Balance Sheet Accounts

Cash, Cash Equivalents, Short-Term Investments

Summary of Cash and Available-for-Sale Securities (in thousands)



	March 31, 2015		June 30, 2014
Cash	$	54,288	$	72,623
Cash equivalents	19,779		567
Short-term investments	1,506		32,692
Total available-for-sale	$	21,285	$	33,259

Total cash, cash equivalents and available-for-sale securities	$	75,573	$	105,882

Available-for-Sale Securities

The following is a summary of available-for-sale securities (in thousands):



	Amortized Cost		Fair Value		Unrealized Holding Gains		Unrealized Holding Losses
March 31, 2015
Money market funds	$	19,779	$	19,779	$	—	$	—
U.S. corporate debt securities	1,506		1,506				—
	$	21,285	$	21,285	$	—	$	—
Classified as:
Cash equivalents	$	19,779	$	19,779	$	—	$	—
Short-term investments	1,506		1,506				—
	$	21,285	$	21,285	$	—	$	—
June 30, 2014
Money market funds	$	567	$	567	$	—	$	—
U.S. corporate debt securities	32,578		32,692		114		—
	$	33,145	$	33,259	$	114	$	—
Classified as:
Cash equivalents	$	567	$	567	$	—	$	—
Short-term investments	32,578		32,692		114		—
	$	33,145	$	33,259	$	114	$	—

The amortized cost and estimated fair value of available-for-sale investments in debt securities at March 31, 2015, by contractual maturity, were as follows (in thousands):



	Amortized Cost		Fair Value
Due in 1 year or less	$	21,285	$	21,285
Total investments in available-for-sale debt securities	$	21,285	$	21,285

The Company considers highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Investments with original maturities of greater than three months, but less than one year at the balance sheet date are classified as Short-term investments.

The Company accumulates unrealized gains and losses on the Company's available-for-sale debt securities, net of tax, in accumulated other comprehensive income (loss) in the stockholders' equity section of its balance sheets. If the fair value of an available-for-sale debt instrument is less than its amortized cost basis, an other-than-temporary impairment is triggered in circumstances where (1) the Company intends to sell the instrument, (2) it is more likely than not that the Company will be required to sell the instrument before recovery of its amortized cost basis, or (3) the Company does not expect to recover the entire amortized cost basis of the instrument (that is, a credit loss exists).

The Company determines the basis of the cost of a security sold or the amount reclassified out of accumulated other comprehensive income (loss) into earnings using the specific identification method. The Company recorded an other-than temporary impairment loss of $148,000 during the nine months ended March 31, 2014.

Deferred Revenue, Net

Deferred revenue, net represents amounts for (i) deferred services revenue (support arrangements, professional services and training), and (ii) deferred product revenue net of the related cost of revenue when the revenue recognition criteria have not been met. The following table summarizes deferred revenue, net (in thousands):



	March 31, 2015		June 30, 2014
Deferred services	$	88,737	$	89,657
Deferred product and other revenue	7,610		8,020
Total deferred revenue	96,347		97,677
Less: current portion	73,206		74,735
Non-current deferred revenue, net	$	23,141	$	22,942

The Company offers for sale to its customers, renewable support arrangements that range from one to five years. Deferred support revenue is included within deferred revenue, net within the services category above. The change in the Company’s deferred support revenue balance in relation to these arrangements was as follows (in thousands):



	Three Months Ended						Nine Months Ended
	March 31, 2015			March 31, 2014			March 31, 2015			March 31, 2014
Balance beginning of period	$	91,373		$	81,485		$	89,657		$	38,003
Assumed from acquisition	—			—			—			35,879
New support arrangements	27,198			30,986			91,254			77,475
Recognition of support revenue	(29,834		)	(28,265		)	(92,174		)	(67,151		)
Balance end of period	88,737			84,206			88,737			84,206
Less: current portion	65,596			64,539			65,596			64,539
Non-current deferred revenue	$	23,141		$	19,667		$	23,141		$	19,667

Deferred Distributors Revenue, Net of Cost of Sales to Distributors

The Company records revenue from its distributors on a sell-through basis, recording deferred revenue and deferred cost of sales associated with all sales transactions to its distributors in “Deferred distributor' revenue, net of cost of sales to distributors” in the liability section of its condensed consolidated balance sheet. The amount shown as “Deferred distributors revenue, net of cost of sales to distributors” represents the deferred gross profit on sales to distributors based on contractual pricing.

The following table summarizes deferred distributors revenue, net of cost of sales to distributors (in thousands):



	March 31, 2015			June 30, 2014
Deferred distributors' revenue	$	46,230		$	40,715
Deferred cost of sales to distributors	(10,543		)	(8,723		)
Deferred distributors revenue, net of cost of sales to distributors	$	35,687		$	31,992

Debt

The Company's debt is comprised of the following (in thousands):



	March 31, 2015		June 30, 2014
Current portion of long-term debt:
Term Loan	$	9,750	$	5,688
Revolving Facility	—		24,000
Current portion of long-term debt	$	9,750	$	29,688

Long-term debt, less current portion:
Term Loan	$	48,750	$	56,875
Revolving Facility	10,000		35,000
Total long-term debt, less current portion	58,750		91,875
Total debt	$	68,500	$	121,563

On October 31, 2013, the Company entered into a Credit Agreement (the “Credit Agreement”) which provides for a five-year revolving credit facility for up to $60.0 million (the “Revolving Facility”) and a $65.0 million five-year term loan (the “Term Loan”) and together with the Revolving Facility (the “Senior Secured Credit Facilities”). The Company drew $24.0 million in the first quarter of fiscal 2015 to fund working capital requirements. During the three months ended December 31, 2014, the Company amended the Credit Agreement and among other things modified certain financial covenants governing quick and leverage ratios. The Company repaid $30.0 million and $19.0 million of the Revolving Facility during the second and third fiscal quarters of 2015, respectively.

The Credit Agreement contains, among others, certain financial covenants that require the Company to maintain defined minimum financial ratios which limit the Company’s availability to borrowings under the Revolving Facility. As of March 31, 2015, the Company had $8.6 million of additional availability under the Revolving Facility, due to these financial covenants.

The Company had $1.0 million of outstanding letters of credit as of March 31, 2015.

Guarantees and Product Warranties

Upon issuance of a standard product warranty, the Company discloses and recognizes a liability for the obligation it assumes under the warranty. The Company’s standard hardware warranty period is typically 12 months from the date of shipment to end-users and 90 days for software. For certain products, the Company offers a limited lifetime hardware warranty commencing on the date of shipment from the Company and ending five (5) years following the Company’s announcement of the end of sale of such product. The following table summarizes the activity related to the Company’s product warranty liability during the three and nine months ended March 31, 2015 and 2014, (in thousands):



	Three Months Ended						Nine Months Ended
	March 31, 2015			March 31, 2014			March 31, 2015			March 31, 2014
Balance beginning of period	$	7,845		$	7,479		$	7,551		$	3,296
Assumed from acquisition	—			—			—			3,732
New warranties issued	1,751			1,824			5,699			4,782
Warranty expenditures	(1,717		)	(1,478		)	(5,371		)	(3,985		)
Balance end of period	$	7,879		$	7,825		$	7,879		$	7,825

The Company has agreed to hold the customer harmless against losses arising from a breach of intellectual property infringement or other claims made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not estimable. We have not recorded a liability related to these indemnification and guarantee provisions and our guarantee and indemnification arrangements have not had any significant impact on our consolidated financial statements to date.

Concentrations

The Company may be subject to concentration of credit risk as a result of certain financial instruments consisting principally of marketable investments and accounts receivable. The Company has placed its investments with high-credit quality issuers. The Company does not invest an amount exceeding 10% of its combined cash, cash equivalents, short-term investments and marketable securities in the securities of any one obligor or maker, except for obligations of the United States government, obligations of United States government agencies and money market accounts.

The following table sets forth major customers accounting for 10% or more of our net revenue for the periods indicated:



	Three Months Ended		Nine Months Ended
	March 31, 2015	March 31, 2014	March 31, 2015	March 31, 2014
Westcon Group, Inc.	16%	14%	14%	13%
ScanSource, Inc.	13%	*	*	*
Tech Data Corporation	*	16%	14%	12%

* Less than 10% of net revenue