2019 Q1 Form 10-Q Financial Statement

#000163397819000030 Filed on May 07, 2019

View on sec.gov

Income Statement

Concept 2019 Q1 2018 Q1 2017 Q4
Revenue $432.9M $298.8M $404.6M
YoY Change 44.88% 52.68%
Cost Of Revenue $316.5M $201.0M $232.7M
YoY Change 57.46% 31.99%
Gross Profit $88.30M $97.00M $171.1M
YoY Change -8.97% 96.67%
Gross Profit Margin 20.4% 32.46% 42.29%
Selling, General & Admin $55.20M $33.20M $35.70M
YoY Change 66.27% 15.16%
% of Gross Profit 62.51% 34.23% 20.86%
Research & Development $57.70M $38.20M $43.80M
YoY Change 51.05% 13.18%
% of Gross Profit 65.35% 39.38% 25.6%
Depreciation & Amortization $29.00M $18.40M $18.20M
YoY Change 57.61% 38.93%
% of Gross Profit 32.84% 18.97% 10.64%
Operating Expenses $164.7M $71.50M $80.30M
YoY Change 130.35% 8.96%
Operating Profit -$76.40M $25.50M $90.80M
YoY Change -399.61% 582.71%
Interest Expense $11.30M -$22.90M $4.700M
YoY Change -149.34% -120.89%
% of Operating Profit -89.8% 5.18%
Other Income/Expense, Net $5.200M -$2.100M -$3.200M
YoY Change -347.62% 1500.0%
Pretax Income -$82.50M $2.700M $95.50M
YoY Change -3155.56% 433.52%
Income Tax -$8.200M $0.00 -$109.3M
% Of Pretax Income 0.0% -114.45%
Net Earnings -$74.30M $2.700M $204.8M
YoY Change -2851.85% 1635.59%
Net Earnings / Revenue -17.16% 0.9% 50.62%
Basic Earnings Per Share -$0.98 $0.04 $3.21
Diluted Earnings Per Share -$0.98 $0.04 $3.05
COMMON SHARES
Basic Shares Outstanding 76.20M shares 62.40M shares 62.20M shares
Diluted Shares Outstanding 76.20M shares 63.30M shares 64.60M shares

Balance Sheet

Concept 2019 Q1 2018 Q1 2017 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $697.5M $692.8M $624.5M
YoY Change 0.68% 274.4%
Cash & Equivalents $358.3M $176.8M $202.1M
Short-Term Investments $340.2M $516.0M $422.4M
Other Short-Term Assets $118.7M $63.00M $59.90M
YoY Change 88.41% -3.85%
Inventory $272.2M $144.2M $147.3M
Prepaid Expenses $28.80M $14.80M $6.400M
Receivables $302.9M $164.7M $222.1M
Other Receivables $26.80M $0.00 $0.00
Total Short-Term Assets $1.418B $1.065B $1.054B
YoY Change 33.19% 99.73%
LONG-TERM ASSETS
Property, Plant & Equipment $390.6M $301.8M $301.3M
YoY Change 29.42% 37.2%
Goodwill $359.8M $11.80M $11.60M
YoY Change 2949.15% 110.71% 123.08%
Intangibles $412.3M
YoY Change
Long-Term Investments
YoY Change
Other Assets $18.40M $3.600M $3.500M
YoY Change 411.11% 29.63%
Total Long-Term Assets $1.353B $453.5M $453.6M
YoY Change 198.41% 68.56%
TOTAL ASSETS
Total Short-Term Assets $1.418B $1.065B $1.054B
Total Long-Term Assets $1.353B $453.5M $453.6M
Total Assets $2.771B $1.518B $1.507B
YoY Change 82.55% 89.21%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $204.1M $100.9M $113.0M
YoY Change 102.28% -11.58%
Accrued Expenses $54.40M $36.30M $29.60M
YoY Change 49.86% 79.39%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $5.800M $9.200M $9.100M
YoY Change -36.96%
Total Short-Term Liabilities $358.0M $191.5M $217.7M
YoY Change 86.95% 7.77%
LONG-TERM LIABILITIES
Long-Term Debt $832.4M $330.7M $328.8M
YoY Change 151.71%
Other Long-Term Liabilities $21.40M $24.20M $24.40M
YoY Change -11.57% 70.63%
Total Long-Term Liabilities $21.40M $24.20M $24.40M
YoY Change -11.57% 70.63%
TOTAL LIABILITIES
Total Short-Term Liabilities $358.0M $191.5M $217.7M
Total Long-Term Liabilities $21.40M $24.20M $24.40M
Total Liabilities $1.268B $605.8M $607.3M
YoY Change 109.23% 148.38%
SHAREHOLDERS EQUITY
Retained Earnings $154.9M $133.2M $130.7M
YoY Change 16.29% 363.48%
Common Stock $100.0K $100.0K $100.0K
YoY Change 0.0% 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $1.504B $876.6M $864.3M
YoY Change
Total Liabilities & Shareholders Equity $2.771B $1.518B $1.507B
YoY Change 82.55% 89.21%

Cashflow Statement

Concept 2019 Q1 2018 Q1 2017 Q4
OPERATING ACTIVITIES
Net Income -$74.30M $2.700M $204.8M
YoY Change -2851.85% 1635.59%
Depreciation, Depletion And Amortization $29.00M $18.40M $18.20M
YoY Change 57.61% 38.93%
Cash From Operating Activities $42.80M $95.10M $105.1M
YoY Change -54.99% 189.53%
INVESTING ACTIVITIES
Capital Expenditures -$27.20M -$22.70M -$17.20M
YoY Change 19.82% -159.52%
Acquisitions
YoY Change
Other Investing Activities -$25.70M -$94.90M -$41.40M
YoY Change -72.92%
Cash From Investing Activities -$52.90M -$117.6M -$58.60M
YoY Change -55.02% 102.77%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -2.900M -2.800M 4.400M
YoY Change 3.57% 91.3%
NET CHANGE
Cash From Operating Activities 42.80M 95.10M 105.1M
Cash From Investing Activities -52.90M -117.6M -58.60M
Cash From Financing Activities -2.900M -2.800M 4.400M
Net Change In Cash -13.00M -25.30M 50.90M
YoY Change -48.62% 424.74%
FREE CASH FLOW
Cash From Operating Activities $42.80M $95.10M $105.1M
Capital Expenditures -$27.20M -$22.70M -$17.20M
Free Cash Flow $70.00M $117.8M $122.3M
YoY Change -40.58% 1552.7%

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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;padding-top:10px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;font-style:normal;font-weight:bold;text-decoration:none;">Note 2. Recently Issued Accounting Pronouncements</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Accounting Pronouncements Recently Adopted</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the Financial Accounting Standards Board (&#8220;FASB&#8221;) issued ASU 2014-09 (Topic 606), which amended the existing accounting standards for revenue recognition. Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance is effective for annual reporting periods including interim reporting periods beginning after December 15, 2017. On July 1, 2018, we adopted Topic 606 using the modified retrospective method applied to all contracts that are not completed contracts at the date of initial adoption (i.e., July 1, 2018). Results for reporting periods after July 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under Topic 605. The adoption of Topic 606 did not have a material impact on the nature and timing of our revenues, condensed consolidated statements of operations, cash flows, and balance sheets and therefore, we do not present results for the three and nine months ended March 30, 2019 under Topic 605. Refer to &#8220;</font><font style="font-family:inherit;font-size:10pt;">Note 1. Description of Business and Summary of Significant Accounting Policies</font><font style="font-family:inherit;font-size:10pt;">&#8221; for the changes in our accounting policies due to adoption of Topic 606.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Select condensed consolidated balance sheet line items, as if we had adopted Topic 606 prior to July 1, 2018 are summarized below as of the periods presented (</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">in millions</font><font style="font-family:inherit;font-size:10pt;">): </font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:left;padding-left:0px;text-indent:0px;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="12" rowspan="1"></td></tr><tr><td style="width:68%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:8%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:8%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:8%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:center;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">June 30, 2018</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:center;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">Adjustments</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:center;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">July 1, 2018</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Assets:</font></div></td><td colspan="3" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Accounts receivable, net </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div 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style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Retained earnings</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">166.4</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">(0.6</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-right:2px;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">)</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">165.8</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr></table></div><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:10px;padding-top:16px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2016, FASB issued ASU 2016-15, S</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">tatement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments</font><font style="font-family:inherit;font-size:10pt;">, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. The amendments contained in ASU 2016-15 are effective for interim and annual periods beginning after December 15, 2017. We adopted ASU 2016-15 on July 1, 2018 on a prospective basis. The application of ASU 2016-15 will have a material impact on our consolidated financial statements if we elect to settle the principal amounts of our 2024 Notes (refer to &#8220;</font><font style="font-family:inherit;font-size:10pt;">Note 13. Convertible Notes</font><font style="font-family:inherit;font-size:10pt;">&#8221;) in cash and on repayment of the term loan (refer to &#8220;Note 7. Term Loan Facility&#8221;). The principal repayment will be bifurcated between (i) cash outflows for operating activities of </font><font style="font-family:inherit;font-size:10pt;">$146.9 million</font><font style="font-family:inherit;font-size:10pt;"> for the portion related to accreted interest attributable to debt discount, and (ii) financing activities for the remainder of </font><font style="font-family:inherit;font-size:10pt;">$803.1 million</font><font style="font-family:inherit;font-size:10pt;">.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2017, FASB issued ASU 2017-01, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Business Combinations (Topic 805)</font><font style="font-family:inherit;font-size:10pt;">, which clarifies the definition of a business. For accounting and financial reporting purposes, businesses are generally comprised of three elements; inputs, processes, and outputs. Integrated sets of assets and activities capable of providing these three elements may not always be considered a business, and the lack of one of the three elements does not always disqualify the set from being a business. The issuance of ASU 2017-01 provides a clarifying test to determine when a set of assets and activities is not a business. Primarily, the test requires that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. The amendments contained in ASU 2017-01 are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. We adopted ASU 2017-01 on July 1, 2018 on a prospective basis. The implementation of ASU 2017-01 did not have an impact on our condensed consolidated financial statements.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In October 2016, FASB issued ASU 2016-16, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets other than Inventory.</font><font style="font-family:inherit;font-size:10pt;"> The new guidance removes the prohibition in ASC 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The new guidance became effective for us in the first quarter of our fiscal 2019. The adoption of ASU 2016-16 did not have a material impact on our financial statements.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2018, FASB issued ASU 2018-15, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer&#8217;s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. </font><font style="font-family:inherit;font-size:10pt;">ASU 2018-15 requires an entity in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. Implementation costs capitalized must be expensed over the term of the hosting arrangement, including the period covered by an option to extend the arrangement. The standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption is permitted, including adoption in any interim period, for all entities. We early adopted ASU 2018-15, which did not have a material impact on our financial statements.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2018, the Securities and Exchange Commission (&#8220;SEC&#8221;) adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Disclosure Update and Simplification</font><font style="font-family:inherit;font-size:10pt;">. The amendments became effective on November 5, 2018. Among the amendments is the requirement to present the changes in shareholders&#8217; equity in the interim financial statements (either in a separate statement or footnote) in quarterly reports on Form 10-Q. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a consolidated statement of operations is required to be filed. The final rule was effective on November 5, 2018. The Company has adopted the final rule as of March 30, 2019, and has included a reconciliation of the changes in statements of redeemable convertible preferred stock, stockholders' equity, and invested equity in this Form 10-Q.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Accounting Pronouncements Not Yet Effective</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2018, FASB issued ASU 2018-14, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans</font><font style="font-family:inherit;font-size:10pt;">. ASU 2018-14 modifies the disclosure requirements for defined benefit pension plans and other postretirement benefit plans. The new guidance is effective for fiscal years ending after December 15, 2020 and early adoption is permitted. ASU 2018-14 should be applied retrospectively to all periods presented and is effective for us in our first quarter of fiscal 2022. We are currently evaluating the impact of ASU 2018-14 on our consolidated financial statements.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2018, FASB issued ASU 2018-13, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. </font><font style="font-family:inherit;font-size:10pt;">ASU 2018-13 modifies the disclosure requirements for fair value measurements. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Entities are permitted to early adopt any removed or modified disclosures upon issuance of ASU 2018-13 and delay adoption of the additional disclosures until the effective date. The standard is effective for us in our first quarter of fiscal 2021. We are currently evaluating the impact of ASU 2018-13 on our consolidated financial statements and related disclosures.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2018, FASB issued ASU 2018-02,&#160;</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income</font><font style="font-family:inherit;font-size:10pt;">,&#160;which allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election.&#160;The amendments in ASU 2018-02 are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. ASU 2018-02 is effective for us in the first quarter of fiscal 2020. We are currently evaluating the impact of our pending adoption of ASU 2018-02 on our consolidated financial statements.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2017, FASB issued ASU 2017-04, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment</font><font style="font-family:inherit;font-size:10pt;">. ASU 2017-04 removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment charge will be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The amendments contained in ASU 2017-04 are effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, which should be applied prospectively. We plan to adopt the accounting standard update in our first quarter of fiscal 2020. We are currently evaluating the impact of ASU 2017-04 on our consolidated financial statements.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2016, FASB issued ASU 2016-13, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments </font><font style="font-family:inherit;font-size:10pt;">and a subsequent amendment, ASU 2018-19 (collectively, Topic 326). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. Topic 326 is effective for annual periods beginning after December 15, 2019, including interim periods within those periods, with early adoption permitted. We are currently evaluating the impact of our pending adoption of Topic 326 on our consolidated financial statements.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2016, FASB issued ASU 2016-02, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Leases (Topic 842) </font><font style="font-family:inherit;font-size:10pt;">and subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10, ASU 2018-11 and ASU 2018-20 (collectively, Topic 842). The new guidance generally requires an entity to recognize on its balance sheet operating and financing lease liabilities and corresponding right-of-use assets. The new guidance contained in Topic 842 is effective for annual periods beginning after December 15, 2018, including interim periods within those periods, with early adoption permitted. The standard is effective for us in our first quarter of fiscal 2020 and provides an optional transition method that allows entities to apply the standard prospectively, with any cumulative-effect adjustment recorded to opening retained earnings in the period of adoption. We expect to adopt the new standard using this optional transition method. We have also elected the practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification, and initial direct costs for contracts that existed prior to adoption date. Based on our current lease portfolio, we estimate the value of leased assets and liabilities that may be recognized will be material. We are continuing to evaluate the impact of Topic 842 which is subject to change.</font></div></div>
us-gaap Fiscal Period
FiscalPeriod
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us-gaap Prior Period Reclassification Adjustment Description
PriorPeriodReclassificationAdjustmentDescription
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certain &#160;prior &#160;period &#160;amounts &#160;have &#160;been &#160;reclassified &#160;to &#160;conform &#160;to &#160;the &#160;current &#160;year &#160;presentation &#160;in &#160;the &#160;notes &#160;to &#160;the &#160;condensed &#160;consolidated &#160;financial statements. &#160;The &#160;reclassification &#160;of &#160;the &#160;prior &#160;period &#160;amounts &#160;did &#160;not &#160;impact &#160;previously &#160;reported &#160;condensed &#160;consolidated &#160;financial &#160;statements.</font></div></div>

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