Market Overview

Ubiquiti Networks Reports Fourth Quarter Fiscal 2018 Financial Results

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~ Revenues of $269.8 million ~

~ Initiates Dividend Program to Complement Existing Stock
Repurchase Program ~

Ubiquiti Networks, Inc. (NASDAQ:UBNT) ("Ubiquiti" or the "Company")
today announced results for its fourth quarter fiscal 2018 ended
June 30, 2018.

Fourth Quarter Fiscal 2018 Financial Summary

  • Revenues of $269.8 million, increasing 18.0% year-over-year
  • GAAP diluted EPS of $0.94, increasing 27.3% year-over-year
  • Non-GAAP diluted EPS of $1.01, increasing 34.7% year-over-year
  • Repurchased 586,924 shares of common stock at an average price of
    $70.11 per share
  • As of June 30, 2018, the Company had $306.2 million in availability
    remaining under authorized repurchase programs

Full Fiscal 2018 Financial Summary

  • Revenues of $1,016.9 million, increasing 17.5% year-over-year
  • GAAP diluted EPS of $2.51, decreasing 19% year-over-year
  • Non-GAAP diluted EPS of $3.69, increasing 21.4% year-over-year
  • Repurchased 7,162,312 shares of common stock at an average price of
    $62.13 per share

Announcement of Dividend Policy and Dividend
Declaration

  • The Company's operating performance and cash flows have provided more
    than sufficient capital to operate and grow its business while
    maintaining a war chest for strategic opportunities and financing a
    stock repurchase program. The Company seeks to complement its existing
    capital return efforts through the initiation of this dividend policy.
  • The Company's Board of Directors (the "Board") declared a $0.25 per
    share cash dividend payable on September 10, 2018 to shareholders of
    record at the close of business on September 4, 2018.
  • The Company intends to pay regular quarterly cash dividends of at
    least $0.25 per share for the remainder of fiscal year 2019, although
    all subsequent dividends, and the establishment of record and payment
    dates, are subject to final determination by the Board each quarter
    after its review of the Company's financial performance and results of
    operations, available cash and cash flow, capital requirements,
    applicable corporate legal requirements, and other factors.
           

Financial Highlights ($, in millions, except per share data)

 
Income statement highlights F4Q18 F3Q18 F4Q17
Revenues 269.8 250.4 228.6
Service Provider Technology 105.9 100.9 114.7
Enterprise Technology 163.8 149.5 114.0
Gross profit 120.5 114.5 103.2
Gross Profit (%) 44.7% 45.7% 45.1%
Total operating expenses 32.4 29.6 31.5
Income from operations 88.1 84.9 71.7
GAAP Net Income 70.1 102.7 60.7
GAAP EPS (diluted) 0.94 1.32 0.74
Non-GAAP Net Income 74.8 76.0 61.0
Non-GAAP EPS (diluted) 1.01 0.98 0.75
 
 
Ubiquiti Networks, Inc.
Revenues by Product Type

(In thousands)
(Unaudited)

      Three Months Ended June 30,     Years Ended June 30,
2018     2017 2018(1)     2017(2)
Service Provider Technology $ 105,941 $ 114,662 $ 446,600 $ 455,598
Enterprise Technology 163,837   113,954   570,261   409,670
Total revenues $ 269,778   $ 228,616   $ 1,016,861   $ 865,268
 
 
Ubiquiti Networks, Inc.

Revenues by Geographical Area

(In thousands)

(Unaudited)

      Three Months Ended June 30,     Years Ended June 30,
2018     2017 2018(1)     2017(2)
North America $ 124,451 $ 84,088 $ 410,378 $ 331,435
South America 20,570 34,271 92,251 105,511
Europe, the Middle East and Africa 102,310 87,937 411,388 334,473
Asia Pacific 22,447   22,320   102,844   93,849
Total revenues $ 269,778   $ 228,616   $ 1,016,861   $ 865,268
(1) Derived from audited consolidated statements for the year ended
June 30, 2018
(2) Derived from audited consolidated statements for the year ended
June 30, 2017
 

Income Statement Items

Gross Margins

During the fourth quarter fiscal 2018, GAAP gross profit was $120.5
million. This GAAP gross margin of 44.7% decreased versus the prior year
GAAP gross margin of 45.1% and the prior quarter GAAP gross margin of
45.7%. The decrease on both a sequential and year-over-year basis was
driven primarily by the Company incurring higher than normal shipping
expenses to expedite the delivery of products.

On a full year basis, fiscal 2018 GAAP gross profit was $443.6 million.
This GAAP gross margin of 43.6% decreased versus fiscal 2017 GAAP gross
margin of 45.7%. Fiscal 2018 GAAP gross margin included $18.6 million in
provisions for obsolete inventory, vendor deposits and loss on purchase
commitments during the second quarter fiscal 2018.

Our long-term gross margin projection remains at 45% to 50% because we
expect operational improvements to alleviate the costs associated with
expedited product delivery and because we expect the margins on our
newer products to expand as we implement cost reduction strategies while
maintaining our selling prices. However, in June 2018, the Office of the
United States Trade Representative announced new proposed tariffs for
certain products imported into the U.S. from China. It is expected that
these tariffs will be finalized after a public comment period ending in
early September 2018. The majority of our products are among the
products to be subject to the additional tariffs. In the event the
tariffs are implemented, or we are unable to execute on our plans to
mitigate the tariffs, we estimate that our gross margins for fiscal year
2019 will decline to around 40%.

Research and Development

During the fourth quarter fiscal 2018, research and development (R&D)
expenses were $19.5 million. This reflects a decrease versus the prior
year R&D expenses of $21.6 million and an increase versus the prior
quarter R&D expenses of $17.4 million.

On a full year basis, fiscal 2018 R&D expenses were $74.3 million versus
$69.1 million in fiscal 2017. Increased costs in fiscal 2018 versus 2017
were primarily driven by higher staffing levels offset, in part, by
lower non-recurring engineering (NRE) payments in fiscal 2018 versus
2017. R&D expenses represented 7.3% of revenues in fiscal 2018, which is
in line with the Company's target model range of 6% to 8%.

Sales, General and Administrative

The Company's selling, general and administrative ("SG&A") expenses for
the quarter were $12.9 million. This reflects an increase versus both
the prior year SG&A expenses of $9.9 million and the prior quarter SG&A
expenses of $12.2 million. On a full year basis, SG&A expenses were
$43.1 million in fiscal 2018 as compared to $36.9 million in fiscal
2017. The increase in SG&A costs are primarily related to professional
fees. SG&A expenses represented 4.2% of revenues in fiscal 2018, which
is in line with the Company's target model range of 3% to 5%.

Taxes

The GAAP effective tax rate was 17.2% for the fourth quarter of fiscal
2018 and includes an incremental $3.8 million of previously-unaccrued
tax expense related to the recently enacted tax reform legislation as we
continue to update our estimate of the transition tax under SAB 118.
Both GAAP and non-GAAP effective rates were negatively impacted by the
higher percentage of revenue and profits experienced in the United
States in the fourth quarter as compared to prior quarters. For
long-term planning purposes, we assume a target effective tax rate of
11% to 14%.

Net Income

During the fourth quarter fiscal 2018, GAAP net income was $70.1 million
and GAAP income per diluted share of $0.94 included $3.8 million of
previously-unaccrued tax expense related to the recently enacted tax
reform legislation. Non-GAAP net income during the quarter was $74.8
million and non-GAAP income per diluted share was $1.01.

For the full year fiscal 2018, GAAP net income of $196.3 million and
GAAP income per diluted share of $2.51 includes $116.6 million of
expense related to the recently enacted tax reform legislation, a $27.4
million net benefit related to equity award exercises and an $18.6
million inventory and obsolescence provision. This compares to fiscal
2017 GAAP net income of $257.5 million and GAAP income per diluted share
of $3.09.

Fiscal 2018 non-GAAP net income was $287.4 million and non-GAAP income
per diluted share was $3.69. These amounts include the foregoing $18.6
million inventory and obsolescence provision which was not eliminated
from non-GAAP net income and non-GAAP income per diluted share. This
compares to fiscal 2017 non-GAAP net income of $251.2 million or $3.04
non-GAAP income per diluted share.

The 14% increase in full year non-GAAP net income, and 21% increase in
full year non-GAAP diluted EPS was driven primarily by a 17.5% increase
in revenues in fiscal 2018 versus the prior year as well as a reduction
in share count driven by the repurchase of 7.2 million shares during the
year.

Balance Sheet Items

Cash

Total cash and cash equivalents as of June 30, 2018 were $666.7 million,
compared with $604.2 million as of June 30, 2017, representing an
increase of over 10%. During the fourth quarter, the Company repurchased
586,924 shares of common stock at an average price of $70.11 per share.
As of June 30, 2018, the Company had $306.2 million in availability
under authorized repurchase programs.

DSOs

This quarter the Company experienced an increase in days sales
outstanding in accounts receivable ("DSO") to 59 days, compared with 57
days in the third fiscal 2018 quarter. DSO's have increased over time
and the Company expects this increase to continue as the mix of the
Company's distributors evolves toward larger volumes of products moving
through large distributors who qualify for credit terms. Enabling these
distributors to purchase higher volumes of products on credit terms
allows them to shorten the cash conversion cycle and has helped enable
Ubiquiti to significantly expand its market share while maintaining a
conservative customer credit profile.

Inventory

Ubiquiti continues to manage inventory levels to reduce lead times and
meet increasing demand and support the commensurate growth of the
Company's customers. The Company is committed to optimizing inventory to
correspond with end-market demand. Finished goods inventory at the end
of the year decreased $37.1 million to $96.7 million, primarily driven
by increased revenue. The Company expects to hold 8 to 12 weeks of
previously introduced product inventory in warehouses going forward, in
addition to new product inventory and selected raw materials.

Cash Flow Statement Items

Our net cash flow from operations for fiscal 2018 was $332.0 million,
compared with a net cash flow from operations of $112.0 million for
fiscal 2017. The $220.0 million increase in operating cash flow during
fiscal 2018 as compared with fiscal 2017 was driven by reduced
investments in working capital, and higher operating earnings. Capital
expenditures for fiscal 2018 were $9.1 million. The Company used $260.4
million of cash related to financing activities, which was primarily
related to stock repurchases, debt servicing costs, and the settlement
of equity awards, and was offset in part by additional borrowings.

Outlook

As previously stated, and in line with the Company's focus on long-term
shareholders, it will transition from providing quarterly and annual
guidance during fiscal 2018 to annual guidance only beginning in fiscal
2019. Based on recent business trends, the Company believes the demand
environment in its end markets supports the following forecast for the
Company's fiscal year ending June 30, 2019:

  • Revenues of $1.1 billion to $1.2 billion; and
  • Diluted EPS of $4.00 to $4.80, provided that if the proposed tariffs
    are implemented, the low-end of our EPS may decline to $3.65 or lower.

Conference Call Information

Ubiquiti Networks will host a Q&A-only call to discuss the Company's
financial results at 11:00 a.m. Eastern Time today. Earnings releases
can be found on the Investor Relations section of the Ubiquiti Networks
website, http://ir.ubnt.com/financial/quarterly-results.
To listen to the Q&A call via telephone, dial 1-800-239-9838 (U.S.
toll-free) or 1-323-794-2551 (International). Participants should dial
in 10 minutes prior to the start of the call.

Investors may also listen to a live webcast of the Q&A conference call
by visiting the Investor Relations section of the Ubiquiti
Networks website at http://ir.ubnt.com.
A recording of the Q&A call will be available for replay at http://ir.ubnt.com.

About Ubiquiti Networks

Ubiquiti Networks, Inc. was founded by Robert Pera in 2005. The Company
sells equipment, and provides the related software platforms, worldwide
through a network of over 100 distributors and on-line retailers. The
Company has a very broad installed base with over 70 million devices
sold in over 200 countries and territories around the world. Ubiquiti
aims to connect everyone to everything, everywhere.

The Company develops technology platforms for high-capacity distributed
Internet access, unified information technology, and next-generation
consumer electronics for home and personal use. The Company categorizes
solutions into three main categories: high performance networking
technology for service providers, enterprises and consumers.

The majority of the company's resources consist of entrepreneurial and
de-centralized R&D teams.

Ubiquiti, Ubiquiti Networks, the U logo, UBNT, airMAX, airFiber, mFi,
EdgeMAX, UniFi, AmpliFi and UFiber are registered trademarks or
trademarks of Ubiquiti Networks, Inc. in the United States and other
countries.

Safe Harbor for Forward Looking Statements

Certain statements in this press release are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Statements other than statements of historical fact including
words such as "look", "will", "anticipate", "believe", "estimate",
"expect", "forecast", "consider" and "plan" and statements in the future
tense are forward looking statements. The statements in this press
release that could be deemed forward-looking statements include
statements regarding expectations for financial results for the full
fiscal year 2019, and statements regarding the expected impact of taxes
on our liquidity and results of operations, our cash position, expenses,
DSO, number of distributors and resellers, shipments, the roll-out of
our consumer retail channel, the introduction of new consumer products,
Gross Margins, R&D, SG&A, tax rates, inventory turns, growth
opportunities, demand and long term global environment for our products,
new products, and financial performance estimates including revenues and
GAAP diluted EPS for the Company's full fiscal year 2019, and any
statements or assumptions underlying any of the foregoing.

Forward-looking statements are subject to certain risks and
uncertainties that could cause our actual future results to differ
materially or cause a material adverse impact on our results. Potential
risks and uncertainties include, but are not limited to, the proposed
impact of US tariffs on results, fluctuations in our operating results;
varying demand for our products due to the financial and operating
condition of our distributors and their customers, and distributors'
inventory management practices; political and economic conditions and
volatility affecting the stability of business environments, economic
growth, currency values, commodity prices and other factors that may
influence the ultimate demand for our products in particular geographies
or globally; impact of counterfeiting and our ability to contain such
impact; our reliance on a limited number of distributors; inability of
our contract manufacturers and suppliers to meet our demand; our
dependence on Qualcomm Atheros for chipsets without a short-term
alternative; as we move into new markets competition from certain of our
current or potential competitors who may be more established in such
markets; our ability to keep pace with technological and market
developments; success and timing of new product introductions by us and
the performance of our products generally; our ability to effectively
manage the significant increase in our transactional sales volumes; we
may become subject to warranty claims, product liability and product
recalls; that a substantial majority of our sales are into countries
outside the United States and we are subject to numerous U.S. export
control and economic sanctions laws; costs related to responding to
government inquiries related to regulatory compliance; our reliance on
the Ubiquiti Community; our reliance on certain key members of our
management team, including our founder and chief executive officer,
Robert J. Pera; adverse tax-related matters such as tax audits, changes
in our effective tax rate or new tax legislative proposals; whether the
final determination of our income tax liability may be materially
different from our income tax provisions; the impact of any intellectual
property litigation and claims for indemnification; litigation related
to U.S. Securities laws; and economic and political conditions in the
United States and abroad. We discuss these risks in greater detail under
the heading "Risk Factors" and elsewhere in our Annual Report on Form
10-K for the year ended June 30, 2018 and subsequent filings filed with
the U.S. Securities and Exchange Commission (the "SEC"), which are
available at the SEC's website at www.sec.gov.
Copies may also be obtained by contacting the Ubiquiti Networks Investor
Relations Department, by email at IR@ubnt.com
or by visiting the Investor Relations section of the Ubiquiti Networks
website, http://ir.ubnt.com.

Given these uncertainties, you should not place undue reliance on these
forward-looking statements. Also, forward-looking statements represent
our management's beliefs and assumptions only as of the date made.
Except as required by law, Ubiquiti Networks undertakes no obligation to
update information contained herein. You should review our SEC filings
carefully and with the understanding that our actual future results may
be materially different from what we expect.

 
Ubiquiti Networks, Inc.

Condensed Consolidated Statement of Operations

(In thousands, except per share data)

(Unaudited)

      Three Months Ended June 30,     Years Ended June 30,
2018     2017 2018(1)     2017(2)
Revenues $ 269,778 $ 228,616 $ 1,016,861 $ 865,268
Cost of revenues 149,238   125,437   573,289   469,560  
Gross profit 120,540   103,179   443,572   395,708  
Operating expenses:
Research and development 19,508 21,614 74,324 69,094
Sales, general and administrative 12,918   9,915   43,121   36,853  
Total operating expenses 32,426   31,529   117,445   105,947  
Income from operations 88,114 71,650 326,127 289,761
Interest expense and other, net (3,451 ) (1,430 ) (11,985 ) (4,737 )
Income before income taxes 84,663 70,220 314,142 285,024
Provision for income taxes 14,578   9,542   117,852   27,518  
Net income and comprehensive income $ 70,085   $ 60,678   $ 196,290   $ 257,506  
Net income per share of common stock:
Basic $ 0.95   $ 0.76   $ 2.54   $ 3.16  
Diluted $ 0.94   $ 0.74   $ 2.51   $ 3.09  
Weighted average shares used in computing net income per share of
common stock:
Basic 74,105   80,272   77,179   81,478  
Diluted 74,307   81,906   78,331   83,252  
(1) Derived from audited consolidated statements for the year ended
June 30, 2018
(2) Derived from audited consolidated statements for the year ended
June 30, 2017
 
 
Ubiquiti Networks, Inc.

Reconciliation of GAAP Net Income to Non-GAAP Net Income

(In thousands, except per share data)

(Unaudited)

      Three Months Ended     Years Ended June 30,

June 30,
2018

   

March 31,
2018

   

June 30,
2017

2018     2017
Net income and comprehensive income $ 70,085 $ 102,739 $ 60,678 $ 196,290 $ 257,506
Stock-based compensation:
Cost of revenues 36 39 51 360 264
Research and development 520 527 499 1,873 1,861
Sales, general and administrative 228 166 141 975 660

Net Tax Benefits related to Equity Awards
Exercises and
Vesting

50 (27,419 ) (80 ) (28,138 ) (7,939 )
SEC Related Matters 492 317 809
Tax Reform Transition Tax 3,774   1     116,572   1  
Tax effect of non-GAAP adjustments (396 ) (325 ) (277 ) (1,328 ) (1,114 )
Non-GAAP net income $ 74,789   $ 76,044   $ 61,012   $ 287,413   $ 251,238  
Non-GAAP diluted EPS $ 1.01   $ 0.98   $ 0.75   $ 3.69   $ 3.04  
Shares outstanding (Diluted) 74,307 77,953 81,906 78,331 83,252
Share adjustment (ASU 2016-09 Adoption) (50 ) (346 ) (622 ) (338 ) (672 )

Weighted-average shares used in non-
GAAP diluted EPS

74,257   77,607   81,284   77,993   82,580  
 

1 Both periods reflect a provisional estimate of the
mandatory repatriation tax expense of $114.3 million and $2.3 million of
tax expense related to the remeasurement of deferred taxes at the lower
tax rate. Included in the Company's second fiscal quarter transition tax
calculation is an approximate $2.1 million benefit recorded in the
second fiscal quarter related to the reduced domestic rate to 28% on the
first fiscal quarter 2018 earnings which were previously provided for at
the 35% rate. As the year to date provision reflects the impact of the
reduced 28% rate for the full year results, this $2.1 million benefit
was not removed from the non-GAAP results for the full year period
ending June 30, 2018. As a result, the Company's non-GAAP Tax Reform
Transition Tax adjustment for the full year will differ from the three
months period by the $2.1 million benefit made during the second quarter
fiscal 2018 related to first fiscal quarter 2018 earnings.

Use of Non-GAAP Financial Information

To supplement our condensed consolidated financial results prepared
under generally accepted accounting principles, or GAAP, we use non-GAAP
measures of net income and earnings per diluted share that are adjusted
to exclude certain costs, expenses and gains such as stock-based
compensation expense, net tax benefits related to equity awards
exercises and vesting, the tax effects of these non-GAAP adjustments,
the SEC related inquiry, and Shareholder litigation stemming from the
SEC inquiry and Tax Reform Transition Tax.

Reconciliations of the adjustments to GAAP results for the periods
presented are provided above. In addition, an explanation of the ways in
which management uses non-GAAP financial information to evaluate its
business, the substance behind management's decision to use this
non-GAAP financial information, material limitations associated with the
use of non-GAAP financial information, the manner in which management
compensates for those limitations, and the substantive reasons
management believes that this non-GAAP financial information provides
useful information to investors is included under the paragraphs below.

A reconciliation of non-GAAP guidance measures to corresponding GAAP
measures is not available on a forward-looking basis due to the high
variability and low visibility with respect to the charges which are
excluded from these non-GAAP measures. For example, share-based
compensation expense is impacted by the Company's future price at which
the Company's stock will trade in those future periods. The items that
are being excluded are difficult to predict and a reconciliation could
result in disclosure that would be imprecise or potentially misleading.
Material changes to any one of these items could have a significant
effect on our guidance and future GAAP results. Certain exclusions, such
as share-based compensation expenses, are generally incurred each
quarter, but the amounts have historically and may continue to vary
significantly from quarter to quarter.

About our Non-GAAP Net Income and Non-GAAP
Earnings per Diluted Share

We believe that the presentation of non-GAAP net income and non-GAAP
earnings per diluted share provides important supplemental information
regarding non-cash expenses, significant items that we believe are
important to understanding our financial, and business trends relating
to our financial condition and results of operations. Non-GAAP net
income and non-GAAP earnings per diluted share are among the primary
indicators used by management as a basis for planning and forecasting
future periods and by management and our board of directors to determine
whether our operating performance has met specified targets and
thresholds. Management uses non-GAAP net income and non-GAAP earnings
per diluted share when evaluating operating performance because it
believes that the exclusion of the items described below, for which the
amounts or timing may vary significantly depending upon the Company's
activities and other factors, facilitates comparability of the Company's
operating performance from period to period. We have chosen to provide
this information to investors so they can analyze our operating results
in the same way that management does and use this information in their
assessment of our business and the valuation of our Company.

Use and Economic Substance of Non-GAAP Financial Measures used by
Ubiquiti Networks

We compute non-GAAP net income and non-GAAP earnings per diluted share
by adjusting GAAP net income and GAAP earnings per diluted share to
remove the impact of certain adjustments and the tax effect of those
adjustments. Items excluded from net income are:

  • SEC related matters
  • Stock-based compensation expense
  • Net Tax Benefits related to Equity Awards Exercises and Vesting
  • Tax effect of non-GAAP adjustments, applying the principles of ASC 740
  • Tax Reform Transition Tax

Usefulness of Non-GAAP Financial Information to Investors

These non-GAAP measures are not in accordance with, or an alternative
to, GAAP and may be materially different from other non-GAAP measures,
including similarly titled non-GAAP measures used by other companies.
The presentation of this additional information should not be considered
in isolation from, as a substitute for, or superior to, net income or
earnings per diluted share prepared in accordance with GAAP. Non-GAAP
financial measures have limitations in that they do not reflect certain
items that may have a material impact upon our reported financial
results.

For more information on the non-GAAP adjustments, please see the table
captioned "Reconciliation of GAAP Net Income to Non-GAAP Net Income"
included in this press release.

         
Ubiquiti Networks, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)

June 30,
2018 2017
Assets
Current assets:
Cash and cash equivalents $ 666,681 $ 604,198
Accounts receivable, net 174,521 140,561
Inventories 102,220 142,048
Vendor deposits 39,029 54,082
Prepaid income taxes 2,419
Prepaid expenses and other current assets 18,901   9,026
Total current assets 1,001,352 952,334
Property and equipment, net 14,328 12,916
Long-term deferred tax assets 3,106 5,133
Other long–term assets 3,791   2,328
Total assets $ 1,022,577   $ 972,711
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 14,098 $ 49,008
Income taxes payable 5,780 1,707
Debt - short-term 24,425 14,743
Other current liabilities 68,613   33,030
Total current liabilities 112,916 98,488
Long-term taxes payable 127,719 28,023
Debt - long-term 460,352 241,821
Other long-term liabilities 5,842   2,615
Total liabilities 706,829   370,947
Stockholders' equity:
Common stock 74 80
Additional paid- in capital 393 525
Retained earnings 315,281   601,159
Total stockholders' equity 315,748   601,764
Total liabilities and stockholders' equity $ 1,022,577   $ 972,711
 
 
Ubiquiti Networks, Inc.

Condensed Consolidated Cash Flows

(In thousands)

      Years Ended June 30,
2018     2017     2016
Cash Flows from Operating Activities:
Net income and comprehensive income $ 196,290 $ 257,506 $ 213,616
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 7,310 7,103 6,037
Amortization of debt issuance costs 751 256 257
Write off unamortized debt issuance costs 489
Provision for inventory obsolescence 2,336 2,479 747
Provisions/(Recovery) for loss on vendor deposits & purchase
commitments
14,891 (1,096 ) (973 )
Write-off of software development costs 2,505
Deferred taxes 2,027 (938 ) (1,145 )
Excess tax benefit from employee stock-based awards (1,004 )
Stock-based compensation 3,208 2,785 3,719
Other, net (849 ) 1,081 823
Changes in operating assets and liabilities:
Accounts receivable (33,973 ) (58,164 ) (16,685 )
Inventories 35,974 (86,988 ) (20,012 )
Vendor Deposits 4,798 (22,730 ) (9,285 )
Prepaid income taxes 2,419 (2,120 ) 2,267
Prepaid expenses and other assets (9,404 ) (3,061 ) 190
Accounts payable (34,596 ) (2,554 ) 7,720
Income taxes payable 103,769 5,041 4,777
Deferred revenues 4,941 3,649 709
Accrued liabilities and other current liabilities 31,666   9,787   3,245  
Net cash provided by operating activities 332,047   112,036   197,508  
Cash Flows from Investing Activities:
Purchase of property and equipment and other long-term assets (9,115 ) (7,232 ) (6,248 )
Net cash (used in) investing activities (9,115 ) (7,232 ) (6,248 )
Cash Flows from Financing Activities:
Proceeds from borrowing under the Second Amended & Restated
Facility- Term
500,000
Proceeds from borrowing under the Amended Credit Facility- Revolver 218,500 99,000 130,000
Repayment against Amended Credit Facility- Revolver (399,500 ) (34,000 ) (14,000 )
Repayment against Amended Credit Facility- Term (76,250 ) (11,250 ) (10,000 )
Repayment against Second Amended & Restated Facility- Term (12,500 )
Debt Issuance Costs (5,186 )
Repurchases of common stock (445,014 ) (105,229 ) (193,517 )
Proceeds from exercise of stock options 1,539 1,436 1,106
Excess tax benefit from employee stock-based awards 1,004
Tax withholding related to net share settlement of equity awards (40,623 )
Tax withholdings related to net share settlements of restricted
stock units
(1,415 )   (1,594 )   (1,223 )
Net cash (used in) financing activities (260,449 ) (51,637 ) (86,630 )
Net increase (decrease) in cash and cash equivalents 62,483 53,167 104,630
Cash and cash equivalents at beginning of year 604,198   551,031   446,401  
Cash and cash equivalents at end of year $ 666,681   $ 604,198   $ 551,031  
Supplemental Disclosure of Cash Flow Information:
Income taxes paid, net of refunds $ 9,605 $ 25,743 $ 18,531
Interest paid $ 11,377 $ 5,194 $ 2,351
Non-Cash Investing and Financing Activities:
Unpaid stock repurchases $ $ $ 6,483
Unpaid property and equipment and other long-term assets $ 144 $ 458 $ 406
 

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