ARRIS GROUP INC

CIK:0001141107|SEC Filings

Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2015

Sep. 30, 2014

Sep. 30, 2015

Sep. 30, 2014

Net sales

$ 1,221,416

$ 1,405,445

$ 3,696,650

$ 4,059,534

Cost of sales

862,083

969,711

2,636,400

2,857,613

Gross margin

359,333

435,734

1,060,250

1,201,921

Operating expenses:

Selling, general and administrative expenses

101,685

103,497

309,219

314,991

Research and development expenses

132,204

142,802

400,932

421,077

Amortization of intangible assets

57,132

57,100

171,062

179,835

Integration, acquisition, restructuring and other costs

7,531

10,226

20,996

34,246

Total operating expenses

298,552

313,625

902,209

950,149

Operating income

60,781

122,109

158,041

251,772

Other expense (income):

Interest expense

14,749

14,217

56,570

49,041

Loss on investments

3,446

6,368

6,565

11,278

Interest income

(513)

(653)

(1,792)

(1,937)

Loss on foreign currency

10,843

3,107

4,204

3,760

Other (income) expense, net

(2,827)

(63)

5,170

6,530

Income before income taxes

35,083

99,133

87,324

183,100

Income tax expense

11,737

44,507

29,710

48,649

Consolidated net income

23,346

54,626

57,614

134,451

Net loss attributable to noncontrolling interest

(2,911)

(4,526)

Net income attributable to ARRIS Group, Inc.

$ 26,257

$ 54,626

$ 62,140

$ 134,451

Net income per common share:

Basic

^[1]

$ 0.18

$ 0.38

$ 0.43

$ 0.93

Diluted

^[1]

$ 0.18

$ 0.37

$ 0.42

$ 0.91

Weighted average common shares:

Basic

146,781

144,967

146,146

144,085

Diluted

149,422

148,753

149,232

147,996

[1]	Calculated based on net income attributable to shareowners of ARRIS Group, Inc.

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating activities:
Consolidated net income	$ 57,614	$ 134,451
Depreciation	54,243	60,213
Amortization of intangible assets	173,984	179,835
Stock compensation expense	46,556	39,812
Deferred income tax benefit	14,970	(19,503)
Amortization of deferred finance fees and debt discount	7,975	9,376
Provision for doubtful accounts	2,253	5,285
Loss on investments	6,565	11,278
Loss on disposal and write down of property, plant & equipment	6,058	3,128
Excess income tax benefits from stock-based compensation plans	(354)	(14,651)
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable	(50,221)	(69,272)
Other receivables	749	(10,465)
Inventories	27,371	(38,499)
Accounts payable and accrued liabilities	6,866	2,865
Prepaids and other, net	(130,131)	35,383
Net cash provided by operating activities	224,498	329,236
Investing activities:
Purchases of property, plant and equipment	(37,698)	(41,759)
Purchases of investments	(47,625)	(33,046)
Sales of investments	61,425	29,319
Purchase of intangible assets	(37,340)
Proceeds from sale-leaseback transaction	24,960
Acquisitions, net of cash acquired	(97,905)	84
Other, net	2,971	19
Net cash used in investing activities	(131,212)	(45,383)
Financing activities:
Excess income tax benefits from stock-based compensation plans	354	14,651
Repurchase of shares to satisfy employee minimum tax withholdings	(32,452)	(29,605)
Proceeds from issuance of common stock	8,016	11,565
Payment of debt obligations	(41,125)	(195,903)
Payment of financing lease obligation	(264)
Proceeds from sale-leaseback financing transaction	58,729
Payment for debt discount	(3,247)
Payment for deferred financing costs	(4,992)
Repurchase of common stock	(24,999)
Contribution from noncontrolling interest	54,250
Net cash provided by (used in) financing activities	14,270	(199,292)
Net increase in cash and cash equivalents	107,556	84,561
Cash and cash equivalents at beginning of period	565,790	442,438
Cash and cash equivalents at end of period	$ 673,346	$ 526,999

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 673,346	$ 565,790
Short-term investments, at fair value	107,777	126,748
Total cash, cash equivalents and short-term investments	781,123	692,538
Accounts receivable (net of allowances for doubtful accounts of $7,388 in 2015 and $6,392 in 2014)	647,726	598,603
Other receivables	8,684	10,640
Inventories (net of reserves of $61,964 in 2015 and $62,359 in 2014)	367,536	401,165
Prepaid income taxes	29,071	11,023
Prepaids	26,430	27,497
Current deferred income tax assets	104,345	113,390
Other current assets	153,527	61,450
Total current assets	2,118,442	1,916,306
Property, plant and equipment (net of accumulated depreciation of $316,354 in 2015 and $265,811 in 2014)	319,443	366,431
Goodwill	1,016,696	936,067
Intangible assets (net of accumulated amortization of $793,267 in 2015 and $619,283 in 2014)	868,054	943,388
Investments	74,924	77,640
Noncurrent deferred income tax assets	70,557	71,686
Other assets	45,124	54,127
Total assets	4,513,240	4,365,645
Current liabilities:
Accounts payable	558,371	480,150
Accrued compensation, benefits and related taxes	97,326	145,278
Accrued warranty	35,488	42,763
Deferred revenue	97,490	92,772
Current portion of long-term debt and financing lease obligations	48,647	73,956
Current income taxes liability	13,139	10,610
Other accrued liabilities	168,870	164,341
Total current liabilities	1,019,331	1,009,870
Long-term debt and financing lease obligations, net of current portion	1,525,454	1,467,370
Accrued pension	67,570	64,917
Noncurrent income tax liability	38,145	41,082
Noncurrent deferred income tax liabilities	329	274
Other noncurrent liabilities	71,560	91,371
Total liabilities	$ 2,722,389	$ 2,674,884
Stockholders' equity:
Preferred stock, par value $1.00 per share, 5.0 million shares authorized; none issued and outstanding
Common stock, par value $0.01 per share, 320.0 million shares authorized; 146.6 million and 145.1 million shares issued and outstanding in 2015 and 2014, respectively	$ 1,819	$ 1,796
Capital in excess of par value	1,762,111	1,739,700
Treasury stock at cost, 35.1 million and 34.2 million shares in 2015 and 2014, respectively	(331,329)	(306,330)
Retained earnings	328,782	266,642
Accumulated other comprehensive loss	(20,236)	(11,047)
Total ARRIS Group, Inc. stockholders' equity	1,741,147	1,690,761
Stockholders' equity attributable to noncontrolling interest	49,704
Total stockholders' equity	1,790,851	1,690,761
Liabilities and Equity, Total	$ 4,513,240	$ 4,365,645