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Business Combinations | 9 Months Ended
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Mar. 31, 2017
Business Combinations [Abstract] |
Business Combinations | 2. Business Combinations On October 28, 2016 (the “Acquisition Date”), the Company completed the acquisition of Zebra Technologies Corporation’s (“Zebra”) wireless LAN assets (the “WLAN Business”). Under the terms of the purchase agreement, the Company acquired customers, employees, technology and other assets as well as assumed certain contracts and other liabilities of the WLAN Business, for cash consideration of $51.1 million. The purchase price consideration is provisional as it is still pending finalization of post close adjustments as defined in the purchase agreement. All accounts noted above are “preliminary” to the table below as all accounts are open. The acquisition has been accounted for using the acquisition method of accounting. The provisional purchase price has been allocated on a preliminary basis to tangible and intangible assets acquired and liabilities assumed. The final purchase price allocation is pending the finalization of valuations, which may result in an adjustment to the preliminary purchase price allocation. Also, additional information which existed as of the acquisition date, but was unknown to the Company at that time, may become known to the Company during the remainder of the measurement period (up to one year from the acquisition date), and may result in a change in the purchase price allocation. While management believes that its preliminary estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill. The following table below summarizes the preliminary allocation as of March 31, 2017 of the tangible and identifiable intangible assets acquired and liabilities assumed:
|  | Preliminary Allocation as of December 31, 2016 |  |  | Change during three months ended March 31, 2017 |  |  |  | Preliminary Allocation as of March 31, 2017 |
Receivables/net |  | $ | 17,818 |  |  | $ | (3,182 | ) | (a) |  | $ | 14,636 |
Inventory |  |  | 12,408 |  |  |  | 635 |  | (b) |  |  | 13,043 |
Other current assets |  |  | 808 |  |  |  | — |  |  |  |  | 808 |
Property and equipment |  |  | 1,780 |  |  |  | 1,379 |  | (c) |  |  | 3,159 |
Identifiable intangible assets |  |  | 20,500 |  |  |  | 100 |  | (d) |  |  | 20,600 |
In-process research and development |  |  | 1,600 |  |  |  | — |  |  |  |  | 1,600 |
Other assets |  |  | 7,634 |  |  |  | — |  |  |  |  | 7,634 |
Goodwill |  |  | 9,836 |  |  |  | 1,967 |  |  |  |  | 11,803 |
Current liabilities |  |  | (7,763 | ) |  |  | (273 | ) | (f) |  |  | (8,036 | )
Deferred revenue |  |  | (13,533 | ) |  |  | (626 | ) | (g) |  |  | (14,159 | )
Total purchase price allocation |  | $ | 51,088 |  |  | $ | - |  |  |  | $ | 51,088 |
The estimated purchase price has been allocated based on the preliminary estimates of the fair value of assets acquired and liabilities assumed as of the acquisition date. The fair value of working capital related items, such as other current assets and accrued liabilities, approximated their book values at the date of acquisition. Inventories were valued at fair value using the net realizable value approach. The fair value of property and equipment was determined using a cost approach. Valuations of the intangible assets were valued using income approaches based on projections provided by management, which we consider to be Level 3 inputs. The Company also continues to analyze the tax implications of the acquisition of the intangible assets which may ultimately impact the overall level of goodwill associated with the acquisition. The changes during the period in the table above is as follows: a) information on accounts receivable and related reserves of matters that existed as of the acquisition date; b) additional receipts of products; c) additional fixed assets acquired in India; d) revised net realizable value based on usefulness of asset; e) additional employee benefits assumed; f) additional maintenance contracts. The following table presents details of the identifiable intangible assets acquired as part of the acquisition (in thousands):
Intangible Assets |  | Estimated Useful Life (in years) |  | Amount |
Developed technology |  | 6 |  | $ | 14,600 |
Customer relationships |  | 4 |  |  | 3,400 |
Trademarks |  | 5 |  |  | 2,600 |
Total identifiable intangible assets |  |  |  | $ | 20,600 |
The amortization for the developed technology is recorded in “Cost of revenues” for product and the amortization for the remaining intangibles is recorded in “Amortization of intangibles” on the condensed consolidated statement of operations. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of the WLAN Business. The Company anticipates both the goodwill and intangible assets to be fully deductible for tax purposes. The Company also has an indefinite lived asset of $1.6 million which represents the fair value of in-process research and development activities. Once the related research and development efforts are completed, the Company will determine whether the asset will continue to be an indefinite lived asset or become a finite lived asset and apply the appropriate accounting accordingly. The results of operations of the WLAN Business are included in the consolidated results of operations beginning October 28, 2016. The Company incurred $7.6 million acquisition-related expenses of which $1.1 million was incurred in the three months ended March 31, 2017. Such acquisition-related costs are included in "Acquisition and integration costs" on the condensed consolidated statement of operations. The costs, which the Company expensed as incurred, consist primarily of professional fees to financial and legal advisors and IT consultants and companies. Pro forma financial information The following unaudited pro forma results of operations are presented as though the acquisition of the WLAN Business had occurred as of the beginning of the earliest period presented after giving effect to purchase accounting adjustments relating to inventories, deferred revenue, depreciation and amortization on acquired property and equipment and intangibles, acquisition costs, interest income and expense and related tax effects. The pro forma results of operations are not necessarily indicative of the combined results that would have occurred had the acquisition been consummated as of the earliest period presented, nor are they necessarily indicative of future operating results. The unaudited pro forma results do not include the impact of synergies, nor any potential impacts on current or future market conditions which could alter the unaudited pro forma results. The unaudited pro forma financial information for the three months ended March 31, 2017, are the results for Extreme for the three months ended March 31, 2017. The unaudited pro forma financial information for the three months ended March 31, 2016, combines the historical results for Extreme for that period, with the historical results of the WLAN Business for the same period. The unaudited pro forma financial information for the nine months ended March 31, 2017 combines the results for Extreme for the nine months ended March 31, 2017, which include the results of the WLAN Business subsequent to the acquisition date, and the historical results of the WLAN Business for the three months ended September 30, 2016 and the month ended October 28, 2016. The unaudited pro forma financial information for the nine months ended March 31, 2016, combines the historical results for Extreme for those periods, with the historical results of the WLAN Business for the nine months ended March 31, 2016. The following table summarizes the unaudited pro forma financial information (in thousands, except per share amounts):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | March 31, 2017 |  |  | March 31, 2016 |  |  | March 31, 2017 |  |  | March 31, 2016 |
Net revenues |  | $ | 148,664 |  |  | $ | 157,798 |  |  | $ | 462,689 |  |  | $ | 488,462 |
Net income (loss) |  | $ | (2,774 | ) |  | $ | (17,833 | ) |  | $ | (7,560 | ) |  | $ | (59,341 | )
Net earnings (loss) per share - basic |  | $ | (0.03 | ) |  | $ | (0.17 | ) |  | $ | (0.07 | ) |  | $ | (0.58 | )
Net earnings (loss) per share - diluted |  | $ | (0.03 | ) |  | $ | (0.17 | ) |  | $ | (0.07 | ) |  | $ | (0.58 | )
Shares used in per share calculation - basic |  |  | 109,213 |  |  |  | 104,104 |  |  |  | 107,531 |  |  |  | 102,486 |
Shares used in per share calculation - diluted |  |  | 109,213 |  |  |  | 104,104 |  |  |  | 107,531 |  |  |  | 102,486 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1497-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1490-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1392-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1486-128463 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4845-128472 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1524-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4922-128472 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4934-128472 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4926-128472 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=73530397&loc=SL65897772-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1383-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 + Details
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