XML 34 R23.htm IDEA: XBRL DOCUMENT v3.20.4
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 9 Months Ended
Dec. 26, 2020
Segments, Geographical Areas [Abstract]  
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
The Company's Chief Executive Officer is identified as its Chief Operating Decision Maker ("CODM"). The CODM has organized the Company, manages resource allocations and measures performance among its two operating segments — Products and Services.

The Products segment includes the Company's Headsets, Voice and Video product lines. The Services segment includes maintenance support on hardware devices as well as professional, managed and cloud services and solutions. In managing the two operating segments the CODM uses information about their revenue and gross margin after adjustments to exclude certain non-cash transactions and activities that are not reflective of the Company's ongoing or core operations as further described below. The CODM does not review asset information by segment.

Purchase accounting amortization: Represents the amortization of purchased intangible assets recorded in connection with the Acquisition of Polycom.

Deferred revenue purchase accounting: Represents the impact of fair value purchase accounting adjustments related to deferred revenue recorded in connection with the Acquisition of Polycom. The Company's deferred revenue primarily relates to Service revenue associated with non-cancelable maintenance support on hardware devices which are typically billed in advance and recognized ratably over the contract term as those services are delivered. This adjustment represents the amount of additional revenue that would have been recognized during the period absent the write-down to fair value required under purchase accounting guidelines.

Consumer optimization: Represents charges related to inventory reserves and supplier liabilities for excess and obsolete inventory incurred in connection with the Company's strategic action to optimize its Consumer product portfolio.

Integration and rebranding costs: Represents charges incurred in connection with the Acquisition and integration of Polycom such as system implementations, legal and accounting fees.

Stock compensation expense: Represents the non-cash expense associated with the Company's issuance of common stock and share-based awards to employees and non-employee directors.
The following table presents segments results for revenue and gross margin, as reviewed by the CODM, and their reconciliation to the Company's condensed consolidated GAAP results:
Three Months EndedNine Months Ended
(in thousands)December 26, 2020December 28, 2019December 26, 2020December 28, 2019
Segment revenues as reviewed by CODM
Products$420,976 $317,058 $1,060,733 $1,096,037 
Services66,998 74,544 203,250 225,725 
Total segment revenues as reviewed by CODM$487,974 $391,602 $1,263,983 $1,321,762 
Segment gross profit as reviewed by CODM
Products$201,392 $138,909 $492,262 $543,706 
Services45,812 54,421 138,329 152,785 
Total segment gross profit as reviewed by CODM$247,204 $193,330 $630,591 $696,491 
Three Months EndedNine Months Ended
(in thousands)December 26, 2020December 28, 2019December 26, 2020December 28, 2019
Total segment revenues as reviewed by CODM$487,974 $391,602 $1,263,983 $1,321,762 
Deferred revenue purchase accounting(3,289)(7,131)(12,608)(27,815)
Consolidated GAAP net revenues$484,685 $384,471 $1,251,375 $1,293,947 
Total segment gross profit as reviewed by CODM (1)
$247,204 $193,330 $630,591 $696,491 
Purchase accounting amortization(16,459)(30,819)(51,873)(91,535)
Deferred revenue purchase accounting(3,289)(7,131)(12,608)(27,815)
Consumer optimization— (10,415)— (10,415)
Integration and rebranding costs— (100)— (1,169)
Stock-based compensation(799)(1,019)(2,374)(2,994)
Consolidated GAAP gross profit$226,657 $143,846 $563,736 $562,563 
(1) Includes depreciation expense of $3.7 million and $4.0 million for the three months ended December 26, 2020 and December 28, 2019, respectively. Includes depreciation expense of $10.7 million and $11.3 million for the nine months ended December 26, 2020 and December 28, 2019, respectively.