| REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS |
REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS
In connection with the preparation of our condensed consolidated financial statements for the quarter ended December 31, 2016, we identified an error related to the manner in which we had previously recognized costs for certain third party maintenance contracts. Specifically, we had historically expensed such costs in the period the contracts were entered into rather than expensing them ratably over the contract period. In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, we evaluated the error and determined that the related impact was not material to our results of operations or financial position for any prior annual or interim period, but that correcting the $1.6 million cumulative impact of the error would be material to our results of operations for the three month period ended December 31, 2016. Accordingly, we have corrected these errors for all prior periods ending on or before September 30, 2016 by revising the consolidated financial statements. We also corrected the timing of a previously recorded immaterial out-of-period adjustment and reflected the adjustment in the period in which it originated in the revised prior period financial statements.
Consolidated Balance Sheets
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As of March 31, |
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2016 |
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As Reported |
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Adjustment |
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As Revised |
Other current assets |
$ |
6,953 |
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$ |
1,054 |
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$ |
8,007 |
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Total current assets |
211,591 |
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1,054 |
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212,645 |
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Total assets |
229,546 |
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1,054 |
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230,600 |
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Accumulated deficit |
(597,994 |
) |
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1,054 |
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(596,940 |
) |
Total stockholders’ deficit |
$ |
(126,939 |
) |
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$ |
1,054 |
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$ |
(125,885 |
) |
Consolidated Statements of Operations – Annual
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Fiscal Year Ended March 31, |
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2016 |
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2015 |
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As Reported |
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Adjustment |
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As Revised |
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As Reported |
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Adjustment |
|
As Revised |
Cost of product revenue |
$ |
206,859 |
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|
$ |
280 |
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$ |
207,139 |
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$ |
237,679 |
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$ |
(279 |
) |
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$ |
237,400 |
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Cost of service revenue |
64,347 |
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1,431 |
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65,778 |
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70,730 |
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(44 |
) |
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70,686 |
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Total cost of revenue |
271,206 |
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1,711 |
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272,917 |
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308,409 |
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(323 |
) |
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308,086 |
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Gross margin |
204,752 |
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(1,711 |
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203,041 |
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244,686 |
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|
323 |
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245,009 |
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Income (loss) from operations |
(66,098 |
) |
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(1,711 |
) |
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(67,809 |
) |
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14,397 |
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|
323 |
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14,720 |
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Income (loss) before income taxes |
(73,500 |
) |
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(1,711 |
) |
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(75,211 |
) |
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17,478 |
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323 |
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17,801 |
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Net income (loss) |
$ |
(74,683 |
) |
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$ |
(1,711 |
) |
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$ |
(76,394 |
) |
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$ |
16,760 |
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$ |
323 |
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$ |
17,083 |
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Condensed Consolidated Statements of Operations – Quarterly – Fiscal 2017 - Unaudited
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Fiscal 2017 |
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1st Quarter |
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2nd Quarter |
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As Reported |
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Adjustment |
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As Revised |
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As Reported |
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Adjustment |
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As Revised |
Cost of service revenue |
$ |
15,781 |
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$ |
(275 |
) |
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$ |
15,506 |
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$ |
14,910 |
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$ |
(246 |
) |
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$ |
14,664 |
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Total cost of revenue |
65,913 |
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(275 |
) |
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65,638 |
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79,262 |
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(246 |
) |
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79,016 |
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Gross margin |
50,371 |
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275 |
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50,646 |
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55,480 |
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|
246 |
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55,726 |
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Income (loss) from operations |
(2,066 |
) |
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275 |
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(1,791 |
) |
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5,346 |
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|
246 |
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5,592 |
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Income (loss) before income taxes |
(3,418 |
) |
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275 |
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(3,143 |
) |
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3,871 |
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246 |
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4,117 |
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Net income (loss) |
$ |
(3,795 |
) |
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$ |
275 |
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$ |
(3,520 |
) |
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$ |
3,826 |
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$ |
246 |
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$ |
4,072 |
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Six Months Ended September 30, 2016 |
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As Reported |
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Adjustment |
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As Revised |
Cost of service revenue |
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$ |
30,691 |
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$ |
(521 |
) |
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$ |
30,170 |
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Total cost of revenue |
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145,175 |
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(521 |
) |
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144,654 |
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Gross margin |
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105,851 |
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|
521 |
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106,372 |
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Income (loss) from operations |
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3,280 |
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|
521 |
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3,801 |
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Income (loss) before income taxes |
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453 |
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521 |
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|
974 |
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Net income (loss) |
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$ |
31 |
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$ |
521 |
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$ |
552 |
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Condensed Consolidated Statements of Operations – Quarterly – Fiscal 2016 - Unaudited
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Fiscal 2016 |
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1st Quarter |
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2nd Quarter |
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As Reported |
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Adjustment |
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As Revised |
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As Reported |
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Adjustment |
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As Revised |
Cost of product revenue |
$ |
46,964 |
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$ |
280 |
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$ |
47,244 |
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$ |
53,073 |
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$ |
— |
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$ |
53,073 |
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Cost of service revenue |
16,927 |
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|
225 |
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17,152 |
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17,635 |
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203 |
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17,838 |
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Total cost of revenue |
63,891 |
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|
505 |
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64,396 |
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70,708 |
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203 |
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70,911 |
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Gross margin |
46,965 |
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(505 |
) |
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46,460 |
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46,317 |
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(203 |
) |
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46,114 |
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Income (loss) from operations |
(8,207 |
) |
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(505 |
) |
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(8,712 |
) |
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(9,619 |
) |
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(203 |
) |
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(9,822 |
) |
Income (loss) before income taxes |
(10,416 |
) |
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(505 |
) |
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(10,921 |
) |
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(10,880 |
) |
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(203 |
) |
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(11,083 |
) |
Net income (loss) |
$ |
(10,755 |
) |
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$ |
(505 |
) |
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$ |
(11,260 |
) |
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$ |
(11,227 |
) |
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$ |
(203 |
) |
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$ |
(11,430 |
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Fiscal 2016 |
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3rd Quarter |
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4th Quarter |
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As Reported |
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Adjustment |
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As Revised |
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As Reported |
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Adjustment |
|
As Revised |
Cost of service revenue |
$ |
15,028 |
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$ |
522 |
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$ |
15,550 |
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$ |
14,757 |
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$ |
482 |
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$ |
15,239 |
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Total cost of revenue |
71,351 |
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|
522 |
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71,873 |
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65,256 |
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|
482 |
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65,738 |
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Gross margin |
56,697 |
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(522 |
) |
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56,175 |
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54,773 |
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(482 |
) |
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54,291 |
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Income (loss) from operations |
1,954 |
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(522 |
) |
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1,432 |
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(50,226 |
) |
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(482 |
) |
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(50,708 |
) |
Income (loss) before income taxes |
132 |
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(522 |
) |
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(390 |
) |
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(52,336 |
) |
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(482 |
) |
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(52,818 |
) |
Net income (loss) |
$ |
(299 |
) |
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$ |
(522 |
) |
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$ |
(821 |
) |
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$ |
(52,402 |
) |
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$ |
(482 |
) |
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$ |
(52,884 |
) |
The revisions did not impact previously reported cash flows. There were no income tax impacts related to the error as the Company has full valuation allowances against its net deferred tax assets in the related jurisdictions and was not subject to income taxes payable in the related periods.
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