Netgear 2012 Annual Report Download - page 101

Table of Contents NETGEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Company's investments in cash equivalents and available-for-
sale securities are classified within Level 1 of the fair value hierarchy
because they are valued based on quoted market prices in active markets. The Company enters into foreign currency forward contracts with only
those counterparties that have long-
term credit ratings of A+/A2 or higher. The Company's foreign currency forward contracts are classified within
Level 2 of the fair value hierarchy as they are valued using pricing models that take into account the contract terms as well as currency rates and
counterparty credit rates. The Company verifies the reasonableness of these pricing models using observable market data for related inputs into such
models. Additionally, the Company includes an adjustment for non-
performance risk in the recognized measure of fair value of derivative
instruments. At December 31, 2012 and December 31, 2011 , the adjustment for non-
performance risk did not have a material impact on the fair
value of the Company's foreign currency forward contracts. The carrying value of non-
financial assets and liabilities measured at fair value in the
financial statements on a recurring basis, including accounts receivable and accounts payable, approximate fair value due to their short maturities.
Note 14. Subsequent Event
Acquisition of AirCard Division of Sierra Wireless, Inc.
On January 28, 2013, the Company entered into an agreement to acquire select assets and operations of the Sierra Wireless, Inc. (“
Sierra
Wireless”)
AirCard business, including customer relationships, certain intellectual property, inventory and fixed assets for a total purchase
consideration of $138 million
in cash. The Company believes this acquisition will accelerate the mobile initiative of the service provider business
unit to become a global leader in providing the latest in LTE data networking access devices. The transaction is subject to customary closing
conditions, including the receipt of necessary regulatory clearances. Accordingly, the final purchase price is subject to adjustments to be made after
closing.
QUARTERLY FINANCIAL DATA
(In thousands, except per share amounts)
(Unaudited)
The following table presents unaudited quarterly financial information for each of the Company’
s last eight quarters. This information has been
derived from t he Company’
s unaudited financial statements and has been prepared on the same basis as the audited Consolidated Financial
Statements appearing elsewhere in this Annual Report on Form 10-
K. In the opinion of management, all necessary adjustments, consisting only of
normal recurring adjustments, have been included to state fairly the quarterly results.
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December 31,
2012 September 30, 2012 July 1, 2012 April 1, 2012
Net revenue
$
310,436
$
315,210
$
320,655
$
325,620
Gross profit
$
91,378
$
97,688
$
94,638
$
99,849
Provision for income taxes
$
12,325
$
9,920
$
9,933
$
10,565
Net income
$
16,079
$
23,791
$
21,522
$
25,147
Net income per share—basic
$
0.42
$
0.62
$
0.57
$
0.67
Net income per share—diluted
$
0.41
$
0.61
$
0.56
$
0.65
December 31,
2011 October 2, 2011 July 3, 2011 April 3, 2011
Net revenue
$
309,155
$
301,800
$
291,240
$
278,823
Gross profit
$
94,973
$
96,310
$
90,377
$
87,786
Provision for income taxes
$
10,780
$
6,178
$
6,742
$
9,142
Net income
$
22,835
$
26,747
$
20,597
$
21,189
Net income per share—basic
$
0.61
$
0.71
$
0.56
$
0.58
Net income per share—diluted
$
0.60
$
0.70
$
0.54
$
0.57