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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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41-1532464
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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11001 Bren Road East
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Minnetonka, Minnesota
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55343
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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Forward-looking Statements
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EX-10.A
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EX-31.A
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EX-31.B
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EX-32
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EX-101 INSTANCE DOCUMENT
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EX-101 SCHEMA DOCUMENT
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EX-101 CALCULATION LINKBASE DOCUMENT
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EX-101 DEFINITION LINKBASE DOCUMENT
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EX-101 LABELS LINKBASE DOCUMENT
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EX-101 PRESENTATION LINKBASE DOCUMENT
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Three months ended June 30,
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Nine months ended June 30,
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||||||||||||
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2014
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2013
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2014
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2013
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(in thousands, except per common share data)
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||||||||||||||
Revenue:
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||||||||
Hardware product
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$
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43,303
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$
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42,330
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$
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125,852
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$
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128,484
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Service
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4,582
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6,494
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15,237
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15,528
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Total revenue
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47,885
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48,824
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141,089
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144,012
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Cost of sales:
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||||||||
Cost of hardware product
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21,587
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20,579
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61,862
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60,827
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||||
Cost of service
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4,149
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3,525
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12,390
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9,025
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Total cost of sales
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25,736
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24,104
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74,252
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69,852
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Gross profit
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22,149
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24,720
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66,837
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74,160
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Operating expenses:
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||||||||
Sales and marketing
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9,859
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10,372
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30,477
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31,060
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Research and development
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7,253
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7,606
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21,921
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22,798
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General and administrative
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5,317
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4,850
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14,659
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16,356
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Restructuring charges (reversal), net
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—
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—
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81
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(37
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)
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Total operating expenses
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22,429
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22,828
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67,138
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70,177
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Operating (loss) income
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(280
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)
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1,892
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(301
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)
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3,983
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Other (loss) income, net:
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Interest income
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39
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58
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132
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160
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Interest expense
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(4
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)
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—
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(5
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)
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(37
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)
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Other (loss) income, net
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(69
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)
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(59
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)
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45
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503
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Total other (loss) income, net
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(34
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)
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(1
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)
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172
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626
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(Loss) income before income taxes
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(314
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)
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1,891
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(129
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)
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4,609
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Income tax (benefit) provision
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(213
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)
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363
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(1,454
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)
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|
851
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Net (loss) income
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$
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(101
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)
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$
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1,528
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$
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1,325
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$
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3,758
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Net income per common share:
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Basic
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$
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0.00
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$
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0.06
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$
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0.05
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$
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0.14
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Diluted
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$
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0.00
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$
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0.06
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$
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0.05
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$
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0.14
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Weighted average common shares:
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Basic
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25,274
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25,849
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25,545
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26,057
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Diluted
|
25,274
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26,114
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25,965
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26,323
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Three months ended June 30,
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Nine months ended June 30,
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2014
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2013
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2014
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2013
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(in thousands)
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Net (loss) income
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$
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(101
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)
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$
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1,528
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$
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1,325
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$
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3,758
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Other comprehensive income (loss), net of tax:
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Foreign currency translation adjustment
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384
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127
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546
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(3,252
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)
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Change in net unrealized (loss) gain on investments
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(2
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)
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(13
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)
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62
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(72
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)
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Less income tax benefit (provision)
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1
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5
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(24
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)
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28
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Other comprehensive income (loss), net of tax (1)
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383
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119
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584
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(3,296
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)
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Comprehensive income
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$
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282
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$
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1,647
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$
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1,909
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$
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462
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June 30, 2014
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September 30, 2013
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(in thousands, except share data)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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55,917
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$
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41,320
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Marketable securities
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32,329
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47,006
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Accounts receivable, net
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24,654
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26,829
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Inventories
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30,483
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26,140
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Deferred tax assets
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3,464
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3,174
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|
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Other
|
5,049
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4,835
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Total current assets
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151,896
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149,304
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Marketable securities, long-term
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12,338
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17,389
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Property, equipment and improvements, net
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13,511
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13,910
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Identifiable intangible assets, net
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7,557
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9,728
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Goodwill
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104,329
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103,569
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|
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Deferred tax assets
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7,664
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6,151
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|
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Other
|
437
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221
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|
||
Total assets
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$
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297,732
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$
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300,272
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
|
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|
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Accounts payable
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$
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10,417
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$
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8,906
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Accrued compensation
|
7,792
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|
|
7,410
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|
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Accrued warranty
|
900
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1,063
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Other
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2,349
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3,911
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Total current liabilities
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21,458
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21,290
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|
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Income taxes payable
|
2,392
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|
3,903
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Deferred tax liabilities
|
288
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|
|
415
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|
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Other noncurrent liabilities
|
242
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|
|
79
|
|
||
Total liabilities
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24,380
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|
|
25,687
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|
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Contingencies (see Note 11)
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|
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Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued and outstanding
|
—
|
|
|
—
|
|
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Common stock, $.01 par value; 60,000,000 shares authorized; 30,650,093 and 30,264,224 shares issued
|
306
|
|
|
303
|
|
||
Additional paid-in capital
|
217,720
|
|
|
211,982
|
|
||
Retained earnings
|
117,732
|
|
|
116,407
|
|
||
Accumulated other comprehensive loss
|
(15,006
|
)
|
|
(15,590
|
)
|
||
Treasury stock, at cost, 5,618,301 and 4,708,965 shares
|
(47,400
|
)
|
|
(38,517
|
)
|
||
Total stockholders’ equity
|
273,352
|
|
|
274,585
|
|
||
Total liabilities and stockholders’ equity
|
$
|
297,732
|
|
|
$
|
300,272
|
|
|
Nine months ended
June 30, |
||||||
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2014
|
|
2013
|
||||
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(in thousands)
|
||||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
1,325
|
|
|
$
|
3,758
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation of property, equipment and improvements
|
2,694
|
|
|
2,551
|
|
||
Amortization of identifiable intangible assets
|
2,787
|
|
|
3,326
|
|
||
Stock-based compensation
|
3,160
|
|
|
2,906
|
|
||
Excess tax benefits from stock-based compensation
|
(44
|
)
|
|
(60
|
)
|
||
Deferred income tax benefit
|
(2,033
|
)
|
|
(1,397
|
)
|
||
Bad debt/product return (recovery) provision
|
(196
|
)
|
|
616
|
|
||
Inventory obsolescence
|
610
|
|
|
759
|
|
||
Restructuring charges (reversal), net
|
81
|
|
|
(37
|
)
|
||
Other
|
(24
|
)
|
|
(109
|
)
|
||
Changes in operating assets and liabilities (net of acquisition)
|
(5,815
|
)
|
|
(4,205
|
)
|
||
Net cash provided by operating activities
|
2,545
|
|
|
8,108
|
|
||
Investing activities:
|
|
|
|
||||
Purchase of marketable securities
|
(15,574
|
)
|
|
(49,121
|
)
|
||
Proceeds from maturities of marketable securities
|
35,364
|
|
|
51,773
|
|
||
Acquisition of business, net of cash acquired
|
—
|
|
|
(12,919
|
)
|
||
Purchase of property, equipment, improvements and certain other intangible assets
|
(2,719
|
)
|
|
(2,415
|
)
|
||
Net cash provided by (used in) investing activities
|
17,071
|
|
|
(12,682
|
)
|
||
Financing activities:
|
|
|
|
||||
Excess tax benefits from stock-based compensation
|
44
|
|
|
60
|
|
||
Proceeds from stock option plan transactions
|
3,336
|
|
|
1,171
|
|
||
Proceeds from employee stock purchase plan transactions
|
770
|
|
|
740
|
|
||
Purchases of common stock
|
(9,651
|
)
|
|
(10,577
|
)
|
||
Net cash used in financing activities
|
(5,501
|
)
|
|
(8,606
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
482
|
|
|
(1,174
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
14,597
|
|
|
(14,354
|
)
|
||
Cash and cash equivalents, beginning of period
|
41,320
|
|
|
60,246
|
|
||
Cash and cash equivalents, end of period
|
$
|
55,917
|
|
|
$
|
45,892
|
|
|
|
|
|
||||
Supplemental schedule of non-cash investing activities:
|
|
|
|
||||
Issuance of common stock for business acquisition
|
$
|
—
|
|
|
$
|
6,804
|
|
Securities purchased, not settled
|
$
|
—
|
|
|
$
|
250
|
|
|
As of September 30, 2013
|
||||||
|
As Reported
|
|
As Revised
|
||||
Deferred tax assets - non-current
|
$
|
5,832
|
|
|
$
|
6,151
|
|
Total assets
|
$
|
299,953
|
|
|
$
|
300,272
|
|
Retained earnings
|
$
|
116,088
|
|
|
$
|
116,407
|
|
Total stockholders’ equity
|
$
|
274,266
|
|
|
$
|
274,585
|
|
Total liabilities and stockholders’ equity
|
$
|
299,953
|
|
|
$
|
300,272
|
|
|
Three months ended June 30,
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Nine months ended June 30,
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||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net (loss) income
|
$
|
(101
|
)
|
|
$
|
1,528
|
|
|
$
|
1,325
|
|
|
$
|
3,758
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Denominator for basic net income per common share — weighted average shares outstanding
|
25,274
|
|
|
25,849
|
|
|
25,545
|
|
|
26,057
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Stock options and restricted stock units
|
—
|
|
|
265
|
|
|
420
|
|
|
266
|
|
||||
Denominator for diluted net income per common share — adjusted weighted average shares
|
25,274
|
|
|
26,114
|
|
|
25,965
|
|
|
26,323
|
|
||||
Net income per common share, basic
|
$
|
0.00
|
|
|
$
|
0.06
|
|
|
$
|
0.05
|
|
|
$
|
0.14
|
|
Net income per common share, diluted
|
$
|
0.00
|
|
|
$
|
0.06
|
|
|
$
|
0.05
|
|
|
$
|
0.14
|
|
|
June 30, 2014
|
|
September 30, 2013
|
||||
Accounts receivable, net:
|
|
|
|
||||
Accounts receivable
|
$
|
24,978
|
|
|
$
|
27,142
|
|
Less allowance for doubtful accounts
|
324
|
|
|
313
|
|
||
|
$
|
24,654
|
|
|
$
|
26,829
|
|
Inventories:
|
|
|
|
||||
Raw materials
|
$
|
26,213
|
|
|
$
|
21,171
|
|
Work in process
|
61
|
|
|
224
|
|
||
Finished goods
|
4,209
|
|
|
4,745
|
|
||
|
$
|
30,483
|
|
|
$
|
26,140
|
|
|
Amortized
Cost (1)
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value (1)
|
||||||||
Current marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
$
|
23,253
|
|
|
$
|
2
|
|
|
$
|
(23
|
)
|
|
$
|
23,232
|
|
Certificates of deposit
|
4,002
|
|
|
2
|
|
|
(1
|
)
|
|
4,003
|
|
||||
Government municipal bonds
|
5,094
|
|
|
—
|
|
|
—
|
|
|
5,094
|
|
||||
Current marketable securities
|
32,349
|
|
|
4
|
|
|
(24
|
)
|
|
32,329
|
|
||||
Non-current marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
5,079
|
|
|
—
|
|
|
(11
|
)
|
|
5,068
|
|
||||
Certificates of deposit
|
7,253
|
|
|
21
|
|
|
(4
|
)
|
|
7,270
|
|
||||
Non-current marketable securities
|
12,332
|
|
|
21
|
|
|
(15
|
)
|
|
12,338
|
|
||||
Total marketable securities
|
$
|
44,681
|
|
|
$
|
25
|
|
|
$
|
(39
|
)
|
|
$
|
44,667
|
|
(1)
|
Included in amortized cost and fair value is purchased and accrued interest of
$327
.
|
|
Amortized
Cost (1)
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value (1)
|
||||||||
Current marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
$
|
35,161
|
|
|
$
|
10
|
|
|
$
|
(30
|
)
|
|
$
|
35,141
|
|
Certificates of deposit
|
1,753
|
|
|
—
|
|
|
(2
|
)
|
|
1,751
|
|
||||
Government municipal bonds
|
10,115
|
|
|
—
|
|
|
(1
|
)
|
|
10,114
|
|
||||
Current marketable securities
|
47,029
|
|
|
10
|
|
|
(33
|
)
|
|
47,006
|
|
||||
Non-current marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
6,439
|
|
|
—
|
|
|
(6
|
)
|
|
6,433
|
|
||||
Certificates of deposit
|
11,003
|
|
|
—
|
|
|
(47
|
)
|
|
10,956
|
|
||||
Non-current marketable securities
|
17,442
|
|
|
—
|
|
|
(53
|
)
|
|
17,389
|
|
||||
Total marketable securities
|
$
|
64,471
|
|
|
$
|
10
|
|
|
$
|
(86
|
)
|
|
$
|
64,395
|
|
(1)
|
Included in amortized cost and fair value is purchased and accrued interest of
$629
.
|
|
June 30, 2014
|
||||||||||||||
|
Less than 12 Months
|
|
More than 12 Months
|
||||||||||||
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
||||||||
Corporate bonds
|
$
|
19,874
|
|
|
$
|
(34
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Certificates of deposit
|
498
|
|
|
(2
|
)
|
|
1,997
|
|
|
(3
|
)
|
||||
Total
|
$
|
20,372
|
|
|
$
|
(36
|
)
|
|
$
|
1,997
|
|
|
$
|
(3
|
)
|
|
September 30, 2013
|
||||||||||||||
|
Less than 12 Months
|
|
More than 12 Months
|
||||||||||||
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
||||||||
Corporate bonds
|
$
|
29,911
|
|
|
$
|
(35
|
)
|
|
$
|
2,001
|
|
|
$
|
(1
|
)
|
Certificates of deposit
|
12,451
|
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
||||
Government municipal bonds
|
6,182
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
48,544
|
|
|
$
|
(85
|
)
|
|
$
|
2,001
|
|
|
$
|
(1
|
)
|
•
|
Level 1 — Inputs are quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 — Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly.
|
•
|
Level 3 — Inputs are unobservable for the asset or liability and their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 may also include certain investment securities for which there is limited market activity or a decrease in the observability of market pricing for the investments, such that the determination of fair value requires significant judgment or estimation.
|
|
|
|
Fair Value Measurements at
June 30, 2014 using:
|
||||||||||||
|
Total carrying
value at
June 30, 2014
|
|
Quoted price in
active markets
(Level 1)
|
|
Significant other
observable inputs
(Level 2)
|
|
Significant
unobservable inputs
(Level 3)
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market
|
$
|
20,629
|
|
|
$
|
20,629
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Available-for-sale marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
28,300
|
|
|
—
|
|
|
28,300
|
|
|
—
|
|
||||
Certificates of deposit
|
11,273
|
|
|
—
|
|
|
11,273
|
|
|
—
|
|
||||
Government municipal bonds
|
5,094
|
|
|
—
|
|
|
5,094
|
|
|
—
|
|
||||
Total cash equivalents and marketable securities
measured at fair value
|
$
|
65,296
|
|
|
$
|
20,629
|
|
|
$
|
44,667
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at
September 30, 2013 using:
|
||||||||||||
|
Total carrying
value at
September 30, 2013
|
|
Quoted price in
active markets
(Level 1)
|
|
Significant other
observable inputs
(Level 2)
|
|
Significant
unobservable inputs
(Level 3)
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market
|
$
|
3,957
|
|
|
$
|
3,957
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Available-for-sale marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
41,574
|
|
|
—
|
|
|
41,574
|
|
|
—
|
|
||||
Certificates of deposit
|
12,707
|
|
|
—
|
|
|
12,707
|
|
|
—
|
|
||||
Government municipal bonds
|
10,114
|
|
|
—
|
|
|
10,114
|
|
|
—
|
|
||||
Total cash equivalents and marketable securities
measured at fair value
|
$
|
68,352
|
|
|
$
|
3,957
|
|
|
$
|
64,395
|
|
|
$
|
—
|
|
|
June 30, 2014
|
|
September 30, 2013
|
||||||||||||||||||||
|
Gross
carrying
amount
|
|
Accum.
amort.
|
|
Net
|
|
Gross
carrying
amount
|
|
Accum.
amort.
|
|
Net
|
||||||||||||
Purchased and core technology
|
$
|
46,323
|
|
|
$
|
(45,299
|
)
|
|
$
|
1,024
|
|
|
$
|
45,960
|
|
|
$
|
(44,306
|
)
|
|
$
|
1,654
|
|
License agreements
|
2,440
|
|
|
(2,440
|
)
|
|
—
|
|
|
2,440
|
|
|
(2,440
|
)
|
|
—
|
|
||||||
Patents and trademarks
|
11,870
|
|
|
(9,824
|
)
|
|
2,046
|
|
|
11,322
|
|
|
(9,000
|
)
|
|
2,322
|
|
||||||
Customer relationships
|
19,185
|
|
|
(15,431
|
)
|
|
3,754
|
|
|
18,954
|
|
|
(14,130
|
)
|
|
4,824
|
|
||||||
Non-compete agreements
|
1,100
|
|
|
(367
|
)
|
|
733
|
|
|
1,100
|
|
|
(202
|
)
|
|
898
|
|
||||||
Order backlog
|
360
|
|
|
(360
|
)
|
|
—
|
|
|
360
|
|
|
(330
|
)
|
|
30
|
|
||||||
Total
|
$
|
81,278
|
|
|
$
|
(73,721
|
)
|
|
$
|
7,557
|
|
|
$
|
80,136
|
|
|
$
|
(70,408
|
)
|
|
$
|
9,728
|
|
|
Nine months ended
June 30, |
||||||
|
2014
|
|
2013
|
||||
Beginning balance, October 1
|
$
|
103,569
|
|
|
$
|
86,209
|
|
Acquisition of Etherios, Inc.
|
—
|
|
|
17,120
|
|
||
Foreign currency translation adjustment
|
760
|
|
|
(718
|
)
|
||
Ending balance, June 30
|
$
|
104,329
|
|
|
$
|
102,611
|
|
Unrecognized tax benefits as of September 30, 2013
|
$
|
3,332
|
|
Decreases related to:
|
|
||
Prior year income tax positions
|
(1,077
|
)
|
|
Settlements
|
(94
|
)
|
|
Expiration of statute of limitations
|
(160
|
)
|
|
Unrecognized tax benefits as of June 30, 2014
|
$
|
2,001
|
|
|
Balance at
|
|
Warranties
|
|
Settlements
|
|
Balance at
|
||||||||
Period
|
April 1
|
|
issued
|
|
made
|
|
June 30
|
||||||||
Three months ended June 30, 2014
|
$
|
972
|
|
|
$
|
105
|
|
|
$
|
(177
|
)
|
|
$
|
900
|
|
Three months ended June 30, 2013
|
$
|
925
|
|
|
$
|
331
|
|
|
$
|
(124
|
)
|
|
$
|
1,132
|
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at
|
|
Warranties
|
|
Settlements
|
|
Balance at
|
||||||||
Period
|
October 1
|
|
issued
|
|
made
|
|
June 30
|
||||||||
Nine months ended June 30, 2014
|
$
|
1,063
|
|
|
$
|
427
|
|
|
$
|
(590
|
)
|
|
$
|
900
|
|
Nine months ended June 30, 2013
|
$
|
1,021
|
|
|
$
|
484
|
|
|
$
|
(373
|
)
|
|
$
|
1,132
|
|
|
Employee
Termination
Costs
|
||
Balance at September 30, 2013
|
$
|
350
|
|
Restructuring charge
|
152
|
|
|
Payments
|
(431
|
)
|
|
Reversals
|
(71
|
)
|
|
Balance at June 30, 2014
|
$
|
—
|
|
|
Three months ended June 30,
|
% incr.
|
|
Nine months ended June 30,
|
% incr.
|
||||||||||||||||||||||||||
|
2014
|
|
2013
|
(decr.)
|
|
2014
|
|
2013
|
(decr.)
|
||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Hardware product
|
$
|
43,303
|
|
|
90.4
|
%
|
|
$
|
42,330
|
|
|
86.7
|
%
|
2.3
|
|
|
$
|
125,852
|
|
|
89.2
|
%
|
|
$
|
128,484
|
|
|
89.2
|
%
|
(2.0
|
)%
|
Service
|
4,582
|
|
|
9.6
|
|
|
6,494
|
|
|
13.3
|
|
(29.4
|
)
|
|
15,237
|
|
|
10.8
|
|
|
15,528
|
|
|
10.8
|
|
(1.9
|
)
|
||||
Total revenue
|
47,885
|
|
|
100.0
|
|
|
48,824
|
|
|
100.0
|
|
(1.9
|
)
|
|
141,089
|
|
|
100.0
|
|
|
144,012
|
|
|
100.0
|
|
(2.0
|
)
|
||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of hardware product
|
21,587
|
|
|
45.1
|
|
|
20,579
|
|
|
42.2
|
|
4.9
|
|
|
61,862
|
|
|
43.8
|
|
|
60,827
|
|
|
42.2
|
|
1.7
|
|
||||
Cost of service
|
4,149
|
|
|
8.6
|
|
|
3,525
|
|
|
7.2
|
|
17.7
|
|
|
12,390
|
|
|
8.8
|
|
|
9,025
|
|
|
6.3
|
|
37.3
|
|
||||
Total cost of sales
|
25,736
|
|
|
53.7
|
|
|
24,104
|
|
|
49.4
|
|
6.8
|
|
|
74,252
|
|
|
52.6
|
|
|
69,852
|
|
|
48.5
|
|
6.3
|
|
||||
Gross profit
|
22,149
|
|
|
46.3
|
|
|
24,720
|
|
|
50.6
|
|
(10.4
|
)
|
|
66,837
|
|
|
47.4
|
|
|
74,160
|
|
|
51.5
|
|
(9.9
|
)
|
||||
Operating expenses
|
22,429
|
|
|
46.8
|
|
|
22,828
|
|
|
46.7
|
|
(1.7
|
)
|
|
67,138
|
|
|
47.6
|
|
|
70,177
|
|
|
48.7
|
|
(4.3
|
)
|
||||
Operating (loss) income
|
(280
|
)
|
|
(0.5
|
)
|
|
1,892
|
|
|
3.9
|
|
(114.8
|
)
|
|
(301
|
)
|
|
(0.2
|
)
|
|
3,983
|
|
|
2.8
|
|
(107.6
|
)
|
||||
Other (loss) income, net
|
(34
|
)
|
|
(0.1
|
)
|
|
(1
|
)
|
|
—
|
|
NM
|
|
172
|
|
|
0.1
|
|
|
626
|
|
|
0.4
|
|
(72.5
|
)
|
|||||
(Loss) income before income taxes
|
(314
|
)
|
|
(0.6
|
)
|
|
1,891
|
|
|
3.9
|
|
(116.6
|
)
|
|
(129
|
)
|
|
(0.1
|
)
|
|
4,609
|
|
|
3.2
|
|
(102.8
|
)
|
||||
Income tax (benefit) provision
|
(213
|
)
|
|
(0.4
|
)
|
|
363
|
|
|
0.8
|
|
(158.7)
|
|
(1,454
|
)
|
|
(1.0
|
)
|
|
851
|
|
|
0.6
|
|
(270.9
|
)
|
|||||
Net (loss) income
|
$
|
(101
|
)
|
|
(0.2
|
)%
|
|
$
|
1,528
|
|
|
3.1
|
%
|
(106.6
|
)%
|
|
$
|
1,325
|
|
|
0.9
|
%
|
|
$
|
3,758
|
|
|
2.6
|
%
|
(64.7
|
)%
|
|
Three months ended June 30,
|
% incr.
|
|
Nine months ended June 30,
|
% incr.
|
||||||||||||||||||||||||||
($ in thousands)
|
2014
|
|
2013
|
(decr.)
|
|
2014
|
|
2013
|
(decr.)
|
||||||||||||||||||||||
Growth hardware products
|
$
|
21,751
|
|
|
50.2
|
%
|
|
$
|
20,943
|
|
|
49.5
|
%
|
3.9
|
%
|
|
$
|
64,369
|
|
|
51.1
|
%
|
|
$
|
64,699
|
|
|
50.4
|
%
|
(0.5
|
)%
|
Mature hardware products
|
21,552
|
|
|
49.8
|
|
|
21,387
|
|
|
50.5
|
|
0.8
|
|
|
61,483
|
|
|
48.9
|
|
|
63,785
|
|
|
49.6
|
|
(3.6
|
)
|
||||
Total product revenue
|
$
|
43,303
|
|
|
100.0
|
%
|
|
$
|
42,330
|
|
|
100.0
|
%
|
2.3
|
%
|
|
$
|
125,852
|
|
|
100.0
|
%
|
|
$
|
128,484
|
|
|
100.0
|
%
|
(2.0
|
)%
|
|
Three months ended June 30,
|
|
$ incr.
|
|
Nine months ended June 30,
|
|
$ incr.
|
||||||||||||||||||||||||||||
($ in thousands)
|
2014
|
|
2013
|
|
(decr.)
|
|
2014
|
|
2013
|
|
(decr.)
|
||||||||||||||||||||||||
Sales and marketing
|
$
|
9,859
|
|
|
20.6
|
%
|
|
$
|
10,372
|
|
|
21.2
|
%
|
|
$
|
(513
|
)
|
|
$
|
30,477
|
|
|
21.6
|
%
|
|
$
|
31,060
|
|
|
21.6
|
%
|
|
$
|
(583
|
)
|
Research and development
|
7,253
|
|
|
15.1
|
%
|
|
7,606
|
|
|
15.6
|
%
|
|
(353
|
)
|
|
21,921
|
|
|
15.5
|
%
|
|
22,798
|
|
|
15.8
|
%
|
|
(877
|
)
|
||||||
General and administrative
|
5,317
|
|
|
11.1
|
%
|
|
4,850
|
|
|
9.9
|
%
|
|
467
|
|
|
14,659
|
|
|
10.4
|
%
|
|
16,356
|
|
|
11.3
|
%
|
|
(1,697
|
)
|
||||||
Restructuring
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
81
|
|
|
0.1
|
%
|
|
(37
|
)
|
|
—
|
%
|
|
118
|
|
||||||
Total operating expenses
|
$
|
22,429
|
|
|
46.8
|
%
|
|
$
|
22,828
|
|
|
46.7
|
%
|
|
$
|
(399
|
)
|
|
$
|
67,138
|
|
|
47.6
|
%
|
|
$
|
70,177
|
|
|
48.7
|
%
|
|
$
|
(3,039
|
)
|
|
Nine months ended June 30,
|
|
% increase
|
|||||
|
2014
|
|
2013
|
|
(decrease)
|
|||
Euro
|
1.3677
|
|
|
1.3078
|
|
|
4.6
|
%
|
British Pound
|
1.6521
|
|
|
1.5655
|
|
|
5.5
|
%
|
Japanese Yen
|
0.0098
|
|
|
0.0111
|
|
|
(11.7
|
)%
|
Indian Rupee
|
0.0164
|
|
|
0.0183
|
|
|
(10.4
|
)%
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of a Publicly Announced Program
|
|
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program
|
April 1, 2014 - April 30, 2014
|
|
84,895
|
|
$9.95
|
|
84,895
|
|
$13,739,446.70
|
May 1, 2014 - May 31, 2014
|
|
155,915
|
|
$8.60
|
|
155,915
|
|
$12,399,235.87
|
June 1, 2014 - June 30, 2014
|
|
226,057
|
|
$9.07
|
|
226,057
|
|
$10,348,838.71
|
Total
|
|
466,867
|
|
$9.07
|
|
466,867
|
|
$10,348,838.71
|
ITEM 6.
|
|
EXHIBITS
|
(1)
|
Incorporated by reference to Exhibit 3(a) to the Company’s Form 10-K for the year ended September 30, 1993 (File No. 0-17972)
|
(2)
|
Incorporated by reference to Exhibit 3 to the Company’s Current Report on Form 8-K filed January 21, 2011 (File No. 1-34033)
|
(3)
|
Incorporated by reference to Exhibit 4(a) to the Company’s Registration Statement on Form 8-A filed on April 25, 2008 (File No. 1-34033)
|
(4)
|
Incorporated by reference to Exhibit 4(b) to the Company’s Registration Statement on Form 8-A filed on April 25, 2008 (File No. 1-34033)
|
(5)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 23, 2014 (File No. 1-34033)
|
|
|
|
|
|
|
|
|
DIGI INTERNATIONAL INC.
|
|
||
Date:
|
August 4, 2014
|
By:
|
/s/ Steven E. Snyder
|
|
|
|
|
|
Steven E. Snyder
|
|
|
|
|
|
Senior Vice President, Chief Financial Officer and
Treasurer (Principal Financial Officer and Authorized Officer)
|
|
Exhibit Number
|
Document Description
|
Form of Filing
|
||
|
|
|
|
|
3
|
|
(a)
|
Restated Certificate of Incorporation of the Company, as Amended
|
Incorporated by Reference
|
|
|
|
|
|
3
|
|
(b)
|
Amended and Restated By-Laws of the Company
|
Incorporated by Reference
|
|
|
|
|
|
4
|
|
(a)
|
Share Rights Agreement, dated as of April 22, 2008, between the Company and Wells Fargo Bank, N.A., as Rights Agent
|
Incorporated by Reference
|
|
|
|
|
|
4
|
|
(b)
|
Form of Amended and Restated Certificate of Powers, Designations, Preferences and Rights of Series A Junior Participating Preferred Shares
|
Incorporated by Reference
|
|
|
|
|
|
10
|
|
(a)
|
Form of (Executive) Restricted Stock Unit Award Agreement (for awards under Digi International Inc. 2014 Omnibus Incentive Plan)
|
Filed Electronically
|
|
|
|
|
|
10
|
|
(b)
|
Transition Agreement between the Company and Joseph T. Dunsmore dated April 22, 2014
|
Incorporated by Reference
|
|
|
|
|
|
31
|
|
(a)
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
Filed Electronically
|
|
|
|
|
|
31
|
|
(b)
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
Filed Electronically
|
|
|
|
|
|
32
|
|
|
Section 1350 Certification
|
Filed Electronically
|
|
|
|
|
|
101.INS
|
|
|
XBRL Instance Document
|
Filed Electronically
|
|
|
|
|
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document
|
Filed Electronically
|
|
|
|
|
|
101.CAL
|
|
|
XBRL Taxonomy Calculation Linkbase Document
|
Filed Electronically
|
|
|
|
|
|
101.DEF
|
|
|
XBRL Taxonomy Definition Linkbase Document
|
Filed Electronically
|
|
|
|
|
|
101.LAB
|
|
|
XBRL Taxonomy Label Linkbase Document
|
Filed Electronically
|
|
|
|
|
|
101.PRE
|
|
|
XBRL Taxonomy Presentation Linkbase Document
|
Filed Electronically
|
|
|
|
|
|
Name of Participant:
|
||
Number of Restricted Stock Units:
|
Grant Date:__________, 20__
|
|
Vesting Schedule:
|
||
Vesting Date(s)
|
Number of Stock Units that Vest
|
PARTICIPANT:
|
DIGI INTERNATIONAL, INC.
|
|
|
_____________________________________________
|
By: ___________________________________________
|
|
|
|
Title: __________________________________________
|
1.
|
Grant of Restricted Stock Units
. The Company hereby grants to you, subject to the terms and conditions in this Agreement and the Plan, an Award of the number of restricted Stock Units (“
Units
”) specified on the cover page of this Agreement, each representing the right to receive one Share of the Company’s Stock. The Units granted to you will be credited to an account in your name maintained by the Company. This account shall be unfunded and maintained for book-keeping purposes only, with the Units simply representing an unfunded and unsecured obligation of the Company.
|
2.
|
Restrictions on Units
. Neither this Award nor the Units subject to this Award may be sold, assigned, transferred, exchanged or encumbered other than by will or the laws of descent and distribution. Any attempted transfer in violation of this Section 2 shall be of no effect and shall result in the forfeiture of all Units. The Units and your right to receive shares in settlement of the Units under this Agreement shall be subject to forfeiture as provided in Section 4 until satisfaction of the vesting conditions set forth in Section 3.
|
3.
|
Vesting of Units
.
|
(c)
|
Change in Control
. “
Change in Control
” shall mean one of the following:
|
4.
|
Effect of Termination of Employment
. Except as otherwise provided in accordance with Section 3(b)(3), if you cease to be employed by the Company or any of its Affiliates prior to the Vesting Date(s) specified on the cover page of this Agreement, you will forfeit all unvested Units.
|
5.
|
Settlement of Units
. After any Units vest pursuant to Section 3, the Company shall, as soon as practicable (but no later than March 15 of the year following the calendar year in which such Units vest), cause to be issued and delivered to you, or to your designated beneficiary or estate in the event of your death, one share of the Company’s Stock in payment and settlement of each vested Unit. Delivery of the Shares shall be effected by an appropriate entry in the stock register maintained by the Company’s transfer agent with a notice of issuance provided to you, or by the electronic delivery of the Shares to a brokerage account you designate, and shall be subject to the tax withholding provisions of Section 6 and compliance with all applicable legal requirements, including compliance with the requirements of applicable federal and state securities laws, and shall be in complete satisfaction and settlement of such vested Units.
|
6.
|
Tax Consequences and Withholding
. As a condition precedent to the delivery of Shares in settlement of the Units, you are required to make arrangements acceptable to the Company for payment of any federal, state, local or foreign withholding taxes that may be due as a result of the settlement of vested Units. You hereby authorize the Company (or any Affiliate) to withhold from payroll or other amounts payable to you any sums required to satisfy such withholding tax obligations, and otherwise agree to satisfy such obligations in accordance with the provisions of Section 15 of the Plan. If you wish to satisfy some or all of such withholding tax obligations by delivering Shares you already own or by having the Company retain a portion of the Shares that would otherwise be delivered to you in settlement of vested Units, you may elect to do so unless the Committee acts to preclude such form of payment. Delivery of Shares upon the vesting of Units is subject to the satisfaction of applicable withholding tax obligations.
|
7.
|
No Stockholder Rights
. The Units subject to this Award do not entitle you to any rights of a holder of the Company’s common stock. You will not have any of the rights of a stockholder of the Company in connection with the grant of Units subject to this Agreement unless and until shares are issued to you in settlement of the Units as provided in Section 5.
|
8.
|
Governing Plan Document
. This Agreement and the Award are subject to all the provisions of the Plan, and to all interpretations, rules and regulations which may, from time to time, be adopted and promulgated by the
|
9.
|
Choice of Law
. This Agreement will be interpreted and enforced under the laws of the state of Minnesota (without regard to its conflicts or choice of law principles).
|
10.
|
Binding Effect
. This Agreement will be binding in all respects on your heirs, representatives, successors and assigns, and on the successors and assigns of the Company.
|
11.
|
Discontinuance of Employment
. This Agreement does not give you a right to continued employment with the Company or any Affiliate, and the Company or any such Affiliate may terminate your employment at any time and otherwise deal with you without regard to the effect it may have upon you under this Agreement.
|
12.
|
Section 409A of the Code
. The award of Units as provided in this Agreement and any issuance of Shares pursuant to this Agreement are intended to be exempt from Section 409A of the Code under the short-term deferral exception specified in Treas. Reg. § 1.409A-l(b)(4).
|
|
||||
|
|
|
|
|
|
|
|
|
|
August 4, 2014
|
/s/ Joseph T. Dunsmore
|
|
||
|
Joseph T. Dunsmore
|
|
||
|
President, Chief Executive Officer and Chairman
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
August 4, 2014
|
/s/ Steven E. Snyder
|
|
||
|
Steven E. Snyder
|
|
||
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
|
||||
|
|
|
|
|
August 4, 2014
|
|
|
|
|
|
/s/ Joseph T. Dunsmore
|
|
||
|
Joseph T. Dunsmore
|
|
||
|
President, Chief Executive Officer, and Chairman
|
|
||
|
||||
|
/s/ Steven E. Snyder
|
|
||
|
Steven E. Snyder
|
|
||
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|