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Unaudited Quarterly Results
 12 Months Ended
Dec. 31, 2013
Unaudited Quarterly Results [Abstract]  
Unaudited Quarterly Results

16  Unaudited Quarterly Results

 

The Company's unaudited quarterly results are summarized below (in thousands, except per share data):

    First Second Third Fourth   
2013 Quarter Quarter Quarter Quarter Total
Net sales $ 430,338 $ 451,115 $ 457,317 $ 565,448 $ 1,904,218
Cost of sales   174,568   188,329   191,568   228,991   783,456
 Gross profit   255,770   262,786   265,749   336,457   1,120,762
Selling and administrative expenses   118,660   123,062   120,563   130,680   492,965
Research and development expenses   25,312   24,650   23,599   26,975   100,536
Purchased intangibles amortization   2,393   2,382   2,518   2,625   9,918
 Operating income   109,405   112,692   119,069   176,177   517,343
Other expense (Note 3)   -   (1,575)   -   -   (1,575)
Interest expense   (7,185)   (7,580)   (7,358)   (7,927)   (30,050)
Interest income   1,187   1,179   946   1,075   4,387
 Income from operations before               
  income taxes   103,407   104,716   112,657   169,325   490,105
Provision for income tax (benefit) expense   (17,652)   15,402   14,609   27,743   40,102
 Net income $ 121,059 $ 89,314 $ 98,048 $ 141,582 $ 450,003
Net income per basic common share   1.41   1.04   1.15   1.67   5.27
Weighted-average number of basic               
 common shares   86,049   85,482   85,185   85,006   85,426
Net income per diluted common share   1.39   1.03   1.14   1.65   5.20
Weighted-average number of diluted               
 common shares and equivalents   87,215   86,576   86,364   86,017   86,546

    First Second Third Fourth   
2012 Quarter Quarter Quarter Quarter Total
Net sales $ 420,458 $ 451,465 $ 449,952 $ 521,766 $ 1,843,641
Cost of sales   167,290   179,259   182,702   208,363   737,614
 Gross profit   253,168   272,206   267,250   313,403   1,106,027
Selling and administrative expenses   117,119   122,682   115,322   122,147   477,270
Research and development expenses   23,347   23,943   23,756   24,958   96,004
Purchased intangibles amortization   2,485   2,458   6,427   2,459   13,829
Litigation provisions   -   3,000   -   4,434   7,434
 Operating income   110,217   120,123   121,745   159,405   511,490
Interest expense   (6,491)   (6,878)   (7,107)   (7,597)   (28,073)
Interest income   769   1,031   1,184   1,224   4,208
 Income from operations before               
  income taxes   104,495   114,276   115,822   153,032   487,625
Provision for income tax expense (benefit)   15,829   16,552   16,713   (22,912)   26,182
 Net income $ 88,666 $ 97,724 $ 99,109 $ 175,944 $ 461,443
Net income per basic common share   1.00   1.11   1.13   2.03   5.25
Weighted-average number of basic               
 common shares   88,992   88,317   87,411   86,712   87,841
Net income per diluted common share   0.98   1.09   1.12   2.00   5.19
Weighted-average number of diluted               
 common shares and equivalents   90,269   89,381   88,451   87,851   88,979

The Company typically experiences an increase in sales in the fourth quarter, as a result of purchasing habits for capital goods of customers that tend to exhaust their spending budgets by calendar year end. Selling and administrative expenses are typically higher in the second and third quarters over the first quarter in each year as the Company's annual payroll merit increases take effect. Selling and administrative expenses will vary in the fourth quarter in relation to performance in the quarter and for the year.

 

In the first quarter of 2013, the Company recorded a $31 million net tax benefit related to the completion of tax audit examinations. In addition, the R&D Tax Credit was retroactively extended in January 2013 for the 2012 and 2013 tax years. The entire $3 million benefit related to the 2012 tax year was recorded in the first quarter of 2013, and the 2013 benefit is included in the annual effective tax rate (see Note 9). The Company recorded litigation provisions in the second and fourth quarters of 2012 for damages and fees estimated to be incurred in connection with complaints filed against the Company relating to patent infringement lawsuits (see Note 10). In the third quarter of 2012, the Company incurred a one-time $4 million charge to purchased intangibles amortization expense related to the discontinuance of a product trade name intangible asset (see Note 7). In the fourth quarter of 2012, the Company recorded a $36 million tax benefit related to the reduction in a deferred tax asset valuation reserve associated with the Company's refinancing of certain of its inter-company debt arrangements, which enabled the Company to recognize a deferred tax asset associated with a non-U.S. net operating loss carryforward (see Note 9). In the fourth quarter of 2012, the Company also recorded a $6 million tax benefit related to tax audit settlements in the U.S.