x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 77-0560433 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | ||||
(Do not check if a smaller reporting company) |
Page | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 6. | ||
Item 1. | Condensed Consolidated Financial Statements |
September 24, 2016 | December 26, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 130,996 | $ | 149,101 | |||
Short-term investments | 136,643 | 125,561 | |||||
Short-term restricted cash | 9,700 | — | |||||
Accounts receivable, net of allowance for doubtful accounts of $807 in 2016 and $630 in 2015 | 152,467 | 186,243 | |||||
Inventory | 231,528 | 174,699 | |||||
Prepaid expenses and other current assets | 30,520 | 29,511 | |||||
Total current assets | 691,854 | 665,115 | |||||
Property, plant and equipment, net | 120,137 | 110,861 | |||||
Intangible assets | 133,939 | 156,319 | |||||
Goodwill | 187,927 | 191,560 | |||||
Long-term investments | 72,439 | 76,507 | |||||
Cost-method investment | 19,500 | 14,500 | |||||
Long-term restricted cash | 6,467 | 5,310 | |||||
Other non-current assets | 4,196 | 4,009 | |||||
Total assets | $ | 1,236,459 | $ | 1,224,181 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 76,789 | $ | 92,554 | |||
Accrued expenses | 37,857 | 33,736 | |||||
Accrued compensation and related benefits | 37,942 | 49,887 | |||||
Accrued warranty | 15,875 | 17,889 | |||||
Deferred revenue | 38,063 | 42,977 | |||||
Total current liabilities | 206,526 | 237,043 | |||||
Long-term debt, net | 130,924 | 123,327 | |||||
Accrued warranty, non-current | 22,746 | 20,955 | |||||
Deferred revenue, non-current | 18,369 | 13,881 | |||||
Deferred tax liability | 31,419 | 35,731 | |||||
Other long-term liabilities | 18,161 | 16,183 | |||||
Commitments and contingencies (Note 16) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.001 par value Authorized shares – 25,000 and no shares issued and outstanding | — | — | |||||
Common stock, $0.001 par value Authorized shares – 500,000 as of September 24, 2016 and December 26, 2015 | |||||||
Issued and outstanding shares – 144,536 as of September 24, 2016 and 140,197 as of December 26, 2015 | 145 | 140 | |||||
Additional paid-in capital | 1,341,501 | 1,300,301 | |||||
Accumulated other comprehensive income (loss) | (6,010 | ) | 1,123 | ||||
Accumulated deficit | (527,322 | ) | (539,413 | ) | |||
Total Infinera Corporation stockholders’ equity | 808,314 | 762,151 | |||||
Noncontrolling interest | — | 14,910 | |||||
Total stockholders' equity | 808,314 | 777,061 | |||||
Total liabilities and stockholders’ equity | $ | 1,236,459 | $ | 1,224,181 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 24, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | ||||||||||||
Revenue: | |||||||||||||||
Product | $ | 156,188 | $ | 202,365 | $ | 599,802 | $ | 542,190 | |||||||
Services | 29,264 | 30,107 | 89,290 | 84,490 | |||||||||||
Total revenue | 185,452 | 232,472 | 689,092 | 626,680 | |||||||||||
Cost of revenue: | |||||||||||||||
Cost of product | 91,064 | 117,154 | 331,564 | 306,151 | |||||||||||
Cost of services | 9,786 | 12,513 | 32,842 | 32,816 | |||||||||||
Total cost of revenue | 100,850 | 129,667 | 364,406 | 338,967 | |||||||||||
Gross profit | 84,602 | 102,805 | 324,686 | 287,713 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 50,855 | 45,466 | 164,541 | 128,144 | |||||||||||
Sales and marketing | 27,960 | 24,721 | 88,434 | 67,298 | |||||||||||
General and administrative | 16,646 | 18,358 | 51,617 | 46,324 | |||||||||||
Total operating expenses | 95,461 | 88,545 | 304,592 | 241,766 | |||||||||||
Income (loss) from operations | (10,859 | ) | 14,260 | 20,094 | 45,947 | ||||||||||
Other income (expense), net: | |||||||||||||||
Interest income | 647 | 406 | 1,764 | 1,371 | |||||||||||
Interest expense | (3,313 | ) | (3,014 | ) | (9,644 | ) | (8,851 | ) | |||||||
Other gain (loss), net | (188 | ) | (3,293 | ) | (1,116 | ) | 1,788 | ||||||||
Total other income (expense), net | (2,854 | ) | (5,901 | ) | (8,996 | ) | (5,692 | ) | |||||||
Income (loss) before income taxes | (13,713 | ) | 8,359 | 11,098 | 40,255 | ||||||||||
Provision for (benefit from) income taxes | (2,416 | ) | (151 | ) | (725 | ) | 1,473 | ||||||||
Net income (loss) | (11,297 | ) | 8,510 | 11,823 | 38,782 | ||||||||||
Less: Loss attributable to noncontrolling interest | (125 | ) | — | (503 | ) | — | |||||||||
Net income (loss) attributable to Infinera Corporation | $ | (11,172 | ) | $ | 8,510 | $ | 12,326 | $ | 38,782 | ||||||
Net income (loss) per common share attributable to Infinera Corporation: | |||||||||||||||
Basic | $ | (0.08 | ) | $ | 0.06 | $ | 0.09 | $ | 0.30 | ||||||
Diluted | $ | (0.08 | ) | $ | 0.06 | $ | 0.08 | $ | 0.27 | ||||||
Weighted average shares used in computing net income (loss) per common share: | |||||||||||||||
Basic | 143,850 | 134,834 | 142,350 | 131,007 | |||||||||||
Diluted | 143,850 | 145,300 | 145,921 | 141,082 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 24, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | ||||||||||||
Net income (loss) | $ | (11,297 | ) | $ | 8,510 | $ | 11,823 | $ | 38,782 | ||||||
Other comprehensive income (loss): | |||||||||||||||
Unrealized gain (loss) on available-for-sale investments | (166 | ) | 90 | 476 | 279 | ||||||||||
Foreign currency translation adjustment | (4,107 | ) | 4,729 | (7,609 | ) | 4,699 | |||||||||
Net change in accumulated other comprehensive income (loss) | (4,273 | ) | 4,819 | (7,133 | ) | 4,978 | |||||||||
Less: Comprehensive loss attributable to noncontrolling interest | (125 | ) | — | (503 | ) | — | |||||||||
Comprehensive income (loss) attributable to Infinera Corporation | $ | (15,445 | ) | $ | 13,329 | $ | 5,193 | $ | 43,760 |
Nine Months Ended | |||||||
September 24, 2016 | September 26, 2015 | ||||||
Cash Flows from Operating Activities: | |||||||
Net income | $ | 11,823 | $ | 38,782 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 45,764 | 22,094 | |||||
Amortization of debt discount and issuance costs | 7,598 | 6,873 | |||||
Amortization of premium on investments | 925 | 2,405 | |||||
Stock-based compensation expense | 29,191 | 23,868 | |||||
Other loss (gain) | 261 | (448 | ) | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 33,044 | 28,838 | |||||
Inventory | (61,078 | ) | (8,901 | ) | |||
Prepaid expenses and other assets | (1,625 | ) | (6,058 | ) | |||
Accounts payable | (13,935 | ) | (2,339 | ) | |||
Accrued liabilities and other expenses | (7,580 | ) | (7,196 | ) | |||
Deferred revenue | (805 | ) | 700 | ||||
Accrued warranty | (179 | ) | 8,742 | ||||
Net cash provided by operating activities | 43,404 | 107,360 | |||||
Cash Flows from Investing Activities: | |||||||
Purchase of available-for-sale investments | (118,017 | ) | (126,940 | ) | |||
Proceeds from sales of available-for-sale investments | — | 67,303 | |||||
Proceeds from maturities and calls of investments | 110,554 | 178,717 | |||||
Acquisition of business, net of cash acquired | — | (144,445 | ) | ||||
Realized gain from forward contract for business acquisition | — | 1,053 | |||||
Purchase of cost-method investment | (5,000 | ) | — | ||||
Purchase of property and equipment | (32,878 | ) | (26,710 | ) | |||
Change in restricted cash | (4,950 | ) | 127 | ||||
Net cash used in investing activities | (50,291 | ) | (50,895 | ) | |||
Cash Flows from Financing Activities: | |||||||
Security pledge related to Squeeze-out Proceedings | (5,921 | ) | — | ||||
Acquisition of noncontrolling interest | (16,771 | ) | — | ||||
Proceeds from issuance of common stock | 16,486 | 23,433 | |||||
Minimum tax withholding paid on behalf of employees for net share settlement | (3,592 | ) | (5,043 | ) | |||
Net cash provided by (used in) financing activities | (9,798 | ) | 18,390 | ||||
Effect of exchange rate changes on cash | (1,420 | ) | (247 | ) | |||
Net change in cash and cash equivalents | (18,105 | ) | 74,608 | ||||
Cash and cash equivalents at beginning of period | 149,101 | 86,495 | |||||
Cash and cash equivalents at end of period | $ | 130,996 | $ | 161,103 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid for income taxes, net of refunds | $ | 5,557 | $ | 2,552 | |||
Cash paid for interest | $ | 1,445 | $ | 1,317 | |||
Supplemental schedule of non-cash investing activities: | |||||||
Transfer of inventory to fixed assets | $ | 5,211 | $ | 5,861 | |||
Common stock issued in connection with acquisition | $ | — | $ | 169,507 |
1. | Basis of Presentation and Significant Accounting Policies |
2. | Recent Accounting Pronouncements |
3. | Fair Value Measurements |
Level 1 | – | Quoted prices in active markets for identical assets or liabilities. | ||
Level 2 | – | Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||
Level 3 | – | Prices or valuations that require management inputs that are both significant to the fair value measurement and unobservable. |
As of September 24, 2016 | As of December 26, 2015 | ||||||||||||||||||||||||||||||
Fair Value Measured Using | Fair Value Measured Using | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Money market funds | $ | 35,629 | $ | — | $ | — | $ | 35,629 | $ | 37,829 | $ | — | $ | — | $ | 37,829 | |||||||||||||||
Certificates of deposit | — | 2,602 | — | 2,602 | — | 5,001 | — | 5,001 | |||||||||||||||||||||||
Commercial paper | — | 40,325 | — | 40,325 | — | 10,997 | — | 10,997 | |||||||||||||||||||||||
Corporate bonds | — | 105,160 | — | 105,160 | — | 163,400 | — | 163,400 | |||||||||||||||||||||||
U.S. agency notes | — | 9,782 | — | 9,782 | — | 10,717 | — | 10,717 | |||||||||||||||||||||||
U.S. treasuries | 56,209 | — | — | 56,209 | 24,851 | — | — | 24,851 | |||||||||||||||||||||||
Foreign currency exchange forward contracts | — | 208 | — | 208 | — | 490 | — | 490 | |||||||||||||||||||||||
Total assets | $ | 91,838 | $ | 158,077 | $ | — | $ | 249,915 | $ | 62,680 | $ | 190,605 | $ | — | $ | 253,285 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Foreign currency exchange forward contracts | $ | — | $ | (263 | ) | $ | — | $ | (263 | ) | $ | — | $ | (44 | ) | $ | — | $ | (44 | ) |
September 24, 2016 | |||||||||||||||
Adjusted Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Money market funds | $ | 35,629 | $ | — | $ | — | $ | 35,629 | |||||||
Certificates of deposit | 2,600 | 2 | — | 2,602 | |||||||||||
Commercial paper | 40,340 | — | (15 | ) | 40,325 | ||||||||||
Corporate bonds | 105,215 | 21 | (76 | ) | 105,160 | ||||||||||
U.S. agency notes | 9,787 | — | (5 | ) | 9,782 | ||||||||||
U.S. treasuries | 56,168 | 47 | (6 | ) | 56,209 | ||||||||||
Total available-for-sale investments | $ | 249,739 | $ | 70 | $ | (102 | ) | $ | 249,707 |
December 26, 2015 | |||||||||||||||
Adjusted Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Money market funds | $ | 37,829 | $ | — | $ | — | $ | 37,829 | |||||||
Certificates of deposit | 5,000 | 1 | — | 5,001 | |||||||||||
Commercial paper | 10,997 | — | — | 10,997 | |||||||||||
Corporate bonds | 163,797 | — | (397 | ) | 163,400 | ||||||||||
U.S. agency notes | 10,786 | — | (69 | ) | 10,717 | ||||||||||
U.S. treasuries | 24,894 | — | (43 | ) | 24,851 | ||||||||||
Total available-for-sale investments | $ | 253,303 | $ | 1 | $ | (509 | ) | $ | 252,795 |
4. | Cost-method Investments |
5. | Derivative Instruments |
As of September 24, 2016 | As of December 26, 2015 | ||||||||||||||||||||||
Gross Notional(1) | Prepaid Expense and Other Assets | Other Accrued Liabilities | Gross Notional(1) | Prepaid Expense and Other Assets | Other Accrued Liabilities | ||||||||||||||||||
Foreign currency exchange forward contracts | |||||||||||||||||||||||
Related to euro denominated receivables | $ | 24,207 | $ | — | $ | (262 | ) | $ | 46,753 | $ | 319 | $ | (44 | ) | |||||||||
Related to British pound denominated receivables | $ | 3,749 | 208 | — | $ | 6,686 | 171 | — | |||||||||||||||
Related to restricted cash | $ | 258 | — | (1 | ) | $ | 252 | — | — | ||||||||||||||
$ | 208 | $ | (263 | ) | $ | 490 | $ | (44 | ) |
(1) | Represents the face amounts of forward contracts that were outstanding as of the period noted. |
Cash | $ | 181,133 | |
Common stock (7.9 million shares) | 169,507 | ||
Total | $ | 350,640 |
Amounts Recognized as of Acquisition Date | Measurement Period Adjustments | Total | |||||||||
Cash | $ | 36,688 | $ | — | $ | 36,688 | |||||
Accounts receivable | 16,183 | — | 16,183 | ||||||||
Inventory | 19,886 | — | 19,886 | ||||||||
Other assets | 8,320 | — | 8,320 | ||||||||
Intangible assets, net | 161,845 | — | 161,845 | ||||||||
Goodwill | 187,220 | 669 | 187,889 | ||||||||
Current liabilities | (24,320 | ) | (800 | ) | (25,120 | ) | |||||
Deferred tax liabilities | (39,221 | ) | 131 | (39,090 | ) | ||||||
Long-term liabilities | (589 | ) | — | (589 | ) | ||||||
Noncontrolling interest | (15,372 | ) | — | (15,372 | ) | ||||||
Total net assets | $ | 350,640 | $ | — | $ | 350,640 |
Fair Value | Estimated Useful Life (Years) | ||||
Trade name | $ | 234 | 0.5 | ||
Customer relationships | 49,033 | 8 | |||
Developed technology | 92,450 | 5 | |||
In-process technology | 20,128 | N/A | |||
Total | $ | 161,845 |
September 24, 2016 | December 26, 2015 | ||||||
Beginning noncontrolling interest | $ | 14,910 | $ | — | |||
Noncontrolling interest investment | — | 15,373 | |||||
Acquisition of noncontrolling interest | (14,407 | ) | — | ||||
Loss attributable to noncontrolling interest | (503 | ) | (463 | ) | |||
Ending noncontrolling interest | $ | — | $ | 14,910 |
7. | Goodwill and Intangible Assets |
Balance as of December 26, 2015 | $ | 191,560 | |
Foreign currency translation adjustments | (3,633 | ) | |
Accumulated impairment loss | — | ||
Balance as of September 24, 2016 | $ | 187,927 |
September 24, 2016 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Useful Life (In Years) | |||||||||||
Intangible assets with finite lives: | ||||||||||||||
Trade names | $ | 234 | $ | (234 | ) | $ | — | — | ||||||
Customer relationships | 49,042 | (6,753 | ) | 42,289 | 6.9 | |||||||||
Developed technology | 100,285 | (21,213 | ) | 79,072 | 4.0 | |||||||||
Other intangible assets | 819 | (554 | ) | 265 | 4.9 | |||||||||
Total intangible assets with finite lives | $ | 150,380 | $ | (28,754 | ) | $ | 121,626 | 5.0 | ||||||
In-process technology | 12,313 | — | 12,313 | |||||||||||
Total intangible assets | $ | 162,693 | $ | (28,754 | ) | $ | 133,939 |
December 26, 2015 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Useful Life (In Years) | |||||||||||
Intangible assets with finite lives: | ||||||||||||||
Trade names | $ | 239 | $ | (168 | ) | $ | 71 | 0.2 | ||||||
Customer relationships | 49,991 | (2,197 | ) | 47,794 | 7.7 | |||||||||
Developed technology | 94,256 | (6,629 | ) | 87,627 | 4.6 | |||||||||
Other intangible assets | 819 | (513 | ) | 306 | 5.6 | |||||||||
Total intangible assets with finite lives | $ | 145,305 | $ | (9,507 | ) | $ | 135,798 | 5.7 | ||||||
In-process technology | 20,521 | — | 20,521 | |||||||||||
Total intangible assets | $ | 165,826 | $ | (9,507 | ) | $ | 156,319 |
Fiscal Years | |||||||||||||||||||||||||||
Total | Remainder of 2016 | 2017 | 2018 | 2019 | 2020 | 2021 and Thereafter | |||||||||||||||||||||
Total future amortization expense | $ | 121,626 | $ | 6,612 | $ | 26,487 | $ | 26,487 | $ | 25,879 | $ | 18,886 | $ | 17,275 |
8. | Balance Sheet Details |
September 24, 2016 | December 26, 2015 | ||||||
Inventory: | |||||||
Raw materials | $ | 37,199 | $ | 27,879 | |||
Work in process | 65,540 | 52,599 | |||||
Finished goods | 128,789 | 94,221 | |||||
Total inventory | $ | 231,528 | $ | 174,699 | |||
Property, plant and equipment, net: | |||||||
Computer hardware | $ | 12,741 | $ | 11,097 | |||
Computer software(1) | 26,718 | 22,548 | |||||
Laboratory and manufacturing equipment | 215,690 | 189,168 | |||||
Furniture and fixtures | 2,060 | 1,897 | |||||
Leasehold improvements | 43,048 | 38,946 | |||||
Construction in progress | 27,976 | 31,060 | |||||
Subtotal | $ | 328,233 | $ | 294,716 | |||
Less accumulated depreciation and amortization | (208,096 | ) | (183,855 | ) | |||
Total property, plant and equipment, net | $ | 120,137 | $ | 110,861 | |||
Accrued expenses: | |||||||
Loss contingency related to non-cancelable purchase commitments | $ | 6,293 | $ | 6,821 | |||
Professional and other consulting fees | 4,198 | 5,363 | |||||
Taxes payable | 4,532 | 3,295 | |||||
Royalties | 5,376 | 4,290 | |||||
Other accrued expenses | 17,458 | 13,967 | |||||
Total accrued expenses | $ | 37,857 | $ | 33,736 |
(1) | Included in computer software at September 24, 2016 and December 26, 2015 were $9.1 million and $7.9 million, respectively, related to an ERP system that the Company implemented. The unamortized ERP costs at September 24, 2016 and December 26, 2015 were $4.3 million and $4.0 million, respectively. |
9. | Accumulated Other Comprehensive Income (Loss) |
Unrealized Gain (Loss) on Other Available-for-Sale Securities | Foreign Currency Translation | Accumulated Tax Effect | Total | |||||||||||||
Balance at December 26, 2015 | $ | (506 | ) | $ | 2,389 | $ | (760 | ) | $ | 1,123 | ||||||
Net current-period other comprehensive income (loss) | 476 | (7,609 | ) | — | (7,133 | ) | ||||||||||
Balance at September 24, 2016 | $ | (30 | ) | $ | (5,220 | ) | $ | (760 | ) | $ | (6,010 | ) |
10. | Basic and Diluted Net Income (Loss) Per Common Share |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 24, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | ||||||||||||
Numerator: | |||||||||||||||
Net income (loss) attributable to Infinera Corporation | $ | (11,172 | ) | $ | 8,510 | $ | 12,326 | $ | 38,782 | ||||||
Denominator: | |||||||||||||||
Basic weighted average common shares outstanding | 143,850 | 134,834 | 142,350 | 131,007 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Employee equity plans | — | 5,397 | 2,580 | 5,911 | |||||||||||
Assumed conversion of convertible senior notes from conversion spread | — | 5,069 | 991 | 4,164 | |||||||||||
Diluted weighted average common shares outstanding | 143,850 | 145,300 | 145,921 | 141,082 | |||||||||||
Net income (loss) per common share attributable to Infinera Corporation | |||||||||||||||
Basic | $ | (0.08 | ) | $ | 0.06 | $ | 0.09 | $ | 0.30 | ||||||
Diluted | $ | (0.08 | ) | $ | 0.06 | $ | 0.08 | $ | 0.27 |
Three Months Ended | Nine Months Ended | ||||||||||
September 24, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | ||||||||
Stock options | 1,834 | 1 | 61 | 7 | |||||||
RSUs | 5,475 | 26 | 2,454 | 535 | |||||||
PSUs | 905 | — | 643 | 97 | |||||||
ESPP shares | 1,334 | 484 | 638 | 300 | |||||||
Total | 9,548 | 511 | 3,796 | 939 |
11. | Convertible Senior Notes |
• | during any fiscal quarter commencing after the fiscal quarter ended on March 28, 2013 (and only during such fiscal quarter) if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; |
• | during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; |
• | upon the occurrence of specified corporate events described under the Indenture, such as a consolidation, merger or binding share exchange; or |
• | at any time on or after December 1, 2017 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. |
September 24, 2016 | December 26, 2015 | ||||||
Principal | $ | 150,000 | $ | 150,000 | |||
Unamortized discount (1) | (17,565 | ) | (24,560 | ) | |||
Unamortized issuance cost (1) | (1,511 | ) | (2,113 | ) | |||
Net carrying amount | $ | 130,924 | $ | 123,327 |
(1) | Unamortized debt conversion discount and issuance costs will be amortized over the remaining life of the Notes, which is approximately 20 months. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 24, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | ||||||||||||
Contractual interest expense | $ | 656 | $ | 656 | $ | 1,969 | $ | 1,969 | |||||||
Amortization of debt issuance costs | 206 | 186 | 602 | 544 | |||||||||||
Amortization of debt discount | 2,391 | 2,162 | 6,996 | 6,328 | |||||||||||
Total interest expense | $ | 3,253 | $ | 3,004 | $ | 9,567 | $ | 8,841 |
12. | Stockholders’ Equity |
Number of Stock Options | Weighted-Average Exercise Price Per Share | Aggregate Intrinsic Value | ||||||||
Outstanding at December 26, 2015 | 2,511 | $ | 7.26 | $ | 28,288 | |||||
Stock options granted | — | $ | — | |||||||
Stock options exercised | (651 | ) | $ | 4.42 | $ | 4,158 | ||||
Stock options canceled | (26 | ) | $ | 12.38 | ||||||
Outstanding at September 24, 2016 | 1,834 | $ | 8.19 | $ | 1,761 | |||||
Exercisable at September 24, 2016 | 1,826 | $ | 8.19 | $ | 1,761 |
Number of Restricted Stock Units | Weighted- Average Grant Date Fair Value Per Share | Aggregate Intrinsic Value | ||||||||
Outstanding at December 26, 2015 | 4,932 | $ | 12.76 | $ | 91,285 | |||||
RSUs granted | 2,791 | $ | 14.32 | |||||||
RSUs released | (1,984 | ) | $ | 10.63 | $ | 23,948 | ||||
RSUs canceled | (263 | ) | $ | 13.74 | ||||||
Outstanding at September 24, 2016 | 5,476 | $ | 14.28 | $ | 48,461 |
Number of Performance Stock Units | Weighted- Average Grant Date Fair Value Per Share | Aggregate Intrinsic Value | ||||||||
Outstanding at December 26, 2015 | 731 | $ | 12.35 | $ | 13,540 | |||||
PSUs granted | 647 | $ | 15.28 | |||||||
PSUs performance earned(1) | 234 | $ | 12.28 | |||||||
PSUs released | (615 | ) | $ | 11.25 | $ | 8,077 | ||||
PSUs canceled | (92 | ) | $ | 15.21 | ||||||
Outstanding at September 24, 2016 | 905 | $ | 14.02 | $ | 8,008 | |||||
Expected to vest at September 24, 2016 | 195 | $ | 1,725 |
(1) | Represents the additional PSUs awarded resulting from the achievement of performance goals above the performance targets established at grant since the original grants were at 100% of target amounts. |
Unrecognized Compensation Expense, Net | Weighted- Average Period (in years) | ||||
Stock options | $ | 30 | 1.3 | ||
RSUs | $ | 60,952 | 2.6 | ||
PSUs | $ | 7,163 | 1.6 |
Three Months Ended | Nine Months Ended | ||||||
Employee Stock Purchase Plan | September 24, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | |||
Volatility | 67% | 39% | 56% - 67% | 39% - 53% | |||
Risk-free interest rate | 0.51% | 0.26% | 0.51% - 0.52% | 0.13% - 0.26% | |||
Expected life | 0.5 years | 0.5 years | 0.5 years | 0.5 years | |||
Estimated fair value | $3.16 | $6.43 | $3.16 - $4.53 | $5.15 - $6.43 | |||
Total stock-based compensation expense | $1,565 | $1,147 | $4,054 | $3,275 |
2016 | 2015 | 2014 | ||||
Index | SPGIIPTR | SPGIIPTR | SPGIIPTR | |||
Index volatility | 18% | 18% - 19% | 25% | |||
Infinera volatility | 55% | 48% | 49% - 50% | |||
Risk-free interest rate | 0.95% - 1.07% | 0.97% - 1.10% | 0.66% - 0.71% | |||
Correlation with index | 0.58 - 0.59 | 0.52 | 0.60 | |||
Estimated fair value | $10.31 - $16.62 | $18.08 - $19.29 | $6.59 - $7.60 |
Total Number of Performance Stock Units | 2013 | 2014 | 2015 | 2016 | |||||||||||
Outstanding at December 26, 2015 | 731 | 147 | 260 | 324 | — | ||||||||||
PSUs granted | 647 | — | — | — | 647 | ||||||||||
PSUs performance earned(1) | 234 | 70 | 53 | 111 | — | ||||||||||
PSUs released | (615 | ) | (211 | ) | (179 | ) | (225 | ) | — | ||||||
PSUs canceled | (92 | ) | (6 | ) | (11 | ) | (62 | ) | (13 | ) | |||||
Outstanding at September 24, 2016 | 905 | — | 123 | 148 | 634 |
(1) | Represents the additional PSUs awarded resulting from the achievement of performance goals above the performance targets established at grant since the original grants were at 100% of target amounts. |
September 24, 2016 | December 26, 2015 | ||||||
Stock-based compensation effects in inventory | $ | 4,378 | $ | 3,129 | |||
Stock-based compensation effects in property, plant and equipment, net | $ | 74 | $ | 93 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 24, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | ||||||||||||
Stock-based compensation effects included in net income (loss) before income taxes | |||||||||||||||
Cost of revenue | $ | 756 | $ | 645 | $ | 2,175 | $ | 1,740 | |||||||
Research and development | 3,496 | 2,788 | 9,721 | 8,183 | |||||||||||
Sales and marketing | 2,826 | 2,131 | 8,006 | 5,922 | |||||||||||
General and administration | 2,465 | 1,911 | 6,850 | 5,406 | |||||||||||
$ | 9,543 | $ | 7,475 | $ | 26,752 | $ | 21,251 | ||||||||
Cost of revenue – amortization from balance sheet (1) | 668 | 976 | 2,439 | 2,617 | |||||||||||
Total stock-based compensation expense | $ | 10,211 | $ | 8,451 | $ | 29,191 | $ | 23,868 |
(1) | Stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods and recognized in the current period. |
13. | Income Taxes |
14. | Segment Information |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 24, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | ||||||||||||
Americas: | |||||||||||||||
United States | $ | 104,045 | $ | 158,845 | $ | 445,270 | $ | 440,610 | |||||||
Other Americas | 17,390 | 20,874 | 31,916 | 39,944 | |||||||||||
121,435 | 179,719 | 477,186 | 480,554 | ||||||||||||
Europe, Middle East and Africa | 51,940 | 41,655 | 176,386 | 114,163 | |||||||||||
Asia Pacific and Japan | 12,077 | 11,098 | 35,520 | 31,963 | |||||||||||
Total revenue | $ | 185,452 | $ | 232,472 | $ | 689,092 | $ | 626,680 |
September 24, 2016 | December 26, 2015 | ||||||
United States | $ | 112,439 | $ | 102,702 | |||
Other Americas | 247 | 173 | |||||
112,686 | 102,875 | ||||||
Europe, Middle East and Africa | 4,447 | 5,417 | |||||
Asia Pacific and Japan | 3,004 | 2,569 | |||||
Total property, plant and equipment, net | $ | 120,137 | $ | 110,861 |
15. | Guarantees |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 24, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | ||||||||||||
Beginning balance | $ | 40,989 | $ | 28,439 | $ | 38,844 | $ | 27,040 | |||||||
Charges to operations | 5,196 | 10,791 | 19,258 | 22,158 | |||||||||||
Utilization | (5,002 | ) | (3,515 | ) | (13,691 | ) | (8,336 | ) | |||||||
Change in estimate(1) | (2,562 | ) | 1,026 | (5,790 | ) | (4,121 | ) | ||||||||
Balance at the end of the period | $ | 38,621 | $ | 36,741 | $ | 38,621 | $ | 36,741 |
(1) | The Company records hardware warranty liabilities based on the latest quality and cost information available as of that date. The changes in estimate shown here are due to changes in overall actual failure rates, the mix of new versus used units related to replacement of failed units, and changes in the estimated cost of repair. As the Company's products mature over time, failure rates and repair costs generally decline leading to favorable changes in warranty reserves. |
16. | Litigation and Contingencies |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended | ||||||||||||||||||||
September 24, 2016 | September 26, 2015 | |||||||||||||||||||
Amount | % of total revenue | Amount | % of total revenue | Change | % Change | |||||||||||||||
Revenue: | ||||||||||||||||||||
Product | $ | 156,188 | 84 | % | $ | 202,365 | 87 | % | $ | (46,177 | ) | (23 | )% | |||||||
Services | 29,264 | 16 | % | 30,107 | 13 | % | (843 | ) | (3 | )% | ||||||||||
Total revenue | $ | 185,452 | 100 | % | $ | 232,472 | 100 | % | $ | (47,020 | ) | (20 | )% | |||||||
Cost of revenue: | ||||||||||||||||||||
Product | $ | 91,064 | 49 | % | $ | 117,154 | 50 | % | $ | (26,090 | ) | (22 | )% | |||||||
Services | 9,786 | 5 | % | 12,513 | 5 | % | (2,727 | ) | (22 | )% | ||||||||||
Total cost of revenue | $ | 100,850 | 54 | % | $ | 129,667 | 55 | % | $ | (28,817 | ) | (22 | )% | |||||||
Gross profit | $ | 84,602 | 45.6 | % | $ | 102,805 | 44.2 | % | $ | (18,203 | ) | (18 | )% |
Nine Months Ended | ||||||||||||||||||||
September 24, 2016 | September 26, 2015 | |||||||||||||||||||
Amount | % of total revenue | Amount | % of total revenue | Change | % Change | |||||||||||||||
Revenue: | ||||||||||||||||||||
Product | $ | 599,802 | 87 | % | $ | 542,190 | 87 | % | $ | 57,612 | 11 | % | ||||||||
Services | 89,290 | 13 | % | 84,490 | 13 | % | 4,800 | 6 | % | |||||||||||
Total revenue | $ | 689,092 | 100 | % | $ | 626,680 | 100 | % | $ | 62,412 | 10 | % | ||||||||
Cost of revenue: | ||||||||||||||||||||
Product | $ | 331,564 | 48 | % | $ | 306,151 | 49 | % | $ | 25,413 | 8 | % | ||||||||
Services | 32,842 | 5 | % | 32,816 | 5 | % | 26 | — | % | |||||||||||
Total cost of revenue | $ | 364,406 | 53 | % | $ | 338,967 | 54 | % | $ | 25,439 | 8 | % | ||||||||
Gross profit | $ | 324,686 | 47.1 | % | $ | 287,713 | 45.9 | % | $ | 36,973 | 13 | % |
Three Months Ended | ||||||||||||||||||||
September 24, 2016 | September 26, 2015 | |||||||||||||||||||
Amount | % of total revenue | Amount | % of total revenue | Change | % Change | |||||||||||||||
Total revenue by geography: | ||||||||||||||||||||
Domestic | $ | 104,045 | 56 | % | $ | 158,846 | 68 | % | $ | (54,801 | ) | (34 | )% | |||||||
International | 81,407 | 44 | % | 73,626 | 32 | % | 7,781 | 11 | % | |||||||||||
$ | 185,452 | 100 | % | $ | 232,472 | 100 | % | $ | (47,020 | ) | (20 | )% | ||||||||
Total revenue by sales channel: | ||||||||||||||||||||
Direct | $ | 158,966 | 86 | % | $ | 216,679 | 93 | % | $ | (57,713 | ) | (27 | )% | |||||||
Indirect | 26,486 | 14 | % | 15,793 | 7 | % | 10,693 | 68 | % | |||||||||||
$ | 185,452 | 100 | % | $ | 232,472 | 100 | % | $ | (47,020 | ) | (20 | )% |
Nine Months Ended | ||||||||||||||||||||
September 24, 2016 | September 26, 2015 | |||||||||||||||||||
Amount | % of total revenue | Amount | % of total revenue | Change | % Change | |||||||||||||||
Total revenue by geography: | ||||||||||||||||||||
Domestic | $ | 445,270 | 65 | % | $ | 440,612 | 70 | % | $ | 4,658 | 1 | % | ||||||||
International | 243,822 | 35 | % | 186,068 | 30 | % | 57,754 | 31 | % | |||||||||||
$ | 689,092 | 100 | % | $ | 626,680 | 100 | % | $ | 62,412 | 10 | % | |||||||||
Total revenue by sales channel: | ||||||||||||||||||||
Direct | $ | 641,376 | 93 | % | $ | 591,057 | 94 | % | $ | 50,319 | 9 | % | ||||||||
Indirect | 47,716 | 7 | % | 35,623 | 6 | % | 12,093 | 34 | % | |||||||||||
$ | 689,092 | 100 | % | $ | 626,680 | 100 | % | $ | 62,412 | 10 | % |
Three Months Ended | ||||||||||||||||||||
September 24, 2016 | September 26, 2015 | |||||||||||||||||||
Amount | % of total revenue | Amount | % of total revenue | Change | % Change | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | $ | 50,855 | 27 | % | $ | 45,466 | 20 | % | $ | 5,389 | 12 | % | ||||||||
Sales and marketing | 27,960 | 15 | % | 24,721 | 11 | % | 3,239 | 13 | % | |||||||||||
General and administrative | 16,646 | 9 | % | 18,358 | 8 | % | (1,712 | ) | (9) | % | ||||||||||
Total operating expenses | $ | 95,461 | 51 | % | $ | 88,545 | 39 | % | $ | 6,916 | 8 | % |
Nine Months Ended | ||||||||||||||||||||
September 24, 2016 | September 26, 2015 | |||||||||||||||||||
Amount | % of total revenue | Amount | % of total revenue | Change | % Change | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | $ | 164,541 | 24 | % | $ | 128,144 | 20 | % | $ | 36,397 | 28 | % | ||||||||
Sales and marketing | 88,434 | 13 | % | 67,298 | 11 | % | 21,136 | 31 | % | |||||||||||
General and administrative | 51,617 | 7 | % | 46,324 | 7 | % | 5,293 | 11 | % | |||||||||||
Total operating expenses | $ | 304,592 | 44 | % | $ | 241,766 | 38 | % | $ | 62,826 | 26 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
September 24, 2016 | September 26, 2015 | Change | % Change | September 24, 2016 | September 26, 2015 | Change | % Change | ||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Interest income | $ | 647 | $ | 406 | $ | 241 | 59 | % | $ | 1,764 | $ | 1,371 | $ | 393 | 29 | % | |||||||||||||
Interest expense | (3,313 | ) | (3,014 | ) | (299 | ) | 10 | % | (9,644 | ) | (8,851 | ) | (793 | ) | 9 | % | |||||||||||||
Other gain (loss), net | (188 | ) | (3,293 | ) | 3,105 | (94 | )% | (1,116 | ) | 1,788 | (2,904 | ) | (162 | )% | |||||||||||||||
Total other income (expense), net | $ | (2,854 | ) | $ | (5,901 | ) | $ | 3,047 | (52 | )% | $ | (8,996 | ) | $ | (5,692 | ) | $ | (3,304 | ) | 58 | % |
Nine Months Ended | |||||||
September 24, 2016 | September 26, 2015 | ||||||
(In thousands) | |||||||
Net cash flow provided by (used in): | |||||||
Operating activities | $ | 43,404 | $ | 107,360 | |||
Investing activities | $ | (50,291 | ) | $ | (50,895 | ) | |
Financing activities | $ | (9,798 | ) | $ | 18,390 |
September 24, 2016 | December 26, 2015 | ||||||
(In thousands) | |||||||
Cash and cash equivalents | $ | 130,996 | $ | 149,101 | |||
Short and long-term investments | 209,082 | 202,068 | |||||
Short and long-term restricted cash | 16,167 | 5,310 | |||||
$ | 356,245 | $ | 356,479 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
• | fluctuations in demand, sales cycles and prices for products and services, including discounts given in response to competitive pricing pressures, as well as the timing of purchases by our key customers; |
• | changes in customers’ budgets for optical transport network equipment purchases and changes or variability in their purchasing cycles; |
• | fluctuations in our customer, product or geographic mix, including the impact of new customer deployments, which typically carry lower gross margins; |
• | the timing of product releases or upgrades by us; |
• | how quickly, or at all, the markets in which we operate adopt our solutions; |
• | the process of integrating the Transmode business with our business and the associated potential disruptions to our business; |
• | order cancellations or reductions or delays in delivery schedules by our customers; |
• | our ability to control costs, including our operating expenses and the costs of components we purchase for our products; |
• | our ability to maintain volumes and yields on products manufactured in our internal manufacturing facilities; |
• | any significant changes in the competitive dynamics of our market, including any new entrants, or customer or competitor consolidation; |
• | readiness of customer sites for installation of our products as well as the availability of third party suppliers to provide contract engineering and installation services for us; |
• | the timing of recognizing revenue in any given quarter, including the impact of revenue recognition standards and any future changes in U.S. GAAP or new interpretations of existing accounting rules; |
• | the impact of a significant natural disaster, such as an earthquake, severe weather, or tsunami or other flooding, as well as interruptions or shortages in the supply of utilities such as water and electricity, in a key location such as our Northern California facilities, which is located near major earthquake fault lines and in a designated flood zone; and |
• | general economic conditions in domestic and international markets. |
• | completion of product development, including the development and completion of our next-generation PICs and specialized ASICs, and the completion of associated module development, including modules developed by third parties; |
• | the qualification and multiple sourcing of critical components; |
• | validation of manufacturing methods and processes; |
• | extensive quality assurance and reliability testing and staffing of testing infrastructure; |
• | validation of software; and |
• | establishment of systems integration and systems test validation requirements. |
• | the mix in any period of the types of customers purchasing our products as well as the product mix; |
• | significant new deployments to existing and new customers, often with a higher portion of lower margin common equipment as we deploy network footprint; |
• | pricing and commercial terms designed to secure long-term customer relationships; |
• | the volume of Infinera Instant Bandwidth-enabled solutions sold, and Instant Bandwidth licenses activated; |
• | price discounts negotiated by our customers; |
• | charges for excess or obsolete inventory; |
• | changes in the price or availability of components for our products; |
• | changes in our manufacturing costs, including fluctuations in yields and production volumes; and |
• | increased warranty or repair costs. |
• | aggressively pricing their optical transport products and other portfolio products, including offering significant one-time discounts and guaranteed future price decreases; |
• | offering optical products at a substantial discount or for free when bundled together with the customers' router or wireless equipment purchases; |
• | providing financing, marketing and advertising assistance to customers; |
• | influencing customer requirements to emphasize different product capabilities, which better suit their products; |
• | offering to repurchase our equipment from existing customers; and |
• | asserting intellectual property rights. |
• | price and other commercial terms; |
• | functionality; |
• | power consumption; |
• | form factor or density; |
• | installation and operation simplicity; |
• | heat dissipation; |
• | encryption; |
• | software features; |
• | customer qualification testing; |
• | existing business and customer relationships; |
• | the ability of products and services to meet customers’ immediate and future network requirements; |
• | service and support; |
• | scalability and investment protection; and |
• | product lead times. |
• | reduced control over delivery schedules, particularly for international contract manufacturing sites; |
• | reliance on the quality assurance procedures of third parties; |
• | potential uncertainty regarding manufacturing yields and costs; |
• | potential lack of adequate capacity during periods of high demand; |
• | potential uncertainty related to the use of international contract manufacturing sites; |
• | limited warranties on components; |
• | potential misappropriation of our intellectual property; and |
• | potential manufacturing disruptions (including disruptions caused by geopolitical events, military actions or natural disasters). |
• | variations in our operating results; |
• | announcements of technological innovations, new services or service enhancements, the gain or loss of customers, strategic alliances or agreements by us or by our competitors; |
• | market conditions in our industry, the industries of our customers and the economy as a whole; |
• | changes in the estimates of our future operating results or external guidance on those results or changes in recommendations or business expectations by any securities analysts that elect to follow our common stock; |
• | recruitment or departure of key personnel; |
• | mergers and acquisitions by us or by our competitors; and |
• | adoption or modification of regulations, policies, procedures or programs applicable to our business. |
• | reduced demand for our products as a result of constraints on capital spending by our customers; |
• | increased price competition for our products, not only from our competitors, but also as a result of our customer’s or potential customer’s utilization of inventoried or underutilized products, which could put additional downward pressure on our near term gross profits; |
• | risk of excess or obsolete inventories; |
• | excess manufacturing capacity and higher associated overhead costs as a percentage of revenue; and |
• | more limited ability to accurately forecast our business and future financial performance. |
• | reduced orders from existing customers; |
• | declining interest from potential customers; |
• | delays in our ability to recognize revenue or in collecting accounts receivables; |
• | costs associated with fixing software or hardware defects or replacing products; |
• | high service and warranty expenses; |
• | delays in shipments; |
• | high inventory excess and obsolescence expense; |
• | high levels of product returns; |
• | diversion of our engineering personnel from our product development efforts; and |
• | payment of liquidated damages, performance guarantees or similar penalties. |
• | our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, litigation, general corporate or other purposes may be limited; |
• | a substantial portion of our future cash balance may be dedicated to the payment of the principal of our indebtedness as we have the intention to pay the principal amount of the Notes in cash upon conversion if specified conditions are met or when due, such that we would not have those funds available for use in our business; and |
• | if, upon any conversion of the Notes we are required to satisfy our conversion obligation with shares of our common stock or if a make-whole fundamental change occurs, our existing stockholders’ interest in us would be diluted. |
• | greater difficulty in collecting accounts receivable and longer collection periods; |
• | difficulties of managing and staffing international offices, and the increased travel, infrastructure and legal compliance costs associated with multiple international locations; |
• | political, social and economic instability, including wars, terrorism, political unrest, boycotts, curtailment of trade and other business restrictions; |
• | tariff and trade barriers and other regulatory requirements or contractual limitations on our ability to sell or develop our products in certain foreign markets; |
• | less effective protection of intellectual property than is afforded to us in the United States or other developed countries; |
• | local laws and practices that favor local companies, including business practices that we are prohibited from engaging in by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations; |
• | potentially adverse tax consequences; and |
• | effects of changes in currency exchange rates, particularly relative increases in the exchange rate of the U.S. dollar versus other currencies that could negatively affect our financial results and cash flows. |
• | changes in the valuation of our deferred tax assets and liabilities, and in deferred tax valuation allowances; |
• | changes in the relative proportions of revenues and income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates; |
• | changing tax laws, regulations, rates, and interpretations in multiple jurisdictions in which we operate; |
• | changes in accounting and tax treatment of equity-based compensation; |
• | changes to the financial accounting rules for income taxes; and |
• | the resolution of issues arising from tax audits. |
• | issue stock that would dilute our current stockholders’ percentage ownership; |
• | incur debt and assume other liabilities; |
• | use a substantial portion of our cash resources; or |
• | incur amortization expenses related to other intangible assets and/or incur large and immediate write-offs. |
• | problems integrating the acquired operations, technologies or products with our own; |
• | diversion of management’s attention from our core business; |
• | adverse impact on overall company operating results; |
• | adverse effects on existing business relationships with suppliers and customers; |
• | risks associated with entering new markets; and |
• | loss of key employees. |
• | authorize the issuance of “blank check” convertible preferred stock that could be issued by our board of directors to thwart a takeover attempt; |
• | establish a classified board of directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following their election; |
• | require that directors only be removed from office for cause and only upon a supermajority stockholder vote; |
• | provide that vacancies on the board of directors, including newly-created directorships, may be filled only by a majority vote of directors then in office rather than by stockholders; |
• | prevent stockholders from calling special meetings; and |
• | prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders. |
Item 6. | Exhibits |
Exhibit No. | Description | |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted 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 |
Infinera Corporation | ||
By: | /s/ BRAD FELLER | |
Brad Feller Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) | ||
Date: | November 1, 2016 |
By: | /s/ THOMAS J. FALLON |
Thomas J. Fallon | |
Chief Executive Officer | |
(Principal Executive Officer) |
By: | /s/ BRAD FELLER |
Brad Feller | |
Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
Date: | November 1, 2016 | /s/ THOMAS J. FALLON | |
Thomas J. Fallon | |||
Chief Executive Officer | |||
(Principal Executive Officer) |
Date: | November 1, 2016 | /s/ BRAD FELLER | |
Brad Feller | |||
Chief Financial Officer | |||
(Principal Financial and Accounting Officer) |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 24, 2016 |
Oct. 28, 2016 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 24, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | INFN | |
Entity Registrant Name | INFINERA CORP | |
Entity Central Index Key | 0001138639 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 144,573,314 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 24, 2016 |
Dec. 26, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Net of allowance for doubtful accounts | $ 807 | $ 630 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, authorized shares (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 144,536,000 | 140,197,000 |
Common stock, shares outstanding (in shares) | 144,536,000 | 140,197,000 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
|
Revenue: | ||||
Product | $ 156,188 | $ 202,365 | $ 599,802 | $ 542,190 |
Services | 29,264 | 30,107 | 89,290 | 84,490 |
Total revenue | 185,452 | 232,472 | 689,092 | 626,680 |
Cost of revenue: | ||||
Cost of product | 91,064 | 117,154 | 331,564 | 306,151 |
Cost of services | 9,786 | 12,513 | 32,842 | 32,816 |
Total cost of revenue | 100,850 | 129,667 | 364,406 | 338,967 |
Gross profit | 84,602 | 102,805 | 324,686 | 287,713 |
Operating expenses: | ||||
Research and development | 50,855 | 45,466 | 164,541 | 128,144 |
Sales and marketing | 27,960 | 24,721 | 88,434 | 67,298 |
General and administrative | 16,646 | 18,358 | 51,617 | 46,324 |
Total operating expenses | 95,461 | 88,545 | 304,592 | 241,766 |
Income (loss) from operations | (10,859) | 14,260 | 20,094 | 45,947 |
Other income (expense), net: | ||||
Interest income | 647 | 406 | 1,764 | 1,371 |
Interest expense | (3,313) | (3,014) | (9,644) | (8,851) |
Other gain (loss), net | (188) | (3,293) | (1,116) | 1,788 |
Total other income (expense), net | (2,854) | (5,901) | (8,996) | (5,692) |
Income (loss) before income taxes | (13,713) | 8,359 | 11,098 | 40,255 |
Provision for (benefit from) income taxes | (2,416) | (151) | (725) | 1,473 |
Net income (loss) | (11,297) | 8,510 | 11,823 | 38,782 |
Less: Loss attributable to noncontrolling interest | (125) | 0 | (503) | 0 |
Net income (loss) attributable to Infinera Corporation | $ (11,172) | $ 8,510 | $ 12,326 | $ 38,782 |
Net income (loss) per common share attributable to Infinera Corporation: | ||||
Basic (in usd per share) | $ (0.08) | $ 0.06 | $ 0.09 | $ 0.30 |
Diluted (in usd per share) | $ (0.08) | $ 0.06 | $ 0.08 | $ 0.27 |
Weighted average shares used in computing net income (loss) per common share: | ||||
Basic (in shares) | 143,850 | 134,834 | 142,350 | 131,007 |
Diluted (in shares) | 143,850 | 145,300 | 145,921 | 141,082 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (11,297) | $ 8,510 | $ 11,823 | $ 38,782 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on available-for-sale investments | (166) | 90 | 476 | 279 |
Foreign currency translation adjustment | (4,107) | 4,729 | (7,609) | 4,699 |
Net change in accumulated other comprehensive income (loss) | (4,273) | 4,819 | (7,133) | 4,978 |
Less: Comprehensive loss attributable to noncontrolling interest | (125) | 0 | (503) | 0 |
Comprehensive income (loss) attributable to Infinera Corporation | $ (15,445) | $ 13,329 | $ 5,193 | $ 43,760 |
Basis of Presentation and Significant Accounting Policies |
9 Months Ended |
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Sep. 24, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation Infinera Corporation (the "Company") prepared its interim condensed consolidated financial statements that accompany these notes in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"), consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the fiscal year ended December 26, 2015. The Company has made certain estimates, assumptions and judgments that can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Significant estimates, assumptions and judgments made by management include revenue recognition, stock-based compensation, inventory valuation, accrued warranty, business combinations, fair value measurement of investments and accounting for income taxes. Other estimates, assumptions and judgments made by management include allowances for sales returns, allowances for doubtful accounts, useful life of intangible assets, property, plant and equipment, and fair value measurement of the liability component of the Company's $150.0 million of 1.75% convertible senior notes due June 1, 2018 (the "Notes"). Management believes that the estimates and judgments upon which they rely are reasonable based upon information available to them at the time that these estimates and judgments are made. To the extent there are material differences between these estimates and actual results, the Company’s condensed consolidated financial statements will be affected. The interim financial information is unaudited, but reflects all adjustments that are, in management’s opinion, necessary to provide a fair presentation of results for the interim periods presented. All adjustments are of a normal recurring nature. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The Company reclassified certain amounts reported in previous periods to conform to the current presentation. This interim information should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 26, 2015. For the three and nine months ended September 24, 2016, cost of revenue was lower by $2.0 million related to a change in estimate associated with the treatment of manufacturing variances as the Company transitioned the former Transmode business onto the Company’s enterprise resource planning ("ERP") system. To date, a few of the Company’s customers have accounted for a significant portion of its revenue. For the three months ended September 24, 2016, two customers individually accounted for 16% and 12% of the Company's total revenue, respectively, and for the corresponding period in 2015, two customers individually accounted for 26% and 16% of the Company's total revenue, respectively. For the nine months ended September 24, 2016, two customers individually accounted for 16% and 10% of the Company's total revenue, respectively, and for the corresponding period in 2015, two customers individually accounted for 18% and 15% of the Company's total revenue, respectively. There have been no material changes in the Company’s significant accounting policies for the nine months ended September 24, 2016 as compared to those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 26, 2015, with the exception of the Company's adoption of Accounting Standards Update 2016-09, "Improvements to Employee Share-Based Payment Accounting") ("ASU 2016-09"). For more information, see Note 2, "Recent Accounting Pronouncements" to the Notes to Condensed Consolidated Financial Statements. |
Recent Accounting Pronouncements |
9 Months Ended |
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Sep. 24, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update 2016-15, "Statement of Cash Flows (Topic 320): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain transactions are presented and classified in the statement of cash flows. This guidance is effective for the Company in its first quarter of fiscal 2018 and will be applied on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-15 will have on its condensed consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for the Company in its first quarter of fiscal 2020 and early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-13 will have on its condensed consolidated financial statements. In May 2016, the FASB issued Accounting Standards Update 2016-11, "Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update)" ("ASU 2016-11"), which rescinds various standards codified as part of Topic 605, Revenue Recognition in relation to the future adoption of Topic 606. These rescissions include changes to topics pertaining to revenue and expense recognition for freight services in process, accounting for shipping and handling fees and costs, and accounting for consideration given by a vendor to a customer. This guidance is effective for the Company in its first quarter of fiscal 2018 and early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-11 will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, which includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements, including the income tax effects of share-based payments and accounting for forfeitures. ASU 2016-09 requires companies to record excess tax benefits and tax deficiencies as income tax benefit or expense in the statement of operations when the awards vest or are settled, eliminates the requirement to reclassify cash flows related to excess tax benefits from operating activities to financing activities on the statement of cash flows, and allows for an accounting policy election to either estimate the number of forfeitures (current U.S. GAAP) or account for forfeitures when they occur, amongst other provisions. This standard provides for prospective, retrospective, or modified retrospective adoption of each of the changes. ASU 2016-09 is effective for the Company in its first quarter of fiscal 2017 and early adoption is permitted. The Company elected to early adopt ASU 2016-09 as of its third fiscal quarter beginning on June 26, 2016. The Company also elected to change its accounting policy to account for forfeitures when they occur on a modified retrospective basis. The adoption of ASU 2016-09 and the change in the Company’s accounting policy resulted in a $0.2 million increase to additional paid-in capital and accumulated deficit as of December 26, 2015. The Company also recorded $0.3 million of stock-based compensation expense during the three months ended September 24, 2016 to true-up for the differential between the amount of stock-based compensation cost previously recorded for the first six months ended June 25, 2016 and the amount that would have been recorded without assuming forfeitures. Additionally, the Company adopted the change in presentation in the condensed consolidated statement of cash flows related to excess tax benefits on a prospective basis. Accordingly, prior periods have not been adjusted. There was no impact for the change in presentation in the condensed consolidated statement of cash flows related to statutory tax withholding requirements as the Company has historically classified the statutory tax withholding as a financing activity in its consolidated statement of cash flows. In February 2016, the FASB issued Accounting Standards Update 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). For lessees, leases will continue to be classified as either operating or financing in the income statement. This guidance is effective for the Company in its first quarter of fiscal 2019 and early adoption is permitted. ASU 2016-02 is required to be applied with a modified retrospective approach and requires application of the new standard at the beginning of the earliest comparative period presented. The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial statements. In September 2015, the FASB issued Accounting Standards Update 2015-16, "Business Combinations and Simplifying the Accounting for Measurement-Period Adjustments" ("ASU 2015-16"), which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The Company adopted ASU 2015-16 during the first quarter of fiscal 2016. The Company's adoption of ASU 2015-16 had no impact on the Company's financial position, results of operations or cash flow. In July 2015, the FASB issued Accounting Standards Update 2015-11, "Simplifying the Measurement of Inventory" ("ASU 2015-11"), to simplify the guidance on the subsequent measurement of inventory, excluding inventory measured using last-in, first-out or the retail inventory method. Under ASU 2015-11, inventory should be at the lower of cost and net realizable value. This guidance is effective for the Company in its first quarter of fiscal 2017 and early adoption permitted. The Company is currently evaluating the impact the adoption of ASU 2015-11 will have on its consolidated financial statements. In April 2015, the FASB issued Accounting Standards Update 2015-03, "Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"), which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. The Company adopted ASU 2015-03 during the first quarter of fiscal 2016. The December 26, 2015 balance sheet was retrospectively adjusted to reclassify $2.1 million from other non-current assets to a reduction of the Notes payable liability. In May 2014, the FASB issued Accounting Standards Update 2014-09, "Revenue from Contracts from Customers" ("ASU 2014-09"), which creates a single, joint revenue standard that is consistent across all industries and markets for companies that prepare their financial statements in accordance with GAAP. Under ASU 2014-09, an entity is required to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to receive in exchange for those goods or services. In July 2015, the FASB decided to delay the effective date of the new revenue standard by one year. In April 2016, the FASB issued Accounting Standards Update 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing," which clarifies the implementation guidance on identifying performance obligations and licensing. In May 2016, the FASB issued Accounting Standards Update 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients," which amends the guidance on collectability, noncash consideration, presentation of sales tax and transition. These standards will be effective for the Company's first quarter of 2018. The Company is currently evaluating the impact of these new standards on its consolidated financial statements. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Pursuant to the accounting guidance for fair value measurements and its subsequent updates, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Valuation techniques used by the Company are based upon observable and unobservable inputs. Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions about market participant assumptions based on the best information available. Observable inputs are the preferred source of values. These two types of inputs create the following fair value hierarchy:
The Company measures its cash equivalents, foreign currency exchange forward contracts and marketable debt securities at fair value and classifies its investments in accordance with the fair value hierarchy. The Company’s money market funds and U.S. treasuries are classified within Level 1 of the fair value hierarchy and are valued based on quoted prices in active markets for identical securities. The Company classifies its certificates of deposit, commercial paper, U.S. agency notes, corporate bonds and foreign currency exchange forward contracts within Level 2 of the fair value hierarchy as follows: Certificates of Deposit The Company reviews market pricing and other observable market inputs for the same or similar securities obtained from a number of industry standard data providers. In the event that a transaction is observed for the same or similar security in the marketplace, the price on that transaction reflects the market price and fair value on that day. In the absence of any observable market transactions for a particular security, the fair market value at period end would be equal to the par value. These inputs represent quoted prices for similar assets or these inputs have been derived from observable market data. Commercial Paper The Company reviews market pricing and other observable market inputs for the same or similar securities obtained from a number of industry standard data providers. In the event that a transaction is observed for the same or similar security in the marketplace, the price on that transaction reflects the market price and fair value on that day and then follows a revised accretion schedule to determine the fair market value at period end. In the absence of any observable market transactions for a particular security, the fair market value at period end is derived by accreting from the last observable market price. These inputs represent quoted prices for similar assets or these inputs have been derived from observable market data accreted mathematically to par. U.S. Agency Notes The Company reviews trading activity and pricing for its U.S. agency notes as of the measurement date. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from a number of industry standard data providers. These inputs represent quoted prices for similar assets in active markets or these inputs have been derived from observable market data. Corporate Bonds The Company reviews trading activity and pricing for each of the corporate bond securities in its portfolio as of the measurement date and determines if pricing data of sufficient frequency and volume in an active market exists in order to support Level 1 classification of these securities. If sufficient quoted pricing for identical securities is not available, the Company obtains market pricing and other observable market inputs for similar securities from a number of industry standard data providers. In instances where multiple prices exist for similar securities, these prices are used as inputs into a distribution-curve to determine the fair market value at period end. Foreign Currency Exchange Forward Contracts As discussed in Note 5, "Derivative Instruments" to the Notes to Condensed Consolidated Financial Statements, the Company mainly holds non-speculative foreign exchange forward contracts to hedge certain foreign currency exchange exposures. The Company estimates the fair values of derivatives based on quoted market prices or pricing models using current market rates. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit risk, foreign exchange rates, and forward and spot prices for currencies. The following tables represent the Company’s fair value hierarchy for its assets and liabilities measured at fair value on a recurring basis (in thousands):
During the three and nine months ended September 24, 2016, there were no transfers of assets or liabilities between Level 1 and Level 2 of the fair value hierarchy. Investments at fair value were as follows (in thousands):
As of September 24, 2016, the Company’s available-for-sale investments have a contractual maturity term of up to 24 months. Gross realized gains and losses on short-term and long-term investments for the three and nine months ended September 24, 2016 and September 26, 2015 were insignificant in all periods. The specific identification method is used to account for gains and losses on available-for-sale investments. As of September 24, 2016 and December 26, 2015, the Company held $90.4 million and $98.4 million of cash in banks, respectively, excluding restricted cash. |
Cost-method Investments |
9 Months Ended |
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Sep. 24, 2016 | |
Investments, All Other Investments [Abstract] | |
Cost-method Investments | Cost-method Investments On September 20, 2016, the Company invested $5.0 million in a privately-held company. In addition to the $5.0 million investment, the transaction included a customer supply agreement and warrants to purchase $10 million of additional preferred stock. The warrants vest and become exercisable upon certain conditions being met. As of September 24, 2016, the Company had investments totaling $19.5 million in two privately-held companies. These investments are accounted for as cost-method investments as the Company owns less than 20% of the voting securities and does not have the ability to exercise significant influence over operating and financial policies of either entity. The investments are carried at historical cost in the Company's condensed consolidated financial statements. The Company regularly evaluates the carrying value of these cost-method investments for impairment. If the Company believes that the carrying value of the cost basis investments is in excess of estimated fair value, the Company’s policy is to record an impairment charge in other income (expense), net, in the accompanying condensed consolidated statements of operations to adjust the carrying value to estimated fair value, when the impairment is deemed other-than-temporary. As of September 24, 2016, no event had occurred that would adversely affect the carrying value of these investments and thus no impairment charges have been recorded for these cost-method investments. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments Foreign Currency Exchange Forward Contracts The Company transacts business in various foreign currencies and has international sales, cost of sales, and expenses denominated in foreign currencies, and carries foreign-currency-denominated monetary assets and liabilities, subjecting the Company to foreign currency risk. The Company’s primary foreign currency risk management objective is to protect the U.S. dollar value of future cash flows and minimize the volatility of reported earnings. The Company utilizes foreign currency forward contracts, primarily short term in nature. Historically, the Company enters into foreign currency exchange forward contracts to manage its exposure to fluctuation in foreign exchange rates that arise from its euro and British pound denominated receivables and restricted cash balances. Gains and losses on these contracts are intended to offset the impact of foreign exchange rate fluctuations on the underlying foreign currency denominated accounts receivables and restricted cash, and therefore, do not subject the Company to material balance sheet risk. During 2016, the Company also entered into foreign currency exchange contracts to reduce the volatility of cash flows primarily related to forecasted revenues and expenses denominated in euro, British pound and Swedish kronor ("SEK"). The contracts are settled for U.S. dollars and SEK at maturity and at rates agreed to at inception of the contracts. The gains and losses on these foreign currency derivatives are recorded to the condensed consolidated statement of operations line item, in the current period, to which the item that is being economically hedged is recorded. For the three months ended September 24, 2016 and September 26, 2015, the before-tax effect of the foreign currency exchange forward contracts were a loss of $0.2 million and a gain of $0.3 million, respectively, and for the nine months ended September 24, 2016 and September 26, 2015, the before-tax effect of the foreign currency exchange forward contracts were a loss of $0.8 million and a loss of $3.1 million, respectively. In each of these periods, the impact of the gross gains and losses were offset by foreign exchange rate fluctuations on the underlying foreign currency denominated amounts. As of September 24, 2016, the Company did not designate foreign currency exchange forward contracts as hedges for accounting purposes and accordingly, changes in the fair value are recorded in the accompanying condensed consolidated statements of operations. These contracts were with two high-quality institutions and the Company consistently monitors the creditworthiness of the counterparties. The fair value of derivative instruments in the Company’s condensed consolidated balance sheets was as follows (in thousands):
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Business Combination |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination | Business Combination On August 20, 2015 (the "Acquisition Date”), the Company completed its public offer to the shareholders of Transmode AB ("Transmode"), acquiring 95.8% of the outstanding common shares and voting interest in Transmode. Transmode is a metro packet-optical networking company based in Stockholm, Sweden. The combination of the two companies brings together a complementary set of customers, products, and technologies into one company. With the acquisition of Transmode, the Company now offers an end-to-end product portfolio of packet-optical solutions for metro, data center interconnect, long-haul and subsea networks. Shortly after the Acquisition Date, the Company initiated compulsory acquisition proceedings in accordance with Swedish law (the "Squeeze-out Proceedings") in order to acquire the remaining 4.2%, or 1.2 million Transmode shares, not tendered through the end of the offer period. As of the Acquisition Date, the fair value of the noncontrolling interest was approximately $15.4 million, which was based on the implied enterprise value of Transmode at the Acquisition Date. In August 2016, the Company received advance title and paid an undisputed purchase price of $16.8 million to acquire the remaining 4.2% of Transmode shares not tendered in the initial offer. The additional $16.8 million paid resulted in the elimination of the noncontrolling interest and an increase in additional paid-in capital. As of September 24, 2016, the Company continues to maintain a security pledge of approximately $5.9 million required by Swedish law until a final adjustment, if any, is determined. The final amount and timing of the final disposition are currently uncertain and will be determined by an arbitration tribunal at the completion of the Squeeze-out Proceedings. The Company has accounted for this transaction as a business combination in exchange for total consideration of $350.6 million, which consisted of the following (in thousands, except shares):
The fair value of the 7.9 million shares of common stock issued was determined based on the closing market price of the Company’s common stock on the Acquisition Date. The Company allocated the fair value of the purchase price of the acquisition to the tangible and intangible assets acquired as well as liabilities assumed, based on their estimated fair values. The excess of the purchase price over the fair values of these identifiable assets and liabilities was recorded as goodwill. The Company prepared an initial determination of the fair value of assets acquired and liabilities assumed as of the acquisition date using preliminary information. In accordance with Accounting Standard Codification 805, "Business Combinations," during the measurement period an acquirer shall retrospectively adjust the provisional amounts recognized at the acquisition date to reflect information obtained about facts and circumstances that existed as of the Acquisition Date that, if known, would have affected the measurement of the amounts recognized as of the Acquisition Date. Accordingly, the Company has recognized measurement period adjustments made during the first quarter of 2016 to the fair value of certain assets acquired and liabilities assumed as a result of additional information obtained. These adjustments were retrospectively applied to the Acquisition Date balance sheet. None of the adjustments had an impact on the Company’s previously reported results of operations. The following table summarizes the Company’s allocation of the purchase consideration based on the fair value of assets acquired and liabilities assumed as of the Acquisition Date (in thousands):
The following table presents details of the identified intangible assets acquired at the Acquisition Date (in thousands):
Goodwill generated from this business combination is primarily attributable to the synergies from combining the operations of Transmode with that of the Company, which resulted in expanded selling opportunities of both metro and long-haul solutions. The goodwill recognized is not tax deductible for Swedish income tax purposes. Noncontrolling interest was as follows (in thousands):
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net tangible and identified intangible assets acquired. The following table presents details of the Company’s goodwill during the nine months ended September 24, 2016 (in thousands):
The gross carrying amount of goodwill may change due to the effects of foreign currency fluctuations as these assets are denominated in SEK. Intangible Assets The following tables present details of the Company’s intangible assets as of September 24, 2016 and December 26, 2015 (in thousands):
The gross carrying amount of intangible assets and the related amortization expense of intangible assets may change due to the effects of foreign currency fluctuations as these assets are denominated in SEK. Amortization expense was $6.7 million and $19.8 million for the three and nine months ended September 24, 2016, respectively, and was $2.6 million for the three and nine months ended September 26, 2015. Intangible assets are carried at cost less accumulated amortization. Amortization expenses are recorded to the appropriate cost and expense categories. During the nine months ended September 24, 2016, the Company transferred $7.8 million of its in-process technology to developed technology, which is being amortized over a maximum useful life of 7 years. In-process technology of $12.3 million as of September 24, 2016 is not subject to amortization. As such, the Company excluded it in the future amortization expense table below. The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of September 24, 2016 (in thousands):
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Balance Sheet Details |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Details | Balance Sheet Details The following table provides details of selected balance sheet items (in thousands):
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Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) includes certain changes in equity that are excluded from net income. The following table sets forth the changes in accumulated other comprehensive income (loss) by component for the nine months ended September 24, 2016 (in thousands):
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Basic and Diluted Net Income (Loss) Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Net Income (Loss) Per Common Share | Basic and Diluted Net Income (Loss) Per Common Share Basic net income (loss) per common share is computed by dividing net income (loss) attributable to Infinera Corporation by the weighted average number of common shares outstanding during the period. Diluted net income (loss) attributable to Infinera Corporation per common share is computed using net income (loss) attributable to Infinera Corporation and the weighted average number of common shares outstanding plus potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of outstanding stock options, assumed release of outstanding restricted stock units ("RSUs") and performance stock units ("PSUs"), and assumed issuance of common stock under the Company’s 2007 Employee Stock Purchase Plan ("ESPP") using the treasury stock method. Potentially dilutive common shares also include the assumed conversion of convertible senior notes from the conversion spread (as discussed in Note 11, "Convertible Senior Notes"). The Company includes the common shares underlying PSUs in the calculation of diluted net income per share only when they become contingently issuable. In net loss periods, these potentially diluted common shares have been excluded from the diluted net loss calculation. The following table sets forth the computation of net income (loss) per common share – basic and diluted (in thousands, except per share amounts):
The Company incurred a net loss during the three months ended September 24, 2016, and as a result, potential common shares from options, RSUs, PSUs and assumed release of outstanding stock under the ESPP were not included in the diluted shares used to calculate net loss per share, as their inclusion would have been anti-dilutive. During the nine months ended September 24, 2016 and the three and nine months ended September 26, 2015, the effects of certain potentially outstanding shares were not included in the calculation of diluted net income per share as their effect were anti-dilutive under the treasury stock method or the performance condition of the award had not been met. During the nine months ended September 24, 2016 and the three and nine months ended September 26, 2015, the Company included the dilutive effects of the Notes in the calculation of diluted net income per common share as the average market price was above the conversion price of the Notes. The dilutive impact of the Notes was based on the difference between the Company's average stock price during the period and the conversion price of the Notes. Upon conversion of the Notes, it is the Company’s intention to pay cash equal to the lesser of the aggregate principal amount or the conversion value of the Notes being converted, therefore, only the conversion spread relating to the Notes would be included in the Company’s diluted earnings per share calculation. The following sets forth the potentially dilutive shares excluded from the computation of the diluted net income (loss) per share because their effect was anti-dilutive (in thousands):
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Convertible Senior Notes |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Senior Notes | Convertible Senior Notes In May 2013, the Company issued the Notes, which will mature on June 1, 2018, unless earlier purchased by the Company or converted. Interest is payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2013. The net proceeds to the Company were approximately $144.5 million. The Notes are governed by an indenture dated as of May 30, 2013 (the "Indenture"), between the Company, as issuer, and U.S. Bank National Association, as trustee. The Notes are unsecured and do not contain any financial covenants or any restrictions on the payment of dividends, the incurrence of senior debt or other indebtedness, or the issuance or repurchase of securities by the Company. Upon conversion, it is the Company's intention to pay cash equal to the lesser of the aggregate principal amount or the conversion value of the Notes. For any remaining conversion obligation, the Company intends to pay cash, shares of common stock or a combination of cash and shares of common stock, at its election. The initial conversion rate is 79.4834 shares of common stock per $1,000 principal amount of Notes, subject to anti-dilution adjustments. The initial conversion price is approximately $12.58 per share of common stock. Throughout the term of the Notes, the conversion rate may be adjusted upon the occurrence of certain events, including for any cash dividends. Holders of the Notes will not receive any cash payment representing accrued and unpaid interest upon conversion of a Note. Accrued but unpaid interest will be deemed to be paid in full upon conversion rather than canceled, extinguished or forfeited. Holders may convert their Notes under the following circumstances:
If the Company undergoes a fundamental change as defined in the Indenture governing the Notes, holders may require the Company to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, upon the occurrence of a “make-whole fundamental change” (as defined in the Indenture), the Company may, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Notes in connection with such make-whole fundamental change. The net carrying amounts of the debt obligation were as follows (in thousands):
As of September 24, 2016 and December 26, 2015, the carrying amount of the equity component of the Notes was $43.3 million. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount ("debt discount") is amortized to interest expense over the term of the Notes. In accounting for the issuance costs of $5.5 million related to the Notes, the Company allocated the total amount incurred to the liability and equity components of the Notes based on their relative values. Issuance costs attributable to the liability component were initially recorded as other non-current assets and will be amortized to interest expense over the term of the Notes. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. The Company adopted ASU 2015-03 during the first quarter of 2016. The December 26, 2015 balance sheet was retrospectively adjusted to reclassify $2.1 million from other non-current assets to a reduction of the Notes payable liability. The issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. Additionally, the Company initially recorded a deferred tax liability of $17.0 million in connection with the issuance of the Notes, and a corresponding reduction in valuation allowance. The impact of both was recorded to stockholders’ equity. The Company determined that the embedded conversion option in the Notes does not require separate accounting treatment as a derivative instrument because it is both indexed to the Company’s own stock and would be classified in stockholder’s equity if freestanding. The following table sets forth total interest expense recognized related to the Notes (in thousands):
The coupon rate is 1.75%. For the three and nine months ended September 24, 2016 and September 26, 2015, the debt discount and debt issuance costs are amortized, using an annual effective interest rate of 10.23%, to interest expense over the term of the Notes. As of September 24, 2016, the fair value of the Notes was $156.0 million. The fair value was determined based on the quoted bid price of the Notes in an over-the-counter market on September 23, 2016. The Notes are classified as Level 2 of the fair value hierarchy. During the three months ended September 24, 2016, the closing price of the Company's common stock did not meet the conversion criteria; therefore, holders of the Notes may not convert their notes during the fourth quarter of 2016. Should the closing price conditions be met during the 30 consecutive trading days prior to the end of the fourth quarter of 2016 or a future quarter, the Notes will be convertible at their holders’ option during the immediately following quarter. Based on the closing price of the Company’s common stock of $8.85 on September 23, 2016, the if-converted value of the Notes did not exceed their principal amount. |
Stockholders' Equity |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity Stock-based Compensation Plans The Company has stock-based compensation plans pursuant to which the Company has granted stock options, RSUs and PSUs. The Company also has an ESPP for all eligible employees. In February 2016, the Company's board of directors adopted the 2016 Equity Incentive Plan ("2016 Plan") and the Company's stockholders approved the 2016 Plan in May 2016. As of September 24, 2016, the Company reserved a total of 7.2 million shares of common stock for issuance of stock options, RSUs and PSUs to employees, non-employees, consultants and members of the Company's board of directors, pursuant to the 2016 Plan, plus any shares subject to awards granted under the Company’s 2007 Equity Incentive Plan (the “2007 Plan”) that, after the effective date of the 2016 Plan, expire, are forfeited or otherwise terminate without having been exercised in full to the extent such awards were exercisable, and shares issued pursuant to awards granted under the 2007 Plan that, after the effective date of the 2016 Plan, are forfeited to or repurchased by the Company due to failure to vest. The 2016 Plan has a maximum term of 10 years from the date of adoption, or it can be earlier terminated by the Company's board of directors. The 2007 Plan was canceled; however, it continues to govern outstanding grants under the 2007 Plan. The following tables summarize the Company’s equity award activity and related information (in thousands, except per share data):
The aggregate intrinsic value of unexercised stock options is calculated as the difference between the closing price of the Company’s common stock of $8.85 at September 23, 2016 (the last trading day of the fiscal quarter) and the exercise prices of the underlying stock options. The aggregate intrinsic value of the stock options that have been exercised is calculated as the difference between the fair market value of the common stock at the date of exercise and the exercise price of the underlying stock options. The aggregate intrinsic value of unreleased RSUs and unreleased PSUs is calculated using the closing price of the Company's common stock of $8.85 at September 23, 2016 (the last trading day of the fiscal quarter). The aggregate intrinsic value of RSUs and PSUs released is calculated using the fair market value of the common stock at the date of release. The following table presents total stock-based compensation cost for instruments granted but not yet amortized, net of estimated forfeitures, of the Company’s equity compensation plans as of September 24, 2016. These costs are expected to be amortized on a straight-line basis over the following weighted-average periods (in thousands, except for weighted-average period):
Employee Stock Options The Company did not grant any stock options during the three and nine months ended September 24, 2016. Amortization of stock-based compensation related to stock options in the three and nine months ended September 24, 2016 and September 26, 2015 was insignificant in both periods. Employee Stock Purchase Plan The fair value of the shares was estimated at the date of grant using the following assumptions (expense amounts in thousands):
Restricted Stock Units The Company granted RSUs to employees and members of the Company’s board of directors to receive shares of the Company’s common stock. All RSUs awarded are subject to each individual's continued service to the Company through each applicable vesting date. The Company accounted for the fair value of the RSUs using the closing market price of the Company’s common stock on the date of grant. Amortization of stock-based compensation related to RSUs in the three and nine months ended September 24, 2016 and September 26, 2015 was approximately $7.7 million and $21.4 million, respectively, and $5.6 million and $16.7 million, respectively. Performance Stock Units Pursuant to the 2007 Plan, the Company has granted PSUs to certain of the Company’s executive officers, senior management and employees. All PSUs awarded are subject to each individual's continued service to the Company through each applicable vesting date and if the performance metrics are not met within the time limits specified in the award agreements, the PSUs will be canceled. A number of PSUs granted to the Company’s executive officers and senior management are based on the total shareholder return of the Company's common stock price as compared to the total shareholder return of the S&P North American Technology Multimedia Networking Index ("SPGIIPTR") over the span of one year, two years and three years. The number of shares to be issued upon vesting of these PSUs range from 0 to 2.0 times the target number of PSUs granted depending on the Company’s performance against the SPGIIPTR. The ranges of estimated values of the PSUs granted that are compared to the SPGIIPTR, as well as the assumptions used in calculating these values were based on estimates as follows:
In addition, certain other PSUs granted to the Company’s executive officers, senior management and certain employees will only vest upon the achievement of specific financial or operational performance criteria. The following table summarizes by grant year, the Company’s PSU activity for the nine months ended September 24, 2016 (in thousands):
Amortization of stock-based compensation related to PSUs for the three and nine months ended September 24, 2016 was approximately $1.7 million and $4.9 million, respectively, and was approximately $1.6 million and $3.8 million, respectively for the corresponding periods in 2015. Stock-Based Compensation The following tables summarize the effects of stock-based compensation on the Company’s condensed consolidated balance sheets and statements of operations for the periods presented (in thousands):
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Income Taxes |
9 Months Ended |
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Sep. 24, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Benefit from income taxes during the three and nine months ended September 24, 2016 was $2.4 million and $0.7 million, respectively, on a pre-tax loss of $13.7 million and pre-tax income of $11.1 million, respectively. This compared to a tax benefit for $0.2 million and tax provision of $1.5 million, respectively, on a pre-tax income of $8.4 million and $40.3 million, respectively, for the three and nine months ended September 26, 2015. The results for the three months ended September 24, 2016 reflect approximately $6.9 million of purchase accounting amortization and other charges related to the acquisition of Transmode, with a corresponding tax benefit of approximately $1.5 million. Exclusive of this tax benefit, provision for income taxes otherwise increased by approximately $2.0 million during the three months ended September 24, 2016 compared to September 26, 2015, which relates to lower forecasted tax expense for the year incurred ratably through the nine months ended September 24, 2016. The results for the nine months ended September 24, 2016 reflected approximately $21.0 million of purchase accounting amortization and other charges related to the acquisition of Transmode, with a corresponding tax benefit of approximately $4.6 million. Exclusive of this tax benefit, provision for income taxes otherwise increased by approximately $1.2 million in the nine months ended September 24, 2016 compared to September 26, 2015, which is attributed to a higher proportion of foreign income earned on a year to date basis related to the Transmode operations and increased spending in certain of the Company's cost-plus foreign subsidiaries. In all periods, the tax expense and benefit projected in the Company's effective tax rate assumptions primarily represents foreign taxes of the Company's overseas subsidiaries compensated on a cost-plus basis, as well as the operating results of Transmode, inclusive of purchase accounting charges and amortization for the three and nine months ended September 24, 2016. Due to the Company's significant U.S. loss carryforward position and corresponding full valuation allowance, the Company has not been subject to federal or state tax on its U.S. income because of the availability of loss carryforwards, with the exception of some state taxes for which the losses are limited. The release of transfer pricing reserves in the future will have a beneficial impact to tax expense, but the timing of the impact depends on factors such as expiration of the statute of limitations or settlements with tax authorities. No significant releases are expected in the near future based on information available at this time. The Company must assess the likelihood that some portion or all of its deferred tax assets will be recovered from future taxable income within the respective jurisdictions. In the past, the Company established a valuation allowance against its deferred tax assets as it determined that its ability to recover the value of these assets did not meet the “more-likely-than-not” standard. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management judgment is required on an on-going basis to determine whether it needs to maintain the valuation allowance recorded against its net deferred tax assets. The Company has been profitable during the nine consecutive quarters between the second quarter of 2014 and the second quarter of 2016. However, in the quarter ending September 24, 2016, the company incurred a net loss. The Company must consider all positive and negative evidence, including its forecasts of taxable income over the applicable carryforward periods, its current financial performance, its market environment, and other factors in evaluating the need for a valuation allowance against its net U.S. deferred tax assets. At September 24, 2016, the Company does not believe that it is more-likely-than-not that it would be able to utilize its deferred tax assets in the foreseeable future. Accordingly, the domestic net deferred tax assets continued to be fully reserved with a valuation allowance. To the extent that the Company determines that deferred tax assets are realizable on a more-likely-than-not basis, and adjustment is needed, that adjustment will be recorded in the period that the determination is made and would generally decrease the valuation allowance and record a corresponding benefit to earnings. On March 30, 2016, FASB issued ASU 2016-09, which the Company early adopted as of June 26, 2016. As a result of the adoption of ASU 2016-09, excess windfall tax benefits and tax deficiencies related to the Company's stock option exercises and vesting of RSUs are recognized as an income tax benefit or expense in its condensed consolidated statements of operations in the period they are deducted on the income tax return. Excess windfall tax benefits and tax deficiencies are therefore not anticipated when determining the annual effective tax rate and are instead recognized in the interim period in which those items occur. The adoption of ASU 2016-09 did not have any material impact on our income tax expense for the three and nine months ended September 24, 2016, primarily due to the Company's valuation allowance position. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Company’s Chief Executive Officer ("CEO"). The Company’s CEO reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region for purposes of allocating resources and evaluating financial performance. The Company has one business activity. Accordingly, the Company is considered to be in a single reporting segment and operating unit structure. Revenue by geographic region is based on the shipping address of the customer. The following tables set forth revenue and long-lived assets by geographic region (in thousands): Revenue
Property, plant and equipment, net
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Guarantees |
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Guarantees [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees | Guarantees Product Warranties The Company warrants that its products will operate substantially in conformity with product specifications. Hardware warranties provide the purchaser with protection in the event that the product does not perform to product specifications. During the warranty period, the purchaser’s sole and exclusive remedy in the event of such defect or failure to perform is limited to the correction of the defect or failure by repair, refurbishment or replacement, at the Company’s sole option and expense. The Company's hardware warranty periods generally range from one to five years from date of acceptance for hardware and the Company's software warranty is 90 days. Upon delivery of the Company's products, the Company provides for the estimated cost to repair or replace products that may be returned under warranty. The hardware warranty accrual is based on actual historical returns and cost of repair experience and the application of those historical rates to the Company's in-warranty installed base. The provision for warranty claims fluctuates depending upon the installed base of products and the failure rates and costs of repair associated with these products under warranty. Furthermore, the Company's costs of repair vary based on repair volume and its ability to repair, rather than replace, defective units. In the event that actual product failure rates and costs to repair differ from the Company's estimates, revisions to the warranty provision are required. In addition, from time to time, specific hardware warranty accruals may be made if unforeseen technical problems arise with specific products. The Company regularly assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Activity related to product warranty was as follows (in thousands):
Letters of Credit and Bank Guarantees The Company had $10.1 million of standby letters of credit and bank guarantees outstanding as of September 24, 2016 that consisted of $4.5 million related to property leases, $4.4 million related to customer performance guarantees, and $1.2 million related to value added tax and customs' licenses. The Company had $5.2 million of standby letters of credit and bank guarantees outstanding as of December 26, 2015, respectively. These consisted of $3.1 million related to customer performance guarantees, $1.2 million related to a value added tax and customs' licenses, and $0.9 million related to property leases. As of September 24, 2016 and December 26, 2015, the Company had a line of credit for approximately $1.3 million and $1.5 million, respectively, to support the issuance of letters of credit, of which $0.7 million had been issued and outstanding. The Company has pledged approximately $4.8 million of assets of a subsidiary to secure this line of credit and other obligations as of September 24, 2016 and December 26, 2015. |
Litigation and Contingencies |
9 Months Ended |
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Sep. 24, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation and Contingencies | Litigation and Contingencies From time to time, the Company is subject to various legal proceedings, claims and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, the Company does not expect that the ultimate costs to resolve these matters will have a material effect on its consolidated financial position, results of operations or cash flows. The Company is subject to the possibility of various losses arising in the ordinary course of business. These may relate to disputes, litigation and other legal actions. In the preparation of its quarterly and annual financial statements, the Company considers the likelihood of loss or the incurrence of a liability, including whether it is probable, reasonably possible or remote that a liability has been incurred, as well as the Company’s ability to reasonably estimate the amount of loss, in determining loss contingencies. In accordance with U.S. GAAP, an estimated loss contingency is accrued when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company regularly evaluates current information to determine whether any accruals should be adjusted and whether new accruals are required. As of September 24, 2016, the Company has accrued the estimated liabilities associated with the Company's potential loss contingencies. Intellectual Property Indemnification The Company has agreed to indemnify certain customers for claims made against the Company’s products, where such claims allege infringement of third party intellectual property rights, including, but not limited to, patents, registered trademarks, and/or copyrights. Under the aforementioned indemnification clauses, the Company may be obligated to defend the customer and pay for the damages awarded against the customer under an infringement claim as well as the customer’s attorneys’ fees and costs. The Company’s indemnification obligations generally do not expire after termination or expiration of the agreement containing the indemnification obligation. In certain cases, there are limits on and exceptions to the Company’s potential liability for indemnification. Although historically the Company has not made significant payments under these indemnification obligations, the Company cannot estimate the amount of potential future payments, if any, that it might be required to make as a result of these agreements. The maximum potential amount of any future payments that the Company could be required to make under these indemnification obligations could be significant. |
Basis of Presentation and Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 24, 2016 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update 2016-15, "Statement of Cash Flows (Topic 320): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain transactions are presented and classified in the statement of cash flows. This guidance is effective for the Company in its first quarter of fiscal 2018 and will be applied on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-15 will have on its condensed consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for the Company in its first quarter of fiscal 2020 and early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-13 will have on its condensed consolidated financial statements. In May 2016, the FASB issued Accounting Standards Update 2016-11, "Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update)" ("ASU 2016-11"), which rescinds various standards codified as part of Topic 605, Revenue Recognition in relation to the future adoption of Topic 606. These rescissions include changes to topics pertaining to revenue and expense recognition for freight services in process, accounting for shipping and handling fees and costs, and accounting for consideration given by a vendor to a customer. This guidance is effective for the Company in its first quarter of fiscal 2018 and early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-11 will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, which includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements, including the income tax effects of share-based payments and accounting for forfeitures. ASU 2016-09 requires companies to record excess tax benefits and tax deficiencies as income tax benefit or expense in the statement of operations when the awards vest or are settled, eliminates the requirement to reclassify cash flows related to excess tax benefits from operating activities to financing activities on the statement of cash flows, and allows for an accounting policy election to either estimate the number of forfeitures (current U.S. GAAP) or account for forfeitures when they occur, amongst other provisions. This standard provides for prospective, retrospective, or modified retrospective adoption of each of the changes. ASU 2016-09 is effective for the Company in its first quarter of fiscal 2017 and early adoption is permitted. The Company elected to early adopt ASU 2016-09 as of its third fiscal quarter beginning on June 26, 2016. The Company also elected to change its accounting policy to account for forfeitures when they occur on a modified retrospective basis. The adoption of ASU 2016-09 and the change in the Company’s accounting policy resulted in a $0.2 million increase to additional paid-in capital and accumulated deficit as of December 26, 2015. The Company also recorded $0.3 million of stock-based compensation expense during the three months ended September 24, 2016 to true-up for the differential between the amount of stock-based compensation cost previously recorded for the first six months ended June 25, 2016 and the amount that would have been recorded without assuming forfeitures. Additionally, the Company adopted the change in presentation in the condensed consolidated statement of cash flows related to excess tax benefits on a prospective basis. Accordingly, prior periods have not been adjusted. There was no impact for the change in presentation in the condensed consolidated statement of cash flows related to statutory tax withholding requirements as the Company has historically classified the statutory tax withholding as a financing activity in its consolidated statement of cash flows. In February 2016, the FASB issued Accounting Standards Update 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). For lessees, leases will continue to be classified as either operating or financing in the income statement. This guidance is effective for the Company in its first quarter of fiscal 2019 and early adoption is permitted. ASU 2016-02 is required to be applied with a modified retrospective approach and requires application of the new standard at the beginning of the earliest comparative period presented. The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial statements. In September 2015, the FASB issued Accounting Standards Update 2015-16, "Business Combinations and Simplifying the Accounting for Measurement-Period Adjustments" ("ASU 2015-16"), which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The Company adopted ASU 2015-16 during the first quarter of fiscal 2016. The Company's adoption of ASU 2015-16 had no impact on the Company's financial position, results of operations or cash flow. In July 2015, the FASB issued Accounting Standards Update 2015-11, "Simplifying the Measurement of Inventory" ("ASU 2015-11"), to simplify the guidance on the subsequent measurement of inventory, excluding inventory measured using last-in, first-out or the retail inventory method. Under ASU 2015-11, inventory should be at the lower of cost and net realizable value. This guidance is effective for the Company in its first quarter of fiscal 2017 and early adoption permitted. The Company is currently evaluating the impact the adoption of ASU 2015-11 will have on its consolidated financial statements. In April 2015, the FASB issued Accounting Standards Update 2015-03, "Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"), which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. The Company adopted ASU 2015-03 during the first quarter of fiscal 2016. The December 26, 2015 balance sheet was retrospectively adjusted to reclassify $2.1 million from other non-current assets to a reduction of the Notes payable liability. In May 2014, the FASB issued Accounting Standards Update 2014-09, "Revenue from Contracts from Customers" ("ASU 2014-09"), which creates a single, joint revenue standard that is consistent across all industries and markets for companies that prepare their financial statements in accordance with GAAP. Under ASU 2014-09, an entity is required to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to receive in exchange for those goods or services. In July 2015, the FASB decided to delay the effective date of the new revenue standard by one year. In April 2016, the FASB issued Accounting Standards Update 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing," which clarifies the implementation guidance on identifying performance obligations and licensing. In May 2016, the FASB issued Accounting Standards Update 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients," which amends the guidance on collectability, noncash consideration, presentation of sales tax and transition. These standards will be effective for the Company's first quarter of 2018. The Company is currently evaluating the impact of these new standards on its consolidated financial statements. |
Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables represent the Company’s fair value hierarchy for its assets and liabilities measured at fair value on a recurring basis (in thousands):
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Investments at Fair Value | Investments at fair value were as follows (in thousands):
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Derivative Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative Instruments not Designated as Hedging Instruments | The fair value of derivative instruments in the Company’s condensed consolidated balance sheets was as follows (in thousands):
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Business Combination (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions by Acquisition, Equity Interest Issued or Issuable | The Company has accounted for this transaction as a business combination in exchange for total consideration of $350.6 million, which consisted of the following (in thousands, except shares):
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Schedule of Business Acquisitions, by Acquisition | The following table summarizes the Company’s allocation of the purchase consideration based on the fair value of assets acquired and liabilities assumed as of the Acquisition Date (in thousands):
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Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table presents details of the identified intangible assets acquired at the Acquisition Date (in thousands):
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Schedule of Indefinite-lived Intangible Assets Acquired as Part of Business Combination | The following table presents details of the identified intangible assets acquired at the Acquisition Date (in thousands):
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Noncontrolling Interest Rollfoward | Noncontrolling interest was as follows (in thousands):
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table presents details of the Company’s goodwill during the nine months ended September 24, 2016 (in thousands):
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Schedule of Finite-Lived Intangible Assets | The following tables present details of the Company’s intangible assets as of September 24, 2016 and December 26, 2015 (in thousands):
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of September 24, 2016 (in thousands):
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Balance Sheet Details (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of Selected Balance Sheet Items | The following table provides details of selected balance sheet items (in thousands):
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Accumulated Other Comprehensive Income (Loss) (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Accumulated Other Comprehensive Income (Loss) | The following table sets forth the changes in accumulated other comprehensive income (loss) by component for the nine months ended September 24, 2016 (in thousands):
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Basic and Diluted Net Income (Loss) Per Common Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Net Income (Loss) Per Common Share Basic and Diluted | The following table sets forth the computation of net income (loss) per common share – basic and diluted (in thousands, except per share amounts):
|
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Antidilutive Shares Excluded from Computation of Diluted Net Income (Loss) Per Share | The following sets forth the potentially dilutive shares excluded from the computation of the diluted net income (loss) per share because their effect was anti-dilutive (in thousands):
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Convertible Senior Notes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Convertible Senior Notes | The net carrying amounts of the debt obligation were as follows (in thousands):
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Interest expense recognized related to Notes | The following table sets forth total interest expense recognized related to the Notes (in thousands):
|
Stockholders' Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Company's Equity Award Activity - Options | The following tables summarize the Company’s equity award activity and related information (in thousands, except per share data):
|
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Summary of Company's Equity Award Activity - RSUs |
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Summary of Company's Equity Award Activity - PSUs |
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Total Stock Based Compensation Cost for Instruments Granted but Not Yet Amortized | The following table presents total stock-based compensation cost for instruments granted but not yet amortized, net of estimated forfeitures, of the Company’s equity compensation plans as of September 24, 2016. These costs are expected to be amortized on a straight-line basis over the following weighted-average periods (in thousands, except for weighted-average period):
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Estimated Fair Value of ESPP Shares | The fair value of the shares was estimated at the date of grant using the following assumptions (expense amounts in thousands):
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Schedule of Share-based Payment Award, Valuation Assumptions | The ranges of estimated values of the PSUs granted that are compared to the SPGIIPTR, as well as the assumptions used in calculating these values were based on estimates as follows:
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Schedule Of Nonvested Performance Based Units Activity By Grant Year | The following table summarizes by grant year, the Company’s PSU activity for the nine months ended September 24, 2016 (in thousands):
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Summary of Effects of Stock-Based Compensation on Company's Balance Sheets and Statements of Operations | The following tables summarize the effects of stock-based compensation on the Company’s condensed consolidated balance sheets and statements of operations for the periods presented (in thousands):
|
Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue and Long-Lived Assets by Geographic Region | Revenue by geographic region is based on the shipping address of the customer. The following tables set forth revenue and long-lived assets by geographic region (in thousands): Revenue
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Property, Plant and Equipment, Net | Property, plant and equipment, net
|
Guarantees (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity Related to Product Warranty | Activity related to product warranty was as follows (in thousands):
|
Basis of Presentation and Significant Accounting Polices (Details) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 24, 2016
USD ($)
customer
|
Sep. 26, 2015
USD ($)
customer
|
Sep. 24, 2016
USD ($)
customer
|
Sep. 26, 2015
USD ($)
customer
|
May 30, 2013
USD ($)
|
|
Concentration Risk [Line Items] | |||||
Cost of revenue | $ (100,850,000) | $ (129,667,000) | $ (364,406,000) | $ (338,967,000) | |
Customers accounting for a significant portion of revenue | customer | 2 | 2 | 2 | 2 | |
Sales revenue, net | Customer One | Customer concentration risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk | 16.00% | 26.00% | 16.00% | 18.00% | |
Sales revenue, net | Customer Two | Customer concentration risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk | 12.00% | 16.00% | 10.00% | 15.00% | |
Transmode | Scenario, adjustment | |||||
Concentration Risk [Line Items] | |||||
Cost of revenue | $ 2,000,000 | $ 2,000,000 | |||
1.75% Convertible Senior Notes Due June 1, 2018 | |||||
Concentration Risk [Line Items] | |||||
Principal amount | $ 150,000,000.0 | ||||
Debt instrument interest percentage | 1.75% | 1.75% | 1.75% |
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 24, 2016 |
Dec. 26, 2015 |
|
Fair Value Disclosures [Abstract] | ||
Available-for-sale investments | 24 months | |
Cash | $ 90.4 | $ 98.4 |
Cost-method Investments - Additional Information (Details) |
9 Months Ended | |||
---|---|---|---|---|
Sep. 20, 2016
USD ($)
|
Sep. 24, 2016
USD ($)
company
|
Sep. 26, 2015
USD ($)
|
Dec. 26, 2015
USD ($)
|
|
Gain (Loss) on Investments [Line Items] | ||||
Purchase of cost-method investment | $ 5,000,000 | $ 0 | ||
Cost-method investment, total | 19,500,000 | $ 14,500,000 | ||
Cost-method Investments | ||||
Gain (Loss) on Investments [Line Items] | ||||
Purchase of cost-method investment | $ 5,000,000 | |||
Cost-method investment, preferred stock warrant issued | $ 10,000,000 | |||
Cost-method investment, total | $ 19,500,000 | |||
Number of privately-held companies | company | 2 | |||
Less than percent of voting securities | 20.00% | |||
Impairment charge on cost-method investments | $ 0 |
Derivative Instruments - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Before-tax effect of foreign currency exchange forward contracts not designated as hedging instruments, gain (loss) | $ (0.2) | $ 0.3 | $ (0.8) | $ (3.1) |
Business Combination (Details) - USD ($) $ in Thousands, shares in Millions |
1 Months Ended | 9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Sep. 24, 2016 |
Aug. 20, 2015 |
Aug. 31, 2016 |
Sep. 24, 2016 |
Sep. 26, 2015 |
Dec. 31, 2016 |
Dec. 26, 2015 |
Dec. 27, 2014 |
|
Business Acquisition [Line Items] | ||||||||
Noncontrolling interest | $ 0 | $ 0 | $ 14,910 | $ 0 | ||||
Undisputed purchase price paid | 16,771 | $ 0 | ||||||
Security pledge associated with Squeeze-out Proceedings | $ 5,921 | $ 0 | ||||||
Transmode | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of acquiree common shares acquired | 95.80% | |||||||
Noncontrolling interest | $ 15,372 | |||||||
Undisputed purchase price paid | $ 16,800 | |||||||
Security pledge associated with Squeeze-out Proceedings | $ 5,900 | |||||||
Total consideration transfered | $ 350,640 | |||||||
Transmode | Scenario, forecast | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of acquiree common shares acquired | 4.20% | |||||||
Remaining acquiree shares (in shares) | 1.2 |
Business Combination Total Consideration For Acquisition (Details) - Transmode $ in Thousands, shares in Millions |
Aug. 20, 2015
USD ($)
shares
|
---|---|
Business Acquisition [Line Items] | |
Cash | $ 181,133 |
Common stock (7.9 million shares) | 169,507 |
Total | $ 350,640 |
Common shares issued in acquisition (in shares) | shares | 7.9 |
Business Combination Allocation Of Purchase Consideration (Details) - USD ($) $ in Thousands |
Sep. 24, 2016 |
Dec. 26, 2015 |
Aug. 20, 2015 |
Dec. 27, 2014 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 187,927 | $ 191,560 | ||
Noncontrolling interest | $ 0 | $ (14,910) | $ 0 | |
Transmode | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 36,688 | |||
Accounts receivable | 16,183 | |||
Inventory | 19,886 | |||
Other assets | 8,320 | |||
Intangible assets, net | 161,845 | |||
Goodwill | 187,889 | |||
Current liabilities | (25,120) | |||
Deferred tax liabilities | (39,090) | |||
Long-term liabilities | (589) | |||
Noncontrolling interest | (15,372) | |||
Total net assets | 350,640 | |||
Scenario, previously reported | Transmode | ||||
Business Acquisition [Line Items] | ||||
Cash | 36,688 | |||
Accounts receivable | 16,183 | |||
Inventory | 19,886 | |||
Other assets | 8,320 | |||
Intangible assets, net | 161,845 | |||
Goodwill | 187,220 | |||
Current liabilities | (24,320) | |||
Deferred tax liabilities | (39,221) | |||
Long-term liabilities | (589) | |||
Noncontrolling interest | (15,372) | |||
Total net assets | 350,640 | |||
Scenario, adjustment | Transmode | ||||
Business Acquisition [Line Items] | ||||
Cash | 0 | |||
Accounts receivable | 0 | |||
Inventory | 0 | |||
Other assets | 0 | |||
Intangible assets, net | 0 | |||
Goodwill | 669 | |||
Current liabilities | (800) | |||
Deferred tax liabilities | 131 | |||
Long-term liabilities | 0 | |||
Noncontrolling interest | 0 | |||
Total net assets | $ 0 |
Business Combination Intangible Assets Acquired (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Aug. 20, 2015 |
Sep. 24, 2016 |
Dec. 26, 2015 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets gross | $ 162,693 | $ 165,826 | |
Estimated useful life (in years) | 5 years | 5 years 8 months 16 days | |
Trade name | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life (in years) | 0 days | 2 months 12 days | |
Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life (in years) | 6 years 10 months 24 days | 7 years 8 months 12 days | |
Developed technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life (in years) | 4 years | 4 years 7 months 24 days | |
Transmode | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets gross | $ 161,845 | ||
Transmode | In-process technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets acquired | 20,128 | ||
Transmode | Trade name | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets acquired | $ 234 | ||
Estimated useful life (in years) | 6 months | ||
Transmode | Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets acquired | $ 49,033 | ||
Estimated useful life (in years) | 8 years | ||
Transmode | Developed technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets acquired | $ 92,450 | ||
Estimated useful life (in years) | 5 years |
Business Combination Noncontrolling Interest (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
Dec. 26, 2015 |
|
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||
Beginning noncontrolling interest | $ 14,910 | $ 0 | $ 0 | ||
Less: Loss attributable to noncontrolling interest | $ (125) | $ 0 | (503) | $ 0 | (463) |
Ending noncontrolling interest | $ 0 | 0 | 14,910 | ||
Noncontrolling Interest | |||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||
Noncontrolling interest investment | 0 | 15,373 | |||
Acquisition of noncontrolling interest | $ (14,407) | $ 0 |
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
Dec. 26, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Amortization expense | $ 6,700 | $ 2,600 | $ 19,800 | $ 2,600 | |
In-process technology | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets | $ 12,313 | 12,313 | $ 20,521 | ||
Developed technology | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, period increase (decrease) | $ 7,800 | ||||
Maximum finite-lived intangible asset, useful life (in years) | 7 years |
Goodwill and Intangible Assets Goodwill Roll Forward (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 24, 2016
USD ($)
| |
Goodwill [Roll Forward] | |
Balance as of December 26, 2015 | $ 191,560 |
Foreign currency translation adjustments | (3,633) |
Accumulated impairment loss | 0 |
Balance as of September 24, 2016 | $ 187,927 |
Goodwill and Intangible Assets - Purchased Intangible Assets (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 24, 2016 |
Dec. 26, 2015 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 150,380 | $ 145,305 |
Accumulated Amortization | (28,754) | (9,507) |
Net Carrying Amount | 121,626 | 135,798 |
Intangible assets gross | 162,693 | 165,826 |
Intangible assets | $ 133,939 | $ 156,319 |
Weighted average remaining useful life (in years) | 5 years | 5 years 8 months 16 days |
In-process technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 12,313 | $ 20,521 |
Trade name | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 234 | 239 |
Accumulated Amortization | (234) | (168) |
Net Carrying Amount | $ 0 | $ 71 |
Weighted average remaining useful life (in years) | 0 days | 2 months 12 days |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 49,042 | $ 49,991 |
Accumulated Amortization | (6,753) | (2,197) |
Net Carrying Amount | $ 42,289 | $ 47,794 |
Weighted average remaining useful life (in years) | 6 years 10 months 24 days | 7 years 8 months 12 days |
Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 100,285 | $ 94,256 |
Accumulated Amortization | (21,213) | (6,629) |
Net Carrying Amount | $ 79,072 | $ 87,627 |
Weighted average remaining useful life (in years) | 4 years | 4 years 7 months 24 days |
Other intangible assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 819 | $ 819 |
Accumulated Amortization | (554) | (513) |
Net Carrying Amount | $ 265 | $ 306 |
Weighted average remaining useful life (in years) | 4 years 10 months 24 days | 5 years 7 months 13 days |
Goodwill and Intangible Assets Future Amortization Expense (Details) - USD ($) $ in Thousands |
Sep. 24, 2016 |
Dec. 26, 2015 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Net Carrying Amount | $ 121,626 | $ 135,798 |
Remainder of 2016 | 6,612 | |
2017 | 26,487 | |
2018 | 26,487 | |
2019 | 25,879 | |
2020 | 18,886 | |
2021 and Thereafter | $ 17,275 |
Balance Sheet Details Selected Balance Sheet Items (Details) - USD ($) $ in Thousands |
Sep. 24, 2016 |
Dec. 26, 2015 |
||
---|---|---|---|---|
Inventory: | ||||
Raw materials | $ 37,199 | $ 27,879 | ||
Work in process | 65,540 | 52,599 | ||
Finished goods | 128,789 | 94,221 | ||
Total inventory | 231,528 | 174,699 | ||
Property, plant and equipment, net: | ||||
Property, plant and equipment, gross | 328,233 | 294,716 | ||
Less accumulated depreciation and amortization | (208,096) | (183,855) | ||
Total property, plant and equipment, net | 120,137 | 110,861 | ||
Accrued expenses: | ||||
Loss contingency related to non-cancelable purchase commitments | 6,293 | 6,821 | ||
Professional and other consulting fees | 4,198 | 5,363 | ||
Taxes payable | 4,532 | 3,295 | ||
Royalties | 5,376 | 4,290 | ||
Other accrued expenses | 17,458 | 13,967 | ||
Total accrued expenses | 37,857 | 33,736 | ||
Computer hardware | ||||
Property, plant and equipment, net: | ||||
Property, plant and equipment, gross | 12,741 | 11,097 | ||
Computer software(1) | ||||
Property, plant and equipment, net: | ||||
Property, plant and equipment, gross | [1] | 26,718 | 22,548 | |
Laboratory and manufacturing equipment | ||||
Property, plant and equipment, net: | ||||
Property, plant and equipment, gross | 215,690 | 189,168 | ||
Furniture and fixtures | ||||
Property, plant and equipment, net: | ||||
Property, plant and equipment, gross | 2,060 | 1,897 | ||
Leasehold improvements | ||||
Property, plant and equipment, net: | ||||
Property, plant and equipment, gross | 43,048 | 38,946 | ||
Construction in progress | ||||
Property, plant and equipment, net: | ||||
Property, plant and equipment, gross | 27,976 | 31,060 | ||
Enterprise Resource Planning Systems | ||||
Property, plant and equipment, net: | ||||
Property, plant and equipment, gross | 9,100 | 7,900 | ||
Total property, plant and equipment, net | $ 4,300 | $ 4,000 | ||
|
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
|
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,123 | |||
Net current-period other comprehensive income (loss) | $ (4,273) | $ 4,819 | (7,133) | $ 4,978 |
Ending balance | (6,010) | (6,010) | ||
Unrealized gain (loss) on other available-for-sale securities | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | (506) | |||
Net current-period other comprehensive income (loss) | 476 | |||
Ending balance | (30) | (30) | ||
Foreign currency translation | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | 2,389 | |||
Net current-period other comprehensive income (loss) | (7,609) | |||
Ending balance | (5,220) | (5,220) | ||
Accumulated tax effect | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | (760) | |||
Net current-period other comprehensive income (loss) | 0 | |||
Ending balance | $ (760) | $ (760) |
Basic and Diluted Net Income (Loss) Per Common Share - Computation of Net Income (Loss) Per Common Share Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
|
Numerator: | ||||
Net income (loss) attributable to Infinera Corporation | $ (11,172) | $ 8,510 | $ 12,326 | $ 38,782 |
Denominator: | ||||
Basic weighted average common shares outstanding (in shares) | 143,850 | 134,834 | 142,350 | 131,007 |
Effect of dilutive securities: | ||||
Employee equity plans (in shares) | 0 | 5,397 | 2,580 | 5,911 |
Assumed conversion of convertible senior notes from conversion spread (in shares) | 0 | 5,069 | 991 | 4,164 |
Diluted weighted average common shares outstanding (in shares) | 143,850 | 145,300 | 145,921 | 141,082 |
Net income (loss) per common share attributable to Infinera Corporation | ||||
Basic (in usd per share) | $ (0.08) | $ 0.06 | $ 0.09 | $ 0.30 |
Diluted (in usd per share) | $ (0.08) | $ 0.06 | $ 0.08 | $ 0.27 |
Basic and Diluted Net Income (Loss) Per Common Share - Antidilutive Shares Excluded from Computation of Diluted Income (Loss) Per Share (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share computation (in shares) | 9,548 | 511 | 3,796 | 939 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share computation (in shares) | 1,834 | 1 | 61 | 7 |
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share computation (in shares) | 5,475 | 26 | 2,454 | 535 |
PSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share computation (in shares) | 905 | 0 | 643 | 97 |
ESPP shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share computation (in shares) | 1,334 | 484 | 638 | 300 |
Convertible Senior Notes - Additional Information (Details) |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|---|
May 31, 2013
USD ($)
d
|
Sep. 24, 2016
USD ($)
|
Sep. 24, 2016
USD ($)
|
Sep. 23, 2016
$ / shares
|
Dec. 26, 2015
USD ($)
|
Sep. 26, 2015 |
May 30, 2013
USD ($)
$ / shares
|
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Purchase price as a percentage on principal amount of the notes upon the occurrence of a fundamental change | 100.00% | ||||||
Remaining life of note | 20 months | ||||||
Debt issuance costs, gross | $ 5,500,000 | ||||||
Deferred tax liability | $ 31,419,000 | $ 31,419,000 | $ 35,731,000 | ||||
Total estimated fair value of the notes | 156,000,000 | 156,000,000 | |||||
Closing price of common stock (in usd per share) | $ / shares | $ 8.85 | ||||||
Other noncurrent assets | Accounting Standards Update 2015-03 | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Debt issuance costs | (2,100,000) | ||||||
Long-term debt | Accounting Standards Update 2015-03 | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Debt issuance costs | 2,100,000 | ||||||
1.75% Convertible Senior Notes Due June 1, 2018 | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Proceeds from issuance of debt, net | 144,500,000 | ||||||
Initial conversion rate per $1,000 principal amount of Notes | 0.0794834 | ||||||
Initial conversion price (in usd per share) | $ / shares | $ 12.58 | ||||||
Net equity component carrying amount | 43,300,000 | 43,300,000 | $ 43,300,000 | ||||
Deferred tax liability | $ 17,000,000 | $ 17,000,000 | |||||
Debt instrument interest percentage | 1.75% | 1.75% | 1.75% | ||||
Additional effective rate of interest to be used on amortized carrying value | 10.23% | 10.23% | 10.23% | ||||
Convertible senior notes, conversion circumstance one | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Threshold trading days for debt instrument conversion | d | 20 | ||||||
Convertible threshold consecutive trading days | 30 days | 30 days | |||||
Convertible threshold minimum percentage | 130.00% | ||||||
Convertible senior notes, conversion circumstance two | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Convertible threshold consecutive trading days | 5 days | ||||||
Convertible threshold business days | d | 5 | ||||||
Debt instrument, convertible, if-converted value in excess of principal | $ 1,000 | ||||||
Convertible, threshold maximum percentage | 98.00% |
Convertible Senior Notes - Components of Convertible Senior Notes (Details) - USD ($) |
Sep. 24, 2016 |
Dec. 26, 2015 |
May 30, 2013 |
|||
---|---|---|---|---|---|---|
Debt Instrument [Line Items] | ||||||
Unamortized discount | [1] | $ (17,565,000) | $ (24,560,000) | |||
Unamortized issuance cost | [1] | (1,511,000) | (2,113,000) | |||
1.75% Convertible Senior Notes Due June 1, 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 150,000,000.0 | |||||
Net carrying amount | 130,924,000 | 123,327,000 | ||||
1.75% Convertible Senior Notes Due June 1, 2018 | Long-term debt | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 150,000,000 | $ 150,000,000 | ||||
|
Convertible Senior Notes - Interest Expense Recognized Related to Notes Prior to Capitalization of Interest (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
|
Debt Disclosure [Abstract] | ||||
Contractual interest expense | $ 656 | $ 656 | $ 1,969 | $ 1,969 |
Amortization of debt issuance costs | 206 | 186 | 602 | 544 |
Amortization of debt discount | 2,391 | 2,162 | 6,996 | 6,328 |
Total interest expense | $ 3,253 | $ 3,004 | $ 9,567 | $ 8,841 |
Stockholders' Equity - Additional Information (Details) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 24, 2016
USD ($)
shares
|
Sep. 26, 2015
USD ($)
|
Sep. 24, 2016
USD ($)
shares
|
Sep. 26, 2015
USD ($)
|
Sep. 23, 2016
$ / shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Closing price of common stock (in usd per share) | $ / shares | $ 8.85 | ||||
Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Amortization of stock-based compensation | $ 7.7 | $ 5.6 | $ 21.4 | $ 16.7 | |
PSUs | Existing employees | Vesting 1 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Duration of grants based on shareholder return of common stock price versus designated index | 1 year | ||||
PSUs | Existing employees | Vesting 2 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Duration of grants based on shareholder return of common stock price versus designated index | 2 years | ||||
PSUs | Existing employees | Vesting 3 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Duration of grants based on shareholder return of common stock price versus designated index | 3 years | ||||
Performance stock unit grants | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Amortization of stock-based compensation | $ 1.7 | $ 1.6 | $ 4.9 | $ 3.8 | |
2016 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Reserved Common stock for issuance of options (in shares) | shares | 7.2 | 7.2 | |||
2016 Plan maximum term | 10 years | ||||
Two Thousand And Seven Equity Incentive Plan | PSUs | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Ranges of number of shares issued on vesting of PSUs | 0 | ||||
Two Thousand And Seven Equity Incentive Plan | PSUs | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Ranges of number of shares issued on vesting of PSUs | 2.0 |
Stockholders' Equity - Summary of Company's Equity Award Activity - Options (Details) - Stock options $ / shares in Units, shares in Thousands, $ in Thousands |
9 Months Ended |
---|---|
Sep. 24, 2016
USD ($)
$ / shares
shares
| |
Number of Stock Options | |
Number of options, beginning balance (in shares) | shares | 2,511 |
Number of options, granted (in shares) | shares | 0 |
Number of options, exercised (in shares) | shares | (651) |
Number of options, canceled (in shares) | shares | (26) |
Number of options, ending balance (in shares) | shares | 1,834 |
Number of options, exercisable (in shares) | shares | 1,826 |
Weighted-Average Exercise Price Per Share | |
Weighted-average exercise price per share, beginning balance (in usd per share) | $ / shares | $ 7.26 |
Weighted-average exercise per share, options granted (in usd per share) | $ / shares | 0.00 |
Weighted-average exercise price per share, options exercised (in usd per share) | $ / shares | 4.42 |
Weighted-average exercise price per share, options canceled (in usd per share) | $ / shares | 12.38 |
Weighted-average exercise price per share, ending balance (in usd per share) | $ / shares | 8.19 |
Average exercise price per dhare, exercisable (in usd per share) | $ / shares | $ 8.19 |
Aggregate Intrinsic Value | |
Aggregate intrinsic value, beginning balance | $ | $ 28,288 |
Aggregate intrinsic value, options exercised | $ | 4,158 |
Aggregate intrinsic value, ending balance | $ | 1,761 |
Aggregate intrinsic value, exercisable | $ | $ 1,761 |
Stockholders' Equity - Summary of Company's Equity Award Activity - RSUs (Details) - Restricted stock units $ / shares in Units, shares in Thousands, $ in Thousands |
9 Months Ended |
---|---|
Sep. 24, 2016
USD ($)
$ / shares
shares
| |
Number of Restricted Stock Units | |
Number of units, beginning balance (in shares) | shares | 4,932 |
Number of shares available for grant cost (in shares) | shares | 2,791 |
Number of restricted/performance stock units, released (in shares) | shares | (1,984) |
Number of restricted stock units, canceled (in shares) | shares | (263) |
Number of units, ending balance (in shares) | shares | 5,476 |
Weighted- Average Grant Date Fair Value Per Share | |
Weighted-average grant date fair value per share, beginning balance (in usd per share) | $ / shares | $ 12.76 |
Weighted-average fair value, granted (in usd per share) | $ / shares | 14.32 |
Weighted-average grant date fair value per share, released (in usd per share) | $ / shares | 10.63 |
Weighted-average grant date fair value per share, canceled (in usd per share) | $ / shares | 13.74 |
Weighted-average grant date fair value per share, ending balance (in usd per share) | $ / shares | $ 14.28 |
Aggregate Intrinsic Value | |
Aggregate intrinsic value, beginning balance | $ | $ 91,285 |
Aggregate intrinsic value, RSUs released | $ | 23,948 |
Aggregate intrinsic value, ending balance | $ | $ 48,461 |
Stockholders' Equity - Summary of Company's Equity Award Activity - PSUs (Details) $ / shares in Units, shares in Thousands, $ in Thousands |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 24, 2016
USD ($)
$ / shares
shares
| ||||||
PSUs | ||||||
Number of Performance Stock Units | ||||||
Number of units, beginning balance (in shares) | 731 | |||||
Number of shares available for grant cost (in shares) | 647 | |||||
Number of restricted/performance stock units, released (in shares) | (615) | |||||
Number of restricted stock units, canceled (in shares) | (92) | |||||
Number of units, ending balance (in shares) | 905 | |||||
Number of restricted stock units, expected to vest (in shares) | 195 | |||||
Weighted- Average Grant Date Fair Value Per Share | ||||||
Weighted-average grant date fair value per share, beginning balance (in usd per share) | $ / shares | $ 12.35 | |||||
Weighted-average fair value, granted (in usd per share) | $ / shares | 15.28 | |||||
Weighted-average grant date fair value per share, released (in usd per share) | $ / shares | 11.25 | |||||
Weighted-average grant date fair value per share, canceled (in usd per share) | $ / shares | 15.21 | |||||
Weighted-average grant date fair value per share, ending balance (in usd per share) | $ / shares | $ 14.02 | |||||
Aggregate Intrinsic Value | ||||||
Aggregate intrinsic value, beginning balance | $ | $ 13,540 | |||||
Aggregate Intrinsic Value, PSUs released | $ | 8,077 | |||||
Aggregate intrinsic value, ending balance | $ | 8,008 | |||||
Aggregate intrinsic value, expected to vest | $ | $ 1,725 | |||||
Additional grants for performance | ||||||
Number of Performance Stock Units | ||||||
Number of shares available for grant cost (in shares) | 234 | [1],[2] | ||||
Weighted- Average Grant Date Fair Value Per Share | ||||||
Weighted-average fair value, granted (in usd per share) | $ / shares | $ 12.28 | [1] | ||||
|
Stockholders' Equity - Total Stock Based Compensation Cost for Instruments Granted but Not Yet Amortized (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 24, 2016
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options, unrecognized compensation expense, net | $ 30 |
Stock options, weighted-average period (in years) | 1 year 3 months 18 days |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense, net | $ 60,952 |
Weighted-average period (in years) | 2 years 7 months 6 days |
PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense, net | $ 7,163 |
Weighted-average period (in years) | 1 year 7 months 6 days |
Stockholders' Equity - Estimated Fair Value of ESPP, Valuation Assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 10,211 | $ 8,451 | $ 29,191 | $ 23,868 |
Employee Stock Purchase Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Volatility | 67.00% | 39.00% | ||
Risk-free interest rate | 0.51% | 0.26% | ||
Expected life | 6 months | 6 months | 6 months | 6 months |
Estimated fair value (in usd per share) | $ 3.16 | $ 6.43 | ||
Stock-based compensation expense | $ 1,565 | $ 1,147 | $ 4,054 | $ 3,275 |
Minimum | Employee Stock Purchase Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Volatility | 56.00% | 39.00% | ||
Risk-free interest rate | 0.51% | 0.13% | ||
Estimated fair value (in usd per share) | $ 3.16 | $ 5.15 | ||
Maximum | Employee Stock Purchase Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Volatility | 67.00% | 53.00% | ||
Risk-free interest rate | 0.52% | 0.26% | ||
Estimated fair value (in usd per share) | $ 4.53 | $ 6.43 |
Stockholders' Equity Stockholders' Equity - Schedule of Share-based Payment Award, Valuation Assumptions (Details) - PSUs |
3 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Sep. 24, 2016 |
Sep. 24, 2016
$ / shares
|
Dec. 26, 2015
$ / shares
|
Dec. 27, 2014
$ / shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
SPGIIPTR Index Expected Volatility Rate | 18.00% | 25.00% | ||
Volatility | 55.00% | 48.00% | ||
Correlation With SPGIIPTR Index | 0.52 | 0.60 | ||
Estimated Fair Value (in usd per share) | $ 15.28 | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
SPGIIPTR Index Expected Volatility Rate | 18.00% | |||
Volatility | 49.00% | |||
Risk-free interest rate | 0.95% | 0.97% | 0.66% | |
Correlation With SPGIIPTR Index | 0.58 | |||
Estimated Fair Value (in usd per share) | $ 10.31 | $ 18.08 | $ 6.59 | |
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
SPGIIPTR Index Expected Volatility Rate | 19.00% | |||
Volatility | 50.00% | |||
Risk-free interest rate | 1.07% | 1.10% | 0.71% | |
Correlation With SPGIIPTR Index | 0.59 | |||
Estimated Fair Value (in usd per share) | $ 16.62 | $ 19.29 | $ 7.60 |
Stockholders' Equity Stockholders' Equity - Schedule Of Nonvested Performance Based Units Activity By Grant Year (Details) shares in Thousands |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 24, 2016
shares
| ||||||
PSUs | ||||||
Number of Performance Stock Units | ||||||
Number of units, beginning balance (in shares) | 731 | |||||
Number of shares available for grant cost (in shares) | 647 | |||||
Number of restricted/performance stock units, released (in shares) | (615) | |||||
Number of restricted stock units, canceled (in shares) | (92) | |||||
Number of units, ending balance (in shares) | 905 | |||||
Additional grants for performance | ||||||
Number of Performance Stock Units | ||||||
Number of shares available for grant cost (in shares) | 234 | [1],[2] | ||||
2013 | PSUs | ||||||
Number of Performance Stock Units | ||||||
Number of units, beginning balance (in shares) | 147 | |||||
Number of shares available for grant cost (in shares) | 0 | |||||
Number of restricted/performance stock units, released (in shares) | (211) | |||||
Number of restricted stock units, canceled (in shares) | (6) | |||||
Number of units, ending balance (in shares) | 0 | |||||
2013 | Additional grants for performance | ||||||
Number of Performance Stock Units | ||||||
Number of shares available for grant cost (in shares) | 70 | [2] | ||||
2014 | PSUs | ||||||
Number of Performance Stock Units | ||||||
Number of units, beginning balance (in shares) | 260 | |||||
Number of shares available for grant cost (in shares) | 0 | |||||
Number of restricted/performance stock units, released (in shares) | (179) | |||||
Number of restricted stock units, canceled (in shares) | (11) | |||||
Number of units, ending balance (in shares) | 123 | |||||
2014 | Additional grants for performance | ||||||
Number of Performance Stock Units | ||||||
Number of shares available for grant cost (in shares) | 53 | [2] | ||||
2015 | PSUs | ||||||
Number of Performance Stock Units | ||||||
Number of units, beginning balance (in shares) | 324 | |||||
Number of shares available for grant cost (in shares) | 0 | |||||
Number of restricted/performance stock units, released (in shares) | (225) | |||||
Number of restricted stock units, canceled (in shares) | (62) | |||||
Number of units, ending balance (in shares) | 148 | |||||
2015 | Additional grants for performance | ||||||
Number of Performance Stock Units | ||||||
Number of shares available for grant cost (in shares) | 111 | [2] | ||||
2016 | PSUs | ||||||
Number of Performance Stock Units | ||||||
Number of units, beginning balance (in shares) | 0 | |||||
Number of shares available for grant cost (in shares) | 647 | |||||
Number of restricted/performance stock units, released (in shares) | 0 | |||||
Number of restricted stock units, canceled (in shares) | (13) | |||||
Number of units, ending balance (in shares) | 634 | |||||
2016 | Additional grants for performance | ||||||
Number of Performance Stock Units | ||||||
Number of shares available for grant cost (in shares) | 0 | [2] | ||||
|
Stockholders' Equity - Summary of Effects of Stock-Based Compensation on Company's Balance Sheet and Statements of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
Dec. 26, 2015 |
|||
Effects Of Stock Based Compensation [Line Items] | |||||||
Stock-based compensation effects included in net income (loss) before income taxes | $ 9,543 | $ 7,475 | $ 26,752 | $ 21,251 | |||
Cost of revenue - amortization from balance sheet | [1] | 668 | 976 | 2,439 | 2,617 | ||
Stock-based compensation expense | 10,211 | 8,451 | 29,191 | 23,868 | |||
Cost of revenue | |||||||
Effects Of Stock Based Compensation [Line Items] | |||||||
Stock-based compensation effects included in net income (loss) before income taxes | 756 | 645 | 2,175 | 1,740 | |||
Research and development | |||||||
Effects Of Stock Based Compensation [Line Items] | |||||||
Stock-based compensation effects included in net income (loss) before income taxes | 3,496 | 2,788 | 9,721 | 8,183 | |||
Sales and marketing | |||||||
Effects Of Stock Based Compensation [Line Items] | |||||||
Stock-based compensation effects included in net income (loss) before income taxes | 2,826 | 2,131 | 8,006 | 5,922 | |||
General and administration | |||||||
Effects Of Stock Based Compensation [Line Items] | |||||||
Stock-based compensation effects included in net income (loss) before income taxes | 2,465 | $ 1,911 | 6,850 | $ 5,406 | |||
Stock-based compensation effects in inventory | |||||||
Effects Of Stock Based Compensation [Line Items] | |||||||
Effects Of Stock Based Compensation | 4,378 | 4,378 | $ 3,129 | ||||
Stock-based compensation effects in property, plant and equipment, net | |||||||
Effects Of Stock Based Compensation [Line Items] | |||||||
Effects Of Stock Based Compensation | $ 74 | $ 74 | $ 93 | ||||
|
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
|
Business Acquisition [Line Items] | ||||
Provision (benefit) for income taxes | $ (2,416) | $ (151) | $ (725) | $ 1,473 |
Pre-tax income (loss) | (13,713) | $ 8,359 | 11,098 | $ 40,255 |
Income tax benefit increase (decrease) | 2,000 | 1,200 | ||
Transmode | ||||
Business Acquisition [Line Items] | ||||
Provision (benefit) for income taxes | (1,500) | (4,600) | ||
Purchase accounting amortization expense | $ 6,900 | $ 21,000 |
Segment Information - Revenue and Long-Lived Assets by Geographic Region (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 24, 2016
USD ($)
|
Sep. 26, 2015
USD ($)
|
Sep. 24, 2016
USD ($)
segment
|
Sep. 26, 2015
USD ($)
|
|
Segment Reporting [Abstract] | ||||
Number of reporting segments | segment | 1 | |||
Number of operating segments | segment | 1 | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 185,452 | $ 232,472 | $ 689,092 | $ 626,680 |
Operating segments | United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 104,045 | 158,845 | 445,270 | 440,610 |
Operating segments | Other Americas | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 17,390 | 20,874 | 31,916 | 39,944 |
Operating segments | Americas | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 121,435 | 179,719 | 477,186 | 480,554 |
Operating segments | Europe, Middle East and Africa | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 51,940 | 41,655 | 176,386 | 114,163 |
Operating segments | Asia Pacific and Japan | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 12,077 | $ 11,098 | $ 35,520 | $ 31,963 |
Segment Information - Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands |
Sep. 24, 2016 |
Dec. 26, 2015 |
---|---|---|
Geographic Information For Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, net | $ 120,137 | $ 110,861 |
Operating segments | United States | ||
Geographic Information For Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, net | 112,439 | 102,702 |
Operating segments | Other Americas | ||
Geographic Information For Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, net | 247 | 173 |
Operating segments | Americas | ||
Geographic Information For Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, net | 112,686 | 102,875 |
Operating segments | Europe, Middle East and Africa | ||
Geographic Information For Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, net | 4,447 | 5,417 |
Operating segments | Asia Pacific and Japan | ||
Geographic Information For Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, net | $ 3,004 | $ 2,569 |
Guarantees - Additional Information (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 24, 2016 |
Dec. 26, 2015 |
|
Guarantor Obligations [Line Items] | ||
Software warranty period | 90 days | |
Outstanding standby letters of credit | $ 10.1 | $ 5.2 |
Debt instrument, collateral amount | 4.8 | 4.8 |
Banker's guarantees or performance bonds | ||
Guarantor Obligations [Line Items] | ||
Line of credit facility, maximum borrowing capacity | 1.3 | 1.5 |
Proceeds from lines of credit | 0.7 | 0.7 |
Letter of credit | ||
Guarantor Obligations [Line Items] | ||
Customer proposal guarantee | 4.4 | 3.1 |
Value added tax license | 1.2 | 1.2 |
Property leases | $ 4.5 | $ 0.9 |
Minimum | ||
Guarantor Obligations [Line Items] | ||
Product warranty period | 1 year | |
Maximum | ||
Guarantor Obligations [Line Items] | ||
Product warranty period | 5 years |
Guarantees - Activity Related to Product Warranty (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 24, 2016 |
Sep. 26, 2015 |
Sep. 24, 2016 |
Sep. 26, 2015 |
|||
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||||
Beginning balance | $ 40,989 | $ 28,439 | $ 38,844 | $ 27,040 | ||
Charges to operations | 5,196 | 10,791 | 19,258 | 22,158 | ||
Utilization | (5,002) | (3,515) | (13,691) | (8,336) | ||
Change in estimate | [1] | (2,562) | 1,026 | (5,790) | (4,121) | |
Balance at the end of the period | $ 38,621 | $ 36,741 | $ 38,621 | $ 36,741 | ||
|