Memorex 2014 Annual Report Download - page 59

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54
In May 2014, the FASB issued new accounting guidance related to revenue recognition. This new guidance will
replace all current U.S. GAAP guidance on revenue recognition and eliminate all industry-specific guidance. The
new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The
underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers
at an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance
provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major
provisions include capitalization of certain contract costs, consideration of time value of money in the transaction
price and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain
circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timing and
uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The guidance is effective
for interim and annual periods beginning on or after December 15, 2016 (early adoption is not permitted). The
guidance permits the use of either a retrospective or cumulative effect transition method. We have not yet selected
a transition method and are currently evaluating the impact of this new guidance on our financial position and
results of operations.
Note 3 — (Loss) Earnings per Common Share
The following table sets forth the computation of the weighted average basic and diluted loss per share:
Years Ended December 31,
2014 2013 2012
(In millions, except per share amounts)
Numerator:
Loss from continuing operations $ (112.4) $ (24.4) $ (324.8)
Loss from discontinued operations (2.3) (20.0) (15.9)
Net loss $ (114.7) $ (44.4) $ (340.7)
Denominator:
Weighted average number of common shares outstanding during
the period 41.0 40.5 37.5
Dilutive effect of stock-based compensation plans — — —
Weighted average number of diluted shares outstanding during
the period 41.0 40.5 37.5
Basic loss per common share:
Continuing operations $ (2.74) $ (0.60) $ (8.67)
Discontinued operations (0.06) (0.49) (0.42)
Net loss (2.80) (1.10) (9.09)
Diluted loss per common share:
Continuing operations $ (2.74) $ (0.60) $ (8.67)
Discontinued operations (0.06) (0.49) (0.42)
Net loss (2.80) (1.10) (9.09)
Anti-dilutive shares excluded from calculation 4.5 6.1 6.3
Note 4 — Acquisitions and Divestitures
Acquisitions
Nexsan Corporation
On December 31, 2012, we acquired Nexsan Corporation (Nexsan) which is a provider of disk-based storage
systems and has a portfolio of disk-based and hybrid disk-and-solid-state storage systems with existing customers
worldwide. This acquisition was made for the intention to significantly accelerate our growth in the small and
medium-sized business and distributed enterprise storage markets. The purchase price consisted of a cash
payment of $104.6 million (subject to adjustment based primarily on working capital received) and 3,319,324
shares of our common stock which was the equivalent of $15.5 million based on the fair value of our stock on the
date of acquisition. Nexsan is a part of our TSS reporting segment.