x
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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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77-0430270
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[State or other jurisdiction
of incorporation or organization]
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[I.R.S Employer
Identification No.]
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145 Rio Robles,
San Jose, California
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95134
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[Address of principal executive office]
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[Zip Code]
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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PAGE
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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December 31,
2014 |
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June 30,
2014 |
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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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88,972
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$
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73,190
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Short-term investments
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20,321
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32,692
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Accounts receivable, net of allowances of $6,138 at December 31, 2014 and $3,618 at June 30, 2014
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93,519
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124,664
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Inventories
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54,431
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57,109
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Deferred income taxes
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911
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1,058
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Prepaid expenses and other current assets
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11,929
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14,143
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Total current assets
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270,083
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302,856
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Property and equipment, net
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43,568
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46,554
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Intangible assets, net
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69,880
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87,459
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Goodwill
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70,877
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70,877
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Other assets
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20,903
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18,686
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Total assets
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$
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475,311
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$
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526,432
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Current portion of long-term debt
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$
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8,125
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$
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29,688
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Accounts payable
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45,503
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37,308
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Accrued compensation and benefits
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22,476
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26,677
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Restructuring liabilities
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75
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322
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Accrued warranty
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7,845
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7,551
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Deferred revenue, net
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74,353
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74,735
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Deferred distributors revenue, net of cost of sales to distributors
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31,172
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31,992
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Other accrued liabilities
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36,030
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38,035
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Total current liabilities
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225,579
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246,308
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Deferred revenue, less current portion
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23,940
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22,942
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Long-term debt, less current portion
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81,000
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91,875
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Other long-term liabilities
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10,676
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8,595
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Commitments and contingencies (Note 8)
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Stockholders’ equity:
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Convertible preferred stock, $.001 par value, issuable in series, 2,000,000 shares authorized; none issued
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—
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—
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Common stock, $.001 par value, 750,000,000 shares authorized; 99,325,978 shares issued and outstanding at December 31, 2014 and 96,980,214 shares issued and outstanding at June 30, 2014
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99
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97
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Additional paid-in-capital
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856,549
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845,267
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Accumulated other comprehensive loss
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(1,884
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)
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(439
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)
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Accumulated deficit
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(720,648
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)
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(688,213
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)
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Total stockholders’ equity
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134,116
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156,712
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Total liabilities and stockholders’ equity
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$
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475,311
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$
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526,432
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Three Months Ended
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Six Months Ended
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||||||||||||
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December 31,
2014 |
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December 31,
2013 |
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December 31,
2014 |
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December 31,
2013 |
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Net revenues:
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||||||||
Product
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$
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112,501
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$
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119,065
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$
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215,173
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$
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180,109
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Service
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34,707
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27,518
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68,309
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42,389
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Total net revenues
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147,208
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146,583
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283,482
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222,498
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Cost of revenues:
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||||||||
Product
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60,496
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66,893
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114,521
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94,409
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Service
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11,550
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9,845
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23,272
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14,538
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Total cost of revenues
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72,046
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76,738
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137,793
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108,947
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Gross profit:
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Product
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52,005
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52,172
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100,652
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85,700
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Service
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23,157
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17,673
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45,037
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27,851
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Total gross profit
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75,162
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69,845
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145,689
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113,551
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Operating expenses:
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Research and development
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24,000
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18,896
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47,347
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28,832
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Sales and marketing
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43,971
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40,636
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88,750
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63,330
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General and administrative
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10,306
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11,189
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21,380
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18,125
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Acquisition and integration costs
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3,500
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8,688
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7,558
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12,382
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Restructuring charge, net of reversals
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—
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430
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—
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505
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Amortization of intangibles
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4,467
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3,778
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8,934
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3,778
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Total operating expenses
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86,244
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83,617
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173,969
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126,952
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Operating loss
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(11,082
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)
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(13,772
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)
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(28,280
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)
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(13,401
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)
|
||||
Interest income
|
196
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|
172
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|
342
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|
|
447
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|
||||
Interest expense
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(825
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)
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(524
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)
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(1,661
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)
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(524
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)
|
||||
Other expense, net
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(64
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)
|
|
(937
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)
|
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(498
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)
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(1,192
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)
|
||||
Loss before income taxes
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(11,775
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)
|
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(15,061
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)
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(30,097
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)
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(14,670
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)
|
||||
Provision for income taxes
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1,330
|
|
|
925
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2,338
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|
|
1,352
|
|
||||
Net loss
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$
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(13,105
|
)
|
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$
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(15,986
|
)
|
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$
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(32,435
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)
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$
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(16,022
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)
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Basic and diluted net loss per share:
|
|
|
|
|
|
|
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||||||||
Net loss per share – basic
|
$
|
(0.13
|
)
|
|
$
|
(0.17
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)
|
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$
|
(0.33
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)
|
|
$
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(0.17
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)
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Net loss per share – diluted
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$
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(0.13
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)
|
|
$
|
(0.17
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)
|
|
$
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(0.33
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)
|
|
$
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(0.17
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)
|
Shares used in per share calculation – basic
|
98,677
|
|
|
95,216
|
|
|
97,996
|
|
|
94,639
|
|
||||
Shares used in per share calculation – diluted
|
98,677
|
|
|
95,216
|
|
|
97,996
|
|
|
94,639
|
|
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Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31,
2014 |
|
December 31,
2013 |
|
December 31,
2014 |
|
December 31,
2013 |
||||||||
Net loss:
|
$
|
(13,105
|
)
|
|
$
|
(15,986
|
)
|
|
$
|
(32,435
|
)
|
|
$
|
(16,022
|
)
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Available for sale securities:
|
|
|
|
|
|
|
|
||||||||
Change in unrealized (losses) gains on available for sale securities, net of taxes
|
32
|
|
|
(52
|
)
|
|
(25
|
)
|
|
233
|
|
||||
Reclassification of adjustment for realized net gains on available for sale securities included in net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
148
|
|
||||
Net change in unrealized (losses) gains on available for sale securities, net of taxes
|
32
|
|
|
(52
|
)
|
|
(25
|
)
|
|
381
|
|
||||
Net change in foreign currency translation adjustments
|
(654
|
)
|
|
952
|
|
|
(1,420
|
)
|
|
1,053
|
|
||||
Other comprehensive (loss) income
|
(622
|
)
|
|
900
|
|
|
(1,445
|
)
|
|
1,434
|
|
||||
Total comprehensive loss
|
$
|
(13,727
|
)
|
|
$
|
(15,086
|
)
|
|
$
|
(33,880
|
)
|
|
$
|
(14,588
|
)
|
|
Six Months Ended
|
||||||
|
December 31,
2014 |
|
December 31,
2013 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(32,435
|
)
|
|
$
|
(16,022
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
6,406
|
|
|
4,143
|
|
||
Amortization of intangible assets
|
17,997
|
|
|
6,997
|
|
||
Provision for doubtful accounts and allowance for sales returns
|
2,520
|
|
|
375
|
|
||
Stock-based compensation
|
9,563
|
|
|
5,033
|
|
||
Other non-cash charges
|
512
|
|
|
1,409
|
|
||
Changes in operating assets and liabilities, net
|
|
|
|
||||
Accounts receivable
|
28,624
|
|
|
(21,370
|
)
|
||
Inventories
|
2,679
|
|
|
(13,105
|
)
|
||
Prepaid expenses and other assets
|
(8
|
)
|
|
2,473
|
|
||
Accounts payable
|
8,196
|
|
|
12,881
|
|
||
Accrued compensation and benefits
|
(4,202
|
)
|
|
(639
|
)
|
||
Restructuring liabilities
|
(247
|
)
|
|
(756
|
)
|
||
Deferred revenue
|
608
|
|
|
9,716
|
|
||
Deferred distributor revenue, net of cost of sales to distributors
|
(811
|
)
|
|
4,795
|
|
||
Other current and long term liabilities
|
2,051
|
|
|
(799
|
)
|
||
Net cash provided by (used in) operating activities
|
41,453
|
|
|
(4,869
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(3,962
|
)
|
|
(12,562
|
)
|
||
Acquisition, net of cash acquired
|
—
|
|
|
(180,000
|
)
|
||
Purchases of investments
|
—
|
|
|
(9,045
|
)
|
||
Proceeds from maturities of investments and marketable securities
|
3,000
|
|
|
20,062
|
|
||
Proceeds from sales of investments and marketable securities
|
9,051
|
|
|
54,578
|
|
||
Purchases of intangible assets
|
(419
|
)
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
7,670
|
|
|
(126,967
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings under Revolving Facility
|
24,000
|
|
|
35,000
|
|
||
Issuance of Term Loan
|
—
|
|
|
65,000
|
|
||
Repayment of debt
|
(56,438
|
)
|
|
(813
|
)
|
||
Proceeds from issuance of common stock
|
1,722
|
|
|
4,803
|
|
||
Net cash (used in) provided by financing activities
|
(30,716
|
)
|
|
103,990
|
|
||
|
|
|
|
||||
Foreign currency effect on cash
|
(2,625
|
)
|
|
347
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
15,782
|
|
|
(27,499
|
)
|
||
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
73,190
|
|
|
95,803
|
|
||
Cash and cash equivalents at end of period
|
$
|
88,972
|
|
|
$
|
68,304
|
|
|
|
Preliminary Allocation as of December 31, 2013 (Initial allocation)
|
|
Change during the measurement period
|
|
Final Allocation as of September 30, 2014
|
||||||
Cash
|
|
$
|
4,969
|
|
|
$
|
2,428
|
|
a
|
$
|
7,397
|
|
Receivables
|
|
25,699
|
|
|
(2,428
|
)
|
a
|
23,271
|
|
|||
Inventory
|
|
33,662
|
|
|
—
|
|
|
33,662
|
|
|||
Other current assets
|
|
8,888
|
|
|
(1,514
|
)
|
b
|
7,374
|
|
|||
Property and equipment
|
|
23,122
|
|
|
(1,829
|
)
|
c
|
21,293
|
|
|||
Identifiable intangible assets
|
|
108,900
|
|
|
—
|
|
d
|
108,900
|
|
|||
In-process research and development
|
|
3,000
|
|
|
—
|
|
|
3,000
|
|
|||
Deferred tax assets
|
|
9
|
|
|
—
|
|
|
9
|
|
|||
Other assets
|
|
7,343
|
|
|
—
|
|
|
7,343
|
|
|||
Goodwill
|
|
57,922
|
|
|
12,955
|
|
|
70,877
|
|
|||
Current liabilities
|
|
(75,394
|
)
|
|
(6,141
|
)
|
c,e,f
|
(81,535
|
)
|
|||
Other long-term liabilities
|
|
(13,151
|
)
|
|
(1,043
|
)
|
c
|
(14,194
|
)
|
|||
Total purchase price allocation
|
|
$
|
184,969
|
|
|
$
|
2,428
|
|
|
$
|
187,397
|
|
Less: Cash acquired from acquisition
|
|
(4,969
|
)
|
|
(2,428
|
)
|
a
|
(7,397
|
)
|
|||
Total purchase price consideration, net of cash acquired
|
|
$
|
180,000
|
|
|
$
|
—
|
|
|
$
|
180,000
|
|
a.
|
The Company finalized the working capital adjustment during the nine months ended September 30, 2014, which led to a decrease of
$2.4 million
in receivables and a corresponding increase in cash. As a result of this adjustment, the total cash acquired from the acquisition also increased by the same amount. The net effect of this adjustment is an increase in goodwill of
$2.4 million
.
|
b.
|
The Company obtained new information regarding the existence of prepaids as of the acquisition date which led to a decrease in the fair value of current assets of
$1.5 million
, and a corresponding increase in goodwill. The change in the amortization of prepaids due to the change in fair value of current assets was immaterial.
|
c.
|
The Company updated its preliminary estimate of the fair value of property and equipment which led to a decrease of
$3.0 million
in property and equipment with a corresponding increase in goodwill. The Company also updated the fair values of the asset retirement obligations and the related asset retirement assets which led to an increase in the fair value of property and equipment of
$1.2 million
and a corresponding increase in current liabilities and other long-term liabilities of
$0.2 million
and
$1.0 million
, respectively. The decrease in depreciation expense due to the change in fair value of property and equipment was immaterial.
|
d.
|
During the nine months ended September 30, 2014, there were no changes to the fair value of the identifiable intangible assets acquired. However, the Company revised the estimated useful life of Order backlog from
1.5
years to
1
year.
|
e.
|
The Company obtained new information regarding accruals for litigation and statutory tax assessment as of the acquisition date which led to an increase in the fair value of current liabilities of
$5.4 million
and a corresponding increase in goodwill.
|
f.
|
The Company obtained new information regarding the existence of accrued liabilities as of the acquisition date which led to a net increase in the fair value of accrued liabilities by
$0.5 million
with a corresponding increase in goodwill.
|
|
December 31, 2014
|
|
June 30, 2014
|
||||
Cash
|
$
|
88,021
|
|
|
$
|
72,623
|
|
|
|
|
|
||||
Cash equivalents
|
$
|
951
|
|
|
$
|
567
|
|
Short-term investments
|
20,321
|
|
|
32,692
|
|
||
Total available-for-sale
|
$
|
21,272
|
|
|
$
|
33,259
|
|
|
|
|
|
||||
Total cash, cash equivalents and available for sale securities
|
$
|
109,293
|
|
|
$
|
105,882
|
|
|
Amortized
Cost
|
|
Fair Value
|
|
Unrealized
Holding
Gains
|
|
Unrealized
Holding
Losses
|
||||||||
December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
951
|
|
|
$
|
951
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. corporate debt securities
|
20,317
|
|
|
20,321
|
|
|
4
|
|
|
—
|
|
||||
|
$
|
21,268
|
|
|
$
|
21,272
|
|
|
$
|
4
|
|
|
$
|
—
|
|
Classified as:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
951
|
|
|
$
|
951
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments
|
20,317
|
|
|
20,321
|
|
|
4
|
|
|
—
|
|
||||
|
$
|
21,268
|
|
|
$
|
21,272
|
|
|
$
|
4
|
|
|
$
|
—
|
|
June 30, 2014
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
567
|
|
|
$
|
567
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. corporate debt securities
|
32,578
|
|
|
32,692
|
|
|
114
|
|
|
—
|
|
||||
|
$
|
33,145
|
|
|
$
|
33,259
|
|
|
$
|
114
|
|
|
$
|
—
|
|
Classified as:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
567
|
|
|
$
|
567
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments
|
32,578
|
|
|
32,692
|
|
|
114
|
|
|
—
|
|
||||
|
$
|
33,145
|
|
|
$
|
33,259
|
|
|
$
|
114
|
|
|
$
|
—
|
|
|
Amortized
Cost
|
|
Fair
Value
|
||||
Due in 1 year or less
|
$
|
20,317
|
|
|
$
|
20,321
|
|
Total investments in available for sale debt securities
|
$
|
20,317
|
|
|
$
|
20,321
|
|
|
December 31, 2014
|
|
June 30, 2014
|
||||
Deferred services
|
$
|
91,373
|
|
|
$
|
89,657
|
|
Deferred product and other revenue
|
6,920
|
|
|
8,020
|
|
||
Total deferred revenue
|
98,293
|
|
|
97,677
|
|
||
Less: current portion
|
74,353
|
|
|
74,735
|
|
||
Non-current deferred revenue, net
|
$
|
23,940
|
|
|
$
|
22,942
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31, 2014
|
|
December 31, 2013
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||
Balance beginning of period
|
$
|
87,012
|
|
|
$
|
37,091
|
|
|
$
|
89,657
|
|
|
$
|
38,003
|
|
Assumed from acquisition
|
—
|
|
|
35,879
|
|
|
—
|
|
|
35,879
|
|
||||
New support arrangements
|
35,517
|
|
|
33,146
|
|
|
64,056
|
|
|
46,489
|
|
||||
Recognition of support revenue
|
(31,156
|
)
|
|
(24,631
|
)
|
|
(62,340
|
)
|
|
(38,886
|
)
|
||||
Balance end of period
|
91,373
|
|
|
81,485
|
|
|
91,373
|
|
|
81,485
|
|
||||
Less: current portion
|
67,433
|
|
|
63,150
|
|
|
67,433
|
|
|
63,150
|
|
||||
Non-current deferred revenue
|
$
|
23,940
|
|
|
$
|
18,335
|
|
|
$
|
23,940
|
|
|
$
|
18,335
|
|
|
December 31, 2014
|
|
June 30, 2014
|
||||
Deferred distributors revenue
|
$
|
40,901
|
|
|
$
|
40,715
|
|
Deferred cost of sales to distributors
|
(9,729
|
)
|
|
(8,723
|
)
|
||
Deferred distributors revenue, net of cost of sales to distributors
|
$
|
31,172
|
|
|
$
|
31,992
|
|
|
|
December 31, 2014
|
|
June 30, 2014
|
||||
Current portion of long-term debt:
|
|
|
|
|
||||
Term Loan
|
|
$
|
8,125
|
|
|
$
|
5,688
|
|
Revolving Facility
|
|
—
|
|
|
24,000
|
|
||
Current portion of long-term debt
|
|
$
|
8,125
|
|
|
$
|
29,688
|
|
|
|
|
|
|
||||
Long-term debt, less current portion:
|
|
|
|
|
||||
Term Loan
|
|
$
|
52,000
|
|
|
$
|
56,875
|
|
Revolving Facility
|
|
29,000
|
|
|
35,000
|
|
||
Total long-term debt, less current portion
|
|
81,000
|
|
|
91,875
|
|
||
Total debt
|
|
$
|
89,125
|
|
|
$
|
121,563
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31, 2014
|
|
December 31, 2013
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||
Balance beginning of period
|
$
|
7,889
|
|
|
$
|
3,440
|
|
|
$
|
7,551
|
|
|
$
|
3,296
|
|
Assumed from acquisition
|
—
|
|
|
3,732
|
|
|
—
|
|
|
3,732
|
|
||||
New warranties issued
|
1,683
|
|
|
1,654
|
|
|
3,948
|
|
|
2,958
|
|
||||
Warranty expenditures
|
(1,727
|
)
|
|
(1,347
|
)
|
|
(3,654
|
)
|
|
(2,507
|
)
|
||||
Balance end of period
|
$
|
7,845
|
|
|
$
|
7,479
|
|
|
$
|
7,845
|
|
|
$
|
7,479
|
|
December 31, 2014
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investments:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
951
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
951
|
|
Corporate notes/bonds
|
—
|
|
|
20,321
|
|
|
—
|
|
|
20,321
|
|
||||
Foreign currency forward contracts
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total
|
$
|
951
|
|
|
$
|
20,322
|
|
|
$
|
—
|
|
|
$
|
21,273
|
|
June 30, 2014
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investments:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
567
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
567
|
|
Corporate notes/bonds
|
—
|
|
|
32,692
|
|
|
—
|
|
|
32,692
|
|
||||
Foreign currency forward contracts
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
||||
Total
|
$
|
567
|
|
|
$
|
32,713
|
|
|
$
|
—
|
|
|
$
|
33,280
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31,
2014 |
|
December 31,
2013 |
|
December 31,
2014 |
|
December 31,
2013 |
||||||||
Cost of product revenue
|
$
|
275
|
|
|
$
|
198
|
|
|
$
|
558
|
|
|
$
|
300
|
|
Cost of service revenue
|
272
|
|
|
—
|
|
|
563
|
|
|
40
|
|
||||
Research and development
|
1,544
|
|
|
898
|
|
|
3,188
|
|
|
1,141
|
|
||||
Sales and marketing
|
1,566
|
|
|
1,279
|
|
|
3,123
|
|
|
1,850
|
|
||||
General and administrative
|
1,092
|
|
|
1,083
|
|
|
2,131
|
|
|
1,702
|
|
||||
Total share-based compensation expense
|
$
|
4,749
|
|
|
$
|
3,458
|
|
|
$
|
9,563
|
|
|
$
|
5,033
|
|
|
Number of
Shares
(000’s)
|
|
Weighted-
Average Grant-
Date Fair Value
|
|
Aggregate Fair Market Value ($000's)
|
|||||
Non-vested stock outstanding at June 30, 2014
|
6,000
|
|
|
$
|
4.98
|
|
|
|
||
Granted
|
828
|
|
|
$
|
3.83
|
|
|
|
||
Vested
|
(1,805
|
)
|
|
$
|
5.25
|
|
|
$
|
6,689
|
|
Cancelled
|
(358
|
)
|
|
$
|
4.28
|
|
|
|
||
Non-vested stock outstanding at December 31, 2014
|
4,665
|
|
|
$
|
4.72
|
|
|
|
|
Number of
Shares
(000’s)
|
|
Weighted-
Average
Exercise Price
Per Share
|
|
Weighted-
Average
Remaining
Contractual
Term (years)
|
|
Aggregate
Intrinsic Value
(000’s)
|
||||||
Options outstanding at June 30, 2014
|
11,732
|
|
|
$
|
4.26
|
|
|
5.13
|
|
|
6,846
|
|
|
Granted
|
1,063
|
|
|
$
|
4.21
|
|
|
|
|
|
|||
Exercised
|
(381
|
)
|
|
$
|
3.29
|
|
|
|
|
$
|
329
|
|
|
Cancelled
|
(1,074
|
)
|
|
$
|
5.14
|
|
|
|
|
|
|||
Options outstanding at December 31, 2014
|
11,340
|
|
|
$
|
4.20
|
|
|
4.96
|
|
|
$
|
1,618
|
|
Exercisable at December 31, 2014
|
5,373
|
|
|
$
|
3.86
|
|
|
3.99
|
|
|
$
|
1,225
|
|
Vested and expected to vest at December 31, 2014
|
10,396
|
|
|
$
|
4.17
|
|
|
4.87
|
|
|
$
|
1,573
|
|
|
Stock Option Plan
|
|
Employee Stock Purchase Plan
|
|
Stock Option Plan
|
|
Employee Stock Purchase Plan
|
||||||||||||||||
|
Three Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||||||
|
December 31,
2014 |
|
December 31,
2013 |
|
December 31,
2014 |
|
December 31,
2013 |
|
December 31,
2014 |
|
December 31,
2013 |
|
December 31,
2014 |
|
December 31,
2013 |
||||||||
Expected life
|
4.8 years
|
|
|
4.0 years
|
|
|
0.25 years
|
|
|
0.25 years
|
|
|
4.7 years
|
|
|
4.0 years
|
|
|
0.25 years
|
|
|
0.25 years
|
|
Risk-free interest rate
|
1.67
|
%
|
|
1.14
|
%
|
|
0.03
|
%
|
|
0.11
|
%
|
|
1.61
|
%
|
|
1.20
|
%
|
|
0.02
|
%
|
|
0.10
|
%
|
Volatility
|
54
|
%
|
|
55
|
%
|
|
63
|
%
|
|
47
|
%
|
|
54
|
%
|
|
56
|
%
|
|
57
|
%
|
|
41
|
%
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31,
2014 |
|
December 31,
2013 |
|
December 31,
2014 |
|
December 31,
2013 |
||||||||
Net loss
|
$
|
(13,105
|
)
|
|
$
|
(15,986
|
)
|
|
$
|
(32,435
|
)
|
|
$
|
(16,022
|
)
|
Weighted-average shares used in per share calculation – basic and diluted
|
98,677
|
|
|
95,216
|
|
|
97,996
|
|
|
94,639
|
|
||||
Net loss per share – basic and diluted
|
$
|
(0.13
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.17
|
)
|
|
|
December 31,
2014 |
|
December 31,
2013 |
||
Options to purchase common stock
|
|
9,203
|
|
|
5,833
|
|
Restricted stock units
|
|
1,369
|
|
|
1,101
|
|
Employee Stock Purchase Plan shares
|
|
563
|
|
|
154
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Net Revenues:
|
December 31,
2014 |
|
December 31,
2013 |
|
December 31,
2014 |
|
December 31,
2013 |
||||||||
Americas:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
58,160
|
|
|
$
|
56,292
|
|
|
$
|
116,648
|
|
|
$
|
81,681
|
|
Other
|
12,576
|
|
|
13,913
|
|
|
19,917
|
|
|
20,214
|
|
||||
Total Americas
|
70,736
|
|
|
70,205
|
|
|
136,565
|
|
|
101,895
|
|
||||
EMEA
|
62,574
|
|
|
61,292
|
|
|
116,509
|
|
|
92,133
|
|
||||
APAC
|
13,898
|
|
|
15,086
|
|
|
30,408
|
|
|
28,470
|
|
||||
Total net revenues
|
$
|
147,208
|
|
|
$
|
146,583
|
|
|
$
|
283,482
|
|
|
$
|
222,498
|
|
Long Lived Assets:
|
|
December 31, 2014
|
|
June 30, 2014
|
||||
Americas
|
|
$
|
93,778
|
|
|
$
|
104,387
|
|
EMEA
|
|
37,021
|
|
|
45,191
|
|
||
APAC
|
|
3,552
|
|
|
3,121
|
|
||
Total long lived assets
|
|
$
|
134,351
|
|
|
$
|
152,699
|
|
•
|
Net revenues of
$147.2 million
compared to net revenues of
$146.6 million
in the
second
quarter of fiscal
2014
.
|
•
|
Product revenues of
$112.5 million
compared to product revenues of
$119.1 million
in the
second
quarter of fiscal
2014
.
|
•
|
Service revenues of
$34.7 million
compared to service revenues of
$27.5 million
in the
second
quarter of fiscal
2014
.
|
•
|
Total gross margin of
51%
of net revenues compared to total gross margin of
48%
of net revenues in the
second
quarter of fiscal
2014
.
|
•
|
Operating loss of
$11.1 million
compared to operating loss of
$13.8 million
in the
second
quarter of fiscal
2014
.
|
•
|
Net loss of
$13.1 million
compared to net loss of
$16.0 million
in the
second
quarter of fiscal
2014
.
|
•
|
Cash flow provided by operating activities of
$41.5 million
in the
three
months ended
December 31, 2014
compared to cash flow used in operating activities of
$4.9 million
in the
three
months ended
December 31, 2013
.
|
•
|
Cash and cash equivalents, short-term investments and marketable securities
increased
by
$3.4 million
to
$109.3 million
as of
December 31, 2014
from
$105.9 million
as of
June 30, 2014
, primarily due to increased proceeds from cash provided by operations offset by repayment of debt.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
Net Revenues
|
December 31,
2014 |
|
December 31,
2013 |
|
$
Change
|
|
%
Change
|
|
December 31,
2014 |
|
December 31,
2013 |
|
$
Change
|
|
%
Change
|
||||||||||||||
Americas:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
United States
|
$
|
58,160
|
|
|
$
|
56,292
|
|
|
$
|
1,868
|
|
|
3.3
|
%
|
|
$
|
116,648
|
|
|
$
|
81,681
|
|
|
$
|
34,967
|
|
|
42.8
|
%
|
Other
|
12,576
|
|
|
13,913
|
|
|
(1,337
|
)
|
|
(9.6
|
)%
|
|
19,917
|
|
|
20,214
|
|
|
(297
|
)
|
|
(1.5
|
)%
|
||||||
Total Americas
|
70,736
|
|
|
70,205
|
|
|
531
|
|
|
0.8
|
%
|
|
136,565
|
|
|
101,895
|
|
|
34,670
|
|
|
34.0
|
%
|
||||||
Percentage of net revenue
|
48.0
|
%
|
|
47.9
|
%
|
|
|
|
|
|
48.2
|
%
|
|
45.8
|
%
|
|
|
|
|
|
|
||||||||
EMEA
|
62,574
|
|
|
61,292
|
|
|
1,282
|
|
|
2.1
|
%
|
|
116,509
|
|
|
92,133
|
|
|
24,376
|
|
|
26.5
|
%
|
||||||
Percentage of net revenue
|
42.5
|
%
|
|
41.8
|
%
|
|
|
|
|
|
41.1
|
%
|
|
41.4
|
%
|
|
|
|
|
|
|
||||||||
APAC
|
13,898
|
|
|
15,086
|
|
|
(1,188
|
)
|
|
(7.9
|
)%
|
|
30,408
|
|
|
28,470
|
|
|
1,938
|
|
|
6.8
|
%
|
||||||
Percentage of net revenue
|
9.4
|
%
|
|
10.3
|
%
|
|
|
|
|
|
10.7
|
%
|
|
12.8
|
%
|
|
|
|
|
||||||||||
Total net revenues
|
$
|
147,208
|
|
|
$
|
146,583
|
|
|
$
|
625
|
|
|
0.4
|
%
|
|
$
|
283,482
|
|
|
$
|
222,498
|
|
|
$
|
60,984
|
|
|
27.4
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
|
December 31,
2014 |
|
December 31,
2013 |
|
$
Change
|
|
%
Change
|
|
December 31,
2014 |
|
December 31,
2013 |
|
$
Change
|
|
%
Change
|
||||||||||||||
Net Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Product
|
$
|
112,501
|
|
|
$
|
119,065
|
|
|
$
|
(6,564
|
)
|
|
(5.5
|
)%
|
|
$
|
215,173
|
|
|
$
|
180,109
|
|
|
$
|
35,064
|
|
|
19.5
|
%
|
Percentage of net revenue
|
76.4
|
%
|
|
81.2
|
%
|
|
|
|
|
|
75.9
|
%
|
|
80.9
|
%
|
|
|
|
|
||||||||||
Service
|
34,707
|
|
|
27,518
|
|
|
7,189
|
|
|
26.1
|
%
|
|
68,309
|
|
|
42,389
|
|
|
25,920
|
|
|
61.1
|
%
|
||||||
Percentage of net revenue
|
23.6
|
%
|
|
18.8
|
%
|
|
|
|
|
|
24.1
|
%
|
|
19.1
|
%
|
|
|
|
|
||||||||||
Total net revenues
|
$
|
147,208
|
|
|
$
|
146,583
|
|
|
$
|
625
|
|
|
0.4
|
%
|
|
$
|
283,482
|
|
|
$
|
222,498
|
|
|
$
|
60,984
|
|
|
27.4
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
|
December 31,
2014 |
|
December 31,
2013 |
|
$
Change
|
|
%
Change
|
|
December 31,
2014 |
|
December 31,
2013 |
|
$
Change
|
|
%
Change
|
||||||||||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Product
|
$
|
52,005
|
|
|
$
|
52,172
|
|
|
$
|
(167
|
)
|
|
(0.3
|
)%
|
|
$
|
100,652
|
|
|
$
|
85,700
|
|
|
$
|
14,952
|
|
|
17.4
|
%
|
Percentage of product revenue
|
46.2
|
%
|
|
43.8
|
%
|
|
|
|
|
|
46.8
|
%
|
|
47.6
|
%
|
|
|
|
|
||||||||||
Service
|
23,157
|
|
|
17,673
|
|
|
5,484
|
|
|
31.0
|
%
|
|
45,037
|
|
|
27,851
|
|
|
17,186
|
|
|
61.7
|
%
|
||||||
Percentage of service revenue
|
66.7
|
%
|
|
64.2
|
%
|
|
|
|
|
|
65.9
|
%
|
|
65.7
|
%
|
|
|
|
|
||||||||||
Total gross profit
|
$
|
75,162
|
|
|
$
|
69,845
|
|
|
$
|
5,317
|
|
|
7.6
|
%
|
|
$
|
145,689
|
|
|
$
|
113,551
|
|
|
$
|
32,138
|
|
|
28.3
|
%
|
Percentage of net revenue
|
51.1
|
%
|
|
47.7
|
%
|
|
|
|
|
|
51.4
|
%
|
|
51.0
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
|
December 31,
2014 |
|
December 31,
2013 |
|
$
Change
|
|
%
Change
|
|
December 31,
2014 |
|
December 31,
2013 |
|
$
Change
|
|
%
Change
|
||||||||||||||
Research and development
|
$
|
24,000
|
|
|
$
|
18,896
|
|
|
$
|
5,104
|
|
|
27.0
|
%
|
|
$
|
47,347
|
|
|
$
|
28,832
|
|
|
$
|
18,515
|
|
|
64.2
|
%
|
Sales and marketing
|
43,971
|
|
|
40,636
|
|
|
3,335
|
|
|
8.2
|
%
|
|
88,750
|
|
|
63,330
|
|
|
25,420
|
|
|
40.1
|
%
|
||||||
General and administrative
|
10,306
|
|
|
11,189
|
|
|
(883
|
)
|
|
(7.9
|
)%
|
|
21,380
|
|
|
18,125
|
|
|
3,255
|
|
|
18.0
|
%
|
||||||
Acquisition and integration costs
|
3,500
|
|
|
8,688
|
|
|
(5,188
|
)
|
|
(59.7
|
)%
|
|
7,558
|
|
|
12,382
|
|
|
(4,824
|
)
|
|
(39.0
|
)%
|
||||||
Restructuring charge, net of reversals
|
—
|
|
|
430
|
|
|
(430
|
)
|
|
(100.0
|
)%
|
|
—
|
|
|
505
|
|
|
(505
|
)
|
|
(100.0
|
)%
|
||||||
Amortization of intangibles
|
4,467
|
|
|
3,778
|
|
|
689
|
|
|
18.2
|
%
|
|
8,934
|
|
|
3,778
|
|
|
5,156
|
|
|
136.5
|
%
|
||||||
Total operating expenses
|
$
|
86,244
|
|
|
$
|
83,617
|
|
|
$
|
2,627
|
|
|
3.1
|
%
|
|
$
|
173,969
|
|
|
$
|
126,952
|
|
|
$
|
47,017
|
|
|
37.0
|
%
|
Operating loss
|
$
|
(11,082
|
)
|
|
$
|
(13,772
|
)
|
|
$
|
2,690
|
|
|
19.5
|
%
|
|
$
|
(28,280
|
)
|
|
$
|
(13,401
|
)
|
|
$
|
(14,879
|
)
|
|
(111.0
|
)%
|
•
|
Revenue Recognition
|
•
|
Business Combinations
|
•
|
Goodwill
|
•
|
Share-based Payments
|
•
|
Deferred Tax Valuation Allowance
|
•
|
Accounting for Uncertainty in Income Taxes
|
|
December 31,
2014 |
|
June 30,
2014 |
||||
Cash and cash equivalent
|
$
|
88,972
|
|
|
$
|
73,190
|
|
Short-term investments
|
20,321
|
|
|
32,692
|
|
||
Total cash and investments
|
$
|
109,293
|
|
|
$
|
105,882
|
|
Working capital
|
$
|
44,504
|
|
|
$
|
56,548
|
|
|
Six Months Ended
|
||||||
|
December 31,
2014 |
|
December 31,
2013 |
||||
Net cash provided by (used in) operating activities
|
$
|
41,453
|
|
|
$
|
(4,869
|
)
|
Net cash provided by (used in) investing activities
|
7,670
|
|
|
(126,967
|
)
|
||
Net cash (used in) provided by financing activities
|
(30,716
|
)
|
|
103,990
|
|
||
Foreign currency effect on cash
|
(2,625
|
)
|
|
347
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
15,782
|
|
|
$
|
(27,499
|
)
|
|
Total
|
|
Less than 1 Year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt obligations
|
$
|
89,126
|
|
|
$
|
8,125
|
|
|
$
|
34,938
|
|
|
$
|
46,063
|
|
|
$
|
—
|
|
Interest on debt obligations
|
7,493
|
|
|
2,540
|
|
|
3,971
|
|
|
982
|
|
|
—
|
|
|||||
Non-cancellable inventory purchase commitments
|
102,437
|
|
|
102,437
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Non-cancellable operating lease obligations
|
56,194
|
|
|
9,237
|
|
|
15,501
|
|
|
13,756
|
|
|
17,700
|
|
|||||
Other liabilities
|
10,100
|
|
|
5,991
|
|
|
3,983
|
|
|
126
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
$
|
265,350
|
|
|
$
|
128,330
|
|
|
$
|
58,393
|
|
|
$
|
60,927
|
|
|
$
|
17,700
|
|
|
Maturing in
|
||||||||||||||||||
|
Three
months
or less
|
|
Three
months to
one year
|
|
Greater
than one
year
|
|
Total
|
|
Fair
Value
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in short-term investments
|
$
|
951
|
|
|
$
|
20,321
|
|
|
$
|
—
|
|
|
$
|
21,272
|
|
|
$
|
21,272
|
|
Weighted average interest rate
|
0.01
|
%
|
|
0.95
|
%
|
|
—
|
%
|
|
|
|
|
Unrealized gain given a decrease in interest rate of X bps
|
|
Fair value as of
|
|
Unrealized loss given an increase in interest rate of X bps
|
||||||||||||||
(100 bps)
|
|
(50 bps)
|
|
December 31, 2014
|
|
100 bps
|
|
50 bps
|
||||||||||
(In thousands)
|
||||||||||||||||||
$
|
23
|
|
|
$
|
11
|
|
|
$
|
21,272
|
|
|
$
|
(23
|
)
|
|
$
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
Change in interest expense given a decrease in interest rate of X bps*
|
|
Average outstanding debt as of
|
|
Change in interest expense given an increase in interest rate of X bps
|
||||||||||||||
(100 bps)
|
|
(50 bps)
|
|
December 31, 2014
|
|
100 bps
|
|
50 bps
|
||||||||||
(In thousands)
|
||||||||||||||||||
$
|
(33
|
)
|
|
$
|
(33
|
)
|
|
$
|
89,125
|
|
|
$
|
223
|
|
|
$
|
111
|
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
we are dependent upon obtaining orders during a quarter and shipping those orders in the same quarter to achieve our revenue objectives;
|
•
|
decreases in the prices of the products that we sell;
|
•
|
the mix of products sold and the mix of distribution channels through which products are sold;
|
•
|
acceptance provisions in customer contracts;
|
•
|
our ability to deliver installation or inspection services by the end of the quarter;
|
•
|
changes in general and/or specific economic conditions in the networking industry;
|
•
|
seasonal fluctuations in demand for our products and services;
|
•
|
a disproportionate percentage of our sales occurring in the last month of the quarter;
|
•
|
our ability to ship products by the end of a quarter;
|
•
|
reduced visibility into the implementation cycles for our products and our customers’ spending plans;
|
•
|
our ability to forecast demand for our products, which in the case of lower-than-expected sales, may result in excess or obsolete inventory in addition to non-cancelable purchase commitments for component parts;
|
•
|
sales to the telecommunications service provider market, which represent a significant source of large product orders, are especially volatile and difficult to forecast;
|
•
|
product returns or the cancellation or rescheduling of orders;
|
•
|
announcements and new product introductions by our competitors;
|
•
|
our ability to develop and support relationships with enterprise customers, service providers and other potential large customers;
|
•
|
our ability to achieve targeted cost reductions;
|
•
|
fluctuations in warranty or other service expenses actually incurred;
|
•
|
our ability to obtain sufficient supplies of sole- or limited-source components for our products on a timely basis;
|
•
|
increases in the price of the components that we purchase.
|
•
|
customers may delay or cancel plans to purchase our products and services;
|
•
|
customers may not be able to pay, or may delay payment of, the amounts that they owe us which may adversely affect our cash flow, the timing of our revenue recognition and the amount of revenue;
|
•
|
increased pricing pressure may result from our competitors aggressively discounting their products;
|
•
|
accurate budgeting and planning will be difficult due to low visibility into future sales;
|
•
|
forecasting customer demand will be more difficult, increasing the risk of either excess and obsolete inventory if our forecast is too high or insufficient inventory to meet customer demand if our forecast is too low; and
|
•
|
our component suppliers and contract manufacturers have been negatively affected by the economy which may result in product delays and changes in pricing and service levels.
|
•
|
issue equity securities which would dilute current stockholders' percentage ownership;
|
•
|
incur substantial debt;
|
•
|
assume contingent liabilities; or
|
•
|
expend significant cash.
|
•
|
difficulties in the assimilation of acquired operations, technologies and/or products;
|
•
|
unanticipated costs associated with the acquisition or investment transaction;
|
•
|
the diversion of management's attention from other business concerns;
|
•
|
adverse effects on existing business relationships with suppliers and customers;
|
•
|
risks associated with entering markets in which we have no or limited prior experience;
|
•
|
the potential loss of key employees of acquired organizations; and
|
•
|
substantial charges for the amortization of certain purchased intangible assets, deferred stock compensation or similar items.
|
•
|
incur additional indebtedness;
|
•
|
create liens;
|
•
|
make investments;
|
•
|
enter into transactions with affiliates;
|
•
|
sell assets;
|
•
|
guarantee indebtedness;
|
•
|
declare or pay dividends or other distributions to stockholders;
|
•
|
repurchase equity interests;
|
•
|
change the nature of our business;
|
•
|
enter into swap agreements;
|
•
|
issue or sell capital stock of certain of our subsidiaries; and
|
•
|
consolidate, merge, or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis.
|
•
|
ASICs;
|
•
|
Merchant silicon;
|
•
|
microprocessors;
|
•
|
programmable integrated circuits;
|
•
|
selected other integrated circuits;
|
•
|
custom power supplies; and
|
•
|
custom-tooled sheet metal.
|
•
|
flash memory;
|
•
|
DRAMs and SRAMs;
|
•
|
printed circuit boards; and
|
•
|
CAMs
|
•
|
Connectors
|
•
|
Timing circuits (crystals & clocks).
|
•
|
stop selling our products that incorporate the challenged intellectual property;
|
•
|
obtain a royalty bearing license to sell or use the relevant technology, and that license may not be available on reasonable terms or available at all;
|
•
|
pay damages; or
|
•
|
redesign those products that use the disputed technology.
|
•
|
open source license terms may be ambiguous and may result in unanticipated obligations regarding the licensing of our products and intellectual property;
|
•
|
open source software cannot be protected under trade secret law;
|
•
|
suppliers of open-source software do not provide the warranty, support and liability protections typically provided by vendors who offer proprietary software; and
|
•
|
it may be difficult for us to accurately determine the developers of the open source code and whether the acquired software infringes third-party intellectual property rights.
|
•
|
longer accounts receivable collection cycles;
|
•
|
difficulties in managing operations across disparate geographic areas;
|
•
|
difficulties associated with enforcing agreements through foreign legal systems;
|
•
|
higher credit risks requiring cash in advance or letters of credit;
|
•
|
difficulties in safeguarding intellectual property;
|
•
|
political and economic turbulence;
|
•
|
terrorism, war or other armed conflict;
|
•
|
natural disasters and epidemics;
|
•
|
potential adverse tax consequences;
|
•
|
compliance with regulatory requirements of foreign countries, including compliance with rapidly evolving environmental regulations;
|
•
|
compliance with U.S. laws and regulations pertaining to the sale and distribution of products to customers in foreign countries, including export controls and anti-corruption laws, including the Foreign Corrupt Practices Act; and
|
•
|
the payment of operating expenses in local currencies, which exposes us to risks of currency fluctuations.
|
•
|
budgetary constraints and internal acceptance reviews by customers will result in the loss of potential sales;
|
•
|
there may be substantial variation in the length of the sales cycle from customer to customer, making decisions on the expenditure of resources difficult to assess;
|
•
|
we may incur substantial sales and marketing expenses and expend significant management time in an attempt to initiate or increase the sale of products to customers, but not succeed;
|
•
|
if a sales forecast from a specific customer for a particular quarter is not achieved in that quarter, we may be unable to compensate for the shortfall, which could harm our operating results; and
|
•
|
downward pricing pressures could occur during the lengthy sales cycle for our products.
|
•
|
the timely adoption and market acceptance of industry standards, and timely resolution of conflicting U.S. and international industry standards; and
|
•
|
our ability to influence the development of emerging industry standards and to introduce new and enhanced products that are compatible with such standards.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities - Not applicable
|
Item 4.
|
Mine Safety Disclosure - Not Applicable
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
(a)
|
Exhibits:
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||
Exhibit Number
|
|
Description of Document
|
|
Form
|
|
Filing Date
|
|
Number
|
|
Filed Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
|
Second Amendment to the Credit Agreement dated November 18, 2014, among Extreme Networks, Inc., a Delaware
Corporation, the Lenders party thereto and Silicon Valley Bank, as the Issuing Lender and Swingline Lender and
Administrative Agent.
|
|
8-K
|
|
11/20/2014
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99.1
|
|
|
Market-performance based restricted stock units agreement
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
99.2
|
|
|
Extreme Networks Inc. 2014 Employee Stock Purchase Plan
|
|
S-8
|
|
1/12/2015
|
|
99.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
Section 302 Certification of Chief Executive Officer
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
Section 302 Certification of Chief Financial Officer
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
|
Section 906 Certification of Chief Executive Officer
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2
|
|
|
Section 906 Certification of Chief Financial Officer
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
EXTREME NETWORKS, INC.
(Registrant)
|
|
/
S
/ KENNETH AROLA
|
KENNETH AROLA
|
Senior Vice President, Chief Financial Officer, and Chief Accounting Officer
|
1.
|
I have reviewed this Form 10-Q of Extreme Networks, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent function):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
January 29, 2015
|
/s/ CHARLES W. BERGER
|
|
|
Charles W. Berger
|
|
|
President and Chief Executive Officer
|
|
|
|
1.
|
I have reviewed this Form 10-Q of Extreme Networks, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent function):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
January 29, 2015
|
/s/ KENNETH AROLA
|
|
|
Kenneth Arola
|
|
|
Senior Vice President, Chief Financial Officer, and Chief Accounting Officer
|
|
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ CHARLES W. BERGER
|
|
Charles W. Berger
|
|
President and Chief Executive Officer
|
|
January 29, 2015
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ KENNETH AROLA
|
|
Kenneth Arola
|
|
Senior Vice President, Chief Financial Officer, and Chief Accounting Officer
|
|
January 29, 2015
|
EXTREME NETWORKS, INC.
|
|
PARTICIPANT
|
||
By:
|
|
|
By:
|
|
Print Name:
|
|
|
Print Name:
|
|
Title:
|
|
|
|
|
Address:
|
145 Rio Robles
|
|
Address:
|
|
|
San Jose, California 95134
|
|
|
|
Performance Differential (Percentage Point Difference of
Company Total Stockholder Return Over/Under Benchmark Index Total Return) |
Performance Multiplier*
|
Earned Units
(Per 1,000 Target Units) |
30.0
|
150.0%
|
1,500
|
25.0
|
150.0%
|
1,500
|
20.0
|
140.0%
|
1,400
|
15.0
|
130.0%
|
1,300
|
10.0
|
120.0%
|
1,200
|
5.0
|
110.0%
|
1,100
|
4.0
|
108.0%
|
1,080
|
3.0
|
106.0%
|
1,060
|
2.0
|
104.0%
|
1,040
|
1.0
|
102.0%
|
1,020
|
0.5
|
101.0%
|
1,010
|
0.1
|
100.2%
|
1,002
|
0
|
100.0%
|
1,000
|
-0.1
|
99.7%
|
997
|
-0.5
|
98.5%
|
985
|
-1.0
|
97.0%
|
970
|
-2.0
|
94.0%
|
940
|
-3.0
|
91.0%
|
910
|
-4.0
|
88.0%
|
880
|
-5.0
|
85.0%
|
850
|
-10.0
|
70.0%
|
700
|
-15.0
|
55.0%
|
550
|
-20.0
|
40.0%
|
400
|
-25.0
|
25.0%
|
250
|
-30.0
|
10.0%
|
100
|
-35.0
|
0.0%
|
0
|
-40.0
|
0.0%
|
0
|
|
|
|
||
Assumptions:
|
|
|
||
|
|
|
||
Extreme Networks, Inc.:
|
|
|
||
Average Per Share Closing Price (beginning)
|
|
|
$5.00
|
|
Average Per Share Closing Price (ending)
|
|
|
$6.50
|
|
|
|
|
||
NASDAQ Composite Index:
|
|
|
||
Average Closing Index Value (beginning)
|
|
4750.00
|
|
|
Average Closing Index Value (ending)
|
|
5700.00
|
|
|
|
|
|
||
Computations:
|
|
|
||
|
|
|
||
Company Total Stockholder Return
|
((6.50 / 5.00) - 1) x 100
|
30.0
|
%
|
|
|
|
|
||
Benchmark Index Total Return
|
((5700 / 4750) - 1) x 100
|
20.0
|
%
|
|
|
|
|
||
Performance Multiplier
|
100 + (2 x (30.0 – 20.0))
|
120.0
|
%
|
|
|
|
|
||
Earned Units
|
1,000 x 120.0%
|
1,200
|
|
|
|
|
|
|
|
|
||
Assumptions:
|
|
|
||
|
|
|
||
Extreme Networks, Inc.:
|
|
|
||
Average Per Share Closing Price (beginning)
|
|
|
$5.00
|
|
Average Per Share Closing Price (ending)
|
|
|
$5.50
|
|
|
|
|
||
NASDAQ Composite Index:
|
|
|
||
Average Closing Index Value (beginning)
|
|
4750.00
|
|
|
Average Closing Index Value (ending)
|
|
5700.00
|
|
|
|
|
|
||
Computations:
|
|
|
||
|
|
|
||
Company Total Stockholder Return
|
((5.50 / 5.00) - 1) x 100
|
10.0
|
%
|
|
|
|
|
||
Benchmark Index Total Return
|
((5700 / 4750) - 1) x 100
|
20.0
|
%
|
|
|
|
|
||
Performance Multiplier
|
100 + (3 x (10.0 – 20.0)
|
70.0
|
%
|
|
|
|
|
||
Earned Units
|
1,000 x 70.0%
|
700
|
|
|
|
|
|