Delaware
|
74-1871327
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
|
11500 North MoPac Expressway
Austin, Texas
|
78759
|
|
(address of principal executive offices)
|
(zip code)
|
Class
|
Outstanding at October 24, 2011
|
Common Stock - $0.01 par value
|
120,397,206
|
PART I. FINANCIAL INFORMATION
|
Page No.
|
|
Item 1
|
Financial Statements:
|
|
September 30, 2011 (unaudited) and December 31, 2010
|
3
|
|
(unaudited) for the three and nine month periods ended September 30, 2011 and 2010
|
4
|
|
(unaudited) for the nine month periods ended September 30, 2011 and 2010
|
5
|
|
6
|
||
Item 2
|
||
24
|
||
Item 3
|
34
|
|
Item 4
|
37
|
|
PART II. OTHER INFORMATION
|
||
Item 1
|
39
|
|
Item 1A
|
39
|
|
Item 2
|
47
|
|
Item 4
|
Reserved
|
47
|
Item 5
|
47
|
|
Item 6
|
48
|
|
50
|
ITEM 1.
|
Financial Statements
|
September 30,
2011
|
December 31,
2010
|
|||||||
Assets
|
(unaudited)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 196,511 | $ | 219,447 | ||||
Short-term investments
|
139,372 | 131,215 | ||||||
Accounts receivable, net
|
158,608 | 127,214 | ||||||
Inventories, net
|
132,554 | 117,765 | ||||||
Prepaid expenses and other current assets
|
46,068 | 36,239 | ||||||
Deferred income taxes, net
|
16,122 | 18,838 | ||||||
Total current assets
|
689,235 | 650,718 | ||||||
Property and equipment, net
|
182,300 | 160,410 | ||||||
Goodwill
|
131,353 | 70,278 | ||||||
Intangible assets, net
|
90,142 | 52,816 | ||||||
Other long-term assets
|
22,649 | 25,460 | ||||||
Total assets
|
$ | 1,115,679 | $ | 959,682 | ||||
Liabilities and stockholders' equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 39,650 | $ | 33,544 | ||||
Accrued compensation
|
38,444 | 27,734 | ||||||
Deferred revenue
|
83,336 | 71,650 | ||||||
Accrued expenses and other liabilities
|
35,290 | 16,538 | ||||||
Other taxes payable
|
22,117 | 16,846 | ||||||
Total current liabilities
|
218,837 | 166,312 | ||||||
Deferred income taxes
|
36,413 | 29,477 | ||||||
Liability for uncertain tax positions
|
15,376 | 14,953 | ||||||
Other long-term liabilities
|
18,255 | 4,395 | ||||||
Total liabilities
|
288,881 | 215,137 | ||||||
Commitments and contingencies
|
||||||||
Stockholders' equity:
|
||||||||
Preferred stock: par value $0.01; 5,000,000 shares authorized; none issued and outstanding
|
- | - | ||||||
Common stock: par value $0.01; 180,000,000 shares authorized; 120,398,881 and 117,904,976 shares issued and outstanding, respectively
|
1,204 | 1,179 | ||||||
Additional paid-in capital
|
459,486 | 407,713 | ||||||
Retained earnings
|
370,211 | 336,363 | ||||||
Accumulated other comprehensive (loss)
|
(4,103 | ) | (710 | ) | ||||
Total stockholders’ equity
|
826,798 | 744,545 | ||||||
Total liabilities and stockholders’ equity
|
$ | 1,115,679 | $ | 959,682 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net sales:
|
||||||||||||||||
Product
|
$ | 247,256 | $ | 203,188 | $ | 699,007 | $ | 573,413 | ||||||||
Software maintenance
|
20,839 | 17,261 | 60,222 | 49,844 | ||||||||||||
GSA Accrual
|
(13,107 | ) | - | (13,107 | ) | - | ||||||||||
Total net sales
|
254,988 | 220,449 | 746,122 | 623,257 | ||||||||||||
Cost of sales:
|
||||||||||||||||
Product
|
$ | 63,579 | $ | 50,380 | $ | 169,340 | $ | 139,818 | ||||||||
Software maintenance
|
1,636 | 1,523 | 4,237 | 3,966 | ||||||||||||
Total cost of sales
|
65,215 | 51,903 | 173,577 | 143,784 | ||||||||||||
Gross profit
|
189,773 | 168,546 | 572,545 | 479,473 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing
|
$ | 103,195 | $ | 79,494 | $ | 286,547 | $ | 233,166 | ||||||||
Research and development
|
54,674 | 39,971 | 144,569 | 114,912 | ||||||||||||
General and administrative
|
21,148 | 17,392 | 61,219 | 49,701 | ||||||||||||
Total operating expenses
|
179,017 | 136,857 | 492,335 | 397,779 | ||||||||||||
Operating income
|
10,756 | 31,689 | 80,210 | 81,694 | ||||||||||||
Other income (expense):
|
||||||||||||||||
Interest income
|
$ | 354 | $ | 380 | $ | 1,039 | $ | 1,051 | ||||||||
Net foreign exchange gain (loss)
|
(708 | ) | 426 | (1,417 | ) | (2,475 | ) | |||||||||
Other income (expense), net
|
(95 | ) | 160 | (220 | ) | 970 | ||||||||||
Income before income taxes
|
10,307 | 32,655 | 79,612 | 81,240 | ||||||||||||
Provision for (benefit from) income taxes
|
(2,429 | ) | 4,522 | 9,867 | 10,152 | |||||||||||
Net income
|
$ | 12,736 | $ | 28,133 | $ | 69,745 | $ | 71,088 | ||||||||
Basic earnings per share
|
$ | 0.11 | $ | 0.24 | $ | 0.58 | $ | 0.61 | ||||||||
Weighted average shares outstanding - basic
|
120,308 | 117,264 | 119,585 | 116,748 | ||||||||||||
Diluted earnings per share
|
$ | 0.11 | $ | 0.24 | $ | 0.58 | $ | 0.60 | ||||||||
Weighted average shares outstanding - diluted
|
121,102 | 118,293 | 121,027 | 118,272 | ||||||||||||
Dividends declared per share
|
$ | 0.10 | $ | 0.09 | $ | 0.30 | $ | 0.26 |
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
Cash flow from operating activities:
|
||||||||
Net income
|
$ | 69,745 | $ | 71,088 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
35,745 | 28,220 | ||||||
Stock-based compensation
|
16,650 | 14,194 | ||||||
Tax (benefit) expense from deferred income taxes
|
(491 | ) | 1,174 | |||||
Tax (benefit) expense from stock option plans
|
(5,047 | ) | 599 | |||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(23,509 | ) | (17,298 | ) | ||||
Inventories
|
(12,376 | ) | (14,712 | ) | ||||
Prepaid expenses and other assets
|
(9,000 | ) | (15,328 | ) | ||||
Accounts payable
|
4,112 | 9,171 | ||||||
Deferred revenue
|
10,215 | 6,698 | ||||||
Taxes and other liabilities
|
30,456 | 33,938 | ||||||
Net cash provided by operating activities
|
116,500 | 117,744 | ||||||
Cash flow from investing activities:
|
||||||||
Capital expenditures
|
(40,329 | ) | (14,404 | ) | ||||
Capitalization of internally developed software
|
(11,412 | ) | (14,300 | ) | ||||
Additions to other intangibles
|
(3,226 | ) | (2,253 | ) | ||||
Acquisitions, net of cash received
|
(73,558 | ) | (2,191 | ) | ||||
Purchases of short-term investments
|
(93,299 | ) | (88,226 | ) | ||||
Sales and maturities of short-term investments
|
86,086 | 63,519 | ||||||
Net cash (used by) investing activities
|
(135,738 | ) | (57,855 | ) | ||||
Cash flow from financing activities:
|
||||||||
Proceeds from issuance of common stock
|
27,152 | 38,368 | ||||||
Repurchase of common stock
|
- | (41,862 | ) | |||||
Dividends paid
|
(35,897 | ) | (30,417 | ) | ||||
Tax benefit (expense) from stock option plans
|
5,047 | (599 | ) | |||||
Net cash (used by) financing activities
|
(3,698 | ) | (34,510 | ) | ||||
Net change in cash and cash equivalents
|
(22,936 | ) | 25,379 | |||||
Cash and cash equivalents at beginning of period
|
219,447 | 201,465 | ||||||
Cash and cash equivalents at end of period
|
$ | 196,511 | $ | 226,844 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Weighted average shares outstanding-basic
|
120,308 | 117,264 | 119,585 | 116,748 | ||||||||||||
Plus: Common share equivalents
|
||||||||||||||||
Stock options, restricted stock units
|
794 | 1,029 | 1,442 | 1,524 | ||||||||||||
Weighted average shares outstanding-diluted
|
121,102 | 118,293 | 121,027 | 118,272 |
As of September 30, 2011
(unaudited)
|
||||||||||||||||||||
Adjusted Cost
|
Gross
Unrealized Gain
|
Gross
Unrealized Loss
|
Cumulative Translation Adjustment
|
Fair Value
|
||||||||||||||||
Cash
|
$ | 96,845 | $ | - | $ | - | $ | - | $ | 96,845 | ||||||||||
Money market accounts
|
99,666 | - | - | - | 99,666 | |||||||||||||||
Municipal bonds
|
15,421 | 20 | - | - | 15,441 | |||||||||||||||
Corporate bonds
|
77,456 | 1 | (276 | ) | - | 77,181 | ||||||||||||||
U.S. treasuries and agencies
|
11,026 | - | (7 | ) | - | 11,019 | ||||||||||||||
Foreign government bonds
|
36,135 | 193 | - | (3,348 | ) | 32,980 | ||||||||||||||
Time deposits
|
2,751 | - | - | - | 2,751 | |||||||||||||||
Cash, Cash equivalents and short-term investments
|
$ | 339,300 | $ | 214 | $ | (283 | ) | $ | (3,348 | ) | $ | 335,883 |
As of December 31, 2010
|
||||||||||||||||||||
Adjusted Cost
|
Gross
Unrealized Gain
|
Gross
Unrealized Loss
|
Cumulative Translation Adjustment
|
Fair Value
|
||||||||||||||||
Cash
|
$ | 86,344 | $ | - | $ | - | $ | - | $ | 86,344 | ||||||||||
Money market accounts
|
133,103 | - | - | - | 133,103 | |||||||||||||||
Municipal bonds
|
16,843 | 18 | - | - | 16,861 | |||||||||||||||
Corporate bonds
|
56,141 | 38 | (69 | ) | - | 56,110 | ||||||||||||||
U.S. treasuries and agencies
|
23,142 | 13 | (20 | ) | - | 23,135 | ||||||||||||||
Foreign government bonds
|
36,010 | 89 | (32 | ) | (3,410 | ) | 32,657 | |||||||||||||
Time deposits
|
2,452 | - | - | - | 2,452 | |||||||||||||||
Cash, Cash equivalents and short-term investments
|
$ | 354,035 | $ | 158 | $ | (121 | ) | $ | (3,410 | ) | $ | 350,662 |
As of September 30, 2011
(Unaudited)
|
||||||||
Adjusted Cost
|
Fair Value
|
|||||||
Due in less than 1 year
|
$ | 81,716 | $ | 79,909 | ||||
Due in 1 to 5 years
|
61,073 | 59,463 | ||||||
Total short-term investments
|
$ | 142,789 | $ | 139,372 | ||||
Due in less than 1 year
|
Adjusted Cost
|
Fair Value
|
||||||
Municipal bonds
|
$ | 15,421 | $ | 15,441 | ||||
Corporate bonds
|
42,084 | 41,940 | ||||||
U.S. treasuries and agencies
|
3,011 | 3,011 | ||||||
Foreign government bonds
|
18,449 | 16,766 | ||||||
Time deposits
|
2,751 | 2,751 | ||||||
Total short-term investments
|
$ | 81,716 | $ | 79,909 | ||||
Due in 1 to 5 years
|
Adjusted Cost
|
Fair Value
|
||||||
Corporate bonds
|
$ | 35,372 | $ | 35,241 | ||||
U.S. treasuries and agencies
|
8,015 | 8,008 | ||||||
Foreign government bonds
|
17,686 | 16,214 | ||||||
Total short-term investments
|
$ | 61,073 | $ | 59,463 |
Fair Value Measurements at Reporting Date Using
(Unaudited)
|
||||||||||||||||
Description
|
September 30, 2011
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||||
Assets
|
||||||||||||||||
Money Market Funds
|
$ | 99,666 | $ | 99,666 | $ | - | $ | - | ||||||||
Short-term investments available for sale:
|
||||||||||||||||
Municipal bonds
|
15,441 | - | 15,441 | - | ||||||||||||
Corporate bonds
|
77,181 | - | 77,181 | - | ||||||||||||
U.S. treasuries and agencies
|
11,019 | - | 11,019 | - | ||||||||||||
Foreign government bonds
|
32,980 | - | 32,980 | - | ||||||||||||
Time deposits
|
2,751 | - | 2,751 | - | ||||||||||||
Derivatives
|
3,254 | - | 3,254 | - | ||||||||||||
Total Assets
|
$ | 242,292 | $ | 99,666 | $ | 142,626 | $ | - | ||||||||
Liabilities
|
||||||||||||||||
Derivatives
|
$ | (3,115 | ) | $ | - | $ | (3,115 | ) | $ | - | ||||||
Total Liabilities
|
$ | (3,115 | ) | $ | - | $ | (3,115 | ) | $ | - |
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
Description
|
December 31, 2010
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||||
Assets
|
||||||||||||||||
Money Market Funds
|
$ | 133,103 | $ | 133,103 | $ | - | $ | - | ||||||||
Short-term investments available for sale:
|
||||||||||||||||
Municipal bonds
|
16,861 | - | 16,861 | - | ||||||||||||
Corporate bonds
|
56,110 | - | 56,110 | - | ||||||||||||
U.S. treasuries and agencies
|
23,135 | - | 23,135 | - | ||||||||||||
Foreign government bonds
|
32,657 | - | 32,657 | - | ||||||||||||
Time deposits
|
2,452 | - | 2,452 | - | ||||||||||||
Derivatives
|
2,325 | - | 2,325 | - | ||||||||||||
Total Assets
|
$ | 266,643 | $ | 133,103 | $ | 133,540 | $ | - | ||||||||
Liabilities
|
||||||||||||||||
Derivatives
|
$ | (3,733 | ) | $ | - | $ | (3,733 | ) | $ | - | ||||||
Total Liabilities
|
$ | (3,733 | ) | $ | - | $ | (3,733 | ) | $ | - |
Asset Derivatives
|
||||||||||
September 30, 2011
(Unaudited)
|
December 31, 2010
|
|||||||||
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
|||||||
Derivatives designated as hedging instruments
|
||||||||||
Foreign exchange contracts - ST forwards
|
Prepaid expenses and other current assets
|
$ | 717 |
Prepaid expenses and other current assets
|
$ | 1,104 | ||||
Foreign exchange contracts - LT forwards
|
Other long-term assets
|
169 |
Other long-term assets
|
490 | ||||||
Total derivatives designated as hedging instruments
|
$ | 886 | $ | 1,594 | ||||||
Derivatives not designated as hedging instruments
|
||||||||||
Foreign exchange contracts - ST forwards
|
Prepaid expenses and other current assets
|
$ | 2,368 |
Prepaid expenses and other current assets
|
$ | 731 | ||||
Total derivatives not designated as hedging instruments
|
$ | 2,368 | $ | 731 | ||||||
Total derivatives
|
$ | 3,254 | $ | 2,325 |
Liability Derivatives
|
||||||||||
September 30, 2011
(Unaudited)
|
December 31, 2010
|
|||||||||
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
|||||||
Derivatives designated as hedging instruments
|
||||||||||
Foreign exchange contracts - ST forwards
|
Accrued expenses and other liabilities
|
$ | (1,808 | ) |
Accrued expenses and other liabilities
|
$ | (2,677 | ) | ||
Foreign exchange contracts - LT forwards
|
Other long-term liabilities
|
(1,115 | ) |
Other long-term liabilities
|
- | |||||
Total derivatives designated as hedging instruments
|
$ | (2,923 | ) | $ | (2,677 | ) | ||||
Derivatives not designated as hedging instruments
|
||||||||||
Foreign exchange contracts - ST forwards
|
Accrued expenses and other liabilities
|
$ | (191 | ) |
Accrued expenses and other liabilities
|
$ | (1,056 | ) | ||
Total derivatives not designated as hedging instruments
|
$ | (191 | ) | $ | (1,056 | ) | ||||
Total derivatives
|
$ | (3,114 | ) | $ | (3,733 | ) |
September 30, 2011
(Unaudited)
|
||||||||||||||
Derivatives in Cash Flow Hedging Relationship
|
Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
|
Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
|
|||||||||
Foreign exchange contracts - forwards and options
|
$ | 1,097 |
Net sales
|
$ | (1,124 | ) |
Net foreign exchange gain (loss)
|
$ | - | |||||
Foreign exchange contracts - forwards and options
|
(3,608 | ) |
Cost of sales
|
507 |
Net foreign exchange gain (loss)
|
- | ||||||||
Foreign exchange contracts - forwards and options
|
(1,684 | ) |
Operating expenses
|
190 |
Net foreign exchange gain (loss)
|
- | ||||||||
Total
|
$ | (4,195 | ) | $ | (427 | ) | $ | - |
September 30, 2010
(Unaudited)
|
||||||||||||||
Derivatives in Cash Flow Hedging Relationship
|
Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
|
Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
|
|||||||||
Foreign exchange contracts - forwards and options
|
$ | (6,201 | ) |
Net sales
|
$ | 1,358 |
Net foreign exchange gain (loss)
|
$ | - | |||||
Foreign exchange contracts - forwards and options
|
2,558 |
Cost of sales
|
374 |
Net foreign exchange gain (loss)
|
- | |||||||||
Foreign exchange contracts - forwards and options
|
1,299 |
Operating expenses
|
266 |
Net foreign exchange gain (loss)
|
- | |||||||||
Total
|
$ | (2,344 | ) | $ | 1,998 | $ | - |
Derivatives not Designated as Hedging Instruments
|
Location of Gain (Loss) Recognized in Income
|
Amount of Gain (Loss) Recognized in Income
|
Amount of Gain (Loss) Recognized in Income
|
||||||
September 30, 2011
(Unaudited)
|
September 30, 2010
(Unaudited)
|
||||||||
Foreign exchange contracts - forwards
|
Net foreign exchange gain/(loss)
|
$ | 2,744 | $ | (2,233 | ) | |||
Total
|
$ | 2,744 | $ | (2,233 | ) |
September 30, 2011
(Unaudited)
|
||||||||||||||
Derivatives in Cash Flow Hedging Relationship
|
Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
|
Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
|
|||||||||
Foreign exchange contracts - forwards and options
|
$ | 630 |
Net sales
|
$ | (2,864 | ) |
Net foreign exchange gain (loss)
|
$ | - | |||||
Foreign exchange contracts - forwards and options
|
(1,128 | ) |
Cost of sales
|
1,257 |
Net foreign exchange gain (loss)
|
- | ||||||||
Foreign exchange contracts - forwards and options
|
(541 | ) |
Operating expenses
|
612 |
Net foreign exchange gain (loss)
|
- | ||||||||
Total
|
$ | (1,039 | ) | $ | (995 | ) | $ | - |
September 30, 2010
(Unaudited)
|
||||||||||||||
Derivatives in Cash Flow Hedging Relationship
|
Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
|
Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
|
Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
|
|||||||||
Foreign exchange contracts - forwards and options
|
$ | (4,457 | ) |
Net sales
|
$ | 4,407 |
Net foreign exchange gain (loss)
|
$ | - | |||||
Foreign exchange contracts - forwards and options
|
(2,152 | ) |
Cost of sales
|
1,785 |
Net foreign exchange gain (loss)
|
- | ||||||||
Foreign exchange contracts - forwards and options
|
(1,095 | ) |
Operating expenses
|
853 |
Net foreign exchange gain (loss)
|
- | ||||||||
Total
|
$ | (7,704 | ) | $ | 7,045 | $ | - |
Derivatives not Designated as Hedging Instruments
|
Location of Gain (Loss) Recognized in Income
|
Amount of Gain (Loss) Recognized in Income
|
Amount of Gain (Loss) Recognized in Income
|
||||||
September 30, 2011
(Unaudited)
|
September 30, 2010
(Unaudited)
|
||||||||
Foreign exchange contracts - forwards
|
Net foreign exchange gain/(loss)
|
$ | 641 | $ | (857 | ) | |||
Total
|
$ | 641 | $ | (857 | ) |
September 30,
|
December 31,
|
|||||||
2011
(Unaudited)
|
2010
|
|||||||
Raw materials
|
$ | 58,666 | $ | 55,218 | ||||
Work-in-process
|
5,425 | 6,359 | ||||||
Finished goods
|
68,463 | 56,188 | ||||||
$ | 132,554 | $ | 117,765 |
September 30, 2011
(Unaudited)
|
December 31, 2010
|
|||||||||||||||||||||||
Gross Carrying Amount
|
Accumulated Amortization
|
Net Carrying Amount
|
Gross Carrying Amount
|
Accumulated Amortization
|
Net Carrying Amount
|
|||||||||||||||||||
Capitalized software development costs
|
$ | 52,400 | $ | (26,153 | ) | $ | 26,247 | $ | 40,481 | $ | (16,217 | ) | $ | 24,264 | ||||||||||
Acquired technology
|
67,308 | (29,904 | ) | 37,404 | 35,634 | (25,017 | ) | 10,617 | ||||||||||||||||
Patents
|
22,180 | (7,025 | ) | 15,155 | 20,790 | (6,312 | ) | 14,478 | ||||||||||||||||
Other
|
23,860 | (12,524 | ) | 11,336 | 14,059 | (10,602 | ) | 3,457 | ||||||||||||||||
$ | 165,748 | $ | (75,606 | ) | $ | 90,142 | $ | 110,964 | $ | (58,148 | ) | $ | 52,816 |
Amount
|
||||
Balance as of December 31, 2010
|
$ | 70,278 | ||
Acquisitions
|
61,069 | |||
Divestitures
|
- | |||
Foreign currency translation impact
|
6 | |||
Balance as of September 30, 2011
|
$ | 131,353 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Comprehensive income:
|
||||||||||||||||
Net income
|
$ | 12,736 | $ | 28,133 | $ | 69,745 | $ | 71,088 | ||||||||
Foreign currency translation gains (losses), net of taxes
|
(8,589 | ) | 8,792 | (1,165 | ) | (2,577 | ) | |||||||||
Unrealized (losses) on derivative instruments, net of taxes
|
(3,573 | ) | (908 | ) | (942 | ) | (8,000 | ) | ||||||||
Unrealized gains (losses) on investments designated as available for sale, net of taxes
|
(282 | ) | (536 | ) | (1,286 | ) | 235 | |||||||||
Total comprehensive income
|
$ | 292 | $ | 35,481 | $ | 66,352 | $ | 60,746 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net sales:
|
||||||||||||||||
Americas:
|
$ | 98,537 | $ | 97,031 | $ | 299,614 | $ | 266,300 | ||||||||
Europe:
|
75,127 | 59,882 | 222,566 | 177,681 | ||||||||||||
Asia Pacific:
|
81,324 | 63,536 | 223,942 | 179,276 | ||||||||||||
$ | 254,988 | $ | 220,449 | $ | 746,122 | $ | 623,257 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Operating income:
|
||||||||||||||||
Americas
|
$ | 1,401 | $ | 21,395 | $ | 40,186 | $ | 52,689 | ||||||||
Europe
|
31,867 | 31,347 | 100,562 | 87,409 | ||||||||||||
Asia Pacific
|
32,162 | 18,918 | 84,031 | 56,508 | ||||||||||||
Unallocated:
|
||||||||||||||||
Research and development expenses
|
(54,674 | ) | (39,971 | ) | (144,569 | ) | (114,912 | ) | ||||||||
$ | 10,756 | $ | 31,689 | $ | 80,210 | $ | 81,694 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Interest income:
|
||||||||||||||||
Americas
|
$ | 82 | $ | 177 | $ | 352 | $ | 433 | ||||||||
Europe
|
238 | 182 | 591 | 546 | ||||||||||||
Asia Pacific
|
34 | 21 | 96 | 72 | ||||||||||||
$ | 354 | $ | 380 | $ | 1,039 | $ | 1,051 |
|
September 30,
2011
|
December 31,
2010
|
||||||
(unaudited)
|
||||||||
Long-lived assets:
|
||||||||
Americas
|
$ | 109,912 | $ | 103,033 | ||||
Europe
|
44,480 | 40,083 | ||||||
Asia Pacific
|
27,908 | 17,294 | ||||||
$ | 182,300 | $ | 160,410 |
Nine Months Ended
|
||||||||
September 30,
|
||||||||
(unaudited)
|
||||||||
2011
|
2010
|
|||||||
Balance at the beginning of the period
|
$ | 921 | $ | 921 | ||||
Accruals for warranties issued during the period
|
2,175 | 1,485 | ||||||
Settlements made (in cash or in kind) during the period
|
(2,175 | ) | (1,483 | ) | ||||
Balance at the end of the period
|
$ | 921 | $ | 923 |
Amount
|
||||
Net tangible assets acquired
|
$ | 10,718 | ||
Amortizable intangible assets
|
31,685 | |||
Deferred tax liability
|
(10,351 | ) | ||
Goodwill
|
34,343 | |||
Total
|
$ | 66,395 |
Amount
|
||||
Net tangible assets acquired
|
$ | 5,624 | ||
Amortizable intangible assets
|
8,331 | |||
Goodwill
|
26,725 | |||
Total
|
$ | 40,680 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(unaudited)
|
||||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net sales:
|
||||||||||||||||
Americas
|
38.6 | % | 44.0 | % | 40.2 | % | 42.7 | % | ||||||||
Europe
|
29.5 | 27.2 | 29.8 | 28.5 | ||||||||||||
Asia Pacific
|
31.9 | 28.8 | 30.0 | 28.8 | ||||||||||||
Consolidated net sales
|
100.0 | 100.0 | 100.0 | 100.0 | ||||||||||||
Cost of sales
|
25.6 | 23.5 | 23.3 | 23.1 | ||||||||||||
Gross profit
|
74.4 | 76.5 | 76.7 | 76.9 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing
|
40.5 | 36.1 | 38.4 | 37.4 | ||||||||||||
Research and development
|
21.4 | 18.1 | 19.4 | 18.4 | ||||||||||||
General and administrative
|
8.3 | 7.9 | 8.2 | 8.0 | ||||||||||||
Total operating expenses
|
70.2 | 62.1 | 66.0 | 63.8 | ||||||||||||
Operating income
|
4.2 | 14.4 | 10.7 | 13.1 | ||||||||||||
Other income (expense):
|
||||||||||||||||
Interest income
|
0.1 | 0.1 | 0.2 | 0.2 | ||||||||||||
Net foreign exchange gain (loss)
|
(0.3 | ) | 0.2 | (0.2 | ) | (0.4 | ) | |||||||||
Other income (expense), net
|
- | 0.1 | - | 0.1 | ||||||||||||
Income before income taxes
|
4.0 | 14.8 | 10.7 | 13.0 | ||||||||||||
Provision for income taxes
|
(1.0 | ) | 2.0 | 1.4 | 1.6 | |||||||||||
Net income
|
5.0 | % | 12.8 | % | 9.3 | % | 11.4 | % |
Three Months Ended
September 30, 2011
|
Nine Months Ended
September 30, 2011
|
|||||||
(Unaudited)
|
||||||||
Effective tax rate for the three and nine month periods ended September 30, 2010
|
14 | % | 12 | % | ||||
Change in unrecognized tax benefits for uncertain tax positions
|
(8) | % | - | % | ||||
Decreased profits in foreign jurisdictions with reduced income tax rates as a percentage of net income
|
4 | % | 4 | % | ||||
Increase in enhanced deduction for certain research and development expenses
|
(1) | % | (1) | % | ||||
Decrease in the partial release of a deferred tax asset valuation allowance
|
1 | % | 1 | % | ||||
Change in research and development tax credit
|
(2) | % | (2) | % | ||||
GSA accrual
|
(33) | % | (3) | % | ||||
Other
|
1 | % | 1 | % | ||||
Effective tax rate at September 30, 2011
|
(24) | % | 12 | % |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenue
|
||||||||||||||||
Acquisition related deferred revenue
|
$ | 2,818 | $ | - | $ | 2,818 | $ | - | ||||||||
GSA accrual
|
13,107 | - | 13,107 | - | ||||||||||||
Provision for (Benefit from) income taxes
|
(5,573 | ) | - | (5,573 | ) | - | ||||||||||
Total
|
$ | 10,352 | $ | - | $ | 10,352 | $ | - |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Stock-based compensation
|
||||||||||||||||
Cost of sales
|
$ | 401 | $ | 332 | $ | 1,116 | $ | 1,014 | ||||||||
Sales and marketing
|
2,630 | 1,960 | 7,009 | 6,060 | ||||||||||||
Research and development
|
2,489 | 1,771 | 6,245 | 5,129 | ||||||||||||
General and administrative
|
834 | 672 | 2,280 | 1,991 | ||||||||||||
Provision for (Benefit from) income taxes
|
(826 | ) | (1,295 | ) | (4,786 | ) | (4,422 | ) | ||||||||
Total
|
$ | 5,528 | $ | 3,440 | $ | 11,864 | $ | 9,772 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Amortization of acquired intangibles
|
||||||||||||||||
Cost of sales
|
$ | 2,586 | $ | 921 | $ | 4,595 | $ | 2,565 | ||||||||
Sales and marketing
|
447 | 89 | 624 | 311 | ||||||||||||
Other income (expense), net
|
198 | - | 765 | - | ||||||||||||
Provision for (Benefit from) income taxes
|
(1,034 | ) | (324 | ) | (1,743 | ) | (904 | ) | ||||||||
Total
|
$ | 2,197 | $ | 686 | $ | 4,241 | $ | 1,972 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Acquisition related transaction costs
|
||||||||||||||||
Cost of sales
|
$ | 22 | $ | - | $ | 22 | $ | - | ||||||||
Sales and marketing
|
147 | - | 1,129 | - | ||||||||||||
Research and development
|
70 | - | 70 | - | ||||||||||||
General and administrative
|
31 | - | 458 | - | ||||||||||||
Provision for (Benefit from) income taxes
|
(95 | ) | - | (146 | ) | - | ||||||||||
Total
|
$ | 175 | $ | - | $ | 1,533 | $ | - |
September 30, 2011
|
December 31, 2010
|
Increase/
(Decrease)
|
||||||||||
(unaudited)
|
||||||||||||
Working capital
|
$ | 470,398 | $ | 484,406 | $ | (14,008 | ) | |||||
Cash and cash equivalents (1)
|
196,511 | 219,447 | (22,936 | ) | ||||||||
Short-term investments (1)
|
139,372 | 131,215 | 8,157 | |||||||||
Total cash, cash equivalents and short-term investments
|
$ | 335,883 | $ | 350,662 | $ | (14,779 | ) |
Nine Months Ended
September 30,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Cash provided by operating activities
|
$ | 116,500 | $ | 117,744 | ||||
Cash (used by) investing activities
|
(135,738 | ) | (57,855 | ) | ||||
Cash provided (used) by financing activities
|
(3,698 | ) | (34,510 | ) | ||||
Net (decrease) increase in cash equivalents
|
(22,936 | ) | 25,379 | |||||
Cash and cash equivalents at beginning of year
|
219,447 | 201,465 | ||||||
Cash and cash equivalents at end of period
|
$ | 196,511 | $ | 226,844 |
·
|
acquisitions of other businesses, assets, products or technologies;
|
·
|
the timing cost or outcome of any future intellectual property or commercial disputes including under our GSA contract;
|
·
|
costs associated with the planned expansion of our manufacturing facilities in Malaysia;
|
·
|
required levels of research and development and other operating costs;
|
·
|
payment of our dividends;
|
·
|
capital improvements for new and existing facilities;
|
·
|
the overall levels of sales of our products and gross profit margins;
|
·
|
our business, product, capital expenditure and research and development plans, and product and technology roadmaps;
|
·
|
the levels of inventory and accounts receivable that we maintain;
|
·
|
repurchases of our common stock;
|
·
|
our relationships with suppliers and customers;
|
·
|
general economic and political conditions and specific conditions in the markets we address, including any volatility in the industrial economy in the various geographic regions in which we do business;
|
·
|
the inability of certain of our customers who depend on credit to have access to their traditional sources of credit to finance the purchase of products from us, which may lead them to reduce their level of purchases or to seek credit or other accommodations from us; and,
|
·
|
the level of exercises of stock options and stock purchases under our employee stock purchase plan.
|
·
|
changes in the amount of revenue derived from large orders;
|
·
|
the timing, cost or outcome of any future intellectual property or commercial disputes including under our GSA contract;
|
·
|
changes in the mix of products sold;
|
·
|
fluctuations in foreign currency exchange rates;
|
·
|
changes in the economy or credit markets in the U.S. or globally;
|
·
|
the availability and pricing of components from third parties (especially limited sources);
|
·
|
the difficulty in maintaining margins, including the higher margins traditionally achieved in international sales;
|
·
|
changes in pricing policies by us, our competitors or suppliers;
|
·
|
delays in product shipments caused by human error or other factors; and,
|
·
|
disruptions in transportation channels.
|
·
|
difficulty in managing manufacturing operations in a foreign country;
|
·
|
challenges in expanding capacity to meet increased demand;
|
·
|
difficulty in achieving or maintaining product quality;
|
·
|
interruption to transportation flows for delivery of components to us and finished goods to our customers;
|
·
|
a restrictive labor code;
|
·
|
increasing labor costs;
|
·
|
the volatility of the Hungarian forint relative to the U.S. dollar;
|
·
|
changing and unstable political environment; and,
|
·
|
significant and frequent changes in the corporate tax law.
|
·
|
the timing cost or outcome of any future intellectual property or commercial disputes including under our GSA contract;
|
·
|
increased costs from hiring more product development engineers or other personnel;
|
·
|
increased costs from hiring more field sales personnel;
|
·
|
increased manufacturing costs resulting from component supply shortages or component price fluctuations;
|
·
|
additional marketing costs for new product introductions or for conferences and tradeshows;
|
·
|
increased component costs resulting from vendors increasing prices in response to increased economic activity; or
|
·
|
additional costs related to acquisitions, if any.
|
·
|
burdens of complying with additional and/or more complex VAT and customs regulations; and,
|
·
|
severe concentration of inventory increasing the risks associated with fire, natural disasters and logistics disruptions to customer order fulfillment.
|
·
|
new product introductions by competitors;
|
·
|
the outcome of any future intellectual property or commercial disputes including under our GSA contract;
|
·
|
the ability of competitors to more fully leverage low cost geographies;
|
·
|
product pricing;
|
·
|
the impact of foreign exchange rates on product pricing;
|
·
|
adequate manufacturing capacity and supply of components and materials;
|
·
|
efficiency of manufacturing operations;
|
·
|
success in developing new products;
|
·
|
timing of our new product introductions;
|
·
|
effectiveness of sales and marketing resources and strategies;
|
·
|
strategic relationships with other suppliers;
|
·
|
quality and performance;
|
·
|
protection of our products by effective use of intellectual property laws;
|
·
|
the financial strength of our competitors;
|
·
|
barriers to entry imposed by competitors with significant market power in new markets;
|
·
|
general market and economic conditions; and,
|
·
|
government actions throughout the world.
|
·
|
fluctuations in local economies;
|
·
|
fluctuations in foreign currencies relative to the U.S. dollar;
|
·
|
difficulties in staffing and managing foreign operations;
|
·
|
greater difficulty in accounts receivable collection;
|
·
|
costs and risks of localizing products for foreign countries;
|
·
|
unexpected changes in regulatory requirements;
|
·
|
tariffs and other trade barriers;
|
·
|
difficulties in the repatriation of earnings; and,
|
·
|
the burdens of complying with a wide variety of foreign laws.
|
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 (1)
|
||||||||||||
July 1, 2011 to July 31, 2011
|
- | $ | - | - | 3,932,245 | |||||||||||
August 1, 2011 to August 31, 2011
|
- | - | - | 3,932,245 | ||||||||||||
September 1, 2011 to September 30, 2011
|
- | - | - | 3,932,245 | ||||||||||||
Total
|
- | $ | - | - |
(1)
|
For the past several years, we have maintained various stock repurchase programs. At September 30, 2011, there were 3,932,245 shares available for repurchase under the plan approved on April 21, 2010. This repurchase plan does not have an expiration date.
|
3.1(1)
|
Certificate of Incorporation, as amended, of the Company.
|
|
3.2(2)
|
Amended and Restated Bylaws of the Company.
|
|
3.3(3)
|
Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock of the Company.
|
|
4.1(4)
|
Specimen of Common Stock certificate of the Company.
|
|
4.2(5)
|
Rights Agreement dated as of January 21, 2004, between the Company and EquiServe Trust Company, N.A.
|
|
10.1(4)
|
Form of Indemnification Agreement.
|
|
10.2(6)
|
1994 Incentive Plan, as amended.*
|
|
10.3(7)
|
1994 Employee Stock Purchase Plan, as amended.*
|
|
10.5(8)
|
National Instruments Corporation Annual Incentive Program, as amended.*
|
|
10.6(9)
|
2005 Incentive Plan.*
|
|
10.7(10)
|
2005 Form of Restricted Stock Unit Award Agreement (Non-Employee Director).*
|
|
10.8(10)
|
2005 Form of Restricted Stock Unit Award Agreement (Performance Vesting).*
|
|
10.9(10)
|
2005 Form of Restricted Stock Unit Award Agreement (Current Employee).*
|
|
10.10(10)
|
2005 Form of Restricted Stock Unit Award Agreement (Newly Hired Employee).*
|
|
10.11(11)
|
2010 Incentive Plan.*
|
|
10.12(12)
|
2010 Form of Restricted Stock Unit Award Agreement (Non-Employee Director).*
|
|
10.13(13)
|
2010 Form of Restricted Stock Unit Award Agreement (Performance Vesting).*
|
|
10.14(14)
|
2010 Form of Restricted Stock Unit Award Agreement (Current Employee).*
|
|
10.15(15)
|
2010 Form of Restricted Stock Unit Award Agreement (Newly Hired Employee).*
|
|
31.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document **
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document **
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document **
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document **
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document **
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document **
|
|
(1)
|
Incorporated by reference to the same-numbered exhibit filed with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003.
|
|
(2)
|
Incorporated by reference to the same-numbered exhibit filed with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007.
|
|
(3)
|
Incorporated by reference to the same-numbered exhibit filed with the Company’s Registration Statement on Form 8-A on April 27, 2004.
|
|
(4)
|
Incorporated by reference to the Company’s Registration Statement on Form S-1 (Reg. No. 33-88386) declared effective March 13, 1995.
|
|
(5)
|
Incorporated by reference to exhibit 4.1 filed with the Company’s Current Report on Form 8-K filed on January 28, 2004.
|
|
(6)
|
Incorporated by reference to the same-numbered exhibit filed with the Company’s Form 10-Q on August 5, 2004.
|
|
(7)
|
Incorporated by reference to exhibit 10.1 filed with the Company’s Current Report on Form 8-K filed on May 16, 2011.
|
|
(8)
|
Incorporated by reference to exhibit 99.1 filed with the Company’s Current Report on Form 8-K filed on October 22, 2010.
|
|
(9)
|
Incorporated by reference to exhibit A of the Company’s Proxy Statement dated and filed on April 4, 2005.
|
|
(10)
|
Incorporated by reference to the same-numbered exhibit filed with the Company’s Form 10-Q on August 2, 2006.
|
|
(11)
|
Incorporated by reference to exhibit 10.1 filed with the Company’s Current Report on Form 8-K filed on May 17, 2010.
|
|
(12)
|
Incorporated by reference to exhibit 10.2 filed with the Company’s Current Report on Form 8-K filed on June 24, 2010.
|
|
(13)
|
Incorporated by reference to exhibit 10.3 filed with the Company’s Current Report on Form 8-K filed on June 24, 2010.
|
|
(14)
|
Incorporated by reference to exhibit 10.4 filed with the Company’s Current Report on Form 8-K filed on June 24, 2010.
|
|
(15)
|
Incorporated by reference to exhibit 10.5 filed with the Company’s Current Report on Form 8-K filed on June 24, 2010.
|
|
*
|
Management Contract or Compensatory Plan or Arrangement
|
|
**
|
In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.
|
NATIONAL INSTRUMENTS CORPORATION | |||
Dated: October 27, 2011
|
By:
|
/s/ Alex M. Davern | |
EVP, Chief Operating Oficer, | |||
Chief Financial Officer and Treasurer | |||
(Principal Financial and Accounting Officer) |
1. | I have reviewed this report on Form 10-Q of National Instruments Corporation; |
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: October 27, 2011
|
By:
|
/s/ James Truchard | |
James Truchard | |||
Chief Executive Officer | |||
1. | I have reviewed this report on Form 10-Q of National Instruments Corporation; |
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: October 27, 2011
|
By:
|
/s/ Alex Davern | |
Alex Davern | |||
Chief Financial Officer | |||
|
By:
|
/s/ James J. Truchard | |
James J. Truchard | |||
Chief Executive Officer | |||
|
By:
|
/s/ Alex M. Davern | |
Alex M. Davern | |||
Chief Financial Officer | |||
Segment Information (Schedule Of Net Sales, By Geographical Areas) (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Net sales | $ 254,988 | $ 220,449 | $ 746,122 | $ 623,257 |
Americas [Member] | ||||
Net sales | 98,537 | 97,031 | 299,614 | 266,300 |
Europe [Member] | ||||
Net sales | 75,127 | 59,882 | 222,566 | 177,681 |
Asia Pacific [Member] | ||||
Net sales | $ 81,324 | $ 63,536 | $ 223,942 | $ 179,276 |
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Consolidated Balance Sheets | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 120,398,881 | 117,904,976 |
Common stock, shares outstanding | 120,398,881 | 117,904,976 |
Consolidated Statements Of Income (USD $) In Thousands, except Per Share data | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Net sales: | ||||
Product | $ 247,256 | $ 203,188 | $ 699,007 | $ 573,413 |
Software maintenance | 20,839 | 17,261 | 60,222 | 49,844 |
GSA Accrual | (13,107) | 0 | (13,107) | 0 |
Total net sales | 254,988 | 220,449 | 746,122 | 623,257 |
Cost of sales: | ||||
Product | 63,579 | 50,380 | 169,340 | 139,818 |
Software maintenance | 1,636 | 1,523 | 4,237 | 3,966 |
Total cost of sales | 65,215 | 51,903 | 173,577 | 143,784 |
Gross profit | 189,773 | 168,546 | 572,545 | 479,473 |
Operating expenses: | ||||
Sales and marketing | 103,195 | 79,494 | 286,547 | 233,166 |
Research and development | 54,674 | 39,971 | 144,569 | 114,912 |
General and administrative | 21,148 | 17,392 | 61,219 | 49,701 |
Total operating expenses | 179,017 | 136,857 | 492,335 | 397,779 |
Operating income | 10,756 | 31,689 | 80,210 | 81,694 |
Other income (expense): | ||||
Interest income | 354 | 380 | 1,039 | 1,051 |
Net foreign exchange gain (loss) | (708) | 426 | (1,417) | (2,475) |
Other income (expense), net | (95) | 160 | (220) | 970 |
Income before income taxes | 10,307 | 32,655 | 79,612 | 81,240 |
Provision for (benefit from) income taxes | (2,429) | 4,522 | 9,867 | 10,152 |
Net income | $ 12,736 | $ 28,133 | $ 69,745 | $ 71,088 |
Basic earnings per share | $ 0.11 | $ 0.24 | $ 0.58 | $ 0.61 |
Weighted average shares outstanding - basic | 120,308 | 117,264 | 119,585 | 116,748 |
Diluted earnings per share | $ 0.11 | $ 0.24 | $ 0.58 | $ 0.60 |
Weighted average shares outstanding - diluted | 121,102 | 118,293 | 121,027 | 118,272 |
Dividends declared per share | $ 0.10 | $ 0.09 | $ 0.30 | $ 0.26 |
Segment Information (Schedule Of Long-Lived Assets, By Geographical Areas) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Long-lived assets | $ 182,300 | $ 160,410 |
Americas [Member] | ||
Long-lived assets | 109,912 | 103,033 |
Europe [Member] | ||
Long-lived assets | 44,480 | 40,083 |
Asia Pacific [Member] | ||
Long-lived assets | $ 27,908 | $ 17,294 |
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of The Denominators Used To Calculate Basic EPS And Diluted EPS |
|
Document And Entity Information | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Oct. 24, 2011 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2011 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2011 | |
Entity Registrant Name | NATIONAL INSTRUMENTS CORP /DE/ | |
Entity Central Index Key | 0000935494 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 120,397,206 |
Derivative Instruments And Hedging Activities (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments And Hedging Activities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values Of Derivative Instruments On Consolidated Balance Sheets |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values Of Derivative Instruments On Consolidated Statements Of Income |
|
Comprehensive Income (Schedule Of Comprehensive Income) (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Comprehensive Income | ||||
Net income | $ 12,736 | $ 28,133 | $ 69,745 | $ 71,088 |
Foreign currency translation gains (losses), net of taxes | (8,589) | 8,792 | (1,165) | (2,577) |
Unrealized (losses) on derivative instruments, net of taxes | (3,573) | (908) | (942) | (8,000) |
Unrealized gains (losses) on investments designated as available for sale, net of taxes | (282) | (536) | (1,286) | 235 |
Total comprehensive income | $ 292 | $ 35,481 | $ 66,352 | $ 60,746 |
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Intangibles | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangibles | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangibles | Note 7 – Intangibles
Intangibles at September 30, 2011 and December 31, 2010 were as follows (in thousands):
Capitalized software development costs for the three month periods ended September 30, 2011 and 2010, were $2.1 million and $3.4 million, respectively, and related amortization expense was $3.3 million and $2.8 million, respectively. For the nine month periods ended September 30, 2011 and 2010, capitalized software development costs were $11.9 million and $15.0 million, respectively, and related amortization expense was $9.9 million and $7.9 million, respectively. For the three month periods ended September 30, 2011 and 2010, capitalized software development costs included costs related to stock based compensation of $96,000 and $144,000, respectively. For the nine month periods ended September 30, 2011 and 2010, capitalized software development costs included costs related to stock based compensation of $508,000 and $655,000, respectively.
Amortization of capitalized software development costs is computed on an individual product basis for those products available for market and is recognized based on the product's estimated economic life, generally three years. Acquired intangible assets which include acquired technology and other are amortized over their useful lives, which range from three to eight years. Patents are amortized using the straight-line method over their estimated period of benefit, generally ten to seventeen years. Total intangible assets amortization expenses were $6.8 million and $5.2 million for the three month periods ended September 30, 2011 and 2010, respectively, and $17.5 million and $13.4 million for the nine month periods ended September 30, 2011 and 2010, respectively.
The overall increase in our acquired technology and other intangible assets can be attributed to our acquisitions of AWR Corporation and Phase Matrix Inc. See Note 16 – Acquisitions of Notes to Consolidated Financial Statements for additional discussion related to these acquisitions. |
Inventories (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||
Inventories | |||||||||||||||||||||||||||||
Summary Of Inventories |
|
Intangibles (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Total amortization expenses | $ 6,800,000 | $ 5,200,000 | $ 17,500,000 | $ 13,400,000 |
Other Assets [Member] | Acquired Technology [Member] | ||||
Useful life, minimum (in years) | 3 | |||
Useful life, maximum (in years) | 8 | |||
Capitalized Software Development Costs [Member] | ||||
Capitalized software development costs | 2,100,000 | 3,400,000 | 11,900,000 | 15,000,000 |
Capitalized computer software amortization | 3,300,000 | 2,800,000 | 9,900,000 | 7,900,000 |
Costs related to stock based compensation | $ 96,000 | $ 144,000 | $ 508,000 | $ 655,000 |
Useful life (in years) | 3 | |||
Patents [Member] | ||||
Useful life, minimum (in years) | 10 | |||
Useful life, maximum (in years) | 17 |
Fair Value Measurements (Assets And Liabilities Measured On Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified | 9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | |
Contractual maturities of short-term investments | less than 24 months | |
Number of items measured at fair value on a nonrecurring basis | 0 | 0 |
Derivative Liabilities [Member] | Estimate Of Fair Value, Fair Value Disclosure [Member] | ||
Total Liabilities | $ (3,115) | (3,733) |
Derivative Liabilities [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | ||
Total Liabilities | 0 | 0 |
Derivative Liabilities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Total Liabilities | (3,115) | (3,733) |
Derivative Liabilities [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Total Liabilities | 0 | 0 |
Derivative Assets [Member] | Estimate Of Fair Value, Fair Value Disclosure [Member] | ||
Total Assets | 3,254 | 2,325 |
Derivative Assets [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | ||
Total Assets | 0 | 0 |
Derivative Assets [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Total Assets | 3,254 | 2,325 |
Derivative Assets [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Total Assets | 0 | 0 |
Money Market Accounts [Member] | Estimate Of Fair Value, Fair Value Disclosure [Member] | ||
Total Assets | 99,666 | 133,103 |
Money Market Accounts [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | ||
Total Assets | 99,666 | 133,103 |
Money Market Accounts [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Total Assets | 0 | 0 |
Money Market Accounts [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Total Assets | 0 | 0 |
Municipal Bonds [Member] | Estimate Of Fair Value, Fair Value Disclosure [Member] | ||
Total Assets | 15,441 | 16,861 |
Municipal Bonds [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | ||
Total Assets | 0 | 0 |
Municipal Bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Total Assets | 15,441 | 16,861 |
Municipal Bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Total Assets | 0 | 0 |
Corporate Bonds [Member] | Estimate Of Fair Value, Fair Value Disclosure [Member] | ||
Total Assets | 77,181 | 56,110 |
Corporate Bonds [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | ||
Total Assets | 0 | 0 |
Corporate Bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Total Assets | 77,181 | 56,110 |
Corporate Bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Total Assets | 0 | 0 |
U.S. Treasuries And Agencies [Member] | Estimate Of Fair Value, Fair Value Disclosure [Member] | ||
Total Assets | 11,019 | 23,135 |
U.S. Treasuries And Agencies [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | ||
Total Assets | 0 | 0 |
U.S. Treasuries And Agencies [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Total Assets | 11,019 | 23,135 |
U.S. Treasuries And Agencies [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Total Assets | 0 | 0 |
Foreign Government Bonds [Member] | Estimate Of Fair Value, Fair Value Disclosure [Member] | ||
Total Assets | 32,980 | 32,657 |
Foreign Government Bonds [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | ||
Total Assets | 0 | 0 |
Foreign Government Bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Total Assets | 32,980 | 32,657 |
Foreign Government Bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Total Assets | 0 | 0 |
Time Deposits [Member] | Estimate Of Fair Value, Fair Value Disclosure [Member] | ||
Total Assets | 2,751 | 2,452 |
Time Deposits [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | ||
Total Assets | 0 | 0 |
Time Deposits [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Total Assets | 2,751 | 2,452 |
Time Deposits [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Total Assets | 0 | 0 |
Estimate Of Fair Value, Fair Value Disclosure [Member] | ||
Total Assets | 242,292 | 266,643 |
Total Liabilities | (3,115) | (3,733) |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | ||
Total Assets | 99,666 | 133,103 |
Total Liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Total Assets | 142,626 | 133,540 |
Total Liabilities | (3,115) | (3,733) |
Significant Unobservable Inputs (Level 3) [Member] | ||
Total Assets | 0 | 0 |
Total Liabilities | $ 0 | 0 |
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Assets And Liabilities Measured On Recurring Basis |
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Segment Information |
Note 12 – Segment information
We determine operating segments using the management approach. The management approach designates the internal organization that is used by management for making operating decisions and assessing performance as the source of our operating segments. It also requires disclosures about products and services, geographic areas and major customers.
We have defined our operating segment based on geographic regions. We sell our products in three geographic regions. Our sales to these regions share similar economic characteristics, similar product mix, similar customers, and similar distribution methods. Accordingly, we have elected to aggregate these three geographic regions into a single operating segment. Revenue from the sale of our products which are similar in nature and software maintenance are reflected as total net sales in our Consolidated Statements of Income.
Total net sales, operating income, interest income and long-lived assets, classified by the major geographic areas in which we operate, are as follows (in thousands):
Total sales outside the U. S. for the three month periods ended September 30, 2011 and 2010, were $163.7 million and $131.3 million, respectively, and $470.2 million and $378.9 million for the nine month periods ended September 30, 2011 and 2010, respectively. |
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Cash, Cash Equivalents And Short-Term Investments | Note 3 – Cash, cash equivalents and short-term investments
The following table summarizes unrealized gains and losses related to our cash, cash equivalents and short-term investments designated as available-for-sale (in thousands):
The following table summarizes the contractual maturities of our investments designated as available-for-sale (in thousands):
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Earnings Per Share (Reconciliation Of The Denominators Used To Calculate Basic EPS And Diluted EPS) (Details) In Thousands | 3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Earnings Per Share | ||||
Weighted average shares outstanding-basic | 120,308 | 117,264 | 119,585 | 116,748 |
Plus: Common share equivalents Stock options, restricted stock units | 794 | 1,029 | 1,442 | 1,524 |
Weighted average shares outstanding-diluted | 121,102 | 118,293 | 121,027 | 118,272 |
Income Taxes | 9 Months Ended |
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Sep. 30, 2011 | |
Income Taxes | |
Income Taxes | Note 9 – Income taxes
We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are established when necessary to reduce deferred tax assets to amounts which are more likely than not to be realized.
We account for uncertainty in income taxes recognized in our financial statements using prescribed recognition thresholds and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on our tax returns. We had $15.4 million and $15.0 million of unrecognized tax benefits at September 30, 2011 and December 31, 2010, respectively, all of which would affect our effective income tax rate if recognized. We recorded a gross increase in unrecognized tax benefits of $853,000 and $3.6 million for the three and nine month periods ended September 30, 2011. We recorded a gross decrease in unrecognized tax benefits of $3.7 million for the three and nine month periods ended September 30, 2011, as a result of the closing of open years. As of September 30, 2011, it is deemed reasonable that we will recognize tax benefits in the amount of $2.2 million in the next twelve months due to the closing of open tax years. Our continuing policy is to recognize interest and penalties related to income tax matters in income tax expense. As of September 30, 2011, we have approximately $618,000 accrued for interest related to uncertain tax positions. The nature of the uncertainty is related to deductions taken on returns that have not been examined by the applicable tax authority. The tax years 2004 through 2010 remain open to examination by the major taxing jurisdictions to which we are subject.
Our provision for income taxes reflected an effective tax rate of (24)% and 14% for the three month periods ended September 30, 2011 and 2010, respectively, and 12% for the nine month periods ended September 30, 2011 and 2010, respectively. For the three and nine month periods ended September 30, 2011, our effective tax rate was lower than the U.S. federal statutory rate of 35% as a result of an enhanced deduction for certain research and development expenses, profits in foreign jurisdictions with reduced income tax rates, the U.S. federal research and development credit, a decrease in unrecognized tax benefits for uncertain tax positions and the tax benefit from our GSA accrual. For the three and nine month periods ended September 30, 2010, our effective tax rate was lower than the U.S. federal statutory rate of 35% as a result of the partial release of a deferred tax asset valuation allowance, an enhanced deduction for certain research and development expenses and profits in foreign jurisdictions with reduced income tax rates. For the nine months ended September 30, 2010, our effective tax rate was lower than the U.S. federal statutory rate of 35% as a result of the partial release of a deferred tax asset valuation allowance, an enhanced deduction for certain research and development expenses, profits in foreign jurisdictions with reduced income tax rates and a decrease in unrecognized tax benefits for uncertain tax positions.
Our earnings in Hungary are subject to a statutory tax rate of 19%. The difference between this rate and the statutory U.S. rate of 35% resulted in income tax benefits of $1.4 million and $4.0 million for the three month periods ended September 30, 2011 and 2010, respectively, and $8.8 million and $9.9 million for the nine month periods ended September 30, 2011 and 2010, respectively. No countries other than Hungary had a significant impact on our effective tax rate. We have not entered into any advanced pricing or other agreements with the Internal Revenue Service with regard to any foreign jurisdictions.
The tax position of our Hungarian operation continues to benefit from assets created by the restructuring of our operations in Hungary in 2003. In addition, our research and development activities in Hungary continue to benefit from a tax law in Hungary that provides for an enhanced deduction for qualified research and development expenses. Partial release of the valuation allowance on assets from the restructuring and the enhanced tax deduction for research expenses resulted in income tax benefits of $2.2 million and $4.5 million for the three month periods ended September 30, 2011 and 2010, respectively, and $12.2 million and $12.3 million for the nine month periods ended September 30, 2011 and 2010, respectively. |
Recently Issued Accounting Pronouncements | 9 Months Ended |
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Sep. 30, 2011 | |
Recently Issued Accounting Pronouncements [Abstract]1 | |
Recently Issued Accounting Pronouncements | Note 14 – Recently issued accounting pronouncements
In October 2009, the FASB updated FASB ASC 605, Revenue Recognition (FASB ASC 605) that amended the criteria for separating consideration in multiple-deliverable arrangements. The amendments establish a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable will be based on vendor-specific objective evidence if available, third–party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific objective evidence nor third-party evidence is available. The amendments will change the application of the residual method of allocation and require that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method. The relative selling price method allocates any discount in the arrangement proportionally to each deliverable on the basis of each deliverable's selling price. This update will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. On January 1, 2011, we adopted the accounting update as required on a prospective basis. The adoption of the amended revenue recognition rules did not change the units of accounting for our revenue transactions. It also did not significantly change how we allocated the arrangement consideration to the various units of accounting or the timing of revenue. The impact of our adoption was not material to our consolidated financial statements for the three and nine month periods ended September 30, 2011. We cannot reasonably estimate the effect of adopting these standards on future financial periods as the impact will vary depending on the nature and volume of new or materially modified sales arrangements in any given period. In addition, as our, or our competitors', pricing practices and strategies evolve, we may modify our pricing practices in the future. This may result in a different allocation of revenue to the deliverables in the multiple element arrangements from the current fiscal quarter, which may change the pattern and timing of revenue recognition for these elements, but will not change the total revenue recognized for the arrangement.
In January 2010, the FASB updated FASB ASC 820, Fair Value Measurements and Disclosures (FASB ASC 820) that requires additional disclosures and clarifies existing disclosures regarding fair value measurements. The additional disclosures include (i) transfers in and out of Levels 1 and 2 and (ii) activity in Level 3 fair value measurements. The update provides amendments that clarify existing disclosures on level of disaggregation and disclosures about inputs and valuation techniques. This update is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. These disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We adopted the update on January 1, 2010 as required and subsequently adopted on January 1, 2011, the update surrounding disclosures on Level 3 fair value measurements and concluded it did not have a material impact on our consolidated financial position or results of operations. In May 2011, the FASB updated FASB ASC 820 that resulted in common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards (IFRSs). Some of the amendments clarify the FASB's intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments are to be applied prospectively and are effective during interim and annual periods beginning after December 15, 2011. We are currently evaluating the requirements of this update and have not yet determined the impact on our consolidated financial statements.
In June 2011, the FASB updated FASB ASC 220, Comprehensive Income (FASB ASC 220) that gives an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The update does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The update does not change the option for an entity to present components of other comprehensive income either net of related tax effects or before related tax effects, with one amount shown for the aggregate income tax expense or benefit related to the total of other comprehensive income items. The update does not affect how earnings per share is calculated or presented. The update should be applied retrospectively and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We are currently evaluating the requirements of this update and have not yet determined the impact on our consolidated financial statements. In September 2011, the FASB updated FASB ASC 350, Goodwill and Other (FASB ASC 350) that gives an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The amendments are effective for annual and interim goodwill impairment test performed for fiscal years beginning after December 15, 2011. We are currently evaluating the requirements of this update and have not yet determined the impact on our consolidated financial statements. |
Comprehensive Income | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Comprehensive Income | Note 10 – Comprehensive income
Our comprehensive income is comprised of net income, foreign currency translation, unrealized gains and losses on forward and option contracts and unrealized gains and losses on our investments designated as available for sale. Comprehensive income for the three and nine month periods ended September 30, 2011 and 2010, was as follows (in thousands):
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Commitments And Contingencies (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||
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Commitments And Contingencies | |||||||||||||||||||||||||||||||||||||
Schedule Of Warranty Reserve |
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Goodwill | 9 Months Ended | ||||||||||||||||||
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Goodwill | Note 8 – Goodwill
The carrying amount of goodwill as of September 30, 2011, was as follows (in thousands):
The excess purchase price over the fair value of assets acquired is recorded as goodwill. As we have one operating segment, we allocate goodwill to one reporting unit for goodwill impairment testing. Goodwill is tested for impairment on an annual basis, and between annual tests if indicators of potential impairment exist, using a fair-value-based approach based on the market capitalization of the reporting unit. Our annual impairment test was performed as of February 28, 2011. No impairment of goodwill has been identified during the period presented. Goodwill is deductible for tax purposes in certain jurisdictions.
See Note 16 – Acquisitions of Notes to Consolidated Financial Statements for additional discussion related to current period acquisitions. |
Segment Information (Schedule of Interest Income, By Geographical Areas) (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Interest income | $ 354 | $ 380 | $ 1,039 | $ 1,051 |
Americas [Member] | ||||
Interest income | 82 | 177 | 352 | 433 |
Europe [Member] | ||||
Interest income | 238 | 182 | 591 | 546 |
Asia Pacific [Member] | ||||
Interest income | $ 34 | $ 21 | $ 96 | $ 72 |
Basis Of Presentation | 9 Months Ended |
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Sep. 30, 2011 | |
Basis Of Presentation | |
Basis Of Presentation | Note 1 – Basis of presentation The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2010, included in our annual report on Form 10-K, filed with the Securities and Exchange Commission. In our opinion, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring items) considered necessary to present fairly our financial position at September 30, 2011 and December 31, 2010, and the results of our operations for the three month and nine month periods ended September 30, 2011 and September 30, 2010 and the cash flows for the nine month periods ended September 30, 2011 and September 30, 2010. Operating results for the three month and nine month periods ended September 30, 2011, are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. |
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Fair Value Measurements | Note 4 – Fair value measurements
We define fair value to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most liquid market and assumptions that market participants would use when pricing the asset or liability.
We follow a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The three values of the fair value hierarchy are the following:
Level 1 – Quoted prices in active markets for identical assets or liabilities
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3 – Inputs that are not based on observable market data
Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):
We value our available-for-sale short term investments based on pricing from third party pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. We classify all of our fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of our financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques. Short-term investments available-for-sale consists of debt securities issued by states of the U.S. and political subdivisions of the U.S., corporate debt securities and debt securities issued by U.S. government corporations and agencies as well as debt securities issued by foreign governments. All short-term investments available-for-sale have contractual maturities of less than 24 months.
Derivatives include foreign currency forward and option contracts. Our foreign currency forward contracts are valued using an income approach (Level 2) based on the spot rate less the contract rate multiplied by the notional amount. Our foreign currency option contracts are valued using a market approach based on the quoted market prices which are derived from observable inputs including current and future spot rates, interest rate spreads as well as quoted market prices of similar instruments. There were not any transfers in or out of Level 1 or Level 2 during the three and nine month periods ended September 30, 2011.
Certain investments have been reclassified to conform to current year presentation.
We did not have any items that were measured at fair value on a nonrecurring basis at September 30, 2011 and December 31, 2010. |
Derivative Instruments And Hedging Activities (Fair Values Of Derivative Instruments On Consolidated Balance Sheets) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
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Derivative assets | $ 3,254 | $ 2,325 |
Derivative liabilities | (3,114) | (3,733) |
Derivatives Designated As Hedging Instrument [Member] | ||
Derivative assets | 886 | 1,594 |
Derivative liabilities | (2,923) | (2,677) |
Derivatives Designated As Hedging Instrument [Member] | Foreign Exchange Contract - Short-Term [Member] | Prepaid Expenses And Other Current Assets [Member] | ||
Derivative assets | 717 | 1,104 |
Derivatives Designated As Hedging Instrument [Member] | Foreign Exchange Contract - Short-Term [Member] | Accrued Expenses And Other Liabilities [Member] | ||
Derivative liabilities | (1,808) | (2,677) |
Derivatives Designated As Hedging Instrument [Member] | Foreign Exchange Contracts - Long-Term [Member] | Other Long-Term Assets [Member] | ||
Derivative assets | 169 | 490 |
Derivatives Designated As Hedging Instrument [Member] | Foreign Exchange Contracts - Long-Term [Member] | Other Long-Term Liabilities [Member] | ||
Derivative liabilities | (1,115) | 0 |
Derivatives Not Designated As Hedging Instrument [Member] | ||
Derivative assets | 2,368 | 731 |
Derivative liabilities | (191) | (1,056) |
Derivatives Not Designated As Hedging Instrument [Member] | Foreign Exchange Contract - Short-Term [Member] | Prepaid Expenses And Other Current Assets [Member] | ||
Derivative assets | 2,368 | 731 |
Derivatives Not Designated As Hedging Instrument [Member] | Foreign Exchange Contract - Short-Term [Member] | Accrued Expenses And Other Liabilities [Member] | ||
Derivative liabilities | $ (191) | $ (1,056) |
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Schedule Of Net Sales, By Geographical Areas |
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Schedule Of Operating Income, By Geographical Areas |
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Schedule of Interest Income, By Geographical Areas |
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Schedule Of Long-Lived Assets, By Geographical Areas |
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Subsequent Events (Narrative) (Details) (Dividend Declared [Member], USD $) | Sep. 30, 2011 |
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Dividend Declared [Member] | |
Dividend payable, date declared | October 18, 2011 |
Dividend payable, amount per share | $ 0.10 |
Dividend payable, date to be paid | November 28, 2011 |
Dividend payable, date of record | November 7, 2011 |
Segment Information (Schedule Of Operating Income, By Geographical Areas) (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Operating income | $ 10,756 | $ 31,689 | $ 80,210 | $ 81,694 |
Americas [Member] | ||||
Operating income | 1,401 | 21,395 | 40,186 | 52,689 |
Europe [Member] | ||||
Operating income | 31,867 | 31,347 | 100,562 | 87,409 |
Asia Pacific [Member] | ||||
Operating income | 32,162 | 18,918 | 84,031 | 56,508 |
Unallocated: Research And Development Expenses [Member] | ||||
Operating income | $ (54,674) | $ (39,971) | $ (144,569) | $ (114,912) |
Derivative Instruments And Hedging Activities | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments And Hedging Activities | Note 5 – Derivative instruments and hedging activities
We recognize all of our derivative instruments as either assets or liabilities in our statements of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, we designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.
We have operations in over 40 countries. Sales outside of the Americas accounted for 61% and 56% of our revenues during the three month periods ended September 30, 2011 and 2010, respectively, and 60% and 57% of our revenues during the nine month periods ended September 30, 2011 and 2010, respectively. Our activities expose us to a variety of market risks, including the effects of changes in foreign currency exchange rates. These financial risks are monitored and managed by us as an integral part of our overall risk management program.
We maintain a foreign currency risk management strategy that uses derivative instruments (foreign currency forward and purchased option contracts) to help protect our earnings and cash flows from fluctuations caused by the volatility in currency exchange rates. Movements in foreign currency exchange rates pose a risk to our operations and competitive position, since exchange rate changes may affect our profitability and cash flow, and the business or pricing strategies of our non-U.S. based competitors.
The vast majority of our foreign sales are denominated in the customers' local currency. We purchase foreign currency forward and option contracts as hedges of forecasted sales that are denominated in foreign currencies and as hedges of foreign currency denominated receivables. These contracts are entered into to help protect against the risk that the eventual dollar-net-cash inflows resulting from such sales or firm commitments will be adversely affected by changes in exchange rates. We also purchase foreign currency forward contracts as hedges of forecasted expenses that are denominated in foreign currencies. These contracts are entered into to help protect against the risk that the eventual dollar-net-cash outflows resulting from foreign currency operating and cost of revenue expenses will be adversely affected by changes in exchange rates.
We designate foreign currency forward and purchased option contracts as cash flow hedges of forecasted revenues or forecasted expenses. In addition, we hedge our foreign currency denominated balance sheet exposures using foreign currency forward contracts that are not designated as hedging instruments. None of our derivative instruments contain a credit-risk-related contingent feature.
Cash flow hedges
To help protect against the reduction in value caused by a fluctuation in foreign currency exchange rates of forecasted foreign currency cash flows resulting from international sales over the next one to two years, we have instituted a foreign currency cash flow hedging program. We hedge portions of our forecasted revenue and forecasted expenses denominated in foreign currencies with forward and purchased option contracts. For forward contracts, when the dollar strengthens significantly against the foreign currencies, the change in the present value of future foreign currency cash flows may be offset by the change in the fair value of the forward contracts designated as hedges. For option contracts, when the dollar strengthens significantly against the foreign currencies, the change in the present value of future foreign currency cash flows may be offset by the change in the fair value of the option contracts net of the premium paid designated as hedges. Our foreign currency purchased option contracts are purchased "at-the-money" or "out-of-the-money". We purchase foreign currency forward and option contracts for up to 100% of our forecasted exposures in selected currencies (primarily in Euro, Japanese yen, British pound sterling, Korean won and Hungarian forint) and limit the duration of these contracts to 40 months or less.
For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income ("OCI") and reclassified into earnings in the same line item (net sales, operating expenses, or cost of sales) associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings or expenses during the current period and are classified as a component of "net foreign exchange gain (loss)". Hedge effectiveness of foreign currency forwards and purchased option contracts designated as cash flow hedges are measured by comparing the hedging instrument's cumulative change in fair value from inception to maturity to the forecasted transaction's terminal value.
We held forward contracts with a notional amount of $65.0 million dollar equivalent of Euro, $1.6 million dollar equivalent of British pound sterling, $48.2 million dollar equivalent of Japanese yen, $5.3 million dollar equivalent of Korean won and $33.3 million dollar equivalent of Hungarian forint at September 30, 2011. These contracts are for terms of up to 24 months. At December 31, 2010, we held forward contracts with a notional amount of $28.3 million dollar equivalent of Euro, $6.0 million dollar equivalent of British pound sterling, $18.4 million dollar equivalent of Japanese yen, and $33.4 million dollar equivalent of Hungarian forint.
We did not have any purchased option contracts at September 30, 2011. At September 30, 2010, we held purchased option contracts with a notional amount of $8.7 million dollar equivalent of Euro.
At September 30, 2011, we expect to reclassify $1.2 million of losses on derivative instruments from accumulated other comprehensive income to net sales during the next twelve months when the hedged international sales occur, $107,000 of gains on derivative instruments from accumulated OCI to cost of sales when the cost of sales are incurred and $49,000 of gains on derivative instruments from accumulated OCI to operating expenses during the next twelve months when the hedged operating expenses occur. Expected amounts are based on derivative valuations at September 30, 2011. Actual results may vary as a result of changes in the corresponding exchange rate subsequent to this date.
We did not record any ineffectiveness from our hedges during the nine months ended September 30, 2011.
Other Derivatives
Other derivatives not designated as hedging instruments consist primarily of foreign currency forward contracts that we use to hedge our foreign denominated net receivable or net payable positions to protect against the change in value caused by a fluctuation in foreign currency exchange rates. We typically attempt to hedge up to 90% of our outstanding foreign denominated net receivables or net payables and typically limit the duration of these foreign currency forward contracts to approximately 120 days. The gain or loss on the derivatives as well as the offsetting gain or loss on the hedge item attributable to the hedged risk is recognized in current earnings under the line item "net foreign exchange gain (loss)". As of September 30, 2011 and December 31, 2010, we held foreign currency forward contracts with a notional amount of $39.8 million and $41.3 million, respectively.
The following tables present the fair value of derivative instruments on our Consolidated Balance Sheets and the effect of derivative instruments on our Consolidated Statements of Income.
Fair Values of Derivative Instruments (in thousands):
Effect of derivative instruments on our Consolidated Statements of Income for the three month periods ended September 30, 2011 and 2010, respectively (in thousands):
Effect of derivative instruments on our Consolidated Statements of Income for the nine month periods ended September 30, 2011 and 2010, respectively (in thousands):
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Inventories (Summary Of Inventories) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
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Inventories | ||
Raw materials | $ 58,666 | $ 55,218 |
Work-in-process | 5,425 | 6,359 |
Finished goods | 68,463 | 56,188 |
Inventories, net | $ 132,554 | $ 117,765 |
Intangibles (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangibles | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Finite-Lived Intangible Assets |
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Acquisitions (Tables) | 9 Months Ended | ||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||
AWR Corporation [Member] | |||||||||||||||||||
Summary Of The Allocation Of The Purchase Price Of Acquisitions |
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Phase Matrix Inc [Member] | |||||||||||||||||||
Summary Of The Allocation Of The Purchase Price Of Acquisitions |
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Derivative Instruments And Hedging Activities (Fair Values Of Derivative Instruments On Consolidated Statements Of Income) (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Cash Flow Hedging [Member] | ||||
Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | $ (4,195) | $ (2,344) | $ (1,039) | $ (7,704) |
Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (427) | 1,998 | (995) | 7,045 |
Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) | 0 | 0 | 0 | 0 |
Cash Flow Hedging [Member] | Foreign Exchange Contracts - Forwards And Options [Member] | Net sales [Member] | ||||
Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 1,097 | (6,201) | 630 | (4,457) |
Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (1,124) | 1,358 | (2,864) | 4,407 |
Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) | 0 | 0 | 0 | 0 |
Cash Flow Hedging [Member] | Foreign Exchange Contracts - Forwards And Options [Member] | Cost Of Sales [Member] | ||||
Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | (3,608) | 2,558 | (1,128) | (2,152) |
Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | 507 | 374 | 1,257 | 1,785 |
Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) | 0 | 0 | 0 | 0 |
Cash Flow Hedging [Member] | Foreign Exchange Contracts - Forwards And Options [Member] | Operating Expense [Member] | ||||
Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | (1,684) | 1,299 | (541) | (1,095) |
Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | 190 | 266 | 612 | 853 |
Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) | 0 | 0 | 0 | 0 |
Derivatives Not Designated As Hedging Instrument [Member] | ||||
Amount of Gain (Loss) Recognized in Income | 2,744 | (2,233) | 641 | (857) |
Derivatives Not Designated As Hedging Instrument [Member] | Foreign Exchange Forward [Member] | Foreign Currency Gain (Loss) [Member] | ||||
Amount of Gain (Loss) Recognized in Income | $ 2,744 | $ (2,233) | $ 641 | $ (857) |
Comprehensive Income (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Comprehensive Income |
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Commitments And Contingencies | 9 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||
Commitments And Contingencies | |||||||||||||||||||||||||||||||||||||
Commitments And Contingencies | Note 13 – Commitments and contingencies
We offer a one-year limited warranty on most hardware products, with a two or three-year warranty on a subset of our hardware products, which is included in the sales price of many of our products. Provision is made for estimated future warranty costs at the time of the sale for the estimated costs that may be incurred under the basic limited warranty. Our estimate is based on historical experience and product sales during this period.
The warranty reserve for the nine month periods ended September 30, 2011 and 2010, respectively, was as follows (in thousands):
As of September 30, 2011, we have non-cancelable purchase commitments with various suppliers of customized inventory and inventory components totaling approximately $11.9 million over the next twelve months.
As of September 30, 2011, we have outstanding guarantees for payment of customs and foreign grants totaling approximately $4.2 million, which are generally payable over the next twelve months.
From November 1999 to May 2011, we sold products to the U.S. government under a contract with the General Services Administration ("GSA"). During such time, our sales under the contract were approximately 2% of our total sales. Our contract with GSA contained a price reduction or "most favored customer" pricing provision. For the past several months, we have been in discussions with GSA regarding our compliance with this pricing provision and have provided GSA with information regarding our pricing practices. GSA conducted an on-site review of our GSA pricing practices and orally informed us that GSA did not agree with our previous determination of the potential non-compliance amount. GSA subsequently requested that we conduct a further analysis of the non-compliance amount based upon a methodology that GSA proposed. This analysis resulted in calculated overpayments (including added interest) by GSA to us of approximately $13.1 million. GSA is reviewing the analysis and has not yet officially responded, and has not made any formal demand for pricing adjustments related to our GSA contract. However, GSA may make such a demand in the future, and there can be no assurance that the amount of any such demand, if we were required to pay it, would not have a material adverse impact on our results of operations. If GSA believes that our pricing practices did not comply with the contract, GSA could conduct a formal investigation of such matter or could refer such matter to the U.S. Department of Justice for investigation, including an investigation regarding potential violations of the False Claims Act, which could result in litigation and the possible imposition of a damage remedy that includes treble damages plus civil penalties, and could also result in us being suspended or debarred from future government contracting. As a result of the foregoing, during the quarter ended September 30, 2011, we established an accrual of $13.1 million which represents the amount of the loss contingency that is reasonably estimable at this time. There can be no assurance that our actual losses will not exceed such reserve amount. Due to the complexities of conducting business with GSA, the relatively small amount of revenue we realized from our GSA contract, and our belief that we can continue to sell our products to U.S. government agencies through other contracting methods, we cancelled our contract with GSA in April 2011, effective May 2011. To date, we have not experienced any material adverse impact on our results of operations as a result of the cancellation of our GSA contract. |
Acquisitions (Narrative) (Details) (USD $) | 9 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||
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Sep. 30, 2011
AWR Corporation [Member]
years | Sep. 30, 2011
AWR Corporation [Member]
Amortizable Intangible Assets [Member]
years | Sep. 30, 2011
Phase Matrix Inc [Member] | Sep. 30, 2011
Phase Matrix Inc [Member]
Amortizable Intangible Assets [Member]
years
months | Dec. 31, 2010
Privately-Held Company First [Member]
years | Dec. 31, 2010
Privately-Held Company Second[Member] | Feb. 01, 2010
Privately-Held Company Second[Member]
years | Dec. 31, 2010
Privately-Held Companies [Member]
Customer Relationships [Member]
years | Dec. 31, 2010
Privately-Held Companies [Member]
Acquired Core Technology [Member]
years | Dec. 31, 2010
Privately-Held Companies [Member]
Non-Compete Agreements [Member]
years | Dec. 31, 2010
Privately-Held Companies [Member]
Trademarks [Member]
years | |
Date of acquisition | June 30, 2011 | May 20, 2011 | December 31, 2010 | February 1, 2010 | |||||||
Acquisition purchase price | $ 66,395,000 | $ 40,680,000 | |||||||||
Cash paid for acquired company | 54,000,000 | 38,900,000 | 2,300,000 | 2,200,000 | |||||||
Term of earn-out arrangement (in number of years) | 3 | ||||||||||
Potential undiscounted payments under the earn-out arrangement, range minimum | 0 | ||||||||||
Potential undiscounted payments under the earn-out arrangement, range maximum | 29,000,000 | ||||||||||
Estimated fair value of the earn-out arrangement | 12,000,000 | ||||||||||
Useful life (in years) | 5 | 5 | 5 | 3 | 3 | ||||||
Useful lives, minimum (in months) | 9 | ||||||||||
Useful life, maximum (in years) | 8 | ||||||||||
Additional cash paid for acquired company | 500,000 | ||||||||||
Common stock paid for acquired company | 1,800,000 | 3,000,000 | |||||||||
Terms of payment related to the remaining balance on the purchase of acquired company (in number of years) | 3 | 4 | |||||||||
Net tangible assets acquired | 10,718,000 | 5,624,000 | 187,000 | 1,100,000 | |||||||
Purchase price allocation, amortizable intangible assets | 31,685,000 | 8,331,000 | 1,500,000 | 5,000,000 | |||||||
Purchase price allocation, goodwill | $ 34,343,000 | $ 26,725,000 | $ 1,100,000 | $ 5,000,000 |
Inventories | 9 Months Ended | ||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||
Inventories | |||||||||||||||||||||||||||||
Inventories | Note 6 – Inventories
Inventories, net consist of the following (in thousands):
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Acquisitions | 9 Months Ended | |||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||
Acquisitions | ||||||||||||||||||||||||||||||||||
Acquisitions | Note 16 – Acquisitions
AWR Corporation
On June 30, 2011, we acquired all of the outstanding shares of AWR Corporation (AWR), a privately held company that is a leading supplier of electronic design automation software for designing radio frequency and high-frequency components and systems for the semiconductor, aerospace and defense, communications and test equipment industries. The acquisition is expected to improve customer productivity through increased interoperability between upfront design and validation and production test functions. The purchase price of the acquisition was $66 million consisting of $54 million in cash and a three-year earn-out arrangement. We funded the purchase price from existing cash balances. The range of potential undiscounted payments that we could be required to make under the earn-out arrangement is between $0 and $29 million and are payable if AWR achieves certain revenue and operating income targets. The fair value of the earn-out arrangement was estimated at $12 million using the income approach, the key assumptions which included probability-weighted revenue and operating expense growth projections.
The allocation of the purchase price was determined using the preliminary fair value of assets and liabilities acquired as of June 30, 2011. The preliminary allocation of the purchase price was based upon a preliminary valuation which is subject to change within the measurement period up to one year from the acquisition date. The primary areas which are not finalized are the fair value of contingent consideration, deferred revenue, intangible assets and related deferred taxes. Our consolidated financial statements include the operating results from the date of acquisition. Pro-forma results of operations have not been presented because the effects of those operations were not material. The following table summarizes the allocation of the purchase price of AWR (in thousands):
Goodwill is not deductible for tax purposes. Amortizable intangible assets have useful lives of 5 years from the date of acquisition.
Phase Matrix Inc.
On May 20, 2011, we acquired all of the outstanding shares of Phase Matrix, Inc. (PMI), a privately held company that designs and manufactures radio frequency and microwave test and measurement instruments, subsystems and components. The acquisition is expected to speed our deployment of high-performance RF and wireless technologies to our production test and R&D customers. The purchase price of the acquisition was $40.7 million consisting of $38.9 million in cash and $1.8 million in shares of our common stock. We funded the cash portion of the purchase price from existing cash balances.
The allocation of the purchase price was determined using the fair value of assets and liabilities acquired as of May 20, 2011. Our consolidated financial statements include the operating results from the date of acquisition. Pro-forma results of operations have not been presented because the effects of those operations were not material. The following table summarizes the allocation of the purchase price of Phase Matrix, Inc. (in thousands):
Goodwill is deductible for tax purposes. Amortizable intangible assets have useful lives which range from 9 months to 8 years from the date of acquisition. These assets are also deductible for tax purposes.
Other acquisitions
On December 31, 2010, we acquired all of the outstanding shares of a privately-held company for $2.3 million in net cash with an additional $500,000 in net cash to be paid out over the next three years. The purchase price for this acquisition included net working capital of $187,000, amortizable intangible assets of $1.5 million, and goodwill of $1.1 million. Our consolidated financial statements include the operating results of the acquired company from the date of acquisition.
On February 1, 2010, we acquired all of the outstanding shares of a privately-held company for $2.2 million in net cash, $3.0 million in shares of our common stock with the remainder to be paid in cash over the next four years. The purchase price allocation for this acquisition included net working capital of $1.1 million, amortizable intangible assets of $5.0 million, and goodwill of $5.0 million. Our consolidated financial statements include the operating results of the acquired company from the date of acquisition.
For these acquisitions, goodwill is not deductible for tax purposes. Existing technology, non-competition agreements, trademarks, and customer relationships have useful lives of 5 years, 3 years, 3 years, and 5 years, respectively, from the date of acquisition. These assets are not deductible for tax purposes. Pro forma results of operations have not been presented because the effect of these acquisitions is not material either individually or in the aggregate to our consolidated results of operations. |
Derivative Instruments And Hedging Activities (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||||||
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Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011
EURO Currency [Member]
Forward Contracts [Member] | Dec. 31, 2010
EURO Currency [Member]
Forward Contracts [Member] | Sep. 30, 2011
British Pound Sterling [Member]
Forward Contracts [Member] | Dec. 31, 2010
British Pound Sterling [Member]
Forward Contracts [Member] | Sep. 30, 2011
Japanese Yen [Member]
Forward Contracts [Member] | Dec. 31, 2010
Japanese Yen [Member]
Forward Contracts [Member] | Sep. 30, 2011
Hungarian Forint [Member]
Forward Contracts [Member] | Dec. 31, 2010
Hungarian Forint [Member]
Forward Contracts [Member] | Sep. 30, 2011
Korean Won [Member]
Forward Contracts [Member] | Sep. 30, 2011
Forward Contracts [Member]
years | Sep. 30, 2011
Options Held [Member] | Sep. 30, 2010
Options Held [Member] | Sep. 30, 2011
Other Derivatives [Member] | Dec. 31, 2010
Other Derivatives [Member] | |
Number of countries where the entity have operations (in number of operations) | 40 | 40 | ||||||||||||||||
Percentage of sales outside of the Americas during the period | 61.00% | 56.00% | 60.00% | 57.00% | ||||||||||||||
Period of protection against the reduction in value caused by a fluctuation, minimum (in number of years) | 1 | |||||||||||||||||
Period of protection against the reduction in value caused by a fluctuation, maximum (in number of years) | 2 | |||||||||||||||||
Percentage of derivative risk hedged | 100.00% | 90.00% | ||||||||||||||||
Duration of derivative contracts entered into by the entity to hedge risk of loss | 40 months or less | 120 days | ||||||||||||||||
Notional amount | $ 65,000,000 | $ 28,300,000 | $ 1,600,000 | $ 6,000,000 | $ 48,200,000 | $ 18,400,000 | $ 33,300,000 | $ 33,400,000 | $ 5,300,000 | $ 0 | $ 8,700,000 | |||||||
Foreign currency forward contract notional amount | 39,800,000 | 41,300,000 | ||||||||||||||||
Duration of foreign currency forward contracts entered into by the entity to hedge risk of loss | up to 24 months | |||||||||||||||||
Estimated amount of reclassification of losses on derivative instruments from accumulated other comprehensive income to net sales | 1,200,000 | |||||||||||||||||
Estimated amount of reclassification of losses on derivative instruments from accumulated other comprehensive income to cost of sales | 107,000 | |||||||||||||||||
Estimated amount of reclassification of losses on derivative instruments from accumulated other comprehensive income to operating expenses | $ 49,000 |
Goodwill (Tables) | 9 Months Ended | ||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||
Goodwill | |||||||||||||||||||
Schedule Of Goodwill |
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Subsequent Events | 9 Months Ended |
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Sep. 30, 2011 | |
Subsequent Events | |
Subsequent Events | Note 17 – Subsequent events
We have evaluated subsequent events through the date the financial statements were issued. On October 18, 2011, our Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable November 28, 2011, to shareholders of record on November 7, 2011. |
Intangibles (Schedule Of Finite-Lived Intangible Assets) (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
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Gross Carrying Amount | $ 165,748 | $ 110,964 |
Accumulated Amortization | (75,606) | (58,148) |
Net Carrying Amount | 90,142 | 52,816 |
Capitalized Software Development Costs [Member] | ||
Gross Carrying Amount | 52,400 | 40,481 |
Accumulated Amortization | (26,153) | (16,217) |
Net Carrying Amount | 26,247 | 24,264 |
Acquired Technology [Member] | ||
Gross Carrying Amount | 67,308 | 35,634 |
Accumulated Amortization | (29,904) | (25,017) |
Net Carrying Amount | 37,404 | 10,617 |
Patents [Member] | ||
Gross Carrying Amount | 22,180 | 20,790 |
Accumulated Amortization | (7,025) | (6,312) |
Net Carrying Amount | 15,155 | 14,478 |
Other [Member] | ||
Gross Carrying Amount | 23,860 | 14,059 |
Accumulated Amortization | (12,524) | (10,602) |
Net Carrying Amount | $ 11,336 | $ 3,457 |
Cash, Cash Equivalents And Short-Term Investments (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Cash, Cash Equivalents And Short-Term Investments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized Gains And Losses Related To Short-Term Investments Designated As Available-For-Sale |
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Contractual Maturities Of Short-Term Investments Designated As Available-For-Sale |
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Earnings Per Share | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Note 2 – Earnings per share
Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing net income by the weighted average number of common shares and common share equivalents outstanding (if dilutive) during each period. The number of common share equivalents, which include stock options and restricted stock units, is computed using the treasury stock method.
The reconciliation of the denominators used to calculate basic EPS and diluted EPS for the three month and nine month periods ended September 30, 2011 and 2010, respectively, are as follows (in thousands):
Stock options to acquire 1,400,000 shares and 717,000 shares for the three month periods ended September 30, 2011 and 2010, respectively, and 640,000 shares and 852,000 shares for the nine month periods ended September 30, 2011 and 2010, respectively, were excluded in the computations of diluted EPS because the effect of including the stock options would have been anti-dilutive. On January 21, 2011, our Board of Directors declared a 3 for 2 stock split which was effected as a stock dividend, and paid on February 21, 2011, to stockholders of record on February 4, 2011. All per share data and numbers of common shares, where appropriate, have been retroactively adjusted to reflect the stock split. |
Stock-Based Compensation Plans | 9 Months Ended |
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Sep. 30, 2011 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Plans | Note 11 – Stock-based compensation plans
Stock option plans
Our stockholders approved the 1994 Incentive Stock Option Plan (the "1994 Plan") on May 9, 1994. At the time of approval, 13,668,750 shares of our common stock were reserved for issuance under this plan. In 1997, an additional 10,631,250 shares of our common stock were reserved for issuance under this plan, and an additional 1,125,000 shares were reserved for issuance under this plan in 2004. The 1994 Plan terminated in May 2005, except with respect to outstanding awards previously granted thereunder.
Awards under the plan were either incentive stock options within the meaning of Section 422 of the Internal Revenue Code or nonqualified options. The right to purchase shares under the options vests over a five to ten-year period, beginning on the date of grant. Vesting of ten year awards may accelerate based on the Company's previous year's earnings and revenue growth but shares cannot accelerate to vest over a period of less than five years. Stock options must be exercised within ten years from date of grant. Stock options were issued with an exercise price which was equal to the market price of our common stock at the grant date. We estimate potential forfeitures of stock grants and adjust compensation cost recorded accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock compensation expense to be recognized in future periods. During the nine month period ended September 30, 2011, we did not make any changes in accounting principles or methods of estimates related to the 1994 Plan.
Restricted stock plans
Our stockholders approved our 2005 Incentive Plan (the "2005 Plan") on May 10, 2005. At the time of approval, 4,050,000 shares of our common stock were reserved for issuance under this plan, as well as the number of shares which had been reserved but not issued under the 1994 Plan (our incentive stock option plan which terminated in May 2005), and any shares that returned to the 1994 Plan as a result of termination of options or repurchase of shares issued under such plan. The 2005 Plan, administered by the Compensation Committee of the Board of Directors, provided for granting of incentive awards in the form of restricted stock and restricted stock units ("RSUs") to directors, executive officers and employees of the Company and its subsidiaries. Awards vest over a three, five or ten-year period, beginning on the date of grant. Vesting of ten year awards may accelerate based on the Company's previous year's earnings and growth but ten year awards cannot accelerate to vest over a period of less than five years. The 2005 Plan terminated on May 11, 2010, except with respect to outstanding awards previously granted thereunder. There were 3,362,304 shares of common stock that were reserved but not issued under the 1994 Plan and the 2005 Plan as of May 11, 2010.
Our stockholders approved our 2010 Incentive Plan (the "2010 Plan") on May 11, 2010. At the time of approval, 3,000,000 shares of our common stock were reserved for issuance under this plan, as well as the 3,362,304 shares of common stock that were reserved but not issued under the 1994 Plan and the 2005 Plan as of May 11, 2010, and any shares that are returned to the 1994 Plan and the 2005 Plan as a result of the forfeiture or termination of options or RSUs or repurchases of shares issued under these plans. The 2010 Plan, administered by the Compensation Committee of the Board of Directors, provides for granting of incentive awards in the form of restricted stock and RSUs to employees, directors and consultants of the Company and employees and consultants of any parent or subsidiary of the Company. Awards vest over a three, five or ten-year period, beginning on the date of grant. Vesting of ten year awards may accelerate based on the Company's previous year's earnings and growth but ten year awards cannot accelerate to vest over a period of less than five years. At September 30, 2011, there were 5,094,572 shares available for grant under the 2010 Plan.
We estimate potential forfeitures of RSUs and adjust compensation cost recorded accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock compensation expense to be recognized in future periods. During the nine month period ended September 30, 2011, we did not make any changes in accounting principles or methods of estimates related to the 2010 Plan.
Employee stock purchase plan
Our employee stock purchase plan permits substantially all domestic employees and employees of designated subsidiaries to acquire our common stock at a purchase price of 85% of the lower of the market price at the beginning or the end of the purchase period. The plan has quarterly purchase periods generally beginning on February 1, May 1, August 1 and November 1 of each year. Employees may designate up to 15% of their compensation for the purchase of common stock under this plan. On May 10, 2011, our stockholders approved an additional 3,000,000 shares for issuance under our employee stock purchase plan, and at September 30, 2011, we had 3,921,240 shares of common stock reserved for future issuance under this plan. During the nine month period ended September 30, 2011, we issued 699,602 shares under this plan. The weighted average fair value of the employees' purchase rights for these shares was $21.78 per share and was estimated using the Black-Scholes model. During the nine month period ended September 30, 2011, we did not make any changes in accounting principles or methods of estimates related to the employee stock purchase plan.
Authorized Preferred Stock and Preferred Stock Purchase Rights Plan
We have 5,000,000 authorized shares of preferred stock. On January 21, 2004, our Board of Directors designated 750,000 of these shares as Series A Participating Preferred Stock in conjunction with its adoption of a Preferred Stock Rights Agreement (the "Rights Agreement") and declaration of a dividend of one preferred share purchase right (a "Right") for each share of common stock outstanding held as of May 10, 2004 or issued thereafter. Each Right will entitle its holder to purchase one one-thousandth of a share of National Instruments' Series A Participating Preferred Stock at an exercise price of $200, subject to adjustment, under certain circumstances. The Rights Agreement was not adopted in response to any effort to acquire control of National Instruments.
The Rights only become exercisable in certain limited circumstances following the tenth day after a person or group announces acquisitions of or tender offers for 20% or more of our common stock. In addition, if an acquirer (subject to certain exclusions for certain current stockholders of National Instruments, an "Acquiring Person") obtains 20% or more of our common stock, then each Right (other than the Rights owned by an Acquiring Person or its affiliates) will entitle the holder to purchase, for the exercise price, shares of our common stock having a value equal to two times the exercise price. Under certain circumstances, our Board of Directors may redeem the Rights, in whole, but not in part, at a purchase price of $0.01 per Right. The Rights have no voting privileges and are attached to and automatically traded with our common stock until the occurrence of specified trigger events. The Rights will expire on the earlier of May 10, 2014 or the exchange or redemption of the Rights.
There were not any shares of preferred stock issued and outstanding at September 30, 2011. |
Commitments And Contingencies (Schedule Of Warranty Reserve) (Details) (USD $) In Thousands | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
Commitments And Contingencies | ||
Balance at the beginning of the period | $ 921 | $ 921 |
Accruals for warranties issued during the period | 2,175 | 1,485 |
Settlements made (in cash or in kind) during the period | (2,175) | (1,483) |
Balance at the end of the period | $ 921 | $ 923 |
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