/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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/ /
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
|
94-2669985
(I.R.S. Employer Identification No.)
|
6024 SILVER CREEK VALLEY ROAD, SAN JOSE, CALIFORNIA
(Address of Principal Executive Offices)
|
95138
(Zip Code)
|
Large accelerated filer
|
ý
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Accelerated Filer
|
¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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|
|
|
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Emerging growth company
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¨
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PART I-FINANCIAL INFORMATION
|
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||
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PART II-OTHER INFORMATION
|
||
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited, in thousands
)
|
September 30, 2018
|
|
April 1, 2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
200,645
|
|
|
$
|
136,873
|
|
Short-term investments
|
192,032
|
|
|
222,026
|
|
||
Accounts receivable, net
|
129,405
|
|
|
108,779
|
|
||
Inventories
|
61,078
|
|
|
68,702
|
|
||
Prepayments and other current assets
|
12,358
|
|
|
12,734
|
|
||
Total current assets
|
595,518
|
|
|
549,114
|
|
||
Property, plant and equipment, net
|
88,986
|
|
|
86,845
|
|
||
Goodwill
|
420,117
|
|
|
420,117
|
|
||
Intangible assets, net
|
174,886
|
|
|
180,781
|
|
||
Deferred tax assets
|
8,453
|
|
|
11,764
|
|
||
Other assets
|
50,202
|
|
|
61,910
|
|
||
Total assets
|
$
|
1,338,162
|
|
|
$
|
1,310,531
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
42,106
|
|
|
$
|
41,070
|
|
Accrued compensation and related expenses
|
39,900
|
|
|
44,002
|
|
||
Current portion of bank loan
|
1,980
|
|
|
2,000
|
|
||
Other accrued liabilities
|
44,091
|
|
|
26,524
|
|
||
Total current liabilities
|
128,077
|
|
|
113,596
|
|
||
Deferred tax liabilities
|
11,362
|
|
|
10,221
|
|
||
Long-term income tax payable
|
23,539
|
|
|
25,034
|
|
||
Convertible notes
|
306,827
|
|
|
299,551
|
|
||
Long-term bank loan, net
|
190,513
|
|
|
191,073
|
|
||
Other long-term liabilities
|
30,286
|
|
|
25,684
|
|
||
Total liabilities
|
690,604
|
|
|
665,159
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
|
|
||
Stockholders' equity:
|
|
|
|
|
|
||
Preferred stock: $0.001 par value: 10,000 shares authorized; no shares issued
|
—
|
|
|
—
|
|
||
Common stock: $0.001 par value: 350,000 shares authorized; 128,999 and 129,531 shares outstanding as of September 30, 2018 and April 1, 2018, respectively
|
129
|
|
|
130
|
|
||
Additional paid-in capital
|
2,792,906
|
|
|
2,752,784
|
|
||
Treasury stock at cost: 131,140 and 128,518 shares as of September 30, 2018 and April 1, 2018, respectively
|
(1,889,110
|
)
|
|
(1,801,624
|
)
|
||
Accumulated deficit
|
(248,906
|
)
|
|
(301,155
|
)
|
||
Accumulated other comprehensive loss
|
(7,461
|
)
|
|
(4,763
|
)
|
||
Total stockholders' equity
|
647,558
|
|
|
645,372
|
|
||
Total liabilities and stockholders' equity
|
$
|
1,338,162
|
|
|
$
|
1,310,531
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(Unaudited, in thousands, except per share data
)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30,
2018 |
|
October 1,
2017 |
||||||||
Revenues
|
$
|
235,484
|
|
|
$
|
204,398
|
|
|
$
|
464,000
|
|
|
$
|
401,111
|
|
Cost of revenues
|
91,900
|
|
|
87,636
|
|
|
183,809
|
|
|
174,311
|
|
||||
Gross profit
|
143,584
|
|
|
116,762
|
|
|
280,191
|
|
|
226,800
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
55,509
|
|
|
48,742
|
|
|
107,743
|
|
|
97,191
|
|
||||
Selling, general and administrative
|
46,753
|
|
|
44,485
|
|
|
89,748
|
|
|
86,427
|
|
||||
Total operating expenses
|
102,262
|
|
|
93,227
|
|
|
197,491
|
|
|
183,618
|
|
||||
Operating income
|
41,322
|
|
|
23,535
|
|
|
82,700
|
|
|
43,182
|
|
||||
Other-than-temporary impairment loss on investment
|
—
|
|
|
—
|
|
|
(2,000
|
)
|
|
—
|
|
||||
Interest expense
|
(7,045
|
)
|
|
(6,834
|
)
|
|
(14,230
|
)
|
|
(13,731
|
)
|
||||
Interest income and other, net
|
2,437
|
|
|
1,948
|
|
|
4,108
|
|
|
4,930
|
|
||||
Income before income taxes
|
36,714
|
|
|
18,649
|
|
|
70,578
|
|
|
34,381
|
|
||||
Benefit from (provision for) income taxes
|
(1,214
|
)
|
|
31
|
|
|
(4,358
|
)
|
|
1,013
|
|
||||
Net income
|
$
|
35,500
|
|
|
$
|
18,680
|
|
|
$
|
66,220
|
|
|
$
|
35,394
|
|
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.27
|
|
|
$
|
0.14
|
|
|
$
|
0.51
|
|
|
$
|
0.27
|
|
Diluted
|
$
|
0.26
|
|
|
$
|
0.14
|
|
|
$
|
0.49
|
|
|
$
|
0.26
|
|
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
129,155
|
|
|
133,269
|
|
|
129,357
|
|
|
133,286
|
|
||||
Diluted
|
134,755
|
|
|
136,059
|
|
|
133,957
|
|
|
136,434
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(Unaudited, in thousands
)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30,
2018 |
|
October 1,
2017 |
||||||||
Net income
|
$
|
35,500
|
|
|
$
|
18,680
|
|
|
$
|
66,220
|
|
|
$
|
35,394
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments
|
(291
|
)
|
|
1,228
|
|
|
(2,999
|
)
|
|
2,631
|
|
||||
Change in net unrealized gain on investments, net of tax
|
272
|
|
|
78
|
|
|
301
|
|
|
212
|
|
||||
Total other comprehensive income (loss)
|
(19
|
)
|
|
1,306
|
|
|
(2,698
|
)
|
|
2,843
|
|
||||
Comprehensive income
|
$
|
35,481
|
|
|
$
|
19,986
|
|
|
$
|
63,522
|
|
|
$
|
38,237
|
|
|
Six Months Ended
|
||||||
(Unaudited, in thousands
)
|
September 30, 2018
|
|
October 1, 2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
66,220
|
|
|
$
|
35,394
|
|
Adjustments:
|
|
|
|
|
|
||
Depreciation
|
13,506
|
|
|
13,173
|
|
||
Amortization of intangible assets
|
20,767
|
|
|
21,626
|
|
||
Amortization of debt issuance costs and debt discount
|
7,686
|
|
|
7,326
|
|
||
Other-than-temporary impairment loss on investment
|
2,000
|
|
|
—
|
|
||
Stock-based compensation expense, net of amounts capitalized in inventory
|
30,700
|
|
|
24,769
|
|
||
Deferred income tax
|
4,452
|
|
|
(7,550
|
)
|
||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||
Accounts receivable, net
|
(9,662
|
)
|
|
(1,569
|
)
|
||
Inventories
|
7,656
|
|
|
7,111
|
|
||
Prepayments and other assets
|
(2,831
|
)
|
|
1,112
|
|
||
Accounts payable
|
1,889
|
|
|
(7,633
|
)
|
||
Accrued compensation and related expenses
|
(4,103
|
)
|
|
852
|
|
||
Deferred income on shipments to distributors
|
—
|
|
|
838
|
|
||
Income taxes payable and receivable
|
(3,432
|
)
|
|
4,573
|
|
||
Other accrued liabilities and long-term liabilities
|
4,774
|
|
|
(1,413
|
)
|
||
Net cash provided by operating activities
|
139,622
|
|
|
98,609
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Business acquisitions, net of cash acquired
|
—
|
|
|
(237,716
|
)
|
||
Asset acquisition
|
—
|
|
|
(12,956
|
)
|
||
Purchases of property, plant and equipment, net
|
(17,294
|
)
|
|
(15,531
|
)
|
||
Purchases of intangible assets
|
(3,045
|
)
|
|
(259
|
)
|
||
Purchase of non-marketable equity securities
|
(950
|
)
|
|
(10,000
|
)
|
||
Purchases of short-term investments
|
(13,096
|
)
|
|
(128,718
|
)
|
||
Proceeds from sales of short-term investments
|
4,455
|
|
|
77,287
|
|
||
Proceeds from maturities of short-term investments
|
38,436
|
|
|
21,292
|
|
||
Net cash provided by (used in) investing activities
|
8,506
|
|
|
(306,601
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from issuance of common stock
|
9,389
|
|
|
5,154
|
|
||
Repurchases of common stock
|
(87,486
|
)
|
|
(58,312
|
)
|
||
Payment of capital lease obligations
|
(581
|
)
|
|
(587
|
)
|
||
Proceeds of Initial Term B Loan, net of discount and issuance costs
|
—
|
|
|
194,252
|
|
||
Principal payments of long-term bank loan
|
(990
|
)
|
|
(1,000
|
)
|
||
Payment of contingent consideration
|
(2,790
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
(82,458
|
)
|
|
139,507
|
|
||
Effect of exchange rates on cash and cash equivalents
|
(1,898
|
)
|
|
1,828
|
|
||
Net increase (decrease) in cash and cash equivalents
|
63,772
|
|
|
(66,657
|
)
|
||
Cash and cash equivalents at beginning of period
|
136,873
|
|
|
214,554
|
|
||
Cash and cash equivalents at end of period
|
$
|
200,645
|
|
|
$
|
147,897
|
|
Supplemental disclosure of cash flow information
|
Six Months Ended
|
||||||
(Unaudited, in thousands
)
|
September 30, 2018
|
|
October 1, 2017
|
||||
Non-cash investing and financing activities:
|
|
|
|
||||
Additions to property, plant and equipment included in accounts payable
|
$
|
661
|
|
|
$
|
1,109
|
|
Additions to intangible assets included in accounts payable and other accrued liabilities
|
$
|
12,605
|
|
|
$
|
4,768
|
|
Fair value of partially vested employee equity awards related to pre-combination services that were assumed as part of the business acquisition
|
$
|
—
|
|
|
$
|
3,400
|
|
Contingent consideration in connection with the asset acquisition included in other accrued liabilities and other long-term liabilities
|
$
|
—
|
|
|
$
|
4,080
|
|
•
|
Identification of the contract or contracts with a customer
|
•
|
Identification of the performance obligation in the contract
|
•
|
Determination of the transaction price
|
•
|
Allocation of the transaction price to the performance obligations in the contract
|
•
|
Recognition of revenue when, or as, the Company satisfies a performance obligation
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands, except per share amounts)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30,
2018 |
|
October 1,
2017 |
||||||||
Numerator (basic and diluted):
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
35,500
|
|
|
$
|
18,680
|
|
|
$
|
66,220
|
|
|
$
|
35,394
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, basic
|
129,155
|
|
|
133,269
|
|
|
129,357
|
|
|
133,286
|
|
||||
Dilutive effect of employee stock options, restricted stock units and performance stock units
|
4,100
|
|
|
2,790
|
|
|
4,052
|
|
|
3,148
|
|
||||
Dilutive effect of convertible notes
|
1,500
|
|
|
—
|
|
|
548
|
|
|
—
|
|
||||
Weighted average common shares outstanding, diluted
|
134,755
|
|
|
136,059
|
|
|
133,957
|
|
|
136,434
|
|
||||
Basic net income per share
|
$
|
0.27
|
|
|
$
|
0.14
|
|
|
$
|
0.51
|
|
|
$
|
0.27
|
|
Diluted net income per share
|
$
|
0.26
|
|
|
$
|
0.14
|
|
|
$
|
0.49
|
|
|
$
|
0.26
|
|
Disaggregated Revenue by Timing of Recognition*
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30, 2018
|
|
October 1, 2017
|
||||||||
Goods/services transferred at a point in time
|
$
|
233,630
|
|
|
$
|
204,159
|
|
|
$
|
460,221
|
|
|
$
|
400,647
|
|
Goods/services transferred over time
|
1,854
|
|
|
239
|
|
|
3,779
|
|
|
464
|
|
||||
Total Revenue
|
$
|
235,484
|
|
|
$
|
204,398
|
|
|
$
|
464,000
|
|
|
$
|
401,111
|
|
(in thousands)
|
Estimated Fair Value
|
|
Estimated Useful Life
|
||
Developed technology
|
$
|
56,000
|
|
|
5 years
|
Customer contracts and related relationships
|
28,900
|
|
|
5 years
|
|
Order backlog
|
200
|
|
|
1 year
|
|
Software licenses
|
2,560
|
|
|
less than a year
|
|
In-process research and development ("IPR&D")
|
10,200
|
|
|
|
|
Total
|
$
|
97,860
|
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||
(in thousands)
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Total
|
||||||
Assets
|
|
|
|
|
|
||||||
Cash Equivalents and Short-Term Investments:
|
|
|
|
|
|
||||||
US government treasuries and agencies securities
|
$
|
60,358
|
|
|
$
|
—
|
|
|
$
|
60,358
|
|
Money market funds
|
101,034
|
|
|
—
|
|
|
101,034
|
|
|||
Asset-backed securities
|
—
|
|
|
13,863
|
|
|
13,863
|
|
|||
Corporate bonds
|
—
|
|
|
107,864
|
|
|
107,864
|
|
|||
International government bonds
|
—
|
|
|
—
|
|
|
—
|
|
|||
Corporate commercial paper
|
—
|
|
|
17,402
|
|
|
17,402
|
|
|||
Bank deposits
|
—
|
|
|
17,216
|
|
|
17,216
|
|
|||
Repurchase agreement
|
—
|
|
|
103
|
|
|
103
|
|
|||
Total assets measured at fair value
|
$
|
161,392
|
|
|
$
|
156,448
|
|
|
$
|
317,840
|
|
|
Fair Value at Reporting Date Using
|
||||||||||
(in thousands)
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Total
|
||||||
Assets
|
|
|
|
|
|
||||||
Cash Equivalents and Short-Term Investments:
|
|
|
|
|
|
||||||
US government treasuries and agencies securities
|
$
|
60,272
|
|
|
$
|
—
|
|
|
$
|
60,272
|
|
Money market funds
|
48,847
|
|
|
—
|
|
|
48,847
|
|
|||
Asset-backed securities
|
—
|
|
|
16,687
|
|
|
16,687
|
|
|||
Corporate bonds
|
—
|
|
|
109,605
|
|
|
109,605
|
|
|||
International government bonds
|
—
|
|
|
2,638
|
|
|
2,638
|
|
|||
Corporate commercial paper
|
—
|
|
|
9,034
|
|
|
9,034
|
|
|||
Bank deposits
|
—
|
|
|
45,080
|
|
|
45,080
|
|
|||
Repurchase agreements
|
—
|
|
|
142
|
|
|
142
|
|
|||
Total assets measured at fair value
|
$
|
109,119
|
|
|
$
|
183,186
|
|
|
$
|
292,305
|
|
(in thousands)
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
U.S. government treasuries and agencies securities
|
$
|
61,203
|
|
|
$
|
—
|
|
|
$
|
(845
|
)
|
|
$
|
60,358
|
|
Money market funds
|
101,034
|
|
|
—
|
|
|
—
|
|
|
101,034
|
|
||||
Asset-backed securities
|
13,931
|
|
|
—
|
|
|
(68
|
)
|
|
13,863
|
|
||||
Corporate bonds
|
109,327
|
|
|
41
|
|
|
(1,504
|
)
|
|
107,864
|
|
||||
International government bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Corporate commercial paper
|
17,402
|
|
|
—
|
|
|
—
|
|
|
17,402
|
|
||||
Bank deposits
|
17,216
|
|
|
—
|
|
|
—
|
|
|
17,216
|
|
||||
Repurchase agreements
|
103
|
|
|
—
|
|
|
—
|
|
|
103
|
|
||||
Total available-for-sale investments
|
320,216
|
|
|
41
|
|
|
(2,417
|
)
|
|
317,840
|
|
||||
Less amounts classified as cash equivalents
|
(125,808
|
)
|
|
—
|
|
|
—
|
|
|
(125,808
|
)
|
||||
Short-term investments
|
$
|
194,408
|
|
|
$
|
41
|
|
|
$
|
(2,417
|
)
|
|
$
|
192,032
|
|
(in thousands)
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
U.S. government treasuries and agencies securities
|
$
|
61,166
|
|
|
$
|
—
|
|
|
$
|
(894
|
)
|
|
$
|
60,272
|
|
Money market funds
|
48,847
|
|
|
—
|
|
|
—
|
|
|
48,847
|
|
||||
Asset-backed securities
|
16,797
|
|
|
—
|
|
|
(110
|
)
|
|
16,687
|
|
||||
Corporate bonds
|
111,266
|
|
|
43
|
|
|
(1,704
|
)
|
|
109,605
|
|
||||
International government bonds
|
2,650
|
|
|
—
|
|
|
(12
|
)
|
|
2,638
|
|
||||
Corporate commercial paper
|
9,034
|
|
|
—
|
|
|
—
|
|
|
9,034
|
|
||||
Bank deposits
|
45,080
|
|
|
—
|
|
|
—
|
|
|
45,080
|
|
||||
Repurchase agreements
|
142
|
|
|
—
|
|
|
—
|
|
|
142
|
|
||||
Total available-for-sale investments
|
294,982
|
|
|
43
|
|
|
(2,720
|
)
|
|
292,305
|
|
||||
Less amounts classified as cash equivalents
|
(70,279
|
)
|
|
—
|
|
|
—
|
|
|
(70,279
|
)
|
||||
Short-term investments
|
$
|
224,703
|
|
|
$
|
43
|
|
|
$
|
(2,720
|
)
|
|
$
|
222,026
|
|
(
in thousands
)
|
Amortized
Cost
|
|
Estimated Fair
Value
|
||||
Due in 1 year or less
|
$
|
200,786
|
|
|
$
|
200,171
|
|
Due in 1-2 years
|
83,229
|
|
|
82,094
|
|
||
Due in 2-5 years
|
36,201
|
|
|
35,575
|
|
||
Total investments in available-for-sale securities
|
$
|
320,216
|
|
|
$
|
317,840
|
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
(in thousands)
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value
|
|
Unrealized
Loss
|
||||||||||||
Corporate bonds
|
$
|
48,989
|
|
|
$
|
(814
|
)
|
|
$
|
51,168
|
|
|
$
|
(690
|
)
|
|
$
|
100,157
|
|
|
$
|
(1,504
|
)
|
Asset-backed securities
|
9,546
|
|
|
(45
|
)
|
|
3,929
|
|
|
(23
|
)
|
|
13,475
|
|
|
(68
|
)
|
||||||
U.S. government treasuries and agencies securities
|
15,522
|
|
|
(155
|
)
|
|
44,836
|
|
|
(690
|
)
|
|
60,358
|
|
|
(845
|
)
|
||||||
Total
|
$
|
74,057
|
|
|
$
|
(1,014
|
)
|
|
$
|
99,933
|
|
|
$
|
(1,403
|
)
|
|
$
|
173,990
|
|
|
$
|
(2,417
|
)
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
(in thousands)
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value
|
|
Unrealized
Loss
|
||||||||||||
Corporate bonds
|
$
|
78,726
|
|
|
$
|
(1,324
|
)
|
|
$
|
23,286
|
|
|
$
|
(380
|
)
|
|
$
|
102,012
|
|
|
$
|
(1,704
|
)
|
Asset-backed securities
|
14,147
|
|
|
(90
|
)
|
|
2,540
|
|
|
(20
|
)
|
|
16,687
|
|
|
(110
|
)
|
||||||
U.S. government treasuries and agencies securities
|
25,352
|
|
|
(221
|
)
|
|
34,920
|
|
|
(673
|
)
|
|
60,272
|
|
|
(894
|
)
|
||||||
International government bonds
|
—
|
|
|
—
|
|
|
2,638
|
|
|
(12
|
)
|
|
2,638
|
|
|
(12
|
)
|
||||||
Total
|
$
|
118,225
|
|
|
$
|
(1,635
|
)
|
|
$
|
63,384
|
|
|
$
|
(1,085
|
)
|
|
$
|
181,609
|
|
|
$
|
(2,720
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30,
2018 |
|
October 1,
2017 |
||||||||
Cost of revenues
|
$
|
829
|
|
|
$
|
763
|
|
|
$
|
1,857
|
|
|
$
|
1,396
|
|
Research and development
|
7,829
|
|
|
6,094
|
|
|
14,965
|
|
|
12,056
|
|
||||
Selling, general and administrative
|
6,979
|
|
|
6,092
|
|
|
13,878
|
|
|
11,317
|
|
||||
Total stock-based compensation expense
|
$
|
15,637
|
|
|
$
|
12,949
|
|
|
$
|
30,700
|
|
|
$
|
24,769
|
|
(in thousands)
|
September 30, 2018
|
|
April 1, 2018
|
||||
Inventories, net
|
|
|
|
||||
Raw materials
|
$
|
4,264
|
|
|
$
|
4,345
|
|
Work-in-process
|
36,017
|
|
|
45,713
|
|
||
Finished goods
|
20,797
|
|
|
18,644
|
|
||
Total inventories, net
|
$
|
61,078
|
|
|
$
|
68,702
|
|
Accounts receivable, net
|
|
|
|
||||
Accounts receivable, gross
|
$
|
131,283
|
|
|
$
|
120,953
|
|
Allowance for returns, price credits and doubtful accounts (1)
|
(1,878
|
)
|
|
(12,174
|
)
|
||
Total accounts receivable, net
|
$
|
129,405
|
|
|
$
|
108,779
|
|
Property, plant and equipment, net
|
|
|
|
|
|
||
Land
|
$
|
11,535
|
|
|
$
|
11,535
|
|
Machinery and equipment
|
298,818
|
|
|
285,784
|
|
||
Building and leasehold improvements
|
51,134
|
|
|
50,722
|
|
||
Total property, plant and equipment, gross
|
361,487
|
|
|
348,041
|
|
||
Less: accumulated depreciation (2)
|
(272,501
|
)
|
|
(261,196
|
)
|
||
Total property, plant and equipment, net
|
$
|
88,986
|
|
|
$
|
86,845
|
|
Other accrued liabilities
|
|
|
|
||||
Accrued restructuring costs (3)
|
$
|
2,340
|
|
|
$
|
4,637
|
|
Current income tax payable
|
4,736
|
|
|
6,281
|
|
||
Refund liabilities (1)
|
11,448
|
|
|
—
|
|
||
Other (4)
|
25,567
|
|
|
15,606
|
|
||
Total other accrued liabilities
|
$
|
44,091
|
|
|
$
|
26,524
|
|
Other long-term obligations
|
|
|
|
||||
Deferred compensation related liabilities
|
$
|
18,207
|
|
|
$
|
16,310
|
|
Other (5)
|
12,079
|
|
|
9,374
|
|
||
Total other long-term liabilities
|
$
|
30,286
|
|
|
$
|
25,684
|
|
(in thousands)
|
Cumulative translation adjustments
|
|
Unrealized gain (loss) on available-for-sale investments
|
|
Pension adjustments
|
|
Total
|
||||||||
Balance as of April 1, 2018
|
$
|
(2,151
|
)
|
|
$
|
(2,677
|
)
|
|
$
|
65
|
|
|
$
|
(4,763
|
)
|
Other comprehensive income (loss) before reclassifications
|
(2,999
|
)
|
|
301
|
|
|
—
|
|
|
(2,698
|
)
|
||||
Net current-period other comprehensive income (loss)
|
(2,999
|
)
|
|
301
|
|
|
—
|
|
|
(2,698
|
)
|
||||
Balance as of September 30, 2018
|
$
|
(5,150
|
)
|
|
$
|
(2,376
|
)
|
|
$
|
65
|
|
|
$
|
(7,461
|
)
|
|
Reportable Segments
|
||||||||||
(in thousands)
|
Communications
|
|
Computing, Consumer and Industrial
|
|
Total
|
||||||
Balance as of April 1, 2018
|
$
|
141,300
|
|
|
$
|
278,817
|
|
|
$
|
420,117
|
|
Reallocation of goodwill
|
(21,206
|
)
|
|
21,206
|
|
|
—
|
|
|||
Balance as of September 30, 2018
|
$
|
120,094
|
|
|
$
|
300,023
|
|
|
$
|
420,117
|
|
|
September 30, 2018
|
||||||||||
(in thousands)
|
Gross Assets
|
|
Accumulated
Amortization
|
|
Net Assets
|
||||||
Purchased intangible assets:
|
|
|
|
|
|
||||||
Developed technology
|
$
|
339,521
|
|
|
$
|
(236,496
|
)
|
|
$
|
103,025
|
|
Trademarks
|
5,391
|
|
|
(5,391
|
)
|
|
—
|
|
|||
Customer relationships
|
201,997
|
|
|
(155,501
|
)
|
|
46,496
|
|
|||
Intellectual property licenses
|
7,500
|
|
|
(4,500
|
)
|
|
3,000
|
|
|||
Software licenses
|
20,894
|
|
|
(2,411
|
)
|
|
18,483
|
|
|||
Total amortizable purchased intangible assets
|
575,303
|
|
|
(404,299
|
)
|
|
171,004
|
|
|||
In-process research and development (IPR&D)
|
3,882
|
|
|
—
|
|
|
3,882
|
|
|||
Total purchased intangible assets
|
$
|
579,185
|
|
|
$
|
(404,299
|
)
|
|
$
|
174,886
|
|
|
April 1, 2018
|
||||||||||||||
(in thousands)
|
Gross Assets
|
|
Impairment
|
|
Accumulated
Amortization
|
|
Net Assets
|
||||||||
Purchased intangible assets:
|
|
|
|
|
|
|
|
||||||||
Developed technology
|
$
|
336,402
|
|
|
$
|
—
|
|
|
$
|
(223,882
|
)
|
|
$
|
112,520
|
|
Trademarks
|
5,391
|
|
|
—
|
|
|
(5,391
|
)
|
|
—
|
|
||||
Customer relationships
|
201,997
|
|
|
—
|
|
|
(149,416
|
)
|
|
52,581
|
|
||||
Intellectual property licenses
|
7,500
|
|
|
—
|
|
|
(3,901
|
)
|
|
3,599
|
|
||||
Software licenses
|
6,023
|
|
|
—
|
|
|
(943
|
)
|
|
5,080
|
|
||||
Total amortizable purchased intangible assets
|
557,313
|
|
|
—
|
|
|
(383,533
|
)
|
|
173,780
|
|
||||
In-process research and development (IPR&D)
|
9,017
|
|
|
(2,016
|
)
|
|
—
|
|
|
7,001
|
|
||||
Total purchased intangible assets
|
$
|
566,330
|
|
|
$
|
(2,016
|
)
|
|
$
|
(383,533
|
)
|
|
$
|
180,781
|
|
Fiscal Year
|
Amount
|
||
2019 (Remaining 6 months)
|
$
|
22,585
|
|
2020
|
45,812
|
|
|
2021
|
44,856
|
|
|
2022
|
39,595
|
|
|
2023 and thereafter
|
18,156
|
|
|
Total amortizable purchased intangible assets
|
171,004
|
|
|
IPR&D
|
3,882
|
|
|
Total intangible assets
|
$
|
174,886
|
|
(in thousands)
|
Amount
|
||
Severance and related charges:
|
|
||
Balance as of April 1, 2018
|
$
|
4,637
|
|
Provision
|
1,891
|
|
|
Payments and other adjustments
|
(4,188
|
)
|
|
Balance as of September 30, 2018
|
$
|
2,340
|
|
Facility and related charges:
|
|
||
Balance as of April 1, 2018
|
$
|
2,281
|
|
Provision
|
315
|
|
|
Payments and other adjustments
|
(2,113
|
)
|
|
Balance as of September 30, 2018
|
$
|
483
|
|
(in thousands)
|
November 3, 2015
|
|
|
Liability component
|
|
||
Principal
|
$
|
274,435
|
|
Less: Issuance cost
|
(7,568
|
)
|
|
Net carrying amount
|
266,867
|
|
|
Equity component *
|
|
|
|
Allocated amount
|
99,316
|
|
|
Less: Issuance cost
|
(2,738
|
)
|
|
Net carrying amount
|
96,578
|
|
|
Convertible Notes, net
|
$
|
363,445
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30, 2018
|
|
October 1, 2017
|
||||||||
Contractual interest expense
|
$
|
827
|
|
|
$
|
827
|
|
|
$
|
1,654
|
|
|
$
|
1,653
|
|
Amortization of debt discount
|
3,391
|
|
|
3,210
|
|
|
6,736
|
|
|
6,377
|
|
||||
Amortization of debt issuance costs
|
270
|
|
|
270
|
|
|
540
|
|
|
540
|
|
||||
|
$
|
4,488
|
|
|
$
|
4,307
|
|
|
$
|
8,930
|
|
|
$
|
8,570
|
|
(in thousands)
|
September 30, 2018
|
||
Net carrying amount as of April 1, 2018
|
$
|
299,551
|
|
Amortization of debt issuance costs during the period
|
540
|
|
|
Amortization of debt discount during the period
|
6,736
|
|
|
Net carrying amount as of September 30, 2018
|
$
|
306,827
|
|
(in thousands)
|
September 30, 2018
|
|
April 1, 2018
|
||||
Outstanding principal balance
|
$
|
197,010
|
|
|
$
|
198,000
|
|
Unamortized debt issuance costs and debt discount
|
(4,517
|
)
|
|
(4,927
|
)
|
||
Outstanding principal, net of unamortized debt issuance costs and debt discount
|
$
|
192,493
|
|
|
$
|
193,073
|
|
Classified as follows:
|
|
|
|
||||
Current portion of bank loan
|
$
|
1,980
|
|
|
$
|
2,000
|
|
Long-term bank loan
|
$
|
190,513
|
|
|
$
|
191,073
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30, 2018
|
|
October 1, 2017
|
||||||||
Contractual interest expense
|
$
|
2,314
|
|
|
$
|
2,275
|
|
|
$
|
4,659
|
|
|
$
|
4,381
|
|
Amortization of debt issuance costs and debt discount
|
205
|
|
|
205
|
|
|
410
|
|
|
409
|
|
||||
Total
|
$
|
2,519
|
|
|
$
|
2,480
|
|
|
$
|
5,069
|
|
|
$
|
4,790
|
|
•
|
Communications segment: includes clock and timing solutions, radio frequency (RF), flow-control management such as multi-port products, telecommunication interface, high-speed static random access memory, first in and first out memory, digital logic and frequency control solutions and Serial RapidIO® switching solutions.
|
•
|
Computing, Consumer and Industrial segment: includes clock generation and distribution products, high-performance server memory interfaces, wireless power, PCI Express®, signal integrity, power management solutions, signal integrity products, optical interconnect, video distribution and contribution solutions and sensing products for mobile, automotive and industrial solutions.
|
Revenues by segment
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30, 2018
|
|
October 1, 2017
|
||||||||
(in thousands)
|
|
|
(1)
|
|
|
|
(1)
|
||||||||
Communications
|
$
|
73,384
|
|
|
$
|
61,957
|
|
|
$
|
140,470
|
|
|
$
|
118,505
|
|
Computing, Consumer and Industrial
|
162,100
|
|
|
142,441
|
|
|
323,530
|
|
|
282,606
|
|
||||
Total revenues
|
$
|
235,484
|
|
|
$
|
204,398
|
|
|
$
|
464,000
|
|
|
$
|
401,111
|
|
Income by segment
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30, 2018
|
|
October 1, 2017
|
||||||||
(in thousands)
|
|
|
(1)
|
|
|
|
(1)
|
||||||||
Communications
|
$
|
35,118
|
|
|
$
|
24,284
|
|
|
$
|
66,495
|
|
|
$
|
44,920
|
|
Computing, Consumer and Industrial
|
36,974
|
|
|
28,782
|
|
|
73,359
|
|
|
57,829
|
|
||||
Unallocated expenses:
|
|
|
|
|
|
|
|
||||||||
Amortization of intangible assets
|
(9,365
|
)
|
|
(8,963
|
)
|
|
(18,699
|
)
|
|
(19,804
|
)
|
||||
Inventory fair market value adjustment
|
—
|
|
|
(2,011
|
)
|
|
(790
|
)
|
|
(6,092
|
)
|
||||
Assets impairment and other
|
—
|
|
|
(917
|
)
|
|
—
|
|
|
(917
|
)
|
||||
Stock-based compensation
|
(15,637
|
)
|
|
(12,949
|
)
|
|
(30,700
|
)
|
|
(24,769
|
)
|
||||
Severance, retention and facility closure costs
|
(1,226
|
)
|
|
(4,179
|
)
|
|
(1,714
|
)
|
|
(4,832
|
)
|
||||
Acquisition-related costs and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,225
|
)
|
||||
Merger-related expenses
|
(3,884
|
)
|
|
—
|
|
|
(3,884
|
)
|
|
—
|
|
||||
Other-than-temporary impairment loss on investment
|
—
|
|
|
—
|
|
|
(2,000
|
)
|
|
—
|
|
||||
Interest expense and other, net
|
(5,266
|
)
|
|
(5,398
|
)
|
|
(11,489
|
)
|
|
(9,729
|
)
|
||||
Income before income taxes
|
$
|
36,714
|
|
|
$
|
18,649
|
|
|
$
|
70,578
|
|
|
$
|
34,381
|
|
(1) Prior period numbers have been adjusted to conform to the current organizational structure.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30,
2018 |
|
October 1,
2017 |
||||||||
Hong Kong
|
$
|
89,796
|
|
|
$
|
70,810
|
|
|
$
|
170,471
|
|
|
$
|
134,698
|
|
Rest of Asia Pacific
|
64,458
|
|
|
62,781
|
|
|
131,750
|
|
|
127,317
|
|
||||
Europe
|
31,219
|
|
|
32,024
|
|
|
60,973
|
|
|
56,356
|
|
||||
Korea
|
25,246
|
|
|
21,275
|
|
|
52,773
|
|
|
39,437
|
|
||||
Americas
(2)
|
24,765
|
|
|
17,508
|
|
|
48,033
|
|
|
43,303
|
|
||||
Total revenues
|
$
|
235,484
|
|
|
$
|
204,398
|
|
|
$
|
464,000
|
|
|
$
|
401,111
|
|
(in thousands)
|
September 30, 2018
|
|
April 1, 2018
|
||||
United States
|
$
|
40,224
|
|
|
$
|
41,230
|
|
Malaysia
|
32,430
|
|
|
28,264
|
|
||
Germany
|
9,233
|
|
|
10,210
|
|
||
All other countries
|
7,099
|
|
|
7,141
|
|
||
Total property, plant and equipment, net
|
$
|
88,986
|
|
|
$
|
86,845
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30, 2018
|
|
October 1, 2017
|
||||||||
Interest income
|
$
|
1,170
|
|
|
$
|
836
|
|
|
$
|
2,345
|
|
|
$
|
1,593
|
|
Other income, net
|
1,267
|
|
|
1,112
|
|
|
1,763
|
|
|
3,337
|
|
||||
Interest income and other, net
|
$
|
2,437
|
|
|
$
|
1,948
|
|
|
$
|
4,108
|
|
|
$
|
4,930
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands, except for percentage)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30,
2018 |
|
October 1,
2017 |
||||||||
Revenues
|
$
|
235,484
|
|
|
$
|
204,398
|
|
|
$
|
464,000
|
|
|
$
|
401,111
|
|
Gross profit
|
$
|
143,584
|
|
|
$
|
116,762
|
|
|
$
|
280,191
|
|
|
$
|
226,800
|
|
As a % of revenues
|
61
|
%
|
|
57
|
%
|
|
60
|
%
|
|
57
|
%
|
||||
Operating income
|
$
|
41,322
|
|
|
$
|
23,535
|
|
|
$
|
82,700
|
|
|
$
|
43,182
|
|
As a % of revenues
|
18
|
%
|
|
12
|
%
|
|
18
|
%
|
|
11
|
%
|
||||
Net income
|
$
|
35,500
|
|
|
$
|
18,680
|
|
|
$
|
66,220
|
|
|
$
|
35,394
|
|
As a % of revenues
|
15
|
%
|
|
9
|
%
|
|
14
|
%
|
|
9
|
%
|
Revenues by segment:
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30,
2018 |
|
October 1,
2017 |
||||||||
(in thousands)
|
|
|
(1)
|
|
|
|
(1)
|
||||||||
Communications
|
$
|
73,384
|
|
|
$
|
61,957
|
|
|
$
|
140,470
|
|
|
$
|
118,505
|
|
Computing, Consumer and Industrial
|
162,100
|
|
|
142,441
|
|
|
323,530
|
|
|
282,606
|
|
||||
Total revenues
|
$
|
235,484
|
|
|
$
|
204,398
|
|
|
$
|
464,000
|
|
|
$
|
401,111
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands, except for percentages)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30,
2018 |
|
October 1,
2017 |
||||||||
Gross Profit
|
$
|
143,584
|
|
|
$
|
116,762
|
|
|
$
|
280,191
|
|
|
$
|
226,800
|
|
Gross Profit Percentage
|
61.0
|
%
|
|
57.1
|
%
|
|
60.4
|
%
|
|
56.5
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30, 2018
|
|
October 1, 2017
|
||||||||||||||||
(in thousands, except for percentages)
|
Dollar Amount
|
% of Net
Revenue
|
|
Dollar Amount
|
% of Net
Revenue |
|
Dollar Amount
|
% of Net
Revenue |
|
Dollar Amount
|
% of Net
Revenue |
||||||||||||
Research and development
|
$
|
55,509
|
|
24
|
%
|
|
$
|
48,742
|
|
24
|
%
|
|
$
|
107,743
|
|
23
|
%
|
|
$
|
97,191
|
|
24
|
%
|
Selling, general and administrative
|
$
|
46,753
|
|
20
|
%
|
|
$
|
44,485
|
|
22
|
%
|
|
$
|
89,748
|
|
19
|
%
|
|
$
|
86,427
|
|
22
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||
(in thousands)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30, 2018
|
|
October 1, 2017
|
||||||
Contractual interest expense
|
3,141
|
|
|
3,102
|
|
|
6,313
|
|
|
6,034
|
|
||
Amortization of debt discount
|
3,391
|
|
|
3,210
|
|
|
6,736
|
|
|
6,377
|
|
||
Amortization of debt issuance costs
|
475
|
|
|
475
|
|
|
950
|
|
|
949
|
|
||
Other
|
38
|
|
|
47
|
|
|
231
|
|
|
371
|
|
||
Total interest expense
|
$
|
7,045
|
|
|
6,834
|
|
|
$
|
14,230
|
|
|
13,731
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30, 2018
|
|
October 1, 2017
|
||||||||
Interest income
|
$
|
1,170
|
|
|
$
|
836
|
|
|
$
|
2,345
|
|
|
$
|
1,593
|
|
Other income, net
|
1,267
|
|
|
1,112
|
|
|
1,763
|
|
|
3,337
|
|
||||
Interest income and other, net
|
$
|
2,437
|
|
|
$
|
1,948
|
|
|
$
|
4,108
|
|
|
$
|
4,930
|
|
•
|
various conditions to the closing of the Merger may not be satisfied or waived;
|
•
|
the pendency and outcome of any legal proceedings that may be instituted against us, our directors and others relating to the transactions contemplated by the Merger Agreement;
|
•
|
potential adverse effects on our relationships with our current suppliers and other business partners, or those with which we are seeking to establish business relationships;
|
•
|
the restrictions imposed on our business and operations under the Merger Agreement, which may prevent us from pursuing opportunities without Renesas’ approval or taking other actions, whether in the form of dividend payments, stock repurchases, restructurings, asset dispositions or otherwise, that we might have undertaken in the absence of this transaction;
|
•
|
that the Merger Agreement contains customary provisions that may limit our ability to pursue alternative sale proposals;
|
•
|
that we may forego opportunities we might otherwise have pursued absent the Merger Agreement;
|
•
|
the required regulatory approvals from governmental entities may delay the Merger or result in the imposition of conditions that could cause Renesas to abandon the Merger;
|
•
|
potential adverse effects on our ability to attract, recruit, retain and motivate current and prospective employees who may be uncertain about their future roles and relationships with us following the completion of the Merger; and
|
•
|
the significant diversion of our employees' and management's attention resulting from the transactions contemplated by the Merger Agreement.
|
•
|
we could be required to pay a termination fee of up to $166.4 million to Renesas under circumstances as described in the Merger Agreement;
|
•
|
we have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the Merger, and these fees and costs are payable by us regardless of whether the Merger is consummated;
|
•
|
the failure of the acquisition to be consummated may result in adverse publicity and a negative impression of us in the investment community;
|
•
|
the pendency and outcome of any legal proceedings may be instituted against us, our directors and others relating to the transactions contemplated by the Merger Agreement;
|
•
|
any disruptions to our business resulting from the announcement and pendency of the acquisition, including any adverse changes in our relationships with our customers, vendors and employees, may continue or intensify in the event the Merger is not consummated;
|
•
|
we may not be able to take advantage of alternative business opportunities or effectively respond to competitive pressures; and
|
•
|
we may experience employee departures.
|
•
|
global economic conditions, including those related to the credit markets;
|
•
|
the cyclicality of the semiconductor industry;
|
•
|
changes in the demand for and mix of products sold and in the markets we and our customers serve;
|
•
|
the availability of industry-wide wafer processing capacity;
|
•
|
the availability of industry-wide and package specific assembly subcontract capacity and related raw materials;
|
•
|
competitive pricing pressures;
|
•
|
the success and timing of new product and process technology announcements and introductions from us or our competitors;
|
•
|
potential loss of market share among a concentrated group of customers;
|
•
|
difficulty in attracting and retaining key personnel;
|
•
|
difficulty in predicting customer product requirements;
|
•
|
production difficulties and interruptions caused by our complex manufacturing and logistics operations;
|
•
|
limited control over our manufacturing and product delivery as a result of our reliance on subcontractors, foundry and other manufacturing services;
|
•
|
unrealized potential of acquired businesses and resulting assets impairment;
|
•
|
availability and costs of raw materials from a limited number of suppliers;
|
•
|
political, economic and health conditions in various geographic areas;
|
•
|
trade-relations disputes and/or tariffs imposed by various countries;
|
•
|
imposition and/or enforcement of U.S. export control restrictions or similar regulatory trade limitations;
|
•
|
timing and execution of plans and programs subject to foreign labor law requirements, including consultation with work councils;
|
•
|
reduced customer demand as a result of the impact from natural and/or man-made disasters which may adversely impact our customer's manufacturing capability or reduce our customer's ability to acquire critical materials or components to manufacture their end products;
|
•
|
costs associated with other events, such as intellectual property disputes or other litigation; and
|
•
|
legislative, tax, accounting, or regulatory changes or changes in their interpretation.
|
•
|
slow, uneven economic growth throughout the world;
|
•
|
uncertainty regarding macroeconomic conditions and/or an institutional or economic collapse in a geographic region;
|
•
|
geo-political events and security breaches throughout the world, such as armed conflict, civil or military unrest, political instability, terrorist activity, cyber attacks and data fraud or theft;
|
•
|
natural disasters and public health issues including pandemics and outbreaks of infectious diseases;
|
•
|
large scale disruptions in transportation, communications and information technology networks;
|
•
|
disruption from trade-relations disputes and/or tariffs imposed by various countries; and
|
•
|
imposition and/or enforcement of U.S. export control restrictions or similar regulatory trade limitations.
|
•
|
preserving customer, supplier and other important relationships of the acquired companies and the Company;
|
•
|
coordinating and integrating operations;
|
•
|
integrating financial forecasting and controls, procedures and reporting cycles;
|
•
|
combining and integrating information technology systems; and
|
•
|
integrating employees and related human resources systems and benefits, maintaining employee morale and retaining key employees.
|
•
|
limit our ability to use our cash flow or borrow additional funds for working capital, capital expenditures, acquisitions and general corporate and other purposes;
|
•
|
make it difficult for us to satisfy our financial obligations;
|
•
|
place us at a competitive disadvantage compared to our less leveraged competitors; and
|
•
|
increase our vulnerability to the impact of adverse economic and industry conditions.
|
•
|
writing off the value of inventory of such products;
|
•
|
disposing of products that cannot be fixed;
|
•
|
recalling such products that have been shipped to customers;
|
•
|
providing product replacements for, or modifications to, such products;
|
•
|
defending against litigation related to such products; and
|
•
|
paying penalties or damages attributable to the defect.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
(percentage of total revenues)
|
September 30, 2018
|
|
October 1, 2017
|
|
September 30, 2018
|
|
October 1, 2017
|
||||
Hong Kong
|
38
|
%
|
|
35
|
%
|
|
37
|
%
|
|
34
|
%
|
Rest of Asia Pacific
|
27
|
%
|
|
31
|
%
|
|
28
|
%
|
|
32
|
%
|
Europe
|
13
|
%
|
|
15
|
%
|
|
14
|
%
|
|
13
|
%
|
Korea
|
11
|
%
|
|
10
|
%
|
|
11
|
%
|
|
10
|
%
|
Americas
|
11
|
%
|
|
9
|
%
|
|
10
|
%
|
|
11
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
•
|
political instability and acts of war or terrorism, which could disrupt our manufacturing and logistical activities;
|
•
|
regulations regarding use of local employees and suppliers;
|
•
|
exposure to foreign employment practices and labor laws;
|
•
|
currency controls and fluctuations, devaluation of foreign currencies, hard currency shortages and exchange rate fluctuations;
|
•
|
changes in local economic conditions;
|
•
|
governmental regulation of taxation of our earnings and those of our personnel; and
|
•
|
changes in tax laws, import and export controls, tariffs and freight rates.
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased
as Part of
Publicly Announced Plans or Programs |
|
Approximate Dollar
Value of Shares that May Yet Be Purchased Under the Plans or Programs |
||||||
July 2, 2018 - July 29, 2018
|
420,600
|
|
|
$
|
33.78
|
|
|
420,600
|
|
|
$
|
443,279,770
|
|
July 30, 2018 - August 26, 2018
|
419,200
|
|
|
$
|
35.68
|
|
|
419,200
|
|
|
$
|
428,319,054
|
|
August 27, 2018 - September 30, 2018
|
224,000
|
|
|
$
|
40.06
|
|
|
224,000
|
|
|
$
|
419,343,712
|
|
Total
|
1,063,800
|
|
|
$
|
35.85
|
|
|
1,063,800
|
|
|
|
Exhibit Number
|
|
Exhibit Description
|
|
|
Agreement and Plan of Merger, dated September 10, 2018, by and between Integrated Device Technology, Inc. and Renesas Electronics Corporation. Incorporated by reference to Exhibit 2.1 to Form 8-K filed on September 11, 2018.
|
||
|
Restated Certificate of Incorporation, as amended to date. Incorporated by reference to Exhibit 3.1 to Form 10-K filed on May 21, 2012.
|
||
3.2
|
|
Certificate of Designations specifying the terms of the Series A Junior Participating Preferred Stock of Integrated Device Technology, Inc., as filed with the Secretary of State of the State of Delaware. Incorporated by reference to Exhibit 3.6 to Form 8-A filed on December 23, 1998.
|
|
|
Amended and Restated Bylaws of the Company, as amended and restated.
|
||
|
Indenture (including form of note), dated as of November 4, 2015, between Integrated Device Technology, Inc., and Wilmington Trust, National Association, as trustee. Incorporated by reference to Exhibit 4.1 to Form 8-K filed on November 4, 2015.
|
||
|
Amendment No.1 dated as of May 29, 2018, by and among JPMorgan Chase Bank, N.A. (and the other lenders party thereto) and Integrated Device Technology, Inc.
|
||
|
Credit Agreement, dated as of April 4, 2017, by and among JPMorgan Chase Bank, N.A. (and the other lenders party thereto) and Integrated Device Technology, Inc.
|
||
|
Share Purchase and Transfer Agreement, dated October 23, 2015, between Global ASIC GmbH, ELBER GmbH, Freistaat Sachsen, Integrated Device Technology Bermuda Ltd. and Integrated Device Technology, Inc. Incorporated by reference to Exhibit 10.1 to Form 10-Q filed on October 29, 2015.
|
||
|
Letter Agreement, dated October 29, 2015, between JPMorgan Chase Bank, National Association and Integrated Device Technology, Inc., regarding the Base Warrants. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on November 4, 2015.
|
||
|
Letter Agreement, dated October 29, 2015, between JPMorgan Chase Bank, National Association and Integrated Device Technology, Inc., regarding the Base Call Option Transaction. Incorporated by reference to Exhibit 10.2 to Form 8-K filed on November 4, 2015.
|
||
|
Letter Agreement, dated November 3, 2015, between JPMorgan Chase Bank, National Association and Integrated Device Technology, Inc., regarding the Additional Warrants. Incorporated by reference to Exhibit 10.3 to Form 8-K filed on November 4, 2015.
|
||
|
Letter Agreement, dated November 3, 2015, between JPMorgan Chase Bank, National Association and Integrated Device Technology, Inc., regarding the Additional Call Option Transaction. Incorporated by reference to Exhibit 10.4 to Form 8-K filed on November 4, 2015.
|
||
|
Master Confirmation—Uncollared Accelerated Share Repurchase dated November 2, 2015 between Integrated Device Technology, Inc. and JPMorgan Chase Bank, National Association. Incorporated by reference to Exhibit 10.5 to Form 8-K filed on November 4, 2015.
|
||
|
Master Confirmation—Uncollared Accelerated Share Repurchase dated November 2, 2015 between Integrated Device Technology, Inc. and Bank of America, N.A. Incorporated by reference to Exhibit 10.6 to Form 8-K filed on November 4, 2015.
|
||
|
Certification of Chief Executive Officer as required by Rule 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934, as amended.
|
||
|
Certification of Chief Financial Officer as required by Rule 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934, as amended.
|
||
32.1
*
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
*
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
|
XBRL Instance Document.
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
INTEGRATED DEVICE TECHNOLOGY, INC.
Registrant
|
|
|
By:
|
/s/ Gregory L. Waters
|
November 6, 2018
|
|
Gregory L. Waters
President and Chief Executive Officer
|
|
|
|
|
|
/s/ Brian C. White
|
November 6, 2018
|
|
Brian C. White
Senior Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
|
CONTENTS
|
||
Page
|
||
Article I STOCKHOLDERS
|
1
|
|
|
|
|
Section 1.1
|
Annual Meetings
|
1
|
Section 1.2
|
Special Meetings
|
1
|
Section 1.3
|
Notice of Meetings
|
1
|
Section 1.4
|
Adjournments
|
1
|
Section 1.5
|
Quorum
|
1
|
Section 1.6
|
Organization
|
2
|
Section 1.7
|
Voting; Proxies
|
2
|
Section 1.8
|
Action at Meeting
|
2
|
Section 1.9
|
Fixing Date for Determination of Stockholders of Record
|
3
|
Section 1.10
|
List of Stockholders Entitled to Vote
|
3
|
Section 1.11
|
Inspectors of Elections
|
3
|
Section 1.12
|
Notice of Business to be Brought Before a Meeting
|
4
|
Section 1.13
|
Notice of Nominations for Election to the Board of Directors
|
6
|
Section 1.14
|
Procedures for Stockholders to Call Special Meetings
|
9
|
Section 1.15
|
Action by Written Consent of Stockholders
|
11
|
|
|
|
Article II BOARD OF DIRECTORS
|
12
|
|
|
|
|
Section 2.1
|
Number; Qualifications
|
12
|
Section 2.2
|
Election; Resignation; Removal; Vacancies
|
12
|
Section 2.3
|
Regular Meetings
|
12
|
Section 2.4
|
Special Meetings
|
12
|
Section 2.5
|
Telephonic Meetings Permitted
|
13
|
Section 2.6
|
Quorum; Vote Required for Action
|
13
|
Section 2.7
|
Organization
|
13
|
Section 2.8
|
Written Action by Directors
|
13
|
Section 2.9
|
Powers
|
13
|
Section 2.10
|
Compensation of Directors
|
13
|
|
|
|
Article III COMMITTEES
|
13
|
|
|
|
|
Section 3.1
|
Committees
|
13
|
Section 3.2
|
Committee Rules
|
14
|
|
|
|
Article IV OFFICERS
|
14
|
|
|
|
|
Section 4.1
|
Generally
|
14
|
Section 4.2
|
Chief Executive Officer
|
14
|
Section 4.3
|
Chairman of the Board
|
15
|
Section 4.4
|
President
|
15
|
Section 4.5
|
Vice President
|
15
|
Section 4.6
|
Chief Financial Officer
|
15
|
Section 4.7
|
Treasurer
|
15
|
Section 4.8
|
Secretary
|
15
|
Section 4.9
|
Delegation of Authority
|
15
|
Section 4.10
|
Removal
|
15
|
|
|
|
Article V STOCK
|
15
|
|
|
|
|
Section 5.1
|
Certificates
|
15
|
Section 5.2
|
Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates
|
16
|
Section 5.3
|
Other Regulations
|
16
|
|
|
|
Article VI INDEMNIFICATION
|
16
|
|
|
|
|
Section 6.1
|
Indemnification of Officers and Directors
|
16
|
Section 6.2
|
Advance of Expenses
|
16
|
Section 6.3
|
Non-Exclusivity of Rights
|
16
|
Section 6.4
|
Indemnification Contracts
|
17
|
Section 6.5
|
Effect of Amendment
|
17
|
|
|
|
Article VII NOTICES
|
17
|
|
|
|
|
Section 7.1
|
Notice
|
17
|
Section 7.2
|
Waiver of Notice
|
17
|
|
|
|
Article VIII INTERESTED DIRECTORS
|
17
|
|
|
|
|
Section 8.1
|
Interested Directors; Quorum
|
17
|
|
|
|
Article IX MISCELLANEOUS
|
18
|
|
|
|
|
Section 9.1
|
Fiscal Year
|
18
|
Section 9.2
|
Seal
|
18
|
Section 9.3
|
Form of Records
|
18
|
Section 9.4
|
Reliance Upon Books and Records
|
18
|
Section 9.5
|
Certificate of Incorporation Governs
|
18
|
Section 9.6
|
Severability
|
18
|
Section 9.7
|
Stockholder Rights Plan
|
18
|
Section 9.8
|
Forum for Adjudication of Disputes
|
19
|
|
|
|
Article X AMENDMENT
|
19
|
|
|
|
|
Section 10.1
|
Amendments
|
19
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Integrated Device Technology, 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 functions):
|
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.
|
|
|
By:
|
/s/ Gregory L. Waters
|
Date:
|
November 6, 2018
|
|
Gregory L. Waters
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Integrated Device Technology, 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 functions):
|
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.
|
|
|
By:
|
/s/ Brian C. White
|
Date:
|
November 6, 2018
|
|
Brian C. White
Senior Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
By:
|
/s/ Gregory L. Waters
|
Date:
|
November 6, 2018
|
|
Gregory L. Waters
President and Chief Executive Officer
|
|
|
By:
|
/s/ Brian C. White
|
Date:
|
November 6, 2018
|
|
Brian C. White
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|