x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 04-2837575 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | ¨ | ||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | ||||
Smaller reporting company | ¨ | Emerging growth company | ¨ |
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | Defaults Upon Senior Securities | |
Item 4. | Mine Safety Disclosures | |
Item 5. | Other Information | |
Item 6. | ||
September 30, 2017 | March 31, 2017 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 251,505 | $ | 304,880 | |||
Marketable securities | 55,582 | 137,892 | |||||
Accounts receivable and unbilled costs, net of allowance for doubtful accounts of $1,689 and $2,066 at September 30, 2017 and March 31, 2017, respectively | 215,227 | 294,374 | |||||
Inventories and deferred costs | 36,956 | 40,002 | |||||
Prepaid income taxes | 48,563 | 40,346 | |||||
Prepaid expenses and other current assets (related party balances of $3,082 and $3,585 at September 30, 2017 and March 31, 2017, respectively) | 29,043 | 36,972 | |||||
Total current assets | 636,876 | 854,466 | |||||
Fixed assets, net | 57,413 | 61,393 | |||||
Goodwill | 1,715,861 | 1,718,162 | |||||
Intangible assets, net | 887,974 | 931,269 | |||||
Deferred income taxes | 5,590 | 6,580 | |||||
Long-term marketable securities | 6,292 | 21,933 | |||||
Other assets | 7,919 | 7,710 | |||||
Total assets | $ | 3,317,925 | $ | 3,601,513 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable (related party balances of $612 and $444 at September 30, 2017 and March 31, 2017, respectively) | $ | 30,128 | $ | 37,407 | |||
Accrued compensation | 62,776 | 77,607 | |||||
Accrued other | 28,881 | 29,522 | |||||
Income taxes payable | 6,263 | 5,057 | |||||
Deferred revenue and customer deposits | 269,644 | 310,594 | |||||
Total current liabilities | 397,692 | 460,187 | |||||
Other long-term liabilities | 5,432 | 3,976 | |||||
Deferred tax liability | 260,371 | 277,599 | |||||
Accrued long-term retirement benefits | 35,548 | 32,117 | |||||
Long-term deferred revenue and customer deposits | 81,660 | 86,595 | |||||
Long-term debt | 300,000 | 300,000 | |||||
Contingent liabilities | 4,865 | 4,789 | |||||
Total liabilities | 1,085,568 | 1,165,263 | |||||
Commitments and contingencies (Note 12) | |||||||
Stockholders' equity: | |||||||
Preferred stock, $0.001 par value: | |||||||
5,000,000 shares authorized; no shares issued or outstanding at September 30, 2017 and March 31, 2017 | — | — | |||||
Common stock, $0.001 par value: | |||||||
300,000,000 shares authorized; 117,137,727 and 115,917,431 shares issued and 87,140,939 and 92,041,288 shares outstanding at September 30, 2017 and March 31, 2017, respectively | 116 | 116 | |||||
Additional paid-in capital | 2,723,693 | 2,693,846 | |||||
Accumulated other comprehensive loss | 505 | (3,472 | ) | ||||
Treasury stock at cost, 29,996,788 and 23,876,143 shares at September 30, 2017 and March 31, 2017, respectively | (781,948 | ) | (570,921 | ) | |||
Retained earnings | 289,991 | 316,681 | |||||
Total stockholders' equity | 2,232,357 | 2,436,250 | |||||
Total liabilities and stockholders' equity | $ | 3,317,925 | $ | 3,601,513 |
Three Months Ended | Six Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue: | |||||||||||||||
Product | $ | 149,281 | $ | 168,873 | $ | 264,103 | $ | 333,462 | |||||||
Service | 107,582 | 103,175 | 218,516 | 207,538 | |||||||||||
Total revenue | 256,863 | 272,048 | 482,619 | 541,000 | |||||||||||
Cost of revenue: | |||||||||||||||
Product (related party balances of $0, $2,486, $245 and $7,063, respectively) | 45,841 | 56,647 | 83,686 | 116,474 | |||||||||||
Service (related party balances of $259, $282, $288, and $472, respectively) | 28,402 | 27,863 | 57,119 | 55,070 | |||||||||||
Total cost of revenue | 74,243 | 84,510 | 140,805 | 171,544 | |||||||||||
Gross profit | 182,620 | 187,538 | 341,814 | 369,456 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development (related party balances of $0, $548, $3, and $1,573, respectively) | 58,509 | 61,046 | 117,475 | 121,597 | |||||||||||
Sales and marketing (related party balances of $0, $872, $2 and $2,472, respectively) | 77,266 | 76,706 | 162,627 | 158,294 | |||||||||||
General and administrative (related party balances of $700, $2,039, $944 and $3,543, respectively) | 29,495 | 31,527 | 59,367 | 62,454 | |||||||||||
Amortization of acquired intangible assets | 18,298 | 17,559 | 36,681 | 35,131 | |||||||||||
Restructuring charges | 291 | (105 | ) | 458 | 1,929 | ||||||||||
Total operating expenses | 183,859 | 186,733 | 376,608 | 379,405 | |||||||||||
Income (loss) from operations | (1,239 | ) | 805 | (34,794 | ) | (9,949 | ) | ||||||||
Interest and other expense, net: | |||||||||||||||
Interest income | 410 | 229 | 890 | 421 | |||||||||||
Interest expense | (2,565 | ) | (2,193 | ) | (5,116 | ) | (4,525 | ) | |||||||
Other expense | (1,168 | ) | (466 | ) | (2,232 | ) | (1,230 | ) | |||||||
Total interest and other expense, net | (3,323 | ) | (2,430 | ) | (6,458 | ) | (5,334 | ) | |||||||
Loss before income tax expense | (4,562 | ) | (1,625 | ) | (41,252 | ) | (15,283 | ) | |||||||
Income tax benefit | (2,094 | ) | (359 | ) | (14,562 | ) | (5,019 | ) | |||||||
Net loss | $ | (2,468 | ) | $ | (1,266 | ) | $ | (26,690 | ) | $ | (10,264 | ) | |||
Basic net loss per share | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.30 | ) | $ | (0.11 | ) | |||
Diluted net loss per share | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.30 | ) | $ | (0.11 | ) | |||
Weighted average common shares outstanding used in computing: | |||||||||||||||
Net loss per share - basic | 88,589 | 91,919 | 89,878 | 92,628 | |||||||||||
Net loss per share - diluted | 88,589 | 91,919 | 89,878 | 92,628 |
Three Months Ended | Six Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net loss | $ | (2,468 | ) | $ | (1,266 | ) | $ | (26,690 | ) | $ | (10,264 | ) | |||
Other comprehensive income (loss): | |||||||||||||||
Cumulative translation adjustments | 2,495 | 171 | 3,630 | (87 | ) | ||||||||||
Changes in market value of investments: | |||||||||||||||
Changes in unrealized gains (losses), net of taxes of $8, $0, $5 and $0, respectively | 13 | (80 | ) | 9 | (39 | ) | |||||||||
Total net change in market value of investments | 13 | (80 | ) | 9 | (39 | ) | |||||||||
Changes in market value of derivatives: | |||||||||||||||
Changes in market value of derivatives, net of taxes (benefits) of $153, ($34), $343 and ($52), respectively | 262 | (54 | ) | 566 | (85 | ) | |||||||||
Reclassification adjustment for net gains included in net loss, net of taxes (benefits) of ($143), ($4), ($139), and $4, respectively | (236 | ) | (7 | ) | (228 | ) | 7 | ||||||||
Total net change in market value of derivatives | 26 | (61 | ) | 338 | (78 | ) | |||||||||
Other comprehensive income (loss) | 2,534 | 30 | 3,977 | (204 | ) | ||||||||||
Total comprehensive income (loss) | $ | 66 | $ | (1,236 | ) | $ | (22,713 | ) | $ | (10,468 | ) |
Six Months Ended | |||||||
September 30, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (26,690 | ) | $ | (10,264 | ) | |
Adjustments to reconcile net loss to cash provided by operating activities, net of the effects of acquisitions: | |||||||
Depreciation and amortization | 75,209 | 80,581 | |||||
Loss on disposal of fixed assets | 421 | 58 | |||||
Deal-related compensation expense and accretion charges | 76 | 76 | |||||
Share-based compensation expense associated with equity awards | 22,829 | 19,802 | |||||
Deferred income taxes | (17,335 | ) | (25,328 | ) | |||
Other gains (losses) | 732 | (237 | ) | ||||
Changes in assets and liabilities | |||||||
Accounts receivable and unbilled costs | 82,280 | 6,636 | |||||
Due from related party | 554 | 22,770 | |||||
Inventories | (1,048 | ) | 239 | ||||
Prepaid expenses and other assets | (1,668 | ) | (7,773 | ) | |||
Accounts payable | (8,092 | ) | 4,414 | ||||
Accrued compensation and other expenses | (8,080 | ) | (14,041 | ) | |||
Due to related party | 168 | (2,579 | ) | ||||
Income taxes payable | 1,769 | (3,469 | ) | ||||
Deferred revenue | (49,064 | ) | (18,657 | ) | |||
Net cash provided by operating activities | 72,061 | 52,228 | |||||
Cash flows from investing activities: | |||||||
Purchase of marketable securities | (57,776 | ) | (53,500 | ) | |||
Proceeds from maturity of marketable securities | 155,741 | 86,853 | |||||
Purchase of fixed assets | (7,554 | ) | (15,748 | ) | |||
Purchase of intangible assets | (505 | ) | (1,020 | ) | |||
Decrease (increase) in deposits | 30 | (53 | ) | ||||
Acquisition of businesses, net of cash acquired | (8,334 | ) | (4,606 | ) | |||
Contingent purchase consideration | 523 | 660 | |||||
Collection of contingently returnable consideration from related party | — | 5,133 | |||||
Capitalized software development costs | (110 | ) | (1,231 | ) | |||
Net cash provided by investing activities | 82,015 | 16,488 | |||||
Cash flows from financing activities: | |||||||
Issuance of common stock under stock plans | — | 1 | |||||
Payment of contingent consideration | (660 | ) | — | ||||
Treasury stock repurchases | (200,000 | ) | (76,592 | ) | |||
Tax withholding on restricted stock units | (11,027 | ) | (6,623 | ) | |||
Net cash used in financing activities | (211,687 | ) | (83,214 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 4,299 | (130 | ) | ||||
Net decrease in cash and cash equivalents | (53,312 | ) | (14,628 | ) | |||
Cash and cash equivalents and restricted cash, beginning of period | 305,726 | 210,897 | |||||
Cash and cash equivalents and restricted cash, end of period | $ | 252,414 | $ | 196,269 | |||
Supplemental disclosures: | |||||||
Non-cash transactions: | |||||||
Transfers of inventory to fixed assets | $ | 5,556 | $ | 4,928 | |||
Additions to property, plant and equipment included in accounts payable | $ | (417 | ) | $ | 362 | ||
Issuance of common stock under employee stock plans | $ | 8,603 | $ | 6,943 | |||
Contingent consideration related to acquisition, included in accrued other | $ | 523 | $ | 660 |
• | On a prospective basis, as required, the Company recorded an excess tax shortfall of $0.2 million and an excess tax benefit of $1.2 million to the provision for income taxes in the consolidated statement of operations for the three and six months ended September 30, 2017, respectively, instead of additional paid-in capital in the consolidated balance sheets. As a result, net income decreased $0.2 million and increased $1.2 million, for the three and six months ended September 30, 2017, respectively. There was no impact to basic and diluted earnings per share for the three months ended September 30, 2017, while basic and diluted earnings per share increased $0.01 for the six months ended September 30, 2017. |
• | Excess tax benefits are presented as operating cash activity instead of financing cash activity in the consolidated statements of cash flows, which the Company elected to apply on a retrospective basis. As a result, the Company classified $1.2 million and $1.4 million of excess tax benefits for the six months ended September 30, 2017 and 2016, respectively, as operating cash outflows included within the change in income taxes payable in the consolidated statements of cash flows. The retrospective classification resulted in decreases in cash provided by operating activities and cash used in financing activities of $1.4 million for the six months ended September 30, 2016. |
• | The Company prospectively excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share under the treasury stock method, which did not have an impact on diluted earnings per share for the three and six months ended September 30, 2017. |
Three Months Ended | Six Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Cost of product revenue | $ | 293 | $ | 266 | $ | 506 | $ | 461 | |||||||
Cost of service revenue | 1,294 | 1,245 | 2,310 | 2,043 | |||||||||||
Research and development | 3,915 | 3,872 | 7,090 | 6,505 | |||||||||||
Sales and marketing | 4,147 | 3,726 | 7,591 | 6,337 | |||||||||||
General and administrative | 2,949 | 2,569 | 5,332 | 4,464 | |||||||||||
$ | 12,598 | $ | 11,678 | $ | 22,829 | $ | 19,810 |
September 30, 2017 | March 31, 2017 | September 30, 2016 | March 31, 2016 | ||||||||||||
Cash and cash equivalents | $ | 251,505 | $ | 304,880 | $ | 195,423 | $ | 210,711 | |||||||
Restricted cash | 909 | 846 | 846 | 186 | |||||||||||
Total cash, cash equivalents and restricted cash | $ | 252,414 | $ | 305,726 | $ | 196,269 | $ | 210,897 |
Amortized Cost | Unrealized Gains (Losses) | Fair Value | |||||||||
Type of security: | |||||||||||
U.S. government and municipal obligations | $ | 40,626 | $ | (30 | ) | $ | 40,596 | ||||
Commercial paper | 13,984 | — | 13,984 | ||||||||
Corporate bonds | 1,003 | (1 | ) | 1,002 | |||||||
Total short-term marketable securities | 55,613 | (31 | ) | 55,582 | |||||||
U.S. government and municipal obligations | 6,290 | 2 | 6,292 | ||||||||
Total long-term marketable securities | 6,290 | 2 | 6,292 | ||||||||
Total marketable securities | $ | 61,903 | $ | (29 | ) | $ | 61,874 |
Amortized Cost | Unrealized Losses | Fair Value | |||||||||
Type of security: | |||||||||||
U.S. government and municipal obligations | $ | 98,989 | $ | (21 | ) | $ | 98,968 | ||||
Commercial paper | 29,469 | — | 29,469 | ||||||||
Corporate bonds | 7,959 | (3 | ) | 7,956 | |||||||
Certificates of deposit | 1,499 | — | 1,499 | ||||||||
Total short-term marketable securities | 137,916 | (24 | ) | 137,892 | |||||||
U.S. government and municipal obligations | 21,952 | (19 | ) | 21,933 | |||||||
Total long-term marketable securities | 21,952 | (19 | ) | 21,933 | |||||||
Total marketable securities | $ | 159,868 | $ | (43 | ) | $ | 159,825 |
September 30, 2017 | March 31, 2017 | ||||||
Available-for-sale securities: | |||||||
Due in 1 year or less | $ | 55,582 | $ | 137,892 | |||
Due after 1 year through 5 years | 6,292 | 21,933 | |||||
$ | 61,874 | $ | 159,825 |
Fair Value Measurements at | |||||||||||||||
September 30, 2017 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
ASSETS: | |||||||||||||||
Cash and cash equivalents | $ | 251,505 | $ | — | $ | — | $ | 251,505 | |||||||
U.S. government and municipal obligations | 21,794 | 25,094 | — | 46,888 | |||||||||||
Commercial paper | — | 13,984 | — | 13,984 | |||||||||||
Corporate bonds | 1,002 | — | — | 1,002 | |||||||||||
Derivative financial instruments | — | 496 | — | 496 | |||||||||||
$ | 274,301 | $ | 39,574 | $ | — | $ | 313,875 | ||||||||
LIABILITIES: | |||||||||||||||
Contingent purchase consideration | $ | — | $ | — | $ | (5,388 | ) | $ | (5,388 | ) | |||||
Derivative financial instruments | — | (18 | ) | — | (18 | ) | |||||||||
$ | — | $ | (18 | ) | $ | (5,388 | ) | $ | (5,406 | ) |
Fair Value Measurements at | |||||||||||||||
March 31, 2017 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
ASSETS: | |||||||||||||||
Cash and cash equivalents | $ | 304,880 | $ | — | $ | — | $ | 304,880 | |||||||
U.S. government and municipal obligations | 40,628 | 80,273 | — | 120,901 | |||||||||||
Commercial paper | — | 29,469 | — | 29,469 | |||||||||||
Corporate bonds | 7,956 | — | — | 7,956 | |||||||||||
Certificate of deposits | — | 1,499 | — | 1,499 | |||||||||||
Derivative financial instruments | — | 110 | — | 110 | |||||||||||
$ | 353,464 | $ | 111,351 | $ | — | $ | 464,815 | ||||||||
LIABILITIES: | |||||||||||||||
Contingent purchase consideration | $ | — | $ | — | $ | (5,449 | ) | $ | (5,449 | ) | |||||
Derivative financial instruments | — | (213 | ) | — | (213 | ) | |||||||||
$ | — | $ | (213 | ) | $ | (5,449 | ) | $ | (5,662 | ) |
Contingent Purchase Consideration | |||
Balance at March 31, 2017 | $ | (5,449 | ) |
Additions to Level 3 | (523 | ) | |
Increase in fair value and accretion expense (included within research and development expense) | (76 | ) | |
Payments made | 660 | ||
Balance at September 30, 2017 | $ | (5,388 | ) |
September 30, 2017 | March 31, 2017 | ||||||
Raw materials | $ | 20,126 | $ | 22,305 | |||
Work in process | 425 | 998 | |||||
Finished goods and deferred costs | 16,405 | 16,699 | |||||
$ | 36,956 | $ | 40,002 |
Initial cash payment | $ | 8,104 | ||
Estimated fair value of contingent purchase consideration | 523 | |||
Estimated purchase price | $ | 8,627 |
Cash | $ | 93 | ||
Accounts receivable | 3 | |||
Prepaid and other current assets | 208 | |||
Property, plant and equipment | 8 | |||
Intangible assets | 2,590 | |||
Deferred tax asset | 841 | |||
Accounts payable | (7 | ) | ||
Accrued other liabilities | (200 | ) | ||
Deferred revenue | (8 | ) | ||
Deferred tax liabilities | (978 | ) | ||
Goodwill | $ | 6,077 |
Fair Value | Useful Life (Years) | |||||
Developed technology | $ | 1,980 | 10 | |||
Customer relationships | 610 | 10 | ||||
$ | 2,590 |
1) | For any outstanding Danaher restricted stock units or stock options held by employees of the Communications Business transferred to Newco (Newco Employees) that vested from July 14, 2015 through August 4, 2015, the awards continued to vest in Danaher shares. These awards met the definition of a derivative under ASC 815 and as such, the Company determined the fair value of these awards on July 14, 2015 and recorded them separately from the business combination as prepaid compensation. The derivative was amortized into compensation expense through August 4, 2015, the post-combination requisite settlement date. |
2) | All outstanding Danaher restricted stock units or stock options held by Newco Employees that were due to vest after August 4, 2015 were cancelled and replaced by NetScout with a cash retention award equal to one half of the value of the employee's cancelled Danaher equity award and up to an aggregate of $15 million of restricted stock units relating to shares of NetScout common stock equal to the remaining one half of the value of the employee’s cancelled Danaher equity award. The restricted stock units issued are considered new share-based payment awards granted by NetScout to the former employees of Danaher. NetScout accounted for these new awards separately from the business combination. The Company recognized share-based compensation net of an estimated forfeiture rate and only recognized compensation cost for those shares expected to vest on a straight-line basis over the requisite service period of the award. The cash retention award was paid on August 4, 2016, to those employees that continued their employment with NetScout through the applicable vesting date of August 4, 2016. Danaher reimbursed NetScout for the amount of the cash retention payments (net of any applicable employment taxes and tax deductions). The cash retention award liability was accounted for separately from the business combination as the cash retention award was automatically forfeited upon termination of employment. NetScout recorded the cash retention award liability over the period it was earned as compensation expense for post-combination services. The reimbursement by Danaher to NetScout of the cash retention award payment was accounted for separately from the business combination on the date |
3) | Newco Employees that were entitled to receive an incentive bonus under the Danaher annual bonus plan and who continued to be employed by NetScout through December 31, 2015 received a cash incentive bonus payment. The cash incentive bonus liability was accounted for separately from the business combination as the cash incentive bonus is automatically forfeited upon termination of employment. NetScout recorded the liability over the period it was earned as compensation expense for post-combination services. The payment of the cash retention award, which was reimbursed by Danaher to NetScout, was accounted for separately from the business combination on the date of the acquisition. |
4) | Certain Newco Employees received cash retention payments that were subject to the employee's continued employment with NetScout through October 16, 2015, ninety (90) days after the close of the acquisition. The cash retention payment liability was accounted for separately from the business combination as the cash retention payment was automatically forfeited upon termination of employment. NetScout recorded the liability over the period it was earned as compensation expense for post-combination services. The payment of the cash retention award, which was reimbursed by Danaher to NetScout, was accounted for separately from the business combination on the date of the acquisition. |
Balance at March 31, 2017 | $ | 1,718,162 | |
Goodwill acquired during the quarter ended September 30, 2017 | 6,077 | ||
Foreign currency translation impact | (8,378 | ) | |
Balance as of September 30, 2017 | $ | 1,715,861 |
Cost | Accumulated Amortization | Net | |||||||||
Developed technology | $ | 258,729 | $ | (129,824 | ) | $ | 128,905 | ||||
Customer relationships | 841,876 | (139,317 | ) | 702,559 | |||||||
Distributor relationships and technology licenses | 8,961 | (4,283 | ) | 4,678 | |||||||
Definite-lived trademark and trade name | 44,230 | (15,364 | ) | 28,866 | |||||||
Core technology | 7,280 | (6,414 | ) | 866 | |||||||
Net beneficial leases | 336 | (336 | ) | — | |||||||
Non-compete agreements | 306 | (306 | ) | — | |||||||
Leasehold interest | 2,600 | (1,484 | ) | 1,116 | |||||||
Backlog | 18,434 | (18,429 | ) | 5 | |||||||
Capitalized software | 3,157 | (1,094 | ) | 2,063 | |||||||
Other | 1,208 | (892 | ) | 316 | |||||||
$ | 1,187,117 | $ | (317,743 | ) | $ | 869,374 |
Cost | Accumulated Amortization | Net | |||||||||
Developed technology | $ | 254,005 | $ | (110,200 | ) | $ | 143,805 | ||||
Customer relationships | 831,731 | (105,319 | ) | 726,412 | |||||||
Distributor relationships and technology licenses | 8,290 | (3,068 | ) | 5,222 | |||||||
Definite-lived trademark and trade name | 43,817 | (12,078 | ) | 31,739 | |||||||
Core technology | 7,108 | (6,009 | ) | 1,099 | |||||||
Net beneficial leases | 336 | (336 | ) | — | |||||||
Non-compete agreements | 278 | (278 | ) | — | |||||||
Leasehold interest | 2,600 | (998 | ) | 1,602 | |||||||
Backlog | 18,142 | (18,133 | ) | 9 | |||||||
Capitalized software | 3,047 | (594 | ) | 2,453 | |||||||
Other | 1,208 | (880 | ) | 328 | |||||||
$ | 1,170,562 | $ | (257,893 | ) | $ | 912,669 |
Three Months Ended | Six Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Amortization of intangible assets included as: | |||||||||||||||
Product revenue | $ | 2 | $ | 2,869 | $ | 4 | $ | 5,746 | |||||||
Cost of product revenue | 10,129 | 10,757 | 19,943 | 21,429 | |||||||||||
Operating expense | 18,303 | 17,636 | 36,692 | 35,263 | |||||||||||
$ | 28,434 | $ | 31,262 | $ | 56,639 | $ | 62,438 |
2018 (remaining six months) | $ | 56,710 | |
2019 | 107,775 | ||
2020 | 98,421 | ||
2021 | 86,287 | ||
2022 | 75,155 | ||
Thereafter | 445,026 | ||
$ | 869,374 |
Notional Amounts (a) | Prepaid Expenses and Other Current Assets | Accrued Other | |||||||||||||||||||||
September 30, 2017 | March 31, 2017 | September 30, 2017 | March 31, 2017 | September 30, 2017 | March 31, 2017 | ||||||||||||||||||
Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||
Forward contracts | $ | 10,504 | $ | 14,752 | $ | 496 | $ | 110 | $ | 18 | $ | 213 |
(a) | Notional amounts represent the gross contract/notional amount of the derivatives outstanding. |
Derivatives in Cash Flow Hedging Relationships | Effective Portion | Ineffective Portion | |||||||||||||||||||||||||
Gain (Loss) Recognized in OCI on Derivative (a) | Loss Reclassified from Accumulated OCI into Income (b) | Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) (c) | |||||||||||||||||||||||||
September 30, 2017 | September 30, 2016 | Location | September 30, 2017 | September 30, 2016 | Location | September 30, 2017 | September 30, 2016 | ||||||||||||||||||||
Forward contracts | $ | 415 | $ | (88 | ) | Research and development | $ | (54 | ) | $ | (6 | ) | Research and development | $ | 34 | $ | 18 | ||||||||||
Sales and marketing | (325 | ) | (5 | ) | Sales and marketing | (46 | ) | (57 | ) | ||||||||||||||||||
$ | 415 | $ | (88 | ) | $ | (379 | ) | $ | (11 | ) | $ | (12 | ) | $ | (39 | ) |
(a) | The amount represents the change in fair value of derivative contracts due to changes in spot rates. |
(b) | The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. |
(c) | The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
Derivatives in Cash Flow Hedging Relationships | Effective Portion | Ineffective Portion | |||||||||||||||||||||||||
Gain (Loss) Recognized in OCI on Derivative (a) | Gain (Loss) Reclassified from Accumulated OCI into Income (b) | Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) (c) | |||||||||||||||||||||||||
September 30, 2017 | September 30, 2016 | Location | September 30, 2017 | September 30, 2016 | Location | September 30, 2017 | September 30, 2016 | ||||||||||||||||||||
Forward contracts | $ | 909 | $ | (137 | ) | Research and development | $ | (82 | ) | $ | (18 | ) | Research and development | $ | 37 | $ | 31 | ||||||||||
Sales and marketing | (285 | ) | 29 | Sales and marketing | (74 | ) | (92 | ) | |||||||||||||||||||
$ | 909 | $ | (137 | ) | $ | (367 | ) | $ | 11 | $ | (37 | ) | $ | (61 | ) |
(a) | The amount represents the change in fair value of derivative contracts due to changes in spot rates. |
(b) | The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. |
(c) | The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
Q4 FY2017 Plan | |||||||||||
Employee-Related | Facilities Related | Total | |||||||||
Balance at March 31, 2017 | $ | 1,550 | $ | 405 | $ | 1,955 | |||||
Restructuring charges to operations | 729 | 208 | $ | 937 | |||||||
Cash payments | (1,519 | ) | (120 | ) | (1,639 | ) | |||||
Other adjustments | (408 | ) | (15 | ) | (423 | ) | |||||
Balance at September 30, 2017 | $ | 352 | $ | 478 | $ | 830 |
Three Months Ended | Six Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Service cost | $ | 70 | $ | 81 | $ | 141 | $ | 165 | |||||||
Interest cost | 136 | 157 | 273 | 321 | |||||||||||
Net periodic pension cost | $ | 206 | $ | 238 | $ | 414 | $ | 486 |
Three Months Ended | Six Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Numerator: | |||||||||||||||
Net loss | $ | (2,468 | ) | $ | (1,266 | ) | $ | (26,690 | ) | $ | (10,264 | ) | |||
Denominator: | |||||||||||||||
Denominator for basic net loss per share - weighted average common shares outstanding | 88,589 | 91,919 | 89,878 | 92,628 | |||||||||||
Dilutive common equivalent shares: | |||||||||||||||
Weighted average restricted stock units | — | — | — | — | |||||||||||
Denominator for diluted net loss per share - weighted average shares outstanding | 88,589 | 91,919 | 89,878 | 92,628 | |||||||||||
Net loss per share: | |||||||||||||||
Basic net loss per share | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.30 | ) | $ | (0.11 | ) | |||
Diluted net loss per share | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.30 | ) | $ | (0.11 | ) |
Three Months Ended | Six Months Ended | ||||||||||
September 30, | September 30, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||
Restricted stock units | 936 | 709 | 1,102 | 797 |
Three Months Ended | Six Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
United States | $ | 153,632 | $ | 180,059 | $ | 292,250 | $ | 349,367 | |||||||
Europe | 43,102 | 40,680 | 78,550 | 82,737 | |||||||||||
Asia | 25,201 | 19,175 | 44,728 | 44,618 | |||||||||||
Rest of the world | 34,928 | 32,134 | 67,091 | 64,278 | |||||||||||
$ | 256,863 | $ | 272,048 | $ | 482,619 | $ | 541,000 |
September 30, 2017 | March 31, 2017 | ||||||
Danaher | $ | 194 | $ | 404 | |||
Fortive | 2,888 | 3,181 | |||||
$ | 3,082 | $ | 3,585 |
September 30, 2017 | March 31, 2017 | ||||||
Fortive | 612 | 444 | |||||
$ | 612 | $ | 444 |
Three Months Ended | Six Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Danaher: | |||||||||||||||
Cost of product revenue | $ | — | $ | 113 | $ | — | $ | 4,690 | |||||||
Cost of service revenue | — | 268 | — | 458 | |||||||||||
Research and development expenses | — | 652 | — | 1,677 | |||||||||||
Sales and marketing | — | 722 | 2 | 2,322 | |||||||||||
General and administrative expenses | 3 | 998 | 4 | 2,502 | |||||||||||
$ | 3 | $ | 2,753 | $ | 6 | $ | 11,649 | ||||||||
Fortive: | |||||||||||||||
Cost of product revenue | $ | — | $ | 2,373 | $ | 245 | $ | 2,373 | |||||||
Cost of service revenue | 259 | 14 | 288 | 14 | |||||||||||
Research and development expenses | — | (104 | ) | 3 | (104 | ) | |||||||||
Sales and marketing | — | 150 | — | 150 | |||||||||||
General and administrative expenses | 697 | 1,041 | 940 | 1,041 | |||||||||||
$ | 956 | $ | 3,474 | $ | 1,476 | $ | 3,474 |
Six Months Ended | |||||||
September 30, | |||||||
2017 | 2016 | ||||||
Due from related party: | |||||||
Danaher | $ | 154 | $ | 16,955 | |||
Fortive | 400 | 5,815 | |||||
Total | $ | 554 | $ | 22,770 | |||
Due to related party: | |||||||
Danaher | $ | — | $ | (2,955 | ) | ||
Fortive | 168 | 376 | |||||
Total | $ | 168 | $ | (2,579 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
GAAP revenue | $ | 256,863 | $ | 272,048 | $ | 482,619 | $ | 541,000 | |||||||
Product deferred revenue fair value adjustment | 719 | 3,130 | 1,435 | 4,475 | |||||||||||
Service deferred revenue fair value adjustment | 2,361 | 5,218 | 4,736 | 10,001 | |||||||||||
Amortization of acquired intangible assets | 2 | 2,869 | 4 | 5,746 | |||||||||||
Non-GAAP revenue | $ | 259,945 | $ | 283,265 | $ | 488,794 | $ | 561,222 | |||||||
GAAP gross profit | $ | 182,620 | 187,538 | $ | 341,814 | $ | 369,456 | ||||||||
Product deferred revenue fair value adjustment | 719 | 3,130 | 1,435 | 4,475 | |||||||||||
Service deferred revenue fair value adjustment | 2,361 | 5,218 | 4,736 | 10,001 | |||||||||||
Share-based compensation expense | 1,587 | 1,511 | 2,816 | 2,504 | |||||||||||
Amortization of acquired intangible assets | 9,309 | 13,253 | 18,550 | 26,499 | |||||||||||
Business development and integration expense | (340 | ) | (68 | ) | 649 | 90 | |||||||||
Compensation for post-combination services | — | 381 | — | 525 | |||||||||||
Acquisition related depreciation expense | 36 | (12 | ) | 78 | 153 | ||||||||||
Non-GAAP gross profit | $ | 196,292 | $ | 210,951 | $ | 370,078 | $ | 413,703 | |||||||
GAAP income (loss) from operations | $ | (1,239 | ) | $ | 805 | $ | (34,794 | ) | $ | (9,949 | ) | ||||
Product deferred revenue fair value adjustment | 719 | 3,130 | 1,435 | 4,475 | |||||||||||
Service deferred revenue fair value adjustment | 2,361 | 5,218 | 4,736 | 10,001 | |||||||||||
Share-based compensation expense | 12,598 | 11,678 | 22,829 | 19,810 | |||||||||||
Amortization of acquired intangible assets | 27,607 | 30,812 | 55,231 | 61,630 | |||||||||||
Business development and integration expense | (1,244 | ) | 2,977 | 4,912 | 6,646 | ||||||||||
New standard implementation expense | 431 | — | 431 | — | |||||||||||
Compensation for post-combination services | 404 | 2,867 | 641 | 4,582 | |||||||||||
Restructuring charges | 291 | (105 | ) | 458 | 1,929 | ||||||||||
Acquisition related depreciation expense | 506 | 666 | 1,061 | 2,025 | |||||||||||
Non-GAAP income from operations | $ | 42,434 | $ | 58,048 | $ | 56,940 | $ | 101,149 |
Three Months Ended | Six Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
GAAP net loss | $ | (2,468 | ) | $ | (1,266 | ) | $ | (26,690 | ) | $ | (10,264 | ) | |||
Product deferred revenue fair value adjustment | 719 | 3,130 | 1,435 | 4,475 | |||||||||||
Service deferred revenue fair value adjustment | 2,361 | 5,218 | 4,736 | 10,001 | |||||||||||
Share-based compensation expense | 12,598 | 11,678 | 22,829 | 19,810 | |||||||||||
Amortization of acquired intangible assets | 27,607 | 30,812 | 55,231 | 61,630 | |||||||||||
Business development and integration expense | (1,244 | ) | 2,977 | 4,912 | 6,646 | ||||||||||
New standard implementation expense | 431 | — | 431 | — | |||||||||||
Compensation for post-combination services | 404 | 2,867 | 641 | 4,582 | |||||||||||
Restructuring charges | 291 | (105 | ) | 458 | 1,929 | ||||||||||
Acquisition-related depreciation expense | 506 | 666 | 1,061 | 2,025 | |||||||||||
Income tax adjustments | (15,001 | ) | (19,544 | ) | (31,221 | ) | (38,072 | ) | |||||||
Non-GAAP net income | $ | 26,204 | $ | 36,433 | $ | 33,823 | $ | 62,762 | |||||||
GAAP diluted net loss per share | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.30 | ) | $ | (0.11 | ) | |||
Per share impact of non-GAAP adjustments identified above | 0.32 | 0.40 | 0.67 | 0.78 | |||||||||||
Non-GAAP diluted net income per share | $ | 0.29 | $ | 0.39 | $ | 0.37 | $ | 0.67 | |||||||
GAAP income (loss) from operations | $ | (1,239 | ) | $ | 805 | $ | (34,794 | ) | $ | (9,949 | ) | ||||
Previous adjustments to determine non-GAAP income from operations | 43,673 | 57,243 | $ | 91,734 | 111,098 | ||||||||||
Non-GAAP income from operations | 42,434 | 58,048 | 56,940 | 101,149 | |||||||||||
Depreciation excluding acquisition related | 9,383 | 8,929 | 18,917 | 16,926 | |||||||||||
Non-GAAP EBITDA from operations | $ | 51,817 | $ | 66,977 | $ | 75,857 | $ | 118,075 |
• | marketable securities; |
• | revenue recognition; |
• | valuation of goodwill, intangible assets and other acquisition accounting items; and |
• | share-based compensation. |
Three Months Ended | Change | |||||||||||||||||||
September 30, | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue | % of Revenue | $ | % | |||||||||||||||||
Revenue: | ||||||||||||||||||||
Product | $ | 149,281 | 58 | % | $ | 168,873 | 62 | % | $ | (19,592 | ) | (12 | )% | |||||||
Service | 107,582 | 42 | 103,175 | 38 | 4,407 | 4 | % | |||||||||||||
Total revenue | $ | 256,863 | 100 | % | $ | 272,048 | 100 | % | $ | (15,185 | ) | (6 | )% |
Three Months Ended | Change | |||||||||||||||||||
September 30, | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue | % of Revenue | $ | % | |||||||||||||||||
United States | $ | 153,632 | 60 | % | $ | 180,059 | 66 | % | $ | (26,427 | ) | (15 | )% | |||||||
International: | ||||||||||||||||||||
Europe | 43,102 | 17 | 40,680 | 15 | 2,422 | 6 | % | |||||||||||||
Asia | 25,201 | 10 | 19,175 | 7 | 6,026 | 31 | % | |||||||||||||
Rest of the world | 34,928 | 13 | 32,134 | 12 | 2,794 | 9 | % | |||||||||||||
Subtotal international | 103,231 | 40 | 91,989 | 34 | 11,242 | 12 | % | |||||||||||||
Total revenue | $ | 256,863 | 100 | % | $ | 272,048 | 100 | % | $ | (15,185 | ) | (6 | )% |
Three Months Ended | Change | |||||||||||||||||||
September 30, | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue | % of Revenue | $ | % | |||||||||||||||||
Cost of revenue | ||||||||||||||||||||
Product | $ | 45,841 | 18 | % | $ | 56,647 | 21 | % | $ | (10,806 | ) | (19 | )% | |||||||
Service | 28,402 | 11 | 27,863 | 10 | 539 | 2 | % | |||||||||||||
Total cost of revenue | $ | 74,243 | 29 | % | $ | 84,510 | 31 | % | $ | (10,267 | ) | (12 | )% | |||||||
Gross profit: | ||||||||||||||||||||
Product $ | $ | 103,440 | 40 | % | $ | 112,226 | 41 | % | $ | (8,786 | ) | (8 | )% | |||||||
Product gross profit % | 69 | % | 66 | % | ||||||||||||||||
Service $ | $ | 79,180 | 31 | % | $ | 75,312 | 28 | % | $ | 3,868 | 5 | % | ||||||||
Service gross profit % | 74 | % | 73 | % | ||||||||||||||||
Total gross profit $ | $ | 182,620 | $ | 187,538 | $ | (4,918 | ) | (3 | )% | |||||||||||
Total gross profit % | 71 | % | 69 | % |
Three Months Ended | Change | |||||||||||||||||||
September 30, | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue | % of Revenue | $ | % | |||||||||||||||||
Research and development | $ | 58,509 | 23 | % | $ | 61,046 | 22 | % | $ | (2,537 | ) | (4 | )% | |||||||
Sales and marketing | 77,266 | 30 | 76,706 | 28 | 560 | 1 | % | |||||||||||||
General and administrative | 29,495 | 11 | 31,527 | 12 | (2,032 | ) | (6 | )% | ||||||||||||
Amortization of acquired intangible assets | 18,298 | 7 | 17,559 | 7 | 739 | 4 | % | |||||||||||||
Restructuring charges | 291 | — | (105 | ) | — | 396 | 377 | % | ||||||||||||
Total operating expenses | $ | 183,859 | 71 | % | $ | 186,733 | 69 | % | $ | (2,874 | ) | (2 | )% |
Three Months Ended | Change | |||||||||||||||||||
September 30, | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue | % of Revenue | $ | % | |||||||||||||||||
Interest and other expense, net | $ | (3,323 | ) | (1 | )% | $ | (2,430 | ) | (1 | )% | $ | (893 | ) | (37 | )% |
Three Months Ended | Change | |||||||||||||||||||
September 30, | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue | % of Revenue | $ | % | |||||||||||||||||
Income tax benefit | $ | (2,094 | ) | (1 | )% | $ | (359 | ) | — | % | $ | (1,735 | ) | (483 | )% |
Six Months Ended | Change | |||||||||||||||||||
September 30, | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue | % of Revenue | $ | % | |||||||||||||||||
Revenue: | ||||||||||||||||||||
Product | $ | 264,103 | 55 | % | $ | 333,462 | 62 | % | $ | (69,359 | ) | (21 | )% | |||||||
Service | 218,516 | 45 | % | 207,538 | 38 | % | 10,978 | 5 | % | |||||||||||
Total revenue | $ | 482,619 | 100 | % | $ | 541,000 | 100 | % | $ | (58,381 | ) | (11 | )% |
Six Months Ended | Change | |||||||||||||||||||
September 30, | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue | % of Revenue | $ | % | |||||||||||||||||
United States | $ | 292,250 | 61 | % | $ | 349,367 | 65 | % | $ | (57,117 | ) | (16 | )% | |||||||
International: | ||||||||||||||||||||
Europe | 78,550 | 16 | 82,737 | 15 | (4,187 | ) | (5 | )% | ||||||||||||
Asia | 44,728 | 9 | 44,618 | 8 | 110 | — | % | |||||||||||||
Rest of the world | 67,091 | 14 | 64,278 | 12 | 2,813 | 4 | % | |||||||||||||
Subtotal international | 190,369 | 39 | 191,633 | 35 | (1,264 | ) | (1 | )% | ||||||||||||
Total revenue | $ | 482,619 | 100 | % | $ | 541,000 | 100 | % | $ | (58,381 | ) | (11 | )% |
Six Months Ended | Change | |||||||||||||||||||
September 30, | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue | % of Revenue | $ | % | |||||||||||||||||
Cost of revenue | ||||||||||||||||||||
Product | $ | 83,686 | 17 | % | $ | 116,474 | 22 | % | $ | (32,788 | ) | (28 | )% | |||||||
Service | 57,119 | 12 | 55,070 | 10 | 2,049 | 4 | % | |||||||||||||
Total cost of revenue | $ | 140,805 | 29 | % | $ | 171,544 | 32 | % | $ | (30,739 | ) | (18 | )% | |||||||
Gross profit: | ||||||||||||||||||||
Product $ | $ | 180,417 | 37 | % | $ | 216,988 | 40 | % | $ | (36,571 | ) | (17 | )% | |||||||
Product gross profit % | 68 | % | 65 | % | ||||||||||||||||
Service $ | $ | 161,397 | 33 | % | $ | 152,468 | 28 | % | $ | 8,929 | 6 | % | ||||||||
Service gross profit % | 74 | % | 73 | % | ||||||||||||||||
Total gross profit $ | $ | 341,814 | $ | 369,456 | $ | (27,642 | ) | (7 | )% | |||||||||||
Total gross profit % | 71 | % | 68 | % |
Six Months Ended | Change | |||||||||||||||||||
September 30, | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue | % of Revenue | $ | % | |||||||||||||||||
Research and development | $ | 117,475 | 24 | % | $ | 121,597 | 22 | % | $ | (4,122 | ) | (3 | )% | |||||||
Sales and marketing | 162,627 | 34 | % | 158,294 | 30 | % | 4,333 | 3 | % | |||||||||||
General and administrative | 59,367 | 12 | % | 62,454 | 12 | % | (3,087 | ) | (5 | )% | ||||||||||
Amortization of acquired intangible assets | 36,681 | 8 | % | 35,131 | 6 | % | 1,550 | 4 | % | |||||||||||
Restructuring charges | 458 | 0 | % | 1,929 | 0 | % | (1,471 | ) | (76 | )% | ||||||||||
Total operating expenses | $ | 376,608 | 78 | % | $ | 379,405 | 70 | % | $ | (2,797 | ) | (1 | )% |
Six Months Ended | Change | |||||||||||||||||||
September 30, | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue | % of Revenue | $ | % | |||||||||||||||||
Interest and other expense, net | $ | (6,458 | ) | (1 | )% | $ | (5,334 | ) | (1 | )% | $ | (1,124 | ) | (21 | )% |
Six Months Ended | Change | |||||||||||||||||||
September 30, | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue | % of Revenue | $ | % | |||||||||||||||||
Income tax benefit | $ | (14,562 | ) | (3 | )% | $ | (5,019 | ) | (1 | )% | $ | (9,543 | ) | (190 | )% |
September 30, 2017 | March 31, 2017 | ||||||
Cash and cash equivalents | $ | 251,505 | $ | 304,880 | |||
Short-term marketable securities | 55,582 | 137,892 | |||||
Long-term marketable securities | 6,292 | 21,933 | |||||
Cash, cash equivalents and marketable securities | $ | 313,379 | $ | 464,705 |
Six months ended September 30, | |||||||
2017 | 2016 (1) | ||||||
Net cash provided by operating activities | $ | 72,061 | $ | 52,228 | |||
Net cash provided by investing activities | $ | 82,015 | $ | 16,488 | |||
Net cash used in financing activities | $ | (211,687 | ) | $ | (83,214 | ) |
Six months ended September 30, | |||||||
(Dollars in Thousands) | |||||||
2017 | 2016 | ||||||
Cash provided by investing activities included the following: | |||||||
Purchase of marketable securities | $ | (57,776 | ) | $ | (53,500 | ) | |
Proceeds from maturity of marketable securities | 155,741 | 86,853 | |||||
Purchase of fixed assets | (7,554 | ) | (15,748 | ) | |||
Purchase of intangible assets | (505 | ) | (1,020 | ) | |||
Decrease (increase) in deposits | 30 | (53 | ) | ||||
Acquisition of businesses, net of cash acquired | (8,334 | ) | (4,606 | ) | |||
Contingent purchase consideration | 523 | 660 | |||||
Collection of contingently returnable consideration from related party | — | 5,133 | |||||
Capitalized software development costs | (110 | ) | (1,231 | ) | |||
$ | 82,015 | $ | 16,488 |
Six months ended September 30, | |||||||
(Dollars in Thousands) | |||||||
2017 | 2016 | ||||||
Cash used in financing activities included the following: | |||||||
Issuance of common stock under stock plans | $ | — | $ | 1 | |||
Payment of contingent consideration | (660 | ) | — | ||||
Treasury stock repurchases | (200,000 | ) | (76,592 | ) | |||
Tax withholding on restricted stock units | (11,027 | ) | (6,623 | ) | |||
$ | (211,687 | ) | $ | (83,214 | ) |
• | On a prospective basis, as required, we recorded an excess tax shortfall of $0.2 million and an excess tax benefit of $1.2 million to the provision for income taxes in the consolidated statement of operations for the three and six months ended September 30, 2017, respectively, instead of additional paid-in capital, in the consolidated balance sheet. As a result, net income decreased $0.2 million and increased $1.2 million, for the three and six months ended September 30, 2017, respectively. There was no impact to basic and diluted earnings per share for the three months ended September 30, 2017, while basic and diluted earnings per share increased by $0.01 for the six months ended September 30, 2017. |
• | Excess tax benefits are presented as operating cash activity in the consolidated statements of cash flows instead of financing cash activity in the consolidated statements of cash flows, which we elected to apply on a retrospective basis. As a result, we classified $1.2 million and $1.4 million of excess tax benefits for the six months ended September 30, 2017 and 2016, respectively, as operating cash outflows included within the change in income taxes payable in the consolidated statement of cash flows. The retrospective classification resulted in decreases in cash provided by operating activities and cash used in financing activities of $1.4 million for the six months ended September 30, 2017. |
• | We prospectively excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share under the treasury stock method, which did not have an impact on diluted earnings per share for the three and six months ended September 30, 2017. |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares That May Yet be Purchased Under the Program | ||||||||
7/1/2017 - 7/30/2017 | — | $ | — | — | 3,993,005 | |||||||
8/1/2017 - 8/31/2017 | 2,046,600 | 33.36 | 1,945,865 | 2,047,140 | ||||||||
9/1/2017 - 9/30/2017 | 1,146,433 | 32.59 | 1,076,490 | 970,650 | ||||||||
Total | 3,193,033 | $ | 33.09 | 3,022,355 | 970,650 |
(1) | We purchased an aggregate of 170,678 shares transferred to us from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted stock units during the period. Such purchases reflected in the table do not reduce the maximum number of shares that may be purchased under our 20 million share repurchase program authorized on May 19, 2015. |
(a) | Exhibits |
Composite conformed copy of Third Amended and Restated Certificate of Incorporation of NetScout (as amended) (filed as Exhibit 3.2 to NetScout's current report on Form 8-K, SEC File No. 000-26251, filed on September 21, 2016, and incorporated herein by reference). | |||
Amended and Restated By-laws of NetScout (filed as Exhibit 3.1 to NetScout's current report on Form 8-K, SEC File No. 000-26251, filed on October 30, 2017 and incorporated herein by reference). | |||
+ | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
+ | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
++ | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
++ | Certification 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. |
+ | Filed herewith. |
++ | Exhibit has been furnished, is not deemed filed and is not to be incorporated by reference into any of the Company's filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in any such filing. |
NETSCOUT SYSTEMS, INC. | ||
Date: November 6, 2017 | /s/ Anil K. Singhal | |
Anil K. Singhal | ||
President, Chief Executive Officer and Chairman | ||
(Principal Executive Officer) | ||
Date: November 6, 2017 | /s/ Jean Bua | |
Jean Bua | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) | ||
(Principal Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of NetScout Systems, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Anil K. Singhal | |
Anil K. Singhal | |
President, Chief Executive Officer and Chairman | |
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of NetScout Systems, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Jean Bua | |
Jean Bua | |
Executive Vice President and Chief Financial Officer | |
(Principal Financial Officer) | |
(Principal Accounting Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Anil K. Singhal | |
Anil K. Singhal | |
President, Chief Executive Officer and Chairman |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Jean Bua | |
Jean Bua | |
Executive Vice President and Chief Financial Officer | |
(Principal Financial Officer) | |
(Principal Accounting Officer) |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 27, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NETSCOUT SYSTEMS INC | |
Entity Central Index Key | 0001078075 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | NTCT | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 87,140,939 |
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Related Party Transaction [Line Items] | ||||
Related party product | $ 45,841 | $ 56,647 | $ 83,686 | $ 116,474 |
Related party service | 28,402 | 27,863 | 57,119 | 55,070 |
Related party research and development | 58,509 | 61,046 | 117,475 | 121,597 |
Related party selling and marketing | 77,266 | 76,706 | 162,627 | 158,294 |
Related party general and administrative expense | 29,495 | 31,527 | 59,367 | 62,454 |
Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party product | 0 | 2,486 | 245 | 7,063 |
Related party service | 259 | 282 | 288 | 472 |
Related party research and development | 0 | 548 | 3 | 1,573 |
Related party selling and marketing | 0 | 872 | 2 | 2,472 |
Related party general and administrative expense | $ 700 | $ 2,039 | $ 944 | $ 3,543 |
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Changes in unrealized (losses) gains, (benefit) tax | $ 8 | $ 0 | $ 5 | $ 0 |
Changes in market value of derivatives, tax (benefit) | 153 | (34) | 343 | (52) |
Reclassification adjustment for net gains included in net income (loss), taxes | $ (143) | $ (4) | $ (139) | $ 4 |
BASIS OF PRESENTATION |
6 Months Ended | ||||||||||||
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Sep. 30, 2017 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements have been prepared by NetScout Systems, Inc., or NetScout or the Company. Certain information and footnote disclosures normally included in financial statements prepared under United States generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company's financial position, results of operations and cash flows. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results reported in these unaudited interim consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. All significant intercompany accounts and transactions are eliminated in consolidation. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017 filed with the Securities and Exchange Commission on May 24, 2017. Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). ASU 2017-12 intends to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2018, with early adoption permitted. ASU 2017-12 is effective for the Company beginning April 1, 2019. The Company is currently assessing the potential impact of the adoption of ASU 2017-12 on its consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost (ASU 2017-07) which requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2017 and should be applied retrospectively to all periods presented. ASU 2017-07 is effective for the Company beginning April 1, 2018. The Company is currently assessing the potential impact of the adoption of ASU 2017-07 on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business (ASU 2017-01). ASU 2017-01 clarifies the definition of a business with the objective of addressing whether transactions involving in-substance nonfinancial assets, held directly or in a subsidiary, should be accounted for as acquisitions or disposals of nonfinancial assets or of businesses. ASU 2017-01 is effective for annual periods beginning after December 15, 2017. ASU 2017-01 is effective for the Company beginning April 1, 2018. Early adoption is permitted for transactions, including acquisitions or dispositions, which occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company is evaluating the new guidance and does not believe the adoption of ASU 2017-01 will have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18) related to the presentation of restricted cash in the statement of cash flows. The pronouncement requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. Entities will also have to disclose the nature of restricted cash and restricted cash equivalent balances. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company adopted this guidance retrospectively on April 1, 2017. The Company does not have a material amount of restricted cash. Adoption of this ASU did not have a material impact on the Company's consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16). ASU 2016-16 requires that entities recognize the income tax effects of intra-entity transfers of assets other than inventory when the transfer occurs. Current GAAP prohibits the recognition of those tax effects until the asset has been sold to an outside party. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. ASU 2016-16 is effective for the Company beginning April 1, 2018. The Company is evaluating the new guidance and does not believe the adoption of ASU 2016-16 will have a material impact on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 is intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU 2016-15 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. ASU 2016-15 is effective for the Company beginning April 1, 2018. The Company is currently assessing the potential impact of the adoption of ASU 2016-15 on its consolidated statement of cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted this guidance on April 1, 2017, which had the following impact on the consolidated financial statements:
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Section A - Leases: Amendments to the FASB Accounting Standards Codification (ASU 2016-02), its new standard on accounting for leases. This update requires the recognition of leased assets and lease obligations by lessees for those leases currently classified as operating leases under existing lease guidance. Short term leases with a term of 12 months or less are not required to be recognized. The update also requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. ASU 2016-02 is effective for annual reporting periods beginning after December 31, 2018 and interim periods within those fiscal years, and early adoption is permitted. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), which provided additional implementation guidance on the previously issued ASU. The Company is currently assessing the potential impact of the adoption of ASU 2016-02 on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09) and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016, December 2016 and September 2017, within ASU 2015-04, 2016-08, ASU 2016-10, ASU 2016-12, ASU 2016-20 and ASU 2017-13, respectively (ASU 2014-09, ASU 2015-04, ASU 2016-08, ASU 2016-10, ASU 2016-12, ASU 2016-20 and 2017-13, collectively, Topic 606). Topic 606 supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in applying this process, it is possible that more judgments and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 will be effective for the Company on April 1, 2018. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this standard. The Company believes it will elect the modified retrospective transition approach. However, the Company is still evaluating the impact of this new accounting standard. The adoption will most likely result in a reduction in deferred revenue as of April 1, 2018 for performance obligations that are deferred under current guidance that may not be deferred under Topic 606. Upon adoption of Topic 606, the Company expects to recognize a greater proportion of revenue upon delivery of its products, whereas some of its current product sales are initially recorded in deferred revenue and recognized over a period of time. Since the Company is currently expensing sales commissions as incurred, the requirement in the new standard to capitalize certain in-scope sales commissions is being evaluated to determine its potential impact on the consolidated financial statements in the year of adoption. The Company does not foresee any material impact on its cash flows. The Company will continue to assess all potential impacts of the guidance and given normal ongoing business dynamics, preliminary conclusions are subject to change. |
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS |
6 Months Ended |
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Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS | CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS Financial instruments that potentially subject us to concentration of credit risk consist primarily of investments, trade accounts receivable and accounts payable. The Company's cash, cash equivalents, and marketable securities are placed with financial institutions with high credit standings. At September 30, 2017 and March 31, 2017, the Company had no direct customers or indirect channel partners which accounted for more than 10% of the accounts receivable balance. During the three and six months ended September 30, 2017, no direct customers or indirect channel partners accounted for more than 10% of the Company's total revenue. During the three and six months ended September 30, 2016, one direct customer, Verizon, accounted for more than 10% of the Company's total revenue, while no indirect channel partners accounted for more than 10% of total revenue. As disclosed parenthetically within the Company's consolidated balance sheet, the Company has receivables from related parties that represent a concentration of credit risk of $3.1 million and $3.6 million at September 30, 2017 and March 31, 2017, respectively. Historically, the Company has not experienced any significant failure of its customers' ability to meet their payment obligations nor does the Company anticipate material non-performance by its customers in the future; accordingly, the Company does not require collateral from its customers. However, if the Company's assumptions are incorrect, there could be an adverse impact on its allowance for doubtful accounts. |
SHARE-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The following is a summary of share-based compensation expense including restricted stock units granted pursuant to the Company's 2007 Equity Incentive Plan, as amended, and employee stock purchases made under the Company's 2011 Employee Stock Purchase Plan (ESPP) based on estimated fair values within the applicable cost and expense lines identified below (in thousands):
Employee Stock Purchase Plan – The Company maintains the ESPP for all eligible employees as described in the Company's Annual Report on Form 10-K for the year ended March 31, 2017. Under the ESPP, shares of the Company's common stock may be purchased on the last day of each bi-annual offering period at 85% of the fair value on the last day of such offering period. The offering periods run from March 1st through August 31st and from September 1st through the last day of February each year. During the six months ended September 30, 2017, employees purchased 262,685 shares under the ESPP and the value per share was $32.75. |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES | CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents and those investments with original maturities greater than three months to be marketable securities. Cash and cash equivalents consisted of money market instruments and cash maintained with various financial institutions at September 30, 2017 and March 31, 2017. Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):
The Company's restricted cash includes cash balances which are legally or contractually restricted. The Company's restricted cash is included within prepaid and other current assets and consists of amounts related to holdbacks associated with prior acquisitions. Marketable Securities The following is a summary of marketable securities held by NetScout at September 30, 2017, classified as short-term and long-term (in thousands):
The following is a summary of marketable securities held by NetScout at March 31, 2017, classified as short-term and long-term (in thousands):
Contractual maturities of the Company's marketable securities held at September 30, 2017 and March 31, 2017 were as follows (in thousands):
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant non-observable inputs. The following tables present the Company's financial assets and liabilities measured on a recurring basis using the fair value hierarchy at September 30, 2017 and March 31, 2017 (in thousands):
This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, the Company measures certain financial assets and liabilities at fair value, including marketable securities and derivative financial instruments. The Company's Level 1 investments are classified as such because they are valued using quoted market prices or alternative pricing sources with reasonable levels of price transparency. The Company's Level 2 investments are classified as such because fair value is calculated using market observable data for similar but not identical instruments, or a discounted cash flow model using the contractual interest rate as compared with the underlying interest yield curve. The Company classifies municipal obligations as level 2 because the fair values are determined using quoted prices from markets the Company considers to be inactive. Commercial paper is classified as Level 2 because the Company uses market information from similar but not identical instruments and discounted cash flow models based on interest rate yield curves to determine fair value. The Company's derivative financial instruments consist of forward foreign exchange contracts and are classified as Level 2 because the fair values of these derivatives are determined using models based on market observable inputs, including spot prices for foreign currencies and credit derivatives, as well as an interest rate factor. The Company's Level 3 liability consists of contingent purchase consideration. The Company's contingent purchase consideration at March 31, 2017 included $660 thousand related to the acquisition of certain assets and liabilities of Avvasi Inc. (Avvasi) in the second quarter of fiscal year 2017. The contingent purchase consideration represented amounts deposited into an escrow account, which was established to cover damages the Company suffers related to any liabilities that the Company did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the asset purchase agreement. The contingent purchase consideration was paid to the seller in August 2017. The fair value of contingent purchase consideration related to the acquisition of Simena LLC (Simena) in November 2011 for future consideration to be paid to the seller is $4.9 million at September 30, 2017. The contingent purchase consideration is included as a contingent liability in the Company's consolidated balance sheet at September 30, 2017 and March 31, 2017. The Company's contingent purchase consideration also includes $523 thousand related to the acquisition of certain assets and liabilities of Efflux Systems, Inc. (Efflux) in the second quarter of fiscal year 2018. The contingent purchase consideration represents amounts deposited into an escrow account, which was established to cover damages NetScout suffers related to any liabilities that NetScout did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the merger agreement. The contingent purchase consideration is included as accrued other in the Company's consolidated balance sheet as of September 30, 2017. The following table sets forth a reconciliation of changes in the fair value of the Company's Level 3 financial assets and liabilities for the six months ended September 30, 2017 (in thousands):
Deal-related compensation expense and accretion charges related to the contingent consideration for the six months ended September 30, 2017 was $76 thousand and was included as part of earnings. |
INVENTORIES |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES Inventories are stated at the lower of actual cost or net realizable value. Cost is determined by using the first in, first out (FIFO) method. Inventories consist of the following (in thousands):
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ACQUISITIONS |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | ACQUISITIONS Efflux On July 12, 2017 (the Efflux Closing Date), the Company completed the acquisition of Efflux for $8.6 million. Efflux's technology detects, analyzes and correlates threat activity within enterprise networks. The Efflux technology and engineering talent have been integrated into Arbor Networks in order to support the ongoing enhancement of Arbor SpectrumTM for advanced threat detection. The Company has completed the purchase accounting related to the Efflux acquisition as of September 30, 2017. The following table summarizes the allocation of the purchase price (in thousands):
Estimated fair value of assets acquired and liabilities assumed (in thousands):
Of the total consideration, $523 thousand was deposited into an escrow account. The escrow account was established to cover damages NetScout suffers related to any liabilities that NetScout did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the merger agreement. Generally, indemnification claims that Efflux would be liable for are limited to the total amount of the escrow account and shall be the sole source for the satisfaction of any damages to the Company for such claims, but such limitation does not apply with respect to seller's breach of certain fundamental representations or related to other specified indemnity items, for which certain of Efflux's shareholders may be liable for additional amounts in excess of the escrow amount. Except to the extent that valid indemnification claims are made prior to such time, the $523 thousand will be paid to the seller on July 12, 2018. In connection with the Efflux acquisition, certain former employees of Efflux will receive cash retention payments subject to such employee's continued employment with the Company through the next regularly scheduled payroll dates following each of the first and second anniversaries of the Efflux Closing Date. The cash retention payment liability was accounted for separately from the business combination as the cash retention payment is automatically forfeited upon termination of employment. The Company will record the liability over the period it is earned as compensation expense for post-combination services. Goodwill was recognized for the excess purchase price over the fair value of the net assets acquired. Goodwill of $6.1 million from the acquisition was included within the Security reporting unit. Goodwill and intangible assets recorded as part of the acquisition are not deductible for tax purposes. The fair values of intangible assets were based on valuations using an income approach. These assumptions include estimates of future revenues associated with the technology purchased as part of the acquisition and the migration of the current technology to a more advanced version of the software. This fair value measurement was based on significant inputs not observable in the market and thus represents Level 3 fair value measurements. The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives (in thousands):
The weighted average useful life of identifiable intangible assets acquired from Efflux is 10 years. Avvasi On August 19, 2016, the Company acquired certain assets and liabilities of Avvasi for $4.6 million. Avvasi's technology allows service providers to measure, improve and monetize video in their networks. This acquisition builds on the Company's ongoing investment to enhance its service assurance capabilities for video traffic over 4G/LTE networks. Goodwill was recognized for the excess purchase price over the fair value of the net assets acquired. Goodwill of $2.0 million from the acquisition was included within the Service Assurance reporting unit. Communications Business On July 14, 2015 (Closing Date), the Company completed the acquisition of Danaher Corporation's (Danaher) Communications Business (Communications Business), which included certain assets, liabilities, technology and employees within Tektronix Communications, VSS Monitoring, Arbor Networks and certain portions of the Fluke Networks Enterprise business, which excluded Danaher's data communications cable installation business and its communication service provider business (the Comms Transaction), which was structured as a Reverse Morris Trust transaction whereby Danaher contributed its Communications Business to a new subsidiary, Potomac Holding LLC (Newco). The total equity consideration was approximately $2.3 billion based on issuing approximately 62.5 million new shares of NetScout common stock to the existing common unit holders of Newco, based on the July 13, 2015 NetScout common stock closing share price of $36.89 per share. On the Closing Date, the Company did not gain control over certain foreign entities due to regulatory and other compliance requirements (Delayed Close Entities). The Company closed on the acquisition of these Delayed Close Entities on October 7, 2015. In connection with the Comms Transaction, under the Employee Matters Agreement dated July 14, 2015 by and among the Company, Danaher and Newco, Danaher funded certain contracts under which employees provided post-combination services to the Company.
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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 The Company has two reporting units: (1) Service Assurance and (2) Security. The Company assesses goodwill for impairment at the reporting unit level at least annually, or on an interim basis if an event occurs or circumstances change that would, more likely than not, reduce the fair value of the reporting unit below its carrying value. The Company completed its annual impairment test on January 31, 2017. At September 30, 2017, goodwill attributable to our Service Assurance and Security reporting units was $1.2 billion and $555.6 million, respectively. At March 31, 2017, goodwill attributable to our Service Assurance and Security reporting units was $1.2 billion and $548.5 million, respectively. The change in the carrying amount of goodwill for the six months ended September 30, 2017 is due to the acquisition of Efflux and the impact of foreign currency translation adjustments related to asset balances that are recorded in currencies other than the U.S. Dollar. The changes in the carrying amount of goodwill for the six months ended September 30, 2017 are as follows (in thousands):
Intangible Assets The net carrying amounts of intangible assets were $888.0 million and $931.3 million at September 30, 2017 and March 31, 2017, respectively. Intangible assets acquired in a business combination are recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition. The Company amortizes intangible assets over their estimated useful lives, except for the acquired trade name which resulted from the Network General Central Corporation (Network General) acquisition, which has an indefinite life and thus is not amortized. The carrying value of the indefinite-lived trade name is evaluated for potential impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at September 30, 2017 (in thousands):
Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at March 31, 2017 (in thousands):
Amortization included as product revenue consists of amortization of backlog. Amortization included as cost of product revenue consists of amortization of developed technology, distributor relationships and technology licenses, core technology and software. Amortization included as operating expense consists of all other intangible assets. The following table provides a summary of amortization expense for the three and six months ended September 30, 2017 and 2016, respectively (in thousands):
The following is the expected future amortization expense at September 30, 2017 for the fiscal years ending March 31 (in thousands):
The weighted-average amortization period of developed technology and core technology is 11.5 years. The weighted-average amortization period for customer and distributor relationships is 16.1 years. The weighted-average amortization period for trademarks and trade names is 8.5 years. The weighted-average amortization period for leasehold interests is 5.6 years. The weighted-average amortization period for backlog is 2.0 years. The weighted-average amortization period for capitalized software is 4.0 years. The weighted-average amortization period for amortizing all intangible assets is 14.6 years. |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES NetScout operates internationally and, in the normal course of business, is exposed to fluctuations in foreign currency exchange rates. The exposures result from costs that are denominated in currencies other than the U.S. Dollar, primarily the Euro, British Pound, Canadian Dollar, and Indian Rupee. The Company manages its foreign cash flow risk by hedging forecasted cash flows for operating expenses denominated in foreign currencies for up to twelve months, within specified guidelines through the use of forward contracts. The Company enters into foreign currency exchange contracts to hedge cash flow exposures from costs that are denominated in currencies other than the U.S. Dollar. These hedges are designated as cash flow hedges at inception. All of the Company's derivative instruments are utilized for risk management purposes, and the Company does not use derivatives for speculative trading purposes. These contracts will mature over the next twelve months and are expected to impact earnings on or before maturity. The notional amounts and fair values of derivative instruments in the consolidated balance sheets at September 30, 2017 and March 31, 2017 were as follows (in thousands):
The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the three months ended September 30, 2017 and 2016 (in thousands):
The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the six months ended September 30, 2017 and 2016 (in thousands):
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LONG-TERM DEBT |
6 Months Ended |
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Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT On July 14, 2015, the Company entered into a certain credit facility with a syndicate of lenders pursuant to a Credit Agreement (Credit Agreement), dated as of July 14, 2015, by and among: the Company; JPMorgan Chase Bank, N.A. (JPMorgan), as administrative agent and collateral agent; J.P. Morgan Securities LLC, KeyBanc Capital Markets, Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets and Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners; Santander Bank, N.A., SunTrust Bank, N.A. and U.S. Bank National Association, as co-documentation agents; and the lenders party thereto. The Credit Agreement provides for a five-year, $800 million senior secured revolving credit facility, including a letter of credit sub-facility of up to $50 million. The Company may elect to use this credit facility for working capital purposes or to finance the repurchase of up to 20 million shares of common stock under the Company's common stock repurchase plan. The commitments under the Credit Agreement will expire on July 14, 2020, and any outstanding loans will be due on that date. At September 30, 2017, $300 million was outstanding under this credit facility. At the Company's election, revolving loans under the Credit Agreement bear interest at either (a) an Alternate Base Rate per annum equal to the greatest of (1) JPMorgan's prime rate, (2) 0.50% in excess of the Federal Funds effective rate, or (3) an adjusted one month LIBOR rate plus 1%; or (b) such adjusted LIBOR rate (for the interest period selected by the Company), in each case plus an applicable margin. For the period from the delivery of the Company's financial statements for the quarter ended June 30, 2017 until the Company has delivered financial statements for the quarter ended September 30, 2017, the applicable margin will be 1.50% per annum for LIBOR loans and 0.50% per annum for Alternate Base Rate loans, and thereafter the applicable margin will vary depending on the Company's leverage ratio, ranging from 1.00% per annum for Base Rate loans and 2.00% per annum for LIBOR loans if the Company's consolidated leverage ratio is greater than 2.50 to 1.00, down to 0.25% per annum for Alternate Base Rate loans and 1.25% per annum for LIBOR loans if the Company's consolidated leverage ratio is equal to or less than 1.00 to 1.00. The Company's consolidated leverage ratio is the ratio of its total funded debt compared to its consolidated adjusted EBITDA. Consolidated adjusted EBITDA includes certain adjustments, including, without limitation, adjustments relating to extraordinary, unusual or non-recurring charges, certain restructuring charges, non-cash charges, certain transaction costs and expenses and certain pro forma adjustments in connection with material acquisitions and dispositions, all as set forth in detail in the definition of consolidated adjusted EBITDA in the Credit Agreement. Commitment fees will accrue on the daily unused amount of the credit facility. For the period from the delivery of the Company's financial statements for the quarter ended June 30, 2017 until the Company has delivered financial statements for the quarter ended September 30, 2017, the commitment fee was 0.25% per annum, and thereafter the commitment fee will vary depending on the Company's consolidated leverage ratio, ranging from 0.35% per annum if the Company's consolidated leverage ratio is greater than 2.50 to 1.00, down to 0.20% per annum if the Company's consolidated leverage ratio is equal to or less than 1.00 to 1.00. Letter of credit participation fees are payable to each lender on the amount of such lender's letter of credit exposure, during the period from the closing date of the Credit Agreement to but excluding the date which is the later of (i) the date on which such lender's commitment terminates or (ii) the date on which such lender ceases to have any letter of credit exposure, at a rate per annum equal to the applicable margin for LIBOR loans. Additionally, the Company will pay a fronting fee to each issuing bank in amounts to be agreed to between the Company and the applicable issuing bank. Interest on Alternate Base Rate loans is payable at the end of each calendar quarter. Interest on LIBOR loans is payable at the end of each interest rate period or at the end of each three-month interval within an interest rate period if the period is longer than three months. The Company may also prepay loans under the Credit Agreement at any time, without penalty, subject to certain notice requirements. Debt is recorded at the amount drawn on the revolving credit facility plus interest based on floating rates reflective of changes in the market which approximates fair value. The loans and other obligations under the credit facility are (a) guaranteed by each of the Company's wholly owned material domestic restricted subsidiaries, subject to certain exceptions, and (b) are secured by substantially all of the assets of the Company and the subsidiary guarantors, including a pledge of all the capital stock of material subsidiaries held directly by the Company and the subsidiary guarantors (which pledge, in the case of any foreign subsidiary, is limited to 65% of the voting stock), subject to certain customary exceptions and limitations. The Credit Agreement generally prohibits any other liens on the assets of the Company and its restricted subsidiaries, subject to certain exceptions as described in the Credit Agreement. The Credit Agreement contains certain covenants applicable to the Company and its restricted subsidiaries, including, without limitation, limitations on additional indebtedness, liens, various fundamental changes, dividends and distributions, investments (including acquisitions), transactions with affiliates, asset sales, including sale-leaseback transactions, speculative hedge agreements, payment of junior financing, changes in business and other limitations customary in senior secured credit facilities. In addition, the Company is required to maintain certain consolidated leverage and interest coverage ratios. These covenants and limitations are more fully described in the Credit Agreement. At September 30, 2017, the Company was in compliance with all of these covenants. The Credit Agreement provides that events of default will exist in certain circumstances, including failure to make payment of principal or interest on the loans when required, failure to perform certain obligations under the Credit Agreement and related documents, defaults under certain other indebtedness, certain insolvency events, certain events arising under ERISA, a change of control and certain other events. Upon an event of default, the administrative agent with the consent of, or at the request of, the holders of more than 50% in principal amount of the loans and commitments may terminate the commitments and accelerate the maturity of the loans and enforce certain other remedies under the Credit Agreement and the other loan documents. In connection with the Company's revolving credit facility described above, effective as of the closing date of the Credit Agreement, the Company terminated its existing term loan and revolving credit facility pursuant to the Credit and Security Agreement, dated as of November 22, 2011, by and among the Company, KeyBank National Association, as joint lead arranger, sole book runner and administrative agent, Wells Fargo Bank, National Association, as joint lead arranger and co-syndication agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arranger, Bank of America, N.A., as co-syndication agent, and Silicon Valley Bank and Comerica Bank, as co-documentation agents, and the Lenders party thereto. The Company capitalized $6.6 million of debt issuance costs associated with the origination of the Credit Agreement, which are being amortized over the life of the revolving credit facility. The unamortized balance was $3.7 million as of September 30, 2017. The balance of $1.3 million was included as prepaid expenses and other current assets and a balance of $2.4 million was included as other assets in the Company's consolidated balance sheet. |
RESTRUCTURING CHARGES |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES During the quarter ended June 30, 2016, the Company restructured certain departments to better align functions subsequent to the Comms Transaction. As a result of the restructuring program, the Company recorded $2.0 million of restructuring charges related to one-time termination benefits to be paid to nineteen employees, which was recorded in the six months ended September 30, 2016. All one-time termination benefits were paid during the twelve months ended March 31, 2017. During the quarter ended March 31, 2017, the Company restructured certain departments to better align functions subsequent to the Comms Transaction, resulting in the termination of forty-one employees. Communication of the plan to the impacted employees was substantially completed on March 31, 2017. As a result of the workforce reduction, during the twelve months ended March 31, 2017, the Company recorded a restructuring charge totaling $1.9 million related to one-time termination benefits and $0.4 million in facility related charges. All of the workforce reduction was completed during the quarter ending September 30, 2017. The Company recorded an additional charge for one-time termination benefits of $0.7 million during the six months ended September 30, 2017. The one-time termination benefits and facilities-related costs will be paid in full during the fiscal year ending March 31, 2018. The following table provides a summary of the activity related to the restructuring plans and the related restructuring liability (in thousands):
The accrual for employee-related severance is included as accrued compensation in the Company's consolidated balance sheets. The balance is expected to be paid in full in the next twelve months. The accruals for facilities-related exit costs are included as accrued other liabilities. The balance is expected to be paid in full in the next twelve months. |
COMMITMENTS AND CONTINGENCIES |
6 Months Ended |
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Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Acquisition related – The Company has a contingent liability related to the acquisition of Simena in November 2011 for future consideration to be paid to the seller which had an initial fair value of $8.0 million at the time of acquisition. At September 30, 2017, the present value of the future consideration was $4.9 million. The Company has a contingent liability for $523 thousand related to the acquisition of Efflux in July 2017 for which an escrow account was established to cover damages NetScout suffers related to any liabilities that NetScout did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the merger agreement. Generally, indemnification claims that Efflux would be liable for are limited to the total amount of the escrow account and shall be the sole source for the satisfaction of any damages to the Company for such claims, but such limitation does not apply with respect to seller's breach of certain fundamental representations or related to other specified indemnity items, for which certain of Efflux's shareholders may be liable for additional amounts in excess of the escrow amount. Except to the extent that valid indemnification claims are made prior to such time, the $523 thousand will be paid to the seller on July 12, 2018. In addition, the Company had a contingent liability at March 31, 2017 for $660 thousand related to the acquisition of Avvasi in August 2016. The $660 thousand was paid to the seller in August 2017. Legal – From time to time, NetScout is subject to legal proceedings and claims in the ordinary course of business. In the opinion of management, the amount of ultimate expense with respect to any current legal proceedings and claims, if determined adversely, will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. As disclosed in Part II, Item 1, in March 2016, Packet Intelligence LLC (“Packet Intelligence” or “Plaintiff”) filed a Complaint against NetScout and two subsidiary entities in the United States District Court for the Eastern District of Texas asserting infringement of five United States patents. Plaintiff’s Complaint alleged that legacy Tektronix GeoProbe products, including the G10 and GeoBlade products, infringed these patents. NetScout filed an Answer denying Plaintiff’s allegations and asserting that Plaintiff’s patents were, among other things, invalid, not infringed, and unenforceable due to inequitable conduct. In September 2017, the Court dismissed Plaintiff’s claims and NetScout’s counterclaims with respect to two of the five patents. In October 2017, a jury trial was held to address the parties’ claims and counterclaims regarding infringement of the remaining three patents by the G10 and GeoBlade products, invalidity of these patents, and damages. On October 13, 2017, the jury rendered a verdict finding in favor of the Plaintiff and that Plaintiff was entitled to $3,500,000 for pre-suit damages and $2,250,000 for post-suit damages. The jury indicated that the awarded damages amounts were intended to reflect a running royalty. The Court also conducted a bench trial on whether these patents were unenforceable due to, among other things, inequitable conduct. The Court has not yet rendered a decision on the equitable issues or entered final judgment in this matter, and the deadline for the parties to file any post-trial motions challenging the jury’s verdict or concerning the other legal and equitable defenses raised by NetScout has not yet passed. NetScout has concluded that the risk of loss from this matter is currently neither remote nor probable. NetScout intends to continue to vigorously dispute Packet Intelligence’s claims. |
PENSION BENEFIT PLANS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSION BENEFIT PLANS | PENSION BENEFIT PLANS Certain of the Company's non-U.S. employees participate in certain noncontributory defined benefit pension plans acquired in the Comms Transaction on July 14, 2015. None of the Company's employees in the U.S. participate in any noncontributory defined benefit pension plans. In general, these plans are funded based on considerations relating to legal requirements, underlying asset returns, the plan's funded status, the anticipated deductibility of the contribution, local practices, market conditions, interest rates and other factors. The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the three and six months ended September 30, 2017 and 2016 (in thousands):
Expected Contributions During the six months ended September 30, 2017, the Company made contributions of $0.1 million to its defined benefit pension plans. During the fiscal year ending March 31, 2018, the Company's cash contribution requirements for its defined benefit pension plans are expected to be less than $1.0 million. As a majority of the participants within the Company's plans are all active employees, the benefit payments are not expected to be material in the foreseeable future. |
TREASURY STOCK |
6 Months Ended |
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Sep. 30, 2017 | |
Equity [Abstract] | |
TREASURY STOCK | TREASURY STOCK On May 19, 2015, the Company's board of directors approved a share repurchase program, conditional upon the completion of the Comms Transaction. This program enables the Company to repurchase up to 20 million shares of its common stock. This plan became effective on July 14, 2015 upon the completion of the Comms Transaction. The Company is not obligated to acquire any specific amount of common stock within any particular timeframe under this program. Through September 30, 2017, the Company has repurchased 19,029,350 shares totaling $580.0 million in the open market under this stock repurchase plan. At September 30, 2017, 970,650 shares of common stock remained available to be purchased under the plan. The Company repurchased 5,802,788 shares for $200.0 million under the program during the six months ended September 30, 2017. In connection with the delivery of common shares upon vesting of restricted stock units, the Company withheld 317,857 shares at a cost of $11.0 million related to minimum statutory tax withholding requirements on these restricted stock units during the six months ended September 30, 2017. These withholding transactions do not fall under the repurchase program described above, and therefore do not reduce the amount that is available for repurchase under that program. |
NET LOSS PER SHARE |
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NET LOSS PER SHARE | NET LOSS PER SHARE Calculations of the basic and diluted net loss per share and potential common shares are as follows (in thousands, except for per share data):
The following table sets forth restricted stock units excluded from the calculation of diluted net loss per share, since their inclusion would be anti-dilutive (in thousands):
Basic net loss per share is calculated by dividing net loss by the weighted average number of shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered outstanding for purposes of calculating basic earnings per share. Diluted net loss per share is calculated by dividing net loss by the weighted average number of shares outstanding plus the dilutive effect, if any, of outstanding stock options, restricted shares and restricted stock units using the treasury stock method. The calculation of the dilutive effect of outstanding equity awards under the treasury stock method includes consideration of proceeds from the assumed exercise of stock options and unrecognized compensation expense as additional proceeds. As we incurred a net loss in the three and six months ended September 30, 2017 and 2016, all outstanding restricted stock units have an anti-dilutive effect and are therefore excluded from the computation of diluted weighted average shares outstanding. |
INCOME TAXES |
6 Months Ended |
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Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's effective income tax rates were 45.9% and 22.1% for the three months ended September 30, 2017 and 2016, respectively. Generally, the effective tax rate differs from the statutory tax rate due to the impact of the domestic production activities deduction, research and development credit, the impact of state taxes and income generated in jurisdictions that have a different tax rate than the U.S. statutory rate. The effective tax rate for the three months ended September 30, 2017 is higher than the effective rate for the three months ended September 30, 2016, primarily due to the benefit of equity compensation deductions recorded during the three months ended September 30, 2017, including benefits recorded to the income statement pursuant to the adoption of ASU 2016-09, Compensation - Stock Compensation. This benefit has the effect of increasing the tax rate due to losses being generated in the three months ended September 30, 2017. The Company's effective income tax rates were 35.3% and 32.8% for the six months ended September 30, 2017 and 2016, respectively. The effective tax rate for the six months ended September 30, 2017 is higher than the effective rate for the six months ended September 30, 2016, primarily due to the benefit of equity compensation deductions recorded during the six months ended September 30, 2017, including benefits recorded to the income statement pursuant to the adoption of ASU 2016-09, Compensation - Stock Compensation. This benefit has the effect of increasing the tax rate due to losses being generated in the six months ended September 30, 2017. |
SEGMENT AND GEOGRAPHIC INFORMATION |
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SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION The Company reports revenues and income under one reportable segment. The Company manages its business in the following geographic areas: United States, Europe, Asia and the rest of the world. In accordance with United States export control regulations, the Company does not sell or do business with countries subject to economic sanctions and export controls. Total revenue by geography is as follows (in thousands):
The United States revenue includes sales to resellers in the United States. These resellers fulfill customer orders and may subsequently ship the Company’s products to international locations. The Company reports these shipments as United States revenue because the Company ships the products to a United States location. Further, the Company determines the geography of its sales after considering where the contract originated. Beginning in the first quarter of fiscal year 2018, the Company changed the structure of its sales force. As a result, consideration was given to this change when determining revenue by geography for the three and six months ended September 30, 2017. Prior periods in fiscal year 2017 were recast to conform to the current presentation. A majority of revenue attributable to locations outside of the United States is a result of export sales. Substantially all of the Company’s identifiable assets are located in the United States. |
RELATED PARTY TRANSACTIONS |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS During our fiscal year ended March 31, 2016 and the three months ended June 30, 2016, a member of the Company's Board of Directors served as an executive officer of Danaher. As part of the split off of Danaher's Communications Business and the Company's subsequent acquisition of that business from Newco's shareholders, NetScout has entered into multiple transactions with Danaher which include: transition services agreements, lease agreements, closing agreements, and compensation for post-combination services provisions within the separation and distribution agreement. This board member is now the founding President and CEO of Fortive Corporation (Fortive), which spun off of Danaher in July 2016. As part of the spin-off of Fortive, the transition services agreement was amended to, among other things, assign Danaher's rights, duties, obligations and liabilities under the transition services agreement to Fluke Corporation, a subsidiary of Fortive. The Company will continue to report the wind down of preexisting transactions as related party transactions through the Company's fiscal year 2018. The Company has disclosed the transactions with Danaher and Fortive parenthetically within the financial statements. As disclosed parenthetically within the Company's consolidated balance sheet, the Company has receivables from related parties. The following table summarizes those balances (in thousands):
As disclosed parenthetically within the Company's consolidated balance sheet, the Company has payables due to related parties. The following table summarizes those balances (in thousands):
As disclosed parenthetically within the Company's consolidated statements of operations, the Company has recorded expenses from related parties. The following table summarizes those balances (in thousands):
As disclosed within the Company's consolidated statements of cash flows, the Company has cash flows resulting from amounts due to related parties and due from related parties. The following table summarizes those cash flows (in thousands):
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SUBSEQUENT EVENTS |
6 Months Ended |
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Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On October 24, 2017, the Company’s Board of Directors approved a new share repurchase program that will enable the Company to repurchase up to twenty-five million shares of its common stock. This new program will become effective once the Company’s previously disclosed twenty million share repurchase program is completed. As of September 30, 2017, there were 970,650 shares available for repurchase under the existing program. The Company plans to acquire shares in open market transactions that may use a 10b5-1 plan, and may also repurchase shares via accelerated stock buyback programs, tender offers, privately negotiated transactions or by other means. Repurchases under this new program will be funded from one or a combination of existing cash balances, future free cash flow and indebtedness. The Company is not obligated to acquire any specific amount of common stock within any particular timeframe as a result of its new share repurchase program. The timing and amount of future repurchase activity under the new program will depend on market conditions, corporate considerations, debt agreements, and regulatory requirements. The new program may be modified, suspended or terminated at any time by the Board. |
BASIS OF PRESENTATION (Policies) |
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Sep. 30, 2017 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Basis of Presentation | The accompanying unaudited interim consolidated financial statements have been prepared by NetScout Systems, Inc., or NetScout or the Company. Certain information and footnote disclosures normally included in financial statements prepared under United States generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company's financial position, results of operations and cash flows. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results reported in these unaudited interim consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. All significant intercompany accounts and transactions are eliminated in consolidation. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017 filed with the Securities and Exchange Commission on May 24, 2017. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). ASU 2017-12 intends to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2018, with early adoption permitted. ASU 2017-12 is effective for the Company beginning April 1, 2019. The Company is currently assessing the potential impact of the adoption of ASU 2017-12 on its consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost (ASU 2017-07) which requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2017 and should be applied retrospectively to all periods presented. ASU 2017-07 is effective for the Company beginning April 1, 2018. The Company is currently assessing the potential impact of the adoption of ASU 2017-07 on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business (ASU 2017-01). ASU 2017-01 clarifies the definition of a business with the objective of addressing whether transactions involving in-substance nonfinancial assets, held directly or in a subsidiary, should be accounted for as acquisitions or disposals of nonfinancial assets or of businesses. ASU 2017-01 is effective for annual periods beginning after December 15, 2017. ASU 2017-01 is effective for the Company beginning April 1, 2018. Early adoption is permitted for transactions, including acquisitions or dispositions, which occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company is evaluating the new guidance and does not believe the adoption of ASU 2017-01 will have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18) related to the presentation of restricted cash in the statement of cash flows. The pronouncement requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. Entities will also have to disclose the nature of restricted cash and restricted cash equivalent balances. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company adopted this guidance retrospectively on April 1, 2017. The Company does not have a material amount of restricted cash. Adoption of this ASU did not have a material impact on the Company's consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16). ASU 2016-16 requires that entities recognize the income tax effects of intra-entity transfers of assets other than inventory when the transfer occurs. Current GAAP prohibits the recognition of those tax effects until the asset has been sold to an outside party. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. ASU 2016-16 is effective for the Company beginning April 1, 2018. The Company is evaluating the new guidance and does not believe the adoption of ASU 2016-16 will have a material impact on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 is intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU 2016-15 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. ASU 2016-15 is effective for the Company beginning April 1, 2018. The Company is currently assessing the potential impact of the adoption of ASU 2016-15 on its consolidated statement of cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted this guidance on April 1, 2017, which had the following impact on the consolidated financial statements:
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Section A - Leases: Amendments to the FASB Accounting Standards Codification (ASU 2016-02), its new standard on accounting for leases. This update requires the recognition of leased assets and lease obligations by lessees for those leases currently classified as operating leases under existing lease guidance. Short term leases with a term of 12 months or less are not required to be recognized. The update also requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. ASU 2016-02 is effective for annual reporting periods beginning after December 31, 2018 and interim periods within those fiscal years, and early adoption is permitted. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), which provided additional implementation guidance on the previously issued ASU. The Company is currently assessing the potential impact of the adoption of ASU 2016-02 on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09) and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016, December 2016 and September 2017, within ASU 2015-04, 2016-08, ASU 2016-10, ASU 2016-12, ASU 2016-20 and ASU 2017-13, respectively (ASU 2014-09, ASU 2015-04, ASU 2016-08, ASU 2016-10, ASU 2016-12, ASU 2016-20 and 2017-13, collectively, Topic 606). Topic 606 supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in applying this process, it is possible that more judgments and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 will be effective for the Company on April 1, 2018. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this standard. The Company believes it will elect the modified retrospective transition approach. However, the Company is still evaluating the impact of this new accounting standard. The adoption will most likely result in a reduction in deferred revenue as of April 1, 2018 for performance obligations that are deferred under current guidance that may not be deferred under Topic 606. Upon adoption of Topic 606, the Company expects to recognize a greater proportion of revenue upon delivery of its products, whereas some of its current product sales are initially recorded in deferred revenue and recognized over a period of time. Since the Company is currently expensing sales commissions as incurred, the requirement in the new standard to capitalize certain in-scope sales commissions is being evaluated to determine its potential impact on the consolidated financial statements in the year of adoption. The Company does not foresee any material impact on its cash flows. The Company will continue to assess all potential impacts of the guidance and given normal ongoing business dynamics, preliminary conclusions are subject to change. |
SHARE-BASED COMPENSATION (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Share-Based Compensation Expense | The following is a summary of share-based compensation expense including restricted stock units granted pursuant to the Company's 2007 Equity Incentive Plan, as amended, and employee stock purchases made under the Company's 2011 Employee Stock Purchase Plan (ESPP) based on estimated fair values within the applicable cost and expense lines identified below (in thousands):
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CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):
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Summary of Marketable Securities | The following is a summary of marketable securities held by NetScout at September 30, 2017, classified as short-term and long-term (in thousands):
The following is a summary of marketable securities held by NetScout at March 31, 2017, classified as short-term and long-term (in thousands):
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Summary of Contractual Maturities of Marketable Securities | Contractual maturities of the Company's marketable securities held at September 30, 2017 and March 31, 2017 were as follows (in thousands):
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FAIR VALUE MEASUREMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Assets and Liabilities | The following tables present the Company's financial assets and liabilities measured on a recurring basis using the fair value hierarchy at September 30, 2017 and March 31, 2017 (in thousands):
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Schedule of Reconciliation of Changes in Fair Value of Level III Financial Assets | The following table sets forth a reconciliation of changes in the fair value of the Company's Level 3 financial assets and liabilities for the six months ended September 30, 2017 (in thousands):
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INVENTORIES (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories consist of the following (in thousands):
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ACQUISITIONS (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation | The following table summarizes the allocation of the purchase price (in thousands):
Estimated fair value of assets acquired and liabilities assumed (in thousands):
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Schedule of Fair value of Acquired Identifiable Intangible Assets and Related Estimates of Useful Lives | The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives (in thousands):
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the six months ended September 30, 2017 are as follows (in thousands):
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Schedule of Intangible Assets | Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at September 30, 2017 (in thousands):
Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at March 31, 2017 (in thousands):
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Finite-lived Intangible Assets Amortization Expense | The following table provides a summary of amortization expense for the three and six months ended September 30, 2017 and 2016, respectively (in thousands):
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Schedule of Expected Future Amortization Expense | The following is the expected future amortization expense at September 30, 2017 for the fiscal years ending March 31 (in thousands):
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Notional Amounts and Fair Values of Derivative Instruments on Consolidated Balance Sheet | The notional amounts and fair values of derivative instruments in the consolidated balance sheets at September 30, 2017 and March 31, 2017 were as follows (in thousands):
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Summary of Effect of Foreign Exchange Forward Contracts on OCI and Results of Operations | The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the three months ended September 30, 2017 and 2016 (in thousands):
The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the six months ended September 30, 2017 and 2016 (in thousands):
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RESTRUCTURING CHARGES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Liability | The following table provides a summary of the activity related to the restructuring plans and the related restructuring liability (in thousands):
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PENSION BENEFIT PLANS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Pension Costs of Noncontributory Defined Benefit Pension Plans | The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the three and six months ended September 30, 2017 and 2016 (in thousands):
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NET LOSS PER SHARE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Calculations of the Basic and Diluted Net Income (Loss) Per Share and Potential Common Shares | Calculations of the basic and diluted net loss per share and potential common shares are as follows (in thousands, except for per share data):
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Summary of Antidilutive Securities Excluded from Computation of Diluted EPS | The following table sets forth restricted stock units excluded from the calculation of diluted net loss per share, since their inclusion would be anti-dilutive (in thousands):
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SEGMENT AND GEOGRAPHIC INFORMATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Total Revenue by Geography | Total revenue by geography is as follows (in thousands):
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RELATED PARTY TRANSACTIONS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | As disclosed parenthetically within the Company's consolidated balance sheet, the Company has receivables from related parties. The following table summarizes those balances (in thousands):
As disclosed parenthetically within the Company's consolidated balance sheet, the Company has payables due to related parties. The following table summarizes those balances (in thousands):
As disclosed parenthetically within the Company's consolidated statements of operations, the Company has recorded expenses from related parties. The following table summarizes those balances (in thousands):
As disclosed within the Company's consolidated statements of cash flows, the Company has cash flows resulting from amounts due to related parties and due from related parties. The following table summarizes those cash flows (in thousands):
|
BASIS OF PRESENTATION (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Excess tax benefit (shortfall) amount | $ (200) | $ 1,200 | ||
Net income | (2,468) | $ (1,266) | (26,690) | $ (10,264) |
Decrease in cash used in financing activities | 1,400 | |||
Accounting Standards Update 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income | $ (200) | $ 1,200 | ||
Basic and diluted earnings per share | $ 0 | $ 0.01 | ||
Excess tax benefit (shortfall) from stock based compensation awards | $ 1,200 | (1,400) | ||
Decrease in cash provided by operating activities | $ 1,400 |
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Mar. 31, 2017 |
---|---|---|
Concentration Risk [Line Items] | ||
Related party prepaid expenses and other current assets | $ 29,043 | $ 36,972 |
Affiliated Entity | ||
Concentration Risk [Line Items] | ||
Related party prepaid expenses and other current assets | $ 3,082 | $ 3,585 |
SHARE-BASED COMPENSATION - Narrative (Details) - ESPP |
6 Months Ended |
---|---|
Sep. 30, 2017
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of common stock price for employees | 85.00% |
Number of shares purchased by employees | shares | 262,685 |
Share price (in dollars per share) | $ / shares | $ 32.75 |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Mar. 31, 2017 |
Sep. 30, 2016 |
Mar. 31, 2016 |
---|---|---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||||
Cash and cash equivalents | $ 251,505 | $ 304,880 | $ 195,423 | $ 210,711 |
Restricted cash | 909 | 846 | 846 | 186 |
Total cash, cash equivalents and restricted cash | $ 252,414 | $ 305,726 | $ 196,269 | $ 210,897 |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES - Summary of Contractual Maturities of Marketable Securities (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Mar. 31, 2017 |
---|---|---|
Available-for-sale securities: | ||
Due in 1 year or less | $ 55,582 | $ 137,892 |
Due after 1 year through 5 years | 6,292 | 21,933 |
Fair Value | $ 61,874 | $ 159,825 |
FAIR VALUE MEASUREMENTS - Schedule of Reconciliation of Changes in Fair Value of Level III Financial Assets (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Payments made | $ 660 | $ 0 |
Fair value, measurements, recurring | Contingent Purchase Consideration | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at March 31, 2017 | (5,449) | |
Additions to Level 3 | (523) | |
Increase in fair value and accretion expense (included within research and development expense) | (76) | |
Payments made | 660 | |
Balance at September 30, 2017 | $ (5,388) |
INVENTORIES (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Mar. 31, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 20,126 | $ 22,305 |
Work in process | 425 | 998 |
Finished goods and deferred costs | 16,405 | 16,699 |
Total inventories | $ 36,956 | $ 40,002 |
GOODWILL AND INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Goodwill [Roll Forward] | |
Balance at March 31, 2017 | $ 1,718,162 |
Goodwill acquired during the quarter ended September 30, 2017 | 6,077 |
Foreign currency translation impact | (8,378) |
Balance as of September 30, 2017 | $ 1,715,861 |
GOODWILL AND INTANGIBLE ASSETS - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | $ 28,434 | $ 31,262 | $ 56,639 | $ 62,438 |
Product revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | 2 | 2,869 | 4 | 5,746 |
Cost of product revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | 10,129 | 10,757 | 19,943 | 21,429 |
Operating expense | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | $ 18,303 | $ 17,636 | $ 36,692 | $ 35,263 |
GOODWILL AND INTANGIBLE ASSETS - Schedule of Expected Future Amortization Expense (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Mar. 31, 2017 |
---|---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2018 (remaining six months) | $ 56,710 | |
2019 | 107,775 | |
2020 | 98,421 | |
2021 | 86,287 | |
2022 | 75,155 | |
Thereafter | 445,026 | |
Net | $ 869,374 | $ 912,669 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) |
6 Months Ended |
---|---|
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Managing period of hedging forecasted cash flows for operating expenses denominated in foreign currencies | 12 months |
Contract maturity period | 12 months |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Notional Amounts and Fair Values of Derivative Instruments on Consolidated Balance Sheet (Details) - Forward contracts - Cash flow hedges - Designated as hedging instrument - USD ($) $ in Thousands |
Sep. 30, 2017 |
Mar. 31, 2017 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Notional Amounts | $ 10,504 | $ 14,752 |
Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Prepaid Expenses and Other Current Assets | 496 | 110 |
Accrued Other | ||
Derivatives, Fair Value [Line Items] | ||
Accrued Other | $ 18 | $ 213 |
RESTRUCTURING CHARGES - Narrative (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
|
Mar. 31, 2017
Employee
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
Employee
|
Mar. 31, 2017
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 291 | $ (105) | $ 458 | $ 1,929 | ||
Employee-Related | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 2,000 | $ 700 | $ 1,900 | |||
Number of employees terminated | Employee | 41 | 19 | ||||
Facilities Related | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 400 |
RESTRUCTURING CHARGES - Schedule of Restructuring Liability (Details) $ in Thousands |
6 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Balance at March 31, 2017 | $ 1,955 |
Restructuring charges to operations | 937 |
Cash payments | (1,639) |
Other adjustments | (423) |
Balance at September 30, 2017 | 830 |
Employee-Related | |
Restructuring Reserve [Roll Forward] | |
Balance at March 31, 2017 | 1,550 |
Restructuring charges to operations | 729 |
Cash payments | (1,519) |
Other adjustments | (408) |
Balance at September 30, 2017 | 352 |
Facilities Related | |
Restructuring Reserve [Roll Forward] | |
Balance at March 31, 2017 | 405 |
Restructuring charges to operations | 208 |
Cash payments | (120) |
Other adjustments | (15) |
Balance at September 30, 2017 | $ 478 |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands |
Oct. 13, 2017 |
Sep. 30, 2017 |
Aug. 21, 2017 |
Mar. 31, 2017 |
Nov. 30, 2011 |
---|---|---|---|---|---|
Commitments and Contingencies Disclosure [Line Items] | |||||
Estimated fair value of contingent purchase consideration | $ 5,388 | $ 5,449 | |||
Simena | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Estimated fair value of contingent purchase consideration | $ 8,000 | ||||
Present value of future consideration | 4,900 | ||||
Efflux | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Estimated fair value of contingent purchase consideration | $ 523 | ||||
Avvasi | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Estimated fair value of contingent purchase consideration | $ 660 | $ 660 | |||
Pre-suit damages | Subsequent Event | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Damages sought | $ 3,500 | ||||
Post-suit damages | Subsequent Event | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Damages sought | $ 2,250 |
PENSION BENEFIT PLANS - Narrative (Details) $ in Millions |
6 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
Employee
| |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions to defined benefit pension plans | $ 0.1 |
Expected cash contribution requirements for defined benefit pension plans, less than | $ 1.0 |
Danaher | United States | |
Defined Benefit Plan Disclosure [Line Items] | |
Number of employees participating in noncontributory defined benefit pension plans | Employee | 0 |
PENSION BENEFIT PLANS - Schedule of Net Periodic Pension Costs of Noncontributory Defined Benefit Pension Plans (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Retirement Benefits [Abstract] | ||||
Service cost | $ 70 | $ 81 | $ 141 | $ 165 |
Interest cost | 136 | 157 | 273 | 321 |
Net periodic pension cost | $ 206 | $ 238 | $ 414 | $ 486 |
TREASURY STOCK (Details) - USD ($) $ in Thousands |
6 Months Ended | 27 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
May 19, 2015 |
|
Equity, Class of Treasury Stock [Line Items] | ||||
Shares repurchased during the period, value | $ 200,000 | $ 76,592 | ||
Share Repurchase Program, May 2015 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stock authorized to repurchase under stock repurchase program (in shares) | 20,000,000 | |||
Shares repurchased during the period (in shares) | 5,802,788 | 19,029,350 | ||
Shares repurchased during the period, value | $ 200,000 | $ 580,000 | ||
Stock remaining to be purchased (in shares) | 970,650 | 970,650 | ||
Restricted stock units | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Shares paid for tax withholding | 317,857 | |||
Cost related to tax withholding | $ 11,000 |
NET LOSS PER SHARE - Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share and Potential Common Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Numerator: | ||||
Net loss | $ (2,468) | $ (1,266) | $ (26,690) | $ (10,264) |
Denominator: | ||||
Denominator for basic net income (loss) per share - weighted average common shares outstanding (in shares) | 88,589 | 91,919 | 89,878 | 92,628 |
Dilutive common equivalent shares: | ||||
Weighted average restricted stock units (in shares) | 0 | 0 | 0 | 0 |
Denominator for diluted net income per share - weighted average shares outstanding (in shares) | 88,589 | 91,919 | 89,878 | 92,628 |
Net loss per share: | ||||
Basic net loss per share (in USD per share) | $ (0.03) | $ (0.01) | $ (0.30) | $ (0.11) |
Diluted net loss per share (in USD per share) | $ (0.03) | $ (0.01) | $ (0.30) | $ (0.11) |
NET LOSS PER SHARE - Summary of Antidilutive Securities Excluded from Computation of Diluted EPS (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 936 | 709 | 1,102 | 797 |
INCOME TAXES (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 45.90% | 22.10% | 35.30% | 32.80% |
SEGMENT AND GEOGRAPHIC INFORMATION - Narrative (Details) |
6 Months Ended |
---|---|
Sep. 30, 2017
Segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Total Revenue by Geography (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 256,863 | $ 272,048 | $ 482,619 | $ 541,000 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 153,632 | 180,059 | 292,250 | 349,367 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 43,102 | 40,680 | 78,550 | 82,737 |
Asia | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 25,201 | 19,175 | 44,728 | 44,618 |
Rest of the world | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 34,928 | $ 32,134 | $ 67,091 | $ 64,278 |
SUBSEQUENT EVENTS (Details) - shares |
Oct. 24, 2017 |
Sep. 30, 2017 |
May 19, 2015 |
---|---|---|---|
Share Repurchase Program, October 2017 | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Stock authorized to repurchase under stock repurchase program (in shares) | 25,000,000 | ||
Share Repurchase Program, May 2015 | |||
Subsequent Event [Line Items] | |||
Stock authorized to repurchase under stock repurchase program (in shares) | 20,000,000 | ||
Stock remaining to be purchased (in shares) | 970,650 |
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