Quarterly report pursuant to Section 13 or 15(d)

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

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REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS
 3 Months Ended
Jun. 30, 2013
REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS [Abstract]  
REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

NOTE 2 REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

During the first quarter of fiscal 2014, we identified an error related to certain allowances recorded for estimated future price adjustments on products and services sold to our customers that had accumulated over a significant number of years, resulting in a $1.5 million cumulative overstatement of revenue and accounts receivable at April 1, 2013. Revenue for fiscal 2013, 2012 and 2011 was $0.1 million overstated, $0.1 million understated and $0.1 million overstated, respectively, for this error. In addition, we identified a $0.7 million under accrual of sales commission expense for the fourth quarter of fiscal 2013 that was not recorded in fiscal 2013. The cumulative effect of recording these two items in the first quarter of fiscal 2014 would have been a $2.2 million reduction in net income.

In addition, we had previously identified the following items:

  • A $0.7 million overstatement of DXi OEM software revenue in fiscal 2010 that was corrected as an out-of-period adjustment in fiscal 2011;
  • A $0.5 million understatement of royalty revenue in fiscal 2011 that was corrected as an out-of-period adjustment in fiscal 2012; and
  • A $0.9 million understatement of payroll tax expense on commissions that was corrected as an out-of-period adjustment in fiscal 2013. Of the cumulative adjustment, $0.3 million related to fiscal 2012 and $0.6 million related to periods prior to fiscal 2011.

We evaluated these errors in accordance with the Securities and Exchange Commission ("SEC") Staff Accounting Bulletin No. 99 and determined that the errors were not material to our results of operations, financial position or cash flows in our previously issued financial statements, and therefore amendments of previously filed reports are not required. However, if the entire correction of the error was recorded during the first quarter of fiscal 2014, the impact would be significant to the quarter ended June 30, 2013. As a result, we have determined that it is appropriate to revise our prior period financial statements in accordance with the SEC's Staff Accounting Bulletin No. 108 for the items discussed above. The revisions to correct these items in the applicable prior periods are reflected in the financial information herein and will be reflected in future filings containing such financial information. The revisions had no net impact on our Consolidated Statements of Cash Flows or net income (loss) per diluted share for any prior period.

The impact of these revisions to our Consolidated Balance Sheets at March 31, 2013 and 2012; our Consolidated Statements of Operations for the years ended March 31, 2013, 2012 and 2011; and our Consolidated Statements of Operations for each quarter of fiscal 2013 and 2012 is summarized as follows (in thousands):

Consolidated Balance Sheets

The As Reported column includes certain reclassifications to conform to the current presentation.

    As of March 31,
    2013   2012
        As Reported       As Revised       As Reported       As Revised
Accounts receivable   $      99,093     $      97,546     $      110,840     $      109,399  
Total current assets     271,727       270,180       281,221       279,780  
Total assets     371,140       369,593       395,348       393,907  
Accrued compensation     30,311       30,964       31,971       32,835  
Total current liabilities     199,782       200,435       209,910       210,774  
Accumulated deficit     (517,816 )     (520,016 )     (465,397 )     (467,702 )
Total stockholders' deficit     (81,582 )     (83,782 )     (46,680 )     (48,985 )
Total liabilities and stockholders' deficit     371,140       369,593       395,348       393,907  

Consolidated Statements of Operations - Annual

    Fiscal Year Ended March 31,
    2013   2012   2011
       As Reported      As Revised      As Reported      As Revised      As Reported      As Revised
Product revenue   $      399,043     $      398,937     $      451,340     $      451,468     $      456,903   $      457,505
Royalty revenue     44,492       44,492       56,666       56,154       64,272     64,784
Total revenue     587,572       587,466       652,370       651,986       672,270     673,384
Cost of service revenue     79,647       79,604       88,459       88,466       94,311     94,311
Total cost of revenue     346,921       346,878       378,535       378,542       389,288     389,288
Gross margin     240,651       240,588       273,835       273,444       282,982     284,096
Sales and marketing expenses     137,041       136,873       130,938       131,239       122,768     122,767
Total operating expenses     283,351       283,183       270,143       270,444       258,278     258,277
Income (loss) from operations     (42,700 )     (42,595 )     5,192       4,500       24,704     25,819
Income (loss) before income taxes     (51,258 )     (51,153 )     (7,922 )     (8,614 )     4,554     5,669
Net income (loss)     (52,419 )     (52,314 )     (8,809 )     (9,501 )     4,541     5,656

Consolidated Statements of Operations - Quarterly - Fiscal 2013

    Fiscal 2013
    1st Quarter   2nd Quarter
        As Reported       As Revised       As Reported       As Revised
Product revenue   $      93,811     $      93,785     $      100,067     $      100,041  
Total revenue     140,879       140,853       147,340       147,314  
Cost of service revenue     20,334       20,304       20,232       20,232  
Total cost of revenue     85,084       85,054       88,116       88,116  
Gross margin     55,795       55,799       59,224       59,198  
Sales and marketing expenses     35,278       34,444       34,441       34,441  
Total operating expenses     70,607       69,773       69,195       69,195  
Loss from operations     (14,812 )     (13,974 )     (9,971 )     (9,997 )
Loss before income taxes     (16,999 )     (16,161 )     (11,898 )     (11,924 )
Net loss     (17,498 )     (16,660 )     (12,268 )     (12,294 )

    3rd Quarter   4th Quarter
        As Reported       As Revised       As Reported       As Revised
Product revenue   $      112,517     $      112,490     $      92,648     $      92,621  
Total revenue     159,395       159,368       139,958       139,931  
Cost of service revenue     19,360       19,360       19,721       19,708  
Total cost of revenue     91,367       91,367       82,354       82,341  
Gross margin     68,028       68,001       57,604       57,590  
Sales and marketing expenses     33,588       33,588       33,734       34,400  
Total operating expenses     73,656       73,656       69,893       70,559  
Loss from operations     (5,628 )     (5,655 )     (12,289 )     (12,969 )
Loss before income taxes     (7,798 )     (7,825 )     (14,563 )     (15,243 )
Net loss     (8,146 )     (8,173 )     (14,507 )     (15,187 )

Consolidated Statements of Operations - Quarterly - Fiscal 2012

    Fiscal 2012
    1st Quarter   2nd Quarter
        As Reported       As Revised       As Reported       As Revised
Product revenue   $      102,268     $      102,300     $      115,126   $      115,158
Royalty revenue     14,571       14,059       14,015     14,015
Total revenue     153,535       153,055       165,039     165,071
Cost of service revenue     22,066       22,064       21,129     21,132
Total cost of revenue     90,273       90,271       93,428     93,431
Gross margin     63,262       62,784       71,611     71,640
Sales and marketing expenses     30,525       30,263       31,115     31,171
Total operating expenses     64,943       64,681       66,211     66,267
Income (loss) from operations     (1,681 )     (1,897 )     6,900     6,873
Income (loss) before income taxes     (4,588 )     (4,804 )     3,866     3,839
Net income (loss)     (5,226 )     (5,442 )     3,561     3,534

    3rd Quarter   4th Quarter
        As Reported       As Revised       As Reported       As Revised
Product revenue   $      124,081   $      124,113   $      109,865     $      109,897  
Royalty revenue     14,049     14,049     14,031       14,031  
Total revenue     173,492     173,524     160,304       160,336  
Cost of service revenue     22,537     22,548     22,727       22,722  
Total cost of revenue     99,775     99,786     95,059       95,054  
Gross margin     73,717     73,738     65,245       65,282  
Sales and marketing expenses     33,350     33,736     35,948       36,069  
Total operating expenses     66,738     67,124     72,251       72,372  
Income (loss) from operations     6,979     6,614     (7,006 )     (7,090 )
Income (loss) before income taxes     4,387     4,022     (11,587 )     (11,671 )
Net income (loss)     3,914     3,549     (11,058 )     (11,142 )

These revisions impacted our Consolidated Statements of Comprehensive Income (Loss) for each period by an amount equal to the impact to net income (loss) for the applicable period.