Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 22, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'CRAY INC | ' |
Entity Central Index Key | '0000949158 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 40,691,023 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $187,691 | $192,633 |
Restricted cash | 18,100 | 0 |
Short-term investments | 49,916 | 14,048 |
Accounts and other receivables, net | 58,765 | 182,527 |
Inventory | 118,194 | 95,129 |
Prepaid expenses and other current assets | 31,722 | 20,999 |
Total current assets | 464,388 | 505,336 |
Long-term restricted cash | 15,100 | 13,768 |
Long-term investments | 7,817 | 0 |
Property and equipment, net | 30,624 | 30,278 |
Service inventory, net | 1,709 | 1,828 |
Goodwill | 14,182 | 14,182 |
Intangible assets other than goodwill, net | 5,764 | 6,362 |
Deferred tax assets | 24,592 | 19,206 |
Other non-current assets | 11,700 | 12,406 |
TOTAL ASSETS | 575,876 | 603,366 |
Current liabilities: | ' | ' |
Accounts payable | 35,833 | 34,225 |
Accrued payroll and related expenses | 10,348 | 22,470 |
Other accrued liabilities | 13,709 | 22,225 |
Deferred revenue | 89,553 | 91,488 |
Total current liabilities | 149,443 | 170,408 |
Long-term deferred revenue | 54,167 | 50,477 |
Other non-current liabilities | 6,675 | 6,894 |
TOTAL LIABILITIES | 210,285 | 227,779 |
Shareholders’ equity: | ' | ' |
Preferred stock — Authorized and undesignated, 5,000,000 shares; no shares issued or outstanding | 0 | 0 |
Common stock and additional paid-in capital, par value $.01 per share — Authorized, 75,000,000 shares; issued and outstanding 40,689,605 and 40,469,854 shares, respectively | 589,721 | 586,243 |
Accumulated other comprehensive income | 572 | 853 |
Accumulated deficit | -224,702 | -211,509 |
TOTAL SHAREHOLDERS’ EQUITY | 365,591 | 375,587 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $575,876 | $603,366 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred stock, shares Authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ' | ' |
Preferred stock, shares outstanding | ' | ' |
Common stock and additional paid-in capital, par value | $0.01 | $0.01 |
Common stock and additional paid-in capital, shares authorized | 75,000,000 | 75,000,000 |
Common stock and additional paid-in capital, shares issued | 40,689,605 | 40,469,854 |
Common stock and additional paid-in capital, shares outstanding | 40,689,605 | 40,469,854 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenue: | ' | ' |
Product | $30,015 | $59,868 |
Service | 25,095 | 19,679 |
Total revenue | 55,110 | 79,547 |
Cost of revenue: | ' | ' |
Cost of product revenue | 23,972 | 45,570 |
Cost of service revenue | 13,201 | 9,827 |
Total cost of revenue | 37,173 | 55,397 |
Gross profit | 17,937 | 24,150 |
Operating expenses: | ' | ' |
Research and development, net | 22,621 | 20,226 |
Sales and marketing | 11,776 | 11,143 |
General and administrative | 5,413 | 5,485 |
Total operating expenses | 39,810 | 36,854 |
Loss from operations | -21,873 | -12,704 |
Other expense, net | -646 | -335 |
Interest income, net | 61 | 376 |
Loss before income taxes | -22,458 | -12,663 |
Income tax benefit | 9,520 | 5,054 |
Net loss | ($12,938) | ($7,609) |
Basic net loss per common share (EPS) | ($0.34) | ($0.20) |
Diluted net loss per common share (EPS) | ($0.34) | ($0.20) |
Basic weighted average shares outstanding (Shares Outstanding) | 38,317 | 37,335 |
Diluted weighted average shares outstanding (Shares Outstanding) | 38,317 | 37,335 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net loss | ($12,938) | ($7,609) |
Other comprehensive income (loss), net of tax: | ' | ' |
Unrealized gain on available-for-sale investments | 4 | 49 |
Foreign currency translation adjustments | 23 | 165 |
Unrealized gain (loss) on cash flow hedges | -328 | 2,020 |
Reclassification adjustments on cash flow hedges included in net loss | 20 | -20 |
Other comprehensive income (loss) | -281 | 2,214 |
Comprehensive loss | ($13,219) | ($5,395) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Operating activities: | ' | ' |
Net loss | ($12,938) | ($7,609) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 3,910 | 3,429 |
Accretion and amortization on available for sale investments | 53 | 0 |
Loss on disposal of fixed assets | 204 | 1 |
Share-based compensation expense | 2,522 | 1,726 |
Inventory write-down | 382 | 0 |
Deferred income taxes | -9,797 | -3,866 |
Cash provided (used) due to changes in operating assets and liabilities: | ' | ' |
Accounts and other receivables | 124,120 | -45,221 |
Inventory | -24,127 | 9,617 |
Prepaid expenses and other assets | -5,588 | -1,200 |
Accounts payable | 1,612 | -2,103 |
Accrued payroll and related expenses and other accrued liabilities | -20,884 | -15,498 |
Other non-current liabilities | -218 | -365 |
Deferred revenue | 1,760 | -10,639 |
Net cash provided by (used in) operating activities | 61,011 | -71,728 |
Investing activities: | ' | ' |
Sales/maturities of available-for-sale investments | 9,000 | 0 |
Purchases of available-for-sale investments | -52,732 | -14,938 |
Increase in restricted cash | -19,432 | 0 |
Purchases of property and equipment | -3,501 | -1,868 |
Net cash used in investing activities | -66,665 | -16,806 |
Financing activities: | ' | ' |
Proceeds from issuance of common stock through employee stock purchase plan | 169 | 110 |
Purchase of employee restricted shares to fund related statutory tax withholding | -453 | -340 |
Proceeds from exercises of stock options | 986 | 1,373 |
Net cash provided by financing activities | 702 | 1,143 |
Effect of foreign exchange rate changes on cash and cash equivalents | 10 | -219 |
Net decrease in cash and cash equivalents | -4,942 | -87,610 |
Cash and cash equivalents: | ' | ' |
Beginning of period | 192,633 | 253,065 |
End of period | 187,691 | 165,455 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid for interest | 5 | 0 |
Cash paid for income taxes | 1,232 | 1,682 |
Non-cash investing and financing activities: | ' | ' |
Inventory transfers to fixed assets and service inventory | $680 | $1,598 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended | |
Mar. 31, 2014 | ||
Basis of Presentation [Abstract] | ' | |
Basis of Presentation | ' | |
Note 1— Basis of Presentation | ||
In these notes, Cray Inc. and its wholly-owned subsidiaries are collectively referred to as the “Company.” In the opinion of management, the accompanying Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Loss, and Statements of Cash Flows have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Management believes that all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation have been included. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. | ||
The Company’s revenue, results of operations and cash balances are likely to fluctuate significantly from quarter to quarter. These fluctuations are due to such factors as the high average sales prices and limited number of sales of the Company’s products, the timing of purchase orders and product deliveries, the revenue recognition accounting policy of generally not recognizing product revenue until customer acceptance and other contractual provisions have been fulfilled and the timing of payments for product sales, maintenance services, government research and development funding and purchases of inventory. Given the nature of the Company’s business, its revenue, receivables and other related accounts are likely to be concentrated among a relatively small number of customers. | ||
Principles of Consolidation | ||
The accompanying condensed consolidated financial statements include the accounts of Cray Inc. and its wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated. | ||
Use of Estimates | ||
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | ||
Revenue Recognition | ||
The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable, and collectibility is reasonably assured. Delivery does not occur until the products have been shipped or services provided to the customer, risk of loss has transferred to the customer, and, where applicable, a customer acceptance has been obtained. The sales price is not considered to be fixed or determinable until all material contingencies related to the sales have been resolved. The Company records revenue in the Condensed Consolidated Statements of Operations net of any sales, use, value added or certain excise taxes imposed by governmental authorities on specific sales transactions. In addition to the aforementioned general policy, the following are the Company's statements of policy with regard to multiple-element arrangements and specific revenue recognition policies for each major category of revenue. | ||
Multiple-Element Arrangements. The Company commonly enters into revenue arrangements that include multiple deliverables of its product and service offerings due to the needs of its customers. Products may be delivered in phases over time periods which can be as long as five years. Maintenance services generally begin upon acceptance of the first equipment delivery and future deliveries of equipment generally have an associated maintenance period. The Company considers the maintenance period to commence upon acceptance of the product or installation in situations where a formal acceptance is not required, which may include a warranty period and accordingly allocates a portion of the arrangement consideration as a separate deliverable which is recognized as service revenue over the entire service period. Other services such as training and engineering services can be delivered as a discrete delivery or over the term of the contract. A multiple-element arrangement is separated into more than one unit of accounting if the following criteria are met: | ||
• | The delivered item(s) has value to the customer on a standalone basis; and | |
• | If the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. | |
If these criteria are met for each element, the arrangement consideration is allocated to the separate units of accounting based on each unit's relative selling price. If these criteria are not met, the arrangement is accounted for as one unit of accounting which would result in revenue being recognized ratably over the contract term or being deferred until the earlier of when such criteria are met or when the last undelivered element is delivered. | ||
The Company follows a selling price hierarchy in determining the best estimate of the selling price of each deliverable. Certain products and services are sold separately in standalone arrangements for which the Company is sometimes able to determine vendor specific objective evidence, or VSOE. The Company determines VSOE based on normal pricing and discounting practices for the product or service when sold separately. | ||
When the Company is not able to establish VSOE for all deliverables in an arrangement with multiple elements, the Company attempts to establish the selling price of each remaining element based on third-party evidence, or TPE. The Company's inability to establish VSOE is often due to a relatively small sample of customer contracts that differ in system size and contract terms which can be due to infrequently selling each element separately, not pricing products within a narrow range, or only having a limited sales history, such as in the case of certain advanced and emerging technologies. TPE is determined based on the Company's prices or competitor prices for similar deliverables when sold separately. However, the Company is often unable to determine TPE, as the Company's offerings contain a significant level of customization and differentiation from those of competitors and the Company is often unable to reliably determine what similar competitor products' selling prices are on a standalone basis. | ||
When the Company is unable to establish selling price using VSOE or TPE, the Company uses estimated selling price, or ESP, in its allocation of arrangement consideration. The objective of ESP is to determine the price at which the Company would transact a sale if the product or service were sold on a standalone basis. In determining ESP, the Company uses the cost to provide the product or service plus a margin, or considers other factors. When using cost plus a margin, the Company considers the total cost of the product or service, including customer-specific and geographic factors. The Company also considers the historical margins of the product or service on previous contracts and several factors including any changes to pricing methodologies, competitiveness of products and services and cost drivers that would cause future margins to differ from historical margins. | ||
Products. The Company most often recognizes revenue from sales of products upon customer acceptance of the system. Where formal acceptance is not required, the Company recognizes revenue upon delivery or installation. When the product is part of a multiple element arrangement, the Company allocates a portion of the arrangement consideration to product revenue based on estimates of selling price. | ||
Services. Maintenance services are provided under separate maintenance contracts with customers. These contracts generally provide for maintenance services for one year, although some are for multi-year periods, often with prepayments for the term of the contract. The Company considers the maintenance period to commence upon acceptance of the product or installation in situations where a formal acceptance is not required, which may include a warranty period. When service is part of a multiple element arrangement, the Company allocates a portion of the arrangement consideration to maintenance service revenue based on estimates of selling price. Maintenance contracts that are billed in advance of revenue recognition are recorded as deferred revenue. Maintenance revenue is recognized ratably over the term of the maintenance contract. | ||
Revenue from engineering services is recognized as services are performed. | ||
Project Revenue. Revenue from design and build contracts is recognized under the percentage-of-completion (or POC method). Under the POC method, revenue is recognized based on the costs incurred to date as a percentage of the total estimated costs to fulfill the contract. If circumstances arise that change the original estimates of revenues, costs, or extent of progress toward completion, revisions to the estimates are made. These revisions may result in increases or decreases in estimated revenues or costs, and such revisions are recorded in income in the period in which the circumstances that gave rise to the revision become known by management. The Company performs ongoing profitability analyses of its contracts accounted for under the POC method in order to determine whether the latest estimates of revenue, costs and extent of progress require updating. If at any time these estimates indicate that the contract will be unprofitable, the entire estimated loss for the remainder of the contract is recorded immediately. | ||
The Company records revenue from certain research and development contracts which include milestones using the milestone method if the milestones are determined to be substantive. A milestone is considered to be substantive if management believes there is substantive uncertainty that it will be achieved and the milestone consideration meets all of the following criteria: | ||
• | It is commensurate with either of the following: | |
• | The Company's performance to achieve the milestone; or | |
• | The enhancement of value of the delivered item or items as a result of a specific outcome resulting from the Company's performance to achieve the milestone. | |
• | It relates solely to past performance. | |
• | It is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement. | |
The individual milestones are determined to be substantive or non-substantive in their entirety and milestone consideration is not bifurcated. | ||
Revenue from projects is classified as Product Revenue or Service Revenue, based on the nature of the work performed. | ||
Nonmonetary Transactions. The Company values and records nonmonetary transactions at the fair value of the asset surrendered unless the fair value of the asset received is more clearly evident, in which case the fair value of the asset received is used. |
Fair_Value_Measurement
Fair Value Measurement | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||
Fair Value Measurement | ' | ||||||||||||
Note 2— Fair Value Measurement | |||||||||||||
Based on the observability of the inputs used in the valuation techniques used to determine the fair value of certain financial assets and liabilities, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. | |||||||||||||
In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize 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 related assets or liabilities. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The following table presents information about the Company’s financial assets and liabilities that have been measured at fair value as of March 31, 2014, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands): | |||||||||||||
Description | Fair Value | Quoted | Significant | ||||||||||
as of | Prices in | Other | |||||||||||
March 31, | Active | Observable | |||||||||||
2014 | Markets | Inputs | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
Assets: | |||||||||||||
Cash and cash equivalents and restricted cash | $ | 220,891 | $ | 220,891 | $ | — | |||||||
Available-for-sale investments (1) | 57,733 | 57,733 | — | ||||||||||
Foreign exchange forward contracts (2) | 1,160 | — | 1,160 | ||||||||||
Assets measured at fair value at March 31, 2014 | $ | 279,784 | $ | 278,624 | $ | 1,160 | |||||||
Liabilities: | |||||||||||||
Foreign exchange forward contracts (3) | $ | (6,734 | ) | $ | — | $ | (6,734 | ) | |||||
Liabilities measured at fair value at March 31, 2014 | $ | (6,734 | ) | $ | — | $ | (6,734 | ) | |||||
____________________ | |||||||||||||
-1 | Included in "Short-term investments" and "Long-term investments" on the Company’s Condensed Consolidated Balance Sheets. | ||||||||||||
-2 | Included in “Prepaid expenses and other current assets” on the Company’s Condensed Consolidated Balance Sheets. | ||||||||||||
-3 | Included in “Other accrued liabilities” and “Other non-current liabilities” on the Company’s Condensed Consolidated Balance Sheets. | ||||||||||||
Foreign Currency Derivatives | |||||||||||||
The Company may enter into foreign currency derivatives to hedge future cash receipts on certain sales transactions that are payable in foreign currencies. | |||||||||||||
As of March 31, 2014, the Company had outstanding forward contracts which were designated as cash flow hedges of anticipated future cash receipts on sales contracts payable in foreign currencies. The outstanding notional amounts were approximately 36.4 million British Pounds, 33.3 million Euro, 2.3 billion Japanese Yen, $3.9 million Canadian Dollars and $1.4 million Singapore Dollars, resulting in hedged foreign currency exposure of approximately $127.8 million. Cash receipts associated with the hedged contracts are expected to be received from 2014 through 2018, during which time the revenue on the associated sales contracts is expected to be recognized. | |||||||||||||
As of December 31, 2013, the outstanding notional amounts were approximately 36.4 million British Pounds, 53.0 million Euro, 1.2 billion Japanese Yen, 5.6 million Swiss Francs, $3.9 million Canadian Dollars and $3.2 million Singapore Dollars, resulting in hedged foreign currency exposure of approximately $151.4 million. | |||||||||||||
Fair Values of Derivative Instruments (in thousands): | |||||||||||||
Hedge Classification | Balance Sheet Location | Fair Value | Fair Value | ||||||||||
as of | as of | ||||||||||||
March 31, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Foreign currency contracts | Prepaid expenses and other current assets | $ | 1,160 | $ | 1,654 | ||||||||
Foreign currency contracts | Other non-current assets | — | 76 | ||||||||||
Foreign currency contracts | Other accrued liabilities | (2,669 | ) | (2,942 | ) | ||||||||
Foreign currency contracts | Other non-current liabilities | (4,065 | ) | (4,295 | ) | ||||||||
Total fair value of derivatives classified as hedging instruments | $ | (5,574 | ) | $ | (5,507 | ) |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income Accumulated Other Comprehensive Income | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | |||||||||||||||
Accumulated Other Comprehensive Income | ' | |||||||||||||||
Note 3— Accumulated Other Comprehensive Income | ||||||||||||||||
The following table shows the gross and net of tax reclassification adjustments from accumulated other comprehensive income resulting from hedged foreign currency transactions recorded by the Company for the three months ended March 31, 2014 and 2013 (in thousands). The gross reclassification adjustments decreased product revenue for the three months ended March 31, 2014. The gross reclassification adjustments increased product revenue for the three months ended March 31, 2013. | ||||||||||||||||
Three Months Ended | ||||||||||||||||
March 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Gross of Tax Reclassifications | $ | (33 | ) | $ | 33 | |||||||||||
Net of Tax Reclassifications | $ | (20 | ) | $ | 20 | |||||||||||
The following tables show the changes in Accumulated Other Comprehensive Income by component for the three months ended March 31, 2014 and 2013 (in thousands): | ||||||||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||
Unrealized Gain on Investments | Foreign Currency Translation Adjustments | Unrealized Loss on Cash Flow Hedges | Accumulated Other Comprehensive Income | |||||||||||||
Beginning balance | $ | — | $ | 3,257 | $ | (2,404 | ) | $ | 853 | |||||||
Current-period change, net of tax | 4 | 23 | (308 | ) | (281 | ) | ||||||||||
Ending balance | $ | 4 | $ | 3,280 | $ | (2,712 | ) | $ | 572 | |||||||
Income tax expense (benefit) associated with current-period change | $ | 2 | $ | (167 | ) | $ | (205 | ) | $ | (370 | ) | |||||
Three Months Ended March 31, 2013 | ||||||||||||||||
Unrealized Gain/(Loss) on Investments | Foreign Currency Translation Adjustments | Unrealized Gain on Cash Flow Hedges | Accumulated Other Comprehensive Income | |||||||||||||
Beginning balance | $ | (46 | ) | $ | 4,301 | $ | 926 | $ | 5,181 | |||||||
Current-period change, net of tax | 49 | 165 | 2,000 | 2,214 | ||||||||||||
Ending balance | $ | 3 | $ | 4,466 | $ | 2,926 | $ | 7,395 | ||||||||
Income tax expense associated with current-period change | $ | 33 | $ | 110 | $ | 1,333 | 1,476 | |||||||||
Earnings_Loss_Per_Share_EPS
Earnings (Loss) Per Share ("EPS") | 3 Months Ended |
Mar. 31, 2014 | |
Earnings Per Share [Abstract] | ' |
Earnings (Loss) Per Share ("EPS") | ' |
Note 4— Earnings (Loss) Per Share ("EPS") | |
Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares, excluding unvested restricted stock, outstanding during the period. Diluted EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common and potential common shares outstanding during the period, which includes the additional dilution related to conversion of stock options, unvested restricted stock and restricted stock units as computed under the treasury stock method. | |
For the three months ended March 31, 2014 and 2013, outstanding stock options, unvested restricted stock grants and restricted stock units were antidilutive because of the net losses and, as such, their effect has not been included in the calculation of basic or diluted net loss per share. For the three months ended March 31, 2014 and 2013, potential gross common shares of 3.2 million and 4.2 million, respectively, were antidilutive and not included in computing diluted EPS. |
Investments
Investments | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||
Investments | ' | |||||||||||
Note 5— Investments | ||||||||||||
The Company’s investments in debt securities with maturities at purchase greater than three months are classified as "available-for-sale." Changes in fair value are reflected in other comprehensive income (loss). | ||||||||||||
The carrying amount of the Company’s investments in available-for-sale securities as of March 31, 2014 is shown in the table below (in thousands): | ||||||||||||
Unrealized | ||||||||||||
Cost | Gains (Losses) | Fair Value | ||||||||||
Short-term available-for-sale securities | $ | 49,889 | $ | 27 | $ | 49,916 | ||||||
Long-term available-for-sale securities | 7,838 | (21 | ) | 7,817 | ||||||||
Total | $ | 57,727 | $ | 6 | $ | 57,733 | ||||||
The carrying amount of the Company’s investments in available-for-sale securities as of December 31, 2013 is shown in the table below (in thousands): | ||||||||||||
Unrealized | ||||||||||||
Cost | Gains (Losses) | Fair Value | ||||||||||
Short-term available-for-sale securities | $ | 14,048 | $ | — | $ | 14,048 | ||||||
Long-term available-for-sale securities | — | — | — | |||||||||
Total | $ | 14,048 | $ | — | $ | 14,048 | ||||||
Accounts_and_Other_Receivables
Accounts and Other Receivables, Net | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Accounts and Other Receivables, Net | ' | |||||||
Note 6— Accounts and Other Receivables, Net | ||||||||
Net accounts and other receivables consisted of the following (in thousands): | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Trade accounts receivable | $ | 44,947 | $ | 169,417 | ||||
Unbilled receivables | 11,329 | 9,075 | ||||||
Advance billings | 1,165 | 2,141 | ||||||
Other receivables | 1,430 | 2,051 | ||||||
58,871 | 182,684 | |||||||
Allowance for doubtful accounts | (106 | ) | (157 | ) | ||||
Accounts and other receivables, net | $ | 58,765 | $ | 182,527 | ||||
Unbilled receivables represent amounts where the Company has recognized revenue in advance of the contractual billing terms. Advance billings represent billings made based on contractual terms for which revenue has not been recognized. | ||||||||
As of March 31, 2014 and December 31, 2013, accounts receivable included $12.0 million and $111.9 million, respectively, due from U.S. government agencies and customers primarily serving the U.S. government. Of these amounts, $0.3 million and $0.3 million were unbilled as of March 31, 2014 and December 31, 2013, respectively, based upon contractual billing arrangements with these customers. As of March 31, 2014, three non-U.S. government customers accounted for 37% of total accounts and other receivables. As of December 31, 2013, no non-U.S. government customer accounted for more than 10% of total accounts and other receivables. |
Inventory
Inventory | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventory | ' | |||||||
Note 7— Inventory | ||||||||
Inventory consisted of the following (in thousands): | ||||||||
31-Mar-14 | 31-Dec-13 | |||||||
Components and subassemblies | $ | 39,376 | $ | 46,339 | ||||
Work in process | 15,880 | 23,618 | ||||||
Finished goods | 62,938 | 25,172 | ||||||
Total | $ | 118,194 | $ | 95,129 | ||||
Finished goods inventory of $61.9 million and $24.8 million was located at customer sites pending acceptance as of March 31, 2014 and December 31, 2013, respectively. At March 31, 2014, two customers accounted for $50.7 million, and at December 31, 2013, one customer accounted for $18.0 million of finished goods inventory. | ||||||||
During the three months ended March 31, 2014 the Company wrote off $0.4 million of inventory, primarily related to our CS300 product line. There were no write offs during the three months ended March 31, 2013. |
Deferred_Revenue
Deferred Revenue | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Deferred Revenue Disclosure [Abstract] | ' | |||||||
Deferred Revenue | ' | |||||||
Note 8— Deferred Revenue | ||||||||
Deferred revenue consisted of the following (in thousands): | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Deferred product revenue | $ | 59,174 | $ | 54,065 | ||||
Deferred service revenue | 84,546 | 87,900 | ||||||
Total deferred revenue | 143,720 | 141,965 | ||||||
Less long-term deferred revenue | (54,167 | ) | (50,477 | ) | ||||
Deferred revenue in current liabilities | $ | 89,553 | $ | 91,488 | ||||
As of March 31, 2014, two customers accounted for 37% of total deferred revenue. At December 31, 2013, three customers accounted for 47% of total deferred revenue. |
ShareBased_Compensation
Share-Based Compensation | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||
Share-based Compensation [Abstract] | ' | ||||||||||||||||||||
Share-Based Compensation | ' | ||||||||||||||||||||
Note 9— Share-Based Compensation | |||||||||||||||||||||
The Company accounts for its share-based compensation based on an estimate of fair value of the grant on the date of grant. | |||||||||||||||||||||
The fair value of unvested restricted stock is based on the market price of a share of the Company’s common stock on the date of grant and is amortized over the vesting period. | |||||||||||||||||||||
In determining fair value of stock options, the Company uses the Black-Scholes option pricing model. As no options were granted during the three months ended March 31, 2013, no calculation was performed for that period. The following key weighted average assumptions were employed in the calculation for the three months ended March 31, 2014: | |||||||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||
Risk-free interest rate | 1.24% | ||||||||||||||||||||
Expected dividend yield | —% | ||||||||||||||||||||
Volatility | 50.40% | ||||||||||||||||||||
Expected life | 4.0 years | ||||||||||||||||||||
Weighted average Black-Scholes value of options granted | $11.01 | ||||||||||||||||||||
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The Company does not anticipate declaring dividends in the foreseeable future. Volatility is based on historical data. The expected life of an option is based on the assumption that options will be exercised, on average, about two years after vesting occurs. The Company recognizes compensation expense for only the portion of options or stock units that are expected to vest. Therefore, management applies an estimated forfeiture rate that is derived from historical employee termination data and adjusted for expected future employee turnover rates. The estimated forfeiture rate applied during the three months ended March 31, 2014 was 10.0%. If the actual number of forfeitures differs from those estimated by management, additional adjustments to compensation expense may be required in future periods. The Company’s stock price volatility, option lives and expected forfeiture rates involve management’s best estimates at the time of such determination, which impact the fair value of the option calculated under the Black-Scholes methodology and, ultimately, the expense that will be recognized over the vesting period or requisite service period of the option. The Company typically issues stock options with a four year vesting period (the requisite service period) and amortizes the fair value of stock options (stock compensation cost) ratably over the requisite service period. The fair value of unvested restricted stock is based on the market price of a share of the Company’s common stock on the date of grant and is amortized over the vesting period. | |||||||||||||||||||||
The Company also has an employee stock purchase plan (“ESPP”) which allows employees to purchase shares of the Company’s common stock at 95% of fair market value on the fourth business day after the end of each offering period. The ESPP is deemed non-compensatory and therefore is not subject to the fair value provisions. | |||||||||||||||||||||
The following table sets forth the gross share-based compensation cost resulting from stock options and unvested restricted stock grants that were recorded in the Company’s Condensed Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013 (in thousands): | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
March 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Cost of product revenue | $ | 52 | $ | 27 | |||||||||||||||||
Cost of service revenue | 69 | 62 | |||||||||||||||||||
Research and development, net | 761 | 386 | |||||||||||||||||||
Sales and marketing | 751 | 516 | |||||||||||||||||||
General and administrative | 889 | 735 | |||||||||||||||||||
Total | $ | 2,522 | $ | 1,726 | |||||||||||||||||
A summary of the Company’s year-to-date stock option activity and related information follows: | |||||||||||||||||||||
Options | Weighted | Weighted | |||||||||||||||||||
Average | Average | ||||||||||||||||||||
Exercise | Remaining | ||||||||||||||||||||
Price | Contractual | ||||||||||||||||||||
Term | |||||||||||||||||||||
Outstanding at December 31, 2013 | 2,078,069 | $ | 9.29 | ||||||||||||||||||
Grants | 44,800 | $ | 27.46 | ||||||||||||||||||
Exercises | (143,258 | ) | $ | 6.95 | |||||||||||||||||
Cancellations | (5,497 | ) | $ | 24.54 | |||||||||||||||||
Outstanding at March 31, 2014 | 1,974,114 | $ | 9.83 | 6.9 | |||||||||||||||||
Exercisable at March 31, 2014 | 1,201,668 | $ | 6.34 | 5.9 | |||||||||||||||||
Available for grant at March 31, 2014 | 2,985,282 | ||||||||||||||||||||
As of March 31, 2014, there was $54.3 million of aggregate intrinsic value of outstanding stock options, including $37.2 million of aggregate intrinsic value of exercisable stock options. Intrinsic value represents the total pretax intrinsic value for all “in-the-money” options (i.e., the difference between the Company’s closing stock price on the last trading day of its first quarter of 2014 and the exercise price, multiplied by the number of shares of common stock underlying the stock options) that would have been received by the option holders had all option holders exercised their options on March 31, 2014. During the three months ended March 31, 2014, stock options covering 143,258 shares of common stock with a total intrinsic value of $4.3 million were exercised. During the three months ended March 31, 2013, stock options covering 202,321 shares of common stock with a total intrinsic value of $2.6 million were exercised. | |||||||||||||||||||||
A summary of the Company’s unvested restricted stock grants and changes during the three months ended March 31, 2014 is as follows: | |||||||||||||||||||||
Standard Restricted Shares | Performance Vesting Restricted Shares | Total Restricted Shares | |||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted Average Grant Date Fair Value | ||||||||||||||||
Average | Average | ||||||||||||||||||||
Grant Date | Grant Date | ||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||
Outstanding at December 31, 2013 | 1,127,700 | $ | 12.05 | 1,094,000 | $ | 15.94 | 2,221,700 | $ | 13.97 | ||||||||||||
Granted | 100,800 | $ | 34.73 | — | $ | — | 100,800 | $ | 34.73 | ||||||||||||
Forfeited | (5,000 | ) | $ | 26.01 | (10,000 | ) | $ | 12.9 | (15,000 | ) | $ | 17.27 | |||||||||
Vested | (36,250 | ) | $ | 8.09 | — | $ | — | (36,250 | ) | $ | 8.09 | ||||||||||
Outstanding at March 31, 2014 | 1,187,250 | $ | 14.04 | 1,084,000 | $ | 15.97 | 2,271,250 | $ | 14.96 | ||||||||||||
The aggregate fair value of restricted stock vested during the three months ended March 31, 2014 and 2013 was $1.1 million and $0.7 million, respectively. | |||||||||||||||||||||
As of March 31, 2014, the Company had $31.2 million of total unrecognized compensation cost related to unvested stock options and unvested restricted stock. This includes $17.0 million for performance vesting restricted stock subject to performance measures which are currently not considered probable to vest and $0.3 million for performance vesting restricted stock subject to performance measures which currently are considered probable to vest. No compensation expense is recorded for performance vesting restricted stock subject to performance measures that are not yet considered probable of attainment. | |||||||||||||||||||||
Unrecognized compensation cost related to unvested stock options and unvested restricted stock grants considered probable to vest is expected to be recognized over a weighted average period of 1.7 years. |
Taxes
Taxes | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Income Tax Disclosure [Abstract] | ' | |||
Taxes | ' | |||
Note 10— Taxes | ||||
The Company’s effective tax rates for the three months ended March 31, 2014 and 2013 were as follows: | ||||
Three Months Ended | ||||
March 31, | ||||
2014 | 2013 | |||
Effective Tax Rates | 42% | 40% | ||
The effective tax rates for the three months ended March 31, 2014 and 2013 were higher than the U.S. federal statutory rate primarily as a result of state taxes. | ||||
The Company continues to provide a partial valuation allowance against its U.S. deferred tax assets and a full valuation allowance against its deferred tax assets in a limited number of foreign jurisdictions as the realization of such assets is not considered to be more likely than not. The Company’s conclusion about the realizability of its deferred tax assets, and therefore the appropriateness of a valuation allowance, is reviewed quarterly. If the Company’s conclusion about the realizability of its deferred tax assets changes in a future period, the Company could record a substantial tax provision or benefit in its Condensed Consolidated Statements of Operations when that occurs. |
Segment_Information
Segment Information | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||||||||||
Segment Information | ' | |||||||||||||||||||||||
Note 11— Segment Information | ||||||||||||||||||||||||
The Company has the following reportable segments: Supercomputing (formerly HPC Systems), Storage and Data Management, and Maintenance and Support. The Company's segment presentation has changed to be consistent with information now provided to its Chief Operating Decision Maker. This information has been modified to include inter-segment revenue and gross profit from Maintenance and Support services in Supercomputing and Storage and Data Management resulting from the sales of products in these segments. The prior period financial information has been reclassified to conform to the current period’s presentation. | ||||||||||||||||||||||||
The Company’s reportable segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the Chief Executive Officer, who is the Chief Operating Decision Maker, in determining how to allocate the Company’s resources and evaluate performance. The segments are determined based on several factors, including the Company’s internal operating structure, the manner in which the Company’s operations are managed, client base, similar economic characteristics and the availability of separate financial information. | ||||||||||||||||||||||||
Supercomputing | ||||||||||||||||||||||||
Supercomputing includes a suite of highly advanced systems, including the Cray XC30, Cray XE6, Cray XE6m, Cray XK7, Cray XK6m, and the Cray CS300, which are used by single users all the way up through large research and engineering centers in universities, government laboratories, and commercial institutions. Supercomputing also includes the ongoing maintenance of these systems as well as system analysts. | ||||||||||||||||||||||||
Storage and Data Management | ||||||||||||||||||||||||
Storage and Data Management offers the Cray Sonexion 1600 and Tiered Adaptive Storage solution as well as other third-party storage products and their ongoing maintenance as well as system analysts. | ||||||||||||||||||||||||
Maintenance and Support | ||||||||||||||||||||||||
Maintenance and Support provides ongoing maintenance of Cray supercomputers, big data storage and analytic systems, as well as system analysts. | ||||||||||||||||||||||||
Engineering Services and Other | ||||||||||||||||||||||||
Included within Engineering Services and Other is the Company’s YarcData business unit and Custom Engineering. | ||||||||||||||||||||||||
The following table presents revenues and gross margin for the Company’s operating segments for the three months ended March 31 (in thousands): | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Supercomputing | $ | 43,626 | $ | 61,755 | ||||||||||||||||||||
Storage and Data Management | 8,065 | 16,282 | ||||||||||||||||||||||
Maintenance and Support | 21,965 | 18,213 | ||||||||||||||||||||||
Engineering Services and Other | 3,419 | 1,510 | ||||||||||||||||||||||
Elimination of inter-segment revenue | (21,965 | ) | (18,213 | ) | ||||||||||||||||||||
Total revenue | $ | 55,110 | $ | 79,547 | ||||||||||||||||||||
Gross Profit: | ||||||||||||||||||||||||
Supercomputing | $ | 13,223 | $ | 16,257 | ||||||||||||||||||||
Storage and Data Management | 2,907 | 7,157 | ||||||||||||||||||||||
Maintenance and Support | 10,214 | 9,160 | ||||||||||||||||||||||
Engineering Services and Other | 1,807 | 736 | ||||||||||||||||||||||
Elimination of inter-segment gross profit | (10,214 | ) | (9,160 | ) | ||||||||||||||||||||
Total gross profit | $ | 17,937 | $ | 24,150 | ||||||||||||||||||||
Revenue and cost of revenue is the only discrete financial information the Company prepares for its segments. Other financial results or assets are not separated by segment. | ||||||||||||||||||||||||
The Company’s geographic operations outside the United States include sales and service offices in Canada, Brazil, Europe, Japan, Australia, India, South Korea, China, Singapore and Taiwan. The following data represents the Company’s revenue for the United States and all other countries, which is determined based upon a customer’s geographic location (in thousands): | ||||||||||||||||||||||||
United States | Other Countries | Total | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Three months ended March 31, | ||||||||||||||||||||||||
Product revenue | $ | 10,463 | $ | 31,144 | $ | 19,552 | $ | 28,724 | $ | 30,015 | $ | 59,868 | ||||||||||||
Service revenue | 17,744 | 13,472 | 7,351 | 6,207 | 25,095 | 19,679 | ||||||||||||||||||
Total revenue | $ | 28,207 | $ | 44,616 | $ | 26,903 | $ | 34,931 | $ | 55,110 | $ | 79,547 | ||||||||||||
Product and service revenue from U.S. government agencies and customers primarily serving the U.S. government totaled approximately $22.0 million for the three months ended March 31, 2014, compared to approximately $38.6 million for the three months ended March 31, 2013. For the three months ended March 31, 2014, revenue in Japan accounted for 25% of total revenue. For the three months ended March 31, 2013, combined revenue in Switzerland and Japan accounted for 32% of total revenue. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended | |
Mar. 31, 2014 | ||
Basis of Presentation [Abstract] | ' | |
Principles of Consolidation | ' | |
Principles of Consolidation | ||
The accompanying condensed consolidated financial statements include the accounts of Cray Inc. and its wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated. | ||
Use of Estimates | ' | |
Use of Estimates | ||
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | ||
Revenue Recognition | ' | |
Revenue Recognition | ||
The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable, and collectibility is reasonably assured. Delivery does not occur until the products have been shipped or services provided to the customer, risk of loss has transferred to the customer, and, where applicable, a customer acceptance has been obtained. The sales price is not considered to be fixed or determinable until all material contingencies related to the sales have been resolved. The Company records revenue in the Condensed Consolidated Statements of Operations net of any sales, use, value added or certain excise taxes imposed by governmental authorities on specific sales transactions. In addition to the aforementioned general policy, the following are the Company's statements of policy with regard to multiple-element arrangements and specific revenue recognition policies for each major category of revenue. | ||
Multiple-Element Arrangements. The Company commonly enters into revenue arrangements that include multiple deliverables of its product and service offerings due to the needs of its customers. Products may be delivered in phases over time periods which can be as long as five years. Maintenance services generally begin upon acceptance of the first equipment delivery and future deliveries of equipment generally have an associated maintenance period. The Company considers the maintenance period to commence upon acceptance of the product or installation in situations where a formal acceptance is not required, which may include a warranty period and accordingly allocates a portion of the arrangement consideration as a separate deliverable which is recognized as service revenue over the entire service period. Other services such as training and engineering services can be delivered as a discrete delivery or over the term of the contract. A multiple-element arrangement is separated into more than one unit of accounting if the following criteria are met: | ||
• | The delivered item(s) has value to the customer on a standalone basis; and | |
• | If the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. | |
If these criteria are met for each element, the arrangement consideration is allocated to the separate units of accounting based on each unit's relative selling price. If these criteria are not met, the arrangement is accounted for as one unit of accounting which would result in revenue being recognized ratably over the contract term or being deferred until the earlier of when such criteria are met or when the last undelivered element is delivered. | ||
The Company follows a selling price hierarchy in determining the best estimate of the selling price of each deliverable. Certain products and services are sold separately in standalone arrangements for which the Company is sometimes able to determine vendor specific objective evidence, or VSOE. The Company determines VSOE based on normal pricing and discounting practices for the product or service when sold separately. | ||
When the Company is not able to establish VSOE for all deliverables in an arrangement with multiple elements, the Company attempts to establish the selling price of each remaining element based on third-party evidence, or TPE. The Company's inability to establish VSOE is often due to a relatively small sample of customer contracts that differ in system size and contract terms which can be due to infrequently selling each element separately, not pricing products within a narrow range, or only having a limited sales history, such as in the case of certain advanced and emerging technologies. TPE is determined based on the Company's prices or competitor prices for similar deliverables when sold separately. However, the Company is often unable to determine TPE, as the Company's offerings contain a significant level of customization and differentiation from those of competitors and the Company is often unable to reliably determine what similar competitor products' selling prices are on a standalone basis. | ||
When the Company is unable to establish selling price using VSOE or TPE, the Company uses estimated selling price, or ESP, in its allocation of arrangement consideration. The objective of ESP is to determine the price at which the Company would transact a sale if the product or service were sold on a standalone basis. In determining ESP, the Company uses the cost to provide the product or service plus a margin, or considers other factors. When using cost plus a margin, the Company considers the total cost of the product or service, including customer-specific and geographic factors. The Company also considers the historical margins of the product or service on previous contracts and several factors including any changes to pricing methodologies, competitiveness of products and services and cost drivers that would cause future margins to differ from historical margins. | ||
Products. The Company most often recognizes revenue from sales of products upon customer acceptance of the system. Where formal acceptance is not required, the Company recognizes revenue upon delivery or installation. When the product is part of a multiple element arrangement, the Company allocates a portion of the arrangement consideration to product revenue based on estimates of selling price. | ||
Services. Maintenance services are provided under separate maintenance contracts with customers. These contracts generally provide for maintenance services for one year, although some are for multi-year periods, often with prepayments for the term of the contract. The Company considers the maintenance period to commence upon acceptance of the product or installation in situations where a formal acceptance is not required, which may include a warranty period. When service is part of a multiple element arrangement, the Company allocates a portion of the arrangement consideration to maintenance service revenue based on estimates of selling price. Maintenance contracts that are billed in advance of revenue recognition are recorded as deferred revenue. Maintenance revenue is recognized ratably over the term of the maintenance contract. | ||
Revenue from engineering services is recognized as services are performed. | ||
Project Revenue. Revenue from design and build contracts is recognized under the percentage-of-completion (or POC method). Under the POC method, revenue is recognized based on the costs incurred to date as a percentage of the total estimated costs to fulfill the contract. If circumstances arise that change the original estimates of revenues, costs, or extent of progress toward completion, revisions to the estimates are made. These revisions may result in increases or decreases in estimated revenues or costs, and such revisions are recorded in income in the period in which the circumstances that gave rise to the revision become known by management. The Company performs ongoing profitability analyses of its contracts accounted for under the POC method in order to determine whether the latest estimates of revenue, costs and extent of progress require updating. If at any time these estimates indicate that the contract will be unprofitable, the entire estimated loss for the remainder of the contract is recorded immediately. | ||
The Company records revenue from certain research and development contracts which include milestones using the milestone method if the milestones are determined to be substantive. A milestone is considered to be substantive if management believes there is substantive uncertainty that it will be achieved and the milestone consideration meets all of the following criteria: | ||
• | It is commensurate with either of the following: | |
• | The Company's performance to achieve the milestone; or | |
• | The enhancement of value of the delivered item or items as a result of a specific outcome resulting from the Company's performance to achieve the milestone. | |
• | It relates solely to past performance. | |
• | It is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement. | |
The individual milestones are determined to be substantive or non-substantive in their entirety and milestone consideration is not bifurcated. | ||
Revenue from projects is classified as Product Revenue or Service Revenue, based on the nature of the work performed. | ||
Nonmonetary Transactions. The Company values and records nonmonetary transactions at the fair value of the asset surrendered unless the fair value of the asset received is more clearly evident, in which case the fair value of the asset received is used. | ||
Investment, Policy | ' | |
The Company’s investments in debt securities with maturities at purchase greater than three months are classified as "available-for-sale." Changes in fair value are reflected in other comprehensive income (loss). |
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||
Company's financial assets and liabilities measured at fair value and the hierarchy of the valuation inputs | ' | ||||||||||||
The following table presents information about the Company’s financial assets and liabilities that have been measured at fair value as of March 31, 2014, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands): | |||||||||||||
Description | Fair Value | Quoted | Significant | ||||||||||
as of | Prices in | Other | |||||||||||
March 31, | Active | Observable | |||||||||||
2014 | Markets | Inputs | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
Assets: | |||||||||||||
Cash and cash equivalents and restricted cash | $ | 220,891 | $ | 220,891 | $ | — | |||||||
Available-for-sale investments (1) | 57,733 | 57,733 | — | ||||||||||
Foreign exchange forward contracts (2) | 1,160 | — | 1,160 | ||||||||||
Assets measured at fair value at March 31, 2014 | $ | 279,784 | $ | 278,624 | $ | 1,160 | |||||||
Liabilities: | |||||||||||||
Foreign exchange forward contracts (3) | $ | (6,734 | ) | $ | — | $ | (6,734 | ) | |||||
Liabilities measured at fair value at March 31, 2014 | $ | (6,734 | ) | $ | — | $ | (6,734 | ) | |||||
____________________ | |||||||||||||
-1 | Included in "Short-term investments" and "Long-term investments" on the Company’s Condensed Consolidated Balance Sheets. | ||||||||||||
-2 | Included in “Prepaid expenses and other current assets” on the Company’s Condensed Consolidated Balance Sheets. | ||||||||||||
-3 | Included in “Other accrued liabilities” and “Other non-current liabilities” on the Company’s Condensed Consolidated Balance Sheets. | ||||||||||||
Fair Values of Derivative Instruments | ' | ||||||||||||
Fair Values of Derivative Instruments (in thousands): | |||||||||||||
Hedge Classification | Balance Sheet Location | Fair Value | Fair Value | ||||||||||
as of | as of | ||||||||||||
March 31, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Foreign currency contracts | Prepaid expenses and other current assets | $ | 1,160 | $ | 1,654 | ||||||||
Foreign currency contracts | Other non-current assets | — | 76 | ||||||||||
Foreign currency contracts | Other accrued liabilities | (2,669 | ) | (2,942 | ) | ||||||||
Foreign currency contracts | Other non-current liabilities | (4,065 | ) | (4,295 | ) | ||||||||
Total fair value of derivatives classified as hedging instruments | $ | (5,574 | ) | $ | (5,507 | ) |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | |||||||||||||||
Reclassification from Accumulated Other Comprehensive Income | ' | |||||||||||||||
The gross reclassification adjustments increased product revenue for the three months ended March 31, 2013. | ||||||||||||||||
Three Months Ended | ||||||||||||||||
March 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Gross of Tax Reclassifications | $ | (33 | ) | $ | 33 | |||||||||||
Net of Tax Reclassifications | $ | (20 | ) | $ | 20 | |||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||||
The following tables show the changes in Accumulated Other Comprehensive Income by component for the three months ended March 31, 2014 and 2013 (in thousands): | ||||||||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||
Unrealized Gain on Investments | Foreign Currency Translation Adjustments | Unrealized Loss on Cash Flow Hedges | Accumulated Other Comprehensive Income | |||||||||||||
Beginning balance | $ | — | $ | 3,257 | $ | (2,404 | ) | $ | 853 | |||||||
Current-period change, net of tax | 4 | 23 | (308 | ) | (281 | ) | ||||||||||
Ending balance | $ | 4 | $ | 3,280 | $ | (2,712 | ) | $ | 572 | |||||||
Income tax expense (benefit) associated with current-period change | $ | 2 | $ | (167 | ) | $ | (205 | ) | $ | (370 | ) | |||||
Three Months Ended March 31, 2013 | ||||||||||||||||
Unrealized Gain/(Loss) on Investments | Foreign Currency Translation Adjustments | Unrealized Gain on Cash Flow Hedges | Accumulated Other Comprehensive Income | |||||||||||||
Beginning balance | $ | (46 | ) | $ | 4,301 | $ | 926 | $ | 5,181 | |||||||
Current-period change, net of tax | 49 | 165 | 2,000 | 2,214 | ||||||||||||
Ending balance | $ | 3 | $ | 4,466 | $ | 2,926 | $ | 7,395 | ||||||||
Income tax expense associated with current-period change | $ | 33 | $ | 110 | $ | 1,333 | 1,476 | |||||||||
Investments_Tables
Investments (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||
Invesrments | ' | |||||||||||
The carrying amount of the Company’s investments in available-for-sale securities as of March 31, 2014 is shown in the table below (in thousands): | ||||||||||||
Unrealized | ||||||||||||
Cost | Gains (Losses) | Fair Value | ||||||||||
Short-term available-for-sale securities | $ | 49,889 | $ | 27 | $ | 49,916 | ||||||
Long-term available-for-sale securities | 7,838 | (21 | ) | 7,817 | ||||||||
Total | $ | 57,727 | $ | 6 | $ | 57,733 | ||||||
The carrying amount of the Company’s investments in available-for-sale securities as of December 31, 2013 is shown in the table below (in thousands): | ||||||||||||
Unrealized | ||||||||||||
Cost | Gains (Losses) | Fair Value | ||||||||||
Short-term available-for-sale securities | $ | 14,048 | $ | — | $ | 14,048 | ||||||
Long-term available-for-sale securities | — | — | — | |||||||||
Total | $ | 14,048 | $ | — | $ | 14,048 | ||||||
Accounts_and_Other_Receivables1
Accounts and Other Receivables, Net (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Accounts and Other Receivables, Net | ' | |||||||
Net accounts and other receivables consisted of the following (in thousands): | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Trade accounts receivable | $ | 44,947 | $ | 169,417 | ||||
Unbilled receivables | 11,329 | 9,075 | ||||||
Advance billings | 1,165 | 2,141 | ||||||
Other receivables | 1,430 | 2,051 | ||||||
58,871 | 182,684 | |||||||
Allowance for doubtful accounts | (106 | ) | (157 | ) | ||||
Accounts and other receivables, net | $ | 58,765 | $ | 182,527 | ||||
Inventory_Tables
Inventory (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventory | ' | |||||||
Inventory consisted of the following (in thousands): | ||||||||
31-Mar-14 | 31-Dec-13 | |||||||
Components and subassemblies | $ | 39,376 | $ | 46,339 | ||||
Work in process | 15,880 | 23,618 | ||||||
Finished goods | 62,938 | 25,172 | ||||||
Total | $ | 118,194 | $ | 95,129 | ||||
Deferred_Revenue_Tables
Deferred Revenue (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Deferred Revenue Disclosure [Abstract] | ' | |||||||
Deferred revenue | ' | |||||||
Deferred revenue consisted of the following (in thousands): | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Deferred product revenue | $ | 59,174 | $ | 54,065 | ||||
Deferred service revenue | 84,546 | 87,900 | ||||||
Total deferred revenue | 143,720 | 141,965 | ||||||
Less long-term deferred revenue | (54,167 | ) | (50,477 | ) | ||||
Deferred revenue in current liabilities | $ | 89,553 | $ | 91,488 | ||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||
Share-based Compensation [Abstract] | ' | ||||||||||||||||||||
Key weighted average assumptions used in determining the fair value | ' | ||||||||||||||||||||
The following key weighted average assumptions were employed in the calculation for the three months ended March 31, 2014: | |||||||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||
Risk-free interest rate | 1.24% | ||||||||||||||||||||
Expected dividend yield | —% | ||||||||||||||||||||
Volatility | 50.40% | ||||||||||||||||||||
Expected life | 4.0 years | ||||||||||||||||||||
Weighted average Black-Scholes value of options granted | $11.01 | ||||||||||||||||||||
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | ' | ||||||||||||||||||||
The following table sets forth the gross share-based compensation cost resulting from stock options and unvested restricted stock grants that were recorded in the Company’s Condensed Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013 (in thousands): | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
March 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Cost of product revenue | $ | 52 | $ | 27 | |||||||||||||||||
Cost of service revenue | 69 | 62 | |||||||||||||||||||
Research and development, net | 761 | 386 | |||||||||||||||||||
Sales and marketing | 751 | 516 | |||||||||||||||||||
General and administrative | 889 | 735 | |||||||||||||||||||
Total | $ | 2,522 | $ | 1,726 | |||||||||||||||||
Stock option activity | ' | ||||||||||||||||||||
A summary of the Company’s year-to-date stock option activity and related information follows: | |||||||||||||||||||||
Options | Weighted | Weighted | |||||||||||||||||||
Average | Average | ||||||||||||||||||||
Exercise | Remaining | ||||||||||||||||||||
Price | Contractual | ||||||||||||||||||||
Term | |||||||||||||||||||||
Outstanding at December 31, 2013 | 2,078,069 | $ | 9.29 | ||||||||||||||||||
Grants | 44,800 | $ | 27.46 | ||||||||||||||||||
Exercises | (143,258 | ) | $ | 6.95 | |||||||||||||||||
Cancellations | (5,497 | ) | $ | 24.54 | |||||||||||||||||
Outstanding at March 31, 2014 | 1,974,114 | $ | 9.83 | 6.9 | |||||||||||||||||
Exercisable at March 31, 2014 | 1,201,668 | $ | 6.34 | 5.9 | |||||||||||||||||
Available for grant at March 31, 2014 | 2,985,282 | ||||||||||||||||||||
Unvested restricted stock grants and restricted stock units changes | ' | ||||||||||||||||||||
A summary of the Company’s unvested restricted stock grants and changes during the three months ended March 31, 2014 is as follows: | |||||||||||||||||||||
Standard Restricted Shares | Performance Vesting Restricted Shares | Total Restricted Shares | |||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted Average Grant Date Fair Value | ||||||||||||||||
Average | Average | ||||||||||||||||||||
Grant Date | Grant Date | ||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||
Outstanding at December 31, 2013 | 1,127,700 | $ | 12.05 | 1,094,000 | $ | 15.94 | 2,221,700 | $ | 13.97 | ||||||||||||
Granted | 100,800 | $ | 34.73 | — | $ | — | 100,800 | $ | 34.73 | ||||||||||||
Forfeited | (5,000 | ) | $ | 26.01 | (10,000 | ) | $ | 12.9 | (15,000 | ) | $ | 17.27 | |||||||||
Vested | (36,250 | ) | $ | 8.09 | — | $ | — | (36,250 | ) | $ | 8.09 | ||||||||||
Outstanding at March 31, 2014 | 1,187,250 | $ | 14.04 | 1,084,000 | $ | 15.97 | 2,271,250 | $ | 14.96 | ||||||||||||
Taxes_Tables
Taxes (Tables) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Income Tax Disclosure [Abstract] | ' | |||
Schedule of Effective Income Tax Rate Reconciliation | ' | |||
The Company’s effective tax rates for the three months ended March 31, 2014 and 2013 were as follows: | ||||
Three Months Ended | ||||
March 31, | ||||
2014 | 2013 | |||
Effective Tax Rates | 42% | 40% |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||||||||||
Information of operating segments | ' | |||||||||||||||||||||||
The following table presents revenues and gross margin for the Company’s operating segments for the three months ended March 31 (in thousands): | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Supercomputing | $ | 43,626 | $ | 61,755 | ||||||||||||||||||||
Storage and Data Management | 8,065 | 16,282 | ||||||||||||||||||||||
Maintenance and Support | 21,965 | 18,213 | ||||||||||||||||||||||
Engineering Services and Other | 3,419 | 1,510 | ||||||||||||||||||||||
Elimination of inter-segment revenue | (21,965 | ) | (18,213 | ) | ||||||||||||||||||||
Total revenue | $ | 55,110 | $ | 79,547 | ||||||||||||||||||||
Gross Profit: | ||||||||||||||||||||||||
Supercomputing | $ | 13,223 | $ | 16,257 | ||||||||||||||||||||
Storage and Data Management | 2,907 | 7,157 | ||||||||||||||||||||||
Maintenance and Support | 10,214 | 9,160 | ||||||||||||||||||||||
Engineering Services and Other | 1,807 | 736 | ||||||||||||||||||||||
Elimination of inter-segment gross profit | (10,214 | ) | (9,160 | ) | ||||||||||||||||||||
Total gross profit | $ | 17,937 | $ | 24,150 | ||||||||||||||||||||
Revenue by geographic location | ' | |||||||||||||||||||||||
The following data represents the Company’s revenue for the United States and all other countries, which is determined based upon a customer’s geographic location (in thousands): | ||||||||||||||||||||||||
United States | Other Countries | Total | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Three months ended March 31, | ||||||||||||||||||||||||
Product revenue | $ | 10,463 | $ | 31,144 | $ | 19,552 | $ | 28,724 | $ | 30,015 | $ | 59,868 | ||||||||||||
Service revenue | 17,744 | 13,472 | 7,351 | 6,207 | 25,095 | 19,679 | ||||||||||||||||||
Total revenue | $ | 28,207 | $ | 44,616 | $ | 26,903 | $ | 34,931 | $ | 55,110 | $ | 79,547 | ||||||||||||
Basis_of_Presentation_Details
Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2014 | |
Basis of Presentation (Textual) [Abstract] | ' |
Product delivery period | '5 years |
Maintenance services period | '1 year |
Fair_Value_Measurement_Details
Fair Value Measurement (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Assets: | ' | ' | |
Cash and cash equivalents and restricted cash | $220,891 | ' | |
Available-for-sale investments | 57,733 | [1] | 14,048 |
Foreign exchange forward contracts | 1,160 | [2] | ' |
Assets measured at fair value at March 31, 2014 | 279,784 | ' | |
Liabilities: | ' | ' | |
Foreign exchange forward contracts | -6,734 | [3] | ' |
Liabilities measured at fair value at March 31, 2014 | -6,734 | ' | |
Quoted Prices in Active Markets (Level 1) | ' | ' | |
Assets: | ' | ' | |
Cash and cash equivalents and restricted cash | 220,891 | ' | |
Available-for-sale investments | 57,733 | [1] | ' |
Foreign exchange forward contracts | 0 | [2] | ' |
Assets measured at fair value at March 31, 2014 | 278,624 | ' | |
Liabilities: | ' | ' | |
Foreign exchange forward contracts | 0 | [3] | ' |
Liabilities measured at fair value at March 31, 2014 | 0 | ' | |
Significant Other Observable Inputs (Level 2) | ' | ' | |
Assets: | ' | ' | |
Cash and cash equivalents and restricted cash | 0 | ' | |
Available-for-sale investments | 0 | [1] | ' |
Foreign exchange forward contracts | 1,160 | [2] | ' |
Assets measured at fair value at March 31, 2014 | 1,160 | ' | |
Liabilities: | ' | ' | |
Foreign exchange forward contracts | -6,734 | [3] | ' |
Liabilities measured at fair value at March 31, 2014 | ($6,734) | ' | |
[1] | Included in "Short-term investments" and "Long-term investments" on the Company’s Condensed Consolidated Balance Sheets. | ||
[2] | Included in “Prepaid expenses and other current assets†on the Company’s Condensed Consolidated Balance Sheets. | ||
[3] | Included in “Other accrued liabilities†and “Other non-current liabilities†on the Company’s Condensed Consolidated Balance Sheets. |
Fair_Value_Measurement_Derivai
Fair Value Measurement Derivaitves (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Derivatives, Fair Value [Line Items] | ' | ' | |
Foreign exchange forward contracts | $1,160 | [1] | ' |
Total derivatives classified as hedging instruments | -5,574 | -5,507 | |
Foreign currency contracts | Prepaid expenses and other current assets | ' | ' | |
Derivatives, Fair Value [Line Items] | ' | ' | |
Foreign exchange forward contracts | 1,160 | 1,654 | |
Foreign currency contracts | Other non-current assets | ' | ' | |
Derivatives, Fair Value [Line Items] | ' | ' | |
Foreign exchange forward contracts | 0 | 76 | |
Foreign currency contracts | Other accrued liabilities | ' | ' | |
Derivatives, Fair Value [Line Items] | ' | ' | |
Total derivatives classified as hedging instruments | -2,669 | -2,942 | |
Foreign currency contracts | Other non-current liabilities | ' | ' | |
Derivatives, Fair Value [Line Items] | ' | ' | |
Total derivatives classified as hedging instruments | ($4,065) | ($4,295) | |
[1] | Included in “Prepaid expenses and other current assets†on the Company’s Condensed Consolidated Balance Sheets. |
Fair_Value_Measurement_Narrati
Fair Value Measurement Narrative (Details) | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Millions, unless otherwise specified | USD ($) | CAD | EUR (€) | GBP (£) | JPY (¥) | SGD | USD ($) | CAD | CHF | EUR (€) | GBP (£) | JPY (¥) | SGD |
Fair Value Disclosures [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding notional amounts, forward contracts | ' | 3.9 | € 33.30 | £ 36.4 | ¥ 2,300 | 1.4 | ' | 3.9 | 5.6 | € 53 | £ 36.4 | ¥ 1,200 | 3.2 |
Hedged foreign currency exposure | $127.80 | ' | ' | ' | ' | ' | $151.40 | ' | ' | ' | ' | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | ' |
Gross of Tax Reclassifications | ($33) | $33 |
Net of Tax Reclassifications | -20 | 20 |
Unrealized Gain (Loss) on Investments, Beginning Balance | 0 | -46 |
Unrealized Gain on Investments, Current-period change, net of tax | 4 | 49 |
Unrealized Gain on Investments, Ending Balance | 4 | 3 |
Unrealized Gain on Investments, Income tax expense associated with current-period change | 2 | 33 |
Foreign Currency Translation Adjustments Beginning Balance | 3,257 | 4,301 |
Foreign Currency Translation Adjustments, Current-period change, net of tax | 23 | 165 |
Foreign Currency Translation Adjustments Ending Balance | 3,280 | 4,466 |
Foreign Currency Translation Adjustments, Income tax expense (benefit) associated with current-period change | -167 | 110 |
Unrealized Gain (Loss) on Cash Flow Hedges Beginning Balance | -2,404 | 926 |
Unrealized Gain (Loss) on Cash Flow Hedges, Current-period change, net of tax | -308 | 2,000 |
Unrealized Gain (Loss) on Cash Flow Hedges Ending Balance | -2,712 | 2,926 |
Unrealized Gain (Loss) on Cash Flow Hedges, Income tax expense (benefit) associated with current-period change | -205 | 1,333 |
Accumulated Other Comprehensive Income Beginning Balance | 853 | 5,181 |
Accumulated Other Comprehensive Income, Current-period change, net of tax | -281 | 2,214 |
Accumulated Other Comprehensive Income Ending Balance | 572 | 7,395 |
Accumulated Other Comprehensive Income, Income tax expense (benefit) associated with current-period change | ($370) | $1,476 |
Earnings_Loss_Per_Share_EPS_De
Earnings (Loss) Per Share ("EPS") (Details) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Earnings Per Share [Abstract] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3.2 | 4.2 |
Investments_Details
Investments (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Schedule of Held-to-maturity Securities [Line Items] | ' | ' | |
Available-for-sale Securities, Amortized Cost | $57,727 | $14,048 | |
Available-for-sale Securities, Gross Unrealized Gain (Losses) | 6 | 0 | |
Available-for-sale investments | 57,733 | [1] | 14,048 |
Short-term available-for-sale securities | ' | ' | |
Schedule of Held-to-maturity Securities [Line Items] | ' | ' | |
Available-for-sale Securities, Amortized Cost | 49,889 | 14,048 | |
Available-for-sale Securities, Gross Unrealized Gain (Losses) | 27 | 0 | |
Available-for-sale investments | 49,916 | 14,048 | |
Long-term available-for-sale securities | ' | ' | |
Schedule of Held-to-maturity Securities [Line Items] | ' | ' | |
Available-for-sale Securities, Amortized Cost | 7,838 | 0 | |
Available-for-sale Securities, Gross Unrealized Gain (Losses) | -21 | 0 | |
Available-for-sale investments | $7,817 | $0 | |
[1] | Included in "Short-term investments" and "Long-term investments" on the Company’s Condensed Consolidated Balance Sheets. |
Accounts_and_Other_Receivables2
Accounts and Other Receivables, Net (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Accounts receivable | $58,871 | $182,684 |
Net accounts and other receivables | ' | ' |
Allowance for doubtful accounts | -106 | -157 |
Accounts and other receivables, net | 58,765 | 182,527 |
Trade accounts receivable | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Accounts receivable | 44,947 | 169,417 |
Advance billings | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Accounts receivable | 1,165 | 2,141 |
Other receivables | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Accounts receivable | 1,430 | 2,051 |
Unbilled receivables | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Accounts receivable | $11,329 | $9,075 |
Accounts_and_Other_Receivables3
Accounts and Other Receivables, Net Narrative (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Accounts receivable | $58,871 | $182,684 |
US. government agencies and customers | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Accounts receivable | 12,000 | 111,900 |
Accounts Receivable | Non US government customers | ' | ' |
Accounts and Other Receivables, Net (Textual) [Abstract] | ' | ' |
Concentration Risk, Number of Customers | 3 | 0 |
Non-U.S. government customers accounted, percentage | 37.00% | 10.00% |
Unbilled receivables | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Accounts receivable | 11,329 | 9,075 |
Unbilled receivables | US. government agencies and customers | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Accounts receivable | $300 | $300 |
Inventory_Details
Inventory (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Components and subassemblies | $39,376 | $46,339 |
Work in process | 15,880 | 23,618 |
Finished goods | 62,938 | 25,172 |
Total | $118,194 | $95,129 |
Narrative_Details
Narrative (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Inventory [Line Items] | ' | ' | ' |
Finished goods inventory | $61,900,000 | ' | $24,800,000 |
Customers accounted of finished goods | 50,700,000 | ' | 18,000,000 |
Inventory , written off | $382,000 | $0 | ' |
Finished Goods Inventory | ' | ' | ' |
Inventory [Line Items] | ' | ' | ' |
Number of customer accounted for finished goods inventory | 2 | ' | 1 |
Deferred_Revenue_Details
Deferred Revenue (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred revenue | ' | ' |
Total deferred revenue | $143,720 | $141,965 |
Less long-term deferred revenue | -54,167 | -50,477 |
Deferred revenue in current liabilities | 89,553 | 91,488 |
Deferred product revenue | ' | ' |
Deferred revenue | ' | ' |
Total deferred revenue | 59,174 | 54,065 |
Deferred service revenue | ' | ' |
Deferred revenue | ' | ' |
Total deferred revenue | $84,546 | $87,900 |
Deferred_Revenue_Narrative_Det
Deferred Revenue Narrative (Details) (Deferred Revenue) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | |
Deferred Revenue Arrangement [Line Items] | ' | ' |
Number of customer accounted for total deferred revenue | 2 | 3 |
Customer Concentration Risk | ' | ' |
Deferred Revenue Arrangement [Line Items] | ' | ' |
Percentage of total deferred revenue | 37.00% | 47.00% |
ShareBased_Compensation_Assump
Share-Based Compensation Assumptions (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Key weighted average assumptions used in determining the fair value | ' |
Risk-free interest rate | 1.24% |
Expected dividend yield | 0.00% |
Volatility | 50.40% |
Expected life | '4 years |
Weighted average Black-Scholes value of options granted | $11.01 |
ShareBased_Compensation_Compen
Share-Based Compensation Compensation Costs (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | ' | ' |
Gross share-based compensation cost, total | $2,522 | $1,726 |
Cost of product revenue | ' | ' |
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | ' | ' |
Gross share-based compensation cost, total | 52 | 27 |
Cost of service revenue | ' | ' |
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | ' | ' |
Gross share-based compensation cost, total | 69 | 62 |
Research and development, net | ' | ' |
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | ' | ' |
Gross share-based compensation cost, total | 761 | 386 |
Sales and marketing | ' | ' |
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | ' | ' |
Gross share-based compensation cost, total | 751 | 516 |
General and administrative | ' | ' |
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | ' | ' |
Gross share-based compensation cost, total | $889 | $735 |
ShareBased_Compensation_Option
Share-Based Compensation Option Activity (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Stock option activity | ' | ' |
Options, Outstanding beginning balance (In Shares) | 2,078,069 | ' |
Weighted Average Exercise Price, Outstanding beginning balance (Per Share) | $9.29 | ' |
Options, Grants (In Shares) | 44,800 | ' |
Weighted Average Exercise Price, Grants (Per Share) | $27.46 | ' |
Options, Exercises (Per Share) | -143,258 | -202,321 |
Weighted Average Exercise Price, Exercises (Per Share) | $6.95 | ' |
Options, Cancellations (In Shares) | -5,497 | ' |
Weighted Average Exercise Price, Cancellations (Per Share) | $24.54 | ' |
Options, Outstanding ending balance (In Shares) | 1,974,114 | ' |
Weighted Average Exercise Price, Outstanding ending balance (Per Share) | $9.83 | ' |
Weighted Average Remaining Contractual Term, Outstanding ending balance | '6 years 11 months 0 days | ' |
Options, Exercisable ending balance (in Shares) | 1,201,668 | ' |
Weighted Average Exercise Price, Exercisable ending balance (Per Share) | $6.34 | ' |
Weighted Average Remaining Contractual Term, Exercisable ending balance | '5 years 10 months 24 days | ' |
Options, Available for grant ending balance (In Shares) | 2,985,282 | ' |
ShareBased_Compensation_Restri
Share-Based Compensation Restricted Stock (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Standard Restricted Shares | ' |
Unvested restricted stock grants and restricted stock units changes | ' |
Shares, Outstanding beginning balance (In Shares) | 1,127,700 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance (Per Share) | $12.05 |
Shares, Granted (In Shares) | 100,800 |
Weighted Average Grant Date Fair Value, Granted (Per Share) | $34.73 |
Shares, Forfeited (In Shares) | -5,000 |
Weighted Average Grant Date Fair Value, Forfeited (Per Share) | $26.01 |
Shares, Vested (In Shares) | -36,250 |
Weighted Average Grant Date Fair Value, Vested (Per Share) | $8.09 |
Shares, Outstanding ending balance (In Shares) | 1,187,250 |
Weighted Average Grant Date Fair Value, Outstanding ending balance (Per Share) | $14.04 |
Performance Vesting Restricted Shares | ' |
Unvested restricted stock grants and restricted stock units changes | ' |
Shares, Outstanding beginning balance (In Shares) | 1,094,000 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance (Per Share) | $15.94 |
Shares, Granted (In Shares) | 0 |
Weighted Average Grant Date Fair Value, Granted (Per Share) | $0 |
Shares, Forfeited (In Shares) | -10,000 |
Weighted Average Grant Date Fair Value, Forfeited (Per Share) | $12.90 |
Shares, Vested (In Shares) | 0 |
Weighted Average Grant Date Fair Value, Vested (Per Share) | $0 |
Shares, Outstanding ending balance (In Shares) | 1,084,000 |
Weighted Average Grant Date Fair Value, Outstanding ending balance (Per Share) | $15.97 |
Total Restricted Shares | ' |
Unvested restricted stock grants and restricted stock units changes | ' |
Shares, Outstanding beginning balance (In Shares) | 2,221,700 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance (Per Share) | $13.97 |
Shares, Granted (In Shares) | 100,800 |
Weighted Average Grant Date Fair Value, Granted (Per Share) | $34.73 |
Shares, Forfeited (In Shares) | -15,000 |
Weighted Average Grant Date Fair Value, Forfeited (Per Share) | $17.27 |
Shares, Vested (In Shares) | -36,250 |
Weighted Average Grant Date Fair Value, Vested (Per Share) | $8.09 |
Shares, Outstanding ending balance (In Shares) | 2,271,250 |
Weighted Average Grant Date Fair Value, Outstanding ending balance (Per Share) | $14.96 |
ShareBased_Compensation_Narrat
Share-Based Compensation Narrative (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Share-based Compensation [Abstract] | ' | ' |
Estimated forfeiture rate | 10.00% | ' |
Vesting period of stock option | '4 years | ' |
Aggregate intrinsic value of outstanding stock option (In USD) | $54.30 | ' |
Aggregate intrinsic value of exercisable stock option (In USD) | 37.2 | ' |
Stock option (In shares) | 143,258 | 202,321 |
Total intrinsic value of shares exercised (In USD) | 4.3 | 2.6 |
Aggregate fair value of restricted stock vested (In USD) | 1.1 | 0.7 |
Unrecognized compensation cost (In USD) | 31.2 | ' |
Unrecognized compensation cost, performance vesting restricted stock which are not considered probable to vest | 17 | ' |
Unrecognized compensation cost for performance vesting restricted stock subject to performance measures which are considered probable to vest | $0.30 | ' |
Unrecognized compensation cost, weighted average period | '1 year 8 months 12 days | ' |
Taxes_Details
Taxes (Details) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' |
Effective Tax Rates | 42.00% | 40.00% |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Information of Operating Segments | ' | ' |
Revenue: | $55,110 | $79,547 |
Gross Profit: | 17,937 | 24,150 |
Supercomputing | ' | ' |
Information of Operating Segments | ' | ' |
Revenue: | 43,626 | 61,755 |
Gross Profit: | 13,223 | 16,257 |
Storage and Data Management | ' | ' |
Information of Operating Segments | ' | ' |
Revenue: | 8,065 | 16,282 |
Gross Profit: | 2,907 | 7,157 |
Maintenance and Support | ' | ' |
Information of Operating Segments | ' | ' |
Revenue: | 21,965 | 18,213 |
Gross Profit: | 10,214 | 9,160 |
Engineering Services and Other | ' | ' |
Information of Operating Segments | ' | ' |
Revenue: | 3,419 | 1,510 |
Gross Profit: | 1,807 | 736 |
Elimination of inter-segment revenue | ' | ' |
Information of Operating Segments | ' | ' |
Revenue: | -21,965 | -18,213 |
Gross Profit: | ($10,214) | ($9,160) |
Segment_Information_Revenue_De
Segment Information Revenue (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenue by geographic location | ' | ' |
Product revenue | $30,015 | $59,868 |
Service | 25,095 | 19,679 |
Revenue: | 55,110 | 79,547 |
United States | ' | ' |
Revenue by geographic location | ' | ' |
Product revenue | 10,463 | 31,144 |
Service | 17,744 | 13,472 |
Revenue: | 28,207 | 44,616 |
Other Countries | ' | ' |
Revenue by geographic location | ' | ' |
Product revenue | 19,552 | 28,724 |
Service | 7,351 | 6,207 |
Revenue: | $26,903 | $34,931 |
Segment_Information_Narrative_
Segment Information Narrative (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenue, Major Customer [Line Items] | ' | ' |
Product and service revenue | $55,110 | $79,547 |
US. government agencies and customers | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Product and service revenue | $22,000 | $38,600 |
Japan | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Percentage of total revenue | 25.00% | ' |
Japan and Switzerland | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Percentage of total revenue | ' | 32.00% |