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DZS (DZSI)

Document and Entity Information

Document and Entity Information - shares6 Months Ended
Jun. 30, 2019Aug. 12, 2019
Document Documentand Entity Information [Abstract]
Entity Registrant NameDASAN ZHONE SOLUTIONS INC
Entity Central Index Key0001101680
Trading SymbolDZSI
Current Fiscal Year End Date--12-31
Entity Filer CategoryNon-accelerated Filer
Document Type10-Q
Document Period End DateJun. 30,
2019
Document Fiscal Year Focus2019
Document Fiscal Period FocusQ2
Amendment Flagfalse
Entity Common Stock, Shares Outstanding21,386,231
Entity Small Businesstrue
Entity Emerging Growth Companyfalse
Entity Current Reporting StatusYes
Entity Shell Companyfalse
Entity File Number000-32743
Entity Tax Identification Number223509099
Entity Address, Address Line One7195 Oakport Street
Entity Address, City or TownOakland
Entity Address, State or ProvinceCalifornia
Entity Address, Postal Zip Code94621
City Area Code510
Local Phone Number777-7000

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Current assets:
Cash and cash equivalents $ 56,421 $ 27,709
Restricted cash8,364 7,003
Accounts receivable, net, trade receivables88,372 71,034
Accounts receivable, net, related parties583
Other receivables, others8,115 12,923
Other receivables, related parties17 65
Contract assets17,093 11,381
Inventories43,306 33,868
Prepaid expenses and other current assets4,857 4,185
Total current assets226,545 168,751
Property, plant and equipment, net6,173 5,518
Right-of-use assets from operating leases20,310
Goodwill3,977 3,977
Intangible assets, net15,831 5,649
Deferred tax assets2,175 2,752
Long-term restricted cash572 936
Other assets4,345 2,424
Total assets279,928 190,007
Current liabilities:
Accounts payable, trade42,394 36,865
Accounts payable, related parties98 1,743
Short-term debt - bank and trade facilities28,867 31,762
Other payables, others2,454 1,792
Other payables, related parties1,586 1,281
Contract liabilities - current3,365 8,511
Operating lease liabilities - current3,892
Accrued and other liabilities10,347 11,517
Total current liabilities93,003 93,471
Long-term debt, bank and trade facilities20,866
Long-term debt, related parties9,097 14,142
Contract liabilities - non-current2,467 1,801
Deferred tax liabilities1,064
Operating lease liabilities - non-current17,542
Pension liabilities13,625
Other long-term liabilities1,715 2,739
Total liabilities159,379 112,153
Commitments and contingencies (Note 15)
Stockholders’ equity and non-controlling interest:
Common stock, authorized 36,000 shares, 21,380 and 16,587 shares outstanding as of June 30, 2019 and December 31, 2018, respectively, at $0.001 par value21 16
Additional paid-in capital137,805 93,192
Accumulated other comprehensive loss(3,064)(192)
Accumulated deficit(15,007)(15,777)
Total stockholders’ equity119,755 77,239
Non-controlling interest794 615
Total stockholders’ equity and non-controlling interest120,549 77,854
Total liabilities, stockholders’ equity and non-controlling interest $ 279,928 $ 190,007

Unaudited Condensed Consolida_2

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in ThousandsJun. 30, 2019Dec. 31, 2018
Statement Of Financial Position [Abstract]
Common stock, authorized (in shares)36,000 36,000
Common stock, outstanding (in shares)21,380 16,587
Common stock, par value (in dollars per share) $ 0.001 $ 0.001

Unaudited Condensed Consolida_3

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Income Statement [Abstract]
Third parties $ 82,790 $ 75,187 $ 156,115 $ 133,093
Related parties874 1,070 1,638 2,668
Total net revenue83,664 76,257 157,753 135,761
Products and services - third parties54,855 52,150 103,050 88,356
Products and services - related parties621 789 1,237 2,199
Amortization of intangible assets406 153 814 306
Total cost of revenue55,882 53,092 105,101 90,861
Gross profit27,782 23,165 52,652 44,900
Operating expenses:
Research and product development9,430 8,714 19,614 17,691
Selling, marketing, general and administrative14,929 11,712 29,968 24,106
Amortization of intangible assets470 131 942 262
Total operating expenses24,829 20,557 50,524 42,059
Operating income2,953 2,608 2,128 2,841
Interest income62 75 150 161
Interest expense(1,244)(560)(2,115)(883)
Other income (loss), net1,345 (427)1,573 (287)
Income before income taxes3,116 1,696 1,736 1,832
Income tax provision732 341 809 336
Net income2,384 1,355 927 1,496
Net income (loss) attributable to non-controlling interest(24)(61)157 (27)
Net income attributable to DASAN Zhone Solutions, Inc.2,408 1,416 770 1,523
Foreign currency translation adjustments(573)(2,548)(1,697)(2,230)
Actuarial loss(1,153)(1,153)
Comprehensive income (loss)658 (1,193)(1,923)(734)
Comprehensive income (loss) attributable to non- controlling interest(2)(83)178 (19)
Comprehensive income (loss) attributable to DASAN Zhone Solutions, Inc. $ 660 $ (1,110) $ (2,101) $ (715)
Net income per share attributable to DASAN Zhone Solutions, Inc.
Basic $ 0.13 $ 0.09 $ 0.04 $ 0.09
Diluted $ 0.13 $ 0.08 $ 0.04 $ 0.09
Weighted average shares outstanding used to compute basic net income per share18,166 16,438 17,384 16,425
Weighted average shares outstanding used to compute diluted net income per share18,482 16,672 17,710 16,645

Unaudited Condensed Consolida_4

Unaudited Condensed Consolidated Statements of Stockholders' Equity and Non-Controlling Interest - USD ($) shares in Thousands, $ in ThousandsTotalCommon stockAdditional paid-in capitalAccumulated other comprehensive income (loss)Accumulated deficitTotal stockholders equityNon-controlling interest
Beginning Balance, Stockholders' equity at Dec. 31, 2017 $ 73,767 $ 16 $ 90,198 $ 1,871 $ (18,852) $ 73,233 $ 534
Beginning Balances, Stockholders' equity (in shares) at Dec. 31, 201716,410
ASC 606 opening balance adjustment342 342 342
Exercise of stock options andrestricted stock grant111 111 111
Exercise of stock options and restricted stock grant (in shares)21
Stock-based compensation363 363 363
Net income (loss)141 107 107 34
Other comprehensive income(loss)287 257 257 30
Ending Balances, Stockholders' equity at Mar. 31, 201875,011 $ 16 90,672 2,128 (18,403)74,413 598
Ending Balances, Stockholders' equity (in shares) at Mar. 31, 201816,431
Beginning Balance, Stockholders' equity at Dec. 31, 201773,767 $ 16 90,198 1,871 (18,852)73,233 534
Beginning Balances, Stockholders' equity (in shares) at Dec. 31, 201716,410
Net income (loss)1,496
Ending Balances, Stockholders' equity at Jun. 30, 201874,270 $ 16 91,126 (399)(16,988)73,755 515
Ending Balances, Stockholders' equity (in shares) at Jun. 30, 201816,450
Beginning Balance, Stockholders' equity at Mar. 31, 201875,011 $ 16 90,672 2,128 (18,403)74,413 598
Beginning Balances, Stockholders' equity (in shares) at Mar. 31, 201816,431
ASC 606 opening balance adjustment(1)(1)(1)
Exercise of stock options andrestricted stock grant77 77 77
Exercise of stock options and restricted stock grant (in shares)19
Stock-based compensation377 377 377
Net income (loss)1,355 1,416 1,416 (61)
Other comprehensive income(loss)(2,549)(2,527)(2,527)(22)
Ending Balances, Stockholders' equity at Jun. 30, 201874,270 $ 16 91,126 (399)(16,988)73,755 515
Ending Balances, Stockholders' equity (in shares) at Jun. 30, 201816,450
Beginning Balance, Stockholders' equity at Dec. 31, 2018 $ 77,854 $ 16 93,192 (192)(15,777)77,239 615
Beginning Balances, Stockholders' equity (in shares) at Dec. 31, 201816,587 16,587
Stock-based compensation $ 825 825 825
Stock-based compensation (in shares)9
Net income (loss)(1,457)(1,638)(1,638)181
Other comprehensive income(loss)(1,125)(1,124)(1,124)(1)
Ending Balances, Stockholders' equity at Mar. 31, 201976,097 $ 16 94,017 (1,316)(17,415)75,302 795
Ending Balances, Stockholders' equity (in shares) at Mar. 31, 201916,596
Beginning Balance, Stockholders' equity at Dec. 31, 2018 $ 77,854 $ 16 93,192 (192)(15,777)77,239 615
Beginning Balances, Stockholders' equity (in shares) at Dec. 31, 201816,587 16,587
Net income (loss) $ 927
Ending Balances, Stockholders' equity at Jun. 30, 2019 $ 120,549 $ 21 137,805 (3,064)(15,007)119,755 794
Ending Balances, Stockholders' equity (in shares) at Jun. 30, 201921,380 21,380
Beginning Balance, Stockholders' equity at Mar. 31, 2019 $ 76,097 $ 16 94,017 (1,316)(17,415)75,302 795
Beginning Balances, Stockholders' equity (in shares) at Mar. 31, 201916,596
Issuance of common stock inpublic offering, net of issuancecosts42,509 $ 5 42,504 42,509
Issuance of common stock in public offering, net of issuance costs (in shares)4,718
Exercise of stock options andrestricted stock grant473 473 473
Exercise of stock options and restricted stock grant (in shares)55
Stock-based compensation811 811 811
Stock-based compensation (in shares)11
Net income (loss)2,384 2,408 2,408 (24)
Other comprehensive income(loss)(1,725)(1,748)(1,748)23
Ending Balances, Stockholders' equity at Jun. 30, 2019 $ 120,549 $ 21 $ 137,805 $ (3,064) $ (15,007) $ 119,755 $ 794
Ending Balances, Stockholders' equity (in shares) at Jun. 30, 201921,380 21,380

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands6 Months Ended
Jun. 30, 2019Jun. 30, 2018
Cash flows from operating activities:
Net income (loss) $ 927 $ 1,496
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization2,767 1,381
Amortization of deferred financing costs264
Bargain purchase gain on acquisition(334)
Stock-based compensation1,636 740
Provision for inventory write-down1,569 411
Allowance for doubtful accounts114
Provision for sales returns374
Unrealized gain on foreign currency transactions(1,117)(141)
Deferred taxes479 (82)
Changes in operating assets and liabilities:
Accounts receivable(11,643)(17,198)
Contract assets(8,236)(1,645)
Inventories(1,543)(14,641)
Prepaid expenses and other assets262 219
Accounts payable6,905 18,498
Contract liabilities(4,730)
Accrued and other liabilities(3,528)(4,448)
Net cash used in operating activities(15,834)(15,410)
Cash flows from investing activities:
Purchases of property, plant and equipment(811)(414)
Acquisition of business, net of cash acquired(4,697)
Net cash used in investing activities(5,508)(414)
Cash flows from financing activities:
Proceeds from issuance of common stock in public offering, net of issuance costs42,509
Proceeds from short-term borrowings and line of credit22,327 44,368
Repayments of short-term borrowings and line of credit(31,262)(26,455)
Proceeds from long-term borrowings25,000
Repayments of long-term borrowings(625)
Proceeds from related party term loan6,064
Repayments of related party term loan(5,000)
Deferred financing costs(1,992)
Proceeds from exercise of stock options473 188
Net cash provided by financing activities51,430 24,165
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(379)(883)
Net increase in cash and cash equivalents and restricted cash29,709 7,458
Cash and cash equivalents and restricted cash at beginning of period35,648 31,412
Cash and cash equivalents and restricted cash at end of period65,357 38,870
Reconciliation of cash, cash equivalents and restricted cash to statement of financial position
Reconciliation of cash, cash equivalents and restricted cash $ 35,648 $ 31,412

Organization and Summary of Sig

Organization and Summary of Significant Accounting Policies6 Months Ended
Jun. 30, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Organization and Summary of Significant Accounting Policies(1)
Organization and Summary of Significant Accounting Policies
(a)
Description of Business DASAN Zhone Solutions, Inc. (referred to, collectively with its subsidiaries, as “DZS” or the “Company”) is a global provider of ultra-broadband network access solutions and communications platforms deployed by advanced Tier 1, 2 and 3 service providers and enterprise customers. The Company provides a wide array of reliable, cost-effective networking technologies, including broadband access, Ethernet switching, mobile backhaul, Passive Optical LAN and software-defined networks, to a diverse customer base that includes more than 900 customers in more than 80 countries worldwide. DZS was incorporated under the laws of the state of Delaware in June 1999, under the name Zhone Technologies, Inc. On September 9, 2016, the Company acquired Dasan Network Solutions, Inc., a California corporation (“DNS”), through the merger of a wholly owned subsidiary of the Company with and into DNS, with DNS surviving as a wholly owned subsidiary of the Company (the “Merger”). At the effective time of the Merger, all issued and outstanding shares of capital stock of DNS held by DASAN Networks, Inc. (“DNI”) were canceled and converted into the right to receive shares of the Company's common stock in an amount equal to 58% of the issued and outstanding shares of the Company's common stock immediately following the Merger. In connection with the Merger, the Company changed its name from Zhone Technologies, Inc. to DASAN Zhone Solutions, Inc. The Company is headquartered in Oakland, California with flexible in-house production facilities in Seminole, Florida and Hanover, Germany (acquired as part of the Keymile Acquisition (defined below) in January 2019), and contract manufacturers located in China, India, Korea and Vietnam. The Company also maintains offices to provide sales and customer support at global locations.
(b )
DNI Ownership As of June 30, 2019, DNI owned approximately 44.4% of the outstanding shares of the Company's common stock. As a result, DNI is able to significantly influence corporate and management policies and the outcome of any corporate transaction or other matter submitted to the Company’s stockholders for approval. Such transactions may include mergers and acquisitions, sales of all or some of the Company’s assets or purchases of assets, and other significant corporate transactions. The interests of DNI may not coincide with the interests of the Company's other stockholders or with holders of the Company's indebtedness. See Note 10, Note 11 and Note 15 to the unaudited condensed consolidated financial statements for additional information.
(c )
Basis of Presentation For a complete description of what the Company believes to be the critical accounting policies and estimates used in the preparation of its unaudited condensed consolidated financial statements, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. All intercompany transactions and balances have been eliminated in consolidation. The results of operations for the current interim period are not necessarily indicative of results to be expected for the current year or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission (“SEC”) on March 12, 2019.
(d )
Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.
(e)
Reclassifications For the three and six months ended June 30, 2018, certain previously reported statement of comprehensive income (loss) and statement of cash flows amounts have been adjusted for certain immaterial reclassifications to correctly reflect: (i) cost of products and services to related parties; and (ii) changes in accounts receivable and contract assets.
( f )
Revenue The following table presents the revenues by source (in thousands):
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Revenue by source:
Products
$
78,861
$
73,317
$
148,443
$
130,043
Services
4,803
2,940
9,310
5,718
Total
$
83,664
$
76,257
$
157,753
$
135,761
The following summarizes required disclosures about geographical concentrations (in thousands):
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Revenue by geography:
United States
$
9,753
$
13,630
$
19,331
$
30,179
Canada
965
1,321
1,888
2,293
Total North America
10,718
14,951
21,219
32,472
Latin America
5,971
7,312
12,556
15,269
Europe, Middle East, Africa
25,177
9,475
43,591
16,963
Korea
18,954
19,111
34,805
31,235
Other Asia Pacific
22,844
25,408
45,582
39,822
Total International
72,946
61,306
136,534
103,289
Total
$
83,664
$
76,257
$
157,753
$
135,761
(g )
Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents which totaled $56.4 million at June 30, 2019, including $9.7 million held by its international subsidiaries. Cash and cash equivalents consist principally of financial deposits and money market accounts that are principally held with various domestic and international financial institutions with high credit standing. The Company’s customers include competitive and incumbent local exchange carriers, competitive access providers, internet service providers, wireless carriers and resellers serving these markets. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Allowances are maintained for potential doubtful accounts. For the three months ended June 30, 2019, one customer accounted for 12% of net revenue. For the six months ended June 30, 2019, no single customer accounted for 10% or more of net revenue. For the three and six months ended June 30, 2018, one customer accounted for 22% and 15% of net revenue, respectively. As of June 30, 2019, one customer represented 14% of net accounts receivable. As of December 31, 2018, two customers represented 11% and 10% of net accounts receivable, respectively. As of June 30, 2019 and December 31, 2018, receivables from customers in countries other than the United States represented 93% and 88%, respectively, of net accounts receivable.
( h )
Business Combination The Company allocates the fair value of purchase consideration to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets and certain tangible assets such as inventory. Critical estimates in valuing certain tangible and intangible assets include but are not limited to future expected cash flows from the underlying assets and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
(i)
Defined Benefit Plans and Plan Assumptions The Company provides certain defined benefit pension plans to employees in Germany. Pension accounting is intended to reflect the recognition of future benefit costs over the employees' average expected future service to the Company based on the terms of the plans and investment and funding decisions. To estimate the impact of these future payments and the Company’s decisions concerning funding of these obligations, the Company is required to make assumptions using actuarial concepts within the framework of U.S. GAAP. Two critical assumptions are the discount rate and the expected long-term return on plan assets. Other important assumptions include expected future salary increases, expected future increases to benefit payments, expected retirement dates, employee turnover, retiree mortality rates and portfolio composition. The Company evaluates these assumptions at least annually.
( j )
Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases The Company adopted the new standard on January 1, 2019, the first day of fiscal 2019, using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to retained earnings as of January 1, 2019 as a result of this adoption. ASC 842 sets out the principles for the recognition, measurement, presentation and disclosure of leases. The Company has elected to use a certain package of practical expedients permitted under the transition guidance within ASC 842. Those practical expedients are as follows:

The Company did not reassess (i) whether expired or existing contracts contain leases under the new definition of a lease; (ii) lease classification for expired or existing leases; and (iii) whether previously capitalized initial direct costs would qualify for capitalization under ASC 842.

The Company did not reassess a lease whose term is 12 months or less and does not include a purchase option that the lessee is reasonably certain to exercise.

The Company did not elect to use hindsight for transition when considering judgments and estimates such as assessments of lessee options to extend or terminate a lease or purchase the underlying asset.

For all asset classes, the Company elected to not recognize a right-of-use asset and lease liability for leases with a term of 12 months or less.

For all asset classes, the Company elected to not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component. The Company applies significant judgment in considering all relevant factors that create an economic benefit (e.g., contract-based, asset-based, entity-based, and market-based, among others) as of the commencement date in determining the initial lease term and future lease payments. For example, the Company exercises judgment in determining whether renewal periods will be exercised during the initial measurement process. If the Company believes it will exercise the renewal option, and the lease payments associated with the renewal periods are known or calculable, such renewal lease payments would be included in the initial measurement of the lease liability. Otherwise, even if the Company believes that it will exercise the renewal period, if the renewal payments are unknown or not calculable, they would not be included until they become known or calculable at which time the Company would remeasure the remaining lease payments similar to a lease modification. Adoption of ASC 842 resulted in the balance sheet recognition of right of use assets and lease liabilities of approximately $22.5 million as of January 1, 2019. Adoption of ASC 842 did not materially impact the Company’s unaudited condensed consolidated statements of comprehensive income (loss) and cash flows. See Note 14 in the notes to unaudited condensed consolidated financial statements. Income Tax Effects within Accumulated Other Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost Other Recent Accounting Pronouncements Not Yet Adopted In January 2017, FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment On August 28, 2018, the FASB issued ASU 2018-13, Fair Value Measurement In August 2018, the FASB issued ASU 2018-14, Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans

Business Combination

Business Combination6 Months Ended
Jun. 30, 2019
Business Combinations [Abstract]
Business Combination(2 )
Business Combination Keymile Acquisition On January 3, 2019, ZTI Merger Subsidiary III Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“ZTI”), acquired all of the outstanding shares of Keymile GmbH (“Keymile”), a limited liability company organized under the laws of Germany, from Riverside KM Beteiligung GmbH (“Riverside”), a limited liability company organized under the laws of Germany, pursuant to a share purchase agreement (the “Keymile Acquisition”). The allocation of the purchase price was based upon a preliminary valuation, and the Company’s estimates and assumptions are subject to refinement, within the measurement period (up to one year from the Acquisition Date). Measurement period adjustments, with the corresponding adjustment to the bargain purchase gain, will be recorded in the reporting period in which the adjustment to the provisional amounts are determined based upon the final valuation. The aggregate cash purchase price paid for all of the shares of Keymile and certain of its subsidiaries, was €10,250,000 (approximately $11.8 million), subject to adjustment for the lockbox mechanism described below. The Company also assumed pension obligations of approximately $12.7 million, net of pension assets of $3.5 million. Following the closing of the Keymile Acquisition, Keymile became the Company’s wholly owned subsidiary. The Keymile Acquisition also provided for a lockbox mechanism such that normal operations were observed by Keymile management and any excess cash flows generated from operating activities for the period from October 1, 2018 to December 31, 2018 remained with Keymile following the closing, with the Company as the beneficiary, as the purchaser of Keymile. At December 31, 2018, cash received from the lockbox mechanism amounted to $2.5 million. On October 1, 2018, as a condition for the Keymile Acquisition, Riverside extended a €4.0 million ($4.5 million, which represents the cash and cash equivalents and short-term debt, in the “Allocation of Purchase Consideration” table below) working capital loan to Keymile. The working capital loan bears interest at a rate of 3.5% per annum and is scheduled for repayment in two equal installments in April and November 2019. The first payment of €2.0 million ($2.2 million) was made in April 2019 and the balance is due in November 2019. As of June 30, 2019, the outstanding balance under this working capital loan was €2.0 million ($2.3 million). Keymile is a leading solution provider and manufacturer of telecommunication systems for broadband access. The Company believes Keymile strengthens its portfolio of broadband access solutions, which now includes a series of multi-service access platforms for FTTx network architectures, including ultra-fast broadband copper access based on VDSL/Vectoring and G. Fast technology. A summary of the preliminary estimated purchase price allocation to the fair value of assets acquired and liabilities assumed is as follows (in thousands):
Purchase consideration
Cash consideration
$
11,776
Working capital adjustment: cash received from lockbox mechanism
(2,497
)
Adjusted purchase consideration
$
9,279
The following summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the Keymile Acquisition (in thousands):
Allocation of purchase consideration
Current assets
Cash and cash equivalents
$
4,582
Accounts receivable - trade, net
6,820
Other receivables
798
Inventories
9,943
Property, plant and equipment
983
Other assets
163
Intangible assets
12,030
Accounts payable - trade
(3,303
)
Short-term debt
(4,582
)
Contract liabilities
(364
)
Accrued liabilities
(3,614
)
Deferred tax liabilities
(1,071
)
Pension obligations
(12,656
)
Other long term liabilities
(116
)
Bargain purchase gain
(334
)
Total purchase consideration
$
9,279
The purchase price allocation resulted in the recognition of a gain on bargain purchase of approximately $0.3 million, which was included in the unaudited condensed consolidated statements of comprehensive income (loss) for the six months ended June 30, 2019. The gain on bargain purchase was the result of the fair value of the identifiable net assets acquired exceeding the purchase price paid for the Keymile Acquisition which was reduced by the lockbox mechanism. The estimated weighted average useful lives of the acquired property, plant and equipment is 5 years. Depreciation is calculated using the straight-line method. The following table represents the preliminary estimated fair value and useful lives of identifiable intangible assets acquired:
Estimated Fair Value (in thousands)
Estimated Useful Life
Intangible assets acquired
Customer relationships
$
3,667
5 years
Trade name
3,208
5 years
Technology - developed core
5,155
5 years
Total intangible assets
$
12,030
As of the valuation date, there was value attributable to Keymile’s existing customer relationships. Keymile’s key customer base is made up of independent telecommunication service providers and network operators, a base of customers that have seen growth since 2012. Keymile is seen as a market leader and historically has had low customer attrition. In addition, switching costs are considered to be high due to the disruption of switching platforms as well as the additional training necessary. The Company valued the customer relationships using the Income Approach, specifically the Multi-Period Excess Earnings Method (“MPEEM”). The Company utilized the Relief from Royalty Method (“RFRM”) to value the tradename and developed technology. The RFRM assumes that the value of the asset equals the amount a third party would pay to use the asset and capitalize on the related benefits of the asset. Therefore, a revenue stream for the asset is estimated, and then an appropriate royalty rate is applied to the forecasted revenue to estimate the pre-tax income associated with the asset. The pre-tax income is then tax-effected to estimate the after-tax net income associated with the asset. Finally, the after tax net income is discounted to the present value using an appropriate rate of return that considers both the risk of the asset and the associated cash flow estimates. Pro Forma Financial Information The unaudited pro forma information for the periods set forth below gives effect to the Keymile Acquisition as if it had occurred as of January 1, 2018. The unaudited pro forma financial information has been prepared by management for illustrative purposes only and does not purport to represent what the results of operations, financial condition or other financial information of the Company would have been if the Keymile Acquisition had occurred on January 1, 2018 or what such results or financial condition will be for any future periods. The unaudited pro forma financial information is based on estimates and assumptions and on the information available at the time of the preparation thereof. These estimates and assumptions may change, be revised or prove to be materially different, and the estimates and assumptions may not be representative of facts existing at the time of the Keymile Acquisition. The pro forma adjustments primarily relate to acquisition related costs, amortization of acquired intangibles and interest expense related to financing arrangements. Below is the pro forma financial information (in thousands):
Three Months Ended
Six Months Ended
June 30, 2018
June 30, 2018
Pro forma net revenues
$
87,381
$
157,216
Pro forma net income attributable to DASAN Zhone Solutions, Inc.
1,775
2,159

Fair Value Measurement

Fair Value Measurement6 Months Ended
Jun. 30, 2019
Fair Value Disclosures [Abstract]
Fair Value Measurement(3 )
Fair Value Measurement The Company utilizes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels:
Level 1
Inputs are quoted prices in active markets for identical assets or liabilities.
Level 2
Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.
Level 3
Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The following financial instruments are not measured at fair value on the Company’s condensed consolidated balance sheet as of June 30, 2019 and the consolidated balance sheet as of December 31, 2018, but require disclosure of their fair values: cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable, accrued liabilities, lease liabilities and debt. The carrying values of financial instruments such as cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable and accrued liabilities approximate their fair values based on their short-term nature. The carrying value of the Company's lease liabilities and debt approximates their fair values based on the current rates available to the Company for debt of similar terms and maturities.

Cash and Cash Equivalents and R

Cash and Cash Equivalents and Restricted Cash6 Months Ended
Jun. 30, 2019
Cash And Cash Equivalents [Abstract]
Cash, Cash Equivalents and Restricted Cash(4 )
Cash, Cash Equivalents and Restricted Cash As of June 30, 2019 and December 31, 2018, the Company's cash and cash equivalents consisted principally of financial deposits and money market accounts that are principally held with various domestic and international financial institutions with high credit standing. Restricted cash consisted primarily of cash restricted for performance bonds, warranty bonds and collateral for borrowings.

Balance Sheet Details

Balance Sheet Details6 Months Ended
Jun. 30, 2019
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Details(5 )
Balance Sheet Details Accounts receivable, net consisted of the following (in thousands):
June 30, 2019
December 31, 2018
Gross accounts receivable
$
88,725
$
71,945
Less: allowance for doubtful accounts
(353
)
(328
)
Total accounts receivable, net
$
88,372
$
71,617
Inventories consisted of the following (in thousands):
June 30, 2019
December 31, 2018
Raw materials
$
17,723
$
15,688
Work in process
3,174
2,429
Finished goods
22,409
15,751
Total inventories
$
43,306
$
33,868
Inventories provided as collateral for borrowings from Export-Import Bank of Korea amounted to $8.1 million and $9.5 million as of June 30, 2019 and December 31, 2018, respectively.

Property, Plant and Equipment

Property, Plant and Equipment6 Months Ended
Jun. 30, 2019
Property Plant And Equipment [Abstract]
Property, Plant and Equipment(6 )
Property, Plant and Equipment Property, plant and equipment consisted of the following (in thousands):
June 30, 2019
December 31, 2018
Furniture and fixtures
$
10,232
$
8,029
Machinery and equipment
2,380
3,553
Leasehold improvements
4,039
3,715
Computers and software
1,154
922
Other
751
982
18,556
17,201
Less: accumulated depreciation and amortization
(12,062
)
(11,271
)
Less: government grants
(321
)
(412
)
Total property and equipment, net
$
6,173
$
5,518
Depreciation expense associated with property and equipment for the three and six months ended June 30, 2019 was $0.5 million and $1.0 million, respectively. Depreciation expense for the three and six months ended June 30, 2018 was $0.4 million and $0.8 million, respectively. The Company receives grants from various government entities mainly to support capital expenditures. Such grants are deferred and are generally refundable to the extent the Company does not utilize the funds for qualifying expenditures. Once earned, the Company records the grants as a contra amount to the assets and amortizes such amount over the useful lives of the related assets as a reduction to depreciation expense.

Goodwill and Intangible Assets

Goodwill and Intangible Assets6 Months Ended
Jun. 30, 2019
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets(7 )
Goodwill and Intangible Assets Goodwill was as follows (in thousands):
June 30, 2019
December 31, 2018
Gross carrying amount
$
3,977
$
3,977
Less: accumulated impairment


Net
$
3,977
$
3,977
The Company did not recognize impairment loss on goodwill during the six months ended June 30, 2019 or 2018. Intangible assets consisted of the following (in thousands):
June 30, 2019
Gross Carrying Amount
Accumulated Amortization
Net
Developed technology
$
8,179
$
(2,246
)
$
5,933
Customer relationships
8,880
(1,849
)
7,031
Trade name
3,185
(318
)
2,867
Total intangible assets, net
$
20,244
$
(4,413
)
$
15,831
December 31, 2018
Gross Carrying Amount
Accumulated Amortization
Net
Developed technology
$
3,060
$
(1,428
)
$
1,632
Customer relationships
5,240
(1,223
)
4,017
Total intangible assets, net
$
8,300
$
(2,651
)
$
5,649
Intangible assets as of June 30, 2019 include the customer relationships, trade name and developed technology acquired through the Keymile Acquisition (see Note 2) as well as previously acquired intangible assets. Amortization expense associated with intangible assets for the three and six months ended June 30, 2019 was $0.9 million and $1.8 million, respectively. Amortization expense for the three and six months ended June 30, 2018 was $0.3 million and $0.6 million, respectively. The following table presents the future amortization expense of the Company’s intangible assets as of June 30, 2019 (in thousands):
Remainder of 2019
$
1,762
2020
3,525
2021
3,321
2022
2,913
2023
2,913
Thereafter
1,397
Total
$
15,831
Weighted average remaining life:
Developed technology
3.98 years
Customer relationships
5.92 years
Trade name
4.50 years

Debt

Debt6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]
Debt(8 )
Debt The following tables summarize the Company’s debt (in thousands):
As of June 30, 2019
Short-term
Long-term
Total
PNC Bank Facility
$
2,500
$
21,875
$
24,375
PNC Revolving Line of Credit
4,394

4,394
Working Capital Loan
2,275

2,275
Bank and Trade Facilities - Foreign Operations
20,417

20,417
Related Party

9,097
9,097
$
29,586
$
30,972
$
60,558
Less: unamortized deferred financing costs on the PNC Bank Facility
(719
)
(1,009
)
(1,728
)
$
28,867
$
29,963
$
58,830
As of December 31, 2018
Short-term
Long-term
Total
Wells Fargo Bank Facility
$
7,000

$
7,000
Bank and Trade Facilities - Foreign Operations
24,762

24,762
Related Party

14,142
14,142
$
31,762
$
14,142
$
45,904
PNC Bank Facility On February 27, 2019, the Company and ZTI (collectively, the “Borrowers”), and certain direct and indirect subsidiaries of the Borrowers, as guarantors, entered into a Revolving Credit, Term Loan, Guaranty and Security Agreement (the “Domestic Credit Agreement”) and an Export-Import Revolving Credit, Guaranty and Security Agreement (the “Ex-Im Credit Agreement,” and together with the Domestic Credit Agreement, the “Credit Agreements”), in each case with PNC Bank, National Association (“PNC”) and Citibank, N.A. as lenders, and PNC as agent for the lenders (the “PNC Facility”), which replaced the Company’s former senior secured credit facilities with Wells Fargo Bank (the “Former WFB Facility”). The Credit Agreements provide for a $25.0 million term loan and a $15.0 million revolving line of credit (including sub-facilities for export-import transactions, letters of credit and swing loans). The amount the Company is able to borrow on the revolving line of credit at any time is based on eligible accounts receivable and other conditions, less certain reserves. Borrowings under the PNC Facility bear interest at the Company’s option, at either (i) a base rate equal to the highest of the federal funds rate plus 0.50%, PNC’s prime rate, or the daily LIBOR rate plus 1.00%, or (ii) the LIBOR rate for the applicable interest period, subject to a floor of 1.00% (with respect to the term loans only), plus in each case, an applicable margin. The applicable margin for term loans is 5.00% for base rate loans and 6.00% for LIBOR rate loans, and the applicable margin for borrowings under the revolving line of credit is 1.50% for base rate loans and 2.50% for LIBOR rate loans. The Company used a portion of the funds borrowed from the term loan under the Credit Agreements to (i) repay $5.0 million in principal amount of existing related-party indebtedness with DNI plus accrued interest, (ii) repay $1.5 million in outstanding borrowings under the Company’s former revolving line of credit plus accrued interest and fees and cash collateralize $3.6 million in outstanding letters of credit under the Former WFB Facility, and (iii) repay $5.6 million short-term debt in Korea and Japan. The Company intends to use the remaining funds for ongoing working capital needs. Obligations under the Credit Agreements are secured by substantially all of the personal property assets of the Borrowers and the subsidiaries that guarantee the Credit Agreements, including their intellectual property. The maturity date under the Credit Agreements is February 27, 2022. The term loan under the Credit Agreements is repayable in eight quarterly installments of $625,000 beginning June 30, 2019, followed by quarterly installments of $937,500 beginning on June 30, 2021, with all remaining unpaid principal and accrued interest due on the maturity date. The Credit Agreements contain certain covenants, limitations, and conditions with respect to the Borrowers and their subsidiaries, including a maximum leverage ratio, a minimum fixed charge coverage ratio, and a minimum liquidity covenant, as well as financial reporting obligations, and customary events of default. If an event of default occurs, the agent and lenders will be entitled to take various actions, including requiring the immediate repayment of all outstanding amounts under the Credit Agreements, terminating commitments to make additional advances and selling the assets of the Borrowers and their subsidiary guarantors to satisfy the obligations under the Credit Agreements. As of June 30, 2019, the Company had $24.4 million in outstanding term loan borrowings under its PNC Facility, and $4.4 million in outstanding borrowings under the revolving line of credit. The interest rate on the term loan and revolving line of credit was 8.44% and 7.00%, respectively, at June 30, 2019. Deferred financing costs of $1.7 million as of June 30, 2019 has been netted against the aggregate principal amount of the PNC term loan in the unaudited condensed consolidated balance sheet as of June 30, 2019. On July 2, 2019, the $4.4 million in outstanding borrowings under the revolving line of credit was repaid in full. Former Wells Fargo Bank Facility On February 27, 2019, in connection with the entry into the PNC Facility, the Company repaid $1.5 million in principal amount of outstanding borrowings plus accrued interest and fees under the Former WFB Facility and cash collateralized $3.6 million in outstanding letters of credit under the Former WFB Facility and terminated the Former WFB Facility. Working Capital Loan On October 1, 2018, as a condition for the Keymile Acquisition, Riverside, the former stockholder of Keymile, extended a €4.0 million ($4.5 million) working capital loan to Keymile. The working capital loan bears interest at a rate of 3.5% per annum and is scheduled for repayment in two equal installments. The first payment of €2.0 million ($2.2 million) was made in April 2019 and the balance is due in November 2019. As of June 30, 2019, the outstanding balance under this working capital loan was €2.0 million ($2.3 million). Bank and Trade Facilities - Foreign Operations Certain of the Company's foreign subsidiaries have entered into various financing arrangements with foreign banks and other lending institutions consisting primarily of revolving lines of credit, trade facilities, term loans and export development loans. These facilities are renewed as they mature and are generally secured by a security interest in certain assets of the applicable foreign subsidiaries and supported by guarantees given by DNI or third parties. Payments under such facilities are made in accordance with the given lender’s amortization schedules. As of June 30, 2019 and December 31, 2018, the Company had an aggregate outstanding balance of $20.4 million and $24.8 million, respectively, under such financing arrangements. The maturity dates and interest rates per annum applicable to outstanding borrowings under these financing arrangements are listed in the tables below (amount in thousands).
As of June 30, 2019
Maturity Date
Denomination
Interest rate (%)
Amount
Industrial Bank of Korea
Credit facility
08/06/2019 ~ 11/12/2019
USD
5.30 ~ 5.50
$
2,972
NongHyup Bank
Credit facility
07/02/2019 ~ 11/07/2019
USD
4.05 ~ 4.20
3,361
The Export-Import Bank of Korea
Export development loan
7/1/2019 *
KRW
3.44
5,316
Korea Development Bank
General loan
8/8/2019
KRW
3.48
4,322
Korea Development Bank
Credit facility
07/08/2019 ~ 10/24/2019
USD
3.35 ~ 3.95
2,717
LGUPlus
General loan
6/17/2020
KRW
0
1,729
$
20,417
*
On July 1, 2019, the maturity date of the export development loan from The Export-Import Bank of Korea was extended to July 1, 2020. As of June 30, 2019, the Company had $9.1 million in outstanding borrowings and $1.3 million committed as security for letters of credit under the Company's $19.0 million credit facilities with certain foreign banks.
As of December 31, 2018
Maturity Date
Denomination
Interest rate (%)
Amount
Industrial Bank of Korea
Credit facility
01/02/2019 ~ 05/15/2019
USD
3.96 ~ 4.36
$
1,982
Industrial Bank of Korea
Trade finance
02/18/2019 ~ 02/25/2019
USD
5.31 ~ 6.08
1,920
Shinhan Bank
General loan
3/30/2019
KRW
6.06
2,862
NongHyup Bank
Credit facility
01/07/2019 ~ 04/29/2019
USD
3.71 ~ 4.50
2,053
The Export-Import Bank of Korea
Export development loan
07/01/2019
KRW
3.44
6,439
The Export-Import Bank of Korea
Import development loan
02/14/2019
USD
4.31
850
Korea Development Bank
General loan
08/08/2019
KRW
3.48
4,472
Korea Development Bank
Credit facility
02/07/2019 ~ 03/06/2019
USD
3.64 ~ 3.91
1,489
LGUPlus
General loan
06/17/2019
KRW
0
1,789
Shoko Chukin Bank
General loan
06/28/2019
JPY
1.33
906
$
24,762
As of December 31, 2018, the Company had $5.5 million in outstanding borrowings and $2.6 million committed as security for letters of credit under the Company's $19.0 million credit facilities with certain foreign banks. See Note 11 Related-Party Transactions for a discussion of related-party debt.

Defined Benefit Plans

Defined Benefit Plans6 Months Ended
Jun. 30, 2019
Compensation And Retirement Disclosure [Abstract]
Defined Benefit Plans(9)
Defined Benefit Plans The Company provides certain defined benefit pension plans in Germany for active and former employees of Keymile and their surviving dependents. These benefits were promised upon an employee either reaching retirement age or becoming disabled. Benefits paid depend on an employee’s years of service and annual earnings. These plans were frozen as of September 30, 2003 and have not been offered to new employees after that date. Employees who were already covered by such plans ceased earning benefits under such plans from the freeze date forward. The benefit obligations are determined separately for each plan by estimating the present value of future benefits that employees have earned in prior periods. Given that all plans are frozen; the Company does not have any current service costs to recognize within its defined benefit obligation or pension expense. The only component of pension expense relates to $0.1 million of interest expense on the defined benefit pension plans, which is recognized in Other income (loss), net in the condensed consolidated statement of comprehensive income (loss). The interest expense is determined by multiplying the defined benefit obligation by the discount rate used to determine the defined benefit obligation. Actuarial gains and losses from changes in assumptions are included in Other comprehensive loss in the condensed consolidated statement of comprehensive income (loss). The following key actuarial assumptions were made in determining the benefit obligation:
June 30, 2019
Discount rate
1.20%
Rate of pension increase
1.70%
Retirement age
63-67 years
As of June 30, 2019, the Company’s employee benefit obligations under the defined benefit plans is approximately $13.6 million, net of pension assets of $3.5 million which is under a reinsurance contract policy. During the three and six months ended June 30, 2019, the Company made no cash contributions to the defined benefit plans.

Non-Controlling Interests

Non-Controlling Interests6 Months Ended
Jun. 30, 2019
Noncontrolling Interest [Abstract]
Non-Controlling Interests(10 )
Non-Controlling Interests Non-controlling interests were as follows (in thousands):
Six Months Ended June 30,
2019
2018
Beginning non-controlling interests
$
615
$
534
Net income (loss) attributable to non-controlling interests
157
(27
)
Foreign currency translation adjustments (OCI)
22
8
Ending non-controlling interests
$
794
$
515

Related Party Transactions

Related Party Transactions6 Months Ended
Jun. 30, 2019
Related Party Transactions [Abstract]
Related Party Transactions(11 )
Related-Party Transactions Related-Party Debt In connection with the Merger, on September 9, 2016, the Company entered into a loan agreement with DNI for a $5.0 million unsecured subordinated term loan facility. The term loan was scheduled to mature in September 2021 and was pre-payable at any time by the Company without premium or penalty. The interest rate under this facility was 4.6% per annum. In February 2019, the Company repaid the term loan in full plus accrued interest in connection with the entry into the PNC Facility, thereby terminating the loan agreement. In February 2016, DNS borrowed $1.8 million from DNI for capital investment, which amount was outstanding as of June 30, 2019, with an interest rate of 4.6% per annum. On February 27, 2019, in connection with the entry into the PNC Facility, the Company amended the terms of this loan to extend the repayment date to May 27, 2022. On December 27, 2018, the Company entered into a loan agreement with DNI, for a $6.0 million term loan, which amount was outstanding as of June 30, 2019 with an interest rate of 4.6% per annum. On February 27, 2019, in connection with the entry into the PNC Facility, the Company amended the terms of the term loan to extend the repayment date to May 27, 2022 and to terminate any security granted to DNI with respect to such term loan In March 2018, Dasan Network Solutions, Inc., a subsidiary of the Company incorporated under the laws of Korea (“DNS Korea”) borrowed KRW6.5 billion ($5.8 million) from DNI, of which KRW5.0 billion ($4.5 million) was repaid on August 8, 2018. As of June 30, 2019, KRW1.5 billion ($1.3 million) remained outstanding. The loan bears interest at a rate of 4.6%, and is secured by certain accounts receivable of DNS Korea. On February 27, 2019, in connection with the entry into the PNC Facility, the Company amended the terms of this loan to extend the repayment date to May 27, 2022. The modifications resulting from the amendments described above were limited to the extension of the maturity dates and removal of the collateral on the outstanding term loans with DNI. There were no fees paid to DNI or external costs otherwise incurred in connection with these modifications. Interest expense on these related-party borrowings for the three and six months ended June 30, 2019 was $0.1 million and $0.2 million, respectively. Interest expense for the three and six months ended June 30, 2018 was $0.1 million and $0.2 million, respectively. Other Related-Party Transactions Sales and purchases (included in manufacturing (cost of revenue)), cost of revenue, research and product development, selling, marketing, general and administrative, interest expense and other expenses to and from related parties were as follows (in thousands):
Three Months Ended June 30, 2019
Counterparty
DNI ownership interest
Sales
Cost of revenue
Manufacturing (cost of revenue)
Research and product development
Selling, marketing, general and administrative
Interest expense
Other expenses
DNI
N/A
$
874
$
621
$

$

$
1,020
$
104
$
82
Tomato Soft Ltd.
100%


29




Tomato Soft (Xi'an) Ltd.
100%



134



Chasan Networks Co., Ltd.
100%


280
18



J-Mobile Corporation
90.47%







$
874
$
621
$
309
$
152
$
1,020
$
104
$
82
Three Months Ended June 30, 2018
Counterparty
DNI ownership interest
Sales
Cost of revenue
Manufacturing (cost of revenue)
Research and product development
Selling, marketing, general and administrative
Interest expense
Other expenses
DNI
N/A
$
962
$
750
$

$

$
1,144
$
145
$
79
Tomato Soft Ltd.
100%


38




Tomato Soft (Xi'an) Ltd.
100%



123



Chasan Networks Co., Ltd.
100%


268
18



Dasan France
100%







HANDYSOFT, Inc.
17.63%
108
39


2


$
1,070
$
789
$
306
$
141
$
1,146
$
145
$
79
Six Months Ended June 30, 2019
Counterparty
DNI ownership interest
Sales
Cost of revenue
Manufacturing (cost of revenue)
Research and product development
Selling, marketing, general and administrative
Interest expense
Other expenses
DNI
N/A
$
1,596
$
1,156
$

$

$
2,018
$
245
$
171
Tomato Soft Ltd.
100%


59




Tomato Soft (Xi'an) Ltd.
100%



255



Chasan Networks Co., Ltd.
100%


558
39


161
J-Mobile Corporation
90.47%
42
81





$
1,638
$
1,237
$
617
$
294
$
2,018
$
245
$
332
Six Months Ended June 30, 2018
Counterparty
DNI ownership interest
Sales
Cost of revenue
Manufacturing (cost of revenue)
Research and product development
Selling, marketing, general and administrative
Interest expense
Other expenses
DNI
N/A
$
2,210
$
1,873
$

$

$
2,166
$
224
$
145
Tomato Soft Ltd.
100%


57




Tomato Soft (Xi'an) Ltd.
100%


10
277



Chasan Networks Co., Ltd.
100%


592
36



Dasan France
100%
202
177





HANDYSOFT, Inc.
17.63%
256
149


2


$
2,668
$
2,199
$
659
$
313
$
2,168
$
224
$
145
The Company has entered into sales agreements with DNI and certain of its subsidiaries. Sales and cost of revenue to DNI and Dasan France represent finished goods produced by the Company that are sold to these related parties who sell the Company's products in Korea and France, respectively. The Company has entered into an agreement with Chasan Networks Co., Ltd. to provide manufacturing and research and development services for the Company. Under the agreement with Chasan Networks., Ltd., the Company is charged a cost plus 7% fee for the manufacturing and development of certain deliverables. The Company has entered into an agreement with Tomato Soft Ltd., a wholly owned subsidiary of DNI, to provide sourcing and inspection services for the Company. Under the agreement with Tomato Soft Ltd., the Company is charged a cost plus 7% fee for sourcing and inspection services. The Company has entered into an agreement with Tomato Soft (Xi'an) Ltd. to provide research and development services for the Company. Under the agreement with Tomato Soft (Xi'an) Ltd., the Company is charged an expected annual fee of $0.8 million for the development of certain deliverables. Prior to the Merger, as DNS was then a wholly owned subsidiary of DNI, DNI had sales agreements with certain customers on DNS' behalf. Since the Merger, due to these prior sales agreements, the Company has entered into an agreement with DNI in which DNI acts as a sales channel to these customers. Sales to DNI necessary for DNI to fulfill agreements with its customers are recorded net of royalty fees in related-party revenue. The Company shares office and certain administrative functions with DNI and certain of DNI's subsidiaries. Prior to the Merger, DNS, then a wholly owned subsidiary of DNI, shared human resources, treasury and other administrative support with DNI. The Company entered into certain service sharing agreements with DNI and certain of its subsidiaries for continued use of the shared office space and shared administrative services. Expenses related to rent and administrative services are allocated to the Company based on square footage occupied and headcount, respectively. Other expenses to related parties represent expenses to DNI for its payment guarantees relating to the Company's borrowings. See Note 15 for more information regarding such guarantees. The Company pays DNI a guarantee fee which is calculated as 0.9% of the guaranteed amount. Balances of Receivables and Payables with Related Parties Balances of receivables and payables arising from sales and purchases of goods and services with related parties were as follows (in thousands):
As of June 30, 2019
Counterparty
DNI ownership interest
Account receivables
Other receivables
Deposits for lease *
Long- term debt
Accounts payable
Other payables
Accrued and other liabilities**
DNI
N/A
$

$
13
$
710
$
9,097
$

$
1,534
$
131
Tomato Soft Ltd.
100%





10

Tomato Soft (Xi'an) Ltd.
100%





42

Chasan Networks Co., Ltd.
100%




98


Dasan France
100%

4





$

$
17
$
710
$
9,097
$
98
$
1,586
$
131
As of December 31, 2018
Counterparty
DNI ownership interest
Account receivables
Other receivables
Deposits for lease*
Loan Payable
Accounts payable
Other payables
Accrued and other liabilities**
DNI
N/A
$

$

$
735
$
14,142
$
1,000
$
1,231
$
169
Tomato Soft Ltd.
100%





9

Tomato Soft (Xi'an) Ltd.
100%





41

Dasan France
100%
280
65





HANDYSOFT, Inc.
14.77%
303



654


Chasan Networks Co., Ltd.
100%




89


$
583
$
65
$
735
$
14,142
$
1,743
$
1,281
$
169
*
Included in other assets related to deposits for lease in the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018.
**
Included in accrued and other liabilities in the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018.

Common Stock

Common Stock6 Months Ended
Jun. 30, 2019
Equity [Abstract]
Common Stock(12)
Common Stock On May 20, 2019, the Company completed a public offering of 4,717,949 shares of its common stock, inclusive of 615,384 shares sold upon full exercise of the underwriters’ option to purchase additional shares of common stock, at a price to the public of $9.75 per share. All shares of common stock were sold by the Company. The total gross proceeds from the offering, before deducting underwriting discounts, commissions and offering expenses, were approximately $46.0 million. After deducting the underwriters’ discount, commissions and other offering expenses, the net proceeds were approximately $42.5 million.

Net Income Per Share Attributab

Net Income Per Share Attributable to DASAN Zhone Solutions, Inc.6 Months Ended
Jun. 30, 2019
Earnings Per Share [Abstract]
Net Income Per Share Attributable to DASAN Zhone Solutions, Inc.(13 )
Net Income Per Share Attributable to DASAN Zhone Solutions, Inc. Basic net income per share attributable to DASAN Zhone Solutions, Inc. is computed by dividing the net income attributable to DASAN Zhone Solutions, Inc. for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net income per share attributable to DASAN Zhone Solutions, Inc. gives effect to common stock equivalents; however, potential common equivalent shares are excluded if their effect is antidilutive. Potential common equivalent shares are composed of incremental shares of common equivalent shares issuable upon the exercise of stock options and the vesting of restricted stock units. The following table is a reconciliation of the numerator and denominator in the basic and diluted net income per share calculation (in thousands, except per share data):
Three Months Ended June 30,
Six Months Ended June 30,
2019
2018
2019
2018
Net income attributable to DASAN Zhone Solutions, Inc.
$
2,408
$
1,416
$
770
$
1,523
Weighted average number of shares outstanding:
Basic
18,166
16,438
17,384
16,425
Effect of dilutive securities:
Stock options, restricted stock units and share awards
316
234
326
220
Diluted
18,482
16,672
17,710
16,645
Net income per share attributable to DASAN Zhone Solutions, Inc.:
Basic
$
0.13
$
0.09
$
0.04
$
0.09
Diluted
$
0.13
$
0.08
$
0.04
$
0.09

Leases

Leases6 Months Ended
Jun. 30, 2019
Leases [Abstract]
Leases(14 )
Leases The Company leases certain properties and buildings (including manufacturing facilities, warehouses, and office spaces) and equipment under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company’s lease portfolio consists of operating leases which expire at various dates through 2027. At June 30, 2019, the Company had one outstanding finance lease. The Company determines if an arrangement contains a lease at inception. The Company evaluates each service contract upon inception to determine whether it is, or contains, a lease. Such determination is made by applying judgment in evaluating each service contract within the context of the 5-step decision making process under ASC 842. The key concepts of the 5-step decision making process that the Company evaluated can be summarized as: (1) is there an identified physical asset; (2) does the Company have the right to substantially all the economic benefits from the asset throughout the contract period; (3) does the Company control how and for what purpose the asset is used; (4) does the Company operate the asset; and (5) did the Company design the asset in a way that predetermines how it will be used. Assets and liabilities related to operating leases are included in the condensed consolidated balance sheet as right-of-use assets from operating leases, operating lease liabilities - current and operating lease liabilities - non-current. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Many of the Company’s lease agreements contain renewal options; however, the Company does not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that the Company is reasonably certain of renewing the lease at inception or when a triggering event occurs. Some of the Company’s lease agreements contain rent escalation clauses, rent holidays, capital improvement funding or other lease concessions. The Company recognizes minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement. The Company amortizes this expense over the term of the lease beginning with the date of initial possession, which is the date lessor makes an underlying asset available for use. Variable lease components represent amounts that are not fixed in nature and are not tied to an index or rate, and are recognized as incurred. In determining its right-of-use assets and lease liabilities, the Company applies a discount rate to the minimum lease payments within each lease agreement. ASC 842 requires the Company to use the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company determines the incremental borrowing rate for each lease based primarily on its lease term and the economic environment of the applicable country or region. When the Company cannot readily determine the discount rate implicit in the lease agreement, the Company utilizes incremental borrowing rate based on the most recent debt facilities interest rates. For the measurement and classification of its lease agreements, the Company groups lease and non-lease components into a single lease component for all underlying asset classes. Variable lease payments include payments for non-lease components of maintenance costs. The components of lease expense are as follows:
Three Months Ended June 30, 2019 (in thousands)
Six Months Ended June 30, 2019 (in thousands)
Operating lease cost
$
1,140
$
2,263
Variable lease cost
162
326
Total net lease cost
$
1,302
$
2,589
Supplemental cash flow information related to the Company’s operating leases was as follows:
Three Months Ended June 30, 2019 (in thousands)
Six Months Ended June 30, 2019 (in thousands)
Cash paid for amounts included in the measurement of operating lease liabilities
$
1,319
$
2,623
ROU assets obtained in exchange for operating lease obligations
$

$

The following table presents the lease balances within the Company’s condensed consolidated balance sheet, weighted average remaining lease term, and weighted average discount rates related to the Company’s operating leases as of June 30, 2019 (in thousands):
Lease Assets and Liabilities
Assets:
Right-of-use assets from operating leases
$
20,310
Liabilities:
Operating lease liabilities - current
$
3,892
Operating lease liabilities - non-current
17,542
Total operating lease liabilities
$
21,434
Weighted average remaining lease term
4.66 years
Weighted average discount rate
6.4
% The following table presents the maturity of the Company’s operating lease liabilities as of June 30, 2019 (in thousands):
Remainder of 2019
$
2,631
2020
4,381
2021
4,044
2022
3,863
2023
3,717
Thereafter
6,530
Total operating lease payments
$
25,166
Less: imputed interest
(3,732
)
Total operating lease liabilities
$
21,434
As of December 31, 2018, the estimated future lease payments under non-cancelable operating leases as defined under the previous lease accounting guidance of ASC Topic 840, for the following five fiscal years and thereafter are as follows (in thousands):
Operating Leases
Year ending December 31:
2019
$
4,100
2020
3,005
2021
2,590
2022
2,664
2023
2,494
Thereafter
5,929
Total minimum lease payments
$
20,782

Commitments and Contingencies

Commitments and Contingencies6 Months Ended
Jun. 30, 2019
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies(15 )
Commitments and Contingencies Warranties The Company accrues warranty costs based on historical trends for the expected material and labor costs to provide warranty services. Warranty periods are generally one to five years from the date of shipment. The following table reconciles changes in the Company’s accrued warranties and related costs included in accrued and other liabilities (in thousands):
Six Months Ended June 30,
2019
2018
Beginning balance
$
1,319
$
931
Assumed balance from Keymile
230

Charged to cost of revenue
233
728
Claims and settlements
(472
)
(421
)
Foreign exchange impact
3
9
Ending balance
$
1,313
$
1,247
Performance Bonds In the normal course of operations, from time to time, the Company arranges for the issuance of various types of surety bonds, such as bid and performance bonds, which are agreements under which the surety company guarantees that the Company will perform in accordance with contractual or legal obligations. As of June 30, 2019, the Company had $13.3 million of surety bonds guaranteed by third parties. Purchase Commitments The Company has agreements with various contract manufacturers which include non-cancellable inventory purchase commitments. The Company’s inventory purchase commitments typically allow for cancellation of orders 30 days in advance of the required inventory availability date as set by the Company at time of order. The amount of non-cancellable purchase commitments outstanding, net of reserve, was $3.3 million as of June 30, 2019. Royalties The Company has certain royalty commitments associated with the shipment and licensing of certain products. Royalty expense is generally based on a dollar amount per unit shipped or a percentage of the underlying revenue and is recorded in cost of revenue. Payment Guarantees provided by Third Parties and DNI The following table sets forth payment guarantees of the Company's indebtedness and other obligations as of June 30, 2019 (in thousands) that have been provided by third parties and DNI. DNI owns approximately 44.4% of the outstanding shares of the Company's common stock:
Guarantor
Amount Guaranteed (in thousands)
Description of Obligations Guaranteed
DNI
$
8,400
Credit facility from Industrial Bank of Korea
DNI
2,075
Purchasing Card from Industrial Bank of Korea
DNI
8,400
Credit facility from Korea Development Bank
DNI
5,187
Borrowings from Korea Development Bank
DNI
6,000
Credit facility from NongHyup Bank
DNI
3,703
Borrowings from Export-Import Bank of Korea
DNI
1,660
Purchasing Card from Shinhan Bank
PNC Bank, N.A.
2,860
Letter of Credit
Seoul Guarantee Insurance Co.
5,454
Performance Bond, Warranty Bond, etc. (*)
Industrial Bank of Korea
3,493
Letter of Credit
Industrial Bank of Korea
2,435
Bank Guarantee
Korea Development Bank
3,476
Letter of Credit
NongHyup Bank
3,360
Letter of Credit
Woori Bank
2,462
Bank Guarantee
Shinhan Bank
2,384
Purchasing Card
AXA Insurance Company
180
Guarantee for flexible retirement program
Polska Agencja Zeglugi Powietrznej
117
Performance Bond, Warranty Bond, etc. (*)
$
61,646
*
The Company is generally responsible for warranty liabilities for a period of two years with respect to major product sales and has, therefore, contracted for surety insurance for a portion of the warranty liabilities. Legal Proceedings From time to time, the Company is subject to various legal proceedings, claims and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, the Company records an accrual for legal contingencies that it has determined to be probable to the extent that the amount of the loss can be reasonably estimated. The Company does not expect that the ultimate costs to resolve these matters will have a material adverse effect on its consolidated financial position or results of operations. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the results of operations of the period in which the ruling occurs, or future periods.

Income Taxes

Income Taxes6 Months Ended
Jun. 30, 2019
Income Tax Disclosure [Abstract]
Income Taxes(16 )
Income Taxes Income tax expense for the three and six months ended June 30, 2019 was approximately $0.7 million and $0.8 million, respectively, on pre-tax income of $3.1 million and $1.7 million, respectively. Income tax expense for the three and six months ended June 30, 2018 was $0.3 million for each period, on pre-tax income of $1.7 million and $1.8 million, respectively. For the three and six months ended June 30, 2019 and 2018, the effective income tax rate varied from the United States statutory income tax rate primarily due to valuation allowances in the United States and the mix of earnings generated by the Company’s wholly owned foreign subsidiaries. The total amount of unrecognized tax benefits, including interest and penalties, at June 30, 2019 was $0.8 million. The amount of tax benefits that would impact the effective income tax rate, if recognized, is $0.1 million. There were no significant changes to unrecognized tax benefits during the three and six months ended June 30, 2019 and 2018. The Company does not anticipate any significant changes with respect to unrecognized tax benefits within the next 12 months.

Enterprise-Wide Information

Enterprise-Wide Information6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]
Enterprise-Wide Information(1 7 )
Enterprise-Wide Information The Company is a global provider of ultra-broadband network access solutions and communications platforms deployed by advanced Tier 1, 2 and 3 service providers and enterprise customers. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the Company unit level. Accordingly, the Company is considered to be in a single reporting segment and operating unit structure. The Company's property, plant and equipment, net of accumulated depreciation, were located in the following geographical areas (in thousands):
June 30, 2019
December 31, 2018
United States
$
2,810
$
3,036
Korea
1,520
1,543
Japan and Vietnam
886
910
Taiwan and India
26
29
Germany
931

$
6,173
$
5,518

Subsequent Events

Subsequent Events6 Months Ended
Jun. 30, 2019
Subsequent Events [Abstract]
Subsequent Events(18)
Subsequent Events Acquisition of HANDYSOFT, Inc. On July 31, 2019, DASAN Network Solutions, Inc., a California corporation and a wholly owned subsidiary of the Company, entered into and consummated a Share Transfer Agreement with HANDYSOFT, Inc., a company duly registered under the laws of the Republic of Korea (“HANDYSOFT”), whereby HANDYSOFT sold all of its interest in DASAN Network Solutions JAPAN, Inc. in exchange for a cash payment of $950,000. Following the share transfer, DASAN Network Solutions JAPAN, Inc. became a wholly-owned, indirect subsidiary of the Company. New Head Office Lease On July 9, 2019, the Company entered into a lease agreement (the “Lease”) with Family Stations, Inc., a California corporation (“Lessor”). The Lease covers approximately 16,500 square feet of space located at 1350 South Loop Road, Alameda, California (the “Premises”). The Lease provides for a term of 63 months, commencing on November 1, 2019 (or such later date as contemplated by the Lease in the event Lessor is unable to tender possession of the Premises by such date), with a basic monthly rent ranging from $41,273 to $47,846 per month.

Organization and Summary of S_2

Organization and Summary of Significant Accounting Policies (Policies)6 Months Ended
Jun. 30, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Basis of Presentation(c )
Basis of Presentation For a complete description of what the Company believes to be the critical accounting policies and estimates used in the preparation of its unaudited condensed consolidated financial statements, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. All intercompany transactions and balances have been eliminated in consolidation. The results of operations for the current interim period are not necessarily indicative of results to be expected for the current year or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission (“SEC”) on March 12, 2019.
Use of Estimates(d )
Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.
Reclassifications(e)
Reclassifications For the three and six months ended June 30, 2018, certain previously reported statement of comprehensive income (loss) and statement of cash flows amounts have been adjusted for certain immaterial reclassifications to correctly reflect: (i) cost of products and services to related parties; and (ii) changes in accounts receivable and contract assets.
Revenue( f )
Revenue The following table presents the revenues by source (in thousands):
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Revenue by source:
Products
$
78,861
$
73,317
$
148,443
$
130,043
Services
4,803
2,940
9,310
5,718
Total
$
83,664
$
76,257
$
157,753
$
135,761
The following summarizes required disclosures about geographical concentrations (in thousands):
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Revenue by geography:
United States
$
9,753
$
13,630
$
19,331
$
30,179
Canada
965
1,321
1,888
2,293
Total North America
10,718
14,951
21,219
32,472
Latin America
5,971
7,312
12,556
15,269
Europe, Middle East, Africa
25,177
9,475
43,591
16,963
Korea
18,954
19,111
34,805
31,235
Other Asia Pacific
22,844
25,408
45,582
39,822
Total International
72,946
61,306
136,534
103,289
Total
$
83,664
$
76,257
$
157,753
$
135,761
Concentration of Risk(g )
Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents which totaled $56.4 million at June 30, 2019, including $9.7 million held by its international subsidiaries. Cash and cash equivalents consist principally of financial deposits and money market accounts that are principally held with various domestic and international financial institutions with high credit standing. The Company’s customers include competitive and incumbent local exchange carriers, competitive access providers, internet service providers, wireless carriers and resellers serving these markets. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Allowances are maintained for potential doubtful accounts. For the three months ended June 30, 2019, one customer accounted for 12% of net revenue. For the six months ended June 30, 2019, no single customer accounted for 10% or more of net revenue. For the three and six months ended June 30, 2018, one customer accounted for 22% and 15% of net revenue, respectively. As of June 30, 2019, one customer represented 14% of net accounts receivable. As of December 31, 2018, two customers represented 11% and 10% of net accounts receivable, respectively. As of June 30, 2019 and December 31, 2018, receivables from customers in countries other than the United States represented 93% and 88%, respectively, of net accounts receivable.
Business Combination( h )
Business Combination The Company allocates the fair value of purchase consideration to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets and certain tangible assets such as inventory. Critical estimates in valuing certain tangible and intangible assets include but are not limited to future expected cash flows from the underlying assets and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Defined Benefit Plans and Plan Assumptions(i)
Defined Benefit Plans and Plan Assumptions The Company provides certain defined benefit pension plans to employees in Germany. Pension accounting is intended to reflect the recognition of future benefit costs over the employees' average expected future service to the Company based on the terms of the plans and investment and funding decisions. To estimate the impact of these future payments and the Company’s decisions concerning funding of these obligations, the Company is required to make assumptions using actuarial concepts within the framework of U.S. GAAP. Two critical assumptions are the discount rate and the expected long-term return on plan assets. Other important assumptions include expected future salary increases, expected future increases to benefit payments, expected retirement dates, employee turnover, retiree mortality rates and portfolio composition. The Company evaluates these assumptions at least annually.
Recent Accounting Pronouncements( j )
Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases The Company adopted the new standard on January 1, 2019, the first day of fiscal 2019, using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to retained earnings as of January 1, 2019 as a result of this adoption. ASC 842 sets out the principles for the recognition, measurement, presentation and disclosure of leases. The Company has elected to use a certain package of practical expedients permitted under the transition guidance within ASC 842. Those practical expedients are as follows:

The Company did not reassess (i) whether expired or existing contracts contain leases under the new definition of a lease; (ii) lease classification for expired or existing leases; and (iii) whether previously capitalized initial direct costs would qualify for capitalization under ASC 842.

The Company did not reassess a lease whose term is 12 months or less and does not include a purchase option that the lessee is reasonably certain to exercise.

The Company did not elect to use hindsight for transition when considering judgments and estimates such as assessments of lessee options to extend or terminate a lease or purchase the underlying asset.

For all asset classes, the Company elected to not recognize a right-of-use asset and lease liability for leases with a term of 12 months or less.

For all asset classes, the Company elected to not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component. The Company applies significant judgment in considering all relevant factors that create an economic benefit (e.g., contract-based, asset-based, entity-based, and market-based, among others) as of the commencement date in determining the initial lease term and future lease payments. For example, the Company exercises judgment in determining whether renewal periods will be exercised during the initial measurement process. If the Company believes it will exercise the renewal option, and the lease payments associated with the renewal periods are known or calculable, such renewal lease payments would be included in the initial measurement of the lease liability. Otherwise, even if the Company believes that it will exercise the renewal period, if the renewal payments are unknown or not calculable, they would not be included until they become known or calculable at which time the Company would remeasure the remaining lease payments similar to a lease modification. Adoption of ASC 842 resulted in the balance sheet recognition of right of use assets and lease liabilities of approximately $22.5 million as of January 1, 2019. Adoption of ASC 842 did not materially impact the Company’s unaudited condensed consolidated statements of comprehensive income (loss) and cash flows. See Note 14 in the notes to unaudited condensed consolidated financial statements. Income Tax Effects within Accumulated Other Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost Other Recent Accounting Pronouncements Not Yet Adopted In January 2017, FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment On August 28, 2018, the FASB issued ASU 2018-13, Fair Value Measurement In August 2018, the FASB issued ASU 2018-14, Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans

Organization and Summary of S_3

Organization and Summary of Significant Accounting Policies (Tables)6 Months Ended
Jun. 30, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Schedule of Revenues by SourceThe following table presents the revenues by source (in thousands):
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Revenue by source:
Products
$
78,861
$
73,317
$
148,443
$
130,043
Services
4,803
2,940
9,310
5,718
Total
$
83,664
$
76,257
$
157,753
$
135,761
Information about Our Net Revenue for North America and International MarketsThe following summarizes required disclosures about geographical concentrations (in thousands):
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Revenue by geography:
United States
$
9,753
$
13,630
$
19,331
$
30,179
Canada
965
1,321
1,888
2,293
Total North America
10,718
14,951
21,219
32,472
Latin America
5,971
7,312
12,556
15,269
Europe, Middle East, Africa
25,177
9,475
43,591
16,963
Korea
18,954
19,111
34,805
31,235
Other Asia Pacific
22,844
25,408
45,582
39,822
Total International
72,946
61,306
136,534
103,289
Total
$
83,664
$
76,257
$
157,753
$
135,761

Business Combination (Tables)

Business Combination (Tables)6 Months Ended
Jun. 30, 2019
Business Combinations [Abstract]
Summary of Preliminary Estimated Purchase Price Allocation to Fair Value of Asset Acquired and Liabilities AssumedA summary of the preliminary estimated purchase price allocation to the fair value of assets acquired and liabilities assumed is as follows (in thousands):
Purchase consideration
Cash consideration
$
11,776
Working capital adjustment: cash received from lockbox mechanism
(2,497
)
Adjusted purchase consideration
$
9,279
Schedule of Estimated Fair Value of Assets Acquired and Liabilities AssumedThe following summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the Keymile Acquisition (in thousands):
Allocation of purchase consideration
Current assets
Cash and cash equivalents
$
4,582
Accounts receivable - trade, net
6,820
Other receivables
798
Inventories
9,943
Property, plant and equipment
983
Other assets
163
Intangible assets
12,030
Accounts payable - trade
(3,303
)
Short-term debt
(4,582
)
Contract liabilities
(364
)
Accrued liabilities
(3,614
)
Deferred tax liabilities
(1,071
)
Pension obligations
(12,656
)
Other long term liabilities
(116
)
Bargain purchase gain
(334
)
Total purchase consideration
$
9,279
Schedule of Preliminary Estimated Fair Value and Useful Lives of Identifiable Intangible AssetsThe following table represents the preliminary estimated fair value and useful lives of identifiable intangible assets acquired:
Estimated Fair Value (in thousands)
Estimated Useful Life
Intangible assets acquired
Customer relationships
$
3,667
5 years
Trade name
3,208
5 years
Technology - developed core
5,155
5 years
Total intangible assets
$
12,030
Summary of Pro Forma InformationThe unaudited pro forma information for the periods set forth below gives effect to the Keymile Acquisition as if it had occurred as of January 1, 2018. The unaudited pro forma financial information has been prepared by management for illustrative purposes only and does not purport to represent what the results of operations, financial condition or other financial information of the Company would have been if the Keymile Acquisition had occurred on January 1, 2018 or what such results or financial condition will be for any future periods. The unaudited pro forma financial information is based on estimates and assumptions and on the information available at the time of the preparation thereof. These estimates and assumptions may change, be revised or prove to be materially different, and the estimates and assumptions may not be representative of facts existing at the time of the Keymile Acquisition. The pro forma adjustments primarily relate to acquisition related costs, amortization of acquired intangibles and interest expense related to financing arrangements. Below is the pro forma financial information (in thousands):
Three Months Ended
Six Months Ended
June 30, 2018
June 30, 2018
Pro forma net revenues
$
87,381
$
157,216
Pro forma net income attributable to DASAN Zhone Solutions, Inc.
1,775
2,159

Balance Sheet Details (Tables)

Balance Sheet Details (Tables)6 Months Ended
Jun. 30, 2019
Balance Sheet Related Disclosures [Abstract]
Schedule of Accounts Receivable, NetAccounts receivable, net consisted of the following (in thousands):
June 30, 2019
December 31, 2018
Gross accounts receivable
$
88,725
$
71,945
Less: allowance for doubtful accounts
(353
)
(328
)
Total accounts receivable, net
$
88,372
$
71,617
Schedule of InventoriesInventories consisted of the following (in thousands):
June 30, 2019
December 31, 2018
Raw materials
$
17,723
$
15,688
Work in process
3,174
2,429
Finished goods
22,409
15,751
Total inventories
$
43,306
$
33,868

Property, Plant and Equipment (

Property, Plant and Equipment (Tables)6 Months Ended
Jun. 30, 2019
Property Plant And Equipment [Abstract]
Property Plant and Equipment, NetProperty, plant and equipment consisted of the following (in thousands):
June 30, 2019
December 31, 2018
Furniture and fixtures
$
10,232
$
8,029
Machinery and equipment
2,380
3,553
Leasehold improvements
4,039
3,715
Computers and software
1,154
922
Other
751
982
18,556
17,201
Less: accumulated depreciation and amortization
(12,062
)
(11,271
)
Less: government grants
(321
)
(412
)
Total property and equipment, net
$
6,173
$
5,518

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)6 Months Ended
Jun. 30, 2019
Goodwill And Intangible Assets Disclosure [Abstract]
Schedule of GoodwillGoodwill was as follows (in thousands):
June 30, 2019
December 31, 2018
Gross carrying amount
$
3,977
$
3,977
Less: accumulated impairment


Net
$
3,977
$
3,977
Schedule of Intangible AssetsIntangible assets consisted of the following (in thousands):
June 30, 2019
Gross Carrying Amount
Accumulated Amortization
Net
Developed technology
$
8,179
$
(2,246
)
$
5,933
Customer relationships
8,880
(1,849
)
7,031
Trade name
3,185
(318
)
2,867
Total intangible assets, net
$
20,244
$
(4,413
)
$
15,831
December 31, 2018
Gross Carrying Amount
Accumulated Amortization
Net
Developed technology
$
3,060
$
(1,428
)
$
1,632
Customer relationships
5,240
(1,223
)
4,017
Total intangible assets, net
$
8,300
$
(2,651
)
$
5,649
Future Amortization Expense of Intangible AssetsThe following table presents the future amortization expense of the Company’s intangible assets as of June 30, 2019 (in thousands):
Remainder of 2019
$
1,762
2020
3,525
2021
3,321
2022
2,913
2023
2,913
Thereafter
1,397
Total
$
15,831
Weighted average remaining life:
Developed technology
3.98 years
Customer relationships
5.92 years
Trade name
4.50 years

Debt (Tables)

Debt (Tables)6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]
Summary of DebtThe following tables summarize the Company’s debt (in thousands):
As of June 30, 2019
Short-term
Long-term
Total
PNC Bank Facility
$
2,500
$
21,875
$
24,375
PNC Revolving Line of Credit
4,394

4,394
Working Capital Loan
2,275

2,275
Bank and Trade Facilities - Foreign Operations
20,417

20,417
Related Party

9,097
9,097
$
29,586
$
30,972
$
60,558
Less: unamortized deferred financing costs on the PNC Bank Facility
(719
)
(1,009
)
(1,728
)
$
28,867
$
29,963
$
58,830
As of December 31, 2018
Short-term
Long-term
Total
Wells Fargo Bank Facility
$
7,000

$
7,000
Bank and Trade Facilities - Foreign Operations
24,762

24,762
Related Party

14,142
14,142
$
31,762
$
14,142
$
45,904
Schedule of Short-term DebtAs of June 30, 2019 and December 31, 2018, the Company had an aggregate outstanding balance of $20.4 million and $24.8 million, respectively, under such financing arrangements. The maturity dates and interest rates per annum applicable to outstanding borrowings under these financing arrangements are listed in the tables below (amount in thousands).
As of June 30, 2019
Maturity Date
Denomination
Interest rate (%)
Amount
Industrial Bank of Korea
Credit facility
08/06/2019 ~ 11/12/2019
USD
5.30 ~ 5.50
$
2,972
NongHyup Bank
Credit facility
07/02/2019 ~ 11/07/2019
USD
4.05 ~ 4.20
3,361
The Export-Import Bank of Korea
Export development loan
7/1/2019 *
KRW
3.44
5,316
Korea Development Bank
General loan
8/8/2019
KRW
3.48
4,322
Korea Development Bank
Credit facility
07/08/2019 ~ 10/24/2019
USD
3.35 ~ 3.95
2,717
LGUPlus
General loan
6/17/2020
KRW
0
1,729
$
20,417
*
On July 1, 2019, the maturity date of the export development loan from The Export-Import Bank of Korea was extended to July 1, 2020.
As of December 31, 2018
Maturity Date
Denomination
Interest rate (%)
Amount
Industrial Bank of Korea
Credit facility
01/02/2019 ~ 05/15/2019
USD
3.96 ~ 4.36
$
1,982
Industrial Bank of Korea
Trade finance
02/18/2019 ~ 02/25/2019
USD
5.31 ~ 6.08
1,920
Shinhan Bank
General loan
3/30/2019
KRW
6.06
2,862
NongHyup Bank
Credit facility
01/07/2019 ~ 04/29/2019
USD
3.71 ~ 4.50
2,053
The Export-Import Bank of Korea
Export development loan
07/01/2019
KRW
3.44
6,439
The Export-Import Bank of Korea
Import development loan
02/14/2019
USD
4.31
850
Korea Development Bank
General loan
08/08/2019
KRW
3.48
4,472
Korea Development Bank
Credit facility
02/07/2019 ~ 03/06/2019
USD
3.64 ~ 3.91
1,489
LGUPlus
General loan
06/17/2019
KRW
0
1,789
Shoko Chukin Bank
General loan
06/28/2019
JPY
1.33
906
$
24,762

Defined Benefit Plans (Tables)

Defined Benefit Plans (Tables)6 Months Ended
Jun. 30, 2019
Compensation And Retirement Disclosure [Abstract]
Schedule of Assumptions Used in Determining the Benefit ObligationThe following key actuarial assumptions were made in determining the benefit obligation:
June 30, 2019
Discount rate
1.20%
Rate of pension increase
1.70%
Retirement age
63-67 years

Non-Controlling Interests (Tabl

Non-Controlling Interests (Tables)6 Months Ended
Jun. 30, 2019
Noncontrolling Interest [Abstract]
Non-controlling InterestsNon-controlling interests were as follows (in thousands):
Six Months Ended June 30,
2019
2018
Beginning non-controlling interests
$
615
$
534
Net income (loss) attributable to non-controlling interests
157
(27
)
Foreign currency translation adjustments (OCI)
22
8
Ending non-controlling interests
$
794
$
515

Related Party Transactions (Tab

Related Party Transactions (Tables)6 Months Ended
Jun. 30, 2019
Related Party Transactions [Abstract]
Schedule of Related Party TransactionsSales and purchases (included in manufacturing (cost of revenue)), cost of revenue, research and product development, selling, marketing, general and administrative, interest expense and other expenses to and from related parties were as follows (in thousands):
Three Months Ended June 30, 2019
Counterparty
DNI ownership interest
Sales
Cost of revenue
Manufacturing (cost of revenue)
Research and product development
Selling, marketing, general and administrative
Interest expense
Other expenses
DNI
N/A
$
874
$
621
$

$

$
1,020
$
104
$
82
Tomato Soft Ltd.
100%


29




Tomato Soft (Xi'an) Ltd.
100%



134



Chasan Networks Co., Ltd.
100%


280
18



J-Mobile Corporation
90.47%







$
874
$
621
$
309
$
152
$
1,020
$
104
$
82
Three Months Ended June 30, 2018
Counterparty
DNI ownership interest
Sales
Cost of revenue
Manufacturing (cost of revenue)
Research and product development
Selling, marketing, general and administrative
Interest expense
Other expenses
DNI
N/A
$
962
$
750
$

$

$
1,144
$
145
$
79
Tomato Soft Ltd.
100%


38




Tomato Soft (Xi'an) Ltd.
100%



123



Chasan Networks Co., Ltd.
100%


268
18



Dasan France
100%







HANDYSOFT, Inc.
17.63%
108
39


2


$
1,070
$
789
$
306
$
141
$
1,146
$
145
$
79
Six Months Ended June 30, 2019
Counterparty
DNI ownership interest
Sales
Cost of revenue
Manufacturing (cost of revenue)
Research and product development
Selling, marketing, general and administrative
Interest expense
Other expenses
DNI
N/A
$
1,596
$
1,156
$

$

$
2,018
$
245
$
171
Tomato Soft Ltd.
100%


59




Tomato Soft (Xi'an) Ltd.
100%



255



Chasan Networks Co., Ltd.
100%


558
39


161
J-Mobile Corporation
90.47%
42
81





$
1,638
$
1,237
$
617
$
294
$
2,018
$
245
$
332
Six Months Ended June 30, 2018
Counterparty
DNI ownership interest
Sales
Cost of revenue
Manufacturing (cost of revenue)
Research and product development
Selling, marketing, general and administrative
Interest expense
Other expenses
DNI
N/A
$
2,210
$
1,873
$

$

$
2,166
$
224
$
145
Tomato Soft Ltd.
100%


57




Tomato Soft (Xi'an) Ltd.
100%


10
277



Chasan Networks Co., Ltd.
100%


592
36



Dasan France
100%
202
177





HANDYSOFT, Inc.
17.63%
256
149


2


$
2,668
$
2,199
$
659
$
313
$
2,168
$
224
$
145
Balances of receivables and payables arising from sales and purchases of goods and services with related parties were as follows (in thousands):
As of June 30, 2019
Counterparty
DNI ownership interest
Account receivables
Other receivables
Deposits for lease *
Long- term debt
Accounts payable
Other payables
Accrued and other liabilities**
DNI
N/A
$

$
13
$
710
$
9,097
$

$
1,534
$
131
Tomato Soft Ltd.
100%





10

Tomato Soft (Xi'an) Ltd.
100%





42

Chasan Networks Co., Ltd.
100%




98


Dasan France
100%

4





$

$
17
$
710
$
9,097
$
98
$
1,586
$
131
As of December 31, 2018
Counterparty
DNI ownership interest
Account receivables
Other receivables
Deposits for lease*
Loan Payable
Accounts payable
Other payables
Accrued and other liabilities**
DNI
N/A
$

$

$
735
$
14,142
$
1,000
$
1,231
$
169
Tomato Soft Ltd.
100%





9

Tomato Soft (Xi'an) Ltd.
100%





41

Dasan France
100%
280
65





HANDYSOFT, Inc.
14.77%
303



654


Chasan Networks Co., Ltd.
100%




89


$
583
$
65
$
735
$
14,142
$
1,743
$
1,281
$
169
*
Included in other assets related to deposits for lease in the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018.
**
Included in accrued and other liabilities in the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018.

Net Income Per Share Attribut_2

Net Income Per Share Attributable to DASAN Zhone Solutions, Inc. (Tables)6 Months Ended
Jun. 30, 2019
Earnings Per Share [Abstract]
Reconciliation of Basic and Diluted Net Income per ShareThe following table is a reconciliation of the numerator and denominator in the basic and diluted net income per share calculation (in thousands, except per share data):
Three Months Ended June 30,
Six Months Ended June 30,
2019
2018
2019
2018
Net income attributable to DASAN Zhone Solutions, Inc.
$
2,408
$
1,416
$
770
$
1,523
Weighted average number of shares outstanding:
Basic
18,166
16,438
17,384
16,425
Effect of dilutive securities:
Stock options, restricted stock units and share awards
316
234
326
220
Diluted
18,482
16,672
17,710
16,645
Net income per share attributable to DASAN Zhone Solutions, Inc.:
Basic
$
0.13
$
0.09
$
0.04
$
0.09
Diluted
$
0.13
$
0.08
$
0.04
$
0.09

Leases (Tables)

Leases (Tables)6 Months Ended
Jun. 30, 2019
Leases [Abstract]
Components of Lease ExpenseThe components of lease expense are as follows:
Three Months Ended June 30, 2019 (in thousands)
Six Months Ended June 30, 2019 (in thousands)
Operating lease cost
$
1,140
$
2,263
Variable lease cost
162
326
Total net lease cost
$
1,302
$
2,589
Supplemental Cash Flow Information Related to Operating LeasesSupplemental cash flow information related to the Company’s operating leases was as follows:
Three Months Ended June 30, 2019 (in thousands)
Six Months Ended June 30, 2019 (in thousands)
Cash paid for amounts included in the measurement of operating lease liabilities
$
1,319
$
2,623
ROU assets obtained in exchange for operating lease obligations
$

$
Lease Balances within Condensed Consolidated Balance Sheet, Weighted Average Remaining Lease Term, and Weighted Average Discount Rates Related to Operating LeasesThe following table presents the lease balances within the Company’s condensed consolidated balance sheet, weighted average remaining lease term, and weighted average discount rates related to the Company’s operating leases as of June 30, 2019 (in thousands):
Lease Assets and Liabilities
Assets:
Right-of-use assets from operating leases
$
20,310
Liabilities:
Operating lease liabilities - current
$
3,892
Operating lease liabilities - non-current
17,542
Total operating lease liabilities
$
21,434
Weighted average remaining lease term
4.66 years
Weighted average discount rate
6.4
%
Maturity of Operating Lease LiabilitiesThe following table presents the maturity of the Company’s operating lease liabilities as of June 30, 2019 (in thousands):
Remainder of 2019
$
2,631
2020
4,381
2021
4,044
2022
3,863
2023
3,717
Thereafter
6,530
Total operating lease payments
$
25,166
Less: imputed interest
(3,732
)
Total operating lease liabilities
$
21,434
Estimated Future Lease Payments under Non-Cancelable Operating LeasesAs of December 31, 2018, the estimated future lease payments under non-cancelable operating leases as defined under the previous lease accounting guidance of ASC Topic 840, for the following five fiscal years and thereafter are as follows (in thousands):
Operating Leases
Year ending December 31:
2019
$
4,100
2020
3,005
2021
2,590
2022
2,664
2023
2,494
Thereafter
5,929
Total minimum lease payments
$
20,782

Commitments and Contingencies (

Commitments and Contingencies (Tables)6 Months Ended
Jun. 30, 2019
Commitments And Contingencies Disclosure [Abstract]
Reconciliation of Changes in Accrued Warranties and Related Costs Included in Accrued and Other Liabilities The following table reconciles changes in the Company’s accrued warranties and related costs included in accrued and other liabilities (in thousands):
Six Months Ended June 30,
2019
2018
Beginning balance
$
1,319
$
931
Assumed balance from Keymile
230

Charged to cost of revenue
233
728
Claims and settlements
(472
)
(421
)
Foreign exchange impact
3
9
Ending balance
$
1,313
$
1,247
Payment Guarantees to Third PartiesThe following table sets forth payment guarantees of the Company's indebtedness and other obligations as of June 30, 2019 (in thousands) that have been provided by third parties and DNI. DNI owns approximately 44.4% of the outstanding shares of the Company's common stock:
Guarantor
Amount Guaranteed (in thousands)
Description of Obligations Guaranteed
DNI
$
8,400
Credit facility from Industrial Bank of Korea
DNI
2,075
Purchasing Card from Industrial Bank of Korea
DNI
8,400
Credit facility from Korea Development Bank
DNI
5,187
Borrowings from Korea Development Bank
DNI
6,000
Credit facility from NongHyup Bank
DNI
3,703
Borrowings from Export-Import Bank of Korea
DNI
1,660
Purchasing Card from Shinhan Bank
PNC Bank, N.A.
2,860
Letter of Credit
Seoul Guarantee Insurance Co.
5,454
Performance Bond, Warranty Bond, etc. (*)
Industrial Bank of Korea
3,493
Letter of Credit
Industrial Bank of Korea
2,435
Bank Guarantee
Korea Development Bank
3,476
Letter of Credit
NongHyup Bank
3,360
Letter of Credit
Woori Bank
2,462
Bank Guarantee
Shinhan Bank
2,384
Purchasing Card
AXA Insurance Company
180
Guarantee for flexible retirement program
Polska Agencja Zeglugi Powietrznej
117
Performance Bond, Warranty Bond, etc. (*)
$
61,646

Enterprise-Wide Information (Ta

Enterprise-Wide Information (Tables)6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]
Property, Plant and Equipment, Net of Accumulated Depreciation The Company's property, plant and equipment, net of accumulated depreciation, were located in the following geographical areas (in thousands):
June 30, 2019
December 31, 2018
United States
$
2,810
$
3,036
Korea
1,520
1,543
Japan and Vietnam
886
910
Taiwan and India
26
29
Germany
931

$
6,173
$
5,518

Organization and Summary of S_4

Organization and Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands3 Months Ended6 Months Ended12 Months Ended
Jun. 30, 2019USD ($)customercountryJun. 30, 2018customerJun. 30, 2019USD ($)customercountryJun. 30, 2018customerDec. 31, 2018customerJan. 01, 2019USD ($)Sep. 09, 2016
Significant Accounting Policies [Line Items]
Number of customers | customer900 900
Number of countries in which entity operates | country80 80
State of entity incorporatedDelaware
Date of entity incorporation1999-06
Right-of-use assets from operating leases $ 20,310 $ 20,310 $ 22,500
Operating lease liabilities21,434 21,434 $ 22,500
Credit Concentration Risk
Significant Accounting Policies [Line Items]
Concentration of credit risk, cash and cash equivalents56,400 $ 56,400
Credit Concentration Risk | Accounts receivable
Significant Accounting Policies [Line Items]
Number of major customers | customer1 2
Concentration risk, percentage14.00%
Credit Concentration Risk | Accounts receivable | Customer One
Significant Accounting Policies [Line Items]
Concentration risk, percentage10.00%
Credit Concentration Risk | Accounts receivable | Customer Two
Significant Accounting Policies [Line Items]
Concentration risk, percentage11.00%
Credit Concentration Risk | International Subsidiaries
Significant Accounting Policies [Line Items]
Concentration of credit risk, cash and cash equivalents $ 9,700 $ 9,700
Customer Concentration Risk | Sales Revenue, Net
Significant Accounting Policies [Line Items]
Number of major customers | customer1 1 0 1
Concentration risk, percentage12.00%22.00%15.00%
Geographic Concentration Risk | Accounts receivable | Foreign Countries
Significant Accounting Policies [Line Items]
Concentration risk, percentage93.00%88.00%
Merger Agreement with Dragon Acquisition Company
Significant Accounting Policies [Line Items]
Percent of voting interest acquired44.40%44.40%58.00%

Organization and Summary of S_5

Organization and Summary of Significant Accounting Policies - Schedule of Revenues by Source (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Disaggregation Of Revenue [Line Items]
Revenue $ 83,664 $ 76,257 $ 157,753 $ 135,761
Product
Disaggregation Of Revenue [Line Items]
Revenue78,861 73,317 148,443 130,043
Service
Disaggregation Of Revenue [Line Items]
Revenue $ 4,803 $ 2,940 $ 9,310 $ 5,718

Organization and Summary of S_6

Organization and Summary of Significant Accounting Policies - Summary of Required Disclosures about Geographical Concentrations (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Significant Accounting Policies [Line Items]
Revenue $ 83,664 $ 76,257 $ 157,753 $ 135,761
United States
Significant Accounting Policies [Line Items]
Revenue9,753 13,630 19,331 30,179
Canada
Significant Accounting Policies [Line Items]
Revenue965 1,321 1,888 2,293
North America
Significant Accounting Policies [Line Items]
Revenue10,718 14,951 21,219 32,472
Latin America
Significant Accounting Policies [Line Items]
Revenue5,971 7,312 12,556 15,269
Europe, Middle East, Africa
Significant Accounting Policies [Line Items]
Revenue25,177 9,475 43,591 16,963
Korea
Significant Accounting Policies [Line Items]
Revenue18,954 19,111 34,805 31,235
Other Asia Pacific
Significant Accounting Policies [Line Items]
Revenue22,844 25,408 45,582 39,822
International
Significant Accounting Policies [Line Items]
Revenue $ 72,946 $ 61,306 $ 136,534 $ 103,289

Business Combination - Addition

Business Combination - Additional Information (Details) $ in ThousandsJan. 03, 2019USD ($)Jan. 03, 2019EUR (€)Oct. 01, 2018USD ($)Oct. 01, 2018EUR (€)Apr. 30, 2019USD ($)Apr. 30, 2019EUR (€)Jun. 30, 2019USD ($)Dec. 31, 2018USD ($)Jun. 30, 2019EUR (€)Oct. 01, 2018EUR (€)
Business Acquisition [Line Items]
Gain on bargain purchase $ 334
Working Capital Loan
Business Acquisition [Line Items]
Repayments of borrowings $ 2,200 € 2,000,000
Outstanding borrowings2,300 € 2,000,000
Keymile GmbH, LLC
Business Acquisition [Line Items]
Payment to acquire business, gross $ 11,800 € 10,250,000 $ 4,500 € 4,000,000
Pension obligation12,700
Pension asset $ 3,500
Cash received $ 2,500
Payment to acquire business, gross $ 4,500 € 4,000,000
Working capital loan interest rate3.50%3.50%
Gain on bargain purchase $ 300
Weighted average useful lives of acquired property, plant and equipment5 years5 years

Business Combination - Summary

Business Combination - Summary of Preliminary Estimated Purchase Price Allocation to Fair Value of Asset Acquired and Liabilities Assumed (Details) - Keymile Acquisition $ in ThousandsJan. 03, 2019USD ($)
Purchase consideration
Cash consideration $ 11,776
Working capital adjustment: cash received from lockbox mechanism(2,497)
Adjusted purchase consideration $ 9,279

Business Combination - Summar_2

Business Combination - Summary of Preliminary Estimated Fair Values of Assets Acquired and Liabilities Assumed at the Date of Acquisition (Details) - Keymile Acquisition $ in ThousandsJan. 03, 2019USD ($)
Current assets
Cash and cash equivalents $ 4,582
Accounts receivable - trade, net6,820
Other receivables798
Inventories9,943
Property, plant and equipment983
Other assets163
Intangible assets12,030
Accounts payable - trade(3,303)
Short-term debt(4,582)
Contract liabilities(364)
Accrued liabilities(3,614)
Deferred tax liabilities(1,071)
Pension obligations(12,656)
Other long term liabilities(116)
Bargain purchase gain(334)
Total purchase consideration $ 9,279

Business Combination - Schedule

Business Combination - Schedule of Preliminary Estimated Fair Value and Useful Lives of Identifiable Intangible Assets (Details) - Keymile Acquisition $ in ThousandsJan. 03, 2019USD ($)
Business Acquisition [Line Items]
Intangible assets $ 12,030
Customer Relationships
Business Acquisition [Line Items]
Intangible assets $ 3,667
Estimated Useful Life5 years
Trade name
Business Acquisition [Line Items]
Intangible assets $ 3,208
Estimated Useful Life5 years
Developed Technology
Business Acquisition [Line Items]
Intangible assets $ 5,155
Estimated Useful Life5 years

Business Combination - Summar_3

Business Combination - Summary of Pro Forma Information (Details) - Keymile Acquisition - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2018Jun. 30, 2018
Business Acquisition [Line Items]
Pro forma net revenues $ 87,381 $ 157,216
Pro forma net income attributable to DASAN Zhone Solutions, Inc. $ 1,775 $ 2,159

Balance Sheet Detail - Schedule

Balance Sheet Detail - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Balance Sheet Related Disclosures [Abstract]
Gross accounts receivable $ 88,725 $ 71,945
Less: allowance for doubtful accounts(353)(328)
Total accounts receivable, net $ 88,372 $ 71,617

Balance Sheet Detail - Schedu_2

Balance Sheet Detail - Schedule of Inventories (Details) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials $ 17,723 $ 15,688
Work in process3,174 2,429
Finished goods22,409 15,751
Total inventories $ 43,306 $ 33,868

Balance Sheet Detail - Addition

Balance Sheet Detail - Additional Information (Details) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Inventory [Line Items]
Total inventories $ 43,306 $ 33,868
Collateral pledged
Inventory [Line Items]
Total inventories $ 8,100 $ 9,500

Property, Plant and Equipment -

Property, Plant and Equipment - Property, Plant and Equipment, Net (Details) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross $ 18,556 $ 17,201
Less: accumulated depreciation and amortization(12,062)(11,271)
Less: government grants(321)(412)
Property, plant and equipment, net6,173 5,518
Furniture and fixtures
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross10,232 8,029
Machinery and equipment
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross2,380 3,553
Leasehold improvements
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross4,039 3,715
Computers and software
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross1,154 922
Other
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross $ 751 $ 982

Property, Plant and Equipment_2

Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Property, Plant and Equipment
Property Plant And Equipment [Line Items]
Depreciation and amortization associated with property, plant and equipment $ 0.5 $ 0.4 $ 1 $ 0.8

Goodwill and Intangible Asset_2

Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
Gross carrying amount $ 3,977 $ 3,977
Net $ 3,977 $ 3,977

Goodwill and Intangible Asset_3

Goodwill and Intangible Assets - Additional Information (Details) - USD ($)3 Months Ended6 Months Ended12 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018Dec. 31, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill, impairment loss $ 0 $ 0
Amortization of intangible assets $ 900,000 $ 300,000 $ 1,800,000 $ 600,000

Goodwill and Intangible Asset_4

Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross $ 20,244 $ 8,300
Accumulated Amortization(4,413)(2,651)
Intangible assets, net15,831 5,649
Developed Technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross8,179 3,060
Accumulated Amortization(2,246)(1,428)
Intangible assets, net5,933 1,632
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross8,880 5,240
Accumulated Amortization(1,849)(1,223)
Intangible assets, net7,031 $ 4,017
Trade name
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross3,185
Accumulated Amortization(318)
Intangible assets, net $ 2,867

Goodwill and Intangible Asset_5

Goodwill and Intangible Assets - Future Amortization Expense of Intangible Assets (Details) $ in Thousands6 Months Ended
Jun. 30, 2019USD ($)
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets, remainder of 2019 $ 1,762
Amortization expense of intangible assets, 20203,525
Amortization expense of intangible assets, 20213,321
Amortization expense of intangible assets, 20222,913
Amortization expense of intangible assets, 20232,913
Amortization expense of intangible assets, thereafter1,397
Amortization expense of intangible assets, total $ 15,831
Developed Technology
Finite-Lived Intangible Assets [Line Items]
Weighted average remaining life3 years 11 months 23 days
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Weighted average remaining life5 years 11 months 1 day
Trade name
Finite-Lived Intangible Assets [Line Items]
Weighted average remaining life4 years 6 months

Debt - Summary of Debt (Details

Debt - Summary of Debt (Details) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs $ 60,558
Less: unamortized deferred financing costs on the PNC Bank Facility(719)
Short-term28,867 $ 31,762
Less: unamortized deferred financing costs on the PNC Bank Facility(1,009)
Long-term29,963 14,142
Less: unamortized deferred financing costs on the PNC Bank Facility(1,728)
Total58,830 45,904
P N C Bank Facility
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs24,375
PNC Revolving Line of Credit
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs4,394
Working Capital Loan
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs2,275
Short-term7,000
Total7,000
Bank And Trade Facilities Foreign Operations
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs20,417
Short-term24,762
Total24,762
Related Party
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs9,097
Long-term14,142
Total $ 14,142
Short-term Debt
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs29,586
Short-term Debt | P N C Bank Facility
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs2,500
Short-term Debt | PNC Revolving Line of Credit
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs4,394
Short-term Debt | Working Capital Loan
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs2,275
Short-term Debt | Bank And Trade Facilities Foreign Operations
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs20,417
Long-term Debt
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs30,972
Long-term Debt | P N C Bank Facility
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs21,875
Long-term Debt | Related Party
Debt Instrument [Line Items]
Debt before unamortized deferred financing costs $ 9,097

Debt - Additional Information (

Debt - Additional Information (Details) $ in ThousandsJul. 02, 2019USD ($)Feb. 27, 2019USD ($)Jan. 03, 2019USD ($)Jan. 03, 2019EUR (€)Oct. 01, 2018USD ($)Oct. 01, 2018EUR (€)Apr. 30, 2019USD ($)Apr. 30, 2019EUR (€)Jun. 30, 2019USD ($)InstallmentJun. 30, 2018USD ($)Jun. 30, 2019EUR (€)Dec. 31, 2018USD ($)
Line Of Credit Facility [Line Items]
Interest rate additional to federal funds rate0.50%
Interest rate additional to PNC's prime rate or LIBOR rate1.00%
Interest rate applicable margin1.00%
Repayment of outstanding letter of credit $ 31,262 $ 26,455
Debt discount $ 1,728
Stated interest rate3.50%3.50%
Number Of Equal Annual Instalments In Repayment Of Debt | Installment2
Debt $ 20,417 $ 24,762
Credit facility, commitment as security for various letters of credit9,100 5,500
Keymile GmbH, LLC
Line Of Credit Facility [Line Items]
Payment to acquire business, gross $ 11,800 € 10,250,000 $ 4,500 € 4,000,000
P N C Debt Facility | Dasan Network Solutions, Inc. (DNS)
Line Of Credit Facility [Line Items]
Repayments of borrowings5,000
PNC Bank
Line Of Credit Facility [Line Items]
Long-term line of credit24,400
Debt discount1,700
Revolving Line of Credit
Line Of Credit Facility [Line Items]
Long-term line of credit $ 4,400
Credit facility, interest rate7.00%7.00%
Revolving Line of Credit | Subsequent Event
Line Of Credit Facility [Line Items]
Repayment of outstanding letter of credit $ 4,400
Letter of Credit
Line Of Credit Facility [Line Items]
Credit facility, commitment as security for various letters of credit $ 1,300 2,600
Foreign Line of Credit
Line Of Credit Facility [Line Items]
Credit facility, commitment as security for various letters of credit19,000 $ 19,000
Base Rate Loans | Term Loans
Line Of Credit Facility [Line Items]
Interest rate applicable margin5.00%
Base Rate Loans | Revolving Line of Credit
Line Of Credit Facility [Line Items]
Interest rate applicable margin1.50%
LIBOR Rate Loans | Term Loans
Line Of Credit Facility [Line Items]
Interest rate applicable margin6.00%
LIBOR Rate Loans | Revolving Line of Credit
Line Of Credit Facility [Line Items]
Interest rate applicable margin2.50%
PNC Bank
Line Of Credit Facility [Line Items]
Long-term line of credit $ 25,000
Credit facility, maximum borrowing capacity15,000
W F B Facility
Line Of Credit Facility [Line Items]
Repayment of revolving line of credit outstanding balance plus accrued interest and fees and cash collateralized1,500 1,500
Repayment of outstanding letter of credit $ 3,600 3,600
Korea And Japan | P N C Debt Facility
Line Of Credit Facility [Line Items]
Repayments of short-term debt $ 5,600
Term Loan | P N C Debt Facility
Line Of Credit Facility [Line Items]
Credit agreement, expiration dateFeb. 27,
2022
Quarterly installments. repayment of term loan | Installment8
Frequency of paymentsquarterly
Repayment of the term loan, monthly $ 625,000
Monthly payment, beginning dateJun. 30,
2019
Repayment of the term loan, quarterly $ 937,500
Quarterly payment, beginning dateJun. 30,
2021
Term Loan | PNC Bank
Line Of Credit Facility [Line Items]
Credit facility, interest rate8.44%8.44%
Working Capital Loan
Line Of Credit Facility [Line Items]
Repayments of borrowings $ 2,200 € 2,000,000
Outstanding borrowings $ 2,300 € 2,000,000

Debt - Schedule of Short-term D

Debt - Schedule of Short-term Debt (Details) - USD ($) $ in Thousands6 Months Ended12 Months Ended
Jun. 30, 2019Dec. 31, 2018Oct. 01, 2018
Debt Instrument [Line Items]
Stated interest rate3.50%
Debt $ 20,417 $ 24,762
Industrial Bankof Korea Credit Facility
Debt Instrument [Line Items]
Debt $ 2,972 $ 1,982
Industrial Bankof Korea Credit Facility | Minimum
Debt Instrument [Line Items]
Maturity Date, startAug. 6,
2019
Jan. 2,
2019
Stated interest rate5.30%3.96%
Industrial Bankof Korea Credit Facility | Maximum
Debt Instrument [Line Items]
Maturity Date, endNov. 12,
2019
May 15,
2019
Stated interest rate5.50%4.36%
NongHyup Bank, Credit facility
Debt Instrument [Line Items]
Debt $ 3,361 $ 2,053
NongHyup Bank, Credit facility | Minimum
Debt Instrument [Line Items]
Maturity Date, startJul. 2,
2019
Jan. 7,
2019
Stated interest rate4.05%3.71%
NongHyup Bank, Credit facility | Maximum
Debt Instrument [Line Items]
Maturity Date, endNov. 7,
2019
Apr. 29,
2019
Stated interest rate4.20%4.50%
The Export Import Bankof Korea Export Development Loan
Debt Instrument [Line Items]
Maturity DateJul. 1,
2019
[1]Jul. 1,
2019
Stated interest rate3.44%3.44%
Debt $ 5,316 $ 6,439
Korea Development Bank, General loan
Debt Instrument [Line Items]
Maturity DateAug. 8,
2019
Aug. 8,
2019
Stated interest rate3.48%3.48%
Debt $ 4,322 $ 4,472
Korea Development Bank, Credit facility
Debt Instrument [Line Items]
Debt $ 2,717 $ 1,489
Korea Development Bank, Credit facility | Minimum
Debt Instrument [Line Items]
Maturity Date, startJul. 8,
2019
Feb. 7,
2019
Stated interest rate3.35%3.64%
Korea Development Bank, Credit facility | Maximum
Debt Instrument [Line Items]
Maturity Date, endOct. 24,
2019
Mar. 6,
2019
Stated interest rate3.95%3.91%
L G U Plus General Loan
Debt Instrument [Line Items]
Maturity DateJun. 17,
2020
Jun. 17,
2019
Stated interest rate0.00%0.00%
Debt $ 1,729 $ 1,789
Industrial Bankof Korea Trade Finance
Debt Instrument [Line Items]
Debt $ 1,920
Industrial Bankof Korea Trade Finance | Minimum
Debt Instrument [Line Items]
Maturity Date, startFeb. 18,
2019
Stated interest rate5.31%
Industrial Bankof Korea Trade Finance | Maximum
Debt Instrument [Line Items]
Maturity Date, endFeb. 25,
2019
Stated interest rate6.08%
Shinhan Bank, General Loan
Debt Instrument [Line Items]
Maturity DateMar. 30,
2019
Stated interest rate6.06%
Debt $ 2,862
The Export Import Bank Of Korea Import Development Loan
Debt Instrument [Line Items]
Maturity DateFeb. 14,
2019
Stated interest rate4.31%
Debt $ 850
Shoko Chukin Bank General Loan
Debt Instrument [Line Items]
Maturity DateJun. 28,
2019
Stated interest rate1.33%
Debt $ 906
[1]On July 1, 2019, the maturity date of the export development loan from The Export-Import Bank of Korea was extended to July 1, 2020.

Debt - Schedule of Short-Term_2

Debt - Schedule of Short-Term Debt (Parenthetical) (Details)Jul. 01, 2019
The Export Import Bankof Korea Export Development Loan | Subsequent Event
Short Term Debt [Line Items]
Debt instrument, extended maturity dateJul. 1,
2020

Defined Benefit Plans - Additio

Defined Benefit Plans - Additional Information (Details)3 Months Ended6 Months Ended
Jun. 30, 2019USD ($)Jun. 30, 2019USD ($)
Defined Benefit Pension Plans And Defined Benefit Postretirement Plans Disclosure [Abstract]
Defined benefit pension plans, interest expense $ 100,000
Defined benefit plans obligation $ 13,600,000 13,600,000
Defined benefit plans assets3,500,000 3,500,000
Defined benefit plans cash contributions $ 0 $ 0

Defined Benefit Plans - Schedul

Defined Benefit Plans - Schedule of Assumptions Used in Determining the Benefit Obligation (Details)6 Months Ended
Jun. 30, 2019
Discount rate1.20%
Rate of pension increase1.70%
Minimum
Retirement age63 years
Maximum
Retirement age67 years

Non-Controlling Interests - Non

Non-Controlling Interests - Non-Controlling Interests (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Beginning balance, non-controlling interests $ 615 $ 534
Net income (loss) attributable to non-controlling interests $ (24) $ (61)157 (27)
Foreign currency translation adjustments (OCI)22 8
Ending balance, non-controlling interests $ 794 $ 515 $ 794 $ 515

Related Party Transactions - Ad

Related Party Transactions - Additional Information (Details) ₩ in BillionsFeb. 27, 2019Aug. 08, 2018USD ($)Aug. 08, 2018KRW (₩)Sep. 09, 2016USD ($)Mar. 31, 2018USD ($)Mar. 31, 2018KRW (₩)Jun. 30, 2019USD ($)Jun. 30, 2018USD ($)Jun. 30, 2019USD ($)Jun. 30, 2018USD ($)Jun. 30, 2019KRW (₩)Dec. 31, 2018USD ($)Oct. 01, 2018
Related Party Transaction [Line Items]
Stated interest rate3.50%
Long-term debt $ 58,830,000 $ 58,830,000 $ 45,904,000
Debt instrument, collateral fees paid to DNI0
Interest expense, related party100,000 $ 100,000 200,000 $ 200,000
Research and product development $ 9,430,000 $ 8,714,000 $ 19,614,000 $ 17,691,000
Term Loan | Loan Agreement
Related Party Transaction [Line Items]
Stated interest rate4.60%4.60%4.60%
Debt instrument maturity dateMay 27,
2022
Line of credit $ 6,000,000 $ 6,000,000
DASAN | Loan Agreement | Dasan Network Solutions, Inc. (DNS)
Related Party Transaction [Line Items]
Stated interest rate4.60%4.60%
Origination of notes receivable from related parties $ 5,800,000 ₩ 6.5
Debt instrument maturity dateMay 27,
2022
Repayments of borrowings $ 4,500,000 ₩ 5
Long-term debt $ 1,300,000 $ 1,300,000 ₩ 1.5
DASAN | Majority Shareholder
Related Party Transaction [Line Items]
Guarantee fee, percent0.90%
DASAN | Junior Lien | Majority Shareholder | Loan Agreement | Dasan Network Solutions, Inc. (DNS)
Related Party Transaction [Line Items]
Stated interest rate4.60%4.60%4.60%
Origination of notes receivable from related parties $ 1,800,000
Debt instrument maturity dateMay 27,
2022
DASAN | Junior Lien | Term Loan | Unsecured Debt | Majority Shareholder | Loan Agreement
Related Party Transaction [Line Items]
Maximum borrowing amount $ 5,000,000
Debt instrument maturity month and year2021-09
Stated interest rate4.60%
Chasan Networks Co., Ltd | Junior Lien | Affiliated Entity | Loan Agreement | Dasan Network Solutions, Inc. (DNS)
Related Party Transaction [Line Items]
Manufacturing and development fee, percent7.00%7.00%7.00%
Tomato Soft Ltd. | Junior Lien | Affiliated Entity | Loan Agreement | Dasan Network Solutions, Inc. (DNS)
Related Party Transaction [Line Items]
Sourcing and inspection services fee, percent7.00%7.00%7.00%
Tomato Soft (Xi'an) Ltd.
Related Party Transaction [Line Items]
Research and product development $ 800,000

Related Party Transactions - Sa

Related Party Transactions - Sales and Purchases To and From Related Parties (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Related Party Transaction [Line Items]
Sales $ 874 $ 1,070 $ 1,638 $ 2,668
Cost of revenue621 789 1,237 2,199
Interest expense100 100 200 200
Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Sales874 1,070 1,638 2,668
Cost of revenue621 789 1,237 2,199
Manufacturing (cost of revenue)309 306 617 659
Research and product development152 141 294 313
Selling, marketing, general and administrative1,020 1,146 2,018 2,168
Interest expense104 145 245 224
Other expenses82 79 332 145
DASAN | Majority Shareholder | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Sales874 962 1,596 2,210
Cost of revenue621 750 1,156 1,873
Selling, marketing, general and administrative1,020 1,144 2,018 2,166
Interest expense104 145 245 224
Other expenses $ 82 $ 79 $ 171 $ 145
Tomato Soft Ltd. | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
DNI ownership interest100.00%100.00%100.00%100.00%
Manufacturing (cost of revenue) $ 29 $ 38 $ 59 $ 57
Tomato Soft (Xi'an) Ltd. | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
DNI ownership interest100.00%100.00%100.00%100.00%
Manufacturing (cost of revenue) $ 10
Research and product development $ 134 $ 123 $ 255 $ 277
Chasan Networks Co., Ltd | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
DNI ownership interest100.00%100.00%100.00%100.00%
Manufacturing (cost of revenue) $ 280 $ 268 $ 558 $ 592
Research and product development $ 18 $ 18 39 $ 36
Other expenses $ 161
J Mobile | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
DNI ownership interest90.47%90.47%
Sales $ 42
Cost of revenue $ 81
Dasan France | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
DNI ownership interest100.00%100.00%
Sales $ 202
Cost of revenue $ 177
Handysoft Inc | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
DNI ownership interest17.63%17.63%
Sales $ 108 $ 256
Cost of revenue39 149
Selling, marketing, general and administrative $ 2 $ 2

Related Party Transactions - Ba

Related Party Transactions - Balances of Receivables and Payables with Related Parties (Details) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Related Party Transaction [Line Items]
Long-term debt $ 58,830 $ 45,904
Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
Account receivables583
Other receivables17 65
Deposits for lease[1]710 735
Long-term debt9,097 14,142
Accounts payable98 1,743
Other payables1,586 1,281
Accrued and other liabilities[2]131 169
DASAN | Majority Shareholder | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
Other receivables13
Deposits for lease[1]710 735
Long-term debt9,097 14,142
Accounts payable1,000
Other payables1,534 1,231
Accrued and other liabilities[2] $ 131 $ 169
Tomato Soft Ltd. | Affiliated Entity | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
DNI ownership interest100.00%100.00%
Other payables $ 10 $ 9
Tomato Soft (Xi'an) Ltd. | Affiliated Entity | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
DNI ownership interest100.00%100.00%
Other payables $ 42 $ 41
Chasan Networks Co., Ltd | Affiliated Entity | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
DNI ownership interest100.00%100.00%
Accounts payable $ 98 $ 89
Dasan France | Affiliated Entity | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
DNI ownership interest100.00%100.00%
Account receivables $ 280
Other receivables $ 4 $ 65
Handysoft Inc | Affiliated Entity | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
DNI ownership interest14.77%
Account receivables $ 303
Accounts payable $ 654
[1]Included in other assets related to deposits for lease in the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018.
[2]Included in accrued and other liabilities in the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018.

Common Stock - Additional Infor

Common Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in ThousandsMay 20, 2019Jun. 30, 2019Jun. 30, 2019
Subsidiary Sale Of Stock [Line Items]
Net proceeds from offering $ 42,509
Common stock
Subsidiary Sale Of Stock [Line Items]
Number of shares issued4,717,949 4,718,000
Shares issued upon exercise of underwriters option615,384
Price per share $ 9.75
Gross proceeds from offering $ 46,000
Net proceeds from offering $ 42,500

Net Income Per Share Attribut_3

Net Income Per Share Attributable to DASAN Zhone Solutions, Inc. - Reconciliation of Basic and Diluted Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Earnings Per Share [Abstract]
Net income attributable to DASAN Zhone Solutions, Inc. $ 2,408 $ 1,416 $ 770 $ 1,523
Basic (in shares)18,166 16,438 17,384 16,425
Effect of dilutive securities:
Stock options, restricted stock units and share awards316 234 326 220
Diluted (in shares)18,482 16,672 17,710 16,645
Basic (in dollar per share) $ 0.13 $ 0.09 $ 0.04 $ 0.09
Diluted (in dollar per share) $ 0.13 $ 0.08 $ 0.04 $ 0.09

Leases - Additional Information

Leases - Additional Information (Details)Jun. 30, 2019USD ($)
Leases [Abstract]
Finance lease $ 1

Leases - Components of Lease Ex

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2019
Leases [Abstract]
Operating lease cost $ 1,140 $ 2,263
Variable lease cost162 326
Total net lease cost $ 1,302 $ 2,589

Leases - Supplemental Cash Flow

Leases - Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2019
Leases [Abstract]
Cash paid for amounts included in the measurement of operating lease liabilities $ 1,319 $ 2,623
ROU assets obtained in exchange for operating lease obligations $ 0 $ 0

Leases - Lease Balances within

Leases - Lease Balances within Condensed Consolidated Balance Sheet, Weighted Average Remaining Lease Term, and Weighted Average Discount Rates Related to Operating Leases (Details) - USD ($) $ in ThousandsJun. 30, 2019Jan. 01, 2019
Assets:
Right-of-use assets from operating leases $ 20,310 $ 22,500
Liabilities:
Operating lease liabilities - current3,892
Operating lease liabilities - non-current17,542
Total operating lease liabilities $ 21,434 $ 22,500
Weighted average remaining lease term4 years 7 months 28 days
Weighted average discount rate6.40%

Leases - Maturity of Operating

Leases - Maturity of Operating Lease Liabilities (Details) - USD ($) $ in ThousandsJun. 30, 2019Jan. 01, 2019
Leases [Abstract]
Remainder of 2019 $ 2,631
20204,381
20214,044
20223,863
20233,717
Thereafter6,530
Total operating lease payments25,166
Less: imputed interest(3,732)
Total operating lease liabilities $ 21,434 $ 22,500

Leases - Estimated Future Lease

Leases - Estimated Future Lease Payments Under Non-cancelable Operating Leases (Details) $ in ThousandsDec. 31, 2018USD ($)
Year ending December 31:
2019 $ 4,100
20203,005
20212,590
20222,664
20232,494
Thereafter5,929
Total minimum lease payments $ 20,782

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Details) $ in Millions6 Months Ended
Jun. 30, 2019USD ($)
Purchase Commitment
Guarantee Obligations [Line Items]
Number of notice days required to notice in advance for cancellation of orders30 days
Amount of non-cancellable purchase commitments outstanding $ 3.3
Performance Guarantee
Guarantee Obligations [Line Items]
Guarantor obligations $ 13.3
Minimum
Guarantee Obligations [Line Items]
Product warranty period from the date of shipment1 year
Maximum
Guarantee Obligations [Line Items]
Product warranty period from the date of shipment5 years

Commitments and Contingencies_2

Commitments and Contingencies - Reconciliation of Changes in Accrued Warranties and Related Costs Included in Accrued and Other Liabilities (Details) - USD ($) $ in Thousands6 Months Ended
Jun. 30, 2019Jun. 30, 2018
Commitments And Contingencies Disclosure [Abstract]
Beginning balance $ 1,319 $ 931
Assumed balance from Keymile230
Charged to cost of revenue233 728
Claims and settlements(472)(421)
Foreign exchange impact3 9
Ending balance $ 1,313 $ 1,247

Commitments and Contingencies_3

Commitments and Contingencies - Payment Guarantees to Third Parties (Details) $ in Thousands6 Months Ended
Jun. 30, 2019USD ($)
Guarantee Obligations [Line Items]
Product warranty term2 years
Payment Guarantee
Guarantee Obligations [Line Items]
Guarantor obligations $ 61,646
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee
Guarantee Obligations [Line Items]
DNI ownership interest44.40%
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Shinhan Bank, General Loan
Guarantee Obligations [Line Items]
Guarantor obligations $ 8,400
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Purchasing Card from Shinhan Bank
Guarantee Obligations [Line Items]
Guarantor obligations2,075
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Purchasing Card from Industrial Bank of Korea
Guarantee Obligations [Line Items]
Guarantor obligations8,400
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | NongHyup Bank, Credit facility
Guarantee Obligations [Line Items]
Guarantor obligations5,187
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Borrowings from Export-Import Bank of Korea
Guarantee Obligations [Line Items]
Guarantor obligations6,000
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Korea Development Bank, General loan
Guarantee Obligations [Line Items]
Guarantor obligations3,703
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Credit Facility from Industrial Bank of Korea
Guarantee Obligations [Line Items]
Guarantor obligations1,660
PNC Bank | Payment Guarantee
Guarantee Obligations [Line Items]
Guarantor obligations2,860
Seoul Guarantee Insurance Co. | Payment Guarantee | Industrial Bank Of Korea Bank Guarantee
Guarantee Obligations [Line Items]
Guarantor obligations5,454
Industrial Bank of Korea | Payment Guarantee | Korea Development Bank, Credit facility
Guarantee Obligations [Line Items]
Guarantor obligations3,493
Industrial Bank of Korea | Payment Guarantee | Industrial Bankof Korea Facility
Guarantee Obligations [Line Items]
Guarantor obligations2,435
Korea Development Bank | Payment Guarantee
Guarantee Obligations [Line Items]
Guarantor obligations3,476
NongHyup Bank | Payment Guarantee
Guarantee Obligations [Line Items]
Guarantor obligations3,360
Woori Bank | Payment Guarantee
Guarantee Obligations [Line Items]
Guarantor obligations2,462
Shinhan Bank | Payment Guarantee
Guarantee Obligations [Line Items]
Guarantor obligations2,384
AXA Insurance Company | Payment Guarantee
Guarantee Obligations [Line Items]
Guarantor obligations180
Polska Agencja Zeglugi Powietrznej | Payment Guarantee
Guarantee Obligations [Line Items]
Guarantor obligations $ 117

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Income Tax Disclosure [Abstract]
Income tax expense $ 732 $ 341 $ 809 $ 336
Income before income taxes3,100 1,700 1,700 1,800
Unrecognized tax benefits800 800
Unrecognized tax benefits that would impact effective tax rate100 100
Unrecognized tax benefits, period increase (decrease) $ 0 $ 0 $ 0 $ 0

Enterprise-Wide Information - P

Enterprise-Wide Information - Property, Plant and Equipment, Net of Accumulated Depreciation (Details) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Property Plant And Equipment [Line Items]
Property, plant and equipment, net $ 6,173 $ 5,518
United States
Property Plant And Equipment [Line Items]
Property, plant and equipment, net2,810 3,036
Korea
Property Plant And Equipment [Line Items]
Property, plant and equipment, net1,520 1,543
Japan and Vietnam
Property Plant And Equipment [Line Items]
Property, plant and equipment, net886 910
Taiwan and India
Property Plant And Equipment [Line Items]
Property, plant and equipment, net26 $ 29
Germany
Property Plant And Equipment [Line Items]
Property, plant and equipment, net $ 931

Subsequent Events - Additional

Subsequent Events - Additional Information (Details) - Subsequent EventJul. 09, 2019USD ($)ft²Jul. 31, 2019USD ($)
Subsequent Event [Line Items]
Area under lease | ft²16,500
Lease term63 months
Lease commenced dateNov. 1,
2019
Minimum
Subsequent Event [Line Items]
Monthly rent expenses $ 41,273
Maximum
Subsequent Event [Line Items]
Monthly rent expenses $ 47,846
Handysoft Inc
Subsequent Event [Line Items]
Payment to acquire business, gross $ 950,000