as a result of credit losses. We do not intend to sell the investments and it is not more likely that we would be required to sell the investments before recovery of their amortized cost bases. As of November 30, 2014, we have not recognized any other-than-temporary impairment loss. |
The following table classifies our marketable debt securities by contractual maturities (in thousands): |
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| | As of | | | | | | | | | | | | | |
November 30, | | | | | | | | | | | | |
2014 | | | | | | | | | | | | |
Due in 1 year | | $ | 813 | | | | | | | | | | | | | |
Due in 1 year through 5 years | | | 7,207 | | | | | | | | | | | | | |
Due in 5 years through 10 years | | | 1,416 | | | | | | | | | | | | | |
Due after 10 years | | | 2,024 | | | | | | | | | | | | | |
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| | $ | 11,460 | | | | | | | | | | | | | |
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Fair Value Measurements |
We determine fair value based on the 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. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value: |
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Level 1: | | Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. | | | | | | | | | | | | | | |
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Level 2: | | Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. | | | | | | | | | | | | | | |
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Level 3: | | Inputs are unobservable inputs based on our assumptions. | | | | | | | | | | | | | | |
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Cash equivalents are classified within Level 1 because they are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Marketable securities are classified within Level 2 if the investments are valued using model driven valuations which use observable inputs such as quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Marketable securities are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models. |
We estimated the fair value of our Level 3 contingent consideration liability based on a weighted probability assessment of achieving the milestones associated with the contingent consideration related to the acquisition of C2C Systems Limited (“C2C”). Significant increases (decreases) in the probability assumptions in isolation would result in a significantly higher (lower) fair value measurement. In developing these estimates, we considered unobservable inputs that are supported by little or no market activity and reflect our own assumptions. As of November 30, 2014, the change in fair value of our Level 3 contingent consideration liability was not material. Refer to Note 3 to Condensed Consolidated Financial Statements for further information. |
The following table summarizes, for assets or liabilities measured at fair value, the respective classification by level of input within the fair value hierarchy (in thousands): |
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| | November 30, 2014 | |
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Cash equivalents: | | | | | | | | | | | | | | | | |
Money market funds | | $ | 83,449 | | | $ | — | | | $ | — | | | $ | 83,449 | |
Marketable securities: | | | | | | | | | | | | | | | | |
Asset-backed securities | | $ | — | | | $ | 3,660 | | | $ | — | | | $ | 3,660 | |
Corporate debt securities | | $ | — | | | $ | 5,179 | | | $ | — | | | $ | 5,179 | |
Foreign government bonds | | $ | — | | | $ | 201 | | | $ | — | | | $ | 201 | |
Mortgage-backed securities | | $ | — | | | $ | 2,420 | | | $ | — | | | $ | 2,420 | |
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Other accrued liabilities (current): | | | | | | | | | | | | | | | | |
Contingent consideration liability | | $ | — | | | $ | — | | | $ | 1,035 | | | $ | 1,035 | |
Other long-term liabilities: | | | | | | | | | | | | | | | | |
Contingent consideration liability | | $ | — | | | $ | — | | | $ | 1,889 | | | $ | 1,889 | |
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| | 28-Feb-14 | |
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Cash equivalents: | | | | | | | | | | | | | | | | |
Money market funds | | $ | 94,548 | | | $ | — | | | $ | — | | | $ | 94,548 | |
Inventories, Net |
Inventories, net, consisted of the following (in thousands): |
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| | November 30, | | | February 28, | | | | | | | | | |
2014 | 2014 | | | | | | | | |
Raw materials | | $ | 2,218 | | | $ | 3,038 | | | | | | | | | |
Finished goods | | | 3,774 | | | | 3,759 | | | | | | | | | |
Reserves | | | (855 | ) | | | (1,149 | ) | | | | | | | | |
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| | $ | 5,137 | | | $ | 5,648 | | | | | | | | | |
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Deferred Costs |
Deferred costs consisted of the following (in thousands): |
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| | November 30, | | | February 28, | | | | | | | | | |
2014 | 2014 | | | | | | | | |
Appliance | | $ | 39,757 | | | $ | 35,000 | | | | | | | | | |
Commissions | | | 16,357 | | | | 15,279 | | | | | | | | | |
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| | $ | 56,114 | | | $ | 50,279 | | | | | | | | | |
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Property and Equipment, Net |
Property and equipment, net, consisted of the following (in thousands): |
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| | November 30, | | | February 28, | | | | | | | | | |
2014 | 2014 | | | | | | | | |
Land | | $ | 6,503 | | | $ | 5,100 | | | | | | | | | |
Building | | | 6,549 | | | | 6,549 | | | | | | | | | |
Computer hardware and software | | | 16,012 | | | | 11,711 | | | | | | | | | |
Vehicles, machinery and equipment | | | 3,402 | | | | 2,462 | | | | | | | | | |
Leasehold improvements | | | 2,994 | | | | 2,560 | | | | | | | | | |
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| | | 35,460 | | | | 28,382 | | | | | | | | | |
Accumulated depreciation and amortization | | | (11,132 | ) | | | (7,824 | ) | | | | | | | | |
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| | $ | 24,328 | | | $ | 20,558 | | | | | | | | | |
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Depreciation and amortization expense related to property and equipment was $1.4 million and $3.7 million for the three and nine months ended November 30, 2014, respectively, and $1.1 million and $2.7 million for the three and nine months ended November 30, 2013, respectively. |
Investment in Non-marketable Equity Security |
In October 2011, we acquired stock in a privately held company for $750,000, which represented an ownership interest of approximately 24%. In October 2014, we acquired additional shares of stock in the privately held company for $500,000 to maintain our approximately 24% ownership interest. Under the equity method of accounting, we recognize our proportional share of earnings and losses of the investee in our financial statements and adjust the carrying amount of our investment accordingly. |
For each of the three and nine months ended November 30, 2014 and 2013, our proportionate share of the investee’s losses was not material. The investment is classified in other non-current assets in our condensed consolidated balance sheets. |
Accumulated Other Comprehensive Loss |
The components of accumulated other comprehensive loss, net of tax, were as follows (in thousands): |
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| | Foreign | | | Unrealized Gains | | | Total | | | | | |
Currency | (Losses) on | | | | |
Translation | Available-for- | | | | |
Adjustments | Sale Investments | | | | |
Balance as of February 28, 2014 | | $ | (817 | ) | | $ | — | | | $ | (817 | ) | | | | |
Other comprehensive income (loss) before reclassifications | | | (1,539 | ) | | | 8 | | | | (1,531 | ) | | | | |
Amounts reclassified from accumulated other comprehensive income (loss) | | | — | | | | — | | | | — | | | | | |
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Other comprehensive income (loss) | | | (1,539 | ) | | | 8 | | | | (1,531 | ) | | | | |
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Balance as of November 30, 2014 | | $ | (2,356 | ) | | $ | 8 | | | $ | (2,348 | ) | | | | |
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