Delaware | 94-3112828 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
1050 Enterprise Way, Suite 700 Sunnyvale, California | 94089 | |||
(Address of principal executive offices) | (ZIP Code) |
Large accelerated filer ý | Accelerated filer o | |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
PAGE | |
Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015 | |
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2016 and 2015 | |
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2015 | |
• | Success in the markets of our products and services or our customers’ products; |
• | Sources of competition; |
• | Research and development costs and improvements in technology; |
• | Sources, amounts and concentration of revenue, including royalties; |
• | Success in signing and renewing license agreements; |
• | Terms of our licenses and amounts owed under license agreements; |
• | Technology product development; |
• | Dispositions, acquisitions, mergers or strategic transactions and our related integration efforts, including our recent acquisition of Smart Card Software Ltd. and our pending acquisitions of Semtech Corporation's Snowbush IP and Inphi Corporation's Memory Interconnect Business; |
• | Integration of announced acquisitions; |
• | Impairment of goodwill and long-lived assets; |
• | Pricing policies of our customers; |
• | Changes in our strategy and business model, including the expansion of our portfolio of inventions, products and solutions to address additional markets in lighting, chip and system security; |
• | Deterioration of financial health of commercial counterparties and their ability to meet their obligations to us; |
• | Effects of security breaches or failures in our or our customers’ products and services on our business; |
• | Engineering, sales and general and administration expenses; |
• | Contract revenue; |
• | Operating results; |
• | International licenses and operations; |
• | Effects of changes in the economy and credit market on our industry and business; |
• | Ability to identify, attract, motivate and retain qualified personnel; |
• | Effects of government regulations on our industry and business; |
• | Manufacturing and supply partners and/or sale and distribution channels; |
• | Growth in our business; |
• | Methods, estimates and judgments in accounting policies; |
• | Adoption of new accounting pronouncements; |
• | Effective tax rates; |
• | Restructurings and plans of termination; |
• | Realization of deferred tax assets/release of deferred tax valuation allowance; |
• | Trading price of our common stock; |
• | Internal control environment; |
• | The level and terms of our outstanding debt and the repayment or financing of such debt; |
• | Litigation expenses; |
• | Protection of intellectual property; |
• | Any changes in laws, agency actions and judicial rulings that may impact the ability to enforce intellectual property rights; |
• | Indemnification and technical support obligations; |
• | Equity repurchase plans; |
• | Issuances of debt or equity securities, which could involve restrictive covenants or be dilutive to our existing stockholders; |
• | Outcome and effect of potential future intellectual property litigation and other significant litigation; and |
• | Likelihood of paying dividends. |
June 30, 2016 | December 31, 2015 | ||||||
(In thousands, except shares and par value) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 188,011 | $ | 143,764 | |||
Marketable securities | 71,320 | 143,942 | |||||
Accounts receivable | 11,326 | 16,408 | |||||
Prepaids and other current assets | 12,993 | 11,476 | |||||
Total current assets | 283,650 | 315,590 | |||||
Intangible assets, net | 100,900 | 64,266 | |||||
Goodwill | 162,715 | 116,899 | |||||
Property, plant and equipment, net | 55,056 | 56,616 | |||||
Deferred tax assets | 159,097 | 162,485 | |||||
Other assets | 4,365 | 2,165 | |||||
Total assets | $ | 765,783 | $ | 718,021 | |||
LIABILITIES & STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 6,269 | $ | 4,096 | |||
Accrued salaries and benefits | 10,040 | 12,278 | |||||
Deferred revenue | 10,347 | 5,780 | |||||
Accrued acquisition liability | 11,476 | — | |||||
Other current liabilities | 5,850 | 6,212 | |||||
Total current liabilities | 43,982 | 28,366 | |||||
Convertible notes, long-term | 122,744 | 119,418 | |||||
Long-term imputed financing obligation | 38,355 | 38,625 | |||||
Long-term income taxes payable | 2,800 | 2,903 | |||||
Deferred tax liabilities | 14,984 | — | |||||
Other long-term liabilities | 556 | 2,176 | |||||
Total liabilities | 223,421 | 191,488 | |||||
Commitments and contingencies (Notes 9 and 13) | |||||||
Stockholders’ equity: | |||||||
Convertible preferred stock, $.001 par value: | |||||||
Authorized: 5,000,000 shares | |||||||
Issued and outstanding: no shares at June 30, 2016 and December 31, 2015 | — | — | |||||
Common stock, $.001 par value: | |||||||
Authorized: 500,000,000 shares | |||||||
Issued and outstanding: 109,896,610 shares at June 30, 2016 and 109,287,591 shares at December 31, 2015 | 110 | 109 | |||||
Additional paid-in capital | 1,164,565 | 1,130,368 | |||||
Accumulated deficit | (616,117 | ) | (604,317 | ) | |||
Accumulated other comprehensive income (loss) | (6,196 | ) | 373 | ||||
Total stockholders’ equity | 542,362 | 526,533 | |||||
Total liabilities and stockholders’ equity | $ | 765,783 | $ | 718,021 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Revenue: | |||||||||||||||
Royalties | $ | 62,835 | $ | 62,387 | $ | 125,712 | $ | 129,350 | |||||||
Contract and other revenue | 13,666 | 10,425 | 23,471 | 16,376 | |||||||||||
Total revenue | 76,501 | 72,812 | 149,183 | 145,726 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Cost of revenue* | 14,089 | 12,137 | 26,296 | 22,893 | |||||||||||
Research and development* | 28,753 | 29,188 | 57,280 | 57,722 | |||||||||||
Sales, general and administrative* | 21,789 | 17,339 | 44,884 | 35,841 | |||||||||||
Gain from sale of intellectual property | — | (896 | ) | — | (3,156 | ) | |||||||||
Gain from settlement | (138 | ) | (510 | ) | (579 | ) | (1,020 | ) | |||||||
Total operating costs and expenses | 64,493 | 57,258 | 127,881 | 112,280 | |||||||||||
Operating income | 12,008 | 15,554 | 21,302 | 33,446 | |||||||||||
Interest income and other income (expense), net | 1,138 | 203 | 1,380 | 335 | |||||||||||
Interest expense | (3,163 | ) | (3,091 | ) | (6,304 | ) | (6,174 | ) | |||||||
Interest and other income (expense), net | (2,025 | ) | (2,888 | ) | (4,924 | ) | (5,839 | ) | |||||||
Income before income taxes | 9,983 | 12,666 | 16,378 | 27,607 | |||||||||||
Provision for income taxes | 6,107 | 5,805 | 10,624 | 11,244 | |||||||||||
Net income | $ | 3,876 | $ | 6,861 | $ | 5,754 | $ | 16,363 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.04 | $ | 0.06 | $ | 0.05 | $ | 0.14 | |||||||
Diluted | $ | 0.03 | $ | 0.06 | $ | 0.05 | $ | 0.14 | |||||||
Weighted average shares used in per share calculation: | |||||||||||||||
Basic | 109,904 | 116,027 | 109,818 | 115,683 | |||||||||||
Diluted | 112,061 | 120,939 | 112,202 | 119,225 |
Cost of revenue | $ | 14 | $ | 27 | $ | 28 | $ | 39 | |||||||
Research and development | $ | 2,109 | $ | 1,988 | $ | 4,189 | $ | 3,755 | |||||||
Sales, general and administrative | $ | 2,926 | $ | 2,400 | $ | 5,696 | $ | 4,387 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(In thousands) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 3,876 | $ | 6,861 | $ | 5,754 | $ | 16,363 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Foreign currency translation adjustment | (5,559 | ) | 9 | (6,199 | ) | 9 | ||||||||||
Unrealized gain (loss) on marketable securities, net of tax | (188 | ) | (26 | ) | (371 | ) | 27 | |||||||||
Total comprehensive income (loss) | $ | (1,871 | ) | $ | 6,844 | $ | (816 | ) | $ | 16,399 |
Six Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(In thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 5,754 | $ | 16,363 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Stock-based compensation | 9,913 | 8,181 | |||||
Depreciation | 5,965 | 6,295 | |||||
Amortization of intangible assets | 15,871 | 12,645 | |||||
Non-cash interest expense and amortization of convertible debt issuance costs | 3,326 | 3,140 | |||||
Deferred income taxes | 2,816 | 1,233 | |||||
Excess tax benefits from stock-based compensation | (591 | ) | (483 | ) | |||
Gain from sale of intellectual property and property, plant and equipment, net | (37 | ) | (3,151 | ) | |||
Effect of exchange rate on assumed cash liability from acquisition | (624 | ) | — | ||||
Change in operating assets and liabilities: | |||||||
Accounts receivable | 14,809 | (744 | ) | ||||
Prepaid expenses and other assets | (1,856 | ) | (2,106 | ) | |||
Accounts payable | 2,167 | (1,873 | ) | ||||
Accrued salaries and benefits and other liabilities | (7,422 | ) | (3,803 | ) | |||
Income taxes payable | (3,196 | ) | 282 | ||||
Deferred revenue | 1,794 | 2,418 | |||||
Net cash provided by operating activities | 48,689 | 38,397 | |||||
Cash flows from investing activities: | |||||||
Purchases of property, plant and equipment | (3,557 | ) | (3,117 | ) | |||
Purchases of marketable securities | (54,869 | ) | (97,665 | ) | |||
Maturities of marketable securities | 81,971 | 70,396 | |||||
Proceeds from sale of marketable securities | 44,546 | 26,648 | |||||
Proceeds from sale of intellectual property and property, plant and equipment | — | 3,404 | |||||
Acquisition of business, net of cash acquired | (80,523 | ) | — | ||||
Net cash used in investing activities | (12,432 | ) | (334 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds received from issuance of common stock under employee stock plans | 8,259 | 9,053 | |||||
Principal payments against lease financing obligation | (295 | ) | (208 | ) | |||
Excess tax benefits from stock-based compensation | 591 | 483 | |||||
Net cash provided by financing activities | 8,555 | 9,328 | |||||
Effect of exchange rate changes on cash and cash equivalents | (565 | ) | (40 | ) | |||
Net increase in cash and cash equivalents | 44,247 | 47,351 | |||||
Cash and cash equivalents at beginning of period | 143,764 | 154,126 | |||||
Cash and cash equivalents at end of period | $ | 188,011 | $ | 201,477 | |||
Non-cash investing activities during the period: | |||||||
Property, plant and equipment received and accrued in accounts payable and other liabilities | $ | 246 | $ | 677 | |||
Non-cash financing activities during the period: | |||||||
Additional purchase consideration from acquisition | $ | 11,476 | $ | — |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income per share: | (In thousands, except per share amounts) | ||||||||||||||
Numerator: | |||||||||||||||
Net income | $ | 3,876 | $ | 6,861 | $ | 5,754 | $ | 16,363 | |||||||
Denominator: | |||||||||||||||
Weighted-average shares outstanding - basic | 109,904 | 116,027 | 109,818 | 115,683 | |||||||||||
Effect of potential dilutive common shares | 2,157 | 4,912 | 2,384 | 3,542 | |||||||||||
Weighted-average shares outstanding - diluted | 112,061 | 120,939 | 112,202 | 119,225 | |||||||||||
Basic net income per share | $ | 0.04 | $ | 0.06 | $ | 0.05 | $ | 0.14 | |||||||
Diluted net income per share | $ | 0.03 | $ | 0.06 | $ | 0.05 | $ | 0.14 |
Reportable Segment: | As of December 31, 2015 | Additions to Goodwill (1) | Impairment Charge of Goodwill | Effect of Exchange Rates (2) | As of June 30, 2016 | |||||||||||||||
(In thousands) | ||||||||||||||||||||
MID | $ | 19,905 | $ | — | $ | — | $ | — | $ | 19,905 | ||||||||||
CRD | 96,994 | 47,239 | — | (1,423 | ) | 142,810 | ||||||||||||||
Total | $ | 116,899 | $ | 47,239 | $ | — | $ | (1,423 | ) | $ | 162,715 |
As of | ||||||||||||
June 30, 2016 | ||||||||||||
Reportable Segment: | Gross Carrying Amount | Accumulated Impairment Losses | Net Carrying Amount | |||||||||
(In thousands) | ||||||||||||
MID | $ | 19,905 | $ | — | $ | 19,905 | ||||||
CRD | 142,810 | — | 142,810 | |||||||||
Other | 21,770 | (21,770 | ) | — | ||||||||
Total | $ | 184,485 | $ | (21,770 | ) | $ | 162,715 |
As of June 30, 2016 | |||||||||||||
Useful Life | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
(In thousands) | |||||||||||||
Existing technology (1) | 3 to 10 years | $ | 210,854 | $ | (139,785 | ) | $ | 71,069 | |||||
Customer contracts and contractual relationships (1) | 1 to 10 years | 61,886 | (32,055 | ) | 29,831 | ||||||||
Non-compete agreements and trademarks | 3 years | 300 | (300 | ) | — | ||||||||
Total intangible assets | $ | 273,040 | $ | (172,140 | ) | $ | 100,900 |
As of December 31, 2015 | |||||||||||||
Useful Life | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
(In thousands) | |||||||||||||
Existing technology | 3 to 10 years | $ | 185,321 | $ | (127,028 | ) | $ | 58,293 | |||||
Customer contracts and contractual relationships | 1 to 10 years | 31,093 | (25,120 | ) | 5,973 | ||||||||
Non-compete agreements and trademarks | 3 years | 300 | (300 | ) | — | ||||||||
Total intangible assets | $ | 216,714 | $ | (152,448 | ) | $ | 64,266 |
Years Ending December 31: | Amount | ||
2016 (remaining 6 months) | $ | 18,448 | |
2017 | 32,684 | ||
2018 | 19,252 | ||
2019 | 10,128 | ||
2020 | 9,598 | ||
Thereafter | 10,790 | ||
$ | 100,900 |
For the Three Months Ended June 30, 2016 | For the Six Months Ended June 30, 2016 | ||||||||||||||||||||||||||||||
MID | CRD | Other | Total | MID | CRD | Other | Total | ||||||||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||||||||
Revenues | $ | 54,467 | $ | 16,407 | $ | 5,627 | $ | 76,501 | $ | 108,012 | $ | 30,508 | $ | 10,663 | $ | 149,183 | |||||||||||||||
Segment operating expenses | 13,229 | 13,105 | 7,092 | 33,426 | 25,272 | 25,015 | 14,218 | 64,505 | |||||||||||||||||||||||
Segment operating income (loss) | $ | 41,238 | $ | 3,302 | $ | (1,465 | ) | $ | 43,075 | $ | 82,740 | $ | 5,493 | $ | (3,555 | ) | $ | 84,678 | |||||||||||||
Reconciling items | (31,067 | ) | (63,376 | ) | |||||||||||||||||||||||||||
Operating income | $ | 12,008 | $ | 21,302 | |||||||||||||||||||||||||||
Interest and other income (expense), net | (2,025 | ) | (4,924 | ) | |||||||||||||||||||||||||||
Income before income taxes | $ | 9,983 | $ | 16,378 |
For the Three Months Ended June 30, 2015 | For the Six Months Ended June 30, 2015 | ||||||||||||||||||||||||||||||
MID | CRD | Other | Total | MID | CRD | Other | Total | ||||||||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||||||||
Revenues | $ | 54,579 | $ | 11,778 | $ | 6,455 | $ | 72,812 | $ | 109,313 | $ | 24,604 | $ | 11,809 | $ | 145,726 | |||||||||||||||
Segment operating expenses | 12,801 | 7,329 | 8,770 | 28,900 | 24,321 | 14,665 | 16,029 | 55,015 | |||||||||||||||||||||||
Segment operating income (loss) | $ | 41,778 | $ | 4,449 | $ | (2,315 | ) | $ | 43,912 | $ | 84,992 | $ | 9,939 | $ | (4,220 | ) | $ | 90,711 | |||||||||||||
Reconciling items | (28,358 | ) | (57,265 | ) | |||||||||||||||||||||||||||
Operating income | $ | 15,554 | $ | 33,446 | |||||||||||||||||||||||||||
Interest and other income (expense), net | (2,888 | ) | (5,839 | ) | |||||||||||||||||||||||||||
Income before income taxes | $ | 12,666 | $ | 27,607 |
As of | ||||||
Customer | June 30, 2016 | December 31, 2015 | ||||
Customer 1 (Other segment) | 31 | % | 27 | % | ||
Customer 2 (CRD reportable segment) | * | 21 | % | |||
Customer 3 (MID reportable segment) | * | 28 | % | |||
Customer 4 (MID reportable segment) | * | 16 | % |
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
Customer | 2016 | 2015 | 2016 | 2015 | |||||||
Customer A (MID and CRD reportable segments) | 20 | % | 21 | % | 21 | % | 21 | % | |||
Customer B (MID reportable segment) | 21 | % | 16 | % | 21 | % | 16 | % | |||
Customer C (MID reportable segment) | 13 | % | 13 | % | 13 | % | 13 | % |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
(In thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
South Korea | $ | 31,632 | $ | 26,821 | $ | 63,086 | $ | 53,642 | |||||||
USA | 26,532 | 29,677 | 51,776 | 57,384 | |||||||||||
Japan | 5,911 | 7,915 | 10,898 | 16,406 | |||||||||||
Europe | 4,377 | 1,540 | 8,189 | 6,715 | |||||||||||
Canada | 1,168 | 5 | 1,382 | 201 | |||||||||||
Singapore | 4,526 | 5,010 | 9,145 | 7,820 | |||||||||||
Asia-Other | 2,355 | 1,844 | 4,707 | 3,558 | |||||||||||
Total | $ | 76,501 | $ | 72,812 | $ | 149,183 | $ | 145,726 |
As of June 30, 2016 | |||||||||||||||||||
(In thousands) | Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Weighted Rate of Return | ||||||||||||||
Money market funds | $ | 128,034 | $ | 128,034 | $ | — | $ | — | 0.22 | % | |||||||||
U.S. Government bonds and notes | 7,002 | 7,002 | 1 | (1 | ) | 0.44 | % | ||||||||||||
Corporate notes, bonds, commercial paper and other | 74,309 | 74,348 | — | (39 | ) | 0.66 | % | ||||||||||||
Total cash equivalents and marketable securities | 209,345 | 209,384 | 1 | (40 | ) | ||||||||||||||
Cash | 49,986 | 49,986 | — | — | |||||||||||||||
Total cash, cash equivalents and marketable securities | $ | 259,331 | $ | 259,370 | $ | 1 | $ | (40 | ) |
As of December 31, 2015 | |||||||||||||||||||
(In thousands) | Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Weighted Rate of Return | ||||||||||||||
Money market funds | $ | 77,804 | $ | 77,804 | $ | — | $ | — | 0.12 | % | |||||||||
U.S. Government bonds and notes | 14,110 | 14,142 | — | (32 | ) | 0.48 | % | ||||||||||||
Corporate notes, bonds, commercial paper and other | 160,823 | 160,979 | — | (156 | ) | 0.45 | % | ||||||||||||
Total cash equivalents and marketable securities | 252,737 | 252,925 | — | (188 | ) | ||||||||||||||
Cash | 34,969 | 34,969 | — | — | |||||||||||||||
Total cash, cash equivalents and marketable securities | $ | 287,706 | $ | 287,894 | $ | — | $ | (188 | ) |
As of | |||||||
June 30, 2016 | December 31, 2015 | ||||||
(In thousands) | |||||||
Cash equivalents | $ | 138,025 | $ | 108,795 | |||
Short term marketable securities | 71,320 | 143,942 | |||||
Total cash equivalents and marketable securities | 209,345 | 252,737 | |||||
Cash | 49,986 | 34,969 | |||||
Total cash, cash equivalents and marketable securities | $ | 259,331 | $ | 287,706 |
Fair Value | Gross Unrealized Loss | ||||||||||||||
June 30, 2016 | December 31, 2015 | June 30, 2016 | December 31, 2015 | ||||||||||||
(In thousands) | |||||||||||||||
Less than one year | |||||||||||||||
U.S. Government bonds and notes | $ | 4,002 | $ | 14,110 | $ | (1 | ) | $ | (32 | ) | |||||
Corporate notes, bonds and commercial paper | 73,771 | 145,563 | (39 | ) | (156 | ) | |||||||||
Total Corporate notes, bonds, and commercial paper and U.S. Government bonds and notes | $ | 77,773 | $ | 159,673 | $ | (40 | ) | $ | (188 | ) |
As of June 30, 2016 | |||||||||||||||
Total | Quoted Market Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
(In thousands) | |||||||||||||||
Money market funds | $ | 128,034 | $ | 128,034 | $ | — | $ | — | |||||||
U.S. Government bonds and notes | 7,002 | — | 7,002 | — | |||||||||||
Corporate notes, bonds, commercial paper and other | 74,309 | 538 | 73,771 | — | |||||||||||
Total available-for-sale securities | $ | 209,345 | $ | 128,572 | $ | 80,773 | $ | — |
As of December 31, 2015 | |||||||||||||||
Total | Quoted Market Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
(In thousands) | |||||||||||||||
Money market funds | $ | 77,804 | $ | 77,804 | $ | — | $ | — | |||||||
U.S. Government bonds and notes | 14,110 | — | 14,110 | — | |||||||||||
Corporate notes, bonds, commercial paper and other | 160,823 | 1,264 | 159,559 | — | |||||||||||
Total available-for-sale securities | $ | 252,737 | $ | 79,068 | $ | 173,669 | $ | — |
As of June 30, 2016 | As of December 31, 2015 | |||||||||||||||||||||||
(In thousands) | Face Value | Carrying Value | Fair Value | Face Value | Carrying Value | Fair Value | ||||||||||||||||||
1.125% Convertible Senior Notes due 2018 (the "2018 Notes") | $ | 138,000 | $ | 122,744 | $ | 160,731 | $ | 138,000 | $ | 119,418 | $ | 156,292 |
(In thousands) | As presented December 31, 2015 | Reclassifications | As adjusted December 31, 2015 | |||||||||
Other assets | $ | 3,648 | $ | (1,483 | ) | $ | 2,165 | |||||
Convertible notes, long-term | 120,901 | (1,483 | ) | 119,418 |
(In thousands) | As of June 30, 2016 | As of December 31, 2015 | ||||||
1.125% Convertible Senior Notes due 2018 | $ | 138,000 | $ | 138,000 | ||||
Unamortized discount | (14,054 | ) | (17,099 | ) | ||||
Unamortized debt issuance costs | (1,202 | ) | (1,483 | ) | ||||
Total convertible notes | $ | 122,744 | $ | 119,418 | ||||
Less current portion | — | — | ||||||
Total long-term convertible notes | $ | 122,744 | $ | 119,418 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(In thousands) | |||||||||||||||
2018 Notes coupon interest at a rate of 1.125% | $ | 388 | $ | 388 | 776 | 791 | |||||||||
2018 Notes amortization of discount and debt issuance costs at an additional effective interest rate of 5.5% | 1,675 | 1,581 | 3,326 | 3,140 | |||||||||||
Total interest expense on convertible notes | $ | 2,063 | $ | 1,969 | $ | 4,102 | $ | 3,931 |
Total | Remainder of 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | |||||||||||||||||||||
Contractual obligations (1) | |||||||||||||||||||||||||||
Imputed financing obligation (2) | $ | 25,336 | $ | 3,116 | $ | 6,302 | $ | 6,447 | $ | 6,602 | $ | 2,869 | $ | — | |||||||||||||
Leases and other contractual obligations | 10,272 | 2,601 | 3,221 | 2,211 | 1,353 | 441 | 445 | ||||||||||||||||||||
Software licenses (3) | 10,678 | 2,008 | 4,235 | 3,701 | 734 | — | — | ||||||||||||||||||||
Convertible notes | 138,000 | — | — | 138,000 | — | — | — | ||||||||||||||||||||
Interest payments related to convertible notes | 3,881 | 776 | 1,553 | 1,552 | — | — | — | ||||||||||||||||||||
Total | $ | 188,167 | $ | 8,501 | $ | 15,311 | $ | 151,911 | $ | 8,689 | $ | 3,310 | $ | 445 |
(1) | The above table does not reflect possible payments in connection with uncertain tax benefits of approximately $22.4 million including $19.6 million recorded as a reduction of long-term deferred tax assets and $2.8 million in long-term income taxes payable as of June 30, 2016. As noted below in Note 12, “Income Taxes,” although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, the Company cannot reasonably estimate the outcome at this time. |
(2) | With respect to the imputed financing obligation, the main components of the difference between the amount reflected in the contractual obligations table and the amount reflected on the unaudited condensed consolidated balance sheets are the interest on the imputed financing obligation and the estimated common area expenses over the future periods. The amount includes the amended Ohio lease and the amended Sunnyvale lease. |
(3) | The Company has commitments with various software vendors for non-cancellable agreements generally having terms longer than one year. |
Shares Available for Grant | ||
Shares available as of December 31, 2015 | 11,173,545 | |
Stock options granted | (440,000 | ) |
Stock options forfeited | 773,912 | |
Stock options expired under former plans | (412,467 | ) |
Nonvested equity stock and stock units granted (1) (2) | (3,336,963 | ) |
Nonvested equity stock and stock units forfeited (1) | 636,828 | |
Total available for grant as of June 30, 2016 | 8,394,855 |
(1) | For purposes of determining the number of shares available for grant under the 2015 Plan (and previously the 2006 Plan) against the maximum number of shares authorized, each share of restricted stock granted reduces the number of shares available for grant by 1.5 shares and each share of restricted stock forfeited increases shares available for grant by 1.5 shares. |
(2) | Amount includes 300,003 shares that have been reserved for potential future issuance related to certain performance unit awards granted in the first quarter of 2016 and discussed under the section titled "Nonvested Equity Stock and Stock Units" below. |
Options Outstanding | ||||||||||||
Number of Shares | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value | |||||||||
(In thousands, except per share amounts) | ||||||||||||
Outstanding as of December 31, 2015 | 8,995,017 | $ | 10.01 | |||||||||
Options granted | 440,000 | $ | 12.31 | |||||||||
Options exercised | (749,058 | ) | $ | 7.01 | ||||||||
Options forfeited | (773,912 | ) | $ | 21.81 | ||||||||
Outstanding as of June 30, 2016 | 7,912,047 | $ | 9.27 | 5.67 | $ | 31,293 | ||||||
Vested or expected to vest at June 30, 2016 | 7,679,174 | $ | 9.30 | 5.61 | $ | 30,418 | ||||||
Options exercisable at June 30, 2016 | 4,989,516 | $ | 10.05 | 4.72 | $ | 18,970 |
Stock Option Plans | |||||||
Six Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
Stock Option Plans | |||||||
Expected stock price volatility | 36 | % | 41 | % | |||
Risk free interest rate | 1.7 | % | 1.2 | % | |||
Expected term (in years) | 6.1 | 6.0 | |||||
Weighted-average fair value of stock options granted to employees | $ | 4.66 | $ | 4.59 |
Employee Stock Purchase Plan | |||||||
Six Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
Employee Stock Purchase Plan | |||||||
Expected stock price volatility | 33 | % | 34 | % | |||
Risk free interest rate | 0.41 | % | 0.05 | % | |||
Expected term (in years) | 0.5 | 0.5 | |||||
Weighted-average fair value of purchase rights granted under the purchase plan | $ | 2.86 | $ | 3.48 |
Nonvested Equity Stock and Stock Units | Shares | Weighted- Average Grant-Date Fair Value | |||||
Nonvested at December 31, 2015 | 3,008,118 | $ | 11.32 | ||||
Granted | 2,024,640 | $ | 12.34 | ||||
Vested | (385,984 | ) | $ | 10.15 | |||
Forfeited | (284,142 | ) | $ | 11.59 | |||
Nonvested at June 30, 2016 | 4,362,632 | $ | 11.88 |
Cumulative Received to-date as of June 30, | Estimated to Be Received in | Total Estimated Cash Receipts | |||||||||||||||||||||||||||||
2016 | Remainder of 2016 | 2017 | 2018 | 2019 | 2020 | 2021 and Thereafter | |||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||
Royalty revenue | $ | 158.1 | $ | 32.0 | $ | 48.0 | $ | 40.0 | $ | 32.0 | $ | 48.0 | $ | 168.0 | $ | 526.1 | |||||||||||||||
Gain from settlement | 1.9 | — | — | — | — | — | — | 1.9 | |||||||||||||||||||||||
Total | $ | 160.0 | $ | 32.0 | $ | 48.0 | $ | 40.0 | $ | 32.0 | $ | 48.0 | $ | 168.0 | $ | 528.0 |
Cumulative Received to-date as of June 30, | Estimated to Be Received in | Total Estimated Cash Receipts | |||||||||||||||||||||||||
2016 | Remainder of 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||
Royalty revenue | $ | 102.2 | $ | 20.0 | $ | 40.0 | $ | 40.0 | $ | 40.0 | $ | 34.5 | $ | 276.7 | |||||||||||||
Gain from settlement | 3.3 | — | — | — | — | — | 3.3 | ||||||||||||||||||||
Total | $ | 105.5 | $ | 20.0 | $ | 40.0 | $ | 40.0 | $ | 40.0 | $ | 34.5 | $ | 280.0 |
Employee Severance and Related Benefits | Facilities | Total | ||||||||||
(In thousands) | ||||||||||||
Balance at December 31, 2014 | $ | — | $ | — | $ | — | ||||||
Charges | 2,993 | 583 | 3,576 | |||||||||
Payments | (1,765 | ) | — | (1,765 | ) | |||||||
Non-cash settlements | — | (583 | ) | * | (583 | ) | ||||||
Balance at December 31, 2015 | $ | 1,228 | $ | — | $ | 1,228 | ||||||
Payments | (1,205 | ) | — | (1,205 | ) | |||||||
Balance at June 30, 2016 | $ | 23 | — | $ | 23 |
Total | |||
(in thousands) | |||
Cash | $ | 12,056 | |
Accounts receivable | 6,563 | ||
Property and equipment | 524 | ||
Other tangible assets | 1,462 | ||
Identified intangible assets | 59,700 | ||
Goodwill | 47,239 | ||
Accounts payable and accrued liabilities | (5,996 | ) | |
Deferred income taxes | (15,556 | ) | |
Deferred revenue | (1,313 | ) | |
Total | $ | 104,679 |
Total | Estimated Weighted Average Useful Life | ||||
(in thousands) | (in years) | ||||
Existing technology | $ | 24,600 | 6 | ||
Customer contracts and contractual relationships (1) | 35,100 | 6 | |||
Total | $ | 59,700 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue | $ | 76,501 | $ | 77,787 | $ | 150,643 | $ | 155,046 | |||||||
Net income | $ | 3,876 | $ | 3,585 | $ | 7,091 | $ | 8,532 | |||||||
Net income per share - diluted | $ | 0.03 | $ | 0.03 | $ | 0.06 | $ | 0.07 |
Differential Power Analysis | DPA |
Dynamic Random Access Memory | DRAM |
Light Emitting Diodes | LED |
Rambus Dynamic Random Access Memory | RDRAM™ |
eXtreme Data Rate | XDR™ |
Advanced Micro Devices Inc. | AMD |
Broadcom Corporation | Broadcom |
Cryptography Research Division | CRD |
eASIC Corporation | eASIC |
Eaton Corporation plc | Eaton |
Elpida Memory, Inc. | Elpida |
Emerging Solutions Division | ESD |
Freescale Semiconductor Inc. | Freescale |
Fujitsu Limited | Fujitsu |
General Electric Company | GE |
Intel Corporation | Intel |
International Business Machines Corporation | IBM |
Lighting and Display Technology | LDT |
LSI Corporation (now a division of Avago Technologies Limited) | LSI |
Memory and Interfaces Division | MID |
Micron Technologies, Inc. | Micron |
Nanya Technology Corporation | Nanya |
Qualcomm Incorporated | Qualcomm |
Panasonic Corporation | Panasonic |
Renesas Electronics | Renesas |
Samsung Electronics Co., Ltd. | Samsung |
SK hynix, Inc. | SK hynix |
Smart Card Software Ltd. | SCS |
Sony Computer Electronics | Sony |
ST Microelectronics N.V. | STMicroelectronics |
Toshiba Corporation | Toshiba |
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Revenue: | |||||||||||
Royalties | 82.1 | % | 85.7 | % | 84.3 | % | 88.8 | % | |||
Contract and other revenue | 17.9 | % | 14.3 | % | 15.7 | % | 11.2 | % | |||
Total revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||
Operating costs and expenses: | |||||||||||
Cost of revenue* | 18.4 | % | 16.7 | % | 17.6 | % | 15.7 | % | |||
Research and development* | 37.6 | % | 40.1 | % | 38.4 | % | 39.6 | % | |||
Sales, general and administrative* | 28.5 | % | 23.8 | % | 30.1 | % | 24.6 | % | |||
Gain from sale of intellectual property | — | % | (1.2 | )% | — | % | (2.2 | )% | |||
Gain from settlement | (0.2 | )% | (0.7 | )% | (0.4 | )% | (0.7 | )% | |||
Total operating costs and expenses | 84.3 | % | 78.7 | % | 85.7 | % | 77.0 | % | |||
Operating income | 15.7 | % | 21.3 | % | 14.3 | % | 23.0 | % | |||
Interest income and other income (expense), net | 1.5 | % | 0.3 | % | 0.9 | % | 0.2 | % | |||
Interest expense | (4.1 | )% | (4.2 | )% | (4.2 | )% | (4.2 | )% | |||
Interest and other income (expense), net | (2.6 | )% | (3.9 | )% | (3.3 | )% | (4.0 | )% | |||
Income before income taxes | 13.1 | % | 17.4 | % | 11.0 | % | 18.9 | % | |||
Provision for income taxes | 8.0 | % | 8.0 | % | 7.1 | % | 7.7 | % | |||
Net income | 5.1 | % | 9.4 | % | 3.9 | % | 11.2 | % |
Cost of revenue | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | |||
Research and development | 2.8 | % | 2.7 | % | 2.8 | % | 2.6 | % | |||
Sales, general and administrative | 3.8 | % | 3.3 | % | 3.8 | % | 3.0 | % |
Three Months | Six Months | |||||||||||||||||||||
Ended June 30, | Change in | Ended June 30, | Change in | |||||||||||||||||||
(Dollars in millions) | 2016 | 2015 | Percentage | 2016 | 2015 | Percentage | ||||||||||||||||
Total Revenue | ||||||||||||||||||||||
Royalties | $ | 62.8 | $ | 62.4 | 0.7 | % | $ | 125.7 | $ | 129.4 | (2.8 | )% | ||||||||||
Contract and other revenue | 13.7 | 10.4 | 31.1 | % | 23.5 | 16.3 | 43.3 | % | ||||||||||||||
Total revenue | $ | 76.5 | $ | 72.8 | 5.1 | % | $ | 149.2 | $ | 145.7 | 2.4 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||||
June 30, | Change in | June 30, | Change in | |||||||||||||||||||
(Dollars in millions) | 2016 | 2015 | Percentage | 2016 | 2015 | Percentage | ||||||||||||||||
Engineering costs | ||||||||||||||||||||||
Cost of revenue | $ | 7.7 | $ | 6.4 | 19.7 | % | $ | 13.5 | $ | 11.5 | 18.0 | % | ||||||||||
Amortization of intangible assets | 6.4 | 5.7 | 12.4 | % | 12.8 | 11.4 | 11.9 | % | ||||||||||||||
Stock-based compensation | 0.0 | 0.0 | — | % | 0.0 | 0.0 | — | % | ||||||||||||||
Total cost of revenue | 14.1 | 12.1 | 16.1 | % | 26.3 | 22.9 | 14.9 | % | ||||||||||||||
Research and development | 26.6 | 27.2 | (2.0 | )% | 53.1 | 53.9 | (1.6 | )% | ||||||||||||||
Stock-based compensation | 2.1 | 2.0 | 6.1 | % | 4.2 | 3.8 | 11.6 | % | ||||||||||||||
Total research and development | 28.7 | 29.2 | (1.5 | )% | 57.3 | 57.7 | (0.8 | )% | ||||||||||||||
Total engineering costs | $ | 42.8 | $ | 41.3 | 3.7 | % | $ | 83.6 | $ | 80.6 | 3.7 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||||
June 30, | Change in | June 30, | Change in | |||||||||||||||||||
(Dollars in millions) | 2016 | 2015 | Percentage | 2016 | 2015 | Percentage | ||||||||||||||||
Sales, general and administrative costs | ||||||||||||||||||||||
Sales, general and administrative costs | $ | 18.9 | $ | 14.9 | 26.3 | % | $ | 39.2 | $ | 31.4 | 24.6 | % | ||||||||||
Stock-based compensation | 2.9 | 2.4 | 21.9 | % | 5.7 | 4.4 | 29.8 | % | ||||||||||||||
Total sales, general and administrative costs | $ | 21.8 | $ | 17.3 | 25.7 | % | $ | 44.9 | $ | 35.8 | 25.2 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||||
June 30, | Change in | June 30, | Change in | |||||||||||||||||||
(Dollars in millions) | 2016 | 2015 | Percentage | 2016 | 2015 | Percentage | ||||||||||||||||
Gain from sale of intellectual property | $ | — | $ | 0.9 | (100.0 | )% | $ | — | $ | 3.2 | (100.0 | )% |
Three Months Ended | Six Months Ended | |||||||||||||||||||||
June 30, | Change in | June 30, | Change in | |||||||||||||||||||
(Dollars in millions) | 2016 | 2015 | Percentage | 2016 | 2015 | Percentage | ||||||||||||||||
Gain from settlement | $ | 0.1 | $ | 0.5 | (72.9 | )% | $ | 0.6 | $ | 1.0 | (43.2 | )% |
Three Months | Six Months | |||||||||||||||||||||
Ended June 30, | Change in | Ended June 30, | Change in | |||||||||||||||||||
(Dollars in millions) | 2016 | 2015 | Percentage | 2016 | 2015 | Percentage | ||||||||||||||||
Interest income and other income (expense), net | $ | 1.1 | $ | 0.2 | NM* | $ | 1.4 | $ | 0.3 | NM* | ||||||||||||
Interest expense | (3.1 | ) | (3.1 | ) | — | % | (6.3 | ) | (6.1 | ) | 2.1 | % | ||||||||||
Interest and other income (expense), net | $ | (2.0 | ) | $ | (2.9 | ) | (29.9 | )% | $ | (4.9 | ) | $ | (5.8 | ) | (15.7 | )% |
* | NM — percentage is not meaningful |
Three Months Ended | Six Months Ended | |||||||||||||||||||||
June 30, | Change in | June 30, | Change in | |||||||||||||||||||
(Dollars in millions) | 2016 | 2015 | Percentage | 2016 | 2015 | Percentage | ||||||||||||||||
Provision for income taxes | $ | 6.1 | $ | 5.8 | 5.2 | % | $ | 10.6 | $ | 11.2 | (5.5 | )% | ||||||||||
Effective tax rate | 61.2 | % | 45.8 | % | 64.9 | % | 40.7 | % |
As of | |||||||
June 30, 2016 | December 31, 2015 | ||||||
(In millions) | |||||||
Cash and cash equivalents | $ | 188.0 | $ | 143.8 | |||
Marketable securities | 71.3 | 143.9 | |||||
Total cash, cash equivalents, and marketable securities | $ | 259.3 | $ | 287.7 |
Six Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(In millions) | |||||||
Net cash provided by operating activities | $ | 48.7 | $ | 38.3 | |||
Net cash used in investing activities | $ | (12.4 | ) | $ | (0.3 | ) | |
Net cash provided by financing activities | $ | 8.6 | $ | 9.3 |
Total | Remainder of 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | |||||||||||||||||||||
Contractual obligations (1) | |||||||||||||||||||||||||||
Imputed financing obligation (2) | $ | 25,336 | $ | 3,116 | $ | 6,302 | $ | 6,447 | $ | 6,602 | $ | 2,869 | $ | — | |||||||||||||
Leases and other contractual obligations | 10,272 | 2,601 | 3,221 | 2,211 | 1,353 | 441 | 445 | ||||||||||||||||||||
Software licenses (3) | 10,678 | 2,008 | 4,235 | 3,701 | 734 | — | — | ||||||||||||||||||||
Convertible notes | 138,000 | — | — | 138,000 | — | — | — | ||||||||||||||||||||
Interest payments related to convertible notes | 3,881 | 776 | 1,553 | 1,552 | — | — | — | ||||||||||||||||||||
Total | $ | 188,167 | $ | 8,501 | $ | 15,311 | $ | 151,911 | $ | 8,689 | $ | 3,310 | $ | 445 |
(1) | The above table does not reflect possible payments in connection with uncertain tax benefits of approximately $22.4 million including $19.6 million recorded as a reduction of long-term deferred tax assets and $2.8 million in long-term income taxes payable as of June 30, 2016. As noted in Note 12, “Income Taxes,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q, although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, we cannot reasonably estimate the outcome at this time. |
(2) | With respect to the imputed financing obligation, the main components of the difference between the amount reflected in the contractual obligations table and the amount reflected on the unaudited condensed consolidated balance sheets are the interest on the imputed financing obligation and the estimated common area expenses over the future periods. The amount includes the amended Ohio lease and the amended Sunnyvale lease. |
(3) | We have commitments with various software vendors for non-cancellable agreements generally having terms longer than one year. |
• | expenditure of significant financial and research and development resources in efforts to analyze, correct, eliminate or work around breaches, errors, bugs or defects or to address and eliminate vulnerabilities; |
• | financial liability to customers for breach of certain contract provisions, including indemnification obligations; |
• | loss of existing or potential customers; |
• | delayed or lost revenue; |
• | delay or failure to attain market acceptance; |
• | negative publicity, which would harm our reputation; and |
• | litigation, regulatory inquiries or investigations that would be costly and harm our reputation. |
• | hiring, maintaining and managing a workforce and facilities remotely and under various legal systems, including compliance with local labor and employment laws; |
• | non-compliance with our code of conduct or other corporate policies; |
• | natural disasters, acts of war, terrorism, widespread illness or security breaches; |
• | export controls, tariffs, import and licensing restrictions and other trade barriers; |
• | profits, if any, earned abroad being subject to local tax laws and not being repatriated to the United States or, if repatriation is possible, limited in amount; |
• | adverse tax treatment of revenue from international sources and changes to tax codes, including being subject to foreign tax laws and being liable for paying withholding, income or other taxes in foreign jurisdictions; |
• | unanticipated changes in foreign government laws and regulations; |
• | increased financial accounting and reporting burdens and complexities; |
• | lack of protection of our intellectual property and other contract rights by jurisdictions in which we may do business to the same extent as the laws of the United States; |
• | potential vulnerability to computer system, internet or other systemic attacks, such as denial of service, viruses or other malware which may be caused by criminals, terrorists or other sophisticated organizations; |
• | social, political and economic instability; |
• | geopolitical issues, including changes in diplomatic and trade relationships; and |
• | cultural differences in the conduct of business both with customers and in conducting business in our international facilities and international sales offices. |
• | any progress, or lack of progress, real or perceived, in the development of products that incorporate our innovations and technology companies' acceptance of our products, including the results of our efforts to expand into new target markets; |
• | our signing or not signing new licenses and the loss of strategic relationships with any customer; |
• | announcements of technological innovations or new products by us, our customers or our competitors; |
• | changes in our strategies, including changes in our licensing focus and/or acquisitions of companies with business models or target markets different from our own; |
• | positive or negative reports by securities analysts as to our expected financial results and business developments; |
• | developments with respect to patents or proprietary rights and other events or factors; |
• | new litigation and the unpredictability of litigation results or settlements; and |
• | issuance of additional securities by us, including in acquisitions. |
• | we may be more vulnerable to economic downturns, less able to withstand competitive pressures and less flexible in responding to changing business and economic conditions; |
• | our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, litigation, general corporate or other purposes may be limited; |
• | a substantial portion of our cash flows from operations in the future may be required for the payment of the principal amount of our existing indebtedness when it becomes due at maturity in August 2018; and |
• | we may be required to make cash payments upon any conversion of the 2018 Notes, which would reduce our cash on hand. |
• | our board of directors is authorized, without prior stockholder approval, to create and issue preferred stock, commonly referred to as “blank check” preferred stock, with rights senior to those of common stock, which means that a stockholder rights plan could be implemented by our board; |
• | our board of directors is staggered into two classes, only one of which is elected at each annual meeting; |
• | stockholder action by written consent is prohibited; |
• | nominations for election to our board of directors and the submission of matters to be acted upon by stockholders at a meeting are subject to advance notice requirements; |
• | certain provisions in our bylaws and certificate of incorporation such as notice to stockholders, the ability to call a stockholder meeting, advance notice requirements and action of stockholders by written consent may only be amended with the approval of stockholders holding 66 2/3% of our outstanding voting stock; |
• | our stockholders have no authority to call special meetings of stockholders; and |
• | our board of directors is expressly authorized to make, alter or repeal our bylaws. |
• | any current or future U.S. or foreign patent applications will be approved and not be challenged by third parties; |
• | our issued patents will protect our intellectual property and not be challenged by third parties; |
• | the validity of our patents will be upheld; |
• | our patents will not be declared unenforceable; |
• | the patents of others will not have an adverse effect on our ability to do business; |
• | Congress or the U.S. courts or foreign countries will not change the nature or scope of rights afforded patents or patent owners or alter in an adverse way the process for seeking or enforcing patents; |
• | changes in law will not be implemented, or changes in interpretation of such laws will occur, that will affect our ability to protect and enforce our patents and other intellectual property; |
• | new legal theories and strategies utilized by our competitors will not be successful; |
• | others will not independently develop similar or competing chip interfaces or design around any patents that may be issued to us; or |
• | factors such as difficulty in obtaining cooperation from inventors, pre-existing challenges or litigation, or license or other contract issues will not present additional challenges in securing protection with respect to patents and other intellectual property that we acquire. |
Period | Total Number of Shares Purchased | 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 Plans or Programs | |||||||
Cumulative shares repurchased as of December 31, 2015 (1) | 7,812,500 | $11.70 | 7,812,500 | 12,187,500 | |||||||
April 1, 2016 - April 30, 2016 (1) | 735,861 | $11.70 | 735,861 | 11,451,639 | |||||||
Cumulative shares repurchased as of June 30, 2016 | 8,548,361 | 8,548,361 |
RAMBUS INC. | ||
Date: July 22, 2016 | By: | /s/ Satish Rishi |
Satish Rishi | ||
Senior Vice President, Finance and Chief Financial Officer | ||
(Principal Financial Officer and Duly Authorized Officer) | ||
Exhibit Number | Description of Document | |
10.1 | Asset Purchase Agreement, dated June 29, 2016, by and among Rambus Inc., Bell ID Singapore Ptd Ltd, Inphi Corporation and Inphi International Pte. Ltd. | |
31.1 | Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Principal Financial Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2* | Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
* | The certifications furnished in Exhibit 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference. |
Page | |||
Article I. THE ASSET PURCHASE | 1 | ||
1.1 | Certain Definitions | 1 | |
1.2 | Additional Defined Terms | 8 | |
1.3 | Purchase and Sale of Assets | 11 | |
1.4 | Excluded Assets | 11 | |
1.5 | Assumption of Certain Liabilities; Employees | 12 | |
1.6 | The Closing | 14 | |
1.7 | Payment of Purchase Price; Instruments of Sale | 14 | |
1.8 | Withholding | 16 | |
1.9 | Asset Allocation | 16 | |
1.10 | Form of Delivery | 16 | |
Article II. REPRESENTATIONS AND WARRANTIES OF SELLER PARTIES | 16 | ||
2.1 | Organization; Power | 16 | |
2.2 | Subsidiaries | 17 | |
2.3 | Authority | 17 | |
2.4 | No Conflict | 17 | |
2.5 | Consents | 18 | |
2.6 | Tax Matters | 18 | |
2.7 | Restrictions on Business Activities | 19 | |
2.8 | Title to Properties; Absence of Liens and Encumbrances | 19 | |
2.9 | Intellectual Property | 20 | |
2.10 | Agreements, Contracts and Commitments | 24 | |
2.11 | Financial Statements | 26 | |
2.12 | No Changes | 26 | |
2.13 | Memory Buffer and Memory Register Product Liability and Recalls | 28 | |
2.14 | Memory Buffer and Memory Register Product Warranty | 29 | |
2.15 | Transferred Inventory | 29 | |
2.16 | Interested Party Transactions | 29 | |
2.17 | Governmental Authorization | 30 | |
2.18 | Litigation | 30 | |
2.19 | Environmental Matters | 30 | |
2.20 | Brokers’ and Finders’ Fees | 30 | |
2.21 | Employee Benefit Plans and Compensation | 30 | |
2.22 | Insurance | 31 | |
2.23 | Customers and Suppliers | 32 | |
2.24 | Compliance with Laws | 32 | |
2.25 | Export Control Laws | 32 | |
2.26 | Valid Title to Purchased Assets | 32 | |
2.27 | Corrupt Practices | 32 |
2.28 | Complete Copies of Materials | 33 | |
2.29 | Sufficiency | 33 | |
2.30 | Representations Complete | 33 | |
Article III. REPRESENTATIONS AND WARRANTIES OF BUYER PARTIES | 33 | ||
3.1 | Organization; Power | 33 | |
3.2 | Authority | 33 | |
3.3 | Conflicts | 34 | |
3.4 | Consents | 34 | |
3.5 | Adequacy of Funds | 34 | |
3.6 | Representations Complete | 34 | |
Article IV. CONDUCT OF BUSINESS PRIOR TO THE CLOSING | 35 | ||
4.1 | Conduct of the Business | 35 | |
4.2 | Negative Covenants | 37 | |
4.3 | Procedures for Requesting Buyer Consent | 38 | |
4.4 | Notice to the Buyer Parties | 38 | |
Article V. ADDITIONAL AGREEMENTS | 38 | ||
5.1 | Taking of Necessary Action; Further Action; Access to Information | 38 | |
5.2 | Confidentiality | 41 | |
5.3 | Expenses | 41 | |
5.4 | Public Disclosure | 41 | |
5.5 | Tax Matters | 41 | |
5.6 | Filings | 43 | |
5.7 | Employee Matters | 43 | |
5.8 | Licensed Intellectual Property Rights | 45 | |
5.9 | Regulatory Approvals | 45 | |
5.10 | Contacts with Suppliers and Customers | 46 | |
5.11 | Inventory and Trademarks | 46 | |
Article VI. CONDITIONS TO THE ASSET PURCHASE | 47 | ||
6.1 | Conditions to Obligations of Each Party to Effect the Asset Purchase | 47 | |
6.2 | Conditions to the Obligations of the Buyer Parties | 47 | |
6.3 | Conditions to the Obligations of Seller | 48 | |
Article VII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ESCROW | 48 | ||
7.1 | Survival of Representations, Warranties and Covenants | 48 | |
7.2 | Indemnification | 49 | |
7.3 | Escrow Arrangements | 50 |
7.4 | Indemnification Procedure | 51 | |
7.5 | No Indemnification Limitations and Other Matters | 52 | |
7.6 | Tax Treatment | 53 | |
Article VIII. TERMINATION, AMENDMENT AND WAIVER | 53 | ||
8.1 | Termination | 53 | |
8.2 | Effect of Termination | 54 | |
8.3 | Amendment | 54 | |
8.4 | Extension; Waiver | 54 | |
Article IX. GENERAL PROVISIONS | 54 | ||
9.1 | Notices | 54 | |
9.2 | Interpretation | 55 | |
9.3 | Counterparts | 56 | |
9.4 | Entire Agreement; Assignment | 56 | |
9.5 | Severability | 56 | |
9.6 | Governing Law | 56 | |
9.7 | Rules of Construction | 57 |
Index of Terms | Section |
Agreement | Preamble |
Index of Terms | Section |
Assumed Accounts Payable | 1.5(a) |
Asset Purchase | Recitals |
Assumed Liabilities | 1.5(a) |
Assumed Warranty Claims | 1.5(a) |
Basket Amount | 7.2(b) |
Bill of Sale | 1.7(c)(2) |
Business Authorizations | 2.17 |
Buyer Parent | Preamble |
Buyer Party(ies) | Preamble |
Buyer | Preamble |
Cash Amount | 1.7(a) |
Cap | 7.3(c) |
Charter Documents | 2.1 |
Closing | 1.6 |
Closing Date | 1.6 |
Confidentiality Agreement | 5.2 |
Conflict | 2.4 |
Consultant Proprietary Information Agreement | 2.9(q) |
Contract(s) | 2.4 |
Counsel | 5.1(c) |
Disclosure Schedule | Article II |
Escrow Agreement | 7.3(a) |
Escrow Amount | 7.3(a) |
Escrow Fund | 7.3(a) |
Escrow Period | 7.3(b) |
Employee Proprietary Information Agreement | 2.9(q) |
Excluded Assets | 1.4 |
GAAP | 2.11 |
Inbound-Licenses | 2.9(j) |
Indemnified Parties | 7.2(a) |
Indemnifying Parties | 7.2(a) |
IP Contracts | 2.9(k) |
IP Recordation Agreements | 1.7(c)(ii) |
Key Employee Employment Agreement | 1.5(c) |
Lease Agreements | 2.8(a) |
Leased Real Property | 2.8(a) |
Loss(es) | 7.2(a) |
Material Contracts | 2.10(a) |
Malware | 2.9(w) |
Non-Assignable Asset | 5.1(e) |
Non-Paying Party | 5.5(b)(iii) |
Index of Terms | Section |
Objection Notice | 7.4(a) |
Officer’s Certificate | 7.4(a) |
Open Source License | 1.1 |
Other Tax Controversy | 7.4(c) |
Outbound-Licenses | 2.9(j) |
Paying Party | 5.5(b)(iii) |
Parent Plan | 5.7(e) |
Pre-Closing Tax Controversy | 7.4(c) |
Projections | 2.11 |
Purchase Price | 1.7(a) |
Purchased Assets | 1.3(h) |
Regular Quarterly Financial Information | 2.11 |
Retained Liabilities | 1.5(b) |
Returns | 2.6(b) |
Seller | Preamble |
Seller Parties | Preamble |
Seller Secretary Certificate | 6.2(f) |
Seller Sub | Preamble |
Special Representations | 7.1 |
Straddle Period Tax | 5.5(b)(iii) |
Survival Date | 7.1 |
Tax(es) | 2.6(a) |
Third Party Claim | 7.4(b) |
Third Party Expenses | 5.3 |
Transferred Employees | 5.7(a) |
Transfer Taxes | 5.5(a) |
WARN | 2.21(e) |
Date: July 22, 2016 | ||
By: | /s/ Ronald Black | |
Name: | Ronald Black, Ph.D. | |
Title: | Chief Executive Officer and President |
Date: July 22, 2016 | ||
By: | /s/ Satish Rishi | |
Name: | Satish Rishi | |
Title: | Senior Vice President, Finance and Chief Financial Officer |
By: | /s/ Ronald Black | |
Name: | Ronald Black, Ph.D. | |
Title: | Chief Executive Officer and President |
By: | /s/ Satish Rishi | |
Name: | Satish Rishi | |
Title: | Senior Vice President, Finance and Chief Financial Officer |
Document and Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2016
shares
| |
Document and Entity Information | |
Entity Registrant Name | RAMBUS INC |
Entity Central Index Key | 0000917273 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2016 |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Entity Current Reporting Status | Yes |
Entity Common Stock, Shares Outstanding | 109,896,610 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Stockholders’ equity: | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock, Authorized shares | 5,000,000 | 5,000,000 |
Convertible preferred stock, Issued shares | 0 | 0 |
Convertible preferred stock, Outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, Authorized shares | 500,000,000 | 500,000,000 |
Common stock, Issued shares | 109,896,610 | 109,287,591 |
Common stock, Outstanding shares | 109,896,610 | 109,287,591 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
||||
Revenue: | |||||||
Royalties | $ 62,835 | $ 62,387 | $ 125,712 | $ 129,350 | |||
Contract and other revenue | 13,666 | 10,425 | 23,471 | 16,376 | |||
Total revenue | 76,501 | 72,812 | 149,183 | 145,726 | |||
Operating costs and expenses: | |||||||
Cost of revenue | [1] | 14,089 | 12,137 | 26,296 | 22,893 | ||
Research and development | [1] | 28,753 | 29,188 | 57,280 | 57,722 | ||
Sales, general and administrative | [1] | 21,789 | 17,339 | 44,884 | 35,841 | ||
Gain from sale of intellectual property | 0 | (896) | 0 | (3,156) | |||
Gain from settlement | (138) | (510) | (579) | (1,020) | |||
Total operating costs and expenses | 64,493 | 57,258 | 127,881 | 112,280 | |||
Operating income (loss) | 12,008 | 15,554 | 21,302 | 33,446 | |||
Interest income and other income (expense), net | 1,138 | 203 | 1,380 | 335 | |||
Interest expense | (3,163) | (3,091) | (6,304) | (6,174) | |||
Interest and other income (expense), net | (2,025) | (2,888) | (4,924) | (5,839) | |||
Income before income taxes | 9,983 | 12,666 | 16,378 | 27,607 | |||
Provision for (benefit from) income taxes | 6,107 | 5,805 | 10,624 | 11,244 | |||
Net Income (Loss) | $ 3,876 | $ 6,861 | $ 5,754 | $ 16,363 | |||
Net income per share: | |||||||
Earnings Per Share, Basic | $ 0.04 | $ 0.06 | $ 0.05 | $ 0.14 | |||
Earnings Per Share, Diluted | $ 0.03 | $ 0.06 | $ 0.05 | $ 0.14 | |||
Weighted average shares used in per share calculation: | |||||||
Basic (in shares) | 109,904 | 116,027 | 109,818 | 115,683 | |||
Diluted (in shares) | 112,061 | 120,939 | 112,202 | 119,225 | |||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Cost of revenue | ||||
Stock-based compensation | $ 14 | $ 27 | $ 28 | $ 39 |
Research and development | ||||
Stock-based compensation | 2,109 | 1,988 | 4,189 | 3,755 |
Sales, general and administrative | ||||
Stock-based compensation | $ 2,926 | $ 2,400 | $ 5,696 | $ 4,387 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net Income (Loss) | $ 3,876 | $ 6,861 | $ 5,754 | $ 16,363 |
Other comprehensive income (loss): | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (5,559) | 9 | (6,199) | 9 |
Unrealized gain (loss) on marketable securities, net of tax | (188) | (26) | (371) | 27 |
Total comprehensive income (loss) | $ (1,871) | $ 6,844 | $ (816) | $ 16,399 |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Rambus Inc. (“Rambus” or the “Company”) and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in the accompanying unaudited condensed consolidated financial statements. Investments in entities with less than 20% ownership or in which the Company does not have the ability to significantly influence the operations of the investee are being accounted for using the cost method and are included in other assets. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring items) necessary to state fairly the financial position and results of operations for each interim period presented. Interim results are not necessarily indicative of results for a full year. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information. Certain information and Note disclosures included in the financial statements prepared in accordance with generally accepted accounting principles have been omitted in these interim statements pursuant to such SEC rules and regulations. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto in Form 10-K for the year ended December 31, 2015. Operating Segment Definitions Operating segments are based upon Rambus' internal organization structure, the manner in which its operations are managed, the criteria used by its Chief Operating Decision Maker ("CODM") to evaluate segment performance and availability of separate financial information regularly reviewed for resource allocation and performance assessment. The Company determined its CODM to be the Chief Executive Officer and determined its operating segments to be: (1) Memory and Interface Division ("MID"), which focuses on the design, development and licensing of technology that is related to memory and interfaces; (2) Cryptography Research Division ("CRD"), which focuses on the design, development and licensing of technologies for chip and system security and anti-counterfeiting; (3) Emerging Solutions Division ("ESD"), which includes the computational sensing and imaging group along with the development efforts in the area of emerging technologies; and (4) Lighting and Display Technologies ("LDT"), which focuses on the design, development and licensing of technologies for lighting. For the three and six months ended June 30, 2016, only MID and CRD were reportable segments as each of them met the quantitative thresholds for disclosure as a reportable segment. The results of the remaining other operating segments were shown under “Other.” Reclassifications Certain prior periods' amounts were reclassified to conform to the current year’s presentation. None of these reclassifications had an impact on reported net income for any of the periods presented. Refer to Note 8 "Convertible Notes" for details. |
Recent Accounting Pronouncements |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13. The purpose of this ASU is to require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In May 2016, the FASB issued ASU No. 2016-12 which amended the revenue recognition guidance regarding collectability, noncash consideration, presentation of sales tax and transition. This ASU is effective during the same period as ASU 2014-09. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606), which amends certain aspects of the FASB's new revenue standard, ASU No. 2014-09, Revenue from Contracts with Customers. The standard should be adopted concurrently with adoption of ASU 2014-09 which is effective for annual and interim periods beginning after December 15, 2017. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting." This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions, which include the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. This ASU will become effective for the Company on January 1, 2017. Early adoption is permitted in any interim or annual period. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases." This ASU requires assets and liabilities arising from leases, including operating leases, to be recognized on the balance sheet. This ASU will become effective for the Company in the first quarter of fiscal year 2019, and requires adoption using a modified retrospective approach. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes (Topic 740)," to simplify the presentation of deferred income taxes. The amendments in this update require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. The Company early adopted this ASU as of December 31, 2015 on a prospective basis. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs", which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU requires retrospective adoption and is effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. The Company has adopted this ASU in the first quarter of 2016 on a retrospective basis. Refer to Note 8, "Convertible Notes" for further details. In May 2014, the FASB and International Accounting Standards Board issued their converged accounting standards update on revenue recognition. The core principle of the new guidance is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new guidance also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements. In August 2015, the FASB deferred the effective date of this accounting standards update by one year. The new accounting standards update becomes effective for the Company on January 1, 2018. The Company is currently evaluating the impact that this guidance will have on its financial condition and results of operations. |
Earnings (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | Earnings Per Share Basic earnings per share is calculated by dividing the net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the earnings by the weighted average number of common shares and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of incremental common shares issuable upon exercise of stock options, employee stock purchases, restricted stock and restricted stock units and shares issuable upon the conversion of convertible notes. The dilutive effect of outstanding shares is reflected in diluted earnings per share by application of the treasury stock method. This method includes consideration of the amounts to be paid by the employees, the amount of excess tax benefits that would be recognized in equity if the instrument was exercised and the amount of unrecognized stock-based compensation related to future services. No potential dilutive common shares are included in the computation of any diluted per share amount when a net loss is reported. The following table sets forth the computation of basic and diluted net income per share:
For the three months ended June 30, 2016 and 2015, options to purchase approximately 2.3 million and 2.6 million shares, respectively, and for the six months ended June 30, 2016 and 2015, options to purchase approximately 2.3 million and 2.6 million shares, respectively, were excluded from the calculation because they were anti-dilutive after considering proceeds from exercise, taxes and related unrecognized stock-based compensation expense. |
Intangible Asset and Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Asset and Goodwill | Intangible Assets and Goodwill Goodwill The following tables present goodwill information for each of the reportable segments for the six months ended June 30, 2016:
(1) During the first quarter of 2016, the Company acquired Smart Card Software Limited (“SCS”) which resulted in the addition to goodwill. See Note 16, “Acquisition” for further details. (2) Effect of exchange rates relates to foreign currency translation adjustments for the period.
Intangible Assets The components of the Company’s intangible assets as of June 30, 2016 and December 31, 2015 were as follows:
(1) Includes intangible assets from the acquisition of SCS. See Note 16, “Acquisition” for further details.
During the three and six months ended June 30, 2016, the Company did not sell any intangible assets. During the three and six months ended June 30, 2015, the Company did not purchase or sell any intangible assets. Included in customer contracts and contractual relationships are favorable contracts which are acquired software and service agreements where the Company has no performance obligations. Cash received from these acquired favorable contracts reduces the favorable contract intangible asset. For the three months ended June 30, 2016 and 2015, the Company received $2.4 million and $0.1 million, respectively, related to the favorable contracts. For the six months ended June 30, 2016 and 2015, the Company received $4.1 million and $0.1 million, respectively, related to the favorable contracts. As of June 30, 2016 and December 31, 2015, the net balance of the favorable contract intangible assets was $4.0 million and zero, respectively. Amortization expense for intangible assets for the three and six months ended June 30, 2016 was $8.2 million and $15.9 million, respectively. Amortization expense for intangible assets for the three and six months ended June 30, 2015 was $6.3 million and $12.6 million, respectively. The estimated future amortization of intangible assets as of June 30, 2016 was as follows (amounts in thousands):
It is reasonably possible that the businesses could perform significantly below the Company's expectations or a deterioration of market and economic conditions could occur. This would adversely impact the Company's ability to meet its projected results, which could cause the goodwill in any of its reporting units or long-lived assets in any of its asset groups to become impaired. Significant differences between these estimates and actual cash flows could materially affect the Company's future financial results. If the Company determines that its goodwill or long-lived assets are impaired, it would be required to record a non-cash charge that could have a material adverse effect on its results of operations and financial position. |
Segments and Major Customers |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments and Major Customers | Segments and Major Customers For the three and six months ended June 30, 2016, MID and CRD were reportable segments as each of them met the quantitative thresholds for disclosure as a reportable segment. The results of the remaining operating segments were shown under “Other.” The Company evaluates the performance of its segments based on segment operating income (loss), which is defined as revenue minus segment operating expenses. Segment operating expenses are comprised of direct operating expenses. Segment operating expenses do not include sales, general and administrative expenses and the allocation of certain expenses managed at the corporate level, such as stock-based compensation, amortization, and certain bonus and acquisition costs. The “Reconciling Items” category includes these unallocated sales, general and administrative expenses as well as corporate level expenses. The tables below present reported segment operating income (loss) for the three and six months ended June 30, 2016 and 2015, respectively.
The Company’s CODM does not review information regarding assets on an operating segment basis. Additionally, the Company does not record intersegment revenue or expense. Accounts receivable from the Company's major customers representing 10% or more of total accounts receivable at June 30, 2016 and December 31, 2015, respectively, was as follows:
_________________________________________ * Customer accounted for less than 10% of total accounts receivable in the period Revenue from the Company’s major customers representing 10% or more of total revenue for the three and six months ended June 30, 2016 and 2015, respectively, was as follows:
Revenue from customers in the geographic regions based on the location of contracting parties was as follows:
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Marketable Securities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | Marketable Securities Rambus invests its excess cash and cash equivalents primarily in U.S. government sponsored obligations, commercial paper, corporate notes and bonds, money market funds and municipal notes and bonds that mature within three years. As of June 30, 2016 and December 31, 2015, all of the Company’s cash equivalents and marketable securities had a remaining maturity of less than one year. All cash equivalents and marketable securities are classified as available-for-sale. Total cash, cash equivalents and marketable securities are summarized as follows:
Available-for-sale securities are reported at fair value on the balance sheets and classified as follows:
The Company continues to invest in highly rated quality, highly liquid debt securities. As of June 30, 2016, these securities have a remaining maturity of less than one year. The Company holds all of its marketable securities as available-for-sale, marks them to market, and regularly reviews its portfolio to ensure adherence to its investment policy and to monitor individual investments for risk analysis, proper valuation, and unrealized losses that may be other than temporary. The estimated fair value of cash equivalents and marketable securities classified by the length of time that the securities have been in a continuous unrealized loss position at June 30, 2016 and December 31, 2015 are as follows:
The gross unrealized loss at June 30, 2016 and December 31, 2015 was not material in relation to the Company’s total available-for-sale portfolio. The gross unrealized loss can be primarily attributed to a combination of market conditions as well as the demand for and duration of the U.S. government sponsored obligations and corporate notes and bonds. There is no need to sell and the Company believes that it can recover the amortized cost of these investments. The Company has found no evidence of impairment due to credit losses in its portfolio. Therefore, these unrealized losses were recorded in other comprehensive income. However, the Company cannot provide any assurance that its portfolio of cash, cash equivalents and marketable securities will not be impacted by adverse conditions in the financial markets, which may require the Company in the future to record an impairment charge for credit losses which could adversely impact its financial results. See Note 7, “Fair Value of Financial Instruments,” for discussion regarding the fair value of the Company’s cash equivalents and marketable securities. |
Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company reviews the pricing inputs by obtaining prices from a different source for the same security on a sample of its portfolio. The Company has not adjusted the pricing inputs it has obtained. The following table presents the financial instruments that are carried at fair value and summarizes the valuation of its cash equivalents and marketable securities by the above pricing levels as of June 30, 2016 and December 31, 2015:
The Company monitors its investments for other-than-temporary impairment and records appropriate reductions in carrying value when necessary. The Company monitors its investments for other-than-temporary losses by considering current factors, including the economic environment, market conditions, operational performance and other specific factors relating to the business underlying the investment, reductions in carrying values when necessary and the Company’s ability and intent to hold the investment for a period of time which may be sufficient for anticipated recovery in the market. Any other-than-temporary loss is reported under “Interest and other income (expense), net” in the condensed consolidated statement of operations. For the three and six months ended June 30, 2016 and 2015, there were no transfers of financial instruments between different categories of fair value. The following table presents the financial instruments that are not carried at fair value but require fair value disclosure as of June 30, 2016 and December 31, 2015:
The fair value of the convertible notes at each balance sheet date is determined based on recent quoted market prices for these notes which is a level 2 measurement. As discussed in Note 8, "Convertible Notes," as of June 30, 2016, the 2018 Notes are carried at their face value of $138.0 million, less any unamortized debt discount and unamortized debt issuance costs. The carrying value of other financial instruments, including accounts receivable, accounts payable and other liabilities, approximates fair value due to their short maturities. |
Convertible Notes |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Notes | Convertible Notes The Company adopted ASU 2015-03 during the first quarter of 2016. Pursuant to the guidance in ASU 2015-03, the Company has reclassified unamortized debt issuance costs associated with the Company's 2018 Notes in the previously reported Consolidated Balance Sheet as of December 31, 2015, as follows:
The Company’s convertible notes are shown in the following table:
Interest expense related to the notes for the three and six months ended June 30, 2016 and 2015 was as follows:
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies As of June 30, 2016, the Company’s material contractual obligations were as follows (in thousands):
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The Company also has commitments related to acquisitions, which are not included in the above table. See Note 16, “Acquisition” for further details. Building lease expense was approximately $0.9 million and $1.7 million for the three and six months ended June 30, 2016, respectively. Building lease expense was approximately $0.6 million and $1.3 million for the three and six months ended June 30, 2015, respectively. Deferred rent of $0.6 million and $0.8 million as of June 30, 2016 and December 31, 2015, respectively, was included primarily in other long-term liabilities. Indemnification From time to time, the Company indemnifies certain customers as a necessary means of doing business. Indemnification covers customers for losses suffered or incurred by them as a result of any patent, copyright, or other intellectual property infringement or any other claim by any third party arising as result of the applicable agreement with the Company. The Company generally attempts to limit the maximum amount of indemnification that the Company could be required to make under these agreements to the amount of fees received by the Company, however, this is not always possible. The fair value of the liability as of June 30, 2016 and December 31, 2015 is not material. |
Equity Incentive Plans and Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Incentive Plans and Stock-Based Compensation | Equity Incentive Plans and Stock-Based Compensation As of June 30, 2016, 8,394,855 shares of the 35,400,000 cumulative shares approved under both the current 2015 Equity Incentive Plan (the “2015 Plan”) and past 2006 Equity Incentive Plan (the “2006 Plan”) remain available for grant, which included an increase of 4,000,000 shares approved under the 2015 Plan. On April 23, 2015, the Company's stockholders approved the 2015 Plan, which authorizes 4,000,000 shares for future issuance plus the number of shares that remained available for grant under the 2006 Plan as of the effective date of the 2015 Plan. The 2015 Plan became effective and replaced the 2006 Plan on April 23, 2015. The 2015 Plan was the Company’s only plan for providing stock-based incentive awards to eligible employees, executive officers, non-employee directors and consultants as of June 30, 2016. No further awards will be made under the 2006 Plan, but the 2006 Plan will continue to govern awards previously granted under it. In addition, any shares subject to stock options or other awards granted under the 2006 Plan that on or after the effective date of the 2015 Plan are forfeited, cancelled, exchanged or surrendered or terminate under the 2006 Plan will become available for grant under the 2015 Plan. Additionally, the 1997 Stock Option Plan (the “1997 Plan”) continues to govern awards previously granted under that plan. A summary of shares available for grant under the Company’s plans is as follows:
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General Stock Option Information The following table summarizes stock option activity under the 1997 Plan, 2006 Plan and 2015 Plan for the six months ended June 30, 2016 and information regarding stock options outstanding, exercisable, and vested and expected to vest as of June 30, 2016.
No stock options that contain a market condition were granted during the three and six months ended June 30, 2016. As of June 30, 2016 and December 31, 2015, there were 1,225,000 and 1,315,000, respectively, stock options outstanding that require the Company to achieve minimum market conditions in order for the options to become exercisable. The fair values of the options granted with a market condition were calculated, on their respective grant dates, using a binomial valuation model, which estimates the potential outcome of reaching the market condition based on simulated future stock prices. The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value for in-the-money options at June 30, 2016, based on the $12.08 closing stock price of Rambus’ common stock on June 30, 2016 on the NASDAQ Global Select Market, which would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options outstanding and exercisable as of June 30, 2016 was 6,148,183 and 3,734,368, respectively. Employee Stock Purchase Plan Under the 2015 Employee Stock Purchase Plan ("2015 ESPP"), the Company issued 340,349 shares at a price of $8.96 per share during the six months ended June 30, 2016. Under the 2006 Employee Stock Purchase Plan ("2006 ESPP"), the Company issued 315,100 shares at a price of $9.66 per share during the six months ended June 30, 2015. As of June 30, 2016, 1,659,651 shares under the 2015 ESPP remain available for issuance. The 2006 ESPP remained in effect until the Company’s November 2, 2015 offering period, at which time the first offering period under the 2015 ESPP began. Stock-Based Compensation For the six months ended June 30, 2016 and 2015, the Company maintained stock plans covering a broad range of potential equity grants including stock options, nonvested equity stock and equity stock units and performance based instruments. In addition, the Company sponsors the 2015 ESPP (and previously the 2006 ESPP), whereby eligible employees are entitled to purchase common stock semi-annually, by means of limited payroll deductions, at a 15% discount from the fair market value of the common stock as of specific dates. Stock Options During the three months ended June 30, 2016, the Company did not grant any stock options. During the six months ended June 30, 2016, the Company granted 440,000 stock options with an estimated total grant-date fair value of $2.1 million. During the three and six months ended June 30, 2016, the Company recorded stock-based compensation expense related to stock options of $1.1 million and $2.3 million, respectively. During the three months ended June 30, 2015, the Company did not grant any stock options. During the six months ended June 30, 2015, the Company granted 362,335 stock options, with an estimated total grant-date fair value of $1.7 million. During the three and six months ended June 30, 2015, the Company recorded stock-based compensation expense related to stock options of and $2.3 million and $4.4 million, respectively. As of June 30, 2016, there was $6.2 million of total unrecognized compensation cost, net of expected forfeitures, related to non-vested stock-based compensation arrangements granted under the stock option plans. That cost is expected to be recognized over a weighted-average period of 1.7 years. The total fair value of shares vested as of June 30, 2016 was $30.9 million. The total intrinsic value of options exercised was $0.9 million and $4.0 million for the three and six months ended June 30, 2016, respectively. The total intrinsic value of options exercised was $3.5 million and $4.6 million for the three and six months ended June 30, 2015, respectively. Intrinsic value is the total value of exercised shares based on the price of the Company’s common stock at the time of exercise less the cash received from the employees to exercise the options. During the six months ended June 30, 2016, net proceeds from employee stock option exercises totaled approximately $5.3 million. Employee Stock Purchase Plan For the three and six months ended June 30, 2016, the Company recorded compensation expense related to the 2015 ESPP of $0.3 million and $0.8 million, respectively. For the three and six months ended June 30, 2015, the Company recorded compensation expense related to the 2006 ESPP of $0.4 million and $0.8 million, respectively. As of June 30, 2016, there was $0.4 million of total unrecognized compensation cost related to stock-based compensation arrangements granted under the 2015 ESPP. That cost is expected to be recognized over four months. There were no tax benefits realized as a result of employee stock option exercises, stock purchase plan purchases, and vesting of equity stock and stock units for the three and six months ended June 30, 2016 and 2015 calculated in accordance with accounting for share-based payments. Valuation Assumptions The fair value of stock awards is estimated as of the grant date using the Black-Scholes-Merton (“BSM”) option-pricing model assuming a dividend yield of 0% and the additional weighted-average assumptions as listed in the table below. The following table presents the weighted-average assumptions used to estimate the fair value of stock options granted that contain only service conditions in the periods presented.
There were no stock options granted during the three months ended June 30, 2016 and 2015.
Nonvested Equity Stock and Stock Units The Company grants nonvested equity stock units to officers, employees and directors. During the three and six months ended June 30, 2016, the Company granted nonvested equity stock units totaling 184,456 and 2,024,640 shares under the 2015 Plan. During the three and six months ended June 30, 2015, the Company granted nonvested equity stock units totaling 60,724 and 1,581,902 shares under the 2006 Plan. These awards have a service condition, generally a service period of four years, except in the case of grants to directors, for which the service period is 1 year. For the three and six months ended June 30, 2016, the nonvested equity stock units were valued at the date of grant giving them a fair value of approximately $2.3 million and $25.0 million. For the three and six months ended June 30, 2015, the nonvested equity stock units were valued at the date of grant giving them a fair value of approximately $0.9 million and $18.0 million. During the first quarters of 2016 and 2015, the Company granted performance unit awards to certain Company executive officers with vesting subject to the achievement of certain performance conditions. The ultimate number of performance units that can be earned can range from 0% to 150% of target depending on performance relative to target over the applicable period. The shares earned will vest on the third anniversary of the date of grant. The Company's shares available for grant has been reduced to reflect the shares that could be earned at 150% of target. During the three and six months ended June 30, 2016, the Company recorded $0.7 million and $1.3 million of stock-based compensation expense related to these performance unit awards. During the three and six months ended June 30, 2015, the Company recorded $0.3 million and $0.5 million of stock-based compensation expense related to these performance unit awards. For the three and six months ended June 30, 2016, the Company recorded stock-based compensation expense of approximately $3.7 million and $6.8 million related to all outstanding nonvested equity stock grants. For the three and six months ended June 30, 2015, the Company recorded stock-based compensation expense of approximately $1.7 million and $2.9 million related to all outstanding nonvested equity stock grants. Unrecognized stock-based compensation related to all nonvested equity stock grants, net of estimated forfeitures, was approximately $34.5 million at June 30, 2016. This amount is expected to be recognized over a weighted average period of 3.0 years. The following table reflects the activity related to nonvested equity stock and stock units for the six months ended June 30, 2016:
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Stockholders' Equity |
6 Months Ended |
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Jun. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Share Repurchase Program During the six months ended June 30, 2016, the Company repurchased and retired 0.7 million shares of its common stock under its share repurchase program. On January 21, 2015, the Company's Board approved a share repurchase program authorizing the repurchase of up to an aggregate of 20.0 million shares. Share repurchases under the plan may be made through the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules, and regulations. There is no expiration date applicable to the plan. On October 26, 2015, the Company initiated an accelerated share repurchase program with Citibank, N.A. The accelerated share repurchase program is part of the broader share repurchase program previously authorized by the Company's Board on January 21, 2015. Under the accelerated share repurchase program, the Company pre-paid to Citibank, N.A., the $100.0 million purchase price for its common stock and, in turn, the Company received an initial delivery of approximately 7.8 million shares of its common stock from Citibank, N.A, in the fourth quarter of 2015, which were retired and recorded as a $80.0 million reduction to stockholders' equity. The remaining $20.0 million of the initial payment was recorded as a reduction to stockholders’ equity as an unsettled forward contract indexed to the Company's stock. The number of shares to be ultimately purchased by the Company was determined based on the volume weighted average price of the common stock during the terms of the transaction, minus an agreed upon discount between the parties. During the second quarter of 2016, the accelerated share repurchase program was completed and the Company received an additional 0.7 million shares of its common stock as the final settlement of the accelerated share repurchase program. As of June 30, 2016, there remained an outstanding authorization to repurchase approximately 11.5 million shares of the Company's outstanding common stock under the current share repurchase program. The Company records stock repurchases as a reduction to stockholders’ equity. The Company records a portion of the purchase price of the repurchased shares as an increase to accumulated deficit when the price of the shares repurchased exceeds the average original proceeds per share received from the issuance of common stock. |
Income Taxes |
6 Months Ended |
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Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded a provision for income taxes of $6.1 million and $5.8 million for the three months ended June 30, 2016 and 2015, respectively, and $10.6 million and $11.2 million for the six months ended June 30, 2016 and 2015, respectively. The income taxes for the three and six months ended June 30, 2016 is primarily comprised of the Company's U.S. federal, state and foreign taxes and income tax expense recognized from exercises and expiration of out-of-the-money fully vested shares from equity incentive plans. The provision for income taxes for the three and six months ended June 30, 2015 was primarily comprised of withholding taxes, state taxes and other foreign taxes based upon income earned during the period. During the three and six months ended June 30, 2016, the Company paid withholding taxes of $5.4 million and $10.9 million, respectively. During the three and six months ended June 30, 2015, the Company paid withholding taxes of $4.8 million and $9.6 million, respectively. As of June 30, 2016, the Company’s unaudited condensed consolidated balance sheets included net deferred tax assets, before valuation allowance, of approximately $165.4 million, which consists of net operating loss carryovers, tax credit carryovers, amortization, employee stock-based compensation expenses and certain liabilities, partially reduced by deferred tax liabilities associated with the convertible notes. As of June 30, 2016, the Company continues to maintain a valuation allowance against the majority of its state deferred tax assets. Management periodically evaluates the realizability of the Company's net deferred tax assets based on all available evidence, both positive and negative. The realizability of the Company's net deferred tax assets is dependent on its ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets. The Company continues to maintain a deferred tax asset valuation allowance of $21.3 million as of June 30, 2016. The Company maintains liabilities for uncertain tax positions within its long-term income taxes payable accounts and as a reduction to existing deferred tax assets to the extent tax attributes are available to offset such liabilities. These liabilities involve judgment and estimation and are monitored by management based on the best information available including changes in tax regulations, the outcome of relevant court cases and other information. As of June 30, 2016, the Company had approximately $22.4 million of unrecognized tax benefits, including $19.6 million recorded as a reduction of long-term deferred tax assets and $2.8 million in long-term income taxes payable. If recognized, approximately $2.8 million would be recorded as an income tax benefit. As of December 31, 2015, the Company had $20.8 million of unrecognized tax benefits, including $18.6 million recorded as a reduction of long-term deferred tax assets and $2.2 million recorded in long-term income taxes payable. Although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, the Company cannot reasonably estimate the outcome at this time. The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision. At June 30, 2016 and December 31, 2015, an immaterial amount of interest and penalties is included in long-term income taxes payable. Rambus files income tax returns for the U.S., California, India and various other state and foreign jurisdictions. The U.S. federal returns are subject to examination from 2012 and forward. The California returns are subject to examination from 2009 and forward. In addition, any research and development credit carryforward or net operating loss carryforward generated in prior years and utilized in these or future years may also be subject to examination. The India returns are subject to examination from fiscal year ended March 2010 and forward. The Company is currently under examination by California for the 2010 and 2011 tax years. The Company’s India subsidiary is under examination by the Indian tax administration for tax years beginning with 2011, except for 2014, which was assessed in the Company's favor. These examinations may result in proposed adjustments to the income taxes as filed during these periods. Management regularly assesses the likelihood of outcomes resulting from income tax examinations to determine the adequacy of their provision for income taxes and believes their provision for unrecognized tax benefits is adequate. Additionally, the Company's future effective tax rates could be adversely affected by earnings being higher than anticipated in countries where the Company has higher statutory rates or lower than anticipated in countries where it has lower statutory rates, by changes in valuation of its deferred tax assets and liabilities or by changes in tax laws or interpretations of those laws. |
Litigation and Asserted Claims |
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Jun. 30, 2016 | |
LitigationAndAssertedClaimsDisclosureAbstract | |
Litigation and Asserted Claims | Litigation and Asserted Claims Rambus is not currently a party to any material pending legal proceeding; however, from time to time, Rambus may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on our business, operating results, financial position or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. The Company records a contingent liability when it is probable that a loss has been incurred and the amount is reasonably estimable in accordance with accounting for contingencies. |
Agreements with SK hynix and Micron |
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Patent License Agreement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Agreement with SK hynix and Micron | Agreements with SK hynix and Micron SK hynix On June 11, 2013, Rambus, SK hynix and certain related entities of SK hynix entered into a settlement agreement, pursuant to which the parties have agreed to release all claims against each other with respect to all outstanding litigation between them. Pursuant to the settlement agreement, Rambus and SK hynix entered into a semiconductor patent license agreement on June 11, 2013, under which SK hynix licenses from Rambus non-exclusive rights to certain Rambus patents and has agreed to pay Rambus cash amounts over the next five years. Under the license agreement, Rambus has granted to SK hynix (i) a paid-up perpetual patent license for certain identified SK hynix DRAM products and (ii) a five-year term patent license to all other DRAM and other semiconductor products. In June 2015, the Company signed an amendment that extends its current agreement with SK hynix for an additional six years for use of Rambus memory-related patented innovations in SK hynix semiconductor products. The Company signed the original agreement with SK hynix for a five-year term in June 2013. Under the amendment, SK hynix has agreed to continue to pay the Company an average quarterly cash payment of $12.0 million which equates to $432.0 million from the signing of the amendment through the term of the agreement ending July 1, 2024, provided that (a) for each of the six full calendar quarters immediately following July 1, 2015, SK hynix will pay the Company a quarterly cash payment of $16.0 million, and (b) in addition, after December 1, 2017, SK hynix will have the option to make six quarterly cash payments of $8.0 million upon six months written notice. In addition, SK hynix has the option to renew the agreement for an additional three-year extension under the existing rate structure. The agreements with SK hynix are considered a multiple element arrangement for accounting purposes. For a multiple element arrangement under the applicable accounting rules, the Company is required to identify specific elements of the arrangement and then determine when those elements should be recognized. The Company identified three elements in the arrangement: antitrust litigation settlement, settlement of past infringement, and license agreement. The Company considered several factors in determining the accounting fair value of the elements of the SK hynix agreements which included a third party valuation using an income approach (collectively the “SK hynix Fair Value”). The inputs and assumptions used in this accounting valuation were from a market participant perspective and included projected customer revenue, royalty rates, estimated discount rates, useful lives and income tax rates, among others. The development of a number of these inputs and assumptions in the model requires a significant amount of management judgment and discretion, and is based upon a number of factors, including the selection of industry comparables, market growth rates and other relevant factors. Changes in any number of these assumptions may have a substantial impact on the SK hynix Fair Value as assigned to each element. These inputs and assumptions represent management’s best estimates at the time of the transaction. During the second quarter of 2016, the Company received cash consideration of $16.0 million from SK hynix. The amount was allocated entirely to royalty revenue ($16.0 million) and none to gain from settlement based on the elements’ SK hynix Fair Value. During the first half of 2016, the Company received cash consideration of $32.0 million from SK hynix. The amount was allocated between royalty revenue ($31.9 million) and gain from settlement ($0.1 million) based on the elements’ SK hynix Fair Value. The cumulative cash receipts through June 30, 2016 and the remaining future cash receipts from the agreements with SK hynix are expected to be recognized as follows assuming no adjustments to the payments under the terms of the agreements (and assuming the option to make the lower payments begins with payments made during the middle of 2018):
Micron On December 9, 2013, Rambus, Micron and certain related entities of Micron entered into a settlement agreement, pursuant to which the parties have agreed that they will release all claims against each other with respect to all outstanding litigation between them and certain other potential claims. Pursuant to the settlement agreement, Rambus and Micron entered into a semiconductor patent license agreement on December 9, 2013. Under the license agreement, Rambus has granted to Micron and its subsidiaries and certain affiliated entities (i) a paid-up perpetual patent license for certain identified Micron DRAM products and (ii) a seven-year term patent license to other memory and semiconductor products. The agreements with Micron are considered a multiple element arrangement for accounting purposes. For a multiple element arrangement under the applicable accounting rules, the Company is required to identify specific elements of the arrangement and then determine when those elements should be recognized. The Company identified three elements in the arrangement: antitrust litigation settlement, settlement of past infringement, and license agreement. The Company considered several factors in determining the accounting fair value of the elements of the Micron agreements which included a third party valuation using an income approach (collectively the “Micron Fair Value”). The inputs and assumptions used in this accounting valuation were from a market participant perspective and included projected customer revenue, royalty rates, estimated discount rates, useful lives and income tax rates, among others. The development of a number of these inputs and assumptions in the model requires a significant amount of management judgment and discretion, and is based upon a number of factors, including the selection of industry comparables, market growth rates and other relevant factors. Changes in any number of these assumptions may have a substantial impact on the Micron Fair Value as assigned to each element. These inputs and assumptions represent management’s best estimates at the time of the transaction. During the second quarter of 2016, the Company received cash consideration of $10.0 million from Micron. The amount was allocated between royalty revenue ($9.9 million) and gain from settlement ($0.1 million) based on the elements’ Micron Fair Value. During the first half of 2016, the Company received cash consideration of $20.0 million from Micron. The amount was allocated between royalty revenue ($19.6 million) and gain from settlement ($0.4 million) based on the elements’ Micron Fair Value. The remaining $174.5 million is expected to be paid in successive quarterly payments of $10.0 million, concluding in the fourth quarter of 2020. The cumulative cash receipts through June 30, 2016 and the remaining future cash receipts from the agreements with Micron are expected to be recognized as follows assuming no adjustments to the payments under the terms of the agreements:
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Restructuring Charges |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs [Table Text Block] | The 2015 Plan During 2015, the Company initiated a restructuring program to reduce overall corporate expenses which is expected to improve future profitability by reducing spending on sales, general and administrative programs and refining some of its research and development efforts ("the 2015 Plan"). In connection with this restructuring program, the Company initiated a plan of termination resulting in a reduction of 8% of the Company's headcount. The Company estimated that it would incur a cash payout related to the reduction in force of approximately $3.0 million, which is related to severance and termination benefits. The estimated non-cash expense was expected to be approximately $1.0 million. During the year ended December 31, 2015, the Company recorded a charge of $3.6 million related primarily to the reduction in workforce, of which $1.4 million was related to the MID reportable segment, $0.1 million was related to the CRD reportable segment, $1.2 million was related to the Other segment and $0.9 million was related to corporate support functions. The majority of the 2015 Plan was completed in the first quarter of 2016. The following table summarizes the 2015 Plan restructuring activities during the six months ended June 30, 2016:
______________________________________ *The non-cash charge of $583 thousand is related to the write down of fixed assets related to the Other segment. |
Acquisition |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition Smart Card Software Limited On January 25, 2016, the Company completed its acquisition of Smart Card Software Limited (“SCS”), a privately-held company incorporated in the United Kingdom, by acquiring all issued and outstanding shares of capital stock of SCS. Pursuant to the merger agreement on January 25, 2016, SCS was merged into Rambus, Inc. The transaction was denominated in British pounds. Under the terms of the merger agreement, the total consideration in U.S. dollar equivalent was $104.7 million which included the purchase price of $92.6 million paid on January 25, 2016 and additional purchase consideration to be paid in the third quarter of 2016 totaling $12.1 million and comprised of $11.6 million in cash, $4.0 million in working capital, offset by $3.5 million in liabilities assumed from SCS. Subsequently, the additional purchase consideration was adjusted to $11.5 million based on the period exchange rate as of June 30, 2016. Of the purchase price, approximately $17.1 million of the consideration was deposited into an escrow account to fund indemnification obligations and other contractual provisions, with releases of portions of the escrow at various intervals through 18 months. SCS is a leader in mobile payments and a leading supplier of smart ticketing systems, which includes Bell Identification Ltd. and Ecebs Ltd. SCS is part of the CRD reporting unit. This acquisition will complement the Company's CRD reporting unit by allowing the Company to leverage its foundational security technology to offer differentiated, value-added security solutions to its customers. As of June 30, 2016, the Company has incurred approximately $2.0 million in external acquisition costs in connection with the acquisition which were expensed as incurred. The initial purchase price allocation and related accounting for this acquisition is preliminary. The preliminary fair value estimates for the assets acquired and liabilities assumed were based upon preliminary calculations and valuations and the Company's estimates and assumptions for the acquisition are subject to change as the Company obtains additional information during the measurement period (up to one year from the acquisition date). The primary area of the preliminary estimates that are not yet finalized, relate to working capital adjustments that could impact the valuation of goodwill and liabilities. The fair value of the assets acquired has been determined primarily by using valuation methods that discount the expected future cash flows to present value using estimates and assumptions determined by management. The Company performed a valuation of the net assets acquired as of the January 25, 2016 closing date. The total consideration from the business combination was allocated as follows:
The goodwill arising from the acquisition is primarily attributed to synergies related to the combination of new and complementary technologies of the Company and the assembled workforce of SCS. This goodwill is not expected to be deductible for tax purposes. The identified intangible assets assumed in the acquisition of SCS were recognized as follows based upon their estimated fair values as of the acquisition date:
(1) Includes favorable contracts of $8.3 million with an estimated useful life of 5 years. The favorable contracts are acquired software and service agreements where the Company has no performance obligations. Cash received from these acquired favorable contracts reduces the favorable contract intangible asset. The following unaudited pro forma financial information presents the combined results of operations for the Company and SCS as if the acquisition had occurred on January 1, 2015. The unaudited pro forma financial information has been prepared for comparative purposes only and does not purport to be indicative of the actual operating results that would have been recorded had the acquisition actually taken place on January 1, 2015, and should not be taken as indicative of future consolidated operating results. Additionally, the unaudited pro forma financial results do not include any anticipated synergies or other expected benefits from the acquisition (unaudited, in thousands, except per share amounts):
Pro forma earnings for 2016 were adjusted to exclude $2.0 million of acquisition-related costs incurred in 2016. Consequently, pro forma earnings for 2015 were adjusted to include these costs. During the second quarter of 2016, the Company signed a definitive agreement to purchase the Memory Interconnect Business from Inphi Corporation (“Inphi”) for $90 million in cash. The acquisition includes all assets of the Inphi Memory Interconnect Business including product inventory, customer contracts, supply chain agreements and intellectual property. Additionally, in the second quarter of 2016, the Company entered into a definitive agreement to acquire the assets of Semtech Corporation's (“Semtech”) Snowbush IP for $32.5 million in cash as well as additional payments based upon specific new product sales through the end of 2022. Snowbush IP, formerly part of Semtech's Systems Innovation Group, is a provider of silicon-proven, high-performance serial link solutions. These acquisitions remain subject to customary closing conditions and each is expected to close during the third quarter of 2016. As a result, the Company is unable to provide the amounts to be recognized for the major classes of assets to be acquired and liabilities to be assumed for each of these acquisitions. |
Earnings (Loss) Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted loss per share | The following table sets forth the computation of basic and diluted net income per share:
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Intangible Asset and Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in carrying amount of goodwill by reporting unit | The following tables present goodwill information for each of the reportable segments for the six months ended June 30, 2016:
(1) During the first quarter of 2016, the Company acquired Smart Card Software Limited (“SCS”) which resulted in the addition to goodwill. See Note 16, “Acquisition” for further details. (2) Effect of exchange rates relates to foreign currency translation adjustments for the period.
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Components of intangible assets | The components of the Company’s intangible assets as of June 30, 2016 and December 31, 2015 were as follows:
(1) Includes intangible assets from the acquisition of SCS. See Note 16, “Acquisition” for further details.
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Estimated future amortization expense of intangible assets | The estimated future amortization of intangible assets as of June 30, 2016 was as follows (amounts in thousands):
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Segments and Major Customers (Tables) |
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Reported segment revenues, and reported segment direct operating income (loss) | The tables below present reported segment operating income (loss) for the three and six months ended June 30, 2016 and 2015, respectively.
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Revenue from external customer by geographic regions | Revenue from customers in the geographic regions based on the location of contracting parties was as follows:
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Accounts Receivable [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of customer accounts representing 10% or more than 10% of total revenue | Accounts receivable from the Company's major customers representing 10% or more of total accounts receivable at June 30, 2016 and December 31, 2015, respectively, was as follows:
_________________________________________ |
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Sales, net | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of customer accounts representing 10% or more than 10% of total revenue | Revenue from the Company’s major customers representing 10% or more of total revenue for the three and six months ended June 30, 2016 and 2015, respectively, was as follows:
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Marketable Securities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash equivalents and marketable securities classified as available-for-sale | All cash equivalents and marketable securities are classified as available-for-sale. Total cash, cash equivalents and marketable securities are summarized as follows:
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Available-for-sale securities reported at fair value | Available-for-sale securities are reported at fair value on the balance sheets and classified as follows:
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Estimated fair value of cash equivalents and marketable securities classified by the length of time that the securities have been in a continuous unrealized loss position | The estimated fair value of cash equivalents and marketable securities classified by the length of time that the securities have been in a continuous unrealized loss position at June 30, 2016 and December 31, 2015 are as follows:
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Fair Value of Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the valuation of cash equivalents and marketable securities by pricing levels | The following table presents the financial instruments that are carried at fair value and summarizes the valuation of its cash equivalents and marketable securities by the above pricing levels as of June 30, 2016 and December 31, 2015:
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Financial instruments not carried at fair value but requiring fair value disclosure | The following table presents the financial instruments that are not carried at fair value but require fair value disclosure as of June 30, 2016 and December 31, 2015:
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Convertible Notes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ReclassifiedUnamortizedDebtIssuanceCostsReportedInBalanceSheetTableTextBlock [Table Text Block] | The Company adopted ASU 2015-03 during the first quarter of 2016. Pursuant to the guidance in ASU 2015-03, the Company has reclassified unamortized debt issuance costs associated with the Company's 2018 Notes in the previously reported Consolidated Balance Sheet as of December 31, 2015, as follows:
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Schedule of convertible notes | The Company’s convertible notes are shown in the following table:
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Schedule of interest expense on notes | Interest expense related to the notes for the three and six months ended June 30, 2016 and 2015 was as follows:
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Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's material contractual obligations | As of June 30, 2016, the Company’s material contractual obligations were as follows (in thousands):
_________________________________________
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Equity Incentive Plans and Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares available for grant under stock-based incentive plans | A summary of shares available for grant under the Company’s plans is as follows:
_________________________________________
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Schedule of stock option activity | The following table summarizes stock option activity under the 1997 Plan, 2006 Plan and 2015 Plan for the six months ended June 30, 2016 and information regarding stock options outstanding, exercisable, and vested and expected to vest as of June 30, 2016.
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Weighted-average assumptions for Stock Option Plans | The following table presents the weighted-average assumptions used to estimate the fair value of stock options granted that contain only service conditions in the periods presented.
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Schedule of nonvested equity stock and stock units activity | The following table reflects the activity related to nonvested equity stock and stock units for the six months ended June 30, 2016:
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Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block] |
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Agreements with SK hynix and Micron (Tables) |
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SK hynix [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition, Multiple-deliverable Arrangements [Table Text Block] | The cumulative cash receipts through June 30, 2016 and the remaining future cash receipts from the agreements with SK hynix are expected to be recognized as follows assuming no adjustments to the payments under the terms of the agreements (and assuming the option to make the lower payments begins with payments made during the middle of 2018):
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Micron [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition, Multiple-deliverable Arrangements [Table Text Block] | The cumulative cash receipts through June 30, 2016 and the remaining future cash receipts from the agreements with Micron are expected to be recognized as follows assuming no adjustments to the payments under the terms of the agreements:
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Restructuring Charges (Tables) |
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2015 Plan [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities Disclosure [Text Block] | The following table summarizes the 2015 Plan restructuring activities during the six months ended June 30, 2016:
______________________________________ *The non-cash charge of $583 thousand is related to the write down of fixed assets related to the Other segment. |
Acquisition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information [Table Text Block] |
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The total consideration from the business combination was allocated as follows:
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Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The identified intangible assets assumed in the acquisition of SCS were recognized as follows based upon their estimated fair values as of the acquisition date:
(1) Includes favorable contracts of $8.3 million with an estimated useful life of 5 years. The favorable contracts are acquired software and service agreements where the Company has no performance obligations. Cash received from these acquired favorable contracts reduces the favorable contract intangible asset. |
Basis of Presentation (Details) |
6 Months Ended |
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Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Percentage of ownership for cost method investment, maximum | 20.00% |
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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Numerator: | ||||
Net Income (Loss) | $ 3,876 | $ 6,861 | $ 5,754 | $ 16,363 |
Denominator: | ||||
Weighted-average common shares outstanding, Basic (in shares) | 109,904 | 116,027 | 109,818 | 115,683 |
Effect of potential dilutive common shares | 2,157 | 4,912 | 2,384 | 3,542 |
Denominator: | ||||
Weighted-average common shares outstanding, Diluted (in shares) | 112,061 | 120,939 | 112,202 | 119,225 |
Earnings Per Share, Basic | $ 0.04 | $ 0.06 | $ 0.05 | $ 0.14 |
Earnings Per Share, Diluted | $ 0.03 | $ 0.06 | $ 0.05 | $ 0.14 |
Earnings (Loss) Per Share (Details 2) - shares shares in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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Options | ||||
Anti-dilutive shares excluded from calculation of earnings per share | ||||
Anti-dilutive shares excluded from calculation of earnings per share | 2.3 | 2.6 | 2.3 | 2.6 |
Intangible Asset and Goodwill (Details) $ in Thousands |
6 Months Ended |
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Jun. 30, 2016
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning Balance | $ 116,899 |
Additions to Goodwill | 47,239 |
Impairment Charge of Goodwill | 0 |
Ending Balance | 162,715 |
Goodwill, Translation Adjustments | (1,423) |
MID Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 19,905 |
Additions to Goodwill | 0 |
Impairment Charge of Goodwill | 0 |
Ending Balance | 19,905 |
Goodwill, Translation Adjustments | 0 |
CRD Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 96,994 |
Additions to Goodwill | 47,239 |
Impairment Charge of Goodwill | 0 |
Ending Balance | 142,810 |
Goodwill, Translation Adjustments | (1,423) |
Other | |
Goodwill [Roll Forward] | |
Ending Balance | $ 0 |
Intangible Asset and Goodwill (Details 2) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
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Goodwill | ||
Gross Carrying Amount | $ 184,485 | |
Accumulated Impairment Losses | (21,770) | |
Net Carrying Amount | 162,715 | $ 116,899 |
MID Segment | ||
Goodwill | ||
Gross Carrying Amount | 19,905 | |
Accumulated Impairment Losses | 0 | |
Net Carrying Amount | 19,905 | 19,905 |
CRD Segment | ||
Goodwill | ||
Gross Carrying Amount | 142,810 | |
Accumulated Impairment Losses | 0 | |
Net Carrying Amount | 142,810 | $ 96,994 |
Other | ||
Goodwill | ||
Gross Carrying Amount | 21,770 | |
Accumulated Impairment Losses | (21,770) | |
Net Carrying Amount | $ 0 |
Intangible Asset and Goodwill (Details 4) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Estimated future amortization expense of intangible assets | ||
2016 (remaining 6 months) | $ 18,448 | |
2017 | 32,684 | |
2018 | 19,252 | |
2019 | 10,128 | |
2020 | 9,598 | |
Thereafter | 10,790 | |
Net Carrying Amount | $ 100,900 | $ 64,266 |
Segments and Major Customers (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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Financial information of business segments | ||||
Revenues | $ 76,501 | $ 72,812 | $ 149,183 | $ 145,726 |
Segment operating expenses | 33,426 | 28,900 | 64,505 | 55,015 |
Segment reconciling items | (31,067) | (28,358) | (63,376) | (57,265) |
Operating income (loss) | 12,008 | 15,554 | 21,302 | 33,446 |
Interest and other income (expense), net | (2,025) | (2,888) | (4,924) | (5,839) |
Income (Loss) before income taxes | 9,983 | 12,666 | 16,378 | 27,607 |
MID Segment | ||||
Financial information of business segments | ||||
Revenues | 54,467 | 54,579 | 108,012 | 109,313 |
Segment operating expenses | 13,229 | 12,801 | 25,272 | 24,321 |
Segment Operating Income (Loss) | 41,238 | 41,778 | 82,740 | 84,992 |
CRD Segment | ||||
Financial information of business segments | ||||
Revenues | 16,407 | 11,778 | 30,508 | 24,604 |
Segment operating expenses | 13,105 | 7,329 | 25,015 | 14,665 |
Segment Operating Income (Loss) | 3,302 | 4,449 | 5,493 | 9,939 |
Other | ||||
Financial information of business segments | ||||
Revenues | 5,627 | 6,455 | 10,663 | 11,809 |
Segment operating expenses | 7,092 | 8,770 | 14,218 | 16,029 |
Segment Operating Income (Loss) | (1,465) | (2,315) | (3,555) | (4,220) |
Operating Segments [Member] | ||||
Financial information of business segments | ||||
Segment Operating Income (Loss) | $ 43,075 | $ 43,912 | $ 84,678 | $ 90,711 |
Segments and Major Customers (Details 1) - Customer Concentration Risk - Accounts Receivable [Member] |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Customer 1 [Member] | ||
Concentration Risk [Line Items] | ||
Customer concentration risk | 31.00% | 27.00% |
Customer 2 [Member] | ||
Concentration Risk [Line Items] | ||
Customer concentration risk | 21.00% | |
Customer 3 [Member] | ||
Concentration Risk [Line Items] | ||
Customer concentration risk | 28.00% | |
Customer 4 [Member] | ||
Concentration Risk [Line Items] | ||
Customer concentration risk | 16.00% |
Segments and Major Customers (Details 2) - Customer Concentration Risk - Sales, net |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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Customer A | ||||
Concentration Risk [Line Items] | ||||
Revenue from major customer as a percentage of total revenue | 20.00% | 21.00% | 21.00% | 21.00% |
Customer B | ||||
Concentration Risk [Line Items] | ||||
Revenue from major customer as a percentage of total revenue | 21.00% | 16.00% | 21.00% | 16.00% |
Customer C | ||||
Concentration Risk [Line Items] | ||||
Revenue from major customer as a percentage of total revenue | 13.00% | 13.00% | 13.00% | 13.00% |
Segments and Major Customers (Details 3) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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Major Customer Disclosure | ||||
Revenues | $ 76,501 | $ 72,812 | $ 149,183 | $ 145,726 |
South Korea | ||||
Major Customer Disclosure | ||||
Revenues | 31,632 | 26,821 | 63,086 | 53,642 |
USA | ||||
Major Customer Disclosure | ||||
Revenues | 26,532 | 29,677 | 51,776 | 57,384 |
Japan | ||||
Major Customer Disclosure | ||||
Revenues | 5,911 | 7,915 | 10,898 | 16,406 |
Europe | ||||
Major Customer Disclosure | ||||
Revenues | 4,377 | 1,540 | 8,189 | 6,715 |
Canada | ||||
Major Customer Disclosure | ||||
Revenues | 1,168 | 5 | 1,382 | 201 |
SINGAPORE | ||||
Major Customer Disclosure | ||||
Revenues | 4,526 | 5,010 | 9,145 | 7,820 |
Asia-Other | ||||
Major Customer Disclosure | ||||
Revenues | $ 2,355 | $ 1,844 | $ 4,707 | $ 3,558 |
Marketable Securities Marketable Securities (Details 1) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities | $ 209,345 | $ 252,737 |
Cash, fair value | 49,986 | 34,969 |
Cash, Cash Equivalents and Short Term Investments, Fair Value Disclosure | 259,331 | 287,706 |
Cash Equivalents [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities | 138,025 | 108,795 |
Short-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities | $ 71,320 | $ 143,942 |
Fair Value of Financial Instruments (Details 2) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Convertible Notes Payable | $ 122,744 | $ 119,418 |
1.125% Convertible Senior Notes due 2018 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | 138,000 | |
1.125% Convertible Senior Notes due 2018 | Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | 138,000 | 138,000 |
Convertible Notes Payable | 122,744 | 119,418 |
Convertible Debt, Fair Value Disclosures | $ 160,731 | $ 156,292 |
Convertible notes stated interest rate (as a percent) | 1.125% | 1.125% |
Convertible Notes (Details 3) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
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Interest expense related to notes | |||||
Amortization of discount and debt issuance costs | $ 3,326 | $ 3,140 | |||
Interest expense | $ 3,163 | $ 3,091 | 6,304 | 6,174 | |
Convertible Senior Notes | |||||
Interest expense related to notes | |||||
Interest expense | 2,063 | 1,969 | 4,102 | 3,931 | |
Convertible Senior Notes | 1.125% Convertible Senior Notes due 2018 | |||||
Interest expense related to notes | |||||
Interest | 388 | 388 | 776 | 791 | |
Amortization of discount and debt issuance costs | $ 1,675 | $ 1,581 | $ 3,326 | $ 3,140 | |
Convertible notes stated interest rate (as a percent) | 1.125% | 1.125% | 1.125% | ||
Additional Effective Interest Rate | 5.50% | 5.50% | 5.50% | 5.50% |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
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Contractual obligations | ||||||||||||
Remainder of 2016 | [1] | $ 8,501 | $ 8,501 | |||||||||
2017 | [1] | 15,311 | 15,311 | |||||||||
2018 | [1] | 151,911 | 151,911 | |||||||||
2019 | [1] | 8,689 | 8,689 | |||||||||
2020 | [1] | 3,310 | 3,310 | |||||||||
Thereafter | [1] | 445 | 445 | |||||||||
Contractual Obligation | [1] | 188,167 | 188,167 | |||||||||
Unrecognized tax benefits | 22,400 | 22,400 | $ 20,800 | |||||||||
Unrecognized tax benefits, reduction of long-term deferred tax assets | 19,600 | 19,600 | 18,600 | |||||||||
Unrecognized tax benefits included in long-term income taxes payable | 2,800 | $ 2,800 | 2,200 | |||||||||
Terms of noncancellable license agreement, minimum (in years) | 1 year | |||||||||||
Rent expense | 900 | $ 600 | $ 1,700 | $ 1,300 | ||||||||
Deferred rent | 600 | 600 | $ 800 | |||||||||
Imputed financing obligation | ||||||||||||
Contractual obligations | ||||||||||||
Remainder of 2016 | [1],[2] | 3,116 | 3,116 | |||||||||
2017 | [1],[2] | 6,302 | 6,302 | |||||||||
2018 | [1],[2] | 6,447 | 6,447 | |||||||||
2019 | [1],[2] | 6,602 | 6,602 | |||||||||
2020 | [1],[2] | 2,869 | 2,869 | |||||||||
Thereafter | [1],[2] | 0 | 0 | |||||||||
Contractual Obligation | [1],[2] | 25,336 | 25,336 | |||||||||
Leases and other contractual obligations | ||||||||||||
Contractual obligations | ||||||||||||
Remainder of 2016 | [1] | 2,601 | 2,601 | |||||||||
2017 | [1] | 3,221 | 3,221 | |||||||||
2018 | [1] | 2,211 | 2,211 | |||||||||
2019 | [1] | 1,353 | 1,353 | |||||||||
2020 | [1] | 441 | 441 | |||||||||
Thereafter | [1] | 445 | 445 | |||||||||
Contractual Obligation | [1] | 10,272 | 10,272 | |||||||||
Software licenses | ||||||||||||
Contractual obligations | ||||||||||||
Remainder of 2016 | [1],[3] | 2,008 | 2,008 | |||||||||
2017 | [1],[3] | 4,235 | 4,235 | |||||||||
2018 | [1],[3] | 3,701 | 3,701 | |||||||||
2019 | [1],[3] | 734 | 734 | |||||||||
2020 | [1],[3] | 0 | 0 | |||||||||
Thereafter | [1],[3] | 0 | 0 | |||||||||
Contractual Obligation | [1],[3] | 10,678 | 10,678 | |||||||||
Convertible notes | ||||||||||||
Contractual obligations | ||||||||||||
Remainder of 2016 | [1] | 0 | 0 | |||||||||
2017 | [1] | 0 | 0 | |||||||||
2018 | [1] | 138,000 | 138,000 | |||||||||
2019 | [1] | 0 | 0 | |||||||||
2020 | [1] | 0 | 0 | |||||||||
Thereafter | [1] | 0 | 0 | |||||||||
Contractual Obligation | [1] | 138,000 | 138,000 | |||||||||
Interest payments related to convertible notes | ||||||||||||
Contractual obligations | ||||||||||||
Remainder of 2016 | [1] | 776 | 776 | |||||||||
2017 | [1] | 1,553 | 1,553 | |||||||||
2018 | [1] | 1,552 | 1,552 | |||||||||
2019 | [1] | 0 | 0 | |||||||||
2020 | [1] | 0 | 0 | |||||||||
Thereafter | [1] | 0 | 0 | |||||||||
Contractual Obligation | [1] | $ 3,881 | $ 3,881 | |||||||||
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Equity Incentive Plans and Stock-Based Compensation (Details 2) - Employee Stock Option [Member] - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Number of Shares | ||
Outstanding, at the beginning of the period (in shares) | 8,995,017 | |
Options granted (in shares) | 440,000 | 362,335 |
Options exercised (in shares) | (749,058) | |
Options forfeited (in shares) | (773,912) | |
Outstanding, at the end of the period (in shares) | 7,912,047 | |
Vested or expected to vest at the end of the period (in shares) | 7,679,174 | |
Options exercisable at the end of the period (in shares) | 4,989,516 | |
Weighted Average Exercise Price | ||
Outstanding at the beginning of the year (in dollars per shares) | $ 10.01 | |
Options granted (in dollars per share) | 12.31 | |
Options exercised (in dollars per share) | 7.01 | |
Options forfeited (in dollars per share) | 21.81 | |
Outstanding at the end of the period (in dollars per shares) | 9.27 | |
Vested or expected to vest at the end of the period (in dollars per share) | 9.30 | |
Options exercisable at the end of the period (in dollars per share) | $ 10.05 | |
Weighted Average Remaining Contractual Term | ||
Outstanding | 5 years 8 months 1 day | |
Vested or expected to vest | 5 years 7 months 10 days | |
Options exercisable | 4 years 8 months 19 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 31,293 | |
Vested or expected to vest | 30,418 | |
Options exercisable | $ 18,970 | |
Stock Options with Market Condition [Member] | ||
Number of Shares | ||
Outstanding, at the beginning of the period (in shares) | 1,315,000 | |
Outstanding, at the end of the period (in shares) | 1,225,000 |
Equity Incentive Plans and Stock-Based Compensation (Details 3) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Employee Stock Option [Member] | ||||
Stock-Based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 440,000 | 362,335 | ||
Share Based Compensation Arrangement by Share Based Payment Award Options, Grants in Period, Total Fair Value | $ 2.1 | $ 1.7 | ||
Valuation assumptions | ||||
Expected stock price volatility (as a percent) | 36.00% | 41.00% | ||
Risk free interest rate | 1.70% | 1.20% | ||
Expected term | 6 years 29 days | 5 years 11 months 19 days | ||
Weighted-average fair value of stock options granted (in dollars per share) | $ 4.66 | $ 4.59 | ||
Employee Stock Purchase Plan | ||||
Valuation assumptions | ||||
Expected stock price volatility (as a percent) | 33.00% | 34.00% | ||
Risk free interest rate | 0.41% | 0.05% | ||
Expected term | 6 months | 6 months | ||
Weighted-average fair value of stock options granted (in dollars per share) | $ 2.86 | $ 3.48 | ||
Restricted Stock and Stock Units [Member] | ||||
Nonvested equity stock and stock units | ||||
Nonvested at the beginning of the period (in shares) | 3,008,118 | |||
Granted (in shares) | 184,456 | 60,724 | 2,024,640 | 1,581,902 |
Vested (in shares) | (385,984) | |||
Forfeited (in shares) | (284,142) | |||
Nonvested at the end of the period (in shares) | 4,362,632 | 4,362,632 | ||
Weighted-Average Grant-Date Fair Value | ||||
Nonvested at the beginning of the period (in dollars per share) | $ 11.32 | |||
Granted (in dollars per share) | 12.34 | |||
Vested (in dollars per share) | 10.15 | |||
Forfeited (in dollars per share) | 11.59 | |||
Nonvested at the end of the period (in dollars per share) | $ 11.88 | $ 11.88 |
Stockholders' Equity (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2016 |
Jan. 21, 2015 |
|
Share repurchase program | ||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 20,000,000.0 | |||
UpfrontPaymentUnderAcceleratedStockRepurchaseProgram | $ 100,000 | |||
Stock Repurchased and Retired During Period, Shares | 700,000 | 7,812,000 | 700,000 | |
Stock Repurchased and Retired During Period, Value | $ 80,000 | |||
UnsettledForwardContractIndexedtoIssuersStockClassifiedwithinStock | $ 20,000 | |||
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 11,500,000 | 11,500,000 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Valuation Allowance [Line Items] | |||||
Provision for (benefit from) income taxes | $ 6,107 | $ 5,805 | $ 10,624 | $ 11,244 | |
Payment of withholding taxes to foreign tax authorities | 5,400 | $ 4,800 | 10,900 | $ 9,600 | |
Deferred Tax Assets, Gross | 165,400 | 165,400 | |||
Deferred Tax Assets, Valuation Allowance | 21,300 | 21,300 | |||
Unrecognized tax benefits | 22,400 | 22,400 | $ 20,800 | ||
Unrecognized tax benefits, reduction of long-term deferred tax assets | 19,600 | 19,600 | 18,600 | ||
Unrecognized tax benefits included in long-term income taxes payable | 2,800 | 2,800 | $ 2,200 | ||
Portion of unrecognized tax benefits, which if recognized, would be recorded as an income tax benefit | $ 2,800 | $ 2,800 |
Agreements with SK hynix and Micron (Details) - USD ($) $ in Millions |
Jun. 18, 2015 |
Dec. 09, 2013 |
Jun. 11, 2013 |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|---|---|---|
SK hynix [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
License Agreement, Term of Agreement | 6 years | 5 years | |||
License Agreement, Average Amount to be Paid Quarterly | $ 12.0 | ||||
Future Receivables | 432.0 | ||||
Micron [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
License Agreement, Term of Agreement | 7 years | ||||
Amount to be paid quarterly | $ 10.0 | ||||
Future Receivables | $ 174.5 | ||||
Maximum | SK hynix [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Amount to be paid quarterly | 16.0 | ||||
Minimum | SK hynix [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Amount to be paid quarterly | $ 8.0 |
Agreements with SK hynix and Micron (Details 2) $ in Thousands |
3 Months Ended | 6 Months Ended | 31 Months Ended | 37 Months Ended |
---|---|---|---|---|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2016
USD ($)
|
|
SK hynix [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Cash Received to date in 2016 | $ 16,000 | $ 32,000 | $ 160,000 | |
Estimated to Be Received in Remainder of 2016 | 32,000 | 32,000 | $ 32,000 | 32,000 |
Estimated to Be Received in 2017 | 48,000 | 48,000 | 48,000 | 48,000 |
Estimated to Be Received in 2018 | 40,000 | 40,000 | 40,000 | 40,000 |
Estimated to Be Received in 2019 | 32,000 | 32,000 | 32,000 | 32,000 |
Estimated to Be Received in 2020 | 48,000 | 48,000 | 48,000 | 48,000 |
Estimated to Be Received in 2021 and thereafter | 168,000 | 168,000 | 168,000 | 168,000 |
Total Estimated Cash receipts | 528,000 | 528,000 | 528,000 | 528,000 |
SK hynix [Member] | Royalty revenue | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Cash Received to date in 2016 | 16,000 | 31,900 | 158,100 | |
Estimated to Be Received in Remainder of 2016 | 32,000 | 32,000 | 32,000 | 32,000 |
Estimated to Be Received in 2017 | 48,000 | 48,000 | 48,000 | 48,000 |
Estimated to Be Received in 2018 | 40,000 | 40,000 | 40,000 | 40,000 |
Estimated to Be Received in 2019 | 32,000 | 32,000 | 32,000 | 32,000 |
Estimated to Be Received in 2020 | 48,000 | 48,000 | 48,000 | 48,000 |
Estimated to Be Received in 2021 and thereafter | 168,000 | 168,000 | 168,000 | 168,000 |
Total Estimated Cash receipts | 526,100 | 526,100 | 526,100 | 526,100 |
SK hynix [Member] | Gain from settlement | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Cash Received to date in 2016 | 100 | 1,900 | ||
Estimated to Be Received in Remainder of 2016 | 0 | 0 | 0 | 0 |
Estimated to Be Received in 2017 | 0 | 0 | 0 | 0 |
Estimated to Be Received in 2018 | 0 | 0 | 0 | 0 |
Estimated to Be Received in 2019 | 0 | 0 | 0 | 0 |
Estimated to Be Received in 2020 | 0 | 0 | 0 | 0 |
Estimated to Be Received in 2021 and thereafter | 0 | 0 | 0 | 0 |
Total Estimated Cash receipts | 1,900 | 1,900 | 1,900 | 1,900 |
Micron [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Cash Received to date in 2016 | 10,000 | 20,000 | 105,500 | |
Estimated to Be Received in Remainder of 2016 | 20,000 | 20,000 | 20,000 | 20,000 |
Estimated to Be Received in 2017 | 40,000 | 40,000 | 40,000 | 40,000 |
Estimated to Be Received in 2018 | 40,000 | 40,000 | 40,000 | 40,000 |
Estimated to Be Received in 2019 | 40,000 | 40,000 | 40,000 | 40,000 |
Estimated to Be Received in 2020 | 34,500 | 34,500 | 34,500 | 34,500 |
Total Estimated Cash receipts | 280,000 | 280,000 | 280,000 | 280,000 |
Micron [Member] | Royalty revenue | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Cash Received to date in 2016 | 9,900 | 19,600 | 102,200 | |
Estimated to Be Received in Remainder of 2016 | 20,000 | 20,000 | 20,000 | 20,000 |
Estimated to Be Received in 2017 | 40,000 | 40,000 | 40,000 | 40,000 |
Estimated to Be Received in 2018 | 40,000 | 40,000 | 40,000 | 40,000 |
Estimated to Be Received in 2019 | 40,000 | 40,000 | 40,000 | 40,000 |
Estimated to Be Received in 2020 | 34,500 | 34,500 | 34,500 | 34,500 |
Total Estimated Cash receipts | 276,700 | 276,700 | 276,700 | 276,700 |
Micron [Member] | Gain from settlement | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Cash Received to date in 2016 | 100 | 400 | 3,300 | |
Estimated to Be Received in Remainder of 2016 | 0 | 0 | 0 | 0 |
Estimated to Be Received in 2017 | 0 | 0 | 0 | 0 |
Estimated to Be Received in 2018 | 0 | 0 | 0 | 0 |
Estimated to Be Received in 2019 | 0 | 0 | 0 | 0 |
Estimated to Be Received in 2020 | 0 | 0 | 0 | 0 |
Total Estimated Cash receipts | $ 3,300 | $ 3,300 | $ 3,300 | $ 3,300 |
Restructuring Charges (Details) - 2015 Plan [Member] - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Restructuring Cost and Reserve [Line Items] | ||
Company estimate of the aggregate restructuring cost | $ 3,000 | |
Restructuring charges | 3,576 | |
noncashrestructuringexpectedcost | $ 1,000 | |
Restructuring and Related Cost, Positions Eliminated [Abstract] | ||
Restructuring and Related Cost, Number of Positions Eliminated, Period Percent | 8.00% | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ (1,228) | $ 0 |
Restructuring charges | 3,576 | |
Payments for Restructuring | (1,205) | (1,765) |
Restructuring Reserve, Settled without Cash | (583) | |
Ending balance | (23) | (1,228) |
Employee Severance [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 2,993 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | (1,228) | 0 |
Restructuring charges | 2,993 | |
Payments for Restructuring | (1,205) | (1,765) |
Restructuring Reserve, Settled without Cash | 0 | |
Ending balance | (23) | (1,228) |
Restructuring Charges [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 0 | 0 |
Restructuring Costs and Asset Impairment Charges | 583 | |
Payments for Restructuring | 0 | 0 |
Restructuring Reserve, Settled without Cash | (583) | |
Ending balance | $ 0 | 0 |
MID Segment | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 1,400 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 1,400 | |
Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 1,200 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 1,200 | |
Corporate | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 900 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 900 | |
CRD [Member] [Domain] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 100 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | $ 100 |
Acquisition (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Jan. 25, 2016 |
Sep. 30, 2016 |
Mar. 31, 2016 |
Jun. 30, 2016 |
|
Smart Card Software Limited | ||||
Business Acquisition [Line Items] | ||||
Total consideration | $ 92.6 | $ 104.7 | ||
Escrow deposit for indemnification obligations and other contractual provisions | $ 17.1 | |||
Escrow deposit release term | 18 months | |||
Business acquisition transaction costs | $ 2.0 | |||
Smart Card Software Limited | Scenario, Previously Reported [Member] | ||||
Business Acquisition [Line Items] | ||||
Total consideration | 12.1 | |||
Cash consideration | 11.6 | |||
Working capital consideration | 4.0 | |||
Liabilities assumed | $ 3.5 | |||
Smart Card Software Limited | Scenario, Forecast | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | $ 11.5 | |||
Inphi Memory Interconnect Business [Member] | Scenario, Forecast | ||||
Business Acquisition [Line Items] | ||||
Total consideration | 90.0 | |||
Snowbush [Member] | Scenario, Forecast | ||||
Business Acquisition [Line Items] | ||||
Total consideration | $ 32.5 |
Acquisition (Allocation of Consideration) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Jan. 25, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 162,715 | $ 116,899 | |
Smart Card Software Limited | |||
Business Acquisition [Line Items] | |||
Cash | $ 12,056 | ||
Accounts receivable | 6,563 | ||
Property and equipment | 524 | ||
Other tangible assets | 1,462 | ||
Identified intangible assets | 59,700 | ||
Goodwill | 47,239 | ||
Accounts payable and accrued liabilities | (5,996) | ||
Deferred income taxes | (15,556) | ||
Deferred revenue | (1,313) | ||
Total | $ 104,679 |
Acquisition (Identified Intangible Assets) (Details) - Smart Card Software Limited $ in Thousands |
Jan. 25, 2016
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Identified intangible assets | $ 59,700 |
Favorable Contracts [Member] | |
Business Acquisition [Line Items] | |
Identified intangible assets | $ 8,300 |
Estimated Weighted Average Useful Life | 5 years |
Existing technology | |
Business Acquisition [Line Items] | |
Identified intangible assets | $ 24,600 |
Estimated Weighted Average Useful Life | 6 years |
Customer contracts and contractual relationships | |
Business Acquisition [Line Items] | |
Identified intangible assets | $ 35,100 |
Estimated Weighted Average Useful Life | 6 years |
Acquisition Business Acquisition, Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Business Combinations [Abstract] | ||||
Business Acquisition, Pro Forma Revenue | $ 76,501 | $ 77,787 | $ 150,643 | $ 155,046 |
Business Acquisition, Pro Forma Net Income (Loss) | $ 3,876 | $ 3,585 | $ 7,091 | $ 8,532 |
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ 0.03 | $ 0.03 | $ 0.06 | $ 0.07 |
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