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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Mellanox Technologies Ltd | NASDAQ:MLNX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 124.89 | 125.75 | 124.91 | 0 | 01:00:00 |
|
|
|
|
|
x
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended: June 30, 2017
|
OR
|
||
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
|
Israel
(State or other jurisdiction of
incorporation or organization)
|
|
98-0233400
(I.R.S. Employer
Identification Number)
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
(Do not check if a
smaller reporting company)
|
|
Smaller reporting company
o
|
|
|
|
|
|
|
Emerging growth company
o
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
|
(in thousands, except par value)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
55,722
|
|
|
$
|
56,780
|
|
Short-term investments
|
254,545
|
|
|
271,661
|
|
||
Accounts receivable, net
|
149,548
|
|
|
141,768
|
|
||
Inventories
|
71,961
|
|
|
65,523
|
|
||
Other current assets
|
20,726
|
|
|
17,346
|
|
||
Total current assets
|
552,502
|
|
|
553,078
|
|
||
Property and equipment, net
|
121,173
|
|
|
118,585
|
|
||
Severance assets
|
17,814
|
|
|
15,870
|
|
||
Intangible assets, net
|
253,440
|
|
|
278,031
|
|
||
Goodwill
|
471,228
|
|
|
471,228
|
|
||
Deferred taxes and other long-term assets
|
50,506
|
|
|
36,713
|
|
||
Total assets
|
$
|
1,466,663
|
|
|
$
|
1,473,505
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
58,754
|
|
|
$
|
59,533
|
|
Accrued liabilities
|
94,446
|
|
|
105,042
|
|
||
Deferred revenue
|
23,013
|
|
|
24,364
|
|
||
Current portion of term debt
|
21,773
|
|
|
23,628
|
|
||
Total current liabilities
|
197,986
|
|
|
212,567
|
|
||
Accrued severance
|
23,041
|
|
|
19,874
|
|
||
Deferred revenue
|
15,237
|
|
|
15,968
|
|
||
Term debt
|
191,570
|
|
|
218,786
|
|
||
Other long-term liabilities
|
33,741
|
|
|
30,580
|
|
||
Total liabilities
|
461,575
|
|
|
497,775
|
|
||
Commitments and Contingencies - (see Note 8)
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Ordinary shares: NIS 0.0175 par value, 200,000 shares authorized, 50,278 and 49,076 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively
|
215
|
|
|
209
|
|
||
Additional paid-in capital
|
820,217
|
|
|
774,605
|
|
||
Accumulated other comprehensive income (loss)
|
3,836
|
|
|
(928
|
)
|
||
Retained earnings
|
180,820
|
|
|
201,844
|
|
||
Total shareholders’ equity
|
1,005,088
|
|
|
975,730
|
|
||
Total liabilities and shareholders' equity
|
$
|
1,466,663
|
|
|
$
|
1,473,505
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Total revenues
|
$
|
211,962
|
|
|
$
|
214,801
|
|
|
$
|
400,613
|
|
|
$
|
411,611
|
|
Cost of revenues
|
73,427
|
|
|
79,807
|
|
|
137,877
|
|
|
150,288
|
|
||||
Gross profit
|
138,535
|
|
|
134,994
|
|
|
262,736
|
|
|
261,323
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
92,348
|
|
|
82,324
|
|
|
180,839
|
|
|
153,358
|
|
||||
Sales and marketing
|
38,110
|
|
|
32,576
|
|
|
73,867
|
|
|
63,804
|
|
||||
General and administrative
|
12,476
|
|
|
13,494
|
|
|
24,995
|
|
|
41,432
|
|
||||
Total operating expenses
|
142,934
|
|
|
128,394
|
|
|
279,701
|
|
|
258,594
|
|
||||
Income (loss) from operations
|
(4,399
|
)
|
|
6,600
|
|
|
(16,965
|
)
|
|
2,729
|
|
||||
Interest expense
|
(1,996
|
)
|
|
(2,215
|
)
|
|
(3,989
|
)
|
|
(3,213
|
)
|
||||
Other income, net
|
827
|
|
|
315
|
|
|
1,510
|
|
|
376
|
|
||||
Interest and other, net
|
(1,169
|
)
|
|
(1,900
|
)
|
|
(2,479
|
)
|
|
(2,837
|
)
|
||||
Income (loss) before taxes on income
|
(5,568
|
)
|
|
4,700
|
|
|
(19,444
|
)
|
|
(108
|
)
|
||||
Provision for taxes on income
|
2,423
|
|
|
46
|
|
|
791
|
|
|
2,406
|
|
||||
Net income (loss)
|
$
|
(7,991
|
)
|
|
$
|
4,654
|
|
|
$
|
(20,235
|
)
|
|
$
|
(2,514
|
)
|
Net income (loss) per share — basic
|
$
|
(0.16
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.41
|
)
|
|
$
|
(0.05
|
)
|
Net income (loss) per share — diluted
|
$
|
(0.16
|
)
|
|
$
|
0.09
|
|
|
$
|
(0.41
|
)
|
|
$
|
(0.05
|
)
|
Shares used in computing net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
50,056
|
|
|
47,900
|
|
|
49,698
|
|
|
47,629
|
|
||||
Diluted
|
50,056
|
|
|
49,194
|
|
|
49,698
|
|
|
47,629
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
||||||||||||||
Net income (loss)
|
$
|
(7,991
|
)
|
|
$
|
4,654
|
|
|
$
|
(20,235
|
)
|
|
$
|
(2,514
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||
Change in unrealized gains/losses on available-for-sale securities, net of tax
|
(47
|
)
|
|
48
|
|
|
22
|
|
|
648
|
|
||||
Change in unrealized gains/losses on derivative contracts, net of tax
|
498
|
|
|
(2,143
|
)
|
|
4,742
|
|
|
1,349
|
|
||||
Other comprehensive income (loss), net of tax
|
451
|
|
|
(2,095
|
)
|
|
4,764
|
|
|
1,997
|
|
||||
Total comprehensive income (loss), net of tax
|
$
|
(7,540
|
)
|
|
$
|
2,559
|
|
|
$
|
(15,471
|
)
|
|
$
|
(517
|
)
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(20,235
|
)
|
|
$
|
(2,514
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
50,814
|
|
|
46,231
|
|
||
Deferred income taxes
|
|
(704
|
)
|
|
1,266
|
|
||
Share-based compensation
|
|
32,433
|
|
|
31,551
|
|
||
Gain on investments, net
|
|
(1,701
|
)
|
|
(489
|
)
|
||
Changes in assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
||||
Accounts receivable
|
|
(7,780
|
)
|
|
(16,886
|
)
|
||
Inventories
|
|
(7,679
|
)
|
|
10,598
|
|
||
Prepaid expenses and other assets
|
|
(2,667
|
)
|
|
3,598
|
|
||
Accounts payable
|
|
48
|
|
|
9,679
|
|
||
Accrued liabilities and other liabilities
|
|
(1,141
|
)
|
|
5,583
|
|
||
Net cash provided by operating activities
|
|
41,388
|
|
|
88,617
|
|
||
|
|
|
|
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchase of severance-related insurance policies
|
|
(651
|
)
|
|
(546
|
)
|
||
Purchase of short-term investments
|
|
(69,110
|
)
|
|
(153,486
|
)
|
||
Proceeds from sales of short-term investments
|
|
74,359
|
|
|
200,457
|
|
||
Proceeds from maturities of short-term investments
|
|
13,590
|
|
|
97,388
|
|
||
Purchase of property and equipment
|
|
(27,120
|
)
|
|
(15,755
|
)
|
||
Purchase of intangible assets
|
|
(1,647
|
)
|
|
—
|
|
||
Purchase of investments in private companies
|
|
(11,000
|
)
|
|
(107
|
)
|
||
Acquisition, net of cash acquired of $87.5 million
|
|
—
|
|
|
(693,692
|
)
|
||
Net cash used in investing activities
|
|
(21,579
|
)
|
|
(565,741
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|||
Proceeds from term debt
|
|
—
|
|
|
280,000
|
|
||
Principal payments on term debt
|
|
(30,000
|
)
|
|
(7,000
|
)
|
||
Term debt issuance costs
|
|
—
|
|
|
(5,521
|
)
|
||
Payments on capital lease and intangible asset financings
|
|
(3,263
|
)
|
|
(491
|
)
|
||
Proceeds from issuances of ordinary shares through employee equity incentive plans
|
|
12,396
|
|
|
10,438
|
|
||
Net cash provided by (used in) financing activities
|
|
(20,867
|
)
|
|
277,426
|
|
||
|
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
|
(1,058
|
)
|
|
(199,698
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
56,780
|
|
|
263,199
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
55,722
|
|
|
$
|
63,501
|
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash investing and financing activities
|
|
|
|
|
||||
Intangible assets financed with debt
|
|
$
|
3,877
|
|
|
$
|
—
|
|
Unpaid property and equipment
|
|
$
|
6,003
|
|
|
$
|
8,867
|
|
Transfer from inventory to property and equipment
|
|
$
|
1,241
|
|
|
$
|
2,358
|
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Balance, beginning of the period
|
$
|
1,474
|
|
|
$
|
1,641
|
|
Assumed warranty liability from acquisition
|
—
|
|
|
290
|
|
||
New warranties issued during the period
|
756
|
|
|
684
|
|
||
Reversal of warranty reserves
|
(350
|
)
|
|
(358
|
)
|
||
Settlements during the period
|
(745
|
)
|
|
(532
|
)
|
||
Balance, end of the period
|
1,135
|
|
|
1,725
|
|
||
Less: long-term portion of product warranty liability
|
(180
|
)
|
|
(360
|
)
|
||
Current portion, end of the period
|
$
|
955
|
|
|
$
|
1,365
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Net income (loss)
|
$
|
(7,991
|
)
|
|
$
|
4,654
|
|
|
$
|
(20,235
|
)
|
|
$
|
(2,514
|
)
|
Basic and diluted shares:
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average ordinary shares outstanding
|
50,056
|
|
|
47,900
|
|
|
49,698
|
|
|
47,629
|
|
||||
Effect of dilutive shares
|
—
|
|
|
1,294
|
|
|
—
|
|
|
—
|
|
||||
Shares used to compute diluted net income (loss) per share
|
50,056
|
|
|
49,194
|
|
|
49,698
|
|
|
47,629
|
|
||||
Net income (loss) per share — basic
|
$
|
(0.16
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.41
|
)
|
|
$
|
(0.05
|
)
|
Net income (loss) per share — diluted
|
$
|
(0.16
|
)
|
|
$
|
0.09
|
|
|
$
|
(0.41
|
)
|
|
$
|
(0.05
|
)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
(in thousands)
|
||||||
Accounts receivable, net:
|
|
|
|
|
|
||
Accounts receivable, gross
|
$
|
150,180
|
|
|
$
|
142,400
|
|
Less: allowance for doubtful accounts
|
(632
|
)
|
|
(632
|
)
|
||
|
$
|
149,548
|
|
|
$
|
141,768
|
|
Inventories:
|
|
|
|
|
|
||
Raw materials
|
$
|
8,046
|
|
|
$
|
8,243
|
|
Work-in-process
|
25,082
|
|
|
26,118
|
|
||
Finished goods
|
38,833
|
|
|
31,162
|
|
||
|
$
|
71,961
|
|
|
$
|
65,523
|
|
Other current assets:
|
|
|
|
|
|||
Prepaid expenses
|
$
|
9,941
|
|
|
$
|
9,053
|
|
Derivative contracts receivable
|
4,004
|
|
|
257
|
|
||
VAT receivable
|
4,412
|
|
|
6,093
|
|
||
Other
|
2,369
|
|
|
1,943
|
|
||
|
$
|
20,726
|
|
|
$
|
17,346
|
|
Property and equipment, net:
|
|
|
|
|
|||
Computer, equipment, and software
|
$
|
234,120
|
|
|
$
|
214,719
|
|
Furniture and fixtures
|
5,279
|
|
|
5,210
|
|
||
Leasehold improvements
|
49,914
|
|
|
46,693
|
|
||
|
289,313
|
|
|
266,622
|
|
||
Less: Accumulated depreciation and amortization
|
(168,140
|
)
|
|
(148,037
|
)
|
||
|
$
|
121,173
|
|
|
$
|
118,585
|
|
Deferred taxes and other long-term assets:
|
|
|
|
|
|||
Equity investments in private companies
|
$
|
19,720
|
|
|
$
|
12,720
|
|
Deferred taxes
|
23,117
|
|
|
22,413
|
|
||
Other assets
|
7,669
|
|
|
1,580
|
|
||
|
$
|
50,506
|
|
|
$
|
36,713
|
|
Accrued liabilities:
|
|
|
|
|
|||
Payroll and related expenses
|
$
|
58,271
|
|
|
$
|
62,969
|
|
Accrued expenses
|
28,820
|
|
|
33,125
|
|
||
Derivative contracts payable
|
11
|
|
|
1,006
|
|
||
Product warranty liability
|
955
|
|
|
1,263
|
|
||
Other
|
6,389
|
|
|
6,679
|
|
||
|
$
|
94,446
|
|
|
$
|
105,042
|
|
Other long-term liabilities:
|
|
|
|
||||
Income tax payable
|
$
|
26,754
|
|
|
$
|
24,184
|
|
Deferred rent
|
2,549
|
|
|
2,504
|
|
||
Other
|
4,438
|
|
|
3,892
|
|
||
|
$
|
33,741
|
|
|
$
|
30,580
|
|
|
|
Fair value
|
|
Weighted Average Useful Life
|
||
|
|
(in thousands)
|
|
(in years)
|
||
Purchased intangible assets:
|
|
|
|
|
||
Trade names
|
|
$
|
5,600
|
|
|
3
|
Customer relationships
|
|
56,400
|
|
|
9
|
|
Backlog
|
|
11,300
|
|
|
1
|
|
Developed technology
|
|
181,246
|
|
|
4 - 6
|
|
In process research and development
(1)
|
|
33,700
|
|
|
-
|
|
Total purchased intangible assets
|
|
$
|
288,246
|
|
|
|
|
||||||
(1)
In-process research and development ("IPR&D") will not be amortized until the underlying products reach technological feasibility. Upon completion, each IPR&D project will be amortized over its useful life.
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Money market funds
|
$
|
2,154
|
|
|
$
|
—
|
|
|
$
|
2,154
|
|
Certificates of deposit
|
—
|
|
|
75,574
|
|
|
75,574
|
|
|||
U.S. Government and agency securities
|
—
|
|
|
48,121
|
|
|
48,121
|
|
|||
Commercial paper
|
—
|
|
|
27,425
|
|
|
27,425
|
|
|||
Corporate bonds
|
—
|
|
|
78,192
|
|
|
78,192
|
|
|||
Municipal bonds
|
—
|
|
|
10,175
|
|
|
10,175
|
|
|||
Foreign government bonds
|
—
|
|
|
15,058
|
|
|
15,058
|
|
|||
|
2,154
|
|
|
254,545
|
|
|
256,699
|
|
|||
Derivative contracts
|
—
|
|
|
4,004
|
|
|
4,004
|
|
|||
Total financial assets
|
$
|
2,154
|
|
|
$
|
258,549
|
|
|
$
|
260,703
|
|
Derivative contracts
|
—
|
|
|
11
|
|
|
11
|
|
|||
Total financial liabilities
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
11
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Money market funds
|
$
|
1,833
|
|
|
$
|
—
|
|
|
$
|
1,833
|
|
Certificates of deposit
|
—
|
|
|
78,643
|
|
|
78,643
|
|
|||
U.S. Government and agency securities
|
—
|
|
|
56,347
|
|
|
56,347
|
|
|||
Commercial paper
|
—
|
|
|
29,483
|
|
|
29,483
|
|
|||
Corporate bonds
|
—
|
|
|
94,162
|
|
|
94,162
|
|
|||
Municipal bonds
|
—
|
|
|
7,706
|
|
|
7,706
|
|
|||
Foreign government bonds
|
—
|
|
|
5,320
|
|
|
5,320
|
|
|||
|
1,833
|
|
|
271,661
|
|
|
273,494
|
|
|||
Derivative contracts
|
—
|
|
|
257
|
|
|
257
|
|
|||
Total financial assets
|
$
|
1,833
|
|
|
$
|
271,918
|
|
|
$
|
273,751
|
|
Derivative contracts
|
—
|
|
|
1,006
|
|
|
1,006
|
|
|||
Total financial liabilities
|
$
|
—
|
|
|
$
|
1,006
|
|
|
$
|
1,006
|
|
|
June 30, 2017
|
||||||||||||||
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Estimated
Fair Value |
||||||||
|
(in thousands)
|
||||||||||||||
Cash
|
$
|
53,568
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53,568
|
|
Money market funds
|
2,154
|
|
|
—
|
|
|
—
|
|
|
2,154
|
|
||||
Certificates of deposit
|
75,586
|
|
|
2
|
|
|
(14
|
)
|
|
75,574
|
|
||||
U.S. Government and agency securities
|
48,259
|
|
|
1
|
|
|
(139
|
)
|
|
48,121
|
|
||||
Commercial paper
|
27,431
|
|
|
8
|
|
|
(14
|
)
|
|
27,425
|
|
||||
Corporate bonds
|
78,208
|
|
|
51
|
|
|
(67
|
)
|
|
78,192
|
|
||||
Municipal bonds
|
10,206
|
|
|
—
|
|
|
(31
|
)
|
|
10,175
|
|
||||
Foreign government bonds
|
15,069
|
|
|
2
|
|
|
(13
|
)
|
|
15,058
|
|
||||
Total
|
310,481
|
|
|
64
|
|
|
(278
|
)
|
|
310,267
|
|
||||
Less amounts classified as cash and cash equivalents
|
(55,722
|
)
|
|
—
|
|
|
—
|
|
|
(55,722
|
)
|
||||
Short-term investments
|
$
|
254,759
|
|
|
$
|
64
|
|
|
$
|
(278
|
)
|
|
$
|
254,545
|
|
|
December 31, 2016
|
||||||||||||||
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Estimated
Fair Value |
||||||||
|
(in thousands)
|
||||||||||||||
Cash
|
$
|
54,947
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54,947
|
|
Money market funds
|
1,833
|
|
|
—
|
|
|
—
|
|
|
1,833
|
|
||||
Certificates of deposit
|
78,643
|
|
|
—
|
|
|
—
|
|
|
78,643
|
|
||||
U.S. Government and agency securities
|
56,431
|
|
|
2
|
|
|
(86
|
)
|
|
56,347
|
|
||||
Commercial paper
|
29,486
|
|
|
—
|
|
|
(3
|
)
|
|
29,483
|
|
||||
Corporate bonds
|
94,292
|
|
|
37
|
|
|
(167
|
)
|
|
94,162
|
|
||||
Municipal bonds
|
7,718
|
|
|
—
|
|
|
(12
|
)
|
|
7,706
|
|
||||
Foreign government bonds
|
5,327
|
|
|
—
|
|
|
(7
|
)
|
|
5,320
|
|
||||
Total
|
328,677
|
|
|
39
|
|
|
(275
|
)
|
|
328,441
|
|
||||
Less amounts classified as cash and cash equivalents
|
(56,780
|
)
|
|
—
|
|
|
—
|
|
|
(56,780
|
)
|
||||
Short-term investments
|
$
|
271,897
|
|
|
$
|
39
|
|
|
$
|
(275
|
)
|
|
$
|
271,661
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Amortized
Cost |
|
Estimated
Fair Value |
|
Amortized
Cost |
|
Estimated
Fair Value |
||||||||
|
(in thousands)
|
||||||||||||||
Due in less than one year
|
$
|
172,611
|
|
|
$
|
172,534
|
|
|
$
|
157,270
|
|
|
$
|
157,163
|
|
Due in one to three years
|
82,148
|
|
|
82,011
|
|
|
114,627
|
|
|
114,498
|
|
||||
|
$
|
254,759
|
|
|
$
|
254,545
|
|
|
$
|
271,897
|
|
|
$
|
271,661
|
|
|
(in thousands)
|
||
Carrying amount of goodwill at December 31, 2016
|
$
|
471,228
|
|
Acquisitions
|
—
|
|
|
Adjustments
|
—
|
|
|
Balance as of June 30, 2017
|
$
|
471,228
|
|
|
Gross
Carrying Value |
|
Accumulated
Amortization |
|
Net
Carrying Value |
||||||
|
(in thousands)
|
||||||||||
Licensed technology
|
$
|
30,106
|
|
|
$
|
(11,013
|
)
|
|
$
|
19,093
|
|
Developed technology
|
250,043
|
|
|
(96,792
|
)
|
|
153,251
|
|
|||
Customer relationships
|
69,776
|
|
|
(21,257
|
)
|
|
48,519
|
|
|||
Trade names
|
5,600
|
|
|
(2,523
|
)
|
|
3,077
|
|
|||
Total finite-lived amortizable intangible assets
|
355,525
|
|
|
(131,585
|
)
|
|
223,940
|
|
|||
In-process research and development
|
29,500
|
|
|
—
|
|
|
29,500
|
|
|||
Total intangible assets
|
$
|
385,025
|
|
|
$
|
(131,585
|
)
|
|
$
|
253,440
|
|
|
Gross
Carrying Value |
|
Accumulated
Amortization |
|
Net
Carrying Value |
||||||
|
(in thousands)
|
||||||||||
Licensed technology
|
$
|
24,583
|
|
|
$
|
(6,559
|
)
|
|
$
|
18,024
|
|
Developed technology
|
250,043
|
|
|
(75,591
|
)
|
|
174,452
|
|
|||
Customer relationships
|
69,776
|
|
|
(17,731
|
)
|
|
52,045
|
|
|||
Backlog
|
11,300
|
|
|
(11,300
|
)
|
|
—
|
|
|||
Trade names
|
5,600
|
|
|
(1,590
|
)
|
|
4,010
|
|
|||
Total finite-lived amortizable intangible assets
|
361,302
|
|
|
(112,771
|
)
|
|
248,531
|
|
|||
In-process research and development
|
29,500
|
|
|
—
|
|
|
29,500
|
|
|||
Total intangible assets
|
$
|
390,802
|
|
|
$
|
(112,771
|
)
|
|
$
|
278,031
|
|
|
|
Other current assets
|
|
Accrued liabilities
|
|
Other current assets
|
|
Accrued liabilities
|
||||||||
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
(in thousands)
|
||||||||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|||||||||
|
Currency forward and option contracts
|
$
|
4,004
|
|
|
$
|
4
|
|
|
$
|
257
|
|
|
$
|
999
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|||||||||
|
Currency forward and option contracts
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Total derivatives
|
$
|
4,004
|
|
|
$
|
11
|
|
|
$
|
257
|
|
|
$
|
1,006
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
(in thousands)
|
||||||
Derivatives designated as hedging instruments
|
|
|
|||||
Currency forward and option contracts
|
$
|
61,670
|
|
|
$
|
105,730
|
|
Derivatives not designated as hedging instruments
|
|
|
|
||||
Currency forward and option contracts
|
$
|
40,046
|
|
|
$
|
34,330
|
|
|
(in thousands)
|
||
December 31, 2016
|
$
|
(692
|
)
|
Amount of gain recognized in OCI (effective portion)
|
8,557
|
|
|
Amount of gain reclassified from OCI to income (effective portion)
|
(3,815
|
)
|
|
June 30, 2017
|
$
|
4,050
|
|
|
|
Derivatives designated as hedging instruments
|
|
Derivatives not designated as hedging instruments
|
||||||||||||
|
|
Three Months Ended June 30,
|
|
Three Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Operating income
|
|
$
|
2,379
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other income
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,239
|
|
|
$
|
271
|
|
|
|
Derivatives designated as hedging instruments
|
|
Derivatives not designated as hedging instruments
|
||||||||||||
|
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Operating income
|
|
$
|
3,815
|
|
|
$
|
161
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other income
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,305
|
|
|
$
|
543
|
|
|
(in thousands)
|
||
|
|
||
2017 (remaining six months)
|
$
|
12,271
|
|
2018
|
19,878
|
|
|
2019
|
14,607
|
|
|
2020
|
12,188
|
|
|
2021
|
11,274
|
|
|
Thereafter
|
64,531
|
|
|
Total minimum lease payments
|
$
|
134,749
|
|
|
Options Outstanding
|
|||||
|
Number
of Shares
|
|
Weighted
Average
Exercise
Price
|
|||
Outstanding at December 31, 2016
|
1,634,485
|
|
|
$
|
32.79
|
|
Options exercised
|
(154,747
|
)
|
|
$
|
14.52
|
|
Options canceled
|
(13,420
|
)
|
|
$
|
61.82
|
|
Outstanding at June 30, 2017
|
1,466,318
|
|
|
$
|
34.46
|
|
|
Restricted Share
Units Outstanding
|
|||||
|
Number of
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Non-vested restricted share units at December 31, 2016
|
3,324,519
|
|
|
$
|
46.67
|
|
Restricted share units granted
|
1,662,375
|
|
|
$
|
50.42
|
|
Restricted share units vested
|
(777,827
|
)
|
|
$
|
46.72
|
|
Restricted share units canceled
|
(181,674
|
)
|
|
$
|
47.21
|
|
Non-vested restricted share units at June 30, 2017
|
4,027,393
|
|
|
$
|
48.18
|
|
|
Number of
Shares |
|
Share options outstanding
|
1,466,318
|
|
Restricted share units outstanding
|
4,027,393
|
|
Shares authorized for future issuance
|
699,435
|
|
ESPP shares available for future issuance
|
3,724,647
|
|
Total shares reserved for future issuance as of June 30, 2017
|
9,917,793
|
|
|
Six Months Ended June 30,
|
||||
|
2017
|
|
2016
|
||
Dividend yield
|
—
|
%
|
|
—
|
%
|
Expected volatility
|
25.3
|
%
|
|
37.6
|
%
|
Risk free interest rate
|
0.91
|
%
|
|
0.50
|
%
|
Expected life, years
|
0.5
|
|
|
0.5
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
|
|
|
|
||||||||||
Cost of goods sold
|
$
|
575
|
|
|
$
|
671
|
|
|
$
|
1,057
|
|
|
$
|
1,146
|
|
Research and development
|
10,297
|
|
|
10,770
|
|
|
18,987
|
|
|
19,922
|
|
||||
Sales and marketing
|
4,010
|
|
|
3,889
|
|
|
7,348
|
|
|
7,537
|
|
||||
General and administrative
|
2,783
|
|
|
2,764
|
|
|
5,041
|
|
|
7,755
|
|
||||
Total share-based compensation expense
|
$
|
17,665
|
|
|
$
|
18,094
|
|
|
$
|
32,433
|
|
|
$
|
36,360
|
|
|
Unrealized Gains (Losses) on Available-for-Sale Securities
|
|
Unrealized Gains (Losses) on Derivatives Designated as Hedging Instruments
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance at December 31, 2016
|
$
|
(236
|
)
|
|
$
|
(692
|
)
|
|
$
|
(928
|
)
|
Other comprehensive income/(loss) before reclassifications, net of taxes
|
22
|
|
|
8,557
|
|
|
8,579
|
|
|||
Realized (gains)/losses reclassified from accumulated other comprehensive income
|
—
|
|
|
(3,815
|
)
|
|
(3,815
|
)
|
|||
Net current-period other comprehensive income/(loss), net of taxes
|
22
|
|
|
4,742
|
|
|
4,764
|
|
|||
Balance at June 30, 2017
|
$
|
(214
|
)
|
|
$
|
4,050
|
|
|
$
|
3,836
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2015
|
$
|
(578
|
)
|
|
$
|
(1,091
|
)
|
|
$
|
(1,669
|
)
|
Other comprehensive income/(loss) before reclassifications, net of taxes
|
166
|
|
|
1,510
|
|
|
1,676
|
|
|||
Realized (gains)/losses reclassified from accumulated other comprehensive income
|
482
|
|
|
(161
|
)
|
|
321
|
|
|||
Net current-period other comprehensive income/(loss), net of taxes
|
648
|
|
|
1,349
|
|
|
1,997
|
|
|||
Balance at June 30, 2016
|
$
|
70
|
|
|
$
|
258
|
|
|
$
|
328
|
|
|
|
Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income (Loss)
|
|
Affected Line Item in the Statement of Operations
|
||||||
|
|
Six Months Ended June 30,
|
|
|
||||||
|
|
2017
|
|
2016
|
|
|
||||
|
|
(in thousands)
|
|
|
||||||
Realized (gains)/losses on derivatives designated as hedging instruments
|
|
$
|
(3,815
|
)
|
|
$
|
(161
|
)
|
|
Cost of revenues and Operating expenses:
|
|
|
(220
|
)
|
|
(10
|
)
|
|
Cost of revenues
|
||
|
|
(427
|
)
|
|
(22
|
)
|
|
General and administrative
|
||
|
|
(372
|
)
|
|
(17
|
)
|
|
Sales and marketing
|
||
|
|
(2,796
|
)
|
|
(112
|
)
|
|
Research and development
|
||
Realized (gains)/losses on available-for-sale securities
|
|
—
|
|
|
482
|
|
|
Other income, net
|
||
Total reclassifications for the period
|
|
$
|
(3,815
|
)
|
|
$
|
321
|
|
|
Total
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
||||||||||||||
Interest income and gains on short-term investments, net
|
$
|
951
|
|
|
$
|
733
|
|
|
$
|
1,828
|
|
|
$
|
848
|
|
Foreign exchange loss, net
|
(161
|
)
|
|
(359
|
)
|
|
(322
|
)
|
|
(368
|
)
|
||||
Other
|
37
|
|
|
(59
|
)
|
|
4
|
|
|
(104
|
)
|
||||
Other income, net
|
$
|
827
|
|
|
$
|
315
|
|
|
$
|
1,510
|
|
|
$
|
376
|
|
|
|
(in thousands)
|
||
Term Debt, principal amount
|
|
$
|
216,000
|
|
Less unamortized debt issuance costs
|
|
2,657
|
|
|
Term Debt, principal net of unamortized debt issuance costs
|
|
$
|
213,343
|
|
Effective interest rate
|
|
3.5
|
%
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||
|
|
June 30,
|
|
|
June 30,
|
|
||||||||
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
Total revenues
|
|
100
|
|
%
|
100
|
|
%
|
|
100
|
|
%
|
100
|
|
%
|
Cost of revenues
|
|
(35
|
)
|
|
(37
|
)
|
|
|
(34
|
)
|
|
(37
|
)
|
|
Gross profit
|
|
65
|
|
|
63
|
|
|
|
66
|
|
|
63
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development
|
|
44
|
|
|
38
|
|
|
|
45
|
|
|
37
|
|
|
Sales and marketing
|
|
18
|
|
|
15
|
|
|
|
18
|
|
|
16
|
|
|
General and administrative
|
|
5
|
|
|
7
|
|
|
|
7
|
|
|
9
|
|
|
Total operating expenses
|
|
67
|
|
|
60
|
|
|
|
70
|
|
|
62
|
|
|
Income (loss) from operations
|
|
(2
|
)
|
|
3
|
|
|
|
(4
|
)
|
|
1
|
|
|
Interest expense
|
|
(1
|
)
|
|
(1
|
)
|
|
|
(1
|
)
|
|
(1
|
)
|
|
Other income, net
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
Interest and other, net
|
|
(1
|
)
|
|
(1
|
)
|
|
|
(1
|
)
|
|
(1
|
)
|
|
Income (loss) before taxes on income
|
|
(3
|
)
|
|
2
|
|
|
|
(5
|
)
|
|
—
|
|
|
Provision for taxes on income
|
|
1
|
|
|
—
|
|
|
|
—
|
|
|
1
|
|
|
Net income (loss)
|
|
(4
|
)
|
%
|
2
|
|
%
|
|
(5
|
)
|
%
|
(1
|
)
|
%
|
|
Three Months Ended June 30,
|
||||||||||||
|
2017
|
|
% of
Revenues
|
|
2016
|
|
% of
Revenues
|
||||||
|
(dollars in thousands)
|
||||||||||||
ICs
|
$
|
34,063
|
|
|
16.1
|
%
|
|
$
|
46,539
|
|
|
21.7
|
%
|
Boards
|
80,425
|
|
|
37.9
|
%
|
|
82,481
|
|
|
38.4
|
%
|
||
Switch systems
|
56,189
|
|
|
26.5
|
%
|
|
49,873
|
|
|
23.2
|
%
|
||
Cables, accessories and other
|
41,285
|
|
|
19.5
|
%
|
|
35,908
|
|
|
16.7
|
%
|
||
Total Revenue
|
$
|
211,962
|
|
|
100.0
|
%
|
|
$
|
214,801
|
|
|
100.0
|
%
|
|
Three Months Ended June 30,
|
||||||||||||
|
2017
|
|
% of
Revenues |
|
2016
|
|
% of
Revenues |
||||||
|
(dollars in thousands)
|
||||||||||||
Salaries and benefits
|
$
|
50,220
|
|
|
23.7
|
%
|
|
$
|
45,291
|
|
|
21.1
|
%
|
Share-based compensation
|
10,297
|
|
|
4.9
|
%
|
|
10,770
|
|
|
5.0
|
%
|
||
Development and tape-out costs
|
9,880
|
|
|
4.7
|
%
|
|
9,284
|
|
|
4.3
|
%
|
||
Other
|
21,951
|
|
|
10.3
|
%
|
|
16,979
|
|
|
7.9
|
%
|
||
Total Research and development
|
$
|
92,348
|
|
|
43.6
|
%
|
|
$
|
82,324
|
|
|
38.3
|
%
|
|
Three Months Ended June 30,
|
||||||||||||
|
2017
|
|
% of
Revenues
|
|
2016
|
|
% of
Revenues |
||||||
|
(dollars in thousands)
|
||||||||||||
Salaries and benefits
|
$
|
23,300
|
|
|
11.0
|
%
|
|
$
|
18,935
|
|
|
8.8
|
%
|
Share-based compensation
|
4,010
|
|
|
1.9
|
%
|
|
3,889
|
|
|
1.8
|
%
|
||
Trade shows and promotions
|
4,692
|
|
|
2.2
|
%
|
|
4,262
|
|
|
2.0
|
%
|
||
Other
|
6,108
|
|
|
2.9
|
%
|
|
5,490
|
|
|
2.6
|
%
|
||
Total Sales and marketing
|
$
|
38,110
|
|
|
18.0
|
%
|
|
$
|
32,576
|
|
|
15.2
|
%
|
|
Three Months Ended June 30,
|
||||||||||||
|
2017
|
|
% of
Revenues |
|
2016
|
|
% of
Revenues |
||||||
|
(dollars in thousands)
|
||||||||||||
Salaries and benefits
|
$
|
5,432
|
|
|
2.6
|
%
|
|
$
|
5,210
|
|
|
2.4
|
%
|
Share-based compensation
|
2,783
|
|
|
1.3
|
%
|
|
2,764
|
|
|
1.3
|
%
|
||
Professional services
|
2,603
|
|
|
1.2
|
%
|
|
3,516
|
|
|
1.6
|
%
|
||
Other
|
1,658
|
|
|
0.8
|
%
|
|
2,004
|
|
|
0.9
|
%
|
||
Total General and administrative
|
$
|
12,476
|
|
|
5.9
|
%
|
|
$
|
13,494
|
|
|
6.2
|
%
|
|
Three Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Cost of goods sold
|
$
|
575
|
|
|
$
|
671
|
|
Research and development
|
10,297
|
|
|
10,770
|
|
||
Sales and marketing
|
4,010
|
|
|
3,889
|
|
||
General and administrative
|
2,783
|
|
|
2,764
|
|
||
|
$
|
17,665
|
|
|
$
|
18,094
|
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
% of
Revenues
|
|
2016
|
|
% of
Revenues
|
||||||
|
(dollars in thousands)
|
||||||||||||
ICs
|
$
|
76,485
|
|
|
19.1
|
%
|
|
$
|
75,070
|
|
|
18.2
|
%
|
Boards
|
144,717
|
|
|
36.1
|
%
|
|
175,413
|
|
|
42.6
|
%
|
||
Switch systems
|
103,335
|
|
|
25.8
|
%
|
|
93,696
|
|
|
22.8
|
%
|
||
Cables, accessories and other
|
76,076
|
|
|
19.0
|
%
|
|
67,432
|
|
|
16.4
|
%
|
||
Total Revenue
|
$
|
400,613
|
|
|
100.0
|
%
|
|
$
|
411,611
|
|
|
100.0
|
%
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
% of
Revenues |
|
2016
|
|
% of
Revenues |
||||||
|
(dollars in thousands)
|
||||||||||||
InfiniBand:
|
|
|
|
|
|
|
|
||||||
EDR
|
$
|
99,059
|
|
|
24.7
|
%
|
|
$
|
45,782
|
|
|
11.1
|
%
|
FDR
|
92,807
|
|
|
23.2
|
%
|
|
154,852
|
|
|
37.6
|
%
|
||
QDR/DDR/SDR
|
13,230
|
|
|
3.3
|
%
|
|
23,543
|
|
|
5.8
|
%
|
||
Total
|
205,096
|
|
|
51.2
|
%
|
|
224,177
|
|
|
54.5
|
%
|
||
Ethernet
|
167,500
|
|
|
41.8
|
%
|
|
156,652
|
|
|
38.1
|
%
|
||
Other
|
28,017
|
|
|
7.0
|
%
|
|
30,782
|
|
|
7.4
|
%
|
||
Total revenue
|
$
|
400,613
|
|
|
100.0
|
%
|
|
$
|
411,611
|
|
|
100.0
|
%
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
% of
Revenues |
|
2016
|
|
% of
Revenues |
||||||
|
(dollars in thousands)
|
||||||||||||
Salaries and benefits
|
$
|
96,201
|
|
|
24.0
|
%
|
|
$
|
82,269
|
|
|
20.0
|
%
|
Share-based compensation
|
18,987
|
|
|
4.7
|
%
|
|
19,922
|
|
|
4.8
|
%
|
||
Development and tape-out costs
|
22,943
|
|
|
5.7
|
%
|
|
18,150
|
|
|
4.4
|
%
|
||
Other
|
42,708
|
|
|
10.6
|
%
|
|
33,017
|
|
|
8.1
|
%
|
||
Total Research and development
|
$
|
180,839
|
|
|
45.0
|
%
|
|
$
|
153,358
|
|
|
37.3
|
%
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
% of
Revenues
|
|
2016
|
|
% of
Revenues |
||||||
|
(dollars in thousands)
|
||||||||||||
Salaries and benefits
|
$
|
44,314
|
|
|
11.0
|
%
|
|
$
|
36,228
|
|
|
8.8
|
%
|
Share-based compensation
|
7,348
|
|
|
1.8
|
%
|
|
7,537
|
|
|
1.8
|
%
|
||
Trade shows and promotions
|
10,203
|
|
|
2.5
|
%
|
|
9,935
|
|
|
2.4
|
%
|
||
Other
|
12,002
|
|
|
3.0
|
%
|
|
10,104
|
|
|
2.5
|
%
|
||
Total Sales and marketing
|
$
|
73,867
|
|
|
18.3
|
%
|
|
$
|
63,804
|
|
|
15.5
|
%
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
% of
Revenues |
|
2016
|
|
% of
Revenues |
||||||
|
(dollars in thousands)
|
||||||||||||
Salaries and benefits
|
$
|
10,728
|
|
|
2.7
|
%
|
|
$
|
10,509
|
|
|
2.6
|
%
|
Share-based compensation
|
5,041
|
|
|
1.2
|
%
|
|
7,755
|
|
|
1.9
|
%
|
||
Professional services
|
5,914
|
|
|
1.5
|
%
|
|
19,273
|
|
|
4.7
|
%
|
||
Other
|
3,312
|
|
|
0.8
|
%
|
|
3,895
|
|
|
0.9
|
%
|
||
Total General and administrative
|
$
|
24,995
|
|
|
6.2
|
%
|
|
$
|
41,432
|
|
|
10.1
|
%
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Cost of goods sold
|
$
|
1,057
|
|
|
$
|
1,146
|
|
Research and development
|
18,987
|
|
|
19,922
|
|
||
Sales and marketing
|
7,348
|
|
|
7,537
|
|
||
General and administrative
|
5,041
|
|
|
7,755
|
|
||
|
$
|
32,433
|
|
|
$
|
36,360
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
(in thousands)
|
||||||
Cash and cash equivalents
|
$
|
55,722
|
|
|
$
|
56,780
|
|
Short-term investments
|
254,545
|
|
|
271,661
|
|
||
Total
|
$
|
310,267
|
|
|
$
|
328,441
|
|
Working capital
|
$
|
354,516
|
|
|
$
|
340,511
|
|
|
Contractual Obligations:
|
||||||||||||||
|
Total
|
|
Non-cancelable operating lease commitments
|
|
Purchase commitments
|
|
Term Debt including interest
|
||||||||
|
(in thousands)
|
||||||||||||||
2017 (remainder of the year)
|
$
|
114,963
|
|
|
$
|
12,271
|
|
|
$
|
99,551
|
|
|
$
|
3,141
|
|
2018
|
100,216
|
|
|
19,878
|
|
|
16,148
|
|
|
64,190
|
|
||||
2019
|
173,293
|
|
|
14,607
|
|
|
530
|
|
|
158,156
|
|
||||
2020
|
12,188
|
|
|
12,188
|
|
|
—
|
|
|
—
|
|
||||
2021
|
11,274
|
|
|
11,274
|
|
|
—
|
|
|
—
|
|
||||
Thereafter
|
64,531
|
|
|
64,531
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
476,465
|
|
|
$
|
134,749
|
|
|
$
|
116,229
|
|
|
$
|
225,487
|
|
•
|
increasing our vulnerability to adverse general economic and industry conditions;
|
•
|
requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, research and development efforts, the execution of our business strategy, acquisitions and other general corporate purposes;
|
•
|
making it more difficult to borrow additional funds in the future to fund growth, acquisitions, working capital, capital expenditures and other purposes.
|
•
|
difficulties in integrating the operations, systems, technologies, products, and personnel of the acquired companies, particularly companies with large and widespread operations and/or complex products;
|
•
|
the diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations resulting from acquisitions;
|
•
|
possible disruption to the continued expansion of our product lines;
|
•
|
potential changes in our customer base and changes to the total available market for our products;
|
•
|
reduced demand for our products;
|
•
|
potential difficulties in completing projects associated with in-process research and development intangibles;
|
•
|
the use of a substantial portion of our cash resources and incurrence of significant amounts of debt;
|
•
|
significantly increase our interest expense, leverage and debt service requirements as a result of incurring debt;
|
•
|
the impact of any such acquisition on our financial results;
|
•
|
internal controls may become more complex and may require significantly more resources to ensure they remain effective;
|
•
|
negative customer reaction to any such acquisition; and
|
•
|
assuming the liabilities of the acquired company.
|
•
|
reduced control over product cost, delivery schedules and product quality;
|
•
|
potential price increases;
|
•
|
inability to achieve sufficient production, increase production or test capacity and achieve acceptable yields on a timely basis;
|
•
|
increased exposure to potential misappropriation of our intellectual property;
|
•
|
shortages of materials used to manufacture products;
|
•
|
capacity shortages;
|
•
|
labor shortages or labor strikes;
|
•
|
political instability in the regions where these subcontractors are located; and
|
•
|
natural disasters impacting these subcontractors.
|
•
|
unpredictable volume and timing of customer orders, which are not fixed by contract but vary on a purchase order basis;
|
•
|
the loss of one or more of our customers, or a significant reduction or postponement of orders from our customers;
|
•
|
our customers' sales outlooks, purchasing patterns and inventory levels based on end-user demands and general economic conditions;
|
•
|
seasonal buying trends;
|
•
|
the timing of new product announcements or introductions by us or by our competitors;
|
•
|
our ability to successfully develop, introduce and sell new or enhanced products in a timely manner;
|
•
|
changes in the relative sales mix of our products;
|
•
|
decreases in the overall average selling prices of our products;
|
•
|
changes in the cost of our finished goods; and
|
•
|
the availability, pricing and timeliness of delivery of other components used in our customers' products.
|
•
|
people may not be deterred from misappropriating our technologies despite the existence of laws or contracts prohibiting it;
|
•
|
policing unauthorized use of our intellectual property may be difficult, expensive and time-consuming, and we may be unable to determine the extent of any unauthorized use; and
|
•
|
the laws of other countries in which we market our products, such as some countries in the Asia/Pacific region, may offer little or no protection for our proprietary technologies.
|
•
|
manage and enhance our relationships with customers, distributors, suppliers, end users and other third parties;
|
•
|
implement additional, and enhance existing, administrative, financial and operations systems, procedures and controls;
|
•
|
address capacity shortages;
|
•
|
expand and upgrade our technological capabilities;
|
•
|
manage the challenges of having U.S., Israeli and other foreign operations; and
|
•
|
hire, train, integrate and manage additional qualified engineers for research and development activities as well as additional personnel to strengthen our sales and marketing, financial and IT functions.
|
•
|
reduced protection of intellectual property rights in some countries;
|
•
|
difficulties in staffing and managing foreign operations;
|
•
|
longer sales and payment cycles;
|
•
|
greater difficulties in collecting accounts receivable;
|
•
|
adverse economic conditions;
|
•
|
seasonal reductions in business activity;
|
•
|
potentially adverse tax consequences;
|
•
|
laws and business practices favoring local competition;
|
•
|
costs and difficulties of customizing products for foreign countries;
|
•
|
compliance with a wide variety of complex foreign laws and treaties;
|
•
|
compliance with the United States' Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions;
|
•
|
compliance with export control and regulations;
|
•
|
licenses, tariffs, other trade barriers, transit restrictions and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets;
|
•
|
restrictive governmental actions, such as restrictions on the transfer or repatriation of funds and foreign investments;
|
•
|
foreign currency exchange risks;
|
•
|
fluctuations in freight rates and transportation disruptions;
|
•
|
political and economic instability;
|
•
|
variance and unexpected changes in local laws and regulations;
|
•
|
natural disasters and public health emergencies; and
|
•
|
trade and travel restrictions.
|
•
|
quarterly variations in our results of operations or those of our competitors;
|
•
|
announcements by us, our competitors, our customers or rumors from sources other than our company related to acquisitions, new products, significant contracts, commercial relationships, capital commitments or changes in the competitive landscape;
|
•
|
our ability to develop and market new and enhanced products on a timely basis;
|
•
|
disruption to our operations;
|
•
|
geopolitical instability;
|
•
|
the emergence of new sales channels in which we are unable to compete effectively;
|
•
|
any major change in our board of directors or management;
|
•
|
changes in financial estimates, including our ability to meet our future revenue and operating profit or loss projections;
|
•
|
changes in governmental regulations or in the status of our regulatory approvals;
|
•
|
general economic conditions and slow or negative growth of related markets;
|
•
|
anticompetitive practices of our competitors;
|
•
|
commencement of, or our involvement in, litigation;
|
•
|
whether our operating results meet our guidance or the expectations of investors or securities analysts;
|
•
|
continuing international conflicts and acts of terrorism; and
|
•
|
changes in accounting rules.
|
•
|
no cumulative voting;
|
•
|
a requirement for any merger involving the Company shall require the approval of the shareholders of at least a majority of the voting power of the Company;
|
•
|
a requirement for the approval of at least 75% of the voting power represented at the general meeting of the shareholders for the removal of any director (not including external directors) from office, and election of any director instead of the director so removed; and
|
•
|
an advance notice requirement for shareholder proposals and nominations.
|
3.1
|
(1)
|
|
|
|
31.1
|
|
|
|
|
31.2
|
|
|
|
|
32.1
|
|
|
|
|
32.2
|
|
|
|
|
101.INS
|
|
|
|
XBRL Instance Document
|
101.SCH
|
|
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
|
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
(1)
|
Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q (SEC File No. 001-33299) filed on July 29, 2016.
|
Date:
|
August 4, 2017
|
Mellanox Technologies, Ltd.
|
|
|
|
|
|
|
|
|
/s/ Jacob Shulman
|
|
|
Jacob Shulman
|
|
|
Chief Financial Officer
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
1 Year Mellanox Technologies Chart |
1 Month Mellanox Technologies Chart |
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