XML 65 R10.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Balance Sheet Accounts | 3 Months Ended
--- | ---
Sep. 30, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Balance Sheet Accounts | Balance Sheet Accounts Cash, Cash Equivalents, Short-Term Investments and Marketable Securities Summary of Cash and Available-for-Sale Securities (in thousands)
| September 30, 2012 |  | June 30, 2012
Cash | $ | 25,132 |  |  | $ | 18,455 |
Cash equivalents | $ | 71,580 |  |  | $ | 36,141 |
Short-term investments | 40,827 |  |  | 23,358 |
Marketable securities | 65,065 |  |  | 75,561 |
Total available-for-sale | $ | 177,472 |  |  | $ | 135,060 |
Total cash and available for sale securities | $ | 202,604 |  |  | $ | 153,515 |
Available-for-Sale Securities The following is a summary of available-for-sale securities (in thousands):
| Amortized Cost |  | Fair Value |  | Unrealized Holding Gains |  | Unrealized Holding Losses
September 30, 2012 |  |  |  |  |  |  |
Money market funds | $ | 71,580 |  |  | $ | 71,580 |  |  | $ | — |  |  | $ | — |
U.S. corporate debt securities | 91,537 |  |  | 91,883 |  |  | 352 |  |  | (6 | )
U.S. government agency securities | 11,251 |  |  | 11,256 |  |  | 5 |  |  | — |
U.S. municipal bonds | 2,743 |  |  | 2,753 |  |  | 10 |  |  | — |
| $ | 177,111 |  |  | $ | 177,472 |  |  | $ | 367 |  |  | $ | (6 | )
Classified as: |  |  |  |  |  |  |
Cash equivalents | $ | 71,580 |  |  | $ | 71,580 |  |  | $ | — |  |  | $ | — |
Short-term investments | 40,701 |  |  | 40,827 |  |  | 126 |  |  | — |
Marketable securities | 64,830 |  |  | 65,065 |  |  | 241 |  |  | (6 | )
| $ | 177,111 |  |  | $ | 177,472 |  |  | $ | 367 |  |  | $ | (6 | )
June 30, 2012 |  |  |  |  |  |  |
Money market funds | $ | 36,141 |  |  | $ | 36,141 |  |  | $ | — |  |  | $ | — |
U.S. corporate debt securities | 84,882 |  |  | 84,949 |  |  | 148 |  |  | (81 | )
U.S. government agency securities | 11,241 |  |  | 11,234 |  |  | 3 |  |  | (10 | )
U.S. municipal bonds | 2,738 |  |  | 2,736 |  |  | — |  |  | (2 | )
| $ | 135,002 |  |  | $ | 135,060 |  |  | $ | 151 |  |  | $ | (93 | )
Classified as: |  |  |  |  |  |  |
Cash equivalents | $ | 36,141 |  |  | $ | 36,141 |  |  | $ | — |  |  | $ | — |
Short-term investments | 23,311 |  |  | 23,358 |  |  | 48 |  |  | (1 | )
Marketable securities | 75,550 |  |  | 75,561 |  |  | 103 |  |  | (92 | )
| $ | 135,002 |  |  | $ | 135,060 |  |  | $ | 151 |  |  | $ | (93 | )
The amortized cost and estimated fair value of available-for-sale investments in debt securities at September 30, 2012, by contractual maturity, were as follows (in thousands):
| Amortized Cost |  | Fair Value
Due in 1 year or less | $ | 40,701 |  |  | $ | 40,828 |
Due in 1-2 years | 35,353 |  |  | 35,443 |
Due in 2-5 years | 29,477 |  |  | 29,621 |
Due in more than 5 years | — |  |  | — |
Total investments in available for sale debt securities | $ | 105,531 |  |  | $ | 105,892 |
The Company considers highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Investments with maturities of greater than three months, but less than one year at the balance sheet date are classified as Short Term Investments. Investments with maturities of greater than one year at balance sheet date are classified as Marketable Securities. Except for direct obligations of the United States government, securities issued by agencies of the United States government, and money market funds, the Company diversifies its investments by limiting its holdings with any individual issuer. Investments include available-for-sale investment-grade debt securities that the Company carries at fair value. The Company accumulates unrealized gains and losses on the Company's available-for-sale debt securities, net of tax, in accumulated other comprehensive income in the stockholders' equity section of its balance sheets. Such an unrealized gain or loss does not reduce net income for the applicable accounting period. If the fair value of an available-for-sale debt instrument is less than its amortized cost basis, an other-than-temporary impairment is triggered in circumstances where (1) the Company intends to sell the instrument, (2) it is more likely than not that the Company will be required to sell the instrument before recovery of its amortized cost basis, or (3) the Company does not expect to recover the entire amortized cost basis of the instrument (that is, a credit loss exists). If the Company intends to sell or it is more likely than not that the Company will be required to sell the available-for-sale debt instrument before recovery of its amortized cost basis, the Company recognizes an other-than-temporary impairment in earnings equal to the entire difference between the debt instruments' amortized cost basis and its fair value. For available-for-sale debt instruments that are considered other-than-temporarily impaired due to the existence of a credit loss, if the Company does not intend to sell and it is not more likely than not that the Company will be required to sell the instrument before recovery of its remaining amortized cost basis (amortized cost basis less any current-period credit loss), the Company separates the amount of the impairment into the amount that is credit related and the amount due to all other factors. The credit loss component is recognized in earnings and is the difference between the debt instrument's amortized cost basis and the present value of its expected future cash flows. The remaining difference between the debt instrument's fair value and the present value of future expected cash flows is due to factors that are not credit related and is recognized in other comprehensive income. The following table presents the Company’s investments’ gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.
| Less than 12 months |  | 12 months or more |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
September 30, 2012 |  |  |  |  |  |  |  |  |  |  |
U.S. corporate debt securities | $ | 5,111 |  |  | $ | (6 | ) |  | $ | — |  |  | $ | — |  |  | $ | 5,111 |  |  | $ | (6 | )
U.S. government agency securities | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
U.S. municipal bonds | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
| $ | 5,111 |  |  | $ | (6 | ) |  | $ | — |  |  | $ | — |  |  | $ | 5,111 |  |  | $ | (6 | )
The Company determines the basis of the cost of a security sold or the amount reclassified out of accumulated other comprehensive income into earnings using the specific identification method. During the three months ended September 30, 2012 and October 2, 2011, realized gains or losses recognized on the sale of investments were not significant. As of September 30, 2012, three out of sixty-three investment securities had unrealized losses. The unrealized gains / (losses) on the Company’s investments were caused by interest rate fluctuations. Substantially all of the Company’s available-for-sale investments are investment grade government and corporate debt securities that have maturities of less than three years. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of its amortized costs. Inventories Inventory is stated at the lower of cost or market. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The Company reduces the carrying value of inventory to net realizable value based on excess and obsolete inventories which are primarily determined by age of inventory and future demand forecasts. At the point of the loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Any written down or obsolete inventory subsequently sold has not had a material impact on gross profit for any of the periods disclosed. Inventories at September 30, 2012 and June 30, 2012, respectively, were (in thousands):
| September 30, 2012 |  | June 30, 2012
Inventory | $ | 25,267 |  |  | $ | 27,964 |
Less: Excess and Obsolete Inventory | 2,513 |  |  | 1,355 |
Inventory, net | $ | 22,754 |  |  | $ | 26,609 |
Long-Lived Assets Long-lived assets include property and equipment, intangible assets, and service inventory. Property and equipment, and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets or asset groups may not be recoverable. If such facts and circumstances exist, the Company assesses the recoverability of these assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. The Company reduces the carrying value of service inventory to net realizable value based on excess and obsolete inventories which are primarily determined by age of inventory and future demand forecasts. On September 11, 2012, the Company completed the sale of its campus and accompanying 16 acres of land in Santa Clara, California for net cash proceeds of approximately $44.7 million. On September 12, 2012, the Company entered into an agreement with the buyer, whereby the Company will lease three of the four buildings comprising the campus, under a cancellable lease arrangement expiring on January 31, 2013 for one building and on August 31, 2014 for the remaining two buildings. The lease is terminable by the Company upon 30 days notice at any time before August 31, 2014. As of September 30, 2012, future minimum rent payments under the lease were $1.1 million for the remainder of fiscal 2013, $5.5 million in fiscal 2014 and $1.0 million in fiscal 2015. During the quarter ended September 30, 2012, the Company realized a gain of $11.7 million in connection with the sale of its campus, of which approximately $0.1 million was deferred and will be recognized ratable over the lease term expiring on January 31, 2013. Intangible Assets The following tables summarize the components of gross and net intangible asset balances (in thousands):
| Weighted Average Remaining Amortization Period |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
September 30, 2012 |  |  |  |  |  |  |
Patents | 7.4 years |  | $ | 1,800 |  |  | $ | 740 |  |  | $ | 1,060 |
License Agreements | 9.6 years |  | 10,157 |  |  | 6,542 |  |  | 3,615 |
Other Intangibles | 3.0 years |  | 659 |  |  | 331 |  |  | 328 |
|  |  | $ | 12,616 |  |  | $ | 7,613 |  |  | $ | 5,003 |
| Weighted Average Remaining Amortization Period |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
June 30, 2012 |  |  |  |  |  |  |
Patents | 7.4 years |  | $ | 1,800 |  |  | $ | 669 |  |  | $ | 1,131 |
License Agreements | 9.3 years |  | 10,158 |  |  | 6,231 |  |  | 3,927 |
Other Intangibles | 0.3 years |  | 324 |  |  | 276 |  |  | 48 |
|  |  | $ | 12,282 |  |  | $ | 7,176 |  |  | $ | 5,106 |
Amortization expense was $0.4 million and $0.5 million for the three months ended September 30, 2012 and October 2, 2011, respectively. Amortization expense expected to be recorded for each of the next five years is as follows (in thousands):
For the fiscal year ending: |
Remaining for fiscal 2013 | $ | 1,044 |
2014 | 916 |
2015 | 549 |
2016 | 375 |
2017 | 302 |
Thereafter | 1,817 |
Total | $ | 5,003 |
Service Inventory The Company holds service inventory to support customers who have purchased long term service contracts with a hardware replacement element.
| September 30, 2012 |  | June 30, 2012
Service Inventory | $ | 12,992 |  |  | $ | 13,109 |
Less: Excess and Obsolete Inventory | 4,947 |  |  | 5,074 |
Service Inventory, Net | $ | 8,045 |  |  | $ | 8,035 |
Deferred Revenue, Net Deferred revenue, net represents amounts for (i) deferred services revenue (support arrangements, professional services and training), and (ii) deferred product revenue net of the related cost of revenue when the revenue recognition criteria have not been met. The following table summarizes deferred revenue, net at September 30, 2012 and June 30, 2012, respectively (in thousands):
| September 30, 2012 |  | June 30, 2012
Deferred services | $ | 35,863 |  |  | $ | 37,708 |
Deferred product: |  |  |
Deferred revenue | 1,798 |  |  | 2,236 |
Deferred cost of sales | (370 | ) |  | (616 | )
Deferred product revenue, net | 1,428 |  |  | 1,620 |
Balance at end of period | 37,291 |  |  | 39,328 |
Less: current portion | 30,007 |  |  | 31,769 |
Non-current deferred revenue, net | $ | 7,284 |  |  | $ | 7,559 |
The Company offers for sale to its customers renewable support arrangements, including extended warranty contracts, that range from one to five years. Deferred support revenue is included within deferred revenue, net within the Services category above. The change in the Company’s deferred support revenue balance in relation to these arrangements was as follows (in thousands):
| Three Months Ended
| September 30, 2012 |  | October 2, 2011
Balance beginning of period | $ | 37,461 |  |  | $ | 35,802 |
New support arrangements | 12,537 |  |  | 14,600 |
Recognition of support revenue | (14,337 | ) |  | (14,672 | )
Balance end of period | 35,661 |  |  | 35,730 |
Less: current portion | 28,377 |  |  | 28,176 |
Non-current deferred revenue | $ | 7,284 |  |  | $ | 7,554 |
Deferred Distributors Revenue, Net of Cost of Sales to Distributors The Company records revenue from its distributors on a sell-through basis, recording deferred revenue and deferred cost of sales associated with all sales transactions to its distributors in “Deferred distributors revenue, net of cost of sales to distributors” in the liability section of its consolidated balance sheet. When the Company ships products to its distributors, legal title to the products passes to its distributors, and a legally enforceable obligation is created for the distributors to pay on a current basis. Therefore, the Company records a trade receivable at the contractual discount to the list selling price and relieves inventory for the cost of goods shipped to the distributor. The amount shown as “Total deferred distributors revenue, net of cost of sales to distributors” represents the deferred gross margin on sales to distributors based on contractual pricing. Distributors purchase products from the Company at a contractual discount based on geographic region and resell the Company's products at a very broad range of individually negotiated price points depending on competitive factors and other market conditions. A portion of the deferred revenue balance represents an amount of the distributors' original purchase price that will be remitted back to the distributors after resale transactions are reported to the Company. Therefore, the amount of gross margin the Company will recognize in future periods from distributor sales will be less than the deferred amount recorded for the original sale to the distributor as a result of the price concessions negotiated at the time of sell-through. The wide range and variability of negotiated price credits granted to distributors do not allow the Company to accurately estimate the portion of the balance in the deferred revenue that will be credited to the distributors in the future. Therefore, the Company does not reduce deferred revenue by anticipated future price credits; instead, price credits are recorded against revenue and accounts receivable when incurred, which is generally at the time the distributor sells the product. The following table summarizes deferred distributors revenue, net of cost of sales to distributors at September 30, 2012 and June 30, 2012, respectively (in thousands):
| September 30, 2012 |  | June 30, 2012
Deferred revenue | $ | 20,737 |  |  | $ | 20,361 |
Deferred cost of Sales | (4,985 | ) |  | (5,042 | )
Total deferred distributors revenue, net of cost of sales to distributors | $ | 15,752 |  |  | $ | 15,319 |
Guarantees and Product Warranties Upon issuance of a standard product warranty, the Company discloses and recognizes a liability for the obligation it assumes under the warranty. The following table summarizes the activity related to the Company’s product warranty liability during the three months ended September 30, 2012 and October 2, 2011:
| Three Months Ended
| September 30, 2012 |  | October 2, 2011
Balance beginning of period | $ | 2,871 |  |  | $ | 2,640 |
New warranties issued | 1,561 |  |  | 1,648 |
Warranty expenditures | (1,461 | ) |  | (1,586 | )
Balance end of period | $ | 2,971 |  |  | $ | 2,702 |
The Company’s standard hardware warranty period is typically 12 months from the date of shipment to end-users and 90 days for software. For certain access products, the Company offers a limited lifetime hardware warranty commencing on the date of shipment from the Company and ending five (5) years following the Company’s announcement of the end of sale of such product. Upon shipment of products to its customers, the Company estimates expenses for the cost to repair or replace products that may be returned under warranty and accrue a liability in cost of product revenue for this amount. The determination of the Company’s warranty requirements is based on actual historical experience with the product or product family, estimates of repair and replacement costs and any product warranty problems that are identified after shipment. The Company estimates and adjusts these accruals at each balance sheet date in accordance with changes in these factors. In the normal course of business to facilitate sales of its products, the Company indemnifies its resellers and end-user customers with respect to certain matters. The Company has agreed to hold the customer harmless against losses arising from a breach of intellectual property infringement or other claims made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. It is not possible to estimate the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on its operating results or financial position. Concentrations The Company may be subject to concentration of credit risk as a result of certain financial instruments consisting principally of marketable investments and accounts receivable. The Company has placed its investments with high-credit quality issuers. The Company does not invest an amount exceeding 10% of its combined cash, cash equivalents, short-term investments and marketable securities in the securities of any one obligor or maker, except for obligations of the United States government, obligations of United States government agencies and money market accounts. The Company performs ongoing credit evaluations of its customers and generally does not require collateral in exchange for credit. The following table sets forth major customers accounting for 10% or more of our net revenue. The amounts for the three months ended October 2, 2011 have been revised to correct previously disclosed amounts:
|  | Three Months Ended
|  | September 30, 2012 |  | October 2, 2011
Westcon Group Inc. |  | 15 | % |  | 16 | %
Scansource, Inc. |  | 12 | % |  | 15 | %
Ericsson AB |  | * |  |  | 13 | %
Tech Data Corporation |  | 10 | % |  | 10 | %
* Less than 10% of revenue |  |  |  |
The following table sets forth major customers accounting for 10% or more of our accounts receivable balance:
|  | September 30, 2012 |  | June 30, 2012
Ericsson AB |  | 16 | % |  | 21 | %
Scansource Inc. |  | 11 | % |  | * |
Westcon Group Inc. |  | 10 | % |  | 16 | %
* Less than 10% of accounts receivable |  |  |  |
Retirement of Treasury Stock During the quarter ended September 30, 2012, the Company retired 39,631,836 shares of treasury stock. These retired shares are now included in the Company's authorized but unissued shares. The retired shares had a carrying value of approximately $149.7 million, and upon the formal retirement of the shares, the Company reduced par value by approximately $0.1 million and additional paid-in capital by approximately $149.7 million.

X
- Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for supplemental balance sheet disclosures, including descriptions and amounts for assets, liabilities, and equity. + References No definition available. + Details
Name: | us-gaap_SupplementalBalanceSheetDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration