Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 13, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 | ||
Entity Registrant Name | CRAY INC | ||
Entity Central Index Key | 949158 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 40,826,651 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Public Float | $1,041,002,837 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $112,633 | $192,633 |
Restricted cash | 16,874 | 0 |
Short-term investments | 16,289 | 14,048 |
Accounts and other receivables, net | 165,113 | 182,527 |
Inventory | 143,632 | 95,129 |
Deferred tax asset | 36,073 | 9,195 |
Prepaid expenses and other current assets | 17,948 | 11,804 |
Total current assets | 508,562 | 505,336 |
Noncurrent Assets: | ||
Long-term restricted cash | 0 | 13,768 |
Long-term investment in sales-type lease, net | 31,089 | 0 |
Property and equipment, net | 34,793 | 30,278 |
Service inventory, net | 1,868 | 1,828 |
Goodwill | 14,182 | 14,182 |
Purchased intangible assets, net | 3,895 | 6,362 |
Deferred tax asset | 41,414 | 19,206 |
Other non-current assets | 15,631 | 12,406 |
TOTAL ASSETS | 651,434 | 603,366 |
Current liabilities: | ||
Accounts payable | 48,699 | 34,225 |
Accrued payroll and related expenses | 16,054 | 22,470 |
Other accrued liabilities | 16,285 | 22,225 |
Deferred revenue | 65,910 | 91,488 |
Total current liabilities | 146,948 | 170,408 |
Noncurrent Liabilities: | ||
Long-term deferred revenue | 47,588 | 50,477 |
Other non-current liabilities | 3,044 | 6,894 |
TOTAL LIABILITIES | 197,580 | 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 39,435,215 and 36,763,379 shares, respectively | 598,390 | 586,243 |
Accumulated other comprehensive income | 6,503 | 853 |
Accumulated deficit | -151,039 | -211,509 |
TOTAL SHAREHOLDERS’ EQUITY | 453,854 | 375,587 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $651,434 | $603,366 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock and additional paid-in capital, shares issued | 40,822,377 | 40,469,854 |
Common stock and additional paid-in capital, shares outstanding | 40,822,377 | 40,469,854 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue: | |||
Product | $460,748 | $436,330 | $353,767 |
Service | 100,858 | 89,419 | 67,291 |
Total revenue | 561,606 | 525,749 | 421,058 |
Cost of revenue: | |||
Cost of product revenue | 321,554 | 298,244 | 231,237 |
Cost of service revenue | 55,638 | 43,179 | 38,643 |
Total cost of revenue | 377,192 | 341,423 | 269,880 |
Gross profit | 184,414 | 184,326 | 151,178 |
Operating expenses: | |||
Research and development, net | 94,048 | 87,728 | 64,303 |
Sales and marketing | 57,785 | 51,345 | 37,180 |
General and administrative | 23,381 | 23,603 | 20,707 |
Total operating expenses | 175,214 | 162,676 | 122,190 |
Net gain on sale of interconnect hardware development program | 0 | 0 | 139,068 |
Income from operations | 9,200 | 21,650 | 168,056 |
Other income (expense), net | -9 | -1,378 | 472 |
Interest income (expense), net | 506 | 757 | 204 |
Income before income taxes | 9,697 | 21,029 | 168,732 |
Income tax benefit (expense) | 52,626 | 11,194 | -7,491 |
Net income | $62,323 | $32,223 | $161,241 |
Basic net income per common share (dollars per share) | $1.61 | $0.85 | $4.42 |
Diluted net income per common share (dollars per share) | $1.54 | $0.81 | $4.27 |
Basic weighted average shares outstanding (shares) | 38,634 | 37,832 | 36,509 |
Diluted weighted average shares outstanding (shares) | 40,435 | 39,776 | 37,789 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income | $62,323 | $32,223 | $161,241 |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Unrealized loss on available-for-sale investments | 12 | 46 | -46 |
Foreign currency translation adjustments | -1,188 | -1,044 | -43 |
Unrealized gain (loss) on cash flow hedges | 8,475 | -4,292 | -824 |
Reclassification adjustments on cash flow hedges included in net income | -1,649 | 962 | -386 |
Other comprehensive income (loss) | 5,650 | -4,328 | -1,299 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | $67,973 | $27,895 | $159,942 |
Consolidated_Statements_of_Sha
Consolidated Statements of Shareholders’ Equity (USD $) | Total | Common Stock and Additional Paid In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
In Thousands, except Share data, unless otherwise specified | ||||
Balance at Dec. 31, 2011 | $166,814 | $564,148 | $6,480 | ($403,814) |
Balance, shares at Dec. 31, 2011 | 36,763,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of shares under employee stock purchase plan, shares | 38,000 | |||
Issuance of shares under employee stock purchase plan | 397 | 397 | ||
Exercise of stock options, shares | 1,346,326 | 1,346,000 | ||
Exercise of stock options | 7,430 | 7,430 | ||
Restricted shares issued for compensation, net of forfeitures, shares | 1,288,000 | |||
Restricted shares issued for compensation, net of forfeitures and taxes | 0 | 0 | ||
Share-based compensation | 5,963 | 5,963 | ||
Other comprehensive income | -1,299 | -1,299 | ||
Net income | 161,241 | 161,241 | ||
Balance at Dec. 31, 2012 | 340,546 | 577,938 | 5,181 | -242,573 |
Balance, shares at Dec. 31, 2012 | 39,435,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of shares under employee stock purchase plan, shares | 25,000 | |||
Issuance of shares under employee stock purchase plan | 517 | 517 | ||
Exercise of stock options, shares | 495,221 | 495,000 | ||
Exercise of stock options | 3,161 | 3,161 | ||
Restricted shares issued for compensation, net of forfeitures, shares | 515,000 | |||
Restricted shares issued for compensation, net of forfeitures and taxes | -3,771 | -2,612 | -1,159 | |
Share-based compensation | 7,239 | 7,239 | ||
Other comprehensive income | -4,328 | -4,328 | ||
Net income | 32,223 | 32,223 | ||
Balance at Dec. 31, 2013 | 375,587 | 586,243 | 853 | -211,509 |
Balance, shares at Dec. 31, 2013 | 40,469,854 | 40,470,000 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of shares under employee stock purchase plan, shares | 21,000 | |||
Issuance of shares under employee stock purchase plan | 611 | 611 | ||
Exercise of stock options, shares | 411,352 | 411,000 | ||
Exercise of stock options | 3,086 | 3,086 | ||
Restricted shares issued for compensation, net of forfeitures, shares | -80,000 | |||
Restricted shares issued for compensation, net of forfeitures and taxes | -3,767 | -1,914 | -1,853 | |
Share-based compensation | 10,364 | 10,364 | ||
Other comprehensive income | 5,650 | 5,650 | ||
Net income | 62,323 | 62,323 | ||
Balance at Dec. 31, 2014 | $453,854 | $598,390 | $6,503 | ($151,039) |
Balance, shares at Dec. 31, 2014 | 40,822,377 | 40,822,000 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities: | |||
Net income | $62,323 | $32,223 | $161,241 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 16,324 | 14,242 | 8,652 |
Accretion and amortization on available for sale investments | 235 | 1,977 | 0 |
Loss on disposal of fixed assets | 1,594 | 42 | 128 |
Net gain on sale of interconnect hardware development program | 0 | 0 | -139,068 |
Share-based compensation expense | 10,364 | 7,239 | 5,963 |
Inventory write-down | 2,330 | 917 | 2,329 |
Deferred income taxes | -53,204 | -13,175 | 3,020 |
Cash (used in) provided by operations due to changes in operating assets and liabilities: | |||
Accounts and other receivables | 17,450 | -169,753 | 60,744 |
Long-term investment in sales-type lease, net | -32,889 | 0 | 0 |
Inventory | -54,147 | -10,780 | 7,004 |
Prepaid expenses and other assets | -9,349 | -2,670 | 1,763 |
Accounts payable | 14,504 | -509 | -6,489 |
Accrued payroll and related expenses and other accrued liabilities | -1,395 | 4,721 | 15,202 |
Other non-current liabilities | -3,842 | 3,701 | 492 |
Deferred revenue | -28,407 | 44,475 | 35,911 |
Net cash (used in) provided by operating activities | -58,109 | -87,350 | 156,892 |
Investing activities: | |||
Sales/maturities of short-term investments | 53,608 | 139,277 | 0 |
Purchases of available-for-sale investments | -56,064 | -85,162 | -70,218 |
Decrease in restricted cash | -3,106 | -13,768 | 3,776 |
Proceeds from the sale of interconnect hardware development program, net | 0 | 0 | 139,225 |
Cash used in acquisition, net of cash acquired | 0 | 0 | -24,246 |
Purchases of property and equipment | -17,193 | -13,136 | -10,843 |
Net cash provided by (used in) investing activities | -22,755 | 27,211 | 37,694 |
Financing activities: | |||
Proceeds from issuance of common stock through employee stock purchase plan | 611 | 517 | 397 |
Restricted shares issued for compensation, net of forfeitures and taxes | -3,767 | -3,771 | 0 |
Proceeds from exercise of options | 3,086 | 3,161 | 7,430 |
Net cash provided by financing activities | -70 | -93 | 7,827 |
Effect of foreign exchange rate changes on cash and cash equivalents | 934 | -200 | 241 |
Net increase (decrease) in cash and cash equivalents | -80,000 | -60,432 | 202,654 |
Cash and cash equivalents: | |||
Beginning of period | 192,633 | 253,065 | 50,411 |
End of period | 112,633 | 192,633 | 253,065 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 5 | 3 | 90 |
Cash paid for income taxes | 2,935 | 2,611 | 2,804 |
Non-cash investing and financing activities: | |||
Inventory transfers to fixed assets and service inventory | $3,313 | $4,530 | $6,278 |
Description_of_Business
Description of Business | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | DESCRIPTION OF BUSINESS |
Cray Inc., or Cray, or the Company, designs, develops, manufactures, markets and services the high-end of the high-performance computing, or HPC, market, primarily categories of systems commonly known as supercomputers, and provides storage and analytics solutions. The Company also provides software, system maintenance and support services and engineering services related to supercomputer systems. Cray’s supercomputer systems address challenging scientific, engineering, commercial and national security computing problems. The Company’s customers include foreign and domestic government agencies, government-funded entities, academic institutions and commercial entities. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Accounting Principles | |||||||||||||
The consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. | |||||||||||||
Principles of Consolidation | |||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. | |||||||||||||
Reclassifications | |||||||||||||
Certain prior year amounts have been reclassified to conform with the current year presentation. There has been no impact on previously reported net income or shareholders’ equity from such reclassifications. | |||||||||||||
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 consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | |||||||||||||
Cash, Cash Equivalents and Restricted Cash | |||||||||||||
Cash and cash equivalents consist of highly liquid financial instruments that are readily convertible to cash and have maturities of three months or less at the time of acquisition. The Company maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. As of December 31, 2014, the Company had $16.9 million in short-term restricted cash and as of December 31, 2013, $13.8 million in long-term restricted cash, associated with certain letters of credit outstanding to secure customer prepayments. | |||||||||||||
Investments | |||||||||||||
The Company’s investments consist primarily of commercial paper, corporate debt, and other debt securities. Debt securities are classified as available-for-sale and are reported at fair value with unrealized gains and losses, net of applicable taxes, recorded in accumulated other comprehensive income, a component of shareholders’ equity. The realized gains and losses for available-for-sale securities are included in other income and expense in the Consolidated Statements of Operations. Realized gains and losses are calculated based on the specific identification method. | |||||||||||||
The Company monitors its investment portfolio for impairment on a periodic basis. When the carrying value of an investment in debt securities exceeds its fair value and the decline in value is determined to be an other-than-temporary decline, and when the Company does not intend to sell the debt security and it is not more likely than not that the Company will be required to sell the debt securities prior to recovery of its amortized cost basis, the Company records an impairment charge in the amount of the credit loss and the balance, if any, to other comprehensive income (loss). | |||||||||||||
Investments that mature between three months and one year from the purchase date are initially classified as short-term investments in the Consolidated Balance Sheet. Investments that mature beyond one year from the purchase date are initially classified as long-term investments in the Consolidated Balance Sheet. | |||||||||||||
Foreign Currency Derivatives | |||||||||||||
The Company uses forward foreign currency exchange contracts to hedge certain foreign currency exposures. Forward contracts are cash flow hedges of the Company’s foreign currency exposures on certain revenue contracts and are recorded at the contract’s fair value. Any gains or losses on the effective portion of the forward contract is initially reported in “Accumulated other comprehensive income,” a component of shareholders’ equity, with a corresponding asset or liability recorded based on the fair value of the forward contract. When the hedged transaction is recognized, any unrecognized gains or losses on the hedged transaction are reclassified into results of operations in the same period. Any hedge ineffectiveness is recorded to operations in the current period. The Company measures hedge effectiveness by comparing changes in fair values of the forward contract and expected cash flows based on changes in the spot prices of the underlying currencies. Cash flows from forward contracts accounted for as cash flow hedges are classified in the same category as the cash flows from the items being hedged. The Company does not use derivative financial instruments for speculative purposes. | |||||||||||||
Concentration of Credit Risk | |||||||||||||
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, available-for-sale investments, accounts receivable, short-term and long-term restricted cash and forward foreign currency exchange contracts. | |||||||||||||
The Company maintains cash and cash equivalents, available-for-sale securities and forward contracts with various financial institutions. As part of its risk management process, the Company performs periodic evaluations of the relative credit standing of the financial institutions. The Company has not sustained any credit losses from instruments held at financial institutions. The Company utilizes forward contracts to protect against the effects of foreign currency fluctuations. Such contracts involve the risk of non-performance by the counterparty, which could result in a material loss. | |||||||||||||
The Company currently derives a significant portion of its revenue from sales of products and services to different agencies of the U.S. government or commercial customers primarily serving various agencies of the U.S. government. See Note 19 — Segment Information for additional information. Given the type of customers, the Company does not believe its accounts receivable represent significant credit risk. | |||||||||||||
The Company currently has a long-term investment in a sales-type lease it entered into with one of its customers. See Note 9 — Sales-type Lease for additional information. Given the credit standing of the customer, the Company does not believe that this investment represents a significant credit risk. | |||||||||||||
Other Concentration | |||||||||||||
The Company obtains certain components from single source suppliers due to technology, availability, price, quality or other considerations. The loss of a single source supplier, the single source supplier’s inability to deliver the required components or intellectual property due to natural disaster or other reasons, the deterioration of the relationship with a single source supplier, or any unilateral modification of contract terms under which the Company is supplied components by a single source supplier could have a significant adverse effect on the Company’s revenue and gross margins. | |||||||||||||
Accounts Receivable | |||||||||||||
Accounts receivable are stated at principal amounts and are primarily comprised of amounts contractually due from customers for products and services and amounts due from government research and development contracts. The Company provides an allowance for doubtful accounts based on an evaluation of customer past due account balances. In determining whether to record an allowance for a specific customer, the Company considers a number of factors, including prior payment history and financial information for the customer. | |||||||||||||
Fair Values of Financial Instruments | |||||||||||||
The Company measures certain financial assets and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company’s financial instruments primarily consist of debt securities, time deposits, money market funds, and foreign currency derivatives. See Note 5 — Fair Value Measurement for a further discussion on fair value of financial instruments. | |||||||||||||
Inventories | |||||||||||||
Inventories are valued at the lower of cost or market, with cost computed on a first-in, first-out basis. The Company regularly evaluates the technological usefulness and anticipated future demand for various inventory components and the expected use of the inventory. When the Company determines it is not likely the cost of inventory items will be recovered through future sales, the Company writes-down the related inventory to its estimated market value. | |||||||||||||
In connection with certain of its sales agreements, the Company may receive used equipment from a customer. This inventory generally will be recorded at no value based on the expectation that the Company will not be able to resell or otherwise use the equipment. In the event that the Company has a specific contractual plan for resale at the date the inventory is acquired, the inventory is recorded at its estimated fair value. | |||||||||||||
Property and Equipment and Intangible Assets, net | |||||||||||||
Property and equipment are recorded at cost less accumulated depreciation and amortization. Additions and improvements are capitalized and maintenance and repairs are expensed as incurred. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets, ranging from eighteen months to seven years for furniture and fixtures, three years for computer equipment, and eight to twenty-five years for buildings and land improvements. Leasehold improvements are depreciated over the life of the lease or asset, whichever is shorter. | |||||||||||||
The Company amortizes purchased intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, ranging from two to ten years. | |||||||||||||
Service Spares | |||||||||||||
Service spares are valued at the lower of cost or market and represent inventory used to support service and maintenance agreements with customers. As inventory is utilized, replaced items are returned to the Company and are either repaired or scrapped. Costs incurred to repair inventory to a usable state are charged to expense as incurred. Service spares are recorded at cost and amortized over the estimated service life of the related product platform (generally four years). | |||||||||||||
Impairment of Long-Lived Assets and Intangibles | |||||||||||||
The Company evaluates property, plant and equipment and intangible assets with finite lives for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flow the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flow expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When the Company identifies an impairment, the carrying value of the asset is reduced to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. | |||||||||||||
Goodwill | |||||||||||||
Goodwill is not amortized but is tested for impairment at least annually. The Company reviews goodwill for impairment annually at the beginning of its fourth fiscal quarter and whenever events or changes in circumstances indicate the carrying value of the asset may not be recoverable. The goodwill impairment test consists of a two-step process, if necessary. However, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in ASC Topic 350. The more likely than not threshold is defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary and goodwill is considered to be unimpaired. However, if based on the qualitative assessment the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company will proceed with performing the two-step process. | |||||||||||||
In step one, the Company determines the fair value of each reporting unit and compares it to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and no further testing is performed. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference. | |||||||||||||
The Company performed its qualitative assessment during the fourth fiscal quarter of 2014 and concluded that it was more likely than not that the fair values of its reporting units were greater than their carrying amounts. After reaching this conclusion, the two-step impairment test was unnecessary and no further testing was performed. The qualitative factors that were considered included, but were not limited to, general economic conditions, outlook for the HPC and big data markets, recent and forecasted financial performance and the price of the Company’s common stock. | |||||||||||||
Business Combinations | |||||||||||||
The Company accounts for business combinations using the acquisition method of accounting and allocates the purchase price to the tangible and intangible assets acquired and the liabilities assumed based upon their estimated fair values at the acquisition date. The difference between the purchase price and the fair value of the net assets acquired is recorded as goodwill. The Company uses estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date. During the measurement period, which may be up to one year from the acquisition date, any refinements made to the fair value of the assets and liabilities assumed are recorded with retrospective effect. | |||||||||||||
The fair values of intangible assets acquired are estimated using a discounted cash flow approach with Level 3 inputs. Under this method, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, the Company uses risk-adjusted cash flows discounted at rates considered appropriate given the inherent risks associated with each type of asset. The Company believes the level and timing of cash flows appropriately reflects market participant assumptions. | |||||||||||||
Revenue Recognition | |||||||||||||
The Company recognizes revenue, including transactions under sales-type leases, 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 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 usually 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. | |||||||||||||
Sales-type leases | |||||||||||||
When the Company leases a system to a customer, the accounting involves specific determinations, which often involve complex provisions and significant judgments. The four criteria of the accounting standard that the Company uses in the determination of whether a lease is a sales-type lease or an operating lease are: (a) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the system; (b) a review of the minimum lease payments to determine if they are equal to or greater than 90% of the fair value of the system; (c) a determination of whether or not the lease transfers ownership to the lessee at the end of the lease term; and (d) a determination of whether or not the lease contains a bargain purchase option. If the lease transaction meets one of the four criteria, then it is recorded as a sales-type lease; otherwise it is an operating lease. Additionally, the Company assesses whether collectibility of the lease payments is reasonably assured and whether there are any significant uncertainties related to costs that it has yet to incur with respect to the lease. | |||||||||||||
The Company considers the economic lives of most of its products to range from three to four years. There is no significant after-market for the Company’s used products and the Company believes that the economic lives are representative of the periods during which its products are expected to be economically usable, with normal service, for the purposes for which they were intended. Residual values are not significant. | |||||||||||||
The discount rate implicit in the sales-type lease is used to calculate the present value of minimum lease payments, which the Company records as a lease receivable. The minimum lease payment consists of the gross lease payments net of executory costs and contingencies, if any. While revenue is recognized at the inception of the lease, the cash flow from the sales-type lease occurs over the course of the lease, which results in interest income. Unearned interest income is recorded at the inception of the lease and amortized over the lease term using the effective interest method. | |||||||||||||
Foreign Currency Translation | |||||||||||||
The Company uses the U.S. dollar predominantly as its functional currency. Assets and liabilities of foreign subsidiaries that have a functional currency denominated in non-U.S. dollars are translated into U.S. dollars at year-end exchange rates, and revenue and expenses of these foreign subsidiaries are translated at average rates prevailing during the year. Translation adjustments are included in “Accumulated other comprehensive income,” a separate component of shareholders’ equity. Transaction gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved are included in “Other (income) expense, net” in the accompanying Consolidated Statements of Operations. Net transaction gains were $2.1 million for 2014 and net transactions losses were $1.3 million, and $0.1 million for 2013, and 2012, respectively. | |||||||||||||
Research and Development | |||||||||||||
Research and development expenses include costs incurred in the development and production of hardware and software, costs incurred to enhance and support existing product features, costs incurred to support and improve development processes, and costs related to future product development. Research and development costs are expensed as incurred, and may be offset by co-funding from third parties. The Company may also enter into arrangements whereby it makes advance, non-refundable payments to a vendor to perform certain research and development services. These payments are deferred and recognized over the vendor’s estimated performance period. During the third quarter of 2009, the Company amended a vendor agreement to settle outstanding performance issues. The Company had made advance payments of $16.2 million to the vendor. Due to the amendment, the Company received a refund of $10.0 million of amounts previously paid to the vendor and the right to receive rebates on future purchases. The Company estimated the fair value of this rebate right to be $6.2 million. The Company believes the rebate right is recoverable and it has been classified in “Other non-current assets” in the Consolidated Balance Sheets. No gain or loss was recorded as a result of this amendment. As of December 31, 2014, $0.1 million in rebates remain available for use. | |||||||||||||
Amounts to be received under co-funding arrangements with the U.S. government or other customers are based on either contractual milestones or costs incurred. These co-funding milestone payments are recognized in operations as performance is estimated to be completed and are measured as milestone achievements occur or as costs are incurred. These estimates are reviewed on a periodic basis and are subject to change, including in the near term. If an estimate is changed, net research and development expense could be impacted significantly. | |||||||||||||
The Company does not record a receivable from the U.S. government prior to completing the requirements necessary to bill for a milestone or cost reimbursement. Funding from the U.S. government is subject to certain budget restrictions and milestones may be subject to completion risk, and as a result, there may be periods in which research and development costs are expensed as incurred for which no reimbursement is recorded, as milestones have not been completed or the U.S. government has not funded an agreement. Accordingly, there can be substantial variability in the amount of net research and development expenses from quarter to quarter and year to year. | |||||||||||||
The Company classifies amounts to be received from funded research and development projects as either revenue or a reduction to research and development expense based on the specific facts and circumstances of the contractual arrangement, considering total costs expected to be incurred compared to total expected funding and the nature of the research and development contractual arrangement. In the event that a particular arrangement is determined to represent revenue, the corresponding research and development costs are classified as cost of revenue. | |||||||||||||
Income Taxes | |||||||||||||
Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and operating loss and tax credit carryforwards and are measured using the enacted tax rates and laws that will be in effect when the differences and carryforwards are expected to be recovered or settled. A valuation allowance for deferred tax assets is provided when the Company estimates that it is more likely than not that all or a portion of the deferred tax assets may not be realized through future operations. This assessment is based upon consideration of available positive and negative evidence, which includes, among other things, recent results of operations and expected future profitability. The Company considers its actual historical results over several years to have stronger weight than other more subjective indicators, including forecasts, when considering whether to establish or reduce a valuation allowance on deferred tax assets. | |||||||||||||
The Company recognizes the income tax benefit from a tax position only if it is more likely than not that the tax position will be sustained on examination by the applicable taxing authorities, based on the technical merits of the Company’s position. The tax benefit recognized in the financial statements from such a position is measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. | |||||||||||||
Estimated interest and penalties are recorded as a component of interest expense and other expense, respectively. | |||||||||||||
As of December 31, 2014, the Company had approximately $87.6 million of net deferred tax assets, against which the Company provided a $10.1 million valuation allowance, resulting in a net deferred tax asset of $77.5 million. During the year ended December 31, 2014 the Company reduced substantially all of the remaining valuation allowance held against the Company’s U.S. deferred tax assets. The Company continues to provide a valuation allowance against specific U.S. deferred tax assets and a full valuation allowance against deferred tax assets arising in a limited number of foreign jurisdictions as the realization of such assets is not considered to be more likely than not at this time. In a future period the Company’s assessment of the realizability of its deferred tax assets and therefore the appropriateness of the valuation allowance could change based on an assessment of all available evidence, both positive and negative in that future period. If the Company’s conclusion about the realizability of its deferred tax assets and therefore the appropriateness of the valuation allowance changes in a future period, the Company could record a substantial tax provision or benefit in its Consolidated Statement of Operations when that occurs. | |||||||||||||
Share-Based Compensation | |||||||||||||
The Company measures compensation cost for share-based payment awards at fair value and recognizes it as compensation expense over the service period for awards expected to vest. Share-based compensation expense is recognized for all share-based payment awards, net of an estimated forfeiture rate. Compensation cost is only recognized for those shares expected to vest on a straight-line basis over the requisite service period of the award. | |||||||||||||
Determining the appropriate fair value model and calculating the fair value of share-based payment awards requires subjective assumptions, including the expected life of the share-based payment awards and stock price volatility. The Company utilizes the Black-Scholes options pricing model to value the stock options granted under its options plans. In this model, the assumptions utilized relate to stock price volatility, stock option term and forfeiture rates that are based upon both historical factors as well as management’s judgment. | |||||||||||||
The fair value of restricted stock and restricted stock units is determined based on the number of shares or units granted and the quoted price of the Company’s common stock at the date of grant. | |||||||||||||
The Company grants performance vesting restricted shares to executives as one of the ways to align compensation with shareholder interests. Vesting of these awards is contingent upon achievement of certain performance conditions. Compensation expense for these awards is only recorded when vesting is deemed to be probable. | |||||||||||||
Shipping and Handling Costs | |||||||||||||
Costs related to shipping and handling are included in “Cost of product revenue” and “Cost of service revenue” in the accompanying Consolidated Statements of Operations. | |||||||||||||
Advertising Costs | |||||||||||||
Sales and marketing expenses in the accompanying Consolidated Statements of Operations include advertising expenses of $2.9 million, $2.2 million, and $1.2 million in 2014, 2013, and 2012, respectively. The Company incurs advertising costs for representation at certain trade shows, promotional events and sales lead generation, as well as design and printing costs for promotional materials. The Company expenses all advertising costs as incurred. | |||||||||||||
Earnings Per Share, or EPS | |||||||||||||
Basic EPS is computed by dividing net income 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 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 years ended December 31, 2014, 2013 and 2012, the added shares from these items included in the calculation of diluted shares and EPS totaled approximately 1.8 million, 1.9 million, and 1.3 million, respectively. Potentially dilutive shares of 0.6 million, 0.5 million, and 0.4 million, respectively, have been excluded from the denominator in the computation of diluted EPS for the years ended December 31, 2014, 2013 and 2012, respectively, because they are antidilutive. Performance vesting restricted stock totaling 0.8 million, 1.1 million and 0.7 million were excluded from the computation of diluted EPS for the years ended December 31, 2014, 2013 and 2012, respectively, because the conditions for vesting had not been met as of the balance sheet date. | |||||||||||||
Accumulated Other Comprehensive Income | |||||||||||||
Accumulated other comprehensive income, a component of Shareholders’ equity, consisted of the following at December 31 (in thousands): | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Accumulated unrealized net gain (loss) on available-for-sale investments | $ | 12 | $ | — | $ | (46 | ) | ||||||
Accumulated currency translation adjustments | 2,069 | 3,257 | 4,301 | ||||||||||
Accumulated unrealized net gain (loss) on cash flow hedges | 4,422 | (2,404 | ) | 926 | |||||||||
Accumulated other comprehensive income | $ | 6,503 | $ | 853 | $ | 5,181 | |||||||
Recent Accounting Pronouncements | |||||||||||||
In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the fiscal and interim reporting periods beginning after December 15, 2016 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. The Company is currently evaluating the potential impact of the pending adoption of ASU 2014-09 on its consolidated financial statements. |
Acquisition
Acquisition | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Business Combinations [Abstract] | ||||||||||
Acquisition | ACQUISITION | |||||||||
On November 21, 2012, the Closing Date, the Company acquired all the outstanding shares of Appro International, Inc., or Appro, for cash consideration of $24.9 million. Appro is a provider of cluster solutions in the high performance computing market. The acquisition of Appro allowed the Company to expand its product offering in the high performance computing market. The Company reports the financial results of the Appro business in the supercomputing segment. | ||||||||||
The Company utilized a third-party appraisal in its determination of the fair value of the various assets acquired and liabilities assumed. The fair value of the acquired assets, net of assumed liabilities, equals the $24.9 million cash consideration paid by the Company. No measurement period adjustments were required. | ||||||||||
The following are the estimated fair values of the assets acquired and liabilities assumed (in thousands): | ||||||||||
Cash | $ | 635 | ||||||||
Inventories | 7,526 | |||||||||
Other tangible assets | 5,702 | |||||||||
Deferred revenue | (2,400 | ) | ||||||||
Accounts payable | (2,918 | ) | ||||||||
Deferred tax liabilities | (3,685 | ) | ||||||||
Other liabilities assumed | (2,061 | ) | ||||||||
Net tangible assets | 2,799 | |||||||||
Trademarks | 300 | |||||||||
Developed technology | 5,400 | |||||||||
Customer relationships | 1,800 | |||||||||
Non-compete agreements | 400 | |||||||||
Goodwill | 14,182 | |||||||||
Total net assets acquired | $ | 24,881 | ||||||||
The fair values of the major components of the intangible assets acquired and their estimated useful lives are as follows (in thousands): | ||||||||||
Useful Life | ||||||||||
Intangible Asset Class | Fair Value | (in Years) | ||||||||
Trademarks | $ | 300 | 5 | |||||||
Developed technology | $ | 5,400 | 3 | |||||||
Customer relationships | $ | 1,800 | 10 | |||||||
Non-compete agreements | $ | 400 | 2 | |||||||
The revenue and net loss of Appro from the Closing Date to December 31, 2012 included in the accompanying consolidated statements of operations were $0.6 million and $1.3 million, respectively. | ||||||||||
The Company incurred acquisition-related costs (i.e., legal, accounting, valuation, and other costs) of $0.9 million during the year ended December 31, 2012. The acquisition-related costs were expensed in the accompanying Consolidated Statements of Operations for the year ended December 31, 2012. | ||||||||||
The following unaudited pro forma condensed financial information presents the combined results of operations of the Company and Appro for the year ended December 31, 2012 as if the acquisition had occurred on January 1, 2012 (in thousands): | ||||||||||
Year Ended December 31, 2012 | ||||||||||
Revenue | $ | 494,369 | ||||||||
Net income | $ | 161,985 | ||||||||
The unaudited pro forma condensed financial information is not intended to represent or be indicative of the results of operations of the Company that would have been reported had the acquisition been completed as of the beginning of the period presented, and should not be taken as representative of the future consolidated results of operations of the Company. | ||||||||||
The goodwill recorded in connection with the acquisition of Appro is primarily related to the synergies expected to be achieved and the value of the assembled workforce. The goodwill balance is not deductible for tax purposes. | ||||||||||
The carrying amount of purchased intangibles at December 31, 2014 was as follows (in thousands): | ||||||||||
31-Dec-14 | ||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||
Trademarks | $ | 300 | $ | 127 | $ | 173 | ||||
Developed technology | 5,400 | 3,800 | 1,600 | |||||||
Customer relationships | 1,800 | 380 | 1,420 | |||||||
Non-compete agreements | 400 | 400 | — | |||||||
Total | $ | 7,900 | $ | 4,707 | $ | 3,193 | ||||
The carrying amount of purchased intangibles at December 31, 2013 was as follows (in thousands): | ||||||||||
31-Dec-13 | ||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||
Trademarks | $ | 300 | $ | 67 | $ | 233 | ||||
Developed technology | 5,400 | 2,000 | 3,400 | |||||||
Customer relationships | 1,800 | 200 | 1,600 | |||||||
Non-compete agreements | 400 | 222 | 178 | |||||||
Total | $ | 7,900 | $ | 2,489 | $ | 5,411 | ||||
Aggregate estimated amortization expense for the years ending December 31 are as follows (in thousands): | ||||||||||
2015 | $ | 1,840 | ||||||||
2016 | 240 | |||||||||
2017 | 233 | |||||||||
2018 | 180 | |||||||||
2019 | 180 | |||||||||
$ | 2,673 | |||||||||
For the years ended December 31, 2014, 2013 and 2012, amortization expense related to purchased intangibles was $2.2 million, $2.2 million and $0.2 million, respectively. |
Sale_of_Interconnect_Hardware_
Sale of Interconnect Hardware Development Program | 12 Months Ended |
Dec. 31, 2014 | |
Sale of Interconnect Hardware Development Program [Abstract] | |
Sale of Interconnect Hardware Development Program | SALE OF INTERCONNECT HARDWARE DEVELOPMENT PROGRAM |
On May 2, 2012, the Company sold its interconnect hardware development program to Intel Corporation (“Intel”) for cash consideration of $140 million. As part of the transaction, 73 of the Company’s employees joined Intel, and certain intellectual property and fixed assets were transferred to Intel. The Company retained certain rights to use the transferred assets and intellectual property. As a result of the sale, the Company recorded a gain of $139.1 million in “Net gain on sale of interconnect hardware development program” on the Consolidated Statements of Operations for the year ended December 31, 2012. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS | ||||||||||||
Under FASB Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, 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 on a recurring basis as of December 31, 2014 and 2013, 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 | |||||||||||
December 31, | Active | Observable | |||||||||||
2014 | Markets | Inputs | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
Assets: | |||||||||||||
Cash and cash equivalents and restricted cash | $ | 129,507 | $ | 129,507 | $ | — | |||||||
Available-for-sale investments (1) | 16,289 | 16,289 | — | ||||||||||
Foreign exchange forward contracts (2) | 11,079 | — | 11,079 | ||||||||||
Assets measured at fair value at December 31, 2014 | $ | 156,875 | $ | 145,796 | $ | 11,079 | |||||||
Liabilities: | |||||||||||||
Foreign exchange forward contracts (3) | 2,139 | — | 2,139 | ||||||||||
Liabilities measured at fair value at December 31, 2014 | $ | 2,139 | $ | — | $ | 2,139 | |||||||
Description | Fair Value | Quoted | Significant | ||||||||||
as of | Prices in | Other | |||||||||||
December 31, | Active | Observable | |||||||||||
2013 | Markets | Inputs | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
Assets: | |||||||||||||
Cash and cash equivalents and restricted cash | $ | 206,401 | $ | 206,401 | $ | — | |||||||
Available-for-sale investments (1) | 14,048 | 14,048 | — | ||||||||||
Foreign exchange forward contracts (2) | 1,730 | — | 1,730 | ||||||||||
Assets measured at fair value at December 31, 2013 | $ | 222,179 | $ | 220,449 | $ | 1,730 | |||||||
Liabilities: | |||||||||||||
Foreign exchange forward contracts (3) | 7,237 | — | 7,237 | ||||||||||
Liabilities measured at fair value at December 31, 2013 | $ | 7,237 | $ | — | $ | 7,237 | |||||||
_______________________________ | |||||||||||||
-1 | Included in “Short-term investments” on the Company’s Consolidated Balance Sheets. | ||||||||||||
-2 | Included in “Prepaid expenses and other current assets” and “Other non-current assets” on the Company’s Consolidated Balance Sheets. | ||||||||||||
-3 | Included in “Other accrued liabilities” and “Other non-current liabilities” on the Company’s 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 December 31, 2014 and 2013, 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 (in millions): | |||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||
British Pounds (GBP) | 77.9 | 36.4 | |||||||||||
Euros (EUR) | 40.7 | 53 | |||||||||||
Swiss Francs (CHF) | 0.9 | 5.6 | |||||||||||
Canadian Dollars (CAD) | — | 3.9 | |||||||||||
Japanese Yen (JPY) | — | 1,239.80 | |||||||||||
Singapore Dollars (SGD) | 0.1 | 3.2 | |||||||||||
Swedish Krona (SEK) | 84.8 | — | |||||||||||
The Company had hedged foreign currency exposure of approximately $192.5 million and $151.4 million as of December 31, 2014 and December 31, 2013, respectively. Cash receipts associated with the hedged contracts are expected to be received from 2015 through 2018, during which time the revenue on the associated sales contracts is expected to be recognized, or in the case of receivables denominated in a foreign currency, the receivables balances will be collected. Any gain or loss on hedged foreign currency will be recognized at the time of customer acceptance or over the period during which hedged receivables denominated in a foreign currency are outstanding. | |||||||||||||
As of December 31, 2014, the Company had outstanding forward contracts which were not designated as cash flow hedges with notional amounts of 28.3 million British Pounds. The foreign currency exposure related to these contracts was approximately $43.4 million. The Company had no outstanding forward contracts which were not designated as cash flow hedges as of December 31, 2013. | |||||||||||||
As of December 31, 2014 and 2013, the fair value of outstanding forward contracts totaled a net gain of $8.9 million and a net loss of $5.5 million, respectively. As of December 31, 2014 and 2013, unrecognized gains, net of tax, of $4.4 million and unrecognized losses, net of tax, of $2.4 million, respectively, were included in “Accumulated other comprehensive income” on the Company’s Consolidated Balance Sheets. | |||||||||||||
Fair values of derivative instruments (in thousands): | |||||||||||||
Hedge Classification | Balance Sheet Location | Fair Value | Fair Value | ||||||||||
as of | as of | ||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Foreign currency contracts | Prepaid expenses and other current assets | $ | 5,362 | $ | 1,654 | ||||||||
Foreign currency contracts | Other non-current assets | 5,717 | 76 | ||||||||||
Foreign currency contracts | Other accrued liabilities | (1,454 | ) | (2,942 | ) | ||||||||
Foreign currency contracts | Other non-current liabilities | (685 | ) | (4,295 | ) | ||||||||
Total fair value of derivatives classified as hedging instruments | $ | 8,940 | $ | (5,507 | ) | ||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||
Accumulated Other Comprehensive Income | 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 years ended December 31, 2014, 2013 and 2012 (in thousands). The gross reclassification adjustments increased product revenue for the years ended December 31, 2014 and 2012 and decreased product revenue for the year ended December 31, 2013. | ||||||||||||||||
Year Ended | ||||||||||||||||
December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Gross of Tax Reclassifications | $ | 2,748 | $ | (1,604 | ) | $ | 643 | |||||||||
Net of Tax Reclassifications | $ | 1,649 | $ | (962 | ) | $ | 386 | |||||||||
The following tables show the changes in Accumulated Other Comprehensive Income by component for the years ended December 31, 2014 and 2013 (in thousands): | ||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||
Unrealized Gain on Investments | Foreign Currency Translation Adjustments | Unrealized Gain/(Loss) on Cash Flow Hedges | Accumulated Other Comprehensive Income | |||||||||||||
Beginning balance | $ | — | $ | 3,257 | $ | (2,404 | ) | $ | 853 | |||||||
Current-period change, net of tax | $ | 12 | $ | (1,188 | ) | $ | 6,826 | $ | 5,650 | |||||||
Ending balance | $ | 12 | $ | 2,069 | $ | 4,422 | $ | 6,503 | ||||||||
Income tax expense (benefit) associated with current-period change | $ | 8 | $ | (229 | ) | $ | 4,593 | $ | 4,372 | |||||||
Year Ended December 31, 2013 | ||||||||||||||||
Unrealized Gain/(Loss) on Investments | Foreign Currency Translation Adjustments | Unrealized Gain/(Loss) on Cash Flow Hedges | Accumulated Other Comprehensive Income | |||||||||||||
Beginning balance | $ | (46 | ) | $ | 4,301 | $ | 926 | $ | 5,181 | |||||||
Current-period change, net of tax | $ | 46 | $ | (1,044 | ) | $ | (3,330 | ) | $ | (4,328 | ) | |||||
Ending balance | $ | — | $ | 3,257 | $ | (2,404 | ) | $ | 853 | |||||||
Income tax expense (benefit) associated with current-period change | $ | 31 | $ | 27 | $ | (2,390 | ) | $ | (2,332 | ) | ||||||
Investments
Investments | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||
Investments | 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. The carrying amount of the Company’s investments in available-for-sale securities as of December 31, 2014 and December 31, 2013 are shown in the table below (in thousands): | ||||||||
31-Dec-14 | 31-Dec-13 | |||||||
Short-term available-for-sale securities cost | $ | 16,269 | $ | 14,048 | ||||
Short-term available-for-sale securities unrealized gains | 20 | — | ||||||
Short-term available-for-sale securities fair value | $ | 16,289 | $ | 14,048 | ||||
As of December 31, 2014, the Company’s debt securities were investment grade and carried a long-term rating of A2/A or higher. |
Accounts_and_Other_Receivables
Accounts and Other Receivables, Net | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Receivables [Abstract] | |||||||||
Accounts and Other Receivables, Net | ACCOUNTS AND OTHER RECEIVABLES, NET | ||||||||
A summary of net accounts and other receivables follows (in thousands): | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Trade accounts receivable | $ | 126,874 | $ | 169,417 | |||||
Unbilled receivables | 20,788 | 9,075 | |||||||
Advance billings | 4,960 | 2,141 | |||||||
Short-term investment in sales-type lease | 10,187 | — | |||||||
Other receivables | 2,401 | 2,051 | |||||||
165,210 | 182,684 | ||||||||
Allowance for doubtful accounts | (97 | ) | (157 | ) | |||||
Accounts and other receivables, net | $ | 165,113 | $ | 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 no revenue has yet been recognized. | |||||||||
As of December 31, 2014 and 2013, accounts receivable included $87.0 million and $111.9 million, respectively, due from the U.S. Government. Of these amounts, $2.1 million and $0.3 million, respectively, were unbilled, based upon contractual billing arrangements with these customers. As of December 31, 2014 and 2013, no non-U.S. Government customers accounted for more than 10% of total accounts and other receivables. |
Salestype_lease
Sales-type lease | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Leases [Abstract] | ||||
Sales-type lease | NOTE 9 SALES-TYPE LEASE | |||
As of December 31, 2014, the Company has a sales-type lease with one of its customers. Under the terms of the arrangement, the Company has agreed to provide a high performance computing solution to the customer for a term of four years, beginning at the customer’s acceptance of the system. | ||||
The following table shows the components of the net investment in the sales-type lease as of December 31, 2014 (in thousands): | ||||
Total minimum lease payments to be received | $ | 53,134 | ||
Less: executory costs | (10,717 | ) | ||
Net minimum lease payments receivable | 42,417 | |||
Estimated residual value of leased property (unguaranteed) | 1,253 | |||
Less: unearned income | (2,394 | ) | ||
Net investment in sales-type lease | 41,276 | |||
Less: long-term investment in sales-type lease | (31,089 | ) | ||
Investment in sales-type lease included in accounts and other receivables | $ | 10,187 | ||
As of December 31, 2014, minimum lease payments for each of the succeeding four fiscal years are as follows (in thousands): | ||||
2015 | $ | 14,169 | ||
2016 | 14,169 | |||
2017 | 14,169 | |||
2018 | 10,627 | |||
Total minimum lease payments to be received | $ | 53,134 | ||
Inventory
Inventory | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventory | INVENTORY | ||||||||
A summary of inventory follows (in thousands): | |||||||||
31-Dec | |||||||||
2014 | 2013 | ||||||||
Components and subassemblies | $ | 60,851 | $ | 46,339 | |||||
Work in process | 46,954 | 23,618 | |||||||
Finished goods | 35,827 | 25,172 | |||||||
$ | 143,632 | $ | 95,129 | ||||||
As of December 31, 2014 and 2013, $35.3 million and $24.8 million, respectively, of finished goods inventory was located at customer sites pending acceptance. At December 31, 2014, two customers accounted for $31.2 million of finished goods inventory. At December 31, 2013, one customer accounted for $18.0 million of finished goods inventory. | |||||||||
During 2014, 2013 and 2012, the Company wrote-off $2.3 million, $0.9 million and $2.3 million related to various product lines. |
Property_and_Equipment_Net
Property and Equipment, Net | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment, Net | PROPERTY AND EQUIPMENT, NET | ||||||||
A summary of property and equipment follows (in thousands): | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Land | $ | 275 | $ | 203 | |||||
Buildings | 20,409 | 17,022 | |||||||
Furniture and equipment | 13,198 | 14,443 | |||||||
Computer equipment | 59,785 | 91,475 | |||||||
Leasehold improvements | 446 | 1,276 | |||||||
94,113 | 124,419 | ||||||||
Accumulated depreciation and amortization | (59,320 | ) | (94,141 | ) | |||||
Property and equipment, net | $ | 34,793 | $ | 30,278 | |||||
Depreciation expense on property and equipment for 2014, 2013 and 2012 was $12.8 million, $10.9 million and $7.4 million, respectively. |
Service_Spares_Net
Service Spares, Net | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Service Spares, Net | SERVICE SPARES, NET | ||||||||
A summary of service spares follows (in thousands): | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Service spares | $ | 13,114 | $ | 16,613 | |||||
Accumulated depreciation | (11,246 | ) | (14,785 | ) | |||||
Service spares, net | $ | 1,868 | $ | 1,828 | |||||
Depreciation expense on service spares for 2014, 2013 and 2012 was $1.0 million, $0.9 million and $0.9 million, respectively. |
Deferred_Revenue
Deferred Revenue | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Revenue Disclosure [Abstract] | |||||||||
Deferred Revenue | DEFERRED REVENUE | ||||||||
Deferred revenue consisted of the following (in thousands): | |||||||||
31-Dec | |||||||||
2014 | 2013 | ||||||||
Deferred product revenue | $ | 21,152 | $ | 54,065 | |||||
Deferred service revenue | 92,346 | 87,900 | |||||||
Total deferred revenue | 113,498 | 141,965 | |||||||
Less long-term deferred revenue | (47,588 | ) | (50,477 | ) | |||||
Deferred revenue in current liabilities | $ | 65,910 | $ | 91,488 | |||||
As of December 31, 2014 and 2013 the U.S. Government accounted for $63.8 million and $49.2 million of total deferred revenue. As of December 31, 2013, two non-U.S. Government customers accounted for $52.0 million of total deferred revenue. As of December 31, 2014, no non-U.S. Government customers accounted for more than 10% of total deferred revenue. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES | ||||||||
The Company has recorded rent expense under leases for buildings or office space, which are accounted for as operating leases, in 2014, 2013 and 2012 of $5.2 million, $5.3 million, and $4.6 million, respectively. | |||||||||
Minimum contractual commitments as of December 31, 2014, were as follows (in thousands): | |||||||||
Operating | Development | ||||||||
Leases | Agreements | ||||||||
2015 | $ | 5,097 | $ | 6,856 | |||||
2016 | 4,762 | 25 | |||||||
2017 | 4,563 | 25 | |||||||
2018 | 4,373 | 25 | |||||||
2019 | 4,266 | 25 | |||||||
Thereafter | 14,563 | — | |||||||
Minimum contractual commitments | $ | 37,624 | $ | 6,956 | |||||
In its normal course of operations, the Company engages in development arrangements under which it hires outside engineering resources to augment its existing internal staff in order to complete research and development projects, or parts thereof. For the years ended December 31, 2014, 2013 and 2012, the Company incurred $12.2 million, $9.3 million and $4.9 million for such arrangements, respectively. | |||||||||
Litigation | |||||||||
From time to time, the Company is subject to various legal proceedings that arise in the ordinary course of business, none of which are currently material to the Company’s business. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | INCOME TAXES | ||||||||||||
Income taxes are recognized for the amount of taxes payable for the current year and for the impact of deferred tax assets and liabilities, which represent consequences of events that have been recognized differently in the financial statements under GAAP than for tax purposes. | |||||||||||||
Most of the Company’s deferred tax assets result from net operating loss carryforwards and research and development tax credits. As of December 31, 2014, the Company had U.S. federal net operating loss carryforwards of approximately $115.4 million, of which approximately $37.9 million was related to stock-based income tax deductions in excess of amounts that have been recognized for financial reporting purposes. Any reduction of taxes payable for stock-based income tax deductions in excess of amounts that have been recognized for financial reporting purposes will be directly credited to shareholders’ equity. As of December 31, 2014, the Company had federal research and development tax credit carryforwards of approximately $21.3 million. The federal net operating loss carryforwards will expire from 2019 through 2031, and the research and development tax credits will expire from 2021 through 2034 if not utilized. Utilization of the Company’s federal net operating loss and research and development tax credit carryforwards generated prior to May 10, 2001 are limited under Section 382 of the Internal Revenue Code. As of December 31, 2014, the Company had approximately $7.0 million of foreign net operating loss carryforwards in various jurisdictions. Most of the Company’s foreign net operating losses can be carried forward indefinitely, with certain amounts expiring from 2016 to 2022. | |||||||||||||
Income before income taxes consisted of the following (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
United States | $ | 5,710 | $ | 17,467 | $ | 161,592 | |||||||
International | 3,987 | 3,562 | 7,140 | ||||||||||
Total | $ | 9,697 | $ | 21,029 | $ | 168,732 | |||||||
The tax provision (benefit) for income taxes related to operations consisted of the following (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current provision (benefit): | |||||||||||||
Federal | $ | 230 | $ | 484 | $ | 1,162 | |||||||
State | (392 | ) | 696 | 2,768 | |||||||||
Foreign | 740 | 801 | 541 | ||||||||||
Total current provision | 578 | 1,981 | 4,471 | ||||||||||
Deferred (benefit) provision: | |||||||||||||
Federal | (53,242 | ) | (13,160 | ) | 1,362 | ||||||||
State | (885 | ) | (327 | ) | 1,415 | ||||||||
Foreign | 923 | 312 | 243 | ||||||||||
Total deferred (benefit) provision | (53,204 | ) | (13,175 | ) | 3,020 | ||||||||
Total (benefit) provision for income taxes | $ | (52,626 | ) | $ | (11,194 | ) | $ | 7,491 | |||||
The tax provision (benefit) differs from the amount computed by applying the federal statutory income tax rate as follows (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Income tax provision at statutory rate | $ | 3,394 | $ | 7,360 | $ | 59,056 | |||||||
State taxes, net of federal benefit | (217 | ) | 369 | 4,183 | |||||||||
Foreign income taxes | 284 | (749 | ) | (518 | ) | ||||||||
Stock compensation adjustment | — | (8,419 | ) | — | |||||||||
Deemed dividends for U.S. income tax purposes | 492 | 477 | 2,352 | ||||||||||
Nondeductible expenses | 337 | 208 | 549 | ||||||||||
Liquidation of subsidiary | — | — | (30,704 | ) | |||||||||
Disallowed compensation | (116 | ) | 19 | 492 | |||||||||
Research and development tax credit | (1,140 | ) | (5,736 | ) | — | ||||||||
Effect of change in valuation allowance on deferred tax assets | (55,660 | ) | (4,723 | ) | (27,919 | ) | |||||||
Effective income tax provision (benefit) | $ | (52,626 | ) | $ | (11,194 | ) | $ | 7,491 | |||||
Significant components of the Company’s deferred income tax assets and liabilities follow (in thousands): | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Current: | |||||||||||||
Deferred Income Tax Assets | |||||||||||||
Inventory | $ | 5,840 | $ | 3,388 | |||||||||
Accrued compensation | 681 | 460 | |||||||||||
Deferred revenue | 18,186 | 12,100 | |||||||||||
Net operating loss carryforwards | 12,981 | 5,922 | |||||||||||
Other | 1,261 | 8,120 | |||||||||||
Gross current deferred tax assets | 38,949 | 29,990 | |||||||||||
Valuation allowance | (2,039 | ) | (20,107 | ) | |||||||||
Current deferred tax assets | 36,910 | 9,883 | |||||||||||
Deferred Income Tax Liabilities | |||||||||||||
Other | (837 | ) | (688 | ) | |||||||||
Current deferred tax liabilities | (837 | ) | (688 | ) | |||||||||
Net current deferred tax assets | $ | 36,073 | $ | 9,195 | |||||||||
Long-Term: | |||||||||||||
Deferred Income Tax Assets | |||||||||||||
Property and equipment | $ | 11,555 | $ | 328 | |||||||||
Research and experimentation credit carryforwards | 24,596 | 23,941 | |||||||||||
Net operating loss carryforwards | 21,511 | 47,154 | |||||||||||
Goodwill | 203 | 628 | |||||||||||
Other | 9,967 | 10,161 | |||||||||||
Gross long-term deferred tax assets | 67,832 | 82,212 | |||||||||||
Valuation allowance | (8,099 | ) | (57,687 | ) | |||||||||
Long-term deferred tax assets | 59,733 | 24,525 | |||||||||||
Deferred Income Tax Liabilities | |||||||||||||
Property and equipment | — | (1,905 | ) | ||||||||||
Investment in sales-type lease, net | (14,321 | ) | — | ||||||||||
Intangible assets | (1,215 | ) | (2,059 | ) | |||||||||
Other | (2,783 | ) | (1,355 | ) | |||||||||
Long-term deferred tax liabilities | (18,319 | ) | (5,319 | ) | |||||||||
Net long-term deferred tax asset | $ | 41,414 | $ | 19,206 | |||||||||
The Company recorded an income tax benefit of $52.6 million and $11.2 million for the years ended December 31, 2014 and 2013, respectively, and income tax expense of $7.5 million during the year ended December 31, 2012. The tax benefit recorded by the Company during the year ended December 31, 2014 was primarily attributable to a partial reduction, in the amount of $55.7 million, of the remaining valuation allowance that was held against the Company’s U.S. deferred tax assets. The tax benefit recorded by the Company during the year ended December 31, 2013 was primarily attributable to a partial reduction, in the amount of $13.5 million, of the valuation allowance held against the Company’s U.S. deferred tax assets. The primary reason for the difference between the income tax provision at the statutory rate and the Company’s effective income tax provision for the year ended December 31, 2012 is that the gain from the sale of the Company’s interconnect hardware development program did not result in significant income tax expense. The Company had existing deferred tax assets that were subject to valuation allowances and deductible temporary differences that were previously unrecognized. The sale of the interconnect hardware development program was never anticipated in previous evaluations of the realizability of the Company’s deferred tax assets and consequently the sale, together with a tax benefit that was recognized as a result of a restructuring of a subsidiary, resulted in the Company’s ability to experience a relatively small tax consequence from the sale. | |||||||||||||
The Company’s decision to partially reduce, in the amount of $55.7 million, the valuation allowance held against the Company’s U.S. deferred tax assets during the year ended December 31, 2014 was based upon an evaluation of all available positive and negative evidence, known business risks and industry trends. The Company considers its actual results over several years to have stronger weight than other more subjective indicators, including forecasts, when considering whether or not to establish or reduce a valuation allowance on deferred tax assets and believes that its ability to forecast results significantly into the future is severely limited due to the rapid rate of technological and competitive change in the industry in which it operates. As of December 31, 2014 the Company had generated U.S. pre-tax income in each of the last three years and cumulative U.S. pre-tax income of $184.8 million ($51.1 million excluding the impact of the sale of the Company’s interconnect hardware development program) over the last three years. In addition to the Company’s cumulative income position, the assessment of the Company’s ability to utilize its U.S. deferred tax assets included an assessment of forecasted domestic and international earnings over a number of years, which included the impact of several major contracts that were finalized during the fourth quarter of 2014. | |||||||||||||
The partial reduction, in the amount of $13.5 million, of the valuation allowance held against the Company’s U.S. deferred tax assets during the year ended December 31, 2013 was due to actual income from operations during the year ended December 31, 2013 exceeding amounts previously used in the evaluation of the realizability of the Company’s deferred tax assets at the beginning of the year and based upon an assessment of all positive and negative evidence relating to future years. | |||||||||||||
During the year ended December 31, 2012 the Company reduced the valuation allowance held against its deferred tax assets by $18.4 million as a result of the sale of the Company’s interconnect hardware development program. The Company further reduced the valuation allowance held against its U.S. deferred tax assets by $10.7 million during the year ended December 31, 2012 due to actual income from operations during the year ended December 31, 2012 exceeding amounts previously used in the evaluation of the realizability of the Company’s deferred tax assets at the beginning of the year and based upon an assessment of all positive and negative evidence relating to future years. | |||||||||||||
The Company’s conclusion about the realizability of its deferred tax assets, and therefore the appropriateness of the valuation allowance, is reviewed quarterly and could change in future periods depending on the Company’s future assessment of all available evidence in support of the likelihood of realization of its deferred tax assets. If the Company’s conclusion about the realizability of its deferred tax assets and therefore the appropriateness of its valuation allowance changes in a future period it could record a substantial tax provision or benefit in the Consolidated Statement of Operations when that occurs. | |||||||||||||
The valuation allowance on deferred tax assets decreased by $67.7 million, $4.7 million and $27.9 million in 2014, 2013 and 2012, respectively. The decrease in the valuation allowance for the year ended December 31, 2014 included a reduction, in the amount of $55.7 million, of the valuation allowance held against the Company’s U.S. deferred tax assets based upon an assessment of all positive and negative evidence relating to future years. The decrease in the valuation allowance for the year ended December 31, 2013 was comprised of the partial reduction of the valuation allowance of $13.5 million which was principally offset by a stock compensation related adjustment of $8.4 million. | |||||||||||||
Undistributed earnings relating to the Company’s foreign subsidiaries are considered to be permanently reinvested; accordingly, no provision for U.S. federal and state income taxes has been provided thereon. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable due to the complexities associated with this hypothetical calculation. As of December 31, 2014, the Company’s foreign subsidiaries held cash in the amount of $42.2 million. | |||||||||||||
The following table summarizes changes in the amount of the Company’s unrecognized tax benefits for uncertain tax positions for the three years ended December 31, 2014, 2013 and 2012 (in thousands): | |||||||||||||
Balance at December 31, 2011 | $ | — | |||||||||||
Increase related to current year income tax positions | 470 | ||||||||||||
Balance at December 31, 2012 | $ | 470 | |||||||||||
Decrease related to prior year income tax positions | (268 | ) | |||||||||||
Balance at December 31, 2013 | $ | 202 | |||||||||||
Increase related to prior year income tax positions | 5,059 | ||||||||||||
Increase related to current year income tax positions | 369 | ||||||||||||
Balance at December 31, 2014 | $ | 5,630 | |||||||||||
The balance of unrecognized tax benefits as of December 31, 2014 was $5.6 million of tax benefits that, if recognized, would affect the effective tax rate. It is not anticipated that the balance of unrecognized tax benefits will significantly change over the next twelve months. | |||||||||||||
The Company or its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company defines its major tax jurisdictions to include Australia, Germany, the United Kingdom and the United States. The Company is no longer subject to income tax examinations with respect to Australia for periods before 2009 and for periods before 2013 in Germany and the United Kingdom, respectively. With respect to the U.S. federal and various state jurisdictions the Company is no longer subject to income tax examinations with respect to periods before 2011, although in such jurisdictions net operating loss and tax credit carryforwards generated in a year are subject to examination and adjustment for at least three years following the year in which such losses or credits are actually used to offset taxable income. | |||||||||||||
Estimated interest and penalties are recorded as a component of interest expense and other expense, respectively. Such amounts were not material for 2014, 2013 and 2012. |
Lines_of_Credit
Lines of Credit | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
Credit Facilities | CREDIT FACILITIES |
As of December 31, 2014, the Company had a $10.0 million unsecured line of credit with Wells Fargo Bank, National Association and an $11.0 million letter of credit facility with Silicon Valley Bank. Both facilities are designed to support the issuance of letters of credit and foreign exchange hedging transactions. The Wells Fargo Bank, National Association credit facility matures in October 2015 and the Silicon Valley Bank credit facility matures in December 2015. The Company made no draws and had no outstanding cash borrowings on any credit facilities as of December 31, 2014. | |
As of December 31, 2014, the Company had $13.5 million in outstanding letters of credit and $16.9 million in restricted cash associated with certain letters of credit to secure customer prepayments and other customer related obligations. |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Share-based Compensation [Abstract] | |||||||||||||||||||||
Shareholders' Equity | SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Preferred Stock: The Company has 5,000,000 shares of undesignated preferred stock authorized, and no shares of preferred stock outstanding. | |||||||||||||||||||||
Common Stock: The Company has 75,000,000 authorized shares of common stock with a par value of $0.01 per share. | |||||||||||||||||||||
Restricted Stock and Restricted Stock Units: During 2014, 2013 and 2012, respectively, the Company issued an aggregate of 463,734, 755,979, and 1,316,447 shares of restricted stock, respectively, to certain directors, executives and other employees. The grant date fair value of these grants was approximately $13.3 million, $15.8 million, and $15.8 million for 2014, 2013 and 2012, respectively. Stock compensation expense is recorded over the vesting period, which has generally been two years for non-employee directors and four years for officers and employees of the Company. As of December 31, 2014, $24.0 million remains to be expensed over the remaining vesting periods of these grants. This includes $12.4 million for performance vesting restricted stock subject to performance measures which are currently not considered probable to vest and $0.2 million for performance vesting restricted stock subject to performance measures which currently are considered probable to vest. No compensation expense is recognized for performance vesting restricted stock subject to performance measures that are not yet considered probable of attainment. | |||||||||||||||||||||
As of December 31, 2012, the Company had issued and outstanding 12,500 restricted stock units. There were no restricted stock units issued and outstanding as of December 31, 2014 and 2013. Restricted stock units have similar vesting characteristics as restricted stock but are not outstanding shares and do not have any voting or dividend rights. The Company records stock-based compensation expense over the vesting period. Once a restricted stock unit vests, a share of common stock of the Company will be issued. | |||||||||||||||||||||
Stock Option Plans: As of December 31, 2014, the Company had one active equity incentive plan that provides shares available for option grants to employees, directors, executives and others. Options granted to employees under the Company’s equity incentive plan typically vest over four years or as otherwise determined by the plan administrator. Options to purchase shares expire no later than ten years after the date of grant. | |||||||||||||||||||||
In determining the fair value of stock options, the Company used the Black-Scholes option pricing model that employed the following key weighted average assumptions: | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Risk-free interest rate | 1.22 | % | 0.98 | % | 0.56 | % | |||||||||||||||
Expected dividend yield | — | % | — | % | — | % | |||||||||||||||
Volatility | 52.43 | % | 50.45 | % | 74.84 | % | |||||||||||||||
Expected life (in years) | 4 | 4 | 4 | ||||||||||||||||||
Weighted average Black-Scholes value of options granted | $ | 11.16 | $ | 8.22 | $ | 6.56 | |||||||||||||||
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 was 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 rates applied for the years ended December 31, 2014, 2013 and 2012 were 8.3%, 10.0%, and 6.6%, respectively. 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, all of which impact the fair value of the option calculated under the Black-Scholes methodology and, ultimately, the expense that will be recognized over the life of the option. | |||||||||||||||||||||
A summary of the Company’s stock option activity and related information follows: | |||||||||||||||||||||
Options | Weighted | Weighted Average Remaining | |||||||||||||||||||
Average | Contractual | ||||||||||||||||||||
Exercise | Term (Years) | ||||||||||||||||||||
Price | |||||||||||||||||||||
Outstanding at January 1, 2012 | 3,417,920 | $ | 6.28 | ||||||||||||||||||
Granted | 359,500 | 11.9 | |||||||||||||||||||
Exercised | (1,346,326 | ) | 5.52 | ||||||||||||||||||
Canceled and forfeited | (137,589 | ) | 11.35 | ||||||||||||||||||
Outstanding at December 31, 2012 | 2,293,505 | 7.31 | |||||||||||||||||||
Granted | 346,360 | 20.65 | |||||||||||||||||||
Exercised | (495,221 | ) | 6.38 | ||||||||||||||||||
Canceled and forfeited | (66,575 | ) | 21.97 | ||||||||||||||||||
Outstanding at December 31, 2013 | 2,078,069 | 9.29 | |||||||||||||||||||
Granted | 323,900 | 26.92 | |||||||||||||||||||
Exercised | (411,352 | ) | 7.5 | ||||||||||||||||||
Canceled and forfeited | (59,627 | ) | 18.45 | ||||||||||||||||||
Outstanding at December 31, 2014 | 1,930,990 | 12.34 | 6.6 | ||||||||||||||||||
Exercisable at December 31, 2014 | 1,251,080 | 8.18 | 5.6 | ||||||||||||||||||
Available for grant at December 31, 2014 | 3,079,888 | ||||||||||||||||||||
As of December 31, 2014, there was $42.8 million of aggregate intrinsic value of outstanding stock options, including $32.9 million of aggregate intrinsic value of exercisable stock options. Intrinsic value is 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 2014 and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options as of December 31, 2014. This amount changes, based on the fair market value of the Company’s stock. Total intrinsic value of options exercised was $10.2 million, $7.9 million, and $7.6 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
A summary of the Company’s unvested restricted stock and restricted stock unit grants and changes during the years ended December 31 was as follows: | |||||||||||||||||||||
Service Vesting 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 January 1, 2012 | 1,302,414 | $ | 5.47 | — | $ | — | 1,302,414 | $ | 5.47 | ||||||||||||
Granted | 579,447 | 10.84 | 737,000 | 12.9 | 1,316,447 | 11.99 | |||||||||||||||
Forfeited | (31,771 | ) | 7.64 | — | — | (31,771 | ) | 7.64 | |||||||||||||
Vested | (384,352 | ) | 5.86 | — | — | (384,352 | ) | 5.86 | |||||||||||||
Outstanding at December 31, 2012 | 1,465,738 | 7.44 | 737,000 | 12.9 | 2,202,738 | 9.27 | |||||||||||||||
Granted | 326,979 | 20.83 | 429,000 | 21 | 755,979 | 20.93 | |||||||||||||||
Forfeited | (3,437 | ) | 5.92 | (72,000 | ) | 14.88 | (75,437 | ) | 14.48 | ||||||||||||
Vested | (661,580 | ) | 6.22 | — | — | (661,580 | ) | 6.22 | |||||||||||||
Outstanding at December 31, 2013 | 1,127,700 | 12.05 | 1,094,000 | 15.94 | 2,221,700 | 13.97 | |||||||||||||||
Granted | 463,734 | 28.74 | — | — | 463,734 | 28.74 | |||||||||||||||
Forfeited | (134,653 | ) | 15.39 | (277,000 | ) | 17.49 | (411,653 | ) | 16.8 | ||||||||||||
Vested | (423,179 | ) | 11.14 | — | — | (423,179 | ) | 11.14 | |||||||||||||
Outstanding at December 31, 2014 | 1,033,602 | 19.48 | 817,000 | 15.41 | 1,850,602 | 17.68 | |||||||||||||||
The estimated forfeiture rate applied to the Company’s restricted stock grants during the year ended December 31, 2014 was 6.3%. The total number of restricted shares outstanding as of December 31, 2014, 2013 and 2012 included 804,500, 1,081,500 and 737,000 performance vesting restricted shares subject to performance conditions that are currently not considered probable of vesting, respectively. | |||||||||||||||||||||
The aggregate fair value of restricted shares vested during 2014, 2013 and 2012 was $11.9 million, $14.0 million, and $4.2 million, respectively. | |||||||||||||||||||||
As of December 31, 2014, the Company had $29.4 million of total unrecognized compensation cost related to unvested stock options and unvested restricted stock grants. Excluding the $12.4 million for performance vesting restricted stock subject to performance measures which are currently not considered probable to vest, unrecognized compensation cost was $17.0 million. No compensation expense is recorded for performance vesting restricted stock subject to performance measures which are not yet considered probable of attainment. Unrecognized compensation cost related to unvested stock options and unvested restricted stock grants considered probable of vesting is expected to be recognized over a weighted average period of 2.9 years. | |||||||||||||||||||||
Outstanding and exercisable options by price range as of December 31, 2014, were as follows: | |||||||||||||||||||||
Outstanding Options | Exercisable Options | ||||||||||||||||||||
Range of Exercise | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||
Prices per Share | Outstanding | Average | Average | Exercisable | Average | ||||||||||||||||
Remaining | Exercise | Exercise | |||||||||||||||||||
Life (Years) | Price | Price | |||||||||||||||||||
$ 0.00 - $ 4.00 | 265,142 | 4.3 | $ | 3.71 | 265,142 | $ | 3.71 | ||||||||||||||
$ 4.01 - $ 6.00 | 240,647 | 5.1 | $ | 5.49 | 240,647 | $ | 5.49 | ||||||||||||||
$ 6.01 - $ 8.00 | 438,159 | 5.7 | $ | 6.29 | 360,553 | $ | 6.33 | ||||||||||||||
$ 8.01 - $ 34.15 | 987,042 | 8.1 | $ | 19.01 | 384,738 | $ | 14.68 | ||||||||||||||
$ 0.00 - $ 34.15 | 1,930,990 | 6.6 | $ | 12.34 | 1,251,080 | $ | 8.18 | ||||||||||||||
The following table (in thousands) sets forth the share-based compensation cost resulting from stock options and stock grants recorded in the Company’s Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Cost of product revenue | $ | 229 | $ | 135 | $ | 57 | |||||||||||||||
Cost of service revenue | 255 | 229 | 258 | ||||||||||||||||||
Research and development | 2,721 | 1,480 | 1,327 | ||||||||||||||||||
Sales and marketing | 3,152 | 2,230 | 1,717 | ||||||||||||||||||
General and administrative | 4,007 | 3,165 | 2,604 | ||||||||||||||||||
Total share-based compensation expense | $ | 10,364 | $ | 7,239 | $ | 5,963 | |||||||||||||||
Employee Stock Purchase Plan (ESPP): Under the Company’s non-compensatory employee stock purchase plan, the maximum number of shares of the Company’s common stock that employees could acquire under the ESPP is 1,750,000 shares. Eligible employees are permitted to acquire shares of the Company’s common stock through payroll deductions not exceeding 15% of base wages. The purchase price per share under the ESPP is 95% of the closing market price on the fourth business day after the end of each offering period. As of December 31, 2014, 2013 and 2012, 1,043,228, 1,022,610 and 998,118 shares, respectively, had been issued under the ESPP. |
Benefit_Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Benefit Plans | BENEFIT PLANS |
401(k) Plan | |
For the three years ended December 31, 2014, the Company’s retirement plan covered substantially all U.S. employees and provided for voluntary salary deferral contributions on a pre-tax basis in accordance with Section 401(k) of the Internal Revenue Code of 1986, as amended. The Company matches a portion of employee contributions. The 2014, 2013 and 2012 Company match expense was $1.6 million, $1.2 million and $1.0 million, respectively. | |
Pension Plan | |
The Company’s German subsidiary maintains a defined benefit pension plan. At December 31, 2014, the excess of plan assets over the projected benefit obligation of $2.3 million was $0.2 million. At December 31, 2013, the excess of plan assets over the projected benefit obligation of $2.6 million was $0.2 million. Plan assets are invested in insurance policies payable to employees. Net pension expense was not material for any period. Contributions to the plan are not expected to be significant to the financial position of the Company. |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Segment Information | SEGMENT INFORMATION | ||||||||||||
The Company has the following reportable segments: Supercomputing (formerly HPC Systems), Storage and Data Management, Maintenance and Support and Engineering Services and Other. The Company’s segment presentation changed beginning January 1, 2014 to be consistent with information now provided to its Chief Executive Officer, who is the Company’s 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 supercomputers and cluster systems 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 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 analytics systems, as well as system analysts. | |||||||||||||
Engineering Services and Other | |||||||||||||
Included within Engineering Services and Other is the Company’s analytics business and Custom Engineering. | |||||||||||||
The following table presents revenues and gross margin for the Company’s operating segments for the years ended December 31 (in thousands): | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Revenue: | |||||||||||||
Supercomputing | $ | 459,729 | $ | 434,133 | $ | 355,736 | |||||||
Storage and Data Management | 84,412 | 76,955 | 55,009 | ||||||||||
Maintenance and Support | 86,573 | 77,817 | 62,245 | ||||||||||
Engineering Services and Other | 17,465 | 14,661 | 10,313 | ||||||||||
Elimination of inter-segment revenue | (86,573 | ) | (77,817 | ) | (62,245 | ) | |||||||
Total revenue | $ | 561,606 | $ | 525,749 | $ | 421,058 | |||||||
Gross Profit: | |||||||||||||
Supercomputing | $ | 146,565 | $ | 143,440 | $ | 128,723 | |||||||
Storage and Data Management | 31,572 | 31,403 | 16,574 | ||||||||||
Maintenance and Support | 38,819 | 38,476 | 25,735 | ||||||||||
Engineering Services and Other | 6,277 | 9,483 | 5,881 | ||||||||||
Elimination of inter-segment gross profit | (38,819 | ) | (38,476 | ) | (25,735 | ) | |||||||
Total gross profit | $ | 184,414 | $ | 184,326 | $ | 151,178 | |||||||
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, the United Arab Emirates, China, Singapore and Taiwan. Product and service revenue and long-lived assets classified by significant country were as follows (in thousands): | |||||||||||||
United | All | Total | |||||||||||
States | Other | ||||||||||||
Countries | |||||||||||||
For the year ended December 31, 2014: | |||||||||||||
Product revenue | $ | 253,930 | $ | 206,818 | $ | 460,748 | |||||||
Service revenue | $ | 72,434 | $ | 28,424 | $ | 100,858 | |||||||
Long-lived assets | $ | 58,868 | $ | 36,792 | $ | 95,660 | |||||||
For the year ended December 31, 2013: | |||||||||||||
Product revenue | $ | 297,583 | $ | 138,747 | $ | 436,330 | |||||||
Service revenue | $ | 62,072 | $ | 27,347 | $ | 89,419 | |||||||
Long-lived assets | $ | 58,910 | $ | 6,146 | $ | 65,056 | |||||||
For the year ended December 31, 2012: | |||||||||||||
Product revenue | $ | 301,162 | $ | 52,605 | $ | 353,767 | |||||||
Service revenue | $ | 42,359 | $ | 24,932 | $ | 67,291 | |||||||
Long-lived assets | $ | 57,549 | $ | 4,460 | $ | 62,009 | |||||||
Long-lived assets as of December 31, 2014 included the $31.1 million long-term investment in sales-type lease which was held by the Company’s UK subsidiary. | |||||||||||||
Revenue attributed to foreign countries is derived from sales to customers located outside the United States. Revenue derived from the U.S. Government totaled approximately $272.0 million, $266.1 million and $286.9 million in 2014, 2013 and 2012, respectively. In 2014, no non-U.S. Government customers accounted for more than 10% of total revenue. In 2013, one non-U.S. Government customer accounted for an aggregate of approximately 11% of total revenue. In 2012, one non-U.S. Government customer accounted for an aggregate of approximately 13% of total revenue. In general, concentrations of revenue by customer encompass all segments. In 2014, the UK and Germany accounted for a combined 23% of total revenue. In 2013 and 2012 no foreign country accounted for more than 10% of total revenue. |
Research_and_Development
Research and Development | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Research and Development [Abstract] | |||||||||||||
Research and Development | RESEARCH AND DEVELOPMENT | ||||||||||||
The detail for the Company’s net research and development costs for the years ended December 31 follows (in thousands): | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Gross research and development expenses | $ | 104,797 | $ | 92,469 | $ | 86,305 | |||||||
Less: Amounts included in cost of revenue | (7,713 | ) | (3,741 | ) | (1,080 | ) | |||||||
Less: Reimbursed research and development (excludes amounts in revenue) | (3,036 | ) | (1,000 | ) | (20,922 | ) | |||||||
Net research and development expenses | $ | 94,048 | $ | 87,728 | $ | 64,303 | |||||||
Interest_Income_Expense
Interest Income (Expense) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||
Interest Income (Expense) | INTEREST INCOME (EXPENSE) | ||||||||||||
The detail of interest income (expense) for the years ended December 31 follows (in thousands): | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Interest income | $ | 643 | $ | 894 | $ | 397 | |||||||
Interest expense | (137 | ) | (137 | ) | (193 | ) | |||||||
Net interest income | $ | 506 | $ | 757 | $ | 204 | |||||||
Interest income is earned by the Company on cash and cash equivalent, investment balances and the investment in sales-type lease. |
Quarterly_Data_Unaudited
Quarterly Data (Unaudited) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Quarterly Data (Unaudited) | QUARTERLY DATA (UNAUDITED) | ||||||||||||||||||||||||||||||||
The following table presents unaudited quarterly financial information for the two years ended December 31, 2014. In the opinion of management, this information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation thereof. | |||||||||||||||||||||||||||||||||
The operating results are not necessarily indicative of results for any future periods. Quarter-to-quarter comparisons should not be relied upon as indicators of future performance. The Company’s business is driven by a few significant contracts and, as a result, the Company’s operating results are subject to very large quarterly fluctuations. The Company’s earnings per share for the full year may not equal the sum of the four quarterly earnings per share amounts because of common share activity during the year. | |||||||||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
For the Quarter Ended | 31-Mar | 30-Jun | 30-Sep | 31-Dec | 31-Mar | 30-Jun | 30-Sep | 31-Dec | |||||||||||||||||||||||||
Revenue | $ | 55,110 | $ | 85,147 | $ | 159,406 | $ | 261,943 | $ | 79,547 | $ | 84,467 | $ | 54,366 | $ | 307,369 | |||||||||||||||||
Cost of revenue | 37,173 | 56,143 | 110,876 | 173,000 | 55,397 | 57,666 | 33,940 | 194,420 | |||||||||||||||||||||||||
Gross profit | 17,937 | 29,004 | 48,530 | 88,943 | 24,150 | 26,801 | 20,426 | 112,949 | |||||||||||||||||||||||||
Research and development, net | 22,621 | 24,189 | 22,503 | 24,735 | 20,226 | 19,968 | 21,555 | 25,979 | |||||||||||||||||||||||||
Sales and marketing | 11,776 | 13,259 | 14,808 | 17,942 | 11,143 | 11,550 | 11,480 | 17,172 | |||||||||||||||||||||||||
General and administrative | 5,413 | 5,316 | 5,813 | 6,839 | 5,485 | 5,085 | 4,970 | 8,063 | |||||||||||||||||||||||||
Net income (loss) (1) | (12,938 | ) | (6,748 | ) | 7,371 | 74,638 | (7,609 | ) | (150 | ) | (11,025 | ) | 51,007 | ||||||||||||||||||||
Net income (loss) per common share, basic | $ | (0.34 | ) | $ | (0.18 | ) | $ | 0.19 | $ | 1.92 | $ | (0.20 | ) | $ | — | $ | (0.29 | ) | $ | 1.33 | |||||||||||||
Net income (loss) per common share, diluted | $ | (0.34 | ) | $ | (0.18 | ) | $ | 0.18 | $ | 1.84 | $ | (0.20 | ) | $ | — | $ | (0.29 | ) | $ | 1.27 | |||||||||||||
-1 | The fourth quarter of 2014 includes the impact of the reduction of substantially all of the valuation allowance held against the Company’s U.S. deferred tax assets. |
Schedule_II_Valuation_and_Qual
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||
Schedule of Valuation and Qualifying Accounts | Schedule II — Valuation and Qualifying Accounts(1) | ||||||||||||||||
December 31, 2014 | |||||||||||||||||
(In Thousands) | |||||||||||||||||
Description | Balance at | Charge/(Benefit) | Deductions (2) | Balance at | |||||||||||||
Beginning | to Expense | End of | |||||||||||||||
of Period | Period | ||||||||||||||||
Year ended December 31, 2012: | |||||||||||||||||
Allowance for doubtful accounts | $ | 110 | $ | (62 | ) | $ | (43 | ) | $ | 5 | |||||||
Year ended December 31, 2013: | |||||||||||||||||
Allowance for doubtful accounts | $ | 5 | $ | 179 | $ | (27 | ) | $ | 157 | ||||||||
Year ended December 31, 2014: | |||||||||||||||||
Allowance for doubtful accounts | $ | 157 | $ | 22 | $ | (82 | ) | $ | 97 | ||||||||
-1 | The Company does not have any warranty liabilities. | ||||||||||||||||
-2 | Deductions represent uncollectible accounts written off, net of recoveries. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Principles of Consolidation | Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. | ||
Reclassifications | Reclassifications | |
Certain prior year amounts have been reclassified to conform with the current year presentation. There has been no impact on previously reported net income or shareholders’ equity from such reclassifications. | ||
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 consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | ||
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash | |
Cash and cash equivalents consist of highly liquid financial instruments that are readily convertible to cash and have maturities of three months or less at the time of acquisition. The Company maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. As of December 31, 2014, the Company had $16.9 million in short-term restricted cash and as of December 31, 2013, $13.8 million in long-term restricted cash, associated with certain letters of credit outstanding to secure customer prepayments. | ||
Investments | Investments | |
The Company’s investments consist primarily of commercial paper, corporate debt, and other debt securities. Debt securities are classified as available-for-sale and are reported at fair value with unrealized gains and losses, net of applicable taxes, recorded in accumulated other comprehensive income, a component of shareholders’ equity. The realized gains and losses for available-for-sale securities are included in other income and expense in the Consolidated Statements of Operations. Realized gains and losses are calculated based on the specific identification method. | ||
The Company monitors its investment portfolio for impairment on a periodic basis. When the carrying value of an investment in debt securities exceeds its fair value and the decline in value is determined to be an other-than-temporary decline, and when the Company does not intend to sell the debt security and it is not more likely than not that the Company will be required to sell the debt securities prior to recovery of its amortized cost basis, the Company records an impairment charge in the amount of the credit loss and the balance, if any, to other comprehensive income (loss). | ||
Investments that mature between three months and one year from the purchase date are initially classified as short-term investments in the Consolidated Balance Sheet. Investments that mature beyond one year from the purchase date are initially classified as long-term investments in the Consolidated Balance Sheet. | ||
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. | ||
Foreign Currency Derivatives | Foreign Currency Derivatives | |
The Company uses forward foreign currency exchange contracts to hedge certain foreign currency exposures. Forward contracts are cash flow hedges of the Company’s foreign currency exposures on certain revenue contracts and are recorded at the contract’s fair value. Any gains or losses on the effective portion of the forward contract is initially reported in “Accumulated other comprehensive income,” a component of shareholders’ equity, with a corresponding asset or liability recorded based on the fair value of the forward contract. When the hedged transaction is recognized, any unrecognized gains or losses on the hedged transaction are reclassified into results of operations in the same period. Any hedge ineffectiveness is recorded to operations in the current period. The Company measures hedge effectiveness by comparing changes in fair values of the forward contract and expected cash flows based on changes in the spot prices of the underlying currencies. Cash flows from forward contracts accounted for as cash flow hedges are classified in the same category as the cash flows from the items being hedged. The Company does not use derivative financial instruments for speculative purposes. | ||
Concentration of Credit Risk | Concentration of Credit Risk | |
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, available-for-sale investments, accounts receivable, short-term and long-term restricted cash and forward foreign currency exchange contracts. | ||
The Company maintains cash and cash equivalents, available-for-sale securities and forward contracts with various financial institutions. As part of its risk management process, the Company performs periodic evaluations of the relative credit standing of the financial institutions. The Company has not sustained any credit losses from instruments held at financial institutions. The Company utilizes forward contracts to protect against the effects of foreign currency fluctuations. Such contracts involve the risk of non-performance by the counterparty, which could result in a material loss. | ||
The Company currently derives a significant portion of its revenue from sales of products and services to different agencies of the U.S. government or commercial customers primarily serving various agencies of the U.S. government. See Note 19 — Segment Information for additional information. Given the type of customers, the Company does not believe its accounts receivable represent significant credit risk. | ||
Other Concentration | Other Concentration | |
The Company obtains certain components from single source suppliers due to technology, availability, price, quality or other considerations. The loss of a single source supplier, the single source supplier’s inability to deliver the required components or intellectual property due to natural disaster or other reasons, the deterioration of the relationship with a single source supplier, or any unilateral modification of contract terms under which the Company is supplied components by a single source supplier could have a significant adverse effect on the Company’s revenue and gross margins. | ||
Accounts Receivable | Accounts Receivable | |
Accounts receivable are stated at principal amounts and are primarily comprised of amounts contractually due from customers for products and services and amounts due from government research and development contracts. The Company provides an allowance for doubtful accounts based on an evaluation of customer past due account balances. In determining whether to record an allowance for a specific customer, the Company considers a number of factors, including prior payment history and financial information for the customer. | ||
Fair Values of Financial Instruments | Fair Values of Financial Instruments | |
The Company measures certain financial assets and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company’s financial instruments primarily consist of debt securities, time deposits, money market funds, and foreign currency derivatives. See Note 5 — Fair Value Measurement for a further discussion on fair value of financial instruments. | ||
Inventories | Inventories | |
Inventories are valued at the lower of cost or market, with cost computed on a first-in, first-out basis. The Company regularly evaluates the technological usefulness and anticipated future demand for various inventory components and the expected use of the inventory. When the Company determines it is not likely the cost of inventory items will be recovered through future sales, the Company writes-down the related inventory to its estimated market value. | ||
In connection with certain of its sales agreements, the Company may receive used equipment from a customer. This inventory generally will be recorded at no value based on the expectation that the Company will not be able to resell or otherwise use the equipment. In the event that the Company has a specific contractual plan for resale at the date the inventory is acquired, the inventory is recorded at its estimated fair value. | ||
Property and Equipment and Intangible Assets | Property and Equipment and Intangible Assets, net | |
Property and equipment are recorded at cost less accumulated depreciation and amortization. Additions and improvements are capitalized and maintenance and repairs are expensed as incurred. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets, ranging from eighteen months to seven years for furniture and fixtures, three years for computer equipment, and eight to twenty-five years for buildings and land improvements. Leasehold improvements are depreciated over the life of the lease or asset, whichever is shorter. | ||
The Company amortizes purchased intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, ranging from two to ten years. | ||
Service Spares | Service Spares | |
Service spares are valued at the lower of cost or market and represent inventory used to support service and maintenance agreements with customers. As inventory is utilized, replaced items are returned to the Company and are either repaired or scrapped. Costs incurred to repair inventory to a usable state are charged to expense as incurred. Service spares are recorded at cost and amortized over the estimated service life of the related product platform (generally four years). | ||
Impairment of Long-Lived Assets and Intangibles | Impairment of Long-Lived Assets and Intangibles | |
The Company evaluates property, plant and equipment and intangible assets with finite lives for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flow the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flow expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When the Company identifies an impairment, the carrying value of the asset is reduced to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. | ||
Goodwill | Goodwill | |
Goodwill is not amortized but is tested for impairment at least annually. The Company reviews goodwill for impairment annually at the beginning of its fourth fiscal quarter and whenever events or changes in circumstances indicate the carrying value of the asset may not be recoverable. The goodwill impairment test consists of a two-step process, if necessary. However, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in ASC Topic 350. The more likely than not threshold is defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary and goodwill is considered to be unimpaired. However, if based on the qualitative assessment the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company will proceed with performing the two-step process. | ||
In step one, the Company determines the fair value of each reporting unit and compares it to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and no further testing is performed. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference. | ||
The Company performed its qualitative assessment during the fourth fiscal quarter of 2014 and concluded that it was more likely than not that the fair values of its reporting units were greater than their carrying amounts. After reaching this conclusion, the two-step impairment test was unnecessary and no further testing was performed. The qualitative factors that were considered included, but were not limited to, general economic conditions, outlook for the HPC and big data markets, recent and forecasted financial performance and the price of the Company’s common stock. | ||
Business Combinations | Business Combinations | |
The Company accounts for business combinations using the acquisition method of accounting and allocates the purchase price to the tangible and intangible assets acquired and the liabilities assumed based upon their estimated fair values at the acquisition date. The difference between the purchase price and the fair value of the net assets acquired is recorded as goodwill. The Company uses estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date. During the measurement period, which may be up to one year from the acquisition date, any refinements made to the fair value of the assets and liabilities assumed are recorded with retrospective effect. | ||
The fair values of intangible assets acquired are estimated using a discounted cash flow approach with Level 3 inputs. Under this method, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, the Company uses risk-adjusted cash flows discounted at rates considered appropriate given the inherent risks associated with each type of asset. The Company believes the level and timing of cash flows appropriately reflects market participant assumptions. | ||
Revenue Recognition | Revenue Recognition | |
The Company recognizes revenue, including transactions under sales-type leases, 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 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 usually 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. | ||
Sales-type lease | Sales-type leases | |
When the Company leases a system to a customer, the accounting involves specific determinations, which often involve complex provisions and significant judgments. The four criteria of the accounting standard that the Company uses in the determination of whether a lease is a sales-type lease or an operating lease are: (a) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the system; (b) a review of the minimum lease payments to determine if they are equal to or greater than 90% of the fair value of the system; (c) a determination of whether or not the lease transfers ownership to the lessee at the end of the lease term; and (d) a determination of whether or not the lease contains a bargain purchase option. If the lease transaction meets one of the four criteria, then it is recorded as a sales-type lease; otherwise it is an operating lease. Additionally, the Company assesses whether collectibility of the lease payments is reasonably assured and whether there are any significant uncertainties related to costs that it has yet to incur with respect to the lease. | ||
The Company considers the economic lives of most of its products to range from three to four years. There is no significant after-market for the Company’s used products and the Company believes that the economic lives are representative of the periods during which its products are expected to be economically usable, with normal service, for the purposes for which they were intended. Residual values are not significant. | ||
The discount rate implicit in the sales-type lease is used to calculate the present value of minimum lease payments, which the Company records as a lease receivable. The minimum lease payment consists of the gross lease payments net of executory costs and contingencies, if any. While revenue is recognized at the inception of the lease, the cash flow from the sales-type lease occurs over the course of the lease, which results in interest income. Unearned interest income is recorded at the inception of the lease and amortized over the lease term using the effective interest method. | ||
Foreign Currency Transaction | Foreign Currency Translation | |
The Company uses the U.S. dollar predominantly as its functional currency. Assets and liabilities of foreign subsidiaries that have a functional currency denominated in non-U.S. dollars are translated into U.S. dollars at year-end exchange rates, and revenue and expenses of these foreign subsidiaries are translated at average rates prevailing during the year. Translation adjustments are included in “Accumulated other comprehensive income,” a separate component of shareholders’ equity. Transaction gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved are included in “Other (income) expense, net” in the accompanying Consolidated Statements of Operations. Net transaction gains were $2.1 million for 2014 and net transactions losses were $1.3 million, and $0.1 million for 2013, and 2012, respectively. | ||
Research and Development | Research and Development | |
Research and development expenses include costs incurred in the development and production of hardware and software, costs incurred to enhance and support existing product features, costs incurred to support and improve development processes, and costs related to future product development. Research and development costs are expensed as incurred, and may be offset by co-funding from third parties. The Company may also enter into arrangements whereby it makes advance, non-refundable payments to a vendor to perform certain research and development services. These payments are deferred and recognized over the vendor’s estimated performance period. During the third quarter of 2009, the Company amended a vendor agreement to settle outstanding performance issues. The Company had made advance payments of $16.2 million to the vendor. Due to the amendment, the Company received a refund of $10.0 million of amounts previously paid to the vendor and the right to receive rebates on future purchases. The Company estimated the fair value of this rebate right to be $6.2 million. The Company believes the rebate right is recoverable and it has been classified in “Other non-current assets” in the Consolidated Balance Sheets. No gain or loss was recorded as a result of this amendment. As of December 31, 2014, $0.1 million in rebates remain available for use. | ||
Amounts to be received under co-funding arrangements with the U.S. government or other customers are based on either contractual milestones or costs incurred. These co-funding milestone payments are recognized in operations as performance is estimated to be completed and are measured as milestone achievements occur or as costs are incurred. These estimates are reviewed on a periodic basis and are subject to change, including in the near term. If an estimate is changed, net research and development expense could be impacted significantly. | ||
The Company does not record a receivable from the U.S. government prior to completing the requirements necessary to bill for a milestone or cost reimbursement. Funding from the U.S. government is subject to certain budget restrictions and milestones may be subject to completion risk, and as a result, there may be periods in which research and development costs are expensed as incurred for which no reimbursement is recorded, as milestones have not been completed or the U.S. government has not funded an agreement. Accordingly, there can be substantial variability in the amount of net research and development expenses from quarter to quarter and year to year. | ||
The Company classifies amounts to be received from funded research and development projects as either revenue or a reduction to research and development expense based on the specific facts and circumstances of the contractual arrangement, considering total costs expected to be incurred compared to total expected funding and the nature of the research and development contractual arrangement. In the event that a particular arrangement is determined to represent revenue, the corresponding research and development costs are classified as cost of revenue. | ||
Income Taxes | Income Taxes | |
Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and operating loss and tax credit carryforwards and are measured using the enacted tax rates and laws that will be in effect when the differences and carryforwards are expected to be recovered or settled. A valuation allowance for deferred tax assets is provided when the Company estimates that it is more likely than not that all or a portion of the deferred tax assets may not be realized through future operations. This assessment is based upon consideration of available positive and negative evidence, which includes, among other things, recent results of operations and expected future profitability. The Company considers its actual historical results over several years to have stronger weight than other more subjective indicators, including forecasts, when considering whether to establish or reduce a valuation allowance on deferred tax assets. | ||
The Company recognizes the income tax benefit from a tax position only if it is more likely than not that the tax position will be sustained on examination by the applicable taxing authorities, based on the technical merits of the Company’s position. The tax benefit recognized in the financial statements from such a position is measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. | ||
Estimated interest and penalties are recorded as a component of interest expense and other expense, respectively. | ||
As of December 31, 2014, the Company had approximately $87.6 million of net deferred tax assets, against which the Company provided a $10.1 million valuation allowance, resulting in a net deferred tax asset of $77.5 million. During the year ended December 31, 2014 the Company reduced substantially all of the remaining valuation allowance held against the Company’s U.S. deferred tax assets. The Company continues to provide a valuation allowance against specific U.S. deferred tax assets and a full valuation allowance against deferred tax assets arising in a limited number of foreign jurisdictions as the realization of such assets is not considered to be more likely than not at this time. In a future period the Company’s assessment of the realizability of its deferred tax assets and therefore the appropriateness of the valuation allowance could change based on an assessment of all available evidence, both positive and negative in that future period. If the Company’s conclusion about the realizability of its deferred tax assets and therefore the appropriateness of the valuation allowance changes in a future period, the Company could record a substantial tax provision or benefit in its Consolidated Statement of Operations when that occurs. | ||
Share-based Compensation | Share-Based Compensation | |
The Company measures compensation cost for share-based payment awards at fair value and recognizes it as compensation expense over the service period for awards expected to vest. Share-based compensation expense is recognized for all share-based payment awards, net of an estimated forfeiture rate. Compensation cost is only recognized for those shares expected to vest on a straight-line basis over the requisite service period of the award. | ||
Determining the appropriate fair value model and calculating the fair value of share-based payment awards requires subjective assumptions, including the expected life of the share-based payment awards and stock price volatility. The Company utilizes the Black-Scholes options pricing model to value the stock options granted under its options plans. In this model, the assumptions utilized relate to stock price volatility, stock option term and forfeiture rates that are based upon both historical factors as well as management’s judgment. | ||
The fair value of restricted stock and restricted stock units is determined based on the number of shares or units granted and the quoted price of the Company’s common stock at the date of grant. | ||
The Company grants performance vesting restricted shares to executives as one of the ways to align compensation with shareholder interests. Vesting of these awards is contingent upon achievement of certain performance conditions. Compensation expense for these awards is only recorded when vesting is deemed to be probable. | ||
Shipping and Handling Costs | Shipping and Handling Costs | |
Costs related to shipping and handling are included in “Cost of product revenue” and “Cost of service revenue” in the accompanying Consolidated Statements of Operations. | ||
Advertising Costs | Advertising Costs | |
Sales and marketing expenses in the accompanying Consolidated Statements of Operations include advertising expenses of $2.9 million, $2.2 million, and $1.2 million in 2014, 2013, and 2012, respectively. The Company incurs advertising costs for representation at certain trade shows, promotional events and sales lead generation, as well as design and printing costs for promotional materials. The Company expenses all advertising costs as incurred. | ||
Earnings Per Share | Earnings Per Share, or EPS | |
Basic EPS is computed by dividing net income 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 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 years ended December 31, 2014, 2013 and 2012, the added shares from these items included in the calculation of diluted shares and EPS totaled approximately 1.8 million, 1.9 million, and 1.3 million, respectively. Potentially dilutive shares of 0.6 million, 0.5 million, and 0.4 million, respectively, have been excluded from the denominator in the computation of diluted EPS for the years ended December 31, 2014, 2013 and 2012, respectively, because they are antidilutive. | ||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the fiscal and interim reporting periods beginning after December 15, 2016 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. The Company is currently evaluating the potential impact of the pending adoption of ASU 2014-09 on its consolidated financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income | |||||||||||||||
Accumulated other comprehensive income, a component of Shareholders’ equity, consisted of the following at December 31 (in thousands): | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Accumulated unrealized net gain (loss) on available-for-sale investments | $ | 12 | $ | — | $ | (46 | ) | |||||||||
Accumulated currency translation adjustments | 2,069 | 3,257 | 4,301 | |||||||||||||
Accumulated unrealized net gain (loss) on cash flow hedges | 4,422 | (2,404 | ) | 926 | ||||||||||||
Accumulated other comprehensive income | $ | 6,503 | $ | 853 | $ | 5,181 | ||||||||||
The following tables show the changes in Accumulated Other Comprehensive Income by component for the years ended December 31, 2014 and 2013 (in thousands): | ||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||
Unrealized Gain on Investments | Foreign Currency Translation Adjustments | Unrealized Gain/(Loss) on Cash Flow Hedges | Accumulated Other Comprehensive Income | |||||||||||||
Beginning balance | $ | — | $ | 3,257 | $ | (2,404 | ) | $ | 853 | |||||||
Current-period change, net of tax | $ | 12 | $ | (1,188 | ) | $ | 6,826 | $ | 5,650 | |||||||
Ending balance | $ | 12 | $ | 2,069 | $ | 4,422 | $ | 6,503 | ||||||||
Income tax expense (benefit) associated with current-period change | $ | 8 | $ | (229 | ) | $ | 4,593 | $ | 4,372 | |||||||
Acquisition_Tables
Acquisition (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Business Combinations [Abstract] | ||||||||||
Schedule of estimated fair values of assets acquired and liabilities assumed | The following are the estimated fair values of the assets acquired and liabilities assumed (in thousands): | |||||||||
Cash | $ | 635 | ||||||||
Inventories | 7,526 | |||||||||
Other tangible assets | 5,702 | |||||||||
Deferred revenue | (2,400 | ) | ||||||||
Accounts payable | (2,918 | ) | ||||||||
Deferred tax liabilities | (3,685 | ) | ||||||||
Other liabilities assumed | (2,061 | ) | ||||||||
Net tangible assets | 2,799 | |||||||||
Trademarks | 300 | |||||||||
Developed technology | 5,400 | |||||||||
Customer relationships | 1,800 | |||||||||
Non-compete agreements | 400 | |||||||||
Goodwill | 14,182 | |||||||||
Total net assets acquired | $ | 24,881 | ||||||||
Schedule of fair value of major components of intangible assets acquired and estimated useful lives | The fair values of the major components of the intangible assets acquired and their estimated useful lives are as follows (in thousands): | |||||||||
Useful Life | ||||||||||
Intangible Asset Class | Fair Value | (in Years) | ||||||||
Trademarks | $ | 300 | 5 | |||||||
Developed technology | $ | 5,400 | 3 | |||||||
Customer relationships | $ | 1,800 | 10 | |||||||
Non-compete agreements | $ | 400 | 2 | |||||||
Schedule of unaudited pro forma condensed financial information | The following unaudited pro forma condensed financial information presents the combined results of operations of the Company and Appro for the year ended December 31, 2012 as if the acquisition had occurred on January 1, 2012 (in thousands): | |||||||||
Year Ended December 31, 2012 | ||||||||||
Revenue | $ | 494,369 | ||||||||
Net income | $ | 161,985 | ||||||||
Schedule of carrying amount of purchased intangibles | The carrying amount of purchased intangibles at December 31, 2014 was as follows (in thousands): | |||||||||
31-Dec-14 | ||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||
Trademarks | $ | 300 | $ | 127 | $ | 173 | ||||
Developed technology | 5,400 | 3,800 | 1,600 | |||||||
Customer relationships | 1,800 | 380 | 1,420 | |||||||
Non-compete agreements | 400 | 400 | — | |||||||
Total | $ | 7,900 | $ | 4,707 | $ | 3,193 | ||||
The carrying amount of purchased intangibles at December 31, 2013 was as follows (in thousands): | ||||||||||
31-Dec-13 | ||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||
Trademarks | $ | 300 | $ | 67 | $ | 233 | ||||
Developed technology | 5,400 | 2,000 | 3,400 | |||||||
Customer relationships | 1,800 | 200 | 1,600 | |||||||
Non-compete agreements | 400 | 222 | 178 | |||||||
Total | $ | 7,900 | $ | 2,489 | $ | 5,411 | ||||
Schedule of amortization expense | Aggregate estimated amortization expense for the years ending December 31 are as follows (in thousands): | |||||||||
2015 | $ | 1,840 | ||||||||
2016 | 240 | |||||||||
2017 | 233 | |||||||||
2018 | 180 | |||||||||
2019 | 180 | |||||||||
$ | 2,673 | |||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||
Dec. 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 on a recurring basis as of December 31, 2014 and 2013, 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 | |||||||||||
December 31, | Active | Observable | |||||||||||
2014 | Markets | Inputs | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
Assets: | |||||||||||||
Cash and cash equivalents and restricted cash | $ | 129,507 | $ | 129,507 | $ | — | |||||||
Available-for-sale investments (1) | 16,289 | 16,289 | — | ||||||||||
Foreign exchange forward contracts (2) | 11,079 | — | 11,079 | ||||||||||
Assets measured at fair value at December 31, 2014 | $ | 156,875 | $ | 145,796 | $ | 11,079 | |||||||
Liabilities: | |||||||||||||
Foreign exchange forward contracts (3) | 2,139 | — | 2,139 | ||||||||||
Liabilities measured at fair value at December 31, 2014 | $ | 2,139 | $ | — | $ | 2,139 | |||||||
Description | Fair Value | Quoted | Significant | ||||||||||
as of | Prices in | Other | |||||||||||
December 31, | Active | Observable | |||||||||||
2013 | Markets | Inputs | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
Assets: | |||||||||||||
Cash and cash equivalents and restricted cash | $ | 206,401 | $ | 206,401 | $ | — | |||||||
Available-for-sale investments (1) | 14,048 | 14,048 | — | ||||||||||
Foreign exchange forward contracts (2) | 1,730 | — | 1,730 | ||||||||||
Assets measured at fair value at December 31, 2013 | $ | 222,179 | $ | 220,449 | $ | 1,730 | |||||||
Liabilities: | |||||||||||||
Foreign exchange forward contracts (3) | 7,237 | — | 7,237 | ||||||||||
Liabilities measured at fair value at December 31, 2013 | $ | 7,237 | $ | — | $ | 7,237 | |||||||
_______________________________ | |||||||||||||
-1 | Included in “Short-term investments” on the Company’s Consolidated Balance Sheets. | ||||||||||||
-2 | Included in “Prepaid expenses and other current assets” and “Other non-current assets” on the Company’s Consolidated Balance Sheets. | ||||||||||||
-3 | Included in “Other accrued liabilities” and “Other non-current liabilities” on the Company’s Consolidated Balance Sheets. | ||||||||||||
Schedule of notional amounts of outstanding derivative positions | As of December 31, 2014 and 2013, 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 (in millions): | ||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||
British Pounds (GBP) | 77.9 | 36.4 | |||||||||||
Euros (EUR) | 40.7 | 53 | |||||||||||
Swiss Francs (CHF) | 0.9 | 5.6 | |||||||||||
Canadian Dollars (CAD) | — | 3.9 | |||||||||||
Japanese Yen (JPY) | — | 1,239.80 | |||||||||||
Singapore Dollars (SGD) | 0.1 | 3.2 | |||||||||||
Swedish Krona (SEK) | 84.8 | — | |||||||||||
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 | ||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Foreign currency contracts | Prepaid expenses and other current assets | $ | 5,362 | $ | 1,654 | ||||||||
Foreign currency contracts | Other non-current assets | 5,717 | 76 | ||||||||||
Foreign currency contracts | Other accrued liabilities | (1,454 | ) | (2,942 | ) | ||||||||
Foreign currency contracts | Other non-current liabilities | (685 | ) | (4,295 | ) | ||||||||
Total fair value of derivatives classified as hedging instruments | $ | 8,940 | $ | (5,507 | ) | ||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||
Reclassification from 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 years ended December 31, 2014, 2013 and 2012 (in thousands). The gross reclassification adjustments increased product revenue for the years ended December 31, 2014 and 2012 and decreased product revenue for the year ended December 31, 2013. | |||||||||||||||
Year Ended | ||||||||||||||||
December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Gross of Tax Reclassifications | $ | 2,748 | $ | (1,604 | ) | $ | 643 | |||||||||
Net of Tax Reclassifications | $ | 1,649 | $ | (962 | ) | $ | 386 | |||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income | |||||||||||||||
Accumulated other comprehensive income, a component of Shareholders’ equity, consisted of the following at December 31 (in thousands): | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Accumulated unrealized net gain (loss) on available-for-sale investments | $ | 12 | $ | — | $ | (46 | ) | |||||||||
Accumulated currency translation adjustments | 2,069 | 3,257 | 4,301 | |||||||||||||
Accumulated unrealized net gain (loss) on cash flow hedges | 4,422 | (2,404 | ) | 926 | ||||||||||||
Accumulated other comprehensive income | $ | 6,503 | $ | 853 | $ | 5,181 | ||||||||||
The following tables show the changes in Accumulated Other Comprehensive Income by component for the years ended December 31, 2014 and 2013 (in thousands): | ||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||
Unrealized Gain on Investments | Foreign Currency Translation Adjustments | Unrealized Gain/(Loss) on Cash Flow Hedges | Accumulated Other Comprehensive Income | |||||||||||||
Beginning balance | $ | — | $ | 3,257 | $ | (2,404 | ) | $ | 853 | |||||||
Current-period change, net of tax | $ | 12 | $ | (1,188 | ) | $ | 6,826 | $ | 5,650 | |||||||
Ending balance | $ | 12 | $ | 2,069 | $ | 4,422 | $ | 6,503 | ||||||||
Income tax expense (benefit) associated with current-period change | $ | 8 | $ | (229 | ) | $ | 4,593 | $ | 4,372 | |||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||
Investments | The carrying amount of the Company’s investments in available-for-sale securities as of December 31, 2014 and December 31, 2013 are shown in the table below (in thousands): | |||||||
31-Dec-14 | 31-Dec-13 | |||||||
Short-term available-for-sale securities cost | $ | 16,269 | $ | 14,048 | ||||
Short-term available-for-sale securities unrealized gains | 20 | — | ||||||
Short-term available-for-sale securities fair value | $ | 16,289 | $ | 14,048 | ||||
Accounts_and_Other_Receivables1
Accounts and Other Receivables, Net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Receivables [Abstract] | |||||||||
Accounts and Other Receivables, Net | A summary of net accounts and other receivables follows (in thousands): | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Trade accounts receivable | $ | 126,874 | $ | 169,417 | |||||
Unbilled receivables | 20,788 | 9,075 | |||||||
Advance billings | 4,960 | 2,141 | |||||||
Short-term investment in sales-type lease | 10,187 | — | |||||||
Other receivables | 2,401 | 2,051 | |||||||
165,210 | 182,684 | ||||||||
Allowance for doubtful accounts | (97 | ) | (157 | ) | |||||
Accounts and other receivables, net | $ | 165,113 | $ | 182,527 | |||||
Salestype_lease_Tables
Sales-type lease (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Leases [Abstract] | ||||
Components of the Net Investment in the Sales-type Lease | The following table shows the components of the net investment in the sales-type lease as of December 31, 2014 (in thousands): | |||
Total minimum lease payments to be received | $ | 53,134 | ||
Less: executory costs | (10,717 | ) | ||
Net minimum lease payments receivable | 42,417 | |||
Estimated residual value of leased property (unguaranteed) | 1,253 | |||
Less: unearned income | (2,394 | ) | ||
Net investment in sales-type lease | 41,276 | |||
Less: long-term investment in sales-type lease | (31,089 | ) | ||
Investment in sales-type lease included in accounts and other receivables | $ | 10,187 | ||
Minimum Lease Payments to be Received for Each of the Next Five Fiscal Years | As of December 31, 2014, minimum lease payments for each of the succeeding four fiscal years are as follows (in thousands): | |||
2015 | $ | 14,169 | ||
2016 | 14,169 | |||
2017 | 14,169 | |||
2018 | 10,627 | |||
Total minimum lease payments to be received | $ | 53,134 | ||
Inventory_Tables
Inventory (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventory | A summary of inventory follows (in thousands): | ||||||||
31-Dec | |||||||||
2014 | 2013 | ||||||||
Components and subassemblies | $ | 60,851 | $ | 46,339 | |||||
Work in process | 46,954 | 23,618 | |||||||
Finished goods | 35,827 | 25,172 | |||||||
$ | 143,632 | $ | 95,129 | ||||||
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment, Net | A summary of property and equipment follows (in thousands): | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Land | $ | 275 | $ | 203 | |||||
Buildings | 20,409 | 17,022 | |||||||
Furniture and equipment | 13,198 | 14,443 | |||||||
Computer equipment | 59,785 | 91,475 | |||||||
Leasehold improvements | 446 | 1,276 | |||||||
94,113 | 124,419 | ||||||||
Accumulated depreciation and amortization | (59,320 | ) | (94,141 | ) | |||||
Property and equipment, net | $ | 34,793 | $ | 30,278 | |||||
Service_Spares_Net_Tables
Service Spares, Net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Service Spares, Net | A summary of service spares follows (in thousands): | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Service spares | $ | 13,114 | $ | 16,613 | |||||
Accumulated depreciation | (11,246 | ) | (14,785 | ) | |||||
Service spares, net | $ | 1,868 | $ | 1,828 | |||||
Deferred_Revenue_Tables
Deferred Revenue (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Revenue Disclosure [Abstract] | |||||||||
Deferred revenue | Deferred revenue consisted of the following (in thousands): | ||||||||
31-Dec | |||||||||
2014 | 2013 | ||||||||
Deferred product revenue | $ | 21,152 | $ | 54,065 | |||||
Deferred service revenue | 92,346 | 87,900 | |||||||
Total deferred revenue | 113,498 | 141,965 | |||||||
Less long-term deferred revenue | (47,588 | ) | (50,477 | ) | |||||
Deferred revenue in current liabilities | $ | 65,910 | $ | 91,488 | |||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||
Commitments and Contingencies | Minimum contractual commitments as of December 31, 2014, were as follows (in thousands): | ||||||||
Operating | Development | ||||||||
Leases | Agreements | ||||||||
2015 | $ | 5,097 | $ | 6,856 | |||||
2016 | 4,762 | 25 | |||||||
2017 | 4,563 | 25 | |||||||
2018 | 4,373 | 25 | |||||||
2019 | 4,266 | 25 | |||||||
Thereafter | 14,563 | — | |||||||
Minimum contractual commitments | $ | 37,624 | $ | 6,956 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income (loss) before income taxes | Income before income taxes consisted of the following (in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
United States | $ | 5,710 | $ | 17,467 | $ | 161,592 | |||||||
International | 3,987 | 3,562 | 7,140 | ||||||||||
Total | $ | 9,697 | $ | 21,029 | $ | 168,732 | |||||||
Tax provision (benefit) for income taxes related to operations | The tax provision (benefit) for income taxes related to operations consisted of the following (in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current provision (benefit): | |||||||||||||
Federal | $ | 230 | $ | 484 | $ | 1,162 | |||||||
State | (392 | ) | 696 | 2,768 | |||||||||
Foreign | 740 | 801 | 541 | ||||||||||
Total current provision | 578 | 1,981 | 4,471 | ||||||||||
Deferred (benefit) provision: | |||||||||||||
Federal | (53,242 | ) | (13,160 | ) | 1,362 | ||||||||
State | (885 | ) | (327 | ) | 1,415 | ||||||||
Foreign | 923 | 312 | 243 | ||||||||||
Total deferred (benefit) provision | (53,204 | ) | (13,175 | ) | 3,020 | ||||||||
Total (benefit) provision for income taxes | $ | (52,626 | ) | $ | (11,194 | ) | $ | 7,491 | |||||
Tax provision (benefit) differs from the amount computed by applying the federal statutory income tax rate | The tax provision (benefit) differs from the amount computed by applying the federal statutory income tax rate as follows (in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Income tax provision at statutory rate | $ | 3,394 | $ | 7,360 | $ | 59,056 | |||||||
State taxes, net of federal benefit | (217 | ) | 369 | 4,183 | |||||||||
Foreign income taxes | 284 | (749 | ) | (518 | ) | ||||||||
Stock compensation adjustment | — | (8,419 | ) | — | |||||||||
Deemed dividends for U.S. income tax purposes | 492 | 477 | 2,352 | ||||||||||
Nondeductible expenses | 337 | 208 | 549 | ||||||||||
Liquidation of subsidiary | — | — | (30,704 | ) | |||||||||
Disallowed compensation | (116 | ) | 19 | 492 | |||||||||
Research and development tax credit | (1,140 | ) | (5,736 | ) | — | ||||||||
Effect of change in valuation allowance on deferred tax assets | (55,660 | ) | (4,723 | ) | (27,919 | ) | |||||||
Effective income tax provision (benefit) | $ | (52,626 | ) | $ | (11,194 | ) | $ | 7,491 | |||||
Significant components of the Company's deferred income tax assets and liabilities | Significant components of the Company’s deferred income tax assets and liabilities follow (in thousands): | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Current: | |||||||||||||
Deferred Income Tax Assets | |||||||||||||
Inventory | $ | 5,840 | $ | 3,388 | |||||||||
Accrued compensation | 681 | 460 | |||||||||||
Deferred revenue | 18,186 | 12,100 | |||||||||||
Net operating loss carryforwards | 12,981 | 5,922 | |||||||||||
Other | 1,261 | 8,120 | |||||||||||
Gross current deferred tax assets | 38,949 | 29,990 | |||||||||||
Valuation allowance | (2,039 | ) | (20,107 | ) | |||||||||
Current deferred tax assets | 36,910 | 9,883 | |||||||||||
Deferred Income Tax Liabilities | |||||||||||||
Other | (837 | ) | (688 | ) | |||||||||
Current deferred tax liabilities | (837 | ) | (688 | ) | |||||||||
Net current deferred tax assets | $ | 36,073 | $ | 9,195 | |||||||||
Long-Term: | |||||||||||||
Deferred Income Tax Assets | |||||||||||||
Property and equipment | $ | 11,555 | $ | 328 | |||||||||
Research and experimentation credit carryforwards | 24,596 | 23,941 | |||||||||||
Net operating loss carryforwards | 21,511 | 47,154 | |||||||||||
Goodwill | 203 | 628 | |||||||||||
Other | 9,967 | 10,161 | |||||||||||
Gross long-term deferred tax assets | 67,832 | 82,212 | |||||||||||
Valuation allowance | (8,099 | ) | (57,687 | ) | |||||||||
Long-term deferred tax assets | 59,733 | 24,525 | |||||||||||
Deferred Income Tax Liabilities | |||||||||||||
Property and equipment | — | (1,905 | ) | ||||||||||
Investment in sales-type lease, net | (14,321 | ) | — | ||||||||||
Intangible assets | (1,215 | ) | (2,059 | ) | |||||||||
Other | (2,783 | ) | (1,355 | ) | |||||||||
Long-term deferred tax liabilities | (18,319 | ) | (5,319 | ) | |||||||||
Net long-term deferred tax asset | $ | 41,414 | $ | 19,206 | |||||||||
Unrecognized tax benefits for uncertain tax positions | The following table summarizes changes in the amount of the Company’s unrecognized tax benefits for uncertain tax positions for the three years ended December 31, 2014, 2013 and 2012 (in thousands): | ||||||||||||
Balance at December 31, 2011 | $ | — | |||||||||||
Increase related to current year income tax positions | 470 | ||||||||||||
Balance at December 31, 2012 | $ | 470 | |||||||||||
Decrease related to prior year income tax positions | (268 | ) | |||||||||||
Balance at December 31, 2013 | $ | 202 | |||||||||||
Increase related to prior year income tax positions | 5,059 | ||||||||||||
Increase related to current year income tax positions | 369 | ||||||||||||
Balance at December 31, 2014 | $ | 5,630 | |||||||||||
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Share-based Compensation [Abstract] | |||||||||||||||||||||
Key weighted average assumptions used in determining fair value | In determining the fair value of stock options, the Company used the Black-Scholes option pricing model that employed the following key weighted average assumptions: | ||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Risk-free interest rate | 1.22 | % | 0.98 | % | 0.56 | % | |||||||||||||||
Expected dividend yield | — | % | — | % | — | % | |||||||||||||||
Volatility | 52.43 | % | 50.45 | % | 74.84 | % | |||||||||||||||
Expected life (in years) | 4 | 4 | 4 | ||||||||||||||||||
Weighted average Black-Scholes value of options granted | $ | 11.16 | $ | 8.22 | $ | 6.56 | |||||||||||||||
Stock option activity | A summary of the Company’s stock option activity and related information follows: | ||||||||||||||||||||
Options | Weighted | Weighted Average Remaining | |||||||||||||||||||
Average | Contractual | ||||||||||||||||||||
Exercise | Term (Years) | ||||||||||||||||||||
Price | |||||||||||||||||||||
Outstanding at January 1, 2012 | 3,417,920 | $ | 6.28 | ||||||||||||||||||
Granted | 359,500 | 11.9 | |||||||||||||||||||
Exercised | (1,346,326 | ) | 5.52 | ||||||||||||||||||
Canceled and forfeited | (137,589 | ) | 11.35 | ||||||||||||||||||
Outstanding at December 31, 2012 | 2,293,505 | 7.31 | |||||||||||||||||||
Granted | 346,360 | 20.65 | |||||||||||||||||||
Exercised | (495,221 | ) | 6.38 | ||||||||||||||||||
Canceled and forfeited | (66,575 | ) | 21.97 | ||||||||||||||||||
Outstanding at December 31, 2013 | 2,078,069 | 9.29 | |||||||||||||||||||
Granted | 323,900 | 26.92 | |||||||||||||||||||
Exercised | (411,352 | ) | 7.5 | ||||||||||||||||||
Canceled and forfeited | (59,627 | ) | 18.45 | ||||||||||||||||||
Outstanding at December 31, 2014 | 1,930,990 | 12.34 | 6.6 | ||||||||||||||||||
Exercisable at December 31, 2014 | 1,251,080 | 8.18 | 5.6 | ||||||||||||||||||
Available for grant at December 31, 2014 | 3,079,888 | ||||||||||||||||||||
Restricted stock activity | A summary of the Company’s unvested restricted stock and restricted stock unit grants and changes during the years ended December 31 was as follows: | ||||||||||||||||||||
Service Vesting 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 January 1, 2012 | 1,302,414 | $ | 5.47 | — | $ | — | 1,302,414 | $ | 5.47 | ||||||||||||
Granted | 579,447 | 10.84 | 737,000 | 12.9 | 1,316,447 | 11.99 | |||||||||||||||
Forfeited | (31,771 | ) | 7.64 | — | — | (31,771 | ) | 7.64 | |||||||||||||
Vested | (384,352 | ) | 5.86 | — | — | (384,352 | ) | 5.86 | |||||||||||||
Outstanding at December 31, 2012 | 1,465,738 | 7.44 | 737,000 | 12.9 | 2,202,738 | 9.27 | |||||||||||||||
Granted | 326,979 | 20.83 | 429,000 | 21 | 755,979 | 20.93 | |||||||||||||||
Forfeited | (3,437 | ) | 5.92 | (72,000 | ) | 14.88 | (75,437 | ) | 14.48 | ||||||||||||
Vested | (661,580 | ) | 6.22 | — | — | (661,580 | ) | 6.22 | |||||||||||||
Outstanding at December 31, 2013 | 1,127,700 | 12.05 | 1,094,000 | 15.94 | 2,221,700 | 13.97 | |||||||||||||||
Granted | 463,734 | 28.74 | — | — | 463,734 | 28.74 | |||||||||||||||
Forfeited | (134,653 | ) | 15.39 | (277,000 | ) | 17.49 | (411,653 | ) | 16.8 | ||||||||||||
Vested | (423,179 | ) | 11.14 | — | — | (423,179 | ) | 11.14 | |||||||||||||
Outstanding at December 31, 2014 | 1,033,602 | 19.48 | 817,000 | 15.41 | 1,850,602 | 17.68 | |||||||||||||||
Outstanding and exercisable options by price range | Outstanding and exercisable options by price range as of December 31, 2014, were as follows: | ||||||||||||||||||||
Outstanding Options | Exercisable Options | ||||||||||||||||||||
Range of Exercise | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||
Prices per Share | Outstanding | Average | Average | Exercisable | Average | ||||||||||||||||
Remaining | Exercise | Exercise | |||||||||||||||||||
Life (Years) | Price | Price | |||||||||||||||||||
$ 0.00 - $ 4.00 | 265,142 | 4.3 | $ | 3.71 | 265,142 | $ | 3.71 | ||||||||||||||
$ 4.01 - $ 6.00 | 240,647 | 5.1 | $ | 5.49 | 240,647 | $ | 5.49 | ||||||||||||||
$ 6.01 - $ 8.00 | 438,159 | 5.7 | $ | 6.29 | 360,553 | $ | 6.33 | ||||||||||||||
$ 8.01 - $ 34.15 | 987,042 | 8.1 | $ | 19.01 | 384,738 | $ | 14.68 | ||||||||||||||
$ 0.00 - $ 34.15 | 1,930,990 | 6.6 | $ | 12.34 | 1,251,080 | $ | 8.18 | ||||||||||||||
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | The following table (in thousands) sets forth the share-based compensation cost resulting from stock options and stock grants recorded in the Company’s Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012. | ||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Cost of product revenue | $ | 229 | $ | 135 | $ | 57 | |||||||||||||||
Cost of service revenue | 255 | 229 | 258 | ||||||||||||||||||
Research and development | 2,721 | 1,480 | 1,327 | ||||||||||||||||||
Sales and marketing | 3,152 | 2,230 | 1,717 | ||||||||||||||||||
General and administrative | 4,007 | 3,165 | 2,604 | ||||||||||||||||||
Total share-based compensation expense | $ | 10,364 | $ | 7,239 | $ | 5,963 | |||||||||||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Information on operating segments | The following table presents revenues and gross margin for the Company’s operating segments for the years ended December 31 (in thousands): | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Revenue: | |||||||||||||
Supercomputing | $ | 459,729 | $ | 434,133 | $ | 355,736 | |||||||
Storage and Data Management | 84,412 | 76,955 | 55,009 | ||||||||||
Maintenance and Support | 86,573 | 77,817 | 62,245 | ||||||||||
Engineering Services and Other | 17,465 | 14,661 | 10,313 | ||||||||||
Elimination of inter-segment revenue | (86,573 | ) | (77,817 | ) | (62,245 | ) | |||||||
Total revenue | $ | 561,606 | $ | 525,749 | $ | 421,058 | |||||||
Gross Profit: | |||||||||||||
Supercomputing | $ | 146,565 | $ | 143,440 | $ | 128,723 | |||||||
Storage and Data Management | 31,572 | 31,403 | 16,574 | ||||||||||
Maintenance and Support | 38,819 | 38,476 | 25,735 | ||||||||||
Engineering Services and Other | 6,277 | 9,483 | 5,881 | ||||||||||
Elimination of inter-segment gross profit | (38,819 | ) | (38,476 | ) | (25,735 | ) | |||||||
Total gross profit | $ | 184,414 | $ | 184,326 | $ | 151,178 | |||||||
Revenue by geographic location | Product and service revenue and long-lived assets classified by significant country were as follows (in thousands): | ||||||||||||
United | All | Total | |||||||||||
States | Other | ||||||||||||
Countries | |||||||||||||
For the year ended December 31, 2014: | |||||||||||||
Product revenue | $ | 253,930 | $ | 206,818 | $ | 460,748 | |||||||
Service revenue | $ | 72,434 | $ | 28,424 | $ | 100,858 | |||||||
Long-lived assets | $ | 58,868 | $ | 36,792 | $ | 95,660 | |||||||
For the year ended December 31, 2013: | |||||||||||||
Product revenue | $ | 297,583 | $ | 138,747 | $ | 436,330 | |||||||
Service revenue | $ | 62,072 | $ | 27,347 | $ | 89,419 | |||||||
Long-lived assets | $ | 58,910 | $ | 6,146 | $ | 65,056 | |||||||
For the year ended December 31, 2012: | |||||||||||||
Product revenue | $ | 301,162 | $ | 52,605 | $ | 353,767 | |||||||
Service revenue | $ | 42,359 | $ | 24,932 | $ | 67,291 | |||||||
Long-lived assets | $ | 57,549 | $ | 4,460 | $ | 62,009 | |||||||
Research_and_Development_Table
Research and Development (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Research and Development [Abstract] | |||||||||||||
Company's Net Research and Development Cost | The detail for the Company’s net research and development costs for the years ended December 31 follows (in thousands): | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Gross research and development expenses | $ | 104,797 | $ | 92,469 | $ | 86,305 | |||||||
Less: Amounts included in cost of revenue | (7,713 | ) | (3,741 | ) | (1,080 | ) | |||||||
Less: Reimbursed research and development (excludes amounts in revenue) | (3,036 | ) | (1,000 | ) | (20,922 | ) | |||||||
Net research and development expenses | $ | 94,048 | $ | 87,728 | $ | 64,303 | |||||||
Interest_Income_Expense_Tables
Interest Income (Expense) (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||
The detail of interest income (expense) for the years ended | The detail of interest income (expense) for the years ended December 31 follows (in thousands): | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Interest income | $ | 643 | $ | 894 | $ | 397 | |||||||
Interest expense | (137 | ) | (137 | ) | (193 | ) | |||||||
Net interest income | $ | 506 | $ | 757 | $ | 204 | |||||||
Quarterly_Data_Unaudited_Table
Quarterly Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
For the Quarter Ended | 31-Mar | 30-Jun | 30-Sep | 31-Dec | 31-Mar | 30-Jun | 30-Sep | 31-Dec | |||||||||||||||||||||||||
Revenue | $ | 55,110 | $ | 85,147 | $ | 159,406 | $ | 261,943 | $ | 79,547 | $ | 84,467 | $ | 54,366 | $ | 307,369 | |||||||||||||||||
Cost of revenue | 37,173 | 56,143 | 110,876 | 173,000 | 55,397 | 57,666 | 33,940 | 194,420 | |||||||||||||||||||||||||
Gross profit | 17,937 | 29,004 | 48,530 | 88,943 | 24,150 | 26,801 | 20,426 | 112,949 | |||||||||||||||||||||||||
Research and development, net | 22,621 | 24,189 | 22,503 | 24,735 | 20,226 | 19,968 | 21,555 | 25,979 | |||||||||||||||||||||||||
Sales and marketing | 11,776 | 13,259 | 14,808 | 17,942 | 11,143 | 11,550 | 11,480 | 17,172 | |||||||||||||||||||||||||
General and administrative | 5,413 | 5,316 | 5,813 | 6,839 | 5,485 | 5,085 | 4,970 | 8,063 | |||||||||||||||||||||||||
Net income (loss) (1) | (12,938 | ) | (6,748 | ) | 7,371 | 74,638 | (7,609 | ) | (150 | ) | (11,025 | ) | 51,007 | ||||||||||||||||||||
Net income (loss) per common share, basic | $ | (0.34 | ) | $ | (0.18 | ) | $ | 0.19 | $ | 1.92 | $ | (0.20 | ) | $ | — | $ | (0.29 | ) | $ | 1.33 | |||||||||||||
Net income (loss) per common share, diluted | $ | (0.34 | ) | $ | (0.18 | ) | $ | 0.18 | $ | 1.84 | $ | (0.20 | ) | $ | — | $ | (0.29 | ) | $ | 1.27 | |||||||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies Cash, Cash Equivalents and Restricted Cash (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Short-term restricted cash | $16,874 | $0 |
Long-term restricted cash | $0 | $13,768 |
Long-term investments, expected term | 1 year | |
Minimum | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Short term investments, expected term | 3 months | |
Maximum | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Short term investments, expected term | 1 year |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies Property and Equipment and Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Minimum | |
Property, Plant and Equpment and Intangible Assets [Line Items] | |
Intangible assets, useful lives (years) | 2 years |
Maximum | |
Property, Plant and Equpment and Intangible Assets [Line Items] | |
Intangible assets, useful lives (years) | 10 years |
Furniture and Fixtures | Minimum | |
Property, Plant and Equpment and Intangible Assets [Line Items] | |
Property and equipment, useful lives (years) | 18 months |
Furniture and Fixtures | Maximum | |
Property, Plant and Equpment and Intangible Assets [Line Items] | |
Property and equipment, useful lives (years) | 7 years |
Computer equipment | |
Property, Plant and Equpment and Intangible Assets [Line Items] | |
Property and equipment, useful lives (years) | 3 years |
Building and Building Improvements | Minimum | |
Property, Plant and Equpment and Intangible Assets [Line Items] | |
Property and equipment, useful lives (years) | 8 years |
Building and Building Improvements | Maximum | |
Property, Plant and Equpment and Intangible Assets [Line Items] | |
Property and equipment, useful lives (years) | 25 years |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies Service Spares (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Service spares, useful life | 4 years |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies Revenue Recognition (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Product Delivery Period | 5 years |
Maintenance Services Period | 1 year |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies Foreign Currency Translation and Transaction (Details) (Other (Income) Expense, Net, USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other (Income) Expense, Net | |||
Foreign Currency Translations and Transactions [Line Items] | |||
Net transaction losses | ($2.10) | ($1.30) | ($0.10) |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies Research and Development (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2009 | Dec. 31, 2014 |
Accounting Policies [Abstract] | ||
Advance payments | $16.20 | |
Amount of refund | 10 | |
Estimated fair value of rebate right | 6.2 | |
Amount of rebates that remain available for use | $0.10 |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies Income Taxes (Details) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Valuation Allowance [Line Items] | |
Net deferred tax assets | $87.60 |
Valuation allowance amount | -10.1 |
Net deferred tax assets of valuation allowance | $77.50 |
Recovered_Sheet1
Summary of Significant Accounting Policies Advertising Costs (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | |||
Advertising expenses | $2.90 | $2.20 | $1.20 |
Recovered_Sheet2
Summary of Significant Accounting Policies EPS (Details) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares added from these items included in the calculation of diluted shares and EPS | 1,800,000 | 1,900,000 | 1,300,000 | |
Potentially dilutive shares excluded from the denominator in the computation of diluted EPS | 600,000 | 500,000 | 400,000 | |
Issued and outstanding restricted stock units (In Shares) | 1,850,602 | 2,221,700 | 2,202,738 | 1,302,414 |
Performance Vesting Restricted Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Issued and outstanding restricted stock units (In Shares) | 817,000 | 1,094,000 | 737,000 | 0 |
Recovered_Sheet3
Summary of Significant Accounting Policies Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $6,503 | $853 | $5,181 |
Accumulated unrealized net loss on available-for-sale investments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 12 | 0 | -46 |
Accumulated currency translation adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 2,069 | 3,257 | 4,301 |
Accumulated other comprehensive income | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $4,422 | ($2,404) | $926 |
Acquisition_Details
Acquisition (Details) (USD $) | 0 Months Ended | ||
Nov. 21, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | |||
Goodwill | $14,182,000 | $14,182,000 | |
Appro International, Inc. | |||
Business Acquisition [Line Items] | |||
Consideration transferred | 24,900,000 | ||
Cash | 635,000 | ||
Inventories | 7,526,000 | ||
Other tangible assets | 5,702,000 | ||
Deferred revenue | -2,400,000 | ||
Accounts payable | -2,918,000 | ||
Deferred tax liabilities | -3,685,000 | ||
Other liabilities assumed | -2,061,000 | ||
Net tangible assets | 2,799,000 | ||
Goodwill | 14,182,000 | ||
Total net assets acquired | 24,881,000 | ||
Developed technology | Appro International, Inc. | |||
Business Acquisition [Line Items] | |||
Fair Value | 5,400,000 | ||
Customer relationships | Appro International, Inc. | |||
Business Acquisition [Line Items] | |||
Fair Value | 1,800,000 | ||
Non-compete agreements | Appro International, Inc. | |||
Business Acquisition [Line Items] | |||
Fair Value | 400,000 | ||
Trademarks | Appro International, Inc. | |||
Business Acquisition [Line Items] | |||
Fair Value | $300,000 |
Acquisition_Intangible_Assets_
Acquisition Intangible Assets by Class (Details) (Appro International, Inc., USD $) | 0 Months Ended |
In Thousands, unless otherwise specified | Nov. 21, 2012 |
Developed technology | |
Finite-Lived and Indefinite-Lived Assets Acquired as Part of Business Combination [Line Items] | |
Fair Value | $5,400 |
Useful Life (Years) | 3 years |
Customer relationships | |
Finite-Lived and Indefinite-Lived Assets Acquired as Part of Business Combination [Line Items] | |
Fair Value | 1,800 |
Useful Life (Years) | 10 years |
Non-compete agreements | |
Finite-Lived and Indefinite-Lived Assets Acquired as Part of Business Combination [Line Items] | |
Fair Value | 400 |
Useful Life (Years) | 2 years |
Trademarks | |
Finite-Lived and Indefinite-Lived Assets Acquired as Part of Business Combination [Line Items] | |
Fair Value | $300 |
Useful Life (Years) | 5 years |
Acquisition_Acquisition_Pro_Fo
Acquisition Acquisition, Pro Forma Information (Details) (Appro International, Inc., USD $) | 1 Months Ended | 12 Months Ended |
Dec. 31, 2012 | Dec. 31, 2012 | |
Appro International, Inc. | ||
Business Acquisition [Line Items] | ||
Revenue since Acquisition Date, Actual | $600,000 | |
Loss since Acquisition Date, Actual | 1,300,000 | |
Acquisition related costs | 900,000 | |
Revenue | 494,369,000 | |
Net income | $161,985,000 |
Acquisition_Carrying_Amount_Ne
Acquisition Carrying Amount, Net, of Amortizable Intangible Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Amount | $3,895 | $6,362 |
Appro International, Inc. | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,900 | 7,900 |
Accumulated Amortization | 4,707 | 2,489 |
Net Carrying Amount | 3,193 | 5,411 |
Developed technology | Appro International, Inc. | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,400 | 5,400 |
Accumulated Amortization | 3,800 | 2,000 |
Net Carrying Amount | 1,600 | 3,400 |
Customer relationships | Appro International, Inc. | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,800 | 1,800 |
Accumulated Amortization | 380 | 200 |
Net Carrying Amount | 1,420 | 1,600 |
Non-compete agreements | Appro International, Inc. | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 400 | 400 |
Accumulated Amortization | 400 | 222 |
Net Carrying Amount | 0 | 178 |
Trademarks | Appro International, Inc. | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 300 | 300 |
Accumulated Amortization | 127 | 67 |
Net Carrying Amount | $173 | $233 |
Acquisition_Future_Amortizatio
Acquisition Future Amortization Expense (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Business Acquisition [Line Items] | |||
2015 | $1,840,000 | ||
2016 | 240,000 | ||
2017 | 233,000 | ||
2018 | 180,000 | ||
2019 | 180,000 | ||
Finite-Lived Intangible Assets, Net | 2,673,000 | ||
Appro International, Inc. | |||
Business Acquisition [Line Items] | |||
Amortization expense related to purchased intangibles | $2,200,000 | $2,200,000 | $200,000 |
Sale_of_Interconnect_Hardware_1
Sale of Interconnect Hardware Development Program (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
2-May-12 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Employee | ||||
Sale of Interconnect Hardware Development Program [Abstract] | ||||
Sale of interconnect hardware development program | $140,000,000 | |||
Number of employees joined Intel as part of transaction | 73 | |||
Net Gain on sale of Interconnect Hardware Development Program | $139,100,000 | $0 | $0 | $139,068,000 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets: | ||
Cash and cash equivalents and restricted cash | $129,507 | $206,401 |
Short-term available-for-sale securities fair value | 16,289 | 14,048 |
Foreign currency contracts | 11,079 | 1,730 |
Assets measured at fair value at December 31 | 156,875 | 222,179 |
Liabilities: | ||
Foreign currency contracts | -2,139 | -7,237 |
Liabilities measured at fair value at December 31 | 2,139 | 7,237 |
Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Cash and cash equivalents and restricted cash | 129,507 | 206,401 |
Short-term available-for-sale securities fair value | 16,289 | 14,048 |
Foreign currency contracts | 0 | 0 |
Assets measured at fair value at December 31 | 145,796 | 220,449 |
Liabilities: | ||
Foreign currency contracts | 0 | 0 |
Liabilities measured at fair value at December 31 | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash and cash equivalents and restricted cash | 0 | 0 |
Short-term available-for-sale securities fair value | 0 | 0 |
Foreign currency contracts | 11,079 | 1,730 |
Assets measured at fair value at December 31 | 11,079 | 1,730 |
Liabilities: | ||
Foreign currency contracts | -2,139 | -7,237 |
Liabilities measured at fair value at December 31 | $2,139 | $7,237 |
Fair_Value_Measurements_Outsta
Fair Value Measurements Outstanding notional amounts of forward contracts designated as cash flow hedges (Details) (Designated as Hedging Instrument [Member]) | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Millions, unless otherwise specified | CAD | CHF | EUR (€) | GBP (£) | JPY (¥) | SEK | SGD | CAD | CHF | EUR (€) | GBP (£) | JPY (¥) | SEK | SGD |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative, Notional Amount | 0 | 0.9 | € 40.70 | £ 77.9 | ¥ 0 | 84.8 | 0.1 | 3.9 | 5.6 | € 53 | £ 36.4 | ¥ 1,239.8 | 0 | 3.2 |
Fair_Value_Measurements_Narrat
Fair Value Measurements Narrative (Details) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 |
USD ($) | USD ($) | USD ($) | Foreign Exchange Forward | Foreign Exchange Forward | Designated as Hedging Instrument [Member] | |
USD ($) | USD ($) | GBP (£) | ||||
Fair Value Measurement [Abstract] | ||||||
Hedged foreign currency exposure | $192,500,000 | $151,400,000 | ||||
Derivative, Notional Amount | 28,300,000 | |||||
Foreign Currency Exposure | 43,400,000 | |||||
Fair value of outstanding forward contracts | 8,900,000 | -5,500,000 | ||||
Foreign currency gains | $2,069,000 | $3,257,000 | $4,301,000 | $4,400,000 | ($2,400,000) |
Fair_Value_Measurements_Deriva
Fair Value Measurements Derivatives (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contracts | $11,079 | $1,730 |
Foreign currency contracts | -2,139 | -7,237 |
Total fair value of derivatives classified as hedging instruments | 8,940 | -5,507 |
Foreign currency contracts | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contracts | 5,362 | 1,654 |
Foreign currency contracts | Other non-current assets | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contracts | 5,717 | 76 |
Foreign currency contracts | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contracts | -1,454 | -2,942 |
Foreign currency contracts | Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contracts | ($685) | ($4,295) |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Gross of Tax Reclassifications | $2,748 | ($1,604) | $643 |
Net of Tax Reclassifications | 1,649 | -962 | 386 |
Unrealized Gain on Investments | |||
Beginning balance | 0 | -46 | |
Current-period change, net of tax | 12 | 46 | |
Ending balance | 12 | 0 | -46 |
Income tax expense (benefit) associated with current-period change | 8 | 31 | |
Foreign Currency Translation Adjustments | |||
Beginning balance | 3,257 | 4,301 | |
Current-period change, net of tax | -1,188 | -1,044 | |
Ending balance | 2,069 | 3,257 | 4,301 |
Income tax expense (benefit) associated with current-period change | -229 | 27 | |
Unrealized Gain/(Loss) on Cash Flow Hedges | |||
Beginning balance | -2,404 | 926 | |
Current-period change, net of tax | 6,826 | -3,330 | |
Ending balance | 4,422 | -2,404 | 926 |
Income tax expense (benefit) associated with current-period change | 4,593 | -2,390 | |
Accumulated Other Comprehensive Income | |||
Beginning balance | 853 | 5,181 | |
Current-period change, net of tax | 5,650 | -4,328 | |
Ending balance | 6,503 | 853 | 5,181 |
Income tax expense (benefit) associated with current-period change | $4,372 | ($2,332) |
Investments_Details
Investments (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Available-for-sale Securities [Line Items] | ||
Short-term available-for-sale securities cost | $16,269 | $14,048 |
Short-term available-for-sale securities unrealized gains | 20 | 0 |
Short-term available-for-sale securities fair value | $16,289 | $14,048 |
Accounts_and_Other_Receivables2
Accounts and Other Receivables, Net (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $165,210 | $182,684 |
Net accounts and other receivables | ||
Allowance for doubtful accounts | -97 | -157 |
Accounts and other receivables, net | 165,113 | 182,527 |
Trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 126,874 | 169,417 |
Advance billings | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 4,960 | 2,141 |
Short-term investment in sales-type lease | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 10,187 | 0 |
Other receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 2,401 | 2,051 |
Unbilled receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $20,788 | $9,075 |
Accounts_and_Other_Receivables3
Accounts and Other Receivables, Net Narrative (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $165,210 | $182,684 |
US. government agencies and customers | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 87,000 | 111,900 |
Accounts Receivable | Non US government customers | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of non-U.S. customers that individually accounted for more than 10% of total accounts and other receivables | 0 | |
Non-U.S. government customers that accounted for total accounts and other receivables, percentage | 10.00% | |
Unbilled receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 20,788 | 9,075 |
Unbilled receivables | US. government agencies and customers | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $2,100 | $300 |
Salestype_lease_Details
Sales-type lease (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Leases [Abstract] | ||
Total minimum lease payments to be received | $53,134 | |
Less: executory costs | -10,717 | |
Net minimum lease payments receivable | 42,417 | |
Estimated residual value of leased property (unguaranteed) | 1,253 | |
Less: unearned income | -2,394 | |
Net investment in sales-type lease | 41,276 | |
Long-term investment in sales-type lease, net | -31,089 | 0 |
Investment in sales-type lease included in accounts and other receivables | 10,187 | |
Capital Leases, Future Minimum Payments Receivable, Fiscal Year Maturity [Abstract] | ||
2015 | 14,169 | |
2016 | 14,169 | |
2017 | 14,169 | |
2018 | 10,627 | |
Total minimum lease payments to be received | $53,134 |
Inventory_Details
Inventory (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Components and subassemblies | $60,851 | $46,339 |
Work in process | 46,954 | 23,618 |
Finished goods | 35,827 | 25,172 |
Total | $143,632 | $95,129 |
Inventory_Narrative_Details
Inventory Narrative (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Inventory [Line Items] | |||
Finished goods inventory located at customer sites pending acceptance | $35,300,000 | $24,800,000 | |
Inventory write-down | 2,330,000 | 917,000 | 2,329,000 |
Finished Goods Inventory | |||
Inventory [Line Items] | |||
Number of customer that individually accounted for more than 10% of finished goods inventory | 2 | 1 | |
Amount of total finished goods inventory from customers that individually accounted for more than 10% of total finished goods inventory | $31,200,000 | $18,000,000 |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $94,113,000 | $124,419,000 | |
Accumulated depreciation and amortization | -59,320,000 | -94,141,000 | |
Property and equipment, net | 34,793,000 | 30,278,000 | |
Depreciation, Depletion and Amortization [Abstract] | |||
Depreciation | 12,800,000 | 10,900,000 | 7,400,000 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 275,000 | 203,000 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 20,409,000 | 17,022,000 | |
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 13,198,000 | 14,443,000 | |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 59,785,000 | 91,475,000 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $446,000 | $1,276,000 |
Service_Spares_Net_Details
Service Spares, Net (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Service spares | $13,114 | $16,613 |
Accumulated depreciation | -11,246 | -14,785 |
Service spares, net | $1,868 | $1,828 |
Service_Spares_Net_Narrative_D
Service Spares, Net Narrative (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Inventory Disclosure [Abstract] | |||
Other Depreciation and Amortization | $1 | $0.90 | $0.90 |
Deferred_Revenue_Details
Deferred Revenue (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | $113,498,000 | $141,965,000 |
Less long-term deferred revenue | -47,588,000 | -50,477,000 |
Deferred revenue in current liabilities | 65,910,000 | 91,488,000 |
Deferred product revenue | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | 21,152,000 | 54,065,000 |
Deferred service revenue | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | $92,346,000 | $87,900,000 |
Deferred_Revenue_Narrative_Det
Deferred Revenue Narrative (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Revenue Arrangement [Line Items] | ||
Deferred Revenue | $113,498,000 | $141,965,000 |
US. government agencies and customers | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred Revenue | 63,800,000 | 49,200,000 |
Non US government customers | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred Revenue | 52,000,000 | |
Deferred Revenue Maximum Percentage | 10.00% | |
Non US government customers | Number of Customers [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred Revenue | $0 | $2 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other Commitments [Line Items] | |||
Rent expense | $5,200,000 | $5,300,000 | $4,600,000 |
Research and development, net | 94,048,000 | 87,728,000 | 64,303,000 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Operating Leases, 2015 | 5,097,000 | ||
Operating Leases, 2016 | 4,762,000 | ||
Operating Leases, 2017 | 4,563,000 | ||
Operating Leases, 2018 | 4,373,000 | ||
Operating Leases, 2019 | 4,266,000 | ||
Operating Leases, Thereafter | 14,563,000 | ||
Minimum contractual commitments | 37,624,000 | ||
Other Commitment, Fiscal Year Maturity [Abstract] | |||
Minimum contractual commitments | 6,956,000 | ||
Development Agreements | |||
Other Commitments [Line Items] | |||
Research and development, net | 12,200,000 | 9,300,000 | 4,900,000 |
Other Commitment, Fiscal Year Maturity [Abstract] | |||
Development Agreements, 2015 | 6,856,000 | ||
Development Agreements, 2016 | 25,000 | ||
Development Agreements, 2017 | 25,000 | ||
Development Agreements, 2018 | 25,000 | ||
Development Agreements, 2019 | 25,000 | ||
Development Agreements, Thereafter | $0 |
Income_Taxes_Narrative_Details
Income Taxes Narrative (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | ||||
United States | $5,710,000 | $17,467,000 | $161,592,000 | |
International | 3,987,000 | 3,562,000 | 7,140,000 | |
Income before income taxes | 9,697,000 | 21,029,000 | 168,732,000 | |
Operating Loss Carryforwards [Line Items] | ||||
Income tax benefit (expense) | -52,626,000 | -11,194,000 | 7,491,000 | |
Change in amount of deferred tax assets | 67,700,000 | 4,700,000 | 27,900,000 | |
Three year cumulative U.S. pre-tax income | 184,800,000 | |||
Three year cumulative U.S. pre-tax income, excluding impact of sale of interconnect hardware development program | 51,100,000 | |||
Stock compensation adjustment | 0 | -8,419,000 | 0 | |
Cash and cash equivalents | 112,633,000 | 192,633,000 | 253,065,000 | 50,411,000 |
Foreign Subsidiaries | ||||
Operating Loss Carryforwards [Line Items] | ||||
Cash and cash equivalents | 42,200,000 | |||
Interconnect Hardware Development Program | ||||
Operating Loss Carryforwards [Line Items] | ||||
Change in amount of deferred tax assets | 18,400,000 | |||
Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforwards | 21,300,000 | |||
Domestic Tax Authority | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 115,400,000 | |||
Stock based income tax deductions in excess of amounts recognized | 37,900,000 | |||
Change in amount of deferred tax assets | 55,700,000 | 13,500,000 | 10,700,000 | |
Foreign Tax Authority | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $7,000,000 |
Income_Taxes_Tax_Provision_Det
Income Taxes Tax Provision (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current provision (benefit): | |||
Federal | $230 | $484 | $1,162 |
State | -392 | 696 | 2,768 |
Foreign | 740 | 801 | 541 |
Total current provision | 578 | 1,981 | 4,471 |
Deferred provision (benefit): | |||
Federal | -53,242 | -13,160 | 1,362 |
State | -885 | -327 | 1,415 |
Foreign | 923 | 312 | 243 |
Total deferred provision (benefit) | -53,204 | -13,175 | 3,020 |
Total provision (benefit) for income taxes | ($52,626) | ($11,194) | $7,491 |
Income_Taxes_Reconciliation_of
Income Taxes Reconciliation of Statutory Federal Tax Rate (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | |||
Income tax provision at statutory rate | $3,394 | $7,360 | $59,056 |
State taxes, net of federal benefit | -217 | 369 | 4,183 |
Foreign income taxes | 284 | -749 | -518 |
Stock compensation adjustment | 0 | -8,419 | 0 |
Deemed dividends for U.S. income tax purposes | 492 | 477 | 2,352 |
Nondeductible expenses | 337 | 208 | 549 |
Liquidation of subsidiary | 0 | 0 | -30,704 |
Disallowed compensation | -116 | 19 | 492 |
Research and development tax credit | -1,140 | -5,736 | 0 |
Effect of change in valuation allowance on deferred tax assets | -55,660 | -4,723 | -27,919 |
Total provision (benefit) for income taxes | ($52,626) | ($11,194) | $7,491 |
Income_Taxes_Deferred_Tax_Asse
Income Taxes Deferred Tax Assets and Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Tax Assets, Net [Abstract] | ||
Inventory | $5,840 | $3,388 |
Accrued compensation | 681 | 460 |
Deferred revenue | 18,186 | 12,100 |
Net operating loss carryforwards | 12,981 | 5,922 |
Other | 1,261 | 8,120 |
Gross current deferred tax assets | 38,949 | 29,990 |
Valuation allowance | -2,039 | -20,107 |
Current deferred tax assets | 36,910 | 9,883 |
Other | -837 | -688 |
Current deferred tax liabilities | -837 | -688 |
Net current deferred tax assets | 36,073 | 9,195 |
Property and equipment | 11,555 | 328 |
Research and experimentation credit carryforwards | 24,596 | 23,941 |
Net operating loss carryforwards | 21,511 | 47,154 |
Goodwill | 203 | 628 |
Other | 9,967 | 10,161 |
Gross long-term deferred tax assets | 67,832 | 82,212 |
Valuation allowance | -8,099 | -57,687 |
Long-term deferred tax assets | 59,733 | 24,525 |
Property and equipment | 0 | -1,905 |
Investment in sales-type lease, net | -14,321 | 0 |
Intangible assets | -1,215 | -2,059 |
Other | -2,783 | -1,355 |
Long-term deferred tax liabilities | -18,319 | -5,319 |
Net long-term deferred tax asset | $41,414 | $19,206 |
Income_Taxes_Unrecognized_Tax_
Income Taxes Unrecognized Tax Benefits (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Contingency [Line Items] | |||
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions | $5,059,000 | ||
Balance of unrecognized tax benefits that if recognized would affect the effective tax rate | 5,600,000 | ||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at December 31, | 202,000 | 470,000 | 0 |
Increase related to current year income tax positions | 369,000 | 470,000 | |
Decrease related to prior year income tax positions | -268,000 | ||
Balance at December 31, | $5,630,000 | $202,000 | $470,000 |
Credit_Facilities_Details
Credit Facilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Line of Credit Facility [Line Items] | ||
Letters of Credit Outstanding, Amount | $13,500,000 | |
Restricted cash | 16,874,000 | 0 |
Wells Fargo Bank | ||
Line of Credit Facility [Line Items] | ||
Amount of credit facility | 10,000,000 | |
Silicon Valley Bank | ||
Line of Credit Facility [Line Items] | ||
Amount of credit facility | $11,000,000 |
Shareholders_Equity_Assumption
Shareholders' Equity Assumptions (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Key weighted average assumptions used in determining fair value | |||
Risk-free interest rate (percent) | 1.22% | 0.98% | 0.56% |
Expected dividend yield (percent) | 0.00% | 0.00% | 0.00% |
Volatility (percent) | 52.43% | 50.45% | 74.84% |
Expected life (in years) | 4 years | 4 years | 4 years |
Weighted average Black-Scholes value of options granted (usd per share) | $11.16 | $8.22 | $6.56 |
Estimated forfeiture rates (percent) | 8.30% | 10.00% | 6.60% |
Option_Activity_Details
Option Activity (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock option activity | |||
Outstanding beginning balance (In Shares) | 2,078,069 | 2,293,505 | 3,417,920 |
Grants (In Shares) | 323,900 | 346,360 | 359,500 |
Exercises (In Shares) | -411,352 | -495,221 | -1,346,326 |
Cancellations (In Shares) | -59,627 | -66,575 | -137,589 |
Outstanding ending balance (In Shares) | 1,930,990 | 2,078,069 | 2,293,505 |
Exercisable ending balance (In Shares) | 1,251,080 | ||
Available for grant ending balance (In Shares) | 3,079,888 | ||
Weighted Average Exercise Price | |||
Outstanding beginning balance (Per Share) | $9.29 | $7.31 | $6.28 |
Grants (Per Share) | $26.92 | $20.65 | $11.90 |
Exercises (Per Share) | $7.50 | $6.38 | $5.52 |
Cancellations (Per Share) | $18.45 | $21.97 | $11.35 |
Outstanding ending balance (Per Share) | $12.34 | $9.29 | $7.31 |
Exercisable ending balance (Per Share) | $8.18 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding ending balance | 6 years 7 months 6 days | ||
Exercisable ending balance | 5 years 7 months 6 days |
Restricted_Stock_Details
Restricted Stock (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Outstanding beginning balance (In Shares) | 2,221,700 | 2,202,738 | 1,302,414 |
Granted (In Shares) | 463,734 | 755,979 | 1,316,447 |
Forfeited (In Shares) | -411,653 | -75,437 | -31,771 |
Vested (In Shares) | -423,179 | -661,580 | -384,352 |
Outstanding ending balance (In Shares) | 1,850,602 | 2,221,700 | 2,202,738 |
Unvested restricted stock grants and restricted stock units changes | |||
Outstanding beginning balance (Per Share) | $13.97 | $9.27 | $5.47 |
Granted (Per Share) | $28.74 | $20.93 | $11.99 |
Forfeited (Per Share) | $16.80 | $14.48 | $7.64 |
Vested (Per Share) | $11.14 | $6.22 | $5.86 |
Outstanding ending balance (Per Share) | $17.68 | $13.97 | $9.27 |
Service Vesting Restricted Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Outstanding beginning balance (In Shares) | 1,127,700 | 1,465,738 | 1,302,414 |
Granted (In Shares) | 463,734 | 326,979 | 579,447 |
Forfeited (In Shares) | -134,653 | -3,437 | -31,771 |
Vested (In Shares) | -423,179 | -661,580 | -384,352 |
Outstanding ending balance (In Shares) | 1,033,602 | 1,127,700 | 1,465,738 |
Unvested restricted stock grants and restricted stock units changes | |||
Outstanding beginning balance (Per Share) | $12.05 | $7.44 | $5.47 |
Granted (Per Share) | $28.74 | $20.83 | $10.84 |
Forfeited (Per Share) | $15.39 | $5.92 | $7.64 |
Vested (Per Share) | $11.14 | $6.22 | $5.86 |
Outstanding ending balance (Per Share) | $19.48 | $12.05 | $7.44 |
Performance Vesting Restricted Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Outstanding beginning balance (In Shares) | 1,094,000 | 737,000 | 0 |
Granted (In Shares) | 0 | 429,000 | 737,000 |
Forfeited (In Shares) | -277,000 | -72,000 | 0 |
Vested (In Shares) | 0 | 0 | 0 |
Outstanding ending balance (In Shares) | 817,000 | 1,094,000 | 737,000 |
Unvested restricted stock grants and restricted stock units changes | |||
Outstanding beginning balance (Per Share) | $15.94 | $12.90 | $0 |
Granted (Per Share) | $0 | $21 | $12.90 |
Forfeited (Per Share) | $17.49 | $14.88 | $0 |
Vested (Per Share) | $0 | $0 | $0 |
Outstanding ending balance (Per Share) | $15.41 | $15.94 | $12.90 |
Shareholders_Equity_Exercise_P
Shareholders' Equity Exercise Price Range (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Lower Range | $0 | |
Upper Range | $34.15 | |
Number Outstanding (In Shares) | 1,930,990 | |
Weighted Average Remaining Life (Years) | 6 years 7 months 6 days | |
Weighted Average Exercise Price (USD Per Share) | $12.34 | |
Number Exercisable (In Shares) | 1,251,080 | |
Weighted Average Exercise Price (In USD Per Share) | $8.18 | |
$ 0.00 - $ 4.00 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Lower Range | $0 | |
Upper Range | $4 | |
Number Outstanding (In Shares) | 265,142 | |
Weighted Average Remaining Life (Years) | 4 years 3 months 18 days | |
Weighted Average Exercise Price (USD Per Share) | $3.71 | |
Number Exercisable (In Shares) | 265,142 | |
Weighted Average Exercise Price (In USD Per Share) | $3.71 | |
$ 4.01 - $ 6.00 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Lower Range | $4.01 | |
Upper Range | $6 | |
Number Outstanding (In Shares) | 240,647 | |
Weighted Average Remaining Life (Years) | 5 years 1 month 6 days | |
Weighted Average Exercise Price (USD Per Share) | $5.49 | |
Number Exercisable (In Shares) | 240,647 | |
Weighted Average Exercise Price (In USD Per Share) | $5.49 | |
$ 6.01 - $ 8.00 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Lower Range | $6.01 | |
Upper Range | $8 | |
Number Outstanding (In Shares) | 438,159 | |
Weighted Average Remaining Life (Years) | 5 years 8 months 12 days | |
Weighted Average Exercise Price (USD Per Share) | $6.29 | |
Number Exercisable (In Shares) | 360,553 | |
Weighted Average Exercise Price (In USD Per Share) | $6.33 | |
$ 8.01 - $ 34.15 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Lower Range | $8.01 | |
Upper Range | $34.15 | |
Number Outstanding (In Shares) | 987,042 | |
Weighted Average Remaining Life (Years) | 8 years 1 month 6 days | |
Weighted Average Exercise Price (USD Per Share) | $19.01 | |
Number Exercisable (In Shares) | 384,738 | |
Weighted Average Exercise Price (In USD Per Share) | $14.68 |
Expense_Details
Expense (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | |||
Gross share-based compensation, total | $10,364 | $7,239 | $5,963 |
Cost of product revenue | |||
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | |||
Gross share-based compensation, total | 229 | 135 | 57 |
Cost of service revenue | |||
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | |||
Gross share-based compensation, total | 255 | 229 | 258 |
Research and development | |||
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | |||
Gross share-based compensation, total | 2,721 | 1,480 | 1,327 |
Sales and marketing | |||
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | |||
Gross share-based compensation, total | 3,152 | 2,230 | 1,717 |
General and administrative | |||
Gross share-based compensation cost recorded in the condensed consolidated statements of operations | |||
Gross share-based compensation, total | $4,007 | $3,165 | $2,604 |
Narrative_Details
Narrative (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||
Common stock, shares authorized | 75,000,000 | 75,000,000 | ||
Common stock, par value | $0.01 | $0.01 | ||
Restricted stock issued (In Shares) | 463,734 | 755,979 | 1,316,447 | |
Grant date fair value of restricted stock issued (In USD) | $3,086,000 | $3,161,000 | $7,430,000 | |
Amount remaining to be expensed (In USD) | 24,000,000 | |||
Unrecognized compensation cost for performance vesting restricted stock subject to performance measures which are not considered probable to vest (In USD) | 12,400,000 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Excluding Performance Vesting Restricted Stock | 17,000,000 | |||
Unrecognized compensation cost for performance vesting restricted stock subject to performance measures which are considered probable to vest (In USD) | 200,000 | |||
Issued and outstanding restricted stock units (In Shares) | 1,850,602 | 2,221,700 | 2,202,738 | 1,302,414 |
Expected average period options will be exercised after vesting (In Years) | 2 years | |||
Aggregate intrinsic value of outstanding stock options (In USD) | 42,800,000 | |||
Aggregate intrinsic value of exercisable stock options (In USD) | 32,900,000 | |||
Total intrinsic value of shares exercised (In USD) | 10,200,000 | 7,900,000 | 7,600,000 | |
Estimated Forfeiture Rate for Restricted Stock (Percentage) | 6.30% | |||
Performance Vesting Restricted Stock Subject To Performance Measures Which Are Currently Not Considered Probable To Vest (In Shares) | 804,500 | 1,081,500 | 737,000 | |
Unrecognized compensation cost, weighted average recognition period (In Years) | 2 years 10 months 24 days | |||
Shares issued under ESPP | 1,043,228 | 1,022,610 | 998,118 | |
Employee Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Available for grant (In Shares) | 1,750,000 | |||
Percentage of pay permitted to acquire shares of common stock | 15.00% | |||
Percentage of closing market price for purchase price | 95.00% | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Issued and outstanding restricted stock units (In Shares) | 0 | 0 | 12,500 | |
Restricted Stock and Restricted Stock Units (RSU's) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grant date fair value of restricted stock issued (In USD) | 13,300,000 | 15,800,000 | 15,800,000 | |
Aggregate fair value of restricted stock vested (In USD) | 11,900,000 | 14,000,000 | 4,200,000 | |
Unrecognized compensation cost (In USD) | $29,400,000 | |||
NonEmployee Director | Restricted Stock and Restricted Stock Units (RSU's) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period of stock options (In Years) | 2 years | |||
Officers and Key Employees | Restricted Stock and Restricted Stock Units (RSU's) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period of stock options (In Years) | 4 years |
Benefit_Plans_Details
Benefit Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
United States Pension Plan of US Entity | |||
Defered Compensation Arrangement with Individual [Line Items] | |||
Company match expense | $1.60 | $1.20 | $1 |
Foreign Pension Plans, Defined Benefit | |||
Defered Compensation Arrangement with Individual [Line Items] | |||
Projected benefit | 2.3 | 2.6 | |
Funded status of plan | $0.20 | $0.20 |
Business_Segment_Details
Business Segment (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Information of Operating Segments | |||||||||||
Revenue: | $261,943 | $159,406 | $85,147 | $55,110 | $307,369 | $54,366 | $84,467 | $79,547 | $561,606 | $525,749 | $421,058 |
Gross Profit: | 88,943 | 48,530 | 29,004 | 17,937 | 112,949 | 20,426 | 26,801 | 24,150 | 184,414 | 184,326 | 151,178 |
Supercomputing | |||||||||||
Information of Operating Segments | |||||||||||
Revenue: | 459,729 | 434,133 | 355,736 | ||||||||
Gross Profit: | 146,565 | 143,440 | 128,723 | ||||||||
Storage and Data Management | |||||||||||
Information of Operating Segments | |||||||||||
Revenue: | 84,412 | 76,955 | 55,009 | ||||||||
Gross Profit: | 31,572 | 31,403 | 16,574 | ||||||||
Maintenance & Support | |||||||||||
Information of Operating Segments | |||||||||||
Revenue: | 86,573 | 77,817 | 62,245 | ||||||||
Gross Profit: | 38,819 | 38,476 | 25,735 | ||||||||
Engineering Services and Other | |||||||||||
Information of Operating Segments | |||||||||||
Revenue: | 17,465 | 14,661 | 10,313 | ||||||||
Gross Profit: | 6,277 | 9,483 | 5,881 | ||||||||
Elimination of inter-segment revenue | |||||||||||
Information of Operating Segments | |||||||||||
Revenue: | -86,573 | -77,817 | -62,245 | ||||||||
Gross Profit: | ($38,819) | ($38,476) | ($25,735) |
Geographic_Segment_Details
Geographic Segment (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product revenue | $460,748 | $436,330 | $353,767 |
Service revenue | 100,858 | 89,419 | 67,291 |
Long-lived assets | 95,660 | 65,056 | 62,009 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product revenue | 253,930 | 297,583 | 301,162 |
Service revenue | 72,434 | 62,072 | 42,359 |
Long-lived assets | 58,868 | 58,910 | 57,549 |
All Other Countries | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product revenue | 206,818 | 138,747 | 52,605 |
Service revenue | 28,424 | 27,347 | 24,932 |
Long-lived assets | $36,792 | $6,146 | $4,460 |
Segment_Information_Narrative_
Segment Information Narrative (Details) (USD $) | 3 Months Ended | 12 Months Ended | 9 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 |
Revenue, Major Customer [Line Items] | ||||||||||||
Long-term investment in sales-type lease, net | ($31,089) | $0 | ($31,089) | $0 | ||||||||
Revenue | 261,943 | 159,406 | 85,147 | 55,110 | 307,369 | 54,366 | 84,467 | 79,547 | 561,606 | 525,749 | 421,058 | |
US. government agencies and customers | ||||||||||||
Revenue, Major Customer [Line Items] | ||||||||||||
Revenue | $272,000 | $266,100 | $286,900 | |||||||||
Non US government customers | ||||||||||||
Revenue, Major Customer [Line Items] | ||||||||||||
Revenue Maximum Percentage | 10.00% | |||||||||||
Percentage of total revenue from customers that individually accounted for more than 10% of total revenue | 11.00% | 13.00% | ||||||||||
Revenue | ||||||||||||
Revenue, Major Customer [Line Items] | ||||||||||||
Number of foreign countries that individually accounted for more than 10% of total revenue | 0 | 1 | 0 | 1 | 1 | |||||||
UK and Germany [Member] | ||||||||||||
Revenue, Major Customer [Line Items] | ||||||||||||
Percentage of total revenue from customers that individually accounted for more than 10% of total revenue | 23.00% | |||||||||||
All Other Countries | ||||||||||||
Revenue, Major Customer [Line Items] | ||||||||||||
Percentage of total revenue from customers that individually accounted for more than 10% of total revenue | 10.00% | |||||||||||
All Other Countries | Revenue | ||||||||||||
Revenue, Major Customer [Line Items] | ||||||||||||
Number of foreign countries that individually accounted for more than 10% of total revenue | 0 | 0 |
Segment_Information_Longlived_
Segment Information Long-lived assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-term investment in sales-type lease, net | $31,089 | $0 |
Research_and_Development_Detai
Research and Development (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Research and Development [Abstract] | |||
Gross research and development expenses | $104,797 | $92,469 | $86,305 |
Less: Amounts included in cost of revenue | -7,713 | -3,741 | -1,080 |
Less: Reimbursed research and development (excludes amounts in revenue) | -3,036 | -1,000 | -20,922 |
Net research and development expenses | $94,048 | $87,728 | $64,303 |
Interest_Income_Expense_Detail
Interest Income (Expense) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other Income and Expenses [Abstract] | |||
Interest income | $643 | $894 | $397 |
Interest expense | -137 | -137 | -193 |
Interest Income (Expense), Net | $506 | $757 | $204 |
Quarterly_Data_Unaudited_Detai
Quarterly Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Selected Quarterly Financial Information [Abstract] | |||||||||||
Revenue | $261,943 | $159,406 | $85,147 | $55,110 | $307,369 | $54,366 | $84,467 | $79,547 | $561,606 | $525,749 | $421,058 |
Cost of revenue | 173,000 | 110,876 | 56,143 | 37,173 | 194,420 | 33,940 | 57,666 | 55,397 | 377,192 | 341,423 | 269,880 |
Gross profit | 88,943 | 48,530 | 29,004 | 17,937 | 112,949 | 20,426 | 26,801 | 24,150 | 184,414 | 184,326 | 151,178 |
Research and development, net | 24,735 | 22,503 | 24,189 | 22,621 | 25,979 | 21,555 | 19,968 | 20,226 | |||
Sales and marketing | 17,942 | 14,808 | 13,259 | 11,776 | 17,172 | 11,480 | 11,550 | 11,143 | 57,785 | 51,345 | 37,180 |
General and administrative | 6,839 | 5,813 | 5,316 | 5,413 | 8,063 | 4,970 | 5,085 | 5,485 | 23,381 | 23,603 | 20,707 |
Net income | $74,638 | $7,371 | ($6,748) | ($12,938) | $51,007 | ($11,025) | ($150) | ($7,609) | $62,323 | $32,223 | $161,241 |
Net income (loss) per common share, basic | $1.92 | $0.19 | ($0.18) | ($0.34) | $1.33 | ($0.29) | $0 | ($0.20) | $1.61 | $0.85 | $4.42 |
Net income (loss) per common share, diluted | $1.84 | $0.18 | ($0.18) | ($0.34) | $1.27 | ($0.29) | $0 | ($0.20) | $1.54 | $0.81 | $4.27 |
Schedule_II_Valuation_and_Qual1
Schedule II - Valuation and Qualifying Accounts (Details) (Allowance for Trade Receivables, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for Trade Receivables | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $157 | $5 | $110 |
Charge/(Benefit) to Expense | 22 | 179 | -62 |
Deductions (2) | -82 | -27 | -43 |
Balance at End of Period | $97 | $157 | $5 |