POWER ONE INC

CIK:0001042825|SEC Filings

(LOSS) EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2013

NOTE 12—(LOSS) EARNINGS PER SHARE

For the first fiscal quarters of 2013 and 2012, basic (loss) earnings per share ("EPS") was calculated utilizing the two-class method, and diluted EPS was calculated utilizing the if-converted method as the if-converted and two-class method of calculating diluted EPS yielded the same result.

Under the two-class method, EPS is computed by dividing earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. Earnings are allocated to both common shares and participating securities based on the respective number of weighted average shares outstanding for the period. Shares of the Company's Junior Preferred Stock are participating securities due to their participation rights related to cash dividends declared by the Company. If dividends are distributed to the common stockholders, the Company is required to pay dividends to the holders of the preferred stock and common stock pro-rata on an as-converted basis. GAAP requires net losses attributable to common stockholders to be allocated among common stock and participating securities to the extent that the securities are required to share in the losses. Since the preferred stock is not contractually obligated to share in the Company's losses, no allocation is made to preferred stock for periods when a net loss exists.

Components of Basic EPS and Diluted EPS are calculated as follows (in millions, except per share data):

	Three Months Ended

	March 31, 2013			April 1, 2012
*Basic EPS*
Net (loss) income attributable to common stockholders	$	(7.2	)	$	5.0
Less: undistributed income allocated to participating preferred stockholders		—			(0.9	)

Net (loss) income allocated to common stockholders (basic)	$	(7.2	)	$	4.1
Weighted average common shares outstanding (basic)		122.1			121.9

	$	(0.06	)	$	0.03

*Diluted EPS*
Net (loss) income attributable to common stockholders (diluted)	$	(7.2	)	$	5.0

Weighted average common shares outstanding (basic)		122.1			121.9
Common shares issuable assuming dilution		—			34.3

Weighted average common shares outstanding (diluted)		122.1			156.2

	$	(0.06	)	$	0.03

Employee equity share options, nonvested share units, convertible preferred stock, warrants and similar equity instruments granted by the Company are treated as potential common shares outstanding in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of in-the-money options and nonvested share units. The dilutive effect of such equity awards is calculated based on the average share price for each fiscal period using the treasury-stock method. For the first fiscal quarter of 2013, as the Company had a net loss attributable to common shareholders, the dilutive effects of 39.6 million weighted average common share equivalents outstanding during the period were excluded from the calculation of diluted earnings per share because their effect on the net loss per share would have been anti-dilutive. For the first fiscal quarter of 2012, the weighted average common share equivalents outstanding during the period that were excluded from the computation of diluted earnings per share because the exercise price for these options was greater than the average market price of the Company's shares of common stock during the first fiscal quarter of 2012 were 5.5 million.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Apr. 01, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (7,161)	$ 4,979
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,859	5,411
Undistributed loss of joint venture	141	303
Amortization of bond premium on fixed-income securities	147
Amortization of debt issuance costs	81
Stock-based compensation	3,741	3,358
Foreign exchange (gain) loss	(297)	2,318
Net loss on disposal of property and equipment	30	112
Deferred income taxes	(81)	(934)
Changes in operating assets and liabilities:
Accounts receivable, net	8,615	30,234
Inventories	8,897	4,186
Prepaid expenses and other current assets	(1,256)	1,335
Accounts payable	9,312	(33,079)
Income tax payable	3,113	2,302
Other accrued expenses	3,025	(1,450)
Other liabilities	3,950	3,499
Net cash provided by operating activities	38,116	22,574
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(4,475)	(9,359)
Other assets	153	769
Net cash used in investing activities	(4,322)	(8,590)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of debt issuance costs	(614)
Issuance of common stock	222	12
Cash paid to satisfy share-related employee tax withholding obligations	(22)	(294)
Net cash used in financing activities	(414)	(282)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(8,439)	5,413
INCREASE IN CASH AND CASH EQUIVALENTS	24,941	19,115
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	230,524	204,881
CASH AND CASH EQUIVALENTS, END OF PERIOD	255,465	223,996
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	240	7
Income taxes	518	3,327
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Additional property and equipment purchased but not yet paid	$ 5,100	$ 2,000

CONSOLIDATED CONDENSED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 30, 2012
CURRENT ASSETS:
Cash and cash equivalents	$ 255,465	$ 230,524
Investments in fixed-income securities	34,614	35,242
Accounts receivable:
Trade, less allowance for doubtful accounts of $10,996 at March 31, 2013 and $9,186 at December 30, 2012	193,978	205,556
Other	12,113	16,124
Inventories	149,423	160,234
Prepaid expenses and other current assets	19,331	18,787
Total current assets	664,924	666,467
PROPERTY AND EQUIPMENT, net of depreciation and amortization: $97,193 at March 31, 2013; $93,179 at December 30, 2012	100,097	101,946
INTANGIBLE ASSETS, net	15,031	15,549
OTHER ASSETS	15,052	14,970
TOTAL	795,104	798,932
CURRENT LIABILITIES:
Accounts payable	138,070	131,078
Income tax payable	6,516	3,600
Other accrued expenses	75,658	73,380
Total current liabilities	220,244	208,058
DEFERRED REVENUE	29,591	29,874
WARRANTIES, less current portion	34,064	31,748
OTHER LONG-TERM LIABILITIES	12,333	12,319
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Series C junior participating convertible preferred stock, par value $0.001; liquidation preference $1,000 per share; 36,900 shares authorized; 36,375 shares outstanding and convertible into 26,944,444 shares of common stock at March 31, 2013 and December 30, 2012	36,326	36,326
Common stock, par value $0.001; 300,000,000 shares authorized; 122,104,943 and 121,890,871 shares issued and outstanding at March 31, 2013 and December 30, 2012	122	122
Additional paid-in capital	665,336	661,395
Accumulated other comprehensive income	1,469	16,310
Accumulated deficit	(204,381)	(197,220)
Total stockholders' equity	498,872	516,933
TOTAL	$ 795,104	$ 798,932