Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 20, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | DASAN ZHONE SOLUTIONS INC | ||
Entity Central Index Key | 0001101680 | ||
Trading Symbol | DZSI | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 21,513,373 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 140,613,277 | ||
Entity File Number | 000-32743 | ||
Entity Tax Identification Number | 22-3509099 | ||
Entity Address, Address Line1 | 1350 South Loop Road, Suite 130 | ||
Entity Address, City or Town | Alameda | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94502 | ||
City Area Code | 510 | ||
Local Phone Number | 777-7000 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Interactive Data Current | Yes | ||
Title of each class | Common Stock, $0.001 Par Value | ||
Name of each exchange on which registered | NASDAQ | ||
Documents Incorporated by Reference | Portions of the registrant's definitive Proxy Statement for its 2020 Annual Meeting of Stockholders are incorporated by reference into Part III where indicated |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 28,747 | $ 27,709 |
Restricted cash | 4,646 | 7,003 |
Accounts receivable, net, trade receivables | 96,865 | 71,034 |
Accounts receivable, net, related parties | 583 | |
Other receivables, others | 8,092 | 12,923 |
Other receivables, related parties | 32 | 65 |
Inventories | 35,439 | 33,868 |
Contract assets | 16,680 | 11,381 |
Prepaid expenses and other current assets | 4,185 | 4,185 |
Total current assets | 194,686 | 168,751 |
Property, plant and equipment, net | 6,769 | 5,518 |
Right-of-use assets from operating leases | 20,469 | |
Goodwill | 3,977 | 3,977 |
Intangible assets, net | 12,381 | 5,649 |
Deferred tax assets, net | 1,622 | 2,752 |
Long-term restricted cash | 242 | 936 |
Other assets | 6,001 | 2,424 |
Total assets | 246,147 | 190,007 |
Current liabilities: | ||
Accounts payable, trade | 38,331 | 36,865 |
Accounts payable, related parties | 96 | 1,743 |
Short-term debt - Bank and trade facilities | 17,484 | 31,762 |
Other payables, others | 1,748 | 1,792 |
Other payables, related parties | 1,530 | 1,281 |
Contract liabilities - current | 3,567 | 8,511 |
Operating lease liabilities - current | 4,201 | |
Accrued and other liabilities | 12,844 | 11,517 |
Total current liabilities | 79,801 | 93,471 |
Long-term debt, bank and trade facilities | 9,937 | |
Long-term debt, related parties | 9,096 | 14,142 |
Contract liabilities - non-current | 3,230 | 1,801 |
Operating lease liabilities - non-current | 18,154 | |
Pension liabilities | 17,671 | |
Other long-term liabilities | 1,710 | 2,739 |
Total liabilities | 139,599 | 112,153 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity and non-controlling interest | ||
Common stock, authorized 36,000 shares, 21,419 and 16,587 shares outstanding as of December 31, 2019 and 2018, respectively, at a $0.001 par value | 21 | 16 |
Additional paid-in capital | 139,700 | 93,192 |
Accumulated other comprehensive loss | (3,939) | (192) |
Accumulated deficit | (29,234) | (15,777) |
Total stockholders' equity | 106,548 | 77,239 |
Non-controlling interest | 615 | |
Total stockholders' equity and non-controlling interest | 106,548 | 77,854 |
Total liabilities, stockholders’ equity and non-controlling interest | $ 246,147 | $ 190,007 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Allowances for doubtful accounts | $ 393 | $ 328 |
Common stock, authorized (in shares) | 36,000 | 36,000 |
Common stock, outstanding (in shares) | 21,419 | 16,587 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Third parties | $ 304,369 | $ 276,718 |
Related parties | 2,513 | 5,630 |
Total net revenue | 306,882 | 282,348 |
Products and services - third parties | 203,269 | 185,709 |
Products and services - related parties | 1,906 | 4,696 |
Amortization of intangible assets | 1,596 | 612 |
Total cost of revenue | 206,771 | 191,017 |
Gross profit | 100,111 | 91,331 |
Operating expenses: | ||
Research and product development | 38,516 | 35,306 |
Selling, marketing, general and administrative | 61,206 | 48,321 |
Restructuring and other charges | 4,908 | |
Amortization of intangible assets | 1,507 | 524 |
Goodwill impairment charge | 1,003 | |
Total operating expenses | 107,140 | 84,151 |
Operating income (loss) | (7,029) | 7,180 |
Interest income | 456 | 264 |
Interest expense | (3,981) | (1,738) |
Other income (expense), net | 876 | (1,146) |
Income (loss) before income taxes | (9,678) | 4,560 |
Income tax provision (benefit) | 3,585 | 1,724 |
Net income (loss) | (13,263) | 2,836 |
Net income (loss) attributable to non-controlling interest | 194 | 69 |
Net income (loss) attributable to DASAN Zhone Solutions, Inc. | (13,457) | 2,767 |
Foreign currency translation adjustments | (1,939) | (2,051) |
Actuarial gain (loss) for pension plan | (1,793) | |
Comprehensive income (loss) | (16,995) | 785 |
Comprehensive income attributable to non-controlling interest | 209 | 81 |
Comprehensive income (loss) attributable to DASAN Zhone Solutions, Inc. | $ (17,204) | $ 704 |
Basic earnings (loss) per share attributable to DASAN Zhone Solutions, Inc. | $ (0.69) | $ 0.17 |
Diluted earnings (loss) per share attributable to DASAN Zhone Solutions, Inc. | $ (0.69) | $ 0.17 |
Weighted average shares outstanding used to compute basic net income (loss) per share | 19,403 | 16,482 |
Weighted average shares outstanding used to compute diluted net income (loss) per share | 19,403 | 16,746 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity and Non-Controlling Interest - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit | Total stockholders' equity | Non-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, 2017 | 16,410 | ||||||
ASC 606 opening balance adjustment | 308 | 308 | 308 | ||||
Exercise of stock options and restricted stock grant | $ 914 | 914 | 914 | ||||
Exercise of stock options and restricted stock grant (in shares) | 150 | 177 | |||||
Stock-based compensation | $ 2,080 | 2,080 | 2,080 | ||||
Net income (loss) | 2,836 | 2,767 | 2,767 | 69 | |||
Other comprehensive loss | (2,051) | (2,063) | (2,063) | 12 | |||
Ending Balances, Stockholders' equity at Dec. 31, 2018 | $ 77,854 | $ 16 | 93,192 | (192) | (15,777) | 77,239 | 615 |
Ending Balances, Stockholders' equity (in shares) at Dec. 31, 2018 | 16,587 | 16,587 | |||||
Issuance of common stock in public offering, net of issuance costs | $ 42,509 | $ 5 | 42,504 | 42,509 | |||
Issuance of common stock in public offering, net of issuance costs (in shares) | 4,718 | ||||||
Purchase of non-controlling interest in subsidiary | (951) | (127) | (127) | (824) | |||
Exercise of stock options and restricted stock grant | $ 256 | 256 | 256 | ||||
Exercise of stock options and restricted stock grant (in shares) | 35 | 75 | |||||
Employee stock plan purchase program (ESPP) | $ 367 | 367 | 367 | ||||
Employee stock plan purchase program (ESPP) (in shares) | 39 | ||||||
Stock-based compensation | 3,508 | 3,508 | 3,508 | ||||
Net income (loss) | (13,263) | (13,457) | (13,457) | 194 | |||
Other comprehensive loss | (3,732) | (3,747) | (3,747) | $ 15 | |||
Ending Balances, Stockholders' equity at Dec. 31, 2019 | $ 106,548 | $ 21 | $ 139,700 | $ (3,939) | $ (29,234) | $ 106,548 | |
Ending Balances, Stockholders' equity (in shares) at Dec. 31, 2019 | 21,419 | 21,419 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (13,263) | $ 2,836 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 5,115 | 2,702 |
Goodwill impairment charge | 1,003 | |
Amortization of deferred financing cost | 664 | |
Stock-based compensation | 3,508 | 2,080 |
Provision for inventory reserves | 2,984 | 835 |
Provision for doubtful accounts | 155 | 20 |
Provision for sales returns | 370 | 1,343 |
Unrealized loss (gain) on foreign currency transactions | 158 | (1,229) |
Provision for deferred income taxes | 1,130 | 202 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (23,072) | (10,287) |
Inventories | 4,802 | (9,359) |
Contract assets | (5,962) | (12,175) |
Prepaid expenses and other assets | (7,688) | 3,381 |
Accounts payable | 10,340 | 5,702 |
Accrued and other liabilities | 854 | (3,727) |
Contract liabilities | (3,800) | 5,458 |
Net cash used in operating activities | (22,702) | (12,218) |
Cash flows from investing activities: | ||
Proceeds from disposal of property, plant and equipment and other assets | 2 | |
Purchases of property, plant and equipment | (2,314) | (1,182) |
Acquisition of business, net of cash acquired | (4,660) | |
Net cash used in investing activities | (6,974) | (1,180) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock in public offerings, net of issuance costs | 42,509 | |
Proceeds from short-term borrowings and line of credit | 49,243 | 55,518 |
Repayments of short-term borrowings and line of credit | (69,357) | (45,033) |
Proceeds from long-term borrowings | 25,000 | |
Repayments of long-term borrowings | (11,875) | |
Proceeds from related party term loan | 12,064 | |
Repayments of related party term loan | (5,000) | (4,460) |
Financing cost - debt issuance | (2,148) | |
Purchase of non-controlling interest | (951) | |
Proceeds from exercise of stock options | 623 | 914 |
Net cash provided by financing activities | 28,044 | 19,003 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (381) | (1,369) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (2,013) | 4,236 |
Cash, cash equivalents and restricted cash at beginning of period | 35,648 | 31,412 |
Cash, cash equivalents and restricted cash at end of period | 33,635 | 35,648 |
Reconciliation of cash, cash equivalents and restricted cash to statement of financial position | ||
Cash and cash equivalents | 28,747 | 27,709 |
Restricted cash | 4,646 | 7,003 |
Long-term restricted cash | 242 | 936 |
Cash, cash equivalents and restricted cash at end of period | 33,635 | 35,648 |
Cash paid during the period for: | ||
Interest - bank and trade facilities | 2,786 | 1,332 |
Interest - related party | 509 | 611 |
Income taxes | $ 2,017 | $ 1,260 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 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 1200 customers in more than 120 countries worldwide. DZS was incorporated under the laws of the state of Delaware in June 1999. The Company is headquartered in Oakland, California with flexible in-house production facilities in Seminole, Florida and Hannover, Germany, 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) Basis of Presentation The consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of the Company, its wholly owned subsidiaries and a subsidiary in which it had a controlling interest. All inter-company transactions and balances have been eliminated in consolidation. (c) DNI Ownership As of December 31, 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 7 and Note 12 to the consolidated financial statements for additional information. (d) Risks and Uncertainties The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, assuming the Company will continue as a going concern. The Company had net loss of $13.3 million for the year ended December 31, 2019 and net income of $2.8 million for the year ended December 31, 2018. Additionally, the Company incurred significant losses in prior years. As of December 31, 2019, the Company had an accumulated deficit of $29.2 million and working capital of $114.9 million. As of December 31, 2019, the Company had $28.7 million in cash and cash equivalents, which included $14.2 million in cash balances held by its international subsidiaries, of which $18.3 million was reflected in current liabilities. The Company’s liquidity could be impacted by: • its vulnerability to adverse economic conditions in its industry or the economy in general; • debt servicing requiring substantial amounts of cash, rather than being available for other purposes, including operations; • its ability to plan for, or react to, changes in its business and industry; and • investor and customer perceptions about its financial stability and limiting its ability to obtain financing or acquire customers. The Company’s ability to meet its obligations as they become due in the ordinary course of business for the next twelve (12) months will depend on its ability (i) to achieve forecasted results of operations, (ii) access funds approved under existing or new credit facilities and/or raise additional capital through sale of the Company’s common stock to the public, and (iii) effectively manage working capital requirements. If the Company cannot raise additional funds when it needs or wants them, its operations and prospects could be negatively affected. Management’s belief that it will achieve forecasted results of operations assumes that, among other things, the Company will continue to be successful in implementing its business strategy. If one or more of these factors do not occur as expected, it could cause the Company to fail to meet its obligations as they come due. At September 30, 2019, the Company was not in compliance with the maximum leverage ratio financial covenant under the PNC Credit Facilities, which represented an event of default thereunder. On November 8, 2019, the Company obtained a waiver of the foregoing event of default. The Company would have been in further breach of this financial covenant as of December 31, 2019. As discussed further in in March 2020, the Company In December 2019, a strain of coronavirus, now known as COVID-19, was reported to have surfaced in Wuhan, China. Since that time, other countries including the United States, South Korea, Italy and Japan have experienced widespread or sustained transmission of the virus, and there is a risk that the virus will continue to spread to additional countries. The Company relies on suppliers and contract manufacturers located in China and has significant business operations in South Korea and Japan. If the virus continues to spread, the effects of the virus could continue to materially and adversely affect our financial condition, results of operations, and cash flows. Given the ongoing and dynamic nature of the virus and the worldwide response related thereto, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The impact of a continued COVID-19 outbreak could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Based on the Company's current plans and current business conditions, the Company believes that its existing cash, cash equivalents and available credit facilities will be sufficient to satisfy its anticipated cash requirements for at least the next twelve (12) months from the date of this Annual Report on Form 10-K. Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, accounts receivable and contract assets. Cash and cash equivalents consist principally of financial deposits and money market accounts. Cash and cash equivalents are principally held with various domestic 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 year ended December 31, 2019, no customer represented 10% or more of net revenue. For the year ended December 31, 2018, one (1) customer represented 11% of net revenue. As of December 31, 2019, two (2) customers represented 18% and 11% of net accounts receivable, respectively. As of December 31, 2018, two (2) customers represented 11% and 10% of net accounts receivable, respectively. As of December 31, 2019 and December 31, 2018, receivables from customers in countries other than the United States represented 94% and 88% of net accounts receivable, respectively. (e) Consolidated Subsidiaries Details of the Company's consolidated operating subsidiaries as of December 31, 2019 and 2018 are as follows: Percentage of ownership (%) Location December 31, 2019 December 31, 2018 Dasan Network Solutions, Inc. (U.S. subsidiary) US 100 % 100 % Dasan Network Solutions, Inc. (Korean subsidiary) Korea 100 % 100 % DZS Japan Inc. Japan 100 % 69.06 % DASAN Vietnam Company Limited Vietnam 100 % 100 % D-Mobile Limited Taiwan 100 % 100 % DASAN India Private Limited India 99.99 % 99.99 % Keymile Gmbh Germany 100 % — % (f) Use of Estimates The preparation of the 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. (g) Revenue Recognition Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company generates revenue primarily from sales of products and services, including, extended warranty service and customer support. Revenue from product sales is recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery dependent upon the terms of the underlying contract. Most of the Company’s arrangements include customer acceptance provisions. Transfer of control occurs upon obtaining the signed acceptance certificate from the customer, unless the Company can objectively demonstrate that customer acceptance is a formality. In those instances, where transfer of control occurs prior to obtaining the signed acceptance certificate, the Company considers a number of factors, including successful completion of customer testing to demonstrate that the delivered products meet all acceptance criteria specified in the arrangement, its experience with the customer and its experience with other contracts for similar products. Revenue from services is generally recognized over time on a ratable basis over the contract term, using an output measure of progress, as the contracts usually provide the customer equal benefit throughout the contract period. The Company typically invoices customers for support contracts in advance, for periods ranging from one (1) to five (5) years. Transaction price is calculated as selling price net of variable consideration. Sales to certain distributors are made under arrangements which provide the distributors with volume discounts, price adjustments, and other allowances under certain circumstances. These adjustments and allowances are accounted for as variable consideration. To estimate variable consideration, the Company analyzes historical data, channel inventory levels, current economic trends and changes in customer demand for the Company's products, among other factors. Historically, variable consideration has not been a significant component of the Company’s contracts with customers. For contracts with customers that contain multiple performance obligations, the Company accounts for the promised performance obligations separately as individual performance obligations if they are distinct. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, including the degree of interrelation and interdependence between obligations and whether or not the good or service significantly modifies or transforms another good or service in the contract. After identifying the separate performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices for products are determined using either an adjusted market assessment or expected cost-plus margin The Company records contract assets when it has a right to consideration and records accounts receivable when it has an unconditional right to consideration. The Company records contract liabilities when cash payments are received (or unconditional rights to receive cash) in advance of fulfilling its performance obligations. The Company’s payment terms vary by the type and location of its customer and the products or services offered. For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer. Other related policies and revenue information Warranties Products sold to customers include standard warranties, typically for one year, covering bug fixes and minor updates such that the product continues to function according to published technical specifications. These standard warranties are assurance type warranties and do not offer any services in addition to the assurance that the product will continue working as specified. Therefore, standard warranties are not considered separate performance obligations. Instead, the expected cost of warranty is accrued as expense in accordance with applicable guidance. Optional extended warranties, for up to five years, are sold with certain products and include additional support services. The transaction price for extended warranties is accounted for as service revenue and recognized ratably over the life of the contract. The Company records estimated costs related to standard warranties upon product shipment or upon identification of a specific product failure. The Company recognizes estimated warranty costs when it is probable that a liability has been incurred and the amount of loss is reasonably estimable. The estimates are based upon historical and projected product failure and claim rates, historical costs incurred in correcting product failures and information available related to any specifically identified product failures. Significant judgment is required in estimating costs associated with warranty activities and the Company's estimates are limited to information available to the Company at the time of such estimates. In some cases, such as when a specific product failure is first identified or a new product is introduced, the Company may initially have limited information and limited historical failure and claim rates upon which to base its estimates, and such estimates may require revision in future periods. The recorded amount is adjusted from time to time for specifically identified warranty exposure. Contract Costs Applying a practical expedient, the Company recognizes the incremental costs of obtaining contracts, which primarily consist of sales commissions, as sales and marketing expense, when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. If the service period, inclusive of any anticipated renewal, is longer than a year, the incremental direct costs are capitalized and amortized over the period of benefit. As of December 31, 2019 and 2018, such Financing The Company applies the practical expedient not to adjust the promised amount of consideration for the effects of a financing component if the Company expects, at contract inception, that the period between when the Company transfers a good or service to the customer and when the customer pays for the good or service will be one year or less. During the year ended December 31, 2019 and 2018, such financing components were not significant. Bill-and-hold The Company recognizes revenue from the sale of products when control has passed to the customer, which is based on the shipping terms of the arrangement, when significant risk and rewards have transferred to the customer. In some instances, the customer agrees to buy product from the Company but requests delivery at a later date, commonly known as bill-and-hold arrangements. For these transactions, the Company deems that control passes to the customer when the product is ready for delivery. The Company views products readiness for delivery when a signed agreement is in place, the transaction is billable, and the customer has significant risk and rewards for the products, the ability to direct the assets, the products have been set aside specifically for the customer, and cannot be redirected to another customer. Shipping and Handling The Company has elected to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost rather than as an additional promised service. As a result, the Company accrues the costs of shipping and handling when the related revenue is recognized Unsatisfied Performance Obligations The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The majority of the Company's performance obligations in its contracts with customers relate to contracts with duration of less than one year. The transaction price allocated to unsatisfied performance obligations included in contracts with duration of more than 12 months is reflected in contract liabilities – non-current on the consolidated balance sheet. Disaggregation of Revenue The following table presents the revenues by source (in thousands): Years ended December 31, 2019 2018 Revenue by products and services: Products $ 286,292 $ 269,269 Services 20,590 13,079 Total $ 306,882 $ 282,348 Information about the Company’s net revenue for North America and international markets for 2019 and 2018 is summarized below (in thousands): Years ended December 31, 2019 2018 Revenue by geography: United States $ 36,383 $ 50,795 Canada 4,690 4,413 Total North America 41,073 55,208 Latin America 23,774 27,596 Europe, Middle East, Africa 78,375 34,741 Korea 79,124 76,006 Other Asia Pacific 84,536 88,797 Total International 265,809 227,140 Total $ 306,882 $ 282,348 (h) Allowances for Sales Returns and Doubtful Accounts The Company records an allowance for sales returns for estimated future product returns related to current period product revenue. The allowance for sales returns is recorded as a reduction of revenue and an increase to accrued and other liabilities. The Company bases its allowance for sales returns on periodic assessments of historical trends in product return rates and current approved returned products. If the actual future returns were to deviate from the historical data on which the reserve had been established, the Company’s future revenue could be adversely affected. The Company records an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make payments for amounts owed to the Company. The allowance for doubtful accounts is recorded as an expense under general and administrative expenses. The Company bases its allowance on periodic assessments of its customers’ liquidity and financial condition through analysis of information obtained from credit rating agencies, financial statement review and historical collection trends. Additional allowances may be required in the future if the liquidity or financial condition of the Company's customers deteriorates, resulting in doubts about their ability to make payments. Activity under the Company’s allowance for doubtful accounts is comprised as follows (in thousands): December 31, 2019 2018 Balance at beginning of year $ 328 $ 1,246 Charged to expense 155 20 Reversal of expense — (11 ) Utilization/write offs/exchange rate differences (90 ) (927 ) Balance at end of year $ 393 $ 328 Activity under the Company’s allowance for sales returns is comprised as follows (in thousands): December 31, 2019 2018 Balance at beginning of year $ 706 $ 445 Charged to revenue 370 1,343 Utilization/write offs/exchange rate differences (733 ) (1,082 ) Balance at end of year $ 343 $ 706 (i) Inventories Inventories are stated at the lower of cost or net realizable value, with cost being determined using the first-in, first-out method. In assessing the net realizable value of inventories, the Company is required to make judgments as to future demand requirements and compare these with the current or committed inventory levels. Once inventory has been written down to its estimated net realizable value, its carrying value cannot be increased due to subsequent changes in demand. To the extent that a severe decline in forecasted demand occurs, or the Company experiences a higher incidence of inventory obsolescence due to rapidly changing technology and customer requirements, the Company may incur significant expenses for excess and obsolete inventory. The Company also evaluates the terms of its agreements with its suppliers and establishes accruals for estimated losses on adverse purchase commitments as necessary, applying the same lower of cost or net realizable value approach that is used to value inventory. (j) Foreign Currency Translation For operations outside the United States, the Company translates assets and liabilities of foreign subsidiaries, whose functional currency is the applicable local currency, at end of period exchange rates. Revenues and expenses are translated at periodic average rates. The adjustment resulting from translating the financial statements of such foreign subsidiaries, is included in accumulated other comprehensive income (loss,) which is reflected as a separate component of stockholders’ equity. Gains and losses on foreign currency transactions are included in other income (expense) in the accompanying consolidated statement of comprehensive income (loss). (k) Comprehensive Income (Loss) There have been no items reclassified out of accumulated other comprehensive income (loss) and into net income (loss). The Company’s other comprehensive income (loss) for the years ended December 31, 2019 and 2018 is comprised of foreign currency translation gains and losses and actuarial gains and losses from pension liability. (l) Property, Plant and Equipment Property, plant, and equipment are stated at cost, less accumulated depreciation, and are depreciated using the straight-line method over the estimated useful life of each asset. The useful life of each asset category is as follows: Asset Category Useful Life Furniture and fixtures 3 to 4 years Machinery and equipment 3 to 10 years Computers and software 3 years Leasehold improvements Shorter of remaining lease term or estimated useful lives Upon retirement or sale, the cost and related accumulated depreciation of the asset are removed from the balance sheet and the resulting gain or loss is reflected in operating expenses. (m) Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the future net undiscounted cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future net undiscounted cash flows, an impairment expense is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Any assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. The Company estimates the fair value of its long-lived assets based on a combination of market information primarily obtained from third-party quotes and online markets. In the application of impairment testing, the Company is required to make estimates of future operating trends and resulting cash flows and judgments on discount rates and other variables. Actual future results and other assumed variables could differ from these estimates. (n) Goodwill and Other Acquisition-Related Intangible Assets Goodwill and other acquisition-related intangible assets not subject to amortization are tested annually for impairment and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. Factors the Company considers important which could trigger an impairment review, include, but are not limited to, significant changes in the manner of use of its acquired assets, significant changes in the strategy for the Company's overall business or significant negative economic trends. If this evaluation indicates that the value of an intangible asset may be impaired, an assessment of the recoverability of the net carrying value of the asset over its remaining useful life is made. If this assessment indicates that the cost of an intangible asset is not recoverable, based on the estimated undiscounted future cash flows or other comparable market valuations of the entity or technology acquired over the remaining amortization period, the net carrying value of the related intangible asset will be reduced to fair value and the remaining amortization period may be adjusted. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. In the application of impairment testing, the Company is required to make estimates of future operating trends and resulting cash flows and judgments on discount rates and other variables. Actual future results and other assumed variables could differ from these estimates. During 2019, the Company recorded Goodwill of $1.0 million related to the acquisition of Keymile. In performing the annual impairment evaluation, utilizing a present value cash flow model to determine the fair value of the reporting unit, the Company determined that the goodwill related to Keymile was impaired, due to the financial performance on the reporting unit. The Company recognized an impairment loss of $1.0 million of this goodwill for the year ended December 31, 2019. (o) Business Combination The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired 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. (p) Stock-Based Compensation The Company amortizes the values of the stock-based compensation to expense using the straight-line method. The value of the award is recognized as expense over the requisite service periods in the Company’s consolidated statement of comprehensive income (loss). The Company accounts for forfeitures as they occur. The Company uses the Black Scholes model to estimate the fair value of options, which is affected by the Company's stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the Company's expected stock price volatility over the expected term of the awards, risk-free interest rates and expected dividends. The expected stock price volatility is based on the weighted average of the historical volatility of the Company's common stock over the most recent period commensurate with the estimated expected life of the Company's stock options. The Company based its expected life assumption on its historical experience and on the terms and conditions of the stock awards granted. Risk-free interest rates reflect the yield on zero-coupon United States Treasury securities. (q) Income Taxes The Company uses the asset and liability method to account for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and the income tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. (r) Net Income (Loss) per Share Attributable to DASAN Zhone Solutions, Inc. Basic net income (loss) per share attributable to DASAN Zhone Solutions, Inc. is computed by dividing the net income (loss) 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 (loss) 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 stock equivalent shares are composed of restricted stock units, unvested restricted shares and incremental shares of common stock issuable upon the exercise of stock options. (s) Research and Development Cost Costs related to research and development, which primarily consists of labor and benefits, supplies, facilities, consulting, and outside service fees, are expensed as incurred. (t) Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term investments (if any) with original maturities of less than three months. (u) Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted Lease Accounting In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification 842, Leases The Company adopted the new standard on January 1, 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 has 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. If the Company believes that it will exercise the renewal period and the renewal payments are unknown or not calculable, the renewal term will 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 consolidated statements of comprehensive income (loss), stockholders’ equity and non-controlling interest, and cash flows. See Note 13 in the notes to consolidated financial statements. Income Tax Effects within Accumulated Other Comprehensive Income In February 201 |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | (2) Business Combinations 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”). 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. The aggregate cash purchase price paid for all of the shares of Keymile and certain of its subsidiaries, was €10.25 million (approximately $11.8 million), prior to adjustment for the lockbox mechanism described below. The Company also assumed pension obligations of approximately $16.2 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, resulting in a final adjusted acquisition price of $9.3 million. On October 1, 2018, as a condition for the Keymile Acquisition, Riverside extended a €4.0 million ($4.4 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 bore interest at a rate of 3.5% per annum and was repaid during 2019. A summary of the final 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 final 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 $ 4,619 Accounts receivable - trade, net 6,820 Other receivables 798 Inventories 9,943 Property, plant and equipment 983 Other assets 3,698 Right-of-use assets from operating leases 5,011 Intangible assets 10,047 Accounts payable - trade (3,303 ) Short-term debt (4,582 ) Contract liabilities (364 ) Accrued liabilities (3,651 ) Operating lease liabilities - current (823 ) Deferred tax liabilities (425 ) Pension obligations (16,191 ) Operating lease liabilities - non-current (4,188 ) Other long term liabilities (116 ) Goodwill 1,003 Total purchase consideration $ 9,279 The purchase price allocation resulted in the recognition of goodwill of approximately $1.0 million. The goodwill was the result of the purchase price paid for the Keymile Acquisition (adjusted for amounts received under the lockbox mechanism) exceeding the fair value of the identifiable net assets acquired. 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 final estimated fair value and useful lives of identifiable intangible assets acquired: Estimated Fair Value (in thousands) Estimated Useful Life Intangible assets acquired Technology - developed core $ 5,040 5 years Customer relationships 3,632 5 years Trade name 1,375 5 years Total intangible assets $ 10,047 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 period 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 of the Company would have been if the Keymile Acquisition had occurred on January 1, 2018 or what such results 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 intangible assets and interest expense related to financing arrangements. Below is the pro forma financial information (in thousands), unaudited: Year Ended December 31, 2018 Pro forma net revenues $ 332,571 Pro forma net income attributable to DASAN Zhone Solutions, Inc. 2,480 Below is the financial information for Keymile (in thousands): Year Ended December 31, 2019 Net revenues $ 36,390 Net loss attributable to DASAN Zhone Solutions, Inc. (13,072 ) Acquisition of the Non-controlling Interest in DZS Japan On July 31, 2019, the Company acquired the remaining 30.94% non-controlling interest of DZS Japan, Inc. (“DZS Japan”), and DZS Japan became a wholly owned subsidiary of the Company. The Company acquired the remaining interest in DZS Japan for total cash consideration of $950,000, consisting entirely of payments to the former shareholder (Handysoft). This transaction resulted in a decrease to “Additional paid-in capital” of $127,000, a decrease to “Non- controlling interest” of $823,000, and a total impact of $950,000 in the consolidated statement of stockholders’ equity and non-controlling interests for the year ended December 31, 2019. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 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 – Level 2 – Level 3 – The following financial instruments were not measured at fair value on the Company’s consolidated balance sheet as of December 31, 2019 and 2018, but require disclosure of their fair values: cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable and debt. The carrying values of financial instruments such as cash and cash equivalents, restricted cash, accounts and other receivables and accounts payable approximate their fair values based on their short-term nature. The carrying value of the Company's debt approximates their fair values based on the current rates available to the Company for debt of similar terms and maturities. All derivatives are entered into and exited at the end of the period, thus there is no fair value associated with any outstanding derivatives at December 31, 2018. No such instruments were in place during 2019. |
Cash and Cash Equivalents and R
Cash and Cash Equivalents and Restricted Cash | 12 Months Ended |
Dec. 31, 2019 | |
Cash And Cash Equivalents [Abstract] | |
Cash and Cash Equivalents and Restricted Cash | (4) Cash and Cash Equivalents and Restricted Cash As of December 31, 2019 and 2018, the Company's cash and cash equivalents consisted of financial deposits. Restricted cash consisted primarily of cash restricted for performance bonds, warranty bonds and collateral for borrowings. At December 31, 2018, cash and cash equivalents included $11.8 million intended for payment for the Keymile acquisition. |
Balance Sheet Detail
Balance Sheet Detail | 12 Months Ended |
Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Detail | (5) Balance Sheet Detail Balance sheet detail as of December 31, 2019 and 2018 is as follows (in thousands): Inventories As of December 31, 2019 2018 Inventories: Raw materials $ 15,774 $ 15,688 Work in process 1,458 2,429 Finished goods 18,207 15,751 $ 35,439 $ 33,868 Inventories provided as collateral for borrowings from Export-Import Bank of Korea amounted to $6.7 million and $9.5 million as of December 31, 2019 and 2018, respectively. Property, plant and equipment As of December 31, 2019 2018 Property, plant and equipment, net: Furniture and fixtures $ 10,803 $ 8,029 Machinery and equipment 2,550 3,553 Leasehold improvements 4,267 3,715 Computers and software 1,990 922 Other 660 982 20,270 17,201 Less: accumulated depreciation and amortization (13,130 ) (11,271 ) Less: government grants (371 ) (412 ) $ 6,769 $ 5,518 Depreciation expense associated with property, plant and equipment was $2.0 million and $1.6 million for the years ended December 31, 2019 and 2018, 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. Accrued and other liabilities As of December 31, 2019 2018 Accrued and other liabilities (in thousands): Accrued warranty $ 1,611 $ 1,319 Accrued compensation 1,618 2,461 Other accrued expenses 9,615 7,737 $ 12,844 $ 11,517 The Company accrues for warranty costs based on historical trends for the expected material and labor costs to provide warranty services. The Company's standard warranty period is one year from the date of shipment with the ability for customers to purchase an extended warranty of up to five years from the date of shipment. The following table summarizes the activity related to the product warranty liability (in thousands): As of December 31, 2019 2018 Balance at beginning of the year $ 1,319 $ 931 Charged to cost of revenue 967 1,171 Claims and settlements (903 ) (791 ) Warranty liability assumed from Keymile acquisition 230 — Foreign exchange impact (2 ) 8 Balance at end of the year $ 1,611 $ 1,319 Contract Asset The balance of Contract Assets, current at December 31, 2019 was $16.7 million, which increased from $11.4 million as of December 31, 2018. The increase in contract assets by $5.3 million was primarily due to new customer contracts entered into during the year of $6.5 million, partially offset by billed products and services during the year of $1.2 million Contract Liability The balance of Contract Liabilities, current at December 31, 2019 was $3.6 million, comprising of Products and services contract liability of $2.7 million and Extended warranty contract liability of $0.9 million. The balance of Contract Liabilities, current at December 31, 2018 was $8.5 million. The balance of Contract Liabilities, long-term at December 31, 2019 was $3.2 million, comprising of Products and services contract liability of $1.0 million and Extended warranty contract liability of $2.2 million. The balance of Contract Liabilities, current at December 31, 2018 was $1.8 million. During the year ended December 31, 2019, the Company recorded $2.5 million in Net Revenue, related to Contract Liabilities as of December 31, 2018. Accrued Restructuring Costs The Company established a restructuring plan in September 2019 to further align its business resources based on an analysis of the current business conditions. The Company incurred restructuring and other charges of approximately $4.9 million for the year ended Severance and Related Benefits Balance as of December 31, 2018 $ — Restructuring charges for the year 3,930 Cash payments (3,930 ) Balance as of December 31, 2019 $ — |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | (6) Goodwill and Intangible Assets Goodwill as of December 31, 2019 and 2018 was as follows (in thousands): As of December 31, 2019 2018 Balance at beginning of the year $ 3,977 $ 3,977 Goodwill from Keymile acquisition 1,003 — Less: Impairment of Keymile acquisition goodwill (1,003 ) — Balance at end of the year $ 3,977 $ 3,977 During 2019, the Company recorded Goodwill of $1.0 million related to the acquisition of Keymile. Refer to Note 2 Business Combinations, for further detail. In performing the annual impairment evaluation, utilizing a present value cash flow model to determine the fair value of the reporting unit, the Company determined that the goodwill related to Keymile was impaired, due to the financial performance of the reporting unit. The Company recognized an impairment loss of $1.0 million on goodwill for the year ended December 31, 2019 and accumulated impairment of goodwill was $1.0 million as of December 31, 2019. Intangible assets as of December 31, 2019 and 2018 were as follows (in thousands): As of December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Developed technology $ 7,994 $ (3,027 ) $ 4,967 Customer relationships 8,795 (2,458 ) 6,337 Trade name 1,346 (269 ) 1,077 Total intangible assets, net $ 18,135 $ (5,754 ) $ 12,381 During 2019 the Company recorded $5.0 million, $3.6 million and $1.4 million in Developed technology, Customer relationships and Trade names, respectively, related to the acquisition of Keymile. Refer to Note 2 Business Combinations, for further detail. As of 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 Backlog 2,179 (2,179 ) - Total intangible assets, net $ 10,479 $ (4,830 ) $ 5,649 Amortization expense associated with intangible assets for the years ended December 31, 2019 and 2018 amounted to $3.1 million, and $1.1 million, respectively. As of December 31, 2019, expected future amortization expense for the years indicated was as follows (in thousands): Period Expected Amortization Expense 2020 $ 3,103 2021 2,899 2022 2,491 2023 2,491 2024 524 Thereafter 873 Total $ 12,381 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | (7) Debt The following tables summarize the Company’s debt (in thousands): As of December 31, 2019 Short-term Long-term Total PNC Credit Facilities $ 2,500 $ 10,625 $ 13,125 Bank and Trade Facilities - Foreign Operations 15,779 — 15,779 Related party — 9,096 9,096 18,279 19,721 38,000 Less: unamortized deferred financing costs on the PNC Bank Facility (795 ) (688 ) (1,483 ) $ 17,484 $ 19,033 $ 36,517 As of December 31, 2018 Short-term Long-term Total Former WFB 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 The future principal maturities of our Secured Term Loans for each of the next five years are as follows (in thousands): Year ended December 31, 2020 $ 18,279 2021 3,438 2022 16,283 2023 — 2024 — Thereafter — Total $ 38,000 PNC Credit Facilities 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 Credit Facilities”), which replaced the Company’s former senior secured credit facilities with Wells Fargo Bank (the “Former WFB Facility”). We refer to such transactions and the agreements referenced above as the “PNC Credit Facilities.” The PNC Credit Facilities provided for a $25 million term loan and a $15 million revolving line of credit (including subfacilities for Ex-Im transactions, letters of credit and swing loans) with a $10 million incremental increase option. The amount the Company was able to borrow on the revolving line of credit at any time was based on eligible accounts receivable and other conditions, less certain reserves. Borrowings under the PNC Credit Facilities bore interest at a floating rate equal to either the PNC prime rate or the LIBOR rate for the applicable period, plus a margin that was based on the type of advance. The Company used a portion of the funds borrowed from the term loan under the PNC Credit Facilities to (i) repay $5.0 million of existing related party indebtedness with DNI plus accrued interest, (ii) repay $1.5 million revolving line of credit outstanding balance plus accrued interest and fees and cash collateralize $3.6 million in outstanding letters of credit under the Wells Fargo Credit Facility (described below), and (iii) repay $5.6 million in short-term debt in Korea and Japan. The Company’s obligations under the PNC Credit Facilities were secured by substantially all of the personal property assets of the Company and its subsidiaries that were co-borrowers or guarantors under the PNC Credit Facilities, including their intellectual property. The PNC Credit Facilities had a three-year term and were scheduled to mature on February 27, 2022. The PNC Credit Facilities contemplated repayment of the term loan in quarterly installments over the term of the loan, with the balance of the term loan and revolving line of credit due at maturity. The PNC Credit Facilities contained certain covenants, limitations, and conditions with respect to the Company, including a maximum leverage ratio, a minimum fixed charge coverage ratio, and a minimum liquidity covenant, as well as financial reporting obligations, and usual and customary events of default. At September 30, 2019, the Company was not in compliance with the maximum leverage ratio financial covenant in the PNC Credit Facilities, which represented an event of default thereunder. On November 8, 2019, the Company obtained a waiver of the foregoing event of default from PNC Bank. As a condition for the issuance of such waiver, the Company voluntarily prepaid $10.0 million of the outstanding term loan and paid a one-time fee of $150,000. The interest rate on the term loan was 8.12% As of December 31, 2019, the Company had $13.1 million in outstanding term loan borrowings under the PNC Facilities, and no outstanding borrowings under the revolving line of credit. Former WFB Facility As of December 31, 2018, the Company had a $25.0 million revolving line of credit facility (including up to $5.0 million in letter of credit) with Wells Fargo (the “Former WFB Facility”). Under the Former WFB Facility, the Company has the option of borrowing funds at agreed upon interest rates. The amount that the Company was able to borrow under the Wells Fargo Facility varied based on eligible accounts receivable and inventory less amount committed as cash collateral for letter of credit. As of December 31, 2018, the Company had $7.0 million outstanding borrowings under its Former WFB Facility and $1.3 million committed as security for letters of credit outstanding. The amounts borrowed under the Wells Fargo Facility bore interest, payable monthly, at a floating rate equal to the three-month LIBOR plus a margin based on the Company's average excess availability as calculated under the Former WFB Facility. The interest rate on the Wells Fargo Facility was 5.1% at December 31, 2018. Subsequently, on January 8, 2019, the Company fully repaid the $7.0 million outstanding borrowings under the revolving line of credit. The Company’s obligations under the Former WFB Facility were secured by substantially all of its assets and those of its subsidiaries that guarantee the Wells Fargo Facility, including their intellectual property. The Former WFB Facility contained certain financial covenants, and customary affirmative and negative covenants. As of December 31, 2018, the Company was in compliance with the covenants under the Former WFB Facility. On February 27, 2019, the Company repaid $1.5 million in principal amount of outstanding borrowings on the revolving line of credit plus accrued interest and fees and cash collateralized $3.6 million in outstanding letters of credit under the Former WFB Facility 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 ($4.4 million) working capital loan to Keymile. The working capital loan bore interest at a rate of 3.5% per annum and was repaid during 2019. 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 December 31, 2019 and 2018, the Company had an aggregate outstanding balance of $15.8 million and $24.8 million, respectively, under such financing arrangements. The weighted average borrowing rate as of December 31, 2019 was 2.7%. The maturity date and interest rates per annum applicable to outstanding borrowings under these financing arrangements were as listed in the tables below (amounts in thousands). As of December 31, 2019 Maturity Date Denomination Interest rate (%) Amount NongHyup Bank Credit facility 09/30/2020 USD 3.50 ~ 4.50 $ 2,091 The Export-Import Bank of Korea Export development loan 07/01/2020 KRW 2.75 5,182 Korea Development Bank General loan 08/08/2020 KRW 3 4,319 Korea Development Bank Credit facility 08/07/2020 USD 3.00 ~ 3.15 2,460 LGUPlus General loan 06/17/2020 KRW 0 1,727 $ 15,779 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, 2019 and December 31, 2018, the Company had $4.6 million and $5.5 million in outstanding borrowings, respectively, and $0.8 million and $2.6 million committed as security for letters of credit under the Company's $19.0 million credit facility with certain foreign banks. Related Party Debt In February 2016, DNS California borrowed $1.8 million from DNI for capital investment, which amount was outstanding as of December 31, 2019. This loan was due to mature in March 2018 with an option of renewal by mutual agreement, and bore interest at a rate of 4.6% per annum, payable annually. Effective January 31, 2018, we amended the terms of this loan to extend the repayment date from March 2018 to July 2019 and maintain an interest rate of 4.6%. On February 27, 2019, we amended the terms of this loan to extend the repayment date until May 27, 2022. In September 2016, we entered into a loan agreement with DNI for a $5.0 million unsecured subordinated term loan facility. Under the loan agreement, we were permitted to request drawdowns of one or more term loans in an aggregate principal amount not to exceed $5.0 million. As of December 31, 2019, the loan was repaid in full. As of December 31, 2018, $5.0 million in term loans was outstanding under the facility. The interest rate as of December 31, 2019 under this facility was 4.6% per annum. On or about February 27, 2019, the entire outstanding balance on this term loan was repaid with some of the proceeds of the PNC Credit Facilities. In March 2018, DNS Korea borrowed $5.8 million from DNI of which $4.5 million was repaid on August 8, 2018. As of December 31, 2018, $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, the Company amended the terms of this loan to extend the repayment date until May 27, 2022. In December 2018, we entered into a Loan Agreement with DNI for a $6.0 million term loan with an interest rate of 4.6% per annum. On February 27, 2019, we amended the terms of the term loan to extend the repayment date until May 27, 2022. The modifications resulting from the amendments described in the four preceding paragraphs 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 was $0.4 million in 2019 and 2018, respectively. On March 5, 2020, DNS Korea entered into a loan transaction with DNI in the amount of KRW billion ($ million USD), which loan matures on , bears interest at a rate of % per annum and is pre-payable without premium or penalty. See Note 18 to the consolidated financial statements for additional information. As of December 31, 2019, we had an aggregate of $9.1 million in outstanding borrowings from DNI, which consisted of a $6.0 million unsecured subordinated term loan facility which matures in May 2022, a $1.8 million loan for capital investment which matures in May 2022, and KRW 1.5 billion ($1.3 million) outstanding under a secured loan from DNS Korea which matures in May 2022. All three loans bear interest at a rate of 4.6% per annum. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | (8) Stockholders’ Equity Changes in Accumulated Other Comprehensive Income (Loss) The table below summarizes the changes in accumulated other comprehensive income (loss) by component, net of tax (in thousands): As of December 31, 2019 2018 Beginning accumulated other comprehensive income $ (192 ) 1,871 Actuarial loss for pension plan (1,793 ) — Foreign currency translation adjustments, net (1,939 ) (2,051 ) Non-controlling interest (15 ) (12 ) Ending accumulated other comprehensive income $ (3,939 ) $ (192 ) Stock-based Compensation As of December 31, 2019, the Company has one (1) stock-based compensation plan related to equity compensation (including equity compensation in the form of stock options, restricted stock and restricted stock units) and one (1) plan related to employee stock purchases. The following table summarizes stock-based compensation expense (in thousands): Years ended December 31, 2019 2018 Cost of revenue $ 41 $ 18 Research and product development 267 134 Selling, marketing, general and administrative 3,200 1,928 $ 3,508 $ 2,080 2017 Stock Incentive Plans The Company’s stock-based compensation plans are designed to attract, motivate, retain and reward employees, directors and consultants and align stockholder and employee interests. On January 4, 2017, the Board of Directors approved, and at the 2017 Annual Meeting of Stockholders, the Company’s stockholders approved, the DASAN Zhone Solutions, Inc. 2017 Incentive Award Plan. On February 12, 2018, the Board of Directors approved an amendment to the 2017 Incentive Award Plan, which is referred to herein as the “2017 Plan Amendment”). The Company’s stockholders approved the 2017 Plan Amendment at the 2018 Annual Meeting of the Stockholders. The 2017 Incentive Award Plan, as amended by the 2017 Plan Amendment, is referred to herein as the “2017 Plan.” The 2017 Plan authorizes the issuance of stock options, restricted stock, restricted stock units, dividend equivalents, stock payment awards, stock appreciation rights, performance bonus awards and other incentive awards. The 2017 Plan authorizes the grant of awards to employees, non-employee directors and consultants of the Company and its subsidiaries. Under the 2017 Plan, stock options may be granted at an exercise price less than, equal to or greater than the fair market value on the date of grant, except that any stock options granted to a 10% stockholder must have an exercise price equal to at least 110% of the fair market value of the Company’s common stock on the date of grant. The Board of Directors determine the term of each stock option, the option exercise price and the vesting terms. Stock options are generally granted at an exercise price equal to the fair market value on the date of grant, expiring seven (7) to ten (10) years from the date of grant and vesting over a period of four years. The maximum number of shares of the Company’s common stock which may be granted under the 2017 Plan is the sum of (i) 600,000 shares, plus (ii) any shares subject to awards granted under the prior plan to the extent such shares become available for issuance under the 2017 Plan pursuant to its terms, plus (iii) any shares subject to an annual increase on each January 1 during the 10 year term of the 2017 Plan equal to the lesser of (x) 4% of the total shares of the Company’s common stock outstanding (on an as-converted basis) and (y) such smaller amount as may be determined by the Board of Directors in its sole discretion. The annual increase on January 1, 2019 was 663,473 shares. In addition, the following annual limitations apply: (i) the maximum aggregate number of shares of the Company’s common stock that may be subject to awards granted to any one participant during a calendar year is 4,000,000 shares; and (ii) the maximum aggregate amount of cash that may be paid to any one participant during any calendar year with respect to awards initially payable in cash is $10 million. The number of shares of the Company’s common stock that may be issued or transferred pursuant to awards granted under the 2017 Plan shall not exceed an aggregate of 8,000,000 shares. The Company has estimated the fair value of stock-based payment awards on the date of grant using the Black Scholes pricing model, which is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the Company’s expected stock price volatility over the term of the awards, actual and projected employee option exercise behaviors, risk-free interest rate and expected dividends. The estimated expected term of options granted was determined based on historical option exercises. Estimated volatility was based on the historical volatility of the Company and the risk-free interest rate was based on the U.S. Treasury yield in effect at the time of grant for the expected life of the options. The Company does not anticipate paying any cash dividends in the foreseeable future, and therefore used an expected dividend yield of zero in the option valuation model. Forfeitures are recognized as they occur. Stock Options The weighted average assumptions used to value option grants for the year ended December 31, 2019 and 2018 are as follows: Years ended December 31, 2019 2018 Expected term (years) 5.85 4.88 Volatility 65.72 % 81.87 % Risk free interest rate 1.99 % 2.74 % The weighted average grant date fair value of options granted during the years ended December 31, 2019 and 2018 were $7.22 and $6.49, respectively. The following table sets forth the summary of option activity under the stock option program for the year ended December 31, 2019 (in thousands, except per share data): Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding as of December 31, 2018 1,744 $ 8.00 Granted 470 10.36 Canceled/Forfeited (128 ) 9.83 Expired (39 ) 8.32 Exercised (35 ) 6.22 Outstanding as of December 31, 2019 2,012 8.47 7.36 2,418 Vested and expected to vest at December 31, 2019 2,012 8.47 7.36 2,418 Vested and exercisable at December 31, 2019 946 7.47 5.74 1,684 The aggregate intrinsic value represents the total pretax intrinsic value, based on the Company’s closing stock price as of December 31, 2019 of $8.86 per share which would have been received by the option holders had the option holders exercised their options as of that date. The aggregate intrinsic value of awards exercised during the years ended December 31, 2019 and 2018 were $0.2 million and $0.6 million, respectively. As of December 31, 2019, there was $6.3 million of unrecognized compensation costs which are recognized over a weighted average period of three (3) years. The following table sets forth the summary of option activity under the stock option program for the year ended December 31, 2018 (in thousands, except per share data): Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding as of December 31, 2017 1,213 $ 6.50 Granted 836 9.86 Canceled/Forfeited (155 ) 8.00 Exercised (150 ) 6.08 Outstanding as of December 31, 2018 1,744 8.00 8.65 10,378 Vested and expected to vest at December 31, 2018 1,744 8.00 8.65 10,378 Vested and exercisable at December 31, 2018 488 6.77 7.51 3,497 Restricted Stock Units The following table sets forth the summary of restricted stock unit awards activity under the stock award program for the year ended December 31, 2019 (in thousands, except per share data): RSU Outstanding Weighted Average Grant Date Fair Value Non-vested as of December 31, 2018 4 $ 7.50 Granted 40 12.77 Canceled/Forfeited — — Vested (33 ) 13.11 Non-vested as of December 31, 2019 11 10.05 The following table sets forth the summary of restricted stock unit awards activity under the stock award program for the year ended December 31, 2018 (in thousands, except per share data): RSU Outstanding Weighted Average Grant Date Fair Value Non-vested as of December 31, 2017 5 $ 7.43 Granted 35 9.66 Canceled/Forfeited — — Vested (36 ) 9.56 Non-vested as of December 31, 2018 4 7.50 Total grant-date fair value of awards granted during the years ended December 31, 2019 and 2018 was $0.5 million and $0.3 million, respectively. Total fair value of awards vested was $0.4 million during both years ended December 31, 2019 and 2018. 2018 Employee Stock Purchase Plan On May 22, 2018, the stockholders of the Company approved the adoption of the DASAN Zhone Solutions, Inc. 2018 Employee Stock Purchase Plan (the “ESPP”). The ESPP replaced the DASAN Zhone Solutions, Inc. 2002 Employee Stock Purchase Plan. The ESPP authorizes the issuance of up to 250,000 shares of the Company’s common stock. In addition, the ESPP provides for an annual increase on the first day of each calendar year beginning on January 1, 2019, and ending on and including January 1, 2028, equal to the lesser of (i) 1% of the shares outstanding on the last day of the immediately preceding calendar year and (ii) such smaller number of shares as may be determined by the Board of Directors in its sole discretion. Notwithstanding the foregoing, the number of shares of stock that may be issued or transferred pursuant to awards under the ESPP may not exceed an aggregate of 2,000,000 shares. These 2,000,000 shares have been registered pursuant to a registration statement on Form S-8 filed with the SEC on November 8, 2018. The purchase price of the shares The weighted average assumptions used to value option grants for the year ended December 31, 2019 included an Expected term of 0.5 years, Volatility of 66.04% and a Risk free interest rate of 2.31%. The Company recorded $149,000 and $14,000 of expense related to the ESPP for the year ended December 31, 2019 and 2018, respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | (9) Net Income (Loss) Per Share The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data): Years ended December 31, 2019 2018 Numerator: Net income (loss) attributable to DASAN Zhone Solutions, Inc. $ (13,457 ) $ 2,767 Denominator: Weighted average number of shares outstanding: Basic 19,403 16,482 Effect of dilutive securities: Stock options, restricted stock units and share awards — 264 Diluted 19,403 16,746 Net income (loss) per share attributable to DASAN Zhone Solutions Inc.: Basic $ (0.69 ) $ 0.17 Diluted $ (0.69 ) $ 0.17 The following tables set forth potential common stock that is not included in the diluted net income (loss) per share calculation above because their effect would be anti-dilutive for the periods indicated (in thousands, except exercise price per share data): 2019 Weighted average option exercise price 2018 Weighted average option exercise price Outstanding stock options, restricted stock units and unvested restricted shares 2,023 $ 8.42 1,747 $ 7.91 As of December 31, 2019 and 2018, no shares of issued common stock were subject to repurchase. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (10) Income Taxes The geographical breakdown of income (loss) before income taxes is as follows (in thousands): Years ended December 31, 2019 2018 Loss before income taxes - Domestic $ (11,069 ) $ (3,003 ) Income before income taxes - Foreign 1,391 7,563 Income (loss) before income taxes $ (9,678 ) $ 4,560 The following is a summary of the components of income tax expense applicable to income (loss) before income taxes (in thousands): Years ended December 31, 2019 2018 Current: Federal $ — $ — State 16 13 Foreign 2,439 1,509 Total current tax provision $ 2,455 $ 1,522 Deferred: Federal $ — $ 12 State — — Foreign 1,130 190 Total deferred tax provision (benefit) $ 1,130 $ 202 Total tax provision (benefit) $ 3,585 $ 1,724 A reconciliation of the expected tax provision (benefit) to the actual tax provision (benefit) is as follows (in thousands): Years ended December 31, 2019 2018 Expected tax provision (benefit) at statutory rate $ (2,032 ) $ 953 State taxes, net of Federal effect 13 297 State change in deferreds 1,927 — Foreign rate differential 2,751 129 Valuation allowance 557 (906 ) Permanent differences 544 297 Other permanent items — 1,178 Tax credit carry-forwards (212 ) (280 ) Tax expense adjustments after tax return for prior period 37 74 Others — (18 ) Total tax provision $ 3,585 $ 1,724 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2019 and 2018 are as follows (in thousands): As of December 31, 2019 2018 Deferred tax assets: Net operating loss, capital loss, and tax credit carryforwards $ 23,195 $ 12,621 Fixed assets and intangible assets 1,057 1,451 Inventory and other reserves 1,368 1,998 Operating lease liability 1,684 — Other (mainly accrued expenses) 2,552 2,042 Gross deferred tax assets 29,856 18,112 Less valuation allowance (26,827 ) (15,360 ) Deferred tax liabilities: Operating lease right-of-use-asset (1,407 ) — Gross deferred tax liabilities (1,407 ) — Total net deferred tax assets $ 1,622 $ 2,752 For the years ended December 31, 2019 and 2018, the net changes in the valuation allowance were an increase of $11.5 million, and a decrease of $0.9 million, respectively. The increase during the current year is mainly due to the increase of U.S. net deferred tax assets and recognition of the Germany deferred tax assets. The decrease during 2018 is mainly due to the decrease of U.S. net deferred tax assets. The Company maintains a valuation allowance on its U.S. and Germany net deferred tax assets since it is more likely than not that the net deferred tax assets will not be realized due to the lack of previously paid taxes and anticipated taxable income. As of December 31, 2019, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $38.0 million and $29.4 million, respectively. The federal losses begin to expire in various years beginning in 2030. The state losses begin to expire in various years beginning in 2021. The Federal net operating loss carryforward includes $12.6 million that has an indefinite carryforward period. Pursuant to Sections 382 and 383 of the Internal Revenue Code, or IRC, annual use of the Company's net operating losses and tax credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. The Company had an ownership change in September 2016, which has resulted in an annual limitation on the amount of net operating loss and tax credit carry forward which arose prior to that date that the Company can utilize in a future year. In addition, some of the pre-acquisition NOLs have written off due to the limitation. As of December 31, 2019, the Company had research credit carryforwards of approximately $1.2 million and $1.6 million for federal and state purposes, respectively. If not utilized, the federal carryforwards will expire beginning in 2036. The California credit carryforwards do not expire and the Georgia credit carryforwards will expire beginning in 2026. In accordance with ASC 740 the Company is required to inventory, evaluate, and measure all uncertain tax positions taken or to be taken on tax returns, and to record liabilities for the amount of such positions that may not be sustained, or may only be partially sustained, upon examination by the relevant taxing authorities. At December 31, 2019, the Company had gross unrecognized tax benefits of $1.0 million, none of which if recognized, would reduce the effective tax rate in a future period, due to the Company's full valuation allowance on U.S. net deferred tax assets. A reconciliation of the beginning and ending unrecognized tax benefit amounts for 2019 and 2018 are as follows (in thousands): As of December 31, 2019 2018 Balance at beginning of the year $ 807 $ 380 Increases related to current year tax positions 229 427 Balance at end of the year $ 1,036 $ 807 It is the Company's policy to account for interest and penalties related to uncertain tax positions as interest expense and general administrative expense, respectively in the consolidated statements of comprehensive income (loss). The Company did not record any interest and penalty (benefit) provision during the years ended December 31, 2019 and 2018. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The open tax years for the major jurisdictions are as follows: Federal 2016 - 2019 California and Canada 2015 - 2019 Brazil 2014 - 2019 Germany 2015 - 2019 Japan 2014 - 2019 Korea 2017 - 2019 United Kingdom 2016 - 2019 Vietnam 2017 - 2019 However, due to the fact the Company had net operating losses and credits carried forward in most jurisdictions, certain items attributable to technically closed years are still subject to adjustment by the relevant taxing authority through an adjustment to tax attributes carried forward to open years. The Company is not currently under examination for income taxes in any material jurisdiction. |
Non-Controlling Interests
Non-Controlling Interests | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interests | (11) Non-Controlling Interests Non-controlling interests were as follows (in thousands): As of December 31, 2019 2018 Beginning non-controlling interests $ 615 534 Net income attributable to non-controlling interests 194 69 Foreign currency translation adjustments (Other Comprehensive Income) 15 12 Purchase of non-controlling interests (824 ) — Ending non-controlling interests $ — $ 615 Acquisition of the Non-Controlling Interest in DNS Japan On July 31, 2019, the Company acquired the remaining 30.94% non-controlling interest of Dasan Network Solutions JAPAN, Inc. (“DNS Japan”), and DNS Japan became a wholly owned subsidiary of the Company. The Company acquired the remaining interest in DNS Japan for total cash consideration of $950,000, consisting entirely of payments to the former shareholder (Handysoft). This transaction resulted in a decrease to Additional paid-in capital of $127,000, a decrease to Non- controlling interest of $823,000, and a total impact of $950,000 in the Consolidated Statements of Stockholders' Equity and Non-Controlling Interest. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (12) Related Party Transactions Related Party Debt As of December 31, 2019 and 2018, the Company had $9.1 million and $14.1 million, respectively, outstanding from related party borrowings from DNI. See Note 7 Debt – Related Party Debt for further information about the Company’s related party debt. Other Related Party Transactions Sales and Purchases to and from Related Parties Sales and purchases, cost of revenue, research and product development, selling, marketing, general and administrative and other income and expenses to and from related parties for the years ended December 31, 2019 and 2018 were as follows (in thousands): For the year ended December 31, 2019 Counterparty DNI direct 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 $ 2,471 $ 1,825 — — $ 3,768 $ 459 $ 341 Tomato Soft Ltd. 100% — — 117 — — — — Tomato Soft (Xi'an) Ltd. 100% — — — 526 — — — CHASAN Networks Co., Ltd. 100% — — 1,103 71 — — — J-Mobile Corporation 91.50% 42 81 — — — — — $ 2,513 $ 1,906 $ 1,220 $ 597 $ 3,768 $ 459 $ 341 For the year ended December 31, 2018 Counterparty DNI direct 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 $ 4,633 $ 3,892 — — $ 4,262 $ 435 $ 343 Tomato Soft Ltd. 100% — — 121 — — — — Tomato Soft (Xi'an) Ltd. 100% — — — 520 — — — Chasan Networks Co., Ltd. 100% — — 1,119 72 — — — Dasan France 100% 203 177 — — — — — Handysoft, Inc. 17.63% 794 627 — — 6 — — $ 5,630 $ 4,696 $ 1,240 $ 592 $ 4,268 $ 435 $ 343 The Company has entered into sales agreements with DNI and certain of its subsidiaries. Sales and cost of revenue to DNI, DASAN France, DASAN INDIA Private Limited, and D-Mobile represent finished goods produced by the Company that are sold to these related parties who sell the Company's products in Korea, France, India and Taiwan, 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 manufacturing and research and development services for the Company. 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 $0.7 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 space 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. As such, the Company entered into certain service sharing agreements with DNI and certain of its subsidiaries for 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. 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 as of December 31, 2019 and 2018 were as follows (in thousands): As of December 31, 2019 Counterparty DNI Ownership Interest Other receivables Deposits for lease* Loans payable Accounts payable Other payables Accrued and other liabilities** DNI (parent company) N/A $ 32 $ 709 $ 9,096 $ — $ 1,475 $ 119 Tomato Soft Ltd. 100% — — — — 10 — Tomato Soft (Xi'an) Ltd. 100% — — — — 45 — Dasan France 100% — — — — — — Chasan Networks Co., Ltd. 100% — — — 96 — — $ 32 $ 709 $ 9,096 $ 96 $ 1,530 $ 119 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 (parent company) 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 consolidated balance sheets as of December 31, 2019 and 2018. ** Included in accrued and other liabilities in the consolidated balance sheet as of December 31, 2019 and 2018. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | (13) 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. 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, 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. 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 were as follows for the year ended December 31, 2019: Year ended December 31, 2019 (in thousands) Operating lease cost $ 5,212 Variable lease cost 644 Short-term lease cost 404 Total net lease cost $ 6,260 Lease expense was approximately $4.3 million for the year ended December 31, 2018. Supplemental cash flow information related to the Company’s operating leases was as follows for the year ended December 31, 2019: Year ended December 31, 2019 (in thousands) Operating cash flows from operating leases $ 4,932 ROU assets obtained in exchange for operating lease obligations $ 3,812 The following table presents the lease balances within the Company’s consolidated balance sheet, weighted average remaining lease term, and weighted average discount rates related to the Company’s operating leases as of December 31, 2019 (in thousands): Lease Assets and Liabilities Assets: Right-of-use assets from operating leases $ 20,469 Liabilities: Operating lease liabilities - current $ 4,201 Operating lease liabilities - non-current 18,154 Total operating lease liabilities $ 22,355 Weighted average remaining lease term 2.22 years Weighted average discount rate 4.8 % The following table presents the maturity of the Company’s operating lease liabilities as of December 31, 2019 (in thousands): Minimum Future Lease Payments Year ending December 31: 2020 $ 5,287 2021 4,655 2022 4,211 2023 3,795 2024 3,320 Thereafter 3,457 Total operating lease payments 24,725 Less: imputed interest (2,370 ) Total minimum lease payments $ 22,355 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (14) Commitments and Contingencies 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 December 31, 2019, the Company had $9.2 million of surety bonds guaranteed by third parties. 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. However, the Company has agreements with various contract manufacturers which include non-cancellable inventory purchase commitments. The amount of non-cancellable purchase commitments outstanding was $4.3 million as of December 31, 2019. 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 December 31, 2019 that have been provided by third parties and DNI. DNI owns approximately 44.3% of the outstanding shares of our common stock. The amount guaranteed exceeds the principal amounts of outstanding obligations due to collateral requirements by the banks. Guarantor Amount Guaranteed (in thousands) Description of Obligations Guaranteed DNI $ 8,400 Credit facility from Industrial Bank of Korea DNI $ 2,073 Purchasing Card from Industrial Bank of Korea DNI $ 8,400 Credit facility from Korea Development Bank DNI $ 5,182 Borrowings from Korea Development Bank DNI $ 6,000 Credit facility from NongHyup Bank DNI $ 3,700 Borrowings from Export-Import Bank of Korea DNI $ 3,000 Payment Guarantee from Shinhan Bank DNI $ 1,658 Backed Loan from Shinhan Bank PNC Bank N.A. $ 4,649 Performance Bond Citi Bank $ 253 Performance Bond Seoul Guarantee Insurance Co. $ 6,009 Performance Bond, Warranty Bond, etc. (*) Industrial Bank of Korea $ 836 Bank Guarantee Korea Development Bank $ 3,124 Letter of Credit NongHyup Bank $ 2,266 Letter of Credit Woori Bank $ 1,626 Bank Guarantee Shinhan Bank $ 583 Purchasing Card Shinhan Bank $ 683 Payment Guarantee AXA Insurance Company $ 179 Guarantee for flexible retirement program $ 58,621 * The Company is responsible for the warranty liabilities generally for the period of two (2) years regarding major product sales and have contracted surety insurance to cover part of the warranty liabilities. 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. Litigation 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, results of operations or cash flows. 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 and cash flows of the reporting period in which the ruling occurs, or future periods. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | (15) Employee Benefit Plans The Company maintains a 401(k) plan for its employees whereby eligible employees may contribute up to a specified percentage of their earnings, on a pretax basis, subject to the maximum amount permitted by the Internal Revenue Code. Under the 401(k) plan, the Company may make discretionary contributions. The Company made no discretionary contributions to the plan in 2019 or 2018. The Company maintains a defined contribution plan for its employees in Korea. Under the defined contribution plan, the Company contributes 8.33% of an employee's gross salary into the plan. For the year ended December 31, 2019, the Company recorded an expense of $1.3 million for the plan. Pension Plans The Company sponsors defined benefit plans for its employees in Keymile and Japan. Defined benefit plans provide pension benefits based on compensation and years of service. The net periodic benefit cost related to the plans consisted of the following components during the year ended December 31, 2019 (in thousands): Year Ended December 31, 2019 Service Cost $ 219 Interest Cost 265 Net amortization — Net periodic benefit cost $ 484 The service cost component of net benefit cost is presented within cost of sales or selling, general and administrative expense on the accompanying statements of operations, in accordance with where compensation cost for the related associate is reported. All other components of net benefit cost, including interest cost and net amortization noted above, are presented within other income/expense, net in the accompanying statements of operations. The following provides a reconciliation of the changes in plan assets and benefit obligation, and the funded status at the end of the year (in thousands): Year Ended December 31, 2019 Benefit obligation, January 1 $ — Assumed with acquisition 16,191 Service cost 219 Interest cost 265 Benefits paid (456 ) Plan amendments — Actuarial (gains) losses 1,793 Foreign exchange impact (341 ) Benefit obligation, December 31 17,671 Underfunded status, December 31 $ 17,671 The Company has recorded the 2019 underfunded status as a long-term liability on the consolidated balance sheets. The accumulated benefit obligation for the plans were $17.7 million as of December 31, 2019. The Company has life insurance contracts, with the Company as beneficiary, in the amount of $3.3 million as of December 31, 2019, related to individuals under the pension plans. These insurance contracts are classified as other assets on the Company’s Consolidated Balance Sheet. The Company intends to use any proceeds from these policies to fund the pension plans. However, since the Company is the beneficiary on these policies, these assets have not been designated pension plan assets. The estimated net loss and prior service cost for the plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $19,000. The Company expects to make no contributions to the plans in 2020. The following gross amounts are recognized net of tax in accumulated other comprehensive loss: The following benefit payments, which reflect expected future service, are expected to be paid (in thousands): Years Ending December 31, 2020 $ 602 2021 647 2022 687 2023 720 2024 699 2025 - 2029 3,496 The following gross amounts are recognized net of tax in accumulated other comprehensive loss: Year Ended December 31, 2019 Prior service cost $ — Net loss 1,793 Net periodic benefit cost $ 1,793 The weighted average assumptions used in determining the periodic net cost and benefit obligation information related to the plans are as follows: Year Ended December 31, 2019 Net periodic benefit cost : Discount rate 0.9 % Rate of compensation increase 1.7 % Benefit obligation: Discount rate 0.9 % Rate of compensation increase 1.7 % |
Enterprise-Wide Information
Enterprise-Wide Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Enterprise-Wide Information | (16) 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 chief operating decision maker is the Company’s Chief Executive Officer, who reviews financial information presented on a consolidated basis accompanied by disaggregated information about revenues by geographic region for purposes of making operating decisions and assessing financial performance. The Company attributes revenue from customers to individual countries based on location shipped. The following summarizes required disclosures about geographical concentrations and revenue by products and services (in thousands): Years ended December 31, 2019 2018 Revenue by geography: United States $ 36,383 $ 50,795 Canada 4,690 4,413 Total North America 41,073 55,208 Latin America 23,774 27,596 Europe, Middle East, Africa 78,375 34,741 Korea 79,124 76,006 Other Asia Pacific 84,536 88,797 Total International 265,809 227,140 Total $ 306,882 $ 282,348 Years ended December 31, 2019 2018 Revenue by products and services: Products $ 286,292 $ 269,269 Services 20,590 13,079 Total $ 306,882 $ 282,348 The Company's property, plant and equipment, net of accumulated depreciation, were located in the following geographical areas as of December 31, 2019 and 2018 (in thousands): As of December 31, 2019 2018 United States $ 2,809 $ 3,036 Korea 2,020 1,543 Japan and Vietnam 1,074 910 Taiwan and India 24 29 Germany 842 — $ 6,769 $ 5,518 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | (17) Subsequent Events Relocation of Corporation Headquarters and New Facilities in Alameda, California On March 2, 2020, the Company announced its plans to relocate its corporate headquarters from Oakland, California to Plano, Texas and establish a new U.S.-based Engineering Center of Excellence in Plano. On February 24, 2020, i n connection with the planned relocation, The Subleases cover premises which, together, consist of 16,333 rentable square feet. Both Subleases are expected to commence in March, 2020 and terminate on November 30, 2025. The Company does not have any option to extend the term of either of the Subleases. The Subleases provide that the base rent will be abated until July 1, 2020. Beginning on July 1, 2020, the aggregate base monthly rent payments due under the Subleases will be $21,777, subject to an annual increase of $0.50 per rentable square foot per annum thereafter. The Company is also responsible for certain other costs under the Subleases including operating expenses, insurance and utilities. DNI Loan On March 5, 2020, DNS Korea, the Company’s wholly-owned, indirect subsidiary entered into a Loan Agreement with DNI (the “March 2020 DNI Loan”). The March 2020 DNI Loan was negotiated and approved on behalf of the Company and its subsidiaries by a special committee of the Board of Directors of the Company (the “Special Committee”) consisting of directors, each of whom was determined to be independent from DNI. The March 2020 DNI Loan consists of a term loan in the amount of KRW 22.4 billion ($18.5 million USD) with interest payable semi-annually at an annual rate of 4.6% and maturing on March 11, 2022. No principal payments are due on the March 2020 DNI Loan until the maturity date, but DNS Korea may prepay the loan, or a portion thereof, without penalty. As security for the March 2020 DNI Loan (and other existing loans between DNI and DNS Korea and/or DNS California), (i) DNS California, a wholly-owned, direct subsidiary of the Company and the sole stockholder of DNS Korea, agreed to pledge the outstanding shares of DNS Korea to DNI and (ii) DNS Korea granted a security interest in its personal property assets, accounts receivable and intellectual property assets to DNI. The March 2020 DNI Loan includes certain covenants consisting of financial reporting obligations, a maintenance covenant whereby DNS Korea agreed to maintain a minimum stockholders’ equity value in an amount equal to or greater than KRW 43.3 billion ($35.8 million USD), and customary events of default. If an event of default occurs and is not remedied within the applicable cure period, DNI will be entitled to take various actions, including requiring the immediate repayment of all outstanding amounts under the March 2020 DNI Loan and selling the shares or assets of DNS Korea. DNS Korea loaned the funds borrowed under the March 2020 DNI Loan to the Company, and the Company intends to utilize a portion of such funds to repay in full and terminate the PNC Credit Facilities. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | (b) Basis of Presentation The consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of the Company, its wholly owned subsidiaries and a subsidiary in which it had a controlling interest. All inter-company transactions and balances have been eliminated in consolidation. |
Concentration of Risk | Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, accounts receivable and contract assets. Cash and cash equivalents consist principally of financial deposits and money market accounts. Cash and cash equivalents are principally held with various domestic 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 year ended December 31, 2019, no customer represented 10% or more of net revenue. For the year ended December 31, 2018, one (1) customer represented 11% of net revenue. As of December 31, 2019, two (2) customers represented 18% and 11% of net accounts receivable, respectively. As of December 31, 2018, two (2) customers represented 11% and 10% of net accounts receivable, respectively. As of December 31, 2019 and December 31, 2018, receivables from customers in countries other than the United States represented 94% and 88% of net accounts receivable, respectively. |
Consolidated Subsidiaries | (e) Consolidated Subsidiaries Details of the Company's consolidated operating subsidiaries as of December 31, 2019 and 2018 are as follows: Percentage of ownership (%) Location December 31, 2019 December 31, 2018 Dasan Network Solutions, Inc. (U.S. subsidiary) US 100 % 100 % Dasan Network Solutions, Inc. (Korean subsidiary) Korea 100 % 100 % DZS Japan Inc. Japan 100 % 69.06 % DASAN Vietnam Company Limited Vietnam 100 % 100 % D-Mobile Limited Taiwan 100 % 100 % DASAN India Private Limited India 99.99 % 99.99 % Keymile Gmbh Germany 100 % — % |
Use of Estimates | (f) Use of Estimates The preparation of the 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. |
Revenue Recognition | (g) Revenue Recognition Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company generates revenue primarily from sales of products and services, including, extended warranty service and customer support. Revenue from product sales is recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery dependent upon the terms of the underlying contract. Most of the Company’s arrangements include customer acceptance provisions. Transfer of control occurs upon obtaining the signed acceptance certificate from the customer, unless the Company can objectively demonstrate that customer acceptance is a formality. In those instances, where transfer of control occurs prior to obtaining the signed acceptance certificate, the Company considers a number of factors, including successful completion of customer testing to demonstrate that the delivered products meet all acceptance criteria specified in the arrangement, its experience with the customer and its experience with other contracts for similar products. Revenue from services is generally recognized over time on a ratable basis over the contract term, using an output measure of progress, as the contracts usually provide the customer equal benefit throughout the contract period. The Company typically invoices customers for support contracts in advance, for periods ranging from one (1) to five (5) years. Transaction price is calculated as selling price net of variable consideration. Sales to certain distributors are made under arrangements which provide the distributors with volume discounts, price adjustments, and other allowances under certain circumstances. These adjustments and allowances are accounted for as variable consideration. To estimate variable consideration, the Company analyzes historical data, channel inventory levels, current economic trends and changes in customer demand for the Company's products, among other factors. Historically, variable consideration has not been a significant component of the Company’s contracts with customers. For contracts with customers that contain multiple performance obligations, the Company accounts for the promised performance obligations separately as individual performance obligations if they are distinct. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, including the degree of interrelation and interdependence between obligations and whether or not the good or service significantly modifies or transforms another good or service in the contract. After identifying the separate performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices for products are determined using either an adjusted market assessment or expected cost-plus margin The Company records contract assets when it has a right to consideration and records accounts receivable when it has an unconditional right to consideration. The Company records contract liabilities when cash payments are received (or unconditional rights to receive cash) in advance of fulfilling its performance obligations. The Company’s payment terms vary by the type and location of its customer and the products or services offered. For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer. Other related policies and revenue information Warranties Products sold to customers include standard warranties, typically for one year, covering bug fixes and minor updates such that the product continues to function according to published technical specifications. These standard warranties are assurance type warranties and do not offer any services in addition to the assurance that the product will continue working as specified. Therefore, standard warranties are not considered separate performance obligations. Instead, the expected cost of warranty is accrued as expense in accordance with applicable guidance. Optional extended warranties, for up to five years, are sold with certain products and include additional support services. The transaction price for extended warranties is accounted for as service revenue and recognized ratably over the life of the contract. The Company records estimated costs related to standard warranties upon product shipment or upon identification of a specific product failure. The Company recognizes estimated warranty costs when it is probable that a liability has been incurred and the amount of loss is reasonably estimable. The estimates are based upon historical and projected product failure and claim rates, historical costs incurred in correcting product failures and information available related to any specifically identified product failures. Significant judgment is required in estimating costs associated with warranty activities and the Company's estimates are limited to information available to the Company at the time of such estimates. In some cases, such as when a specific product failure is first identified or a new product is introduced, the Company may initially have limited information and limited historical failure and claim rates upon which to base its estimates, and such estimates may require revision in future periods. The recorded amount is adjusted from time to time for specifically identified warranty exposure. Contract Costs Applying a practical expedient, the Company recognizes the incremental costs of obtaining contracts, which primarily consist of sales commissions, as sales and marketing expense, when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. If the service period, inclusive of any anticipated renewal, is longer than a year, the incremental direct costs are capitalized and amortized over the period of benefit. As of December 31, 2019 and 2018, such Financing The Company applies the practical expedient not to adjust the promised amount of consideration for the effects of a financing component if the Company expects, at contract inception, that the period between when the Company transfers a good or service to the customer and when the customer pays for the good or service will be one year or less. During the year ended December 31, 2019 and 2018, such financing components were not significant. Bill-and-hold The Company recognizes revenue from the sale of products when control has passed to the customer, which is based on the shipping terms of the arrangement, when significant risk and rewards have transferred to the customer. In some instances, the customer agrees to buy product from the Company but requests delivery at a later date, commonly known as bill-and-hold arrangements. For these transactions, the Company deems that control passes to the customer when the product is ready for delivery. The Company views products readiness for delivery when a signed agreement is in place, the transaction is billable, and the customer has significant risk and rewards for the products, the ability to direct the assets, the products have been set aside specifically for the customer, and cannot be redirected to another customer. Shipping and Handling The Company has elected to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost rather than as an additional promised service. As a result, the Company accrues the costs of shipping and handling when the related revenue is recognized Unsatisfied Performance Obligations The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The majority of the Company's performance obligations in its contracts with customers relate to contracts with duration of less than one year. The transaction price allocated to unsatisfied performance obligations included in contracts with duration of more than 12 months is reflected in contract liabilities – non-current on the consolidated balance sheet. Disaggregation of Revenue The following table presents the revenues by source (in thousands): Years ended December 31, 2019 2018 Revenue by products and services: Products $ 286,292 $ 269,269 Services 20,590 13,079 Total $ 306,882 $ 282,348 Information about the Company’s net revenue for North America and international markets for 2019 and 2018 is summarized below (in thousands): Years ended December 31, 2019 2018 Revenue by geography: United States $ 36,383 $ 50,795 Canada 4,690 4,413 Total North America 41,073 55,208 Latin America 23,774 27,596 Europe, Middle East, Africa 78,375 34,741 Korea 79,124 76,006 Other Asia Pacific 84,536 88,797 Total International 265,809 227,140 Total $ 306,882 $ 282,348 |
Allowances for Sales Returns and Doubtful Accounts | (h) Allowances for Sales Returns and Doubtful Accounts The Company records an allowance for sales returns for estimated future product returns related to current period product revenue. The allowance for sales returns is recorded as a reduction of revenue and an increase to accrued and other liabilities. The Company bases its allowance for sales returns on periodic assessments of historical trends in product return rates and current approved returned products. If the actual future returns were to deviate from the historical data on which the reserve had been established, the Company’s future revenue could be adversely affected. The Company records an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make payments for amounts owed to the Company. The allowance for doubtful accounts is recorded as an expense under general and administrative expenses. The Company bases its allowance on periodic assessments of its customers’ liquidity and financial condition through analysis of information obtained from credit rating agencies, financial statement review and historical collection trends. Additional allowances may be required in the future if the liquidity or financial condition of the Company's customers deteriorates, resulting in doubts about their ability to make payments. Activity under the Company’s allowance for doubtful accounts is comprised as follows (in thousands): December 31, 2019 2018 Balance at beginning of year $ 328 $ 1,246 Charged to expense 155 20 Reversal of expense — (11 ) Utilization/write offs/exchange rate differences (90 ) (927 ) Balance at end of year $ 393 $ 328 Activity under the Company’s allowance for sales returns is comprised as follows (in thousands): December 31, 2019 2018 Balance at beginning of year $ 706 $ 445 Charged to revenue 370 1,343 Utilization/write offs/exchange rate differences (733 ) (1,082 ) Balance at end of year $ 343 $ 706 |
Inventories | (i) Inventories Inventories are stated at the lower of cost or net realizable value, with cost being determined using the first-in, first-out method. In assessing the net realizable value of inventories, the Company is required to make judgments as to future demand requirements and compare these with the current or committed inventory levels. Once inventory has been written down to its estimated net realizable value, its carrying value cannot be increased due to subsequent changes in demand. To the extent that a severe decline in forecasted demand occurs, or the Company experiences a higher incidence of inventory obsolescence due to rapidly changing technology and customer requirements, the Company may incur significant expenses for excess and obsolete inventory. The Company also evaluates the terms of its agreements with its suppliers and establishes accruals for estimated losses on adverse purchase commitments as necessary, applying the same lower of cost or net realizable value approach that is used to value inventory. |
Foreign Currency Translation | (j) Foreign Currency Translation For operations outside the United States, the Company translates assets and liabilities of foreign subsidiaries, whose functional currency is the applicable local currency, at end of period exchange rates. Revenues and expenses are translated at periodic average rates. The adjustment resulting from translating the financial statements of such foreign subsidiaries, is included in accumulated other comprehensive income (loss,) which is reflected as a separate component of stockholders’ equity. Gains and losses on foreign currency transactions are included in other income (expense) in the accompanying consolidated statement of comprehensive income (loss). |
Comprehensive Income (Loss) | (k) Comprehensive Income (Loss) There have been no items reclassified out of accumulated other comprehensive income (loss) and into net income (loss). The Company’s other comprehensive income (loss) for the years ended December 31, 2019 and 2018 is comprised of foreign currency translation gains and losses and actuarial gains and losses from pension liability. |
Property, Plant and Equipment | (l) Property, Plant and Equipment Property, plant, and equipment are stated at cost, less accumulated depreciation, and are depreciated using the straight-line method over the estimated useful life of each asset. The useful life of each asset category is as follows: Asset Category Useful Life Furniture and fixtures 3 to 4 years Machinery and equipment 3 to 10 years Computers and software 3 years Leasehold improvements Shorter of remaining lease term or estimated useful lives Upon retirement or sale, the cost and related accumulated depreciation of the asset are removed from the balance sheet and the resulting gain or loss is reflected in operating expenses. |
Long-Lived Assets | (m) Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the future net undiscounted cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future net undiscounted cash flows, an impairment expense is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Any assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. The Company estimates the fair value of its long-lived assets based on a combination of market information primarily obtained from third-party quotes and online markets. In the application of impairment testing, the Company is required to make estimates of future operating trends and resulting cash flows and judgments on discount rates and other variables. Actual future results and other assumed variables could differ from these estimates. |
Goodwill and Other Acquisition-Related Intangible Assets | (n) Goodwill and Other Acquisition-Related Intangible Assets Goodwill and other acquisition-related intangible assets not subject to amortization are tested annually for impairment and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. Factors the Company considers important which could trigger an impairment review, include, but are not limited to, significant changes in the manner of use of its acquired assets, significant changes in the strategy for the Company's overall business or significant negative economic trends. If this evaluation indicates that the value of an intangible asset may be impaired, an assessment of the recoverability of the net carrying value of the asset over its remaining useful life is made. If this assessment indicates that the cost of an intangible asset is not recoverable, based on the estimated undiscounted future cash flows or other comparable market valuations of the entity or technology acquired over the remaining amortization period, the net carrying value of the related intangible asset will be reduced to fair value and the remaining amortization period may be adjusted. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. In the application of impairment testing, the Company is required to make estimates of future operating trends and resulting cash flows and judgments on discount rates and other variables. Actual future results and other assumed variables could differ from these estimates. During 2019, the Company recorded Goodwill of $1.0 million related to the acquisition of Keymile. In performing the annual impairment evaluation, utilizing a present value cash flow model to determine the fair value of the reporting unit, the Company determined that the goodwill related to Keymile was impaired, due to the financial performance on the reporting unit. The Company recognized an impairment loss of $1.0 million of this goodwill for the year ended December 31, 2019. |
Business Combination | (o) Business Combination The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired 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. |
Stock-Based Compensation | (p) Stock-Based Compensation The Company amortizes the values of the stock-based compensation to expense using the straight-line method. The value of the award is recognized as expense over the requisite service periods in the Company’s consolidated statement of comprehensive income (loss). The Company accounts for forfeitures as they occur. The Company uses the Black Scholes model to estimate the fair value of options, which is affected by the Company's stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the Company's expected stock price volatility over the expected term of the awards, risk-free interest rates and expected dividends. The expected stock price volatility is based on the weighted average of the historical volatility of the Company's common stock over the most recent period commensurate with the estimated expected life of the Company's stock options. The Company based its expected life assumption on its historical experience and on the terms and conditions of the stock awards granted. Risk-free interest rates reflect the yield on zero-coupon United States Treasury securities. |
Income Taxes | (q) Income Taxes The Company uses the asset and liability method to account for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and the income tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. |
Net Income (Loss) per Share Attributable to DASAN Zhone Solutions, Inc. | (r) Net Income (Loss) per Share Attributable to DASAN Zhone Solutions, Inc. Basic net income (loss) per share attributable to DASAN Zhone Solutions, Inc. is computed by dividing the net income (loss) 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 (loss) 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 stock equivalent shares are composed of restricted stock units, unvested restricted shares and incremental shares of common stock issuable upon the exercise of stock options. |
Research and Development Cost | (s) Research and Development Cost Costs related to research and development, which primarily consists of labor and benefits, supplies, facilities, consulting, and outside service fees, are expensed as incurred. |
Cash and Cash Equivalents | (t) Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term investments (if any) with original maturities of less than three months. |
Recent Accounting Pronouncements | (u) Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted Lease Accounting In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification 842, Leases The Company adopted the new standard on January 1, 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 has 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. If the Company believes that it will exercise the renewal period and the renewal payments are unknown or not calculable, the renewal term will 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 consolidated statements of comprehensive income (loss), stockholders’ equity and non-controlling interest, and cash flows. See Note 13 in the notes to 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 In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes In November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses ASU 2019-11 clarifies that to use the practical expedient, entities must reasonably expect the borrower “to continue to replenish the collateral to meet the requirements of the contract.” In addition, if entities have elected the practical expedient (i.e., they reasonably expect the borrower to continue to replenish the collateral to meet the requirements of the contract) and the fair value of the collateral is less than the amortized cost of the financial asset, they should estimate expected credit losses on the portion of the amortized cost basis that is unsecured (i.e., the amount by which the amortized cost basis of the financial asset exceeds the fair value of the collateral). The expected credit loss is limited to the difference between the amortized cost basis of the financial asset and the fair value of the collateral. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments - Credit Losses Codification Improvements to Topic 326, Financial Instruments - Credit Losses Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief In November 2019, the FASB issued ASU 2019-08, Compensation - Stock Compensation (ASC 718). In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other Internal-Use Software - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement 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) | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Consolidated Operating Subsidiaries | Details of the Company's consolidated operating subsidiaries as of December 31, 2019 and 2018 are as follows: Percentage of ownership (%) Location December 31, 2019 December 31, 2018 Dasan Network Solutions, Inc. (U.S. subsidiary) US 100 % 100 % Dasan Network Solutions, Inc. (Korean subsidiary) Korea 100 % 100 % DZS Japan Inc. Japan 100 % 69.06 % DASAN Vietnam Company Limited Vietnam 100 % 100 % D-Mobile Limited Taiwan 100 % 100 % DASAN India Private Limited India 99.99 % 99.99 % Keymile Gmbh Germany 100 % — % |
Schedule of Revenues by Source | The following table presents the revenues by source (in thousands): Years ended December 31, 2019 2018 Revenue by products and services: Products $ 286,292 $ 269,269 Services 20,590 13,079 Total $ 306,882 $ 282,348 |
Schedule of Information about the Company's Net Revenue for North America and International Markets | Information about the Company’s net revenue for North America and international markets for 2019 and 2018 is summarized below (in thousands): Years ended December 31, 2019 2018 Revenue by geography: United States $ 36,383 $ 50,795 Canada 4,690 4,413 Total North America 41,073 55,208 Latin America 23,774 27,596 Europe, Middle East, Africa 78,375 34,741 Korea 79,124 76,006 Other Asia Pacific 84,536 88,797 Total International 265,809 227,140 Total $ 306,882 $ 282,348 |
Schedule of Allowances for Doubtful Accounts | Activity under the Company’s allowance for doubtful accounts is comprised as follows (in thousands): December 31, 2019 2018 Balance at beginning of year $ 328 $ 1,246 Charged to expense 155 20 Reversal of expense — (11 ) Utilization/write offs/exchange rate differences (90 ) (927 ) Balance at end of year $ 393 $ 328 |
Schedule Allowances for Sales Returns | Activity under the Company’s allowance for sales returns is comprised as follows (in thousands): December 31, 2019 2018 Balance at beginning of year $ 706 $ 445 Charged to revenue 370 1,343 Utilization/write offs/exchange rate differences (733 ) (1,082 ) Balance at end of year $ 343 $ 706 |
Schedule of Property, Plant and Equipment, Net | Property, plant, and equipment are stated at cost, less accumulated depreciation, and are depreciated using the straight-line method over the estimated useful life of each asset. The useful life of each asset category is as follows: Asset Category Useful Life Furniture and fixtures 3 to 4 years Machinery and equipment 3 to 10 years Computers and software 3 years Leasehold improvements Shorter of remaining lease term or estimated useful lives Property, plant and equipment As of December 31, 2019 2018 Property, plant and equipment, net: Furniture and fixtures $ 10,803 $ 8,029 Machinery and equipment 2,550 3,553 Leasehold improvements 4,267 3,715 Computers and software 1,990 922 Other 660 982 20,270 17,201 Less: accumulated depreciation and amortization (13,130 ) (11,271 ) Less: government grants (371 ) (412 ) $ 6,769 $ 5,518 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Summary of Final Estimated Purchase Price Allocation to Fair Value of Asset Acquired and Liabilities Assumed | A summary of the final 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 Assumed | The following summarizes the final 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 $ 4,619 Accounts receivable - trade, net 6,820 Other receivables 798 Inventories 9,943 Property, plant and equipment 983 Other assets 3,698 Right-of-use assets from operating leases 5,011 Intangible assets 10,047 Accounts payable - trade (3,303 ) Short-term debt (4,582 ) Contract liabilities (364 ) Accrued liabilities (3,651 ) Operating lease liabilities - current (823 ) Deferred tax liabilities (425 ) Pension obligations (16,191 ) Operating lease liabilities - non-current (4,188 ) Other long term liabilities (116 ) Goodwill 1,003 Total purchase consideration $ 9,279 |
Schedule of Final Estimated Fair Value and Useful Lives of Identifiable Intangible Assets | The following table represents the final estimated fair value and useful lives of identifiable intangible assets acquired: Estimated Fair Value (in thousands) Estimated Useful Life Intangible assets acquired Technology - developed core $ 5,040 5 years Customer relationships 3,632 5 years Trade name 1,375 5 years Total intangible assets $ 10,047 |
Summary of Pro Forma Information | The unaudited pro forma information for the period 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 of the Company would have been if the Keymile Acquisition had occurred on January 1, 2018 or what such results 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 intangible assets and interest expense related to financing arrangements. Below is the pro forma financial information (in thousands), unaudited: Year Ended December 31, 2018 Pro forma net revenues $ 332,571 Pro forma net income attributable to DASAN Zhone Solutions, Inc. 2,480 |
Summary of Financial Information | Below is the financial information for Keymile (in thousands): Year Ended December 31, 2019 Net revenues $ 36,390 Net loss attributable to DASAN Zhone Solutions, Inc. (13,072 ) |
Balance Sheet Detail (Tables)
Balance Sheet Detail (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventories | Inventories As of December 31, 2019 2018 Inventories: Raw materials $ 15,774 $ 15,688 Work in process 1,458 2,429 Finished goods 18,207 15,751 $ 35,439 $ 33,868 |
Schedule of Property, Plant and Equipment, Net | Property, plant, and equipment are stated at cost, less accumulated depreciation, and are depreciated using the straight-line method over the estimated useful life of each asset. The useful life of each asset category is as follows: Asset Category Useful Life Furniture and fixtures 3 to 4 years Machinery and equipment 3 to 10 years Computers and software 3 years Leasehold improvements Shorter of remaining lease term or estimated useful lives Property, plant and equipment As of December 31, 2019 2018 Property, plant and equipment, net: Furniture and fixtures $ 10,803 $ 8,029 Machinery and equipment 2,550 3,553 Leasehold improvements 4,267 3,715 Computers and software 1,990 922 Other 660 982 20,270 17,201 Less: accumulated depreciation and amortization (13,130 ) (11,271 ) Less: government grants (371 ) (412 ) $ 6,769 $ 5,518 |
Schedule of Accrued and Other Liabilities | Accrued and other liabilities As of December 31, 2019 2018 Accrued and other liabilities (in thousands): Accrued warranty $ 1,611 $ 1,319 Accrued compensation 1,618 2,461 Other accrued expenses 9,615 7,737 $ 12,844 $ 11,517 |
Summary of Product Warranty Liability | The following table summarizes the activity related to the product warranty liability (in thousands): As of December 31, 2019 2018 Balance at beginning of the year $ 1,319 $ 931 Charged to cost of revenue 967 1,171 Claims and settlements (903 ) (791 ) Warranty liability assumed from Keymile acquisition 230 — Foreign exchange impact (2 ) 8 Balance at end of the year $ 1,611 $ 1,319 |
Schedule of Accrued Restructuring Costs | The Company established a restructuring plan in September 2019 to further align its business resources based on an analysis of the current business conditions. The Company incurred restructuring and other charges of approximately $4.9 million for the year ended Severance and Related Benefits Balance as of December 31, 2018 $ — Restructuring charges for the year 3,930 Cash payments (3,930 ) Balance as of December 31, 2019 $ — |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill as of December 31, 2019 and 2018 was as follows (in thousands): As of December 31, 2019 2018 Balance at beginning of the year $ 3,977 $ 3,977 Goodwill from Keymile acquisition 1,003 — Less: Impairment of Keymile acquisition goodwill (1,003 ) — Balance at end of the year $ 3,977 $ 3,977 |
Schedule of Intangible Assets | Intangible assets as of December 31, 2019 and 2018 were as follows (in thousands): As of December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Developed technology $ 7,994 $ (3,027 ) $ 4,967 Customer relationships 8,795 (2,458 ) 6,337 Trade name 1,346 (269 ) 1,077 Total intangible assets, net $ 18,135 $ (5,754 ) $ 12,381 During 2019 the Company recorded $5.0 million, $3.6 million and $1.4 million in Developed technology, Customer relationships and Trade names, respectively, related to the acquisition of Keymile. Refer to Note 2 Business Combinations, for further detail. As of 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 Backlog 2,179 (2,179 ) - Total intangible assets, net $ 10,479 $ (4,830 ) $ 5,649 |
Expected Future Amortization Expense | As of December 31, 2019, expected future amortization expense for the years indicated was as follows (in thousands): Period Expected Amortization Expense 2020 $ 3,103 2021 2,899 2022 2,491 2023 2,491 2024 524 Thereafter 873 Total $ 12,381 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Debt | The following tables summarize the Company’s debt (in thousands): As of December 31, 2019 Short-term Long-term Total PNC Credit Facilities $ 2,500 $ 10,625 $ 13,125 Bank and Trade Facilities - Foreign Operations 15,779 — 15,779 Related party — 9,096 9,096 18,279 19,721 38,000 Less: unamortized deferred financing costs on the PNC Bank Facility (795 ) (688 ) (1,483 ) $ 17,484 $ 19,033 $ 36,517 As of December 31, 2018 Short-term Long-term Total Former WFB 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 Future Principal Maturities Of Our Secured Term Loans | The future principal maturities of our Secured Term Loans for each of the next five years are as follows (in thousands): Year ended December 31, 2020 $ 18,279 2021 3,438 2022 16,283 2023 — 2024 — Thereafter — Total $ 38,000 |
Schedule of Short-term Debt | As of December 31, 2019 and 2018, the Company had an aggregate outstanding balance of $15.8 million and $24.8 million, respectively, under such financing arrangements. The weighted average borrowing rate as of December 31, 2019 was 2.7%. The maturity date and interest rates per annum applicable to outstanding borrowings under these financing arrangements were as listed in the tables below (amounts in thousands). As of December 31, 2019 Maturity Date Denomination Interest rate (%) Amount NongHyup Bank Credit facility 09/30/2020 USD 3.50 ~ 4.50 $ 2,091 The Export-Import Bank of Korea Export development loan 07/01/2020 KRW 2.75 5,182 Korea Development Bank General loan 08/08/2020 KRW 3 4,319 Korea Development Bank Credit facility 08/07/2020 USD 3.00 ~ 3.15 2,460 LGUPlus General loan 06/17/2020 KRW 0 1,727 $ 15,779 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 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders Equity Note [Abstract] | |
Summary of Changes In Accumulated Other Comprehensive Income (Loss) by Component, Net of Tax | The table below summarizes the changes in accumulated other comprehensive income (loss) by component, net of tax (in thousands): As of December 31, 2019 2018 Beginning accumulated other comprehensive income $ (192 ) 1,871 Actuarial loss for pension plan (1,793 ) — Foreign currency translation adjustments, net (1,939 ) (2,051 ) Non-controlling interest (15 ) (12 ) Ending accumulated other comprehensive income $ (3,939 ) $ (192 ) |
Summary of Stock Based Compensation Expense | The following table summarizes stock-based compensation expense (in thousands): Years ended December 31, 2019 2018 Cost of revenue $ 41 $ 18 Research and product development 267 134 Selling, marketing, general and administrative 3,200 1,928 $ 3,508 $ 2,080 |
Summary of Assumptions Used to Value Options Grants for Stock Options | The weighted average assumptions used to value option grants for the year ended December 31, 2019 and 2018 are as follows: Years ended December 31, 2019 2018 Expected term (years) 5.85 4.88 Volatility 65.72 % 81.87 % Risk free interest rate 1.99 % 2.74 % |
Summary of Option Activity under Stock Option Program | The following table sets forth the summary of option activity under the stock option program for the year ended December 31, 2019 (in thousands, except per share data): Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding as of December 31, 2018 1,744 $ 8.00 Granted 470 10.36 Canceled/Forfeited (128 ) 9.83 Expired (39 ) 8.32 Exercised (35 ) 6.22 Outstanding as of December 31, 2019 2,012 8.47 7.36 2,418 Vested and expected to vest at December 31, 2019 2,012 8.47 7.36 2,418 Vested and exercisable at December 31, 2019 946 7.47 5.74 1,684 The following table sets forth the summary of option activity under the stock option program for the year ended December 31, 2018 (in thousands, except per share data): Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding as of December 31, 2017 1,213 $ 6.50 Granted 836 9.86 Canceled/Forfeited (155 ) 8.00 Exercised (150 ) 6.08 Outstanding as of December 31, 2018 1,744 8.00 8.65 10,378 Vested and expected to vest at December 31, 2018 1,744 8.00 8.65 10,378 Vested and exercisable at December 31, 2018 488 6.77 7.51 3,497 |
Summary of Restricted Stock Unit Awards Activity Under Stock Award Program | The following table sets forth the summary of restricted stock unit awards activity under the stock award program for the year ended December 31, 2019 (in thousands, except per share data): RSU Outstanding Weighted Average Grant Date Fair Value Non-vested as of December 31, 2018 4 $ 7.50 Granted 40 12.77 Canceled/Forfeited — — Vested (33 ) 13.11 Non-vested as of December 31, 2019 11 10.05 The following table sets forth the summary of restricted stock unit awards activity under the stock award program for the year ended December 31, 2018 (in thousands, except per share data): RSU Outstanding Weighted Average Grant Date Fair Value Non-vested as of December 31, 2017 5 $ 7.43 Granted 35 9.66 Canceled/Forfeited — — Vested (36 ) 9.56 Non-vested as of December 31, 2018 4 7.50 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data): Years ended December 31, 2019 2018 Numerator: Net income (loss) attributable to DASAN Zhone Solutions, Inc. $ (13,457 ) $ 2,767 Denominator: Weighted average number of shares outstanding: Basic 19,403 16,482 Effect of dilutive securities: Stock options, restricted stock units and share awards — 264 Diluted 19,403 16,746 Net income (loss) per share attributable to DASAN Zhone Solutions Inc.: Basic $ (0.69 ) $ 0.17 Diluted $ (0.69 ) $ 0.17 |
Potential Common Stock not Included in Diluted Net Loss Per Share Calculation | The following tables set forth potential common stock that is not included in the diluted net income (loss) per share calculation above because their effect would be anti-dilutive for the periods indicated (in thousands, except exercise price per share data): 2019 Weighted average option exercise price 2018 Weighted average option exercise price Outstanding stock options, restricted stock units and unvested restricted shares 2,023 $ 8.42 1,747 $ 7.91 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Geographical Breakdown of Income (Loss) Before Income Taxes | The geographical breakdown of income (loss) before income taxes is as follows (in thousands): Years ended December 31, 2019 2018 Loss before income taxes - Domestic $ (11,069 ) $ (3,003 ) Income before income taxes - Foreign 1,391 7,563 Income (loss) before income taxes $ (9,678 ) $ 4,560 |
Components of Income Tax Expense Applicable to Income (Loss) Before Income Taxes | The following is a summary of the components of income tax expense applicable to income (loss) before income taxes (in thousands): Years ended December 31, 2019 2018 Current: Federal $ — $ — State 16 13 Foreign 2,439 1,509 Total current tax provision $ 2,455 $ 1,522 Deferred: Federal $ — $ 12 State — — Foreign 1,130 190 Total deferred tax provision (benefit) $ 1,130 $ 202 Total tax provision (benefit) $ 3,585 $ 1,724 |
Reconciliation of Expected Tax Provision (Benefit) to Actual Tax Provision (Benefit) | A reconciliation of the expected tax provision (benefit) to the actual tax provision (benefit) is as follows (in thousands): Years ended December 31, 2019 2018 Expected tax provision (benefit) at statutory rate $ (2,032 ) $ 953 State taxes, net of Federal effect 13 297 State change in deferreds 1,927 — Foreign rate differential 2,751 129 Valuation allowance 557 (906 ) Permanent differences 544 297 Other permanent items — 1,178 Tax credit carry-forwards (212 ) (280 ) Tax expense adjustments after tax return for prior period 37 74 Others — (18 ) Total tax provision $ 3,585 $ 1,724 |
Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2019 and 2018 are as follows (in thousands): As of December 31, 2019 2018 Deferred tax assets: Net operating loss, capital loss, and tax credit carryforwards $ 23,195 $ 12,621 Fixed assets and intangible assets 1,057 1,451 Inventory and other reserves 1,368 1,998 Operating lease liability 1,684 — Other (mainly accrued expenses) 2,552 2,042 Gross deferred tax assets 29,856 18,112 Less valuation allowance (26,827 ) (15,360 ) Deferred tax liabilities: Operating lease right-of-use-asset (1,407 ) — Gross deferred tax liabilities (1,407 ) — Total net deferred tax assets $ 1,622 $ 2,752 |
Reconciliation of Beginning and Ending Unrecognized Tax Benefit | A reconciliation of the beginning and ending unrecognized tax benefit amounts for 2019 and 2018 are as follows (in thousands): As of December 31, 2019 2018 Balance at beginning of the year $ 807 $ 380 Increases related to current year tax positions 229 427 Balance at end of the year $ 1,036 $ 807 |
Open Tax Years for Major Jurisdictions | The open tax years for the major jurisdictions are as follows: Federal 2016 - 2019 California and Canada 2015 - 2019 Brazil 2014 - 2019 Germany 2015 - 2019 Japan 2014 - 2019 Korea 2017 - 2019 United Kingdom 2016 - 2019 Vietnam 2017 - 2019 |
Non-Controlling Interests (Tabl
Non-Controlling Interests (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Schedule of Non-controlling Interests | Non-controlling interests were as follows (in thousands): As of December 31, 2019 2018 Beginning non-controlling interests $ 615 534 Net income attributable to non-controlling interests 194 69 Foreign currency translation adjustments (Other Comprehensive Income) 15 12 Purchase of non-controlling interests (824 ) — Ending non-controlling interests $ — $ 615 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Sales and purchases, cost of revenue, research and product development, selling, marketing, general and administrative and other income and expenses to and from related parties for the years ended December 31, 2019 and 2018 were as follows (in thousands): For the year ended December 31, 2019 Counterparty DNI direct 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 $ 2,471 $ 1,825 — — $ 3,768 $ 459 $ 341 Tomato Soft Ltd. 100% — — 117 — — — — Tomato Soft (Xi'an) Ltd. 100% — — — 526 — — — CHASAN Networks Co., Ltd. 100% — — 1,103 71 — — — J-Mobile Corporation 91.50% 42 81 — — — — — $ 2,513 $ 1,906 $ 1,220 $ 597 $ 3,768 $ 459 $ 341 For the year ended December 31, 2018 Counterparty DNI direct 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 $ 4,633 $ 3,892 — — $ 4,262 $ 435 $ 343 Tomato Soft Ltd. 100% — — 121 — — — — Tomato Soft (Xi'an) Ltd. 100% — — — 520 — — — Chasan Networks Co., Ltd. 100% — — 1,119 72 — — — Dasan France 100% 203 177 — — — — — Handysoft, Inc. 17.63% 794 627 — — 6 — — $ 5,630 $ 4,696 $ 1,240 $ 592 $ 4,268 $ 435 $ 343 Balances of receivables and payables arising from sales and purchases of goods and services with related parties as of December 31, 2019 and 2018 were as follows (in thousands): As of December 31, 2019 Counterparty DNI Ownership Interest Other receivables Deposits for lease* Loans payable Accounts payable Other payables Accrued and other liabilities** DNI (parent company) N/A $ 32 $ 709 $ 9,096 $ — $ 1,475 $ 119 Tomato Soft Ltd. 100% — — — — 10 — Tomato Soft (Xi'an) Ltd. 100% — — — — 45 — Dasan France 100% — — — — — — Chasan Networks Co., Ltd. 100% — — — 96 — — $ 32 $ 709 $ 9,096 $ 96 $ 1,530 $ 119 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 (parent company) 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 consolidated balance sheets as of December 31, 2019 and 2018. ** Included in accrued and other liabilities in the consolidated balance sheet as of December 31, 2019 and 2018. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows for the year ended December 31, 2019: Year ended December 31, 2019 (in thousands) Operating lease cost $ 5,212 Variable lease cost 644 Short-term lease cost 404 Total net lease cost $ 6,260 |
Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to the Company’s operating leases was as follows for the year ended December 31, 2019: Year ended December 31, 2019 (in thousands) Operating cash flows from operating leases $ 4,932 ROU assets obtained in exchange for operating lease obligations $ 3,812 |
Lease Balances within Condensed Consolidated Balance Sheet, Weighted Average Remaining Lease Term, and Weighted Average Discount Rates Related to Operating Leases | The following table presents the lease balances within the Company’s consolidated balance sheet, weighted average remaining lease term, and weighted average discount rates related to the Company’s operating leases as of December 31, 2019 (in thousands): Lease Assets and Liabilities Assets: Right-of-use assets from operating leases $ 20,469 Liabilities: Operating lease liabilities - current $ 4,201 Operating lease liabilities - non-current 18,154 Total operating lease liabilities $ 22,355 Weighted average remaining lease term 2.22 years Weighted average discount rate 4.8 % |
Maturity of Operating Lease Liabilities | The following table presents the maturity of the Company’s operating lease liabilities as of December 31, 2019 (in thousands): Minimum Future Lease Payments Year ending December 31: 2020 $ 5,287 2021 4,655 2022 4,211 2023 3,795 2024 3,320 Thereafter 3,457 Total operating lease payments 24,725 Less: imputed interest (2,370 ) Total minimum lease payments $ 22,355 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Payment Guarantees to Third Parties | The following table sets forth payment guarantees of the Company's indebtedness and other obligations as of December 31, 2019 that have been provided by third parties and DNI. DNI owns approximately 44.3% of the outstanding shares of our common stock. The amount guaranteed exceeds the principal amounts of outstanding obligations due to collateral requirements by the banks. Guarantor Amount Guaranteed (in thousands) Description of Obligations Guaranteed DNI $ 8,400 Credit facility from Industrial Bank of Korea DNI $ 2,073 Purchasing Card from Industrial Bank of Korea DNI $ 8,400 Credit facility from Korea Development Bank DNI $ 5,182 Borrowings from Korea Development Bank DNI $ 6,000 Credit facility from NongHyup Bank DNI $ 3,700 Borrowings from Export-Import Bank of Korea DNI $ 3,000 Payment Guarantee from Shinhan Bank DNI $ 1,658 Backed Loan from Shinhan Bank PNC Bank N.A. $ 4,649 Performance Bond Citi Bank $ 253 Performance Bond Seoul Guarantee Insurance Co. $ 6,009 Performance Bond, Warranty Bond, etc. (*) Industrial Bank of Korea $ 836 Bank Guarantee Korea Development Bank $ 3,124 Letter of Credit NongHyup Bank $ 2,266 Letter of Credit Woori Bank $ 1,626 Bank Guarantee Shinhan Bank $ 583 Purchasing Card Shinhan Bank $ 683 Payment Guarantee AXA Insurance Company $ 179 Guarantee for flexible retirement program $ 58,621 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Schedule of Net Periodic Benefit Cost Related to Plans | The net periodic benefit cost related to the plans consisted of the following components during the year ended December 31, 2019 (in thousands): Year Ended December 31, 2019 Service Cost $ 219 Interest Cost 265 Net amortization — Net periodic benefit cost $ 484 |
Reconciliation of Changes in Plan Assets and Benefit Obligation | The following provides a reconciliation of the changes in plan assets and benefit obligation, and the funded status at the end of the year (in thousands): Year Ended December 31, 2019 Benefit obligation, January 1 $ — Assumed with acquisition 16,191 Service cost 219 Interest cost 265 Benefits paid (456 ) Plan amendments — Actuarial (gains) losses 1,793 Foreign exchange impact (341 ) Benefit obligation, December 31 17,671 Underfunded status, December 31 $ 17,671 |
Schedule of Benefit Payments which Reflect Expected Future Service are Expected To Be Paid | The following benefit payments, which reflect expected future service, are expected to be paid (in thousands): Years Ending December 31, 2020 $ 602 2021 647 2022 687 2023 720 2024 699 2025 - 2029 3,496 |
Schedule of Gross Amounts Recognized Net of Tax in Accumulated Other Comprehensive Loss | The following gross amounts are recognized net of tax in accumulated other comprehensive loss: Year Ended December 31, 2019 Prior service cost $ — Net loss 1,793 Net periodic benefit cost $ 1,793 |
Weighted Average Assumptions Used In Determining Periodic Net Cost and Benefit Obligation Information Related to Plans | The weighted average assumptions used in determining the periodic net cost and benefit obligation information related to the plans are as follows: Year Ended December 31, 2019 Net periodic benefit cost : Discount rate 0.9 % Rate of compensation increase 1.7 % Benefit obligation: Discount rate 0.9 % Rate of compensation increase 1.7 % |
Enterprise-Wide Information (Ta
Enterprise-Wide Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Revenue by Geography | The following summarizes required disclosures about geographical concentrations and revenue by products and services (in thousands): Years ended December 31, 2019 2018 Revenue by geography: United States $ 36,383 $ 50,795 Canada 4,690 4,413 Total North America 41,073 55,208 Latin America 23,774 27,596 Europe, Middle East, Africa 78,375 34,741 Korea 79,124 76,006 Other Asia Pacific 84,536 88,797 Total International 265,809 227,140 Total $ 306,882 $ 282,348 |
Revenue by Products and Services | Years ended December 31, 2019 2018 Revenue by products and services: Products $ 286,292 $ 269,269 Services 20,590 13,079 Total $ 306,882 $ 282,348 |
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 as of December 31, 2019 and 2018 (in thousands): As of December 31, 2019 2018 United States $ 2,809 $ 3,036 Korea 2,020 1,543 Japan and Vietnam 1,074 910 Taiwan and India 24 29 Germany 842 — $ 6,769 $ 5,518 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands, ₩ in Billions | 12 Months Ended | ||||
Dec. 31, 2019USD ($)customercountry | Dec. 31, 2018USD ($)customer | Mar. 05, 2020USD ($) | Mar. 05, 2020KRW (₩) | Jan. 01, 2019USD ($) | |
Significant Accounting Policies [Line Items] | |||||
Number of customers | customer | 1,200 | ||||
Number of countries in which entity operates | country | 120 | ||||
State of entity incorporated | DE | ||||
Date of entity incorporation | 1999-06 | ||||
Net income (loss) | $ (13,263) | $ 2,836 | |||
Accumulated deficit | 29,234 | 15,777 | |||
Working capital | 114,900 | ||||
Cash and cash equivalents | 28,747 | $ 27,709 | |||
Debt | 38,000 | ||||
Debt, current | 18,300 | ||||
Goodwill, impairment loss | 1,003 | ||||
Right-of-use assets from operating leases | 20,469 | $ 22,500 | |||
Operating lease liabilities | $ 22,355 | $ 22,500 | |||
Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Invoices customers for support contracts in advance ranging periods | 1 year | ||||
Product warranty, life | 1 year | ||||
Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Invoices customers for support contracts in advance ranging periods | 5 years | ||||
Product warranty, life | 5 years | ||||
Customer Concentration Risk | Sales Revenue, Net | |||||
Significant Accounting Policies [Line Items] | |||||
Number of major customers | customer | 0 | 1 | |||
Concentration risk, percentage | 10.00% | 11.00% | |||
Customer Concentration Risk | Accounts receivable | |||||
Significant Accounting Policies [Line Items] | |||||
Number of major customers | customer | 2 | 2 | |||
Customer Concentration Risk | Accounts receivable | Customer One | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 18.00% | 11.00% | |||
Customer Concentration Risk | Accounts receivable | Customer Two | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 11.00% | 10.00% | |||
Geographic Concentration Risk | Accounts receivable | Foreign Countries | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 94.00% | 88.00% | |||
2020 DNI Loan | Subsequent Event | |||||
Significant Accounting Policies [Line Items] | |||||
Long-term line of credit | $ 18,500 | ₩ 22.4 | |||
Revolving Credit Facility | |||||
Significant Accounting Policies [Line Items] | |||||
Credit facility, remaining borrowing capacity | $ 4,500 | ||||
Long-term line of credit | 0 | ||||
Dasan Network Solutions, Inc. (Korean subsidiary) | |||||
Significant Accounting Policies [Line Items] | |||||
Cash and cash equivalents | $ 14,200 | ||||
Merger Agreement with Dragon Acquisition Company | |||||
Significant Accounting Policies [Line Items] | |||||
Percent of voting interest acquired | 44.40% | ||||
Keymile Acquisition | |||||
Significant Accounting Policies [Line Items] | |||||
Goodwill | $ 1,000 | ||||
Goodwill, impairment loss | $ 1,000 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Schedule of Operating Subsidiary Ownership Percentages (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Dasan Network Solutions, Inc. (U.S. subsidiary) | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Subsidiary ownership percent | 100.00% | 100.00% |
Dasan Network Solutions, Inc. (Korean subsidiary) | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Subsidiary ownership percent | 100.00% | 100.00% |
DZS Japan Inc. | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Subsidiary ownership percent | 100.00% | 69.06% |
DASAN Vietnam Company Limited | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Subsidiary ownership percent | 100.00% | 100.00% |
D-Mobile Limited | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Subsidiary ownership percent | 100.00% | 100.00% |
DASAN India Private Limited | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Subsidiary ownership percent | 99.99% | 99.99% |
Keymile GmbH, LLC | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Subsidiary ownership percent | 100.00% |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Schedule of Revenues by Source (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 306,882 | $ 282,348 |
Product | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 286,292 | 269,269 |
Service | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 20,590 | $ 13,079 |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies - Schedule of Information about the Company's Net Revenue for North America and International Markets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Significant Accounting Policies [Line Items] | ||
Revenue | $ 306,882 | $ 282,348 |
United States | ||
Significant Accounting Policies [Line Items] | ||
Revenue | 36,383 | 50,795 |
Canada | ||
Significant Accounting Policies [Line Items] | ||
Revenue | 4,690 | 4,413 |
North America | ||
Significant Accounting Policies [Line Items] | ||
Revenue | 41,073 | 55,208 |
Latin America | ||
Significant Accounting Policies [Line Items] | ||
Revenue | 23,774 | 27,596 |
Europe, Middle East, Africa | ||
Significant Accounting Policies [Line Items] | ||
Revenue | 78,375 | 34,741 |
Korea | ||
Significant Accounting Policies [Line Items] | ||
Revenue | 79,124 | 76,006 |
Other Asia Pacific | ||
Significant Accounting Policies [Line Items] | ||
Revenue | 84,536 | 88,797 |
International | ||
Significant Accounting Policies [Line Items] | ||
Revenue | $ 265,809 | $ 227,140 |
Organization and Summary of S_8
Organization and Summary of Significant Accounting Policies - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Balance at beginning of year | $ 328 | $ 1,246 |
Charged to expense | 155 | 20 |
Reversal of expense | (11) | |
Utilization/write offs/exchange rate differences | (90) | (927) |
Balance at end of year | $ 393 | $ 328 |
Organization and Summary of S_9
Organization and Summary of Significant Accounting Policies - Schedule of Allowance for Sales Returns (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Balance at beginning of year | $ 706 | $ 445 |
Charged to revenue | 370 | 1,343 |
Utilization/write offs/exchange rate differences | (733) | (1,082) |
Balance at end of year | $ 343 | $ 706 |
Organization and Summary of _10
Organization and Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 3 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 4 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 10 years |
Computers and software | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 3 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, estimated useful lives | Shorter of remaining lease term or estimated useful lives |
Business Combinations - Additio
Business Combinations - Additional Information (Details) € in Thousands | Jul. 31, 2019USD ($) | Jan. 03, 2019USD ($) | Jan. 03, 2019EUR (€) | Oct. 01, 2018USD ($) | Oct. 01, 2018EUR (€) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Oct. 01, 2018EUR (€) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | |||||||||
Recognition of goodwill | $ 3,977,000 | $ 3,977,000 | $ 3,977,000 | ||||||
Purchase of interest in subsidiary | 951,000 | ||||||||
Additional paid-in capital | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase of interest in subsidiary | 127,000 | ||||||||
Non-controlling interest | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase of interest in subsidiary | 824,000 | ||||||||
Keymile GmbH, LLC | |||||||||
Business Acquisition [Line Items] | |||||||||
Payment to acquire business, gross | $ 11,800,000 | € 10,250 | $ 4,400,000 | € 4,000 | |||||
Pension obligation | $ 16,200,000 | ||||||||
Cash received | 2,500,000 | ||||||||
Final adjusted acquisition price | $ 9,300,000 | ||||||||
Payment to acquire business, gross | $ 4,400,000 | € 4,000 | |||||||
Working capital loan interest rate | 3.50% | 3.50% | |||||||
Recognition of goodwill | 1,000,000 | ||||||||
Weighted average useful lives of acquired property, plant and equipment | 5 years | 5 years | |||||||
DZS Japan Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Remaining non controlling interest percentage acquired | 30.94% | ||||||||
Payments to acquire remaining non controlling | $ 950,000 | ||||||||
Purchase of interest in subsidiary | 950,000 | ||||||||
DZS Japan Inc. | Additional paid-in capital | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase of interest in subsidiary | 127,000 | ||||||||
DZS Japan Inc. | Non-controlling interest | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase of interest in subsidiary | $ 823,000 |
Business Combinations - Summary
Business Combinations - Summary of Final Estimated Purchase Price Allocation to Fair Value of Asset Acquired and Liabilities Assumed (Details) - Keymile Acquisition $ in Thousands | Jan. 03, 2019USD ($) |
Purchase consideration | |
Cash consideration | $ 11,776 |
Working capital adjustment: cash received from lockbox mechanism | (2,497) |
Adjusted purchase consideration | $ 9,279 |
Business Combinations - Summa_2
Business Combinations - Summary of Final Estimated Fair Values of Assets Acquired and Liabilities Assumed at the Date of Acquisition (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 03, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||||
Goodwill | $ 3,977 | $ 3,977 | $ 3,977 | |
Keymile Acquisition | ||||
Current assets | ||||
Cash and cash equivalents | $ 4,619 | |||
Accounts receivable - trade, net | 6,820 | |||
Other receivables | 798 | |||
Inventories | 9,943 | |||
Property, plant and equipment | 983 | |||
Other assets | 3,698 | |||
Right-of-use assets from operating leases | 5,011 | |||
Intangible assets | 10,047 | |||
Accounts payable - trade | (3,303) | |||
Short-term debt | (4,582) | |||
Contract liabilities | (364) | |||
Accrued liabilities | (3,651) | |||
Operating lease liabilities - current | (823) | |||
Deferred tax liabilities | (425) | |||
Pension obligations | (16,191) | |||
Operating lease liabilities - non-current | (4,188) | |||
Other long term liabilities | (116) | |||
Goodwill | 1,003 | |||
Total purchase consideration | $ 9,279 |
Business Combinations - Schedul
Business Combinations - Schedule of Final Estimated Fair Value and Useful Lives of Identifiable Intangible Assets (Details) - Keymile Acquisition $ in Thousands | Jan. 03, 2019USD ($) |
Business Acquisition [Line Items] | |
Intangible assets | $ 10,047 |
Customer Relationships | |
Business Acquisition [Line Items] | |
Intangible assets | $ 3,632 |
Estimated Useful Life | 5 years |
Trade name | |
Business Acquisition [Line Items] | |
Intangible assets | $ 1,375 |
Estimated Useful Life | 5 years |
Developed Technology | |
Business Acquisition [Line Items] | |
Intangible assets | $ 5,040 |
Estimated Useful Life | 5 years |
Business Combinations - Summa_3
Business Combinations - Summary of Pro Forma Information (Details) - Keymile Acquisition $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Business Acquisition [Line Items] | |
Pro forma net revenues | $ 332,571 |
Pro forma net income attributable to DASAN Zhone Solutions, Inc. | $ 2,480 |
Business Combinations - Summa_4
Business Combinations - Summary of Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||
Revenue | $ 306,882 | $ 282,348 |
Net loss attributable to DASAN Zhone Solutions, Inc. | (13,457) | $ 2,767 |
Keymile Acquisition | ||
Business Acquisition [Line Items] | ||
Revenue | 36,390 | |
Net loss attributable to DASAN Zhone Solutions, Inc. | $ (13,072) |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Inforrmation (Detail) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Derivative fair value | $ 0 | $ 0 |
Cash and Cash Equivalents and_2
Cash and Cash Equivalents and Restricted Cash - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Cash And Cash Equivalents [Line Items] | ||
Acquisition intended for payment included in cash and cash equivalents | $ 28,747 | $ 27,709 |
Keymile Acquisition | ||
Cash And Cash Equivalents [Line Items] | ||
Acquisition intended for payment included in cash and cash equivalents | $ 11,800 |
Balance Sheet Detail - Schedule
Balance Sheet Detail - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 15,774 | $ 15,688 |
Work in process | 1,458 | 2,429 |
Finished goods | 18,207 | 15,751 |
Total inventories | $ 35,439 | $ 33,868 |
Balance Sheet Detail - Addition
Balance Sheet Detail - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Inventory [Line Items] | ||
Total inventories | $ 35,439 | $ 33,868 |
Contract asset | 16,700 | 11,400 |
Increase in contract assets | 5,962 | 12,175 |
Contract liabilities - current | 3,567 | 8,511 |
Products and services contract liability | 2,700 | |
Extended warranty contract liability | 900 | |
Contract liabilities, long-term | 3,230 | 1,801 |
Products and services contract liability | 1,000 | |
Extended warranty contract liability | 2,200 | |
Net revenue related to contract liabilities | 2,513 | 5,630 |
Restructuring charges | 4,900 | |
Impairment charge related to Right-of-use asset from operating lease | 1,000 | |
Severance and other termination related benefits | ||
Inventory [Line Items] | ||
Restructuring charges | 3,930 | |
New customer contracts | ||
Inventory [Line Items] | ||
Increase in contract assets | 5,300 | |
New customer contracts | 6,500 | |
Contract asset offset amount | 1,200 | |
Property, Plant and Equipment | ||
Inventory [Line Items] | ||
Depreciation and amortization associated with property, plant and equipment | 2,000 | 1,600 |
Collateral pledged | ||
Inventory [Line Items] | ||
Total inventories | $ 6,700 | $ 9,500 |
Balance Sheet Detail - Schedu_2
Balance Sheet Detail - Schedule of Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, plant and equipment, net: | ||
Property, plant and equipment, gross | $ 20,270 | $ 17,201 |
Less: accumulated depreciation and amortization | (13,130) | (11,271) |
Less: government grants | (371) | (412) |
Property, plant and equipment, net | 6,769 | 5,518 |
Furniture and fixtures | ||
Property, plant and equipment, net: | ||
Property, plant and equipment, gross | 10,803 | 8,029 |
Machinery and equipment | ||
Property, plant and equipment, net: | ||
Property, plant and equipment, gross | 2,550 | 3,553 |
Leasehold improvements | ||
Property, plant and equipment, net: | ||
Property, plant and equipment, gross | 4,267 | 3,715 |
Computers and software | ||
Property, plant and equipment, net: | ||
Property, plant and equipment, gross | 1,990 | 922 |
Others | ||
Property, plant and equipment, net: | ||
Property, plant and equipment, gross | $ 660 | $ 982 |
Balance Sheet Detail - Schedu_3
Balance Sheet Detail - Schedule of Accrued and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | |||
Accrued warranty | $ 1,611 | $ 1,319 | $ 931 |
Accrued compensation | 1,618 | 2,461 | |
Other accrued expenses | 9,615 | 7,737 | |
Accrued and other liabilities | $ 12,844 | $ 11,517 |
Balance Sheet Detail - Summary
Balance Sheet Detail - Summary of Product Warranty Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of the year | $ 1,319 | $ 931 |
Charged to cost of revenue | 967 | 1,171 |
Claims and settlements | (903) | (791) |
Warranty liability assumed from Keymile acquisition | 230 | |
Foreign exchange impact | (2) | 8 |
Balance at end of the year | $ 1,611 | $ 1,319 |
Balance Sheet Detail - Schedu_4
Balance Sheet Detail - Schedule of Accrued Restructuring Costs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Restructuring charges for the year | $ 4,900 |
Severance and Related Benefits | |
Restructuring Cost And Reserve [Line Items] | |
Restructuring charges for the year | 3,930 |
Cash payments | $ (3,930) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Line Items] | ||
Balance at beginning of the year | $ 3,977 | $ 3,977 |
Less: Impairment of Keymile acquisition goodwill | (1,003) | |
Balance at end of the year | 3,977 | 3,977 |
Keymile GmbH, LLC | ||
Goodwill [Line Items] | ||
Goodwill | 1,003 | $ 0 |
Less: Impairment of Keymile acquisition goodwill | (1,003) | |
Balance at end of the year | $ 1,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Asset [Line Items] | ||
Goodwill, impairment loss | $ 1,003 | |
Intangible assets net excluding goodwill | 12,381 | $ 5,649 |
Amortization of intangible assets | 3,100 | 1,100 |
Keymile GmbH, LLC | ||
Goodwill and Intangible Asset [Line Items] | ||
Goodwill, acquired during period | 1,003 | $ 0 |
Goodwill, impairment loss | 1,003 | |
Goodwill, accumulated impairment loss | 1,000 | |
Keymile GmbH, LLC | Developed Technology | ||
Goodwill and Intangible Asset [Line Items] | ||
Intangible assets net excluding goodwill | 5,000 | |
Keymile GmbH, LLC | Customer Relationships | ||
Goodwill and Intangible Asset [Line Items] | ||
Intangible assets net excluding goodwill | 3,600 | |
Keymile GmbH, LLC | Trade names | ||
Goodwill and Intangible Asset [Line Items] | ||
Intangible assets net excluding goodwill | $ 1,400 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 18,135 | $ 10,479 |
Accumulated Amortization | (5,754) | (4,830) |
Intangible assets, net | 12,381 | 5,649 |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 7,994 | 3,060 |
Accumulated Amortization | (3,027) | (1,428) |
Intangible assets, net | 4,967 | 1,632 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 8,795 | 5,240 |
Accumulated Amortization | (2,458) | (1,223) |
Intangible assets, net | 6,337 | 4,017 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 1,346 | |
Accumulated Amortization | (269) | |
Intangible assets, net | $ 1,077 | |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 2,179 | |
Accumulated Amortization | (2,179) | |
Intangible assets, net | $ 0 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Expected Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Amortization expense of intangible assets, 2020 | $ 3,103 |
Amortization expense of intangible assets, 2021 | 2,899 |
Amortization expense of intangible assets, 2022 | 2,491 |
Amortization expense of intangible assets, 2023 | 2,491 |
Amortization expense of intangible assets, 2024 | 524 |
Amortization expense of intangible assets, Thereafter | 873 |
Amortization expense of intangible assets, total | $ 12,381 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | $ 38,000 | |
Less: unamortized deferred financing costs on the PNC Bank Facility, short-term | (795) | |
Short-term | 17,484 | $ 31,762 |
Less: unamortized deferred financing costs on the PNC Bank Facility, long-term | (688) | |
Long-term | 19,033 | 14,142 |
Less: unamortized deferred financing costs on the PNC Bank Facility | (1,483) | |
Total | 36,517 | 45,904 |
PNC Credit Facilities | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | 13,125 | |
Bank And Trade Facilities Foreign Operations | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | 15,779 | |
Short-term | 24,762 | |
Total | 24,762 | |
Related Party | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | 9,096 | |
Long-term | 14,142 | |
Total | 14,142 | |
Former WFB Facility | ||
Debt Instrument [Line Items] | ||
Short-term | 7,000 | |
Total | $ 7,000 | |
Short-term Debt | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | 18,279 | |
Short-term Debt | PNC Credit Facilities | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | 2,500 | |
Short-term Debt | Bank And Trade Facilities Foreign Operations | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | 15,779 | |
Long-term Debt | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | 19,721 | |
Long-term Debt | PNC Credit Facilities | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | 10,625 | |
Long-term Debt | Related Party | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | $ 9,096 |
Debt - Schedule of Future Princ
Debt - Schedule of Future Principal Maturities Of Our Secured Term Loans (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 18,279 |
2021 | 3,438 |
2022 | 16,283 |
Total | $ 38,000 |
Debt - Additional Information (
Debt - Additional Information (Details) € in Thousands, ₩ in Billions | Mar. 05, 2020USD ($) | Nov. 08, 2019USD ($) | Jul. 02, 2019USD ($) | Feb. 27, 2019USD ($) | Jan. 08, 2019USD ($) | Jan. 03, 2019USD ($) | Jan. 03, 2019EUR (€) | Oct. 01, 2018USD ($) | Oct. 01, 2018EUR (€) | Aug. 08, 2018USD ($) | Jan. 31, 2018 | Mar. 31, 2018USD ($) | Feb. 29, 2016 | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 05, 2020KRW (₩) | Dec. 31, 2019KRW (₩) | Sep. 30, 2016USD ($) |
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Repayment of outstanding letter of credit | $ 69,357,000 | $ 45,033,000 | ||||||||||||||||
Debt discount | 1,483,000 | |||||||||||||||||
Credit facility, commitment as security for various letters of credit | 4,600,000 | 5,500,000 | ||||||||||||||||
Stated interest rate | 3.50% | 3.50% | ||||||||||||||||
Debt | $ 15,779,000 | 24,762,000 | ||||||||||||||||
Weighted average borrowing rate | 2.70% | 2.70% | ||||||||||||||||
Long-term debt | $ 36,517,000 | 45,904,000 | ||||||||||||||||
Interest expense, related party | 400,000 | 400,000 | ||||||||||||||||
DASAN | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Long-term line of credit | 9,100,000 | |||||||||||||||||
DASAN | Unsecured Debt | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Long-term line of credit | $ 6,000,000 | |||||||||||||||||
Stated interest rate | 4.60% | 4.60% | ||||||||||||||||
Debt instrument maturity month and year | 2022-05 | |||||||||||||||||
DASAN | Capital Investment | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Long-term line of credit | $ 1,800,000 | |||||||||||||||||
Stated interest rate | 4.60% | 4.60% | ||||||||||||||||
Debt instrument maturity month and year | 2022-05 | |||||||||||||||||
Keymile GmbH, LLC | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Payment to acquire business, gross | $ 11,800,000 | € 10,250 | $ 4,400,000 | € 4,000 | ||||||||||||||
PNC Credit Facilities | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Long-term line of credit | $ 13,100,000 | |||||||||||||||||
Debt discount | 1,500,000 | |||||||||||||||||
Dasan Network Solutions, Inc. (DNS) | DASAN | Loan Agreement | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Repayments of borrowings | $ 4,500,000 | |||||||||||||||||
Stated interest rate | 4.60% | |||||||||||||||||
Origination of notes receivable from related parties | $ 5,800,000 | |||||||||||||||||
Debt instrument maturity date | May 27, 2022 | |||||||||||||||||
Long-term debt | 1,300,000 | |||||||||||||||||
Dasan Network Solutions, Inc. (DNS) | Junior Lien | DASAN | Majority Shareholder | Loan Agreement | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Stated interest rate | 4.60% | 4.60% | ||||||||||||||||
Origination of notes receivable from related parties | 1,800,000 | |||||||||||||||||
Debt instrument maturity month and year | 2018-03 | |||||||||||||||||
Debt instrument maturity date | May 27, 2022 | |||||||||||||||||
Dasan Network Solutions, Inc. (DNS) | Junior Lien | DASAN | Majority Shareholder | Loan Agreement | Minimum | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Debt instrument extended repayment period | 2018-03 | |||||||||||||||||
Dasan Network Solutions, Inc. (DNS) | Junior Lien | DASAN | Majority Shareholder | Loan Agreement | Maximum | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Debt instrument extended repayment period | 2019-07 | |||||||||||||||||
Revolving Credit Facility | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Long-term line of credit | 0 | |||||||||||||||||
Repayment of outstanding letter of credit | $ 4,400,000 | |||||||||||||||||
Secured Loan | DASAN | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Long-term line of credit | $ 1,300,000 | ₩ 1.5 | ||||||||||||||||
Stated interest rate | 4.60% | 4.60% | ||||||||||||||||
Debt instrument maturity month and year | 2022-05 | |||||||||||||||||
PNC Credit Facilities | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Long-term line of credit | $ 25,000,000 | |||||||||||||||||
Credit facility, maximum borrowing capacity | 15,000,000 | |||||||||||||||||
Repayment of revolving line of credit outstanding balance plus accrued interest and fees and cash collateralized | $ 1,500,000 | |||||||||||||||||
Repayment of outstanding letter of credit | 3,600,000 | |||||||||||||||||
Repayments of short-term debt | 5,600,000 | |||||||||||||||||
PNC Credit Facilities | Dasan Network Solutions, Inc. (DNS) | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Repayments of borrowings | $ 5,000,000 | |||||||||||||||||
PNC Credit Facilities | Revolving Credit Facility | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Line of credit facility, incremental increase option | $ 10,000,000 | |||||||||||||||||
Term Loan | Loan Agreement | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Long-term line of credit | $ 6,000,000 | |||||||||||||||||
Stated interest rate | 4.60% | |||||||||||||||||
Debt instrument maturity date | May 27, 2022 | |||||||||||||||||
Term Loan | Junior Lien | DASAN | Majority Shareholder | Loan Agreement | Unsecured Debt | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Long-term line of credit | $ 5,000,000 | $ 5,000,000 | ||||||||||||||||
Credit facility, maximum borrowing capacity | $ 5,000,000 | |||||||||||||||||
Stated interest rate | 4.60% | 4.60% | ||||||||||||||||
Term Loan | PNC Credit Facilities | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Long-term debt, Term | 3 years | 3 years | ||||||||||||||||
Credit agreement, expiration date | Feb. 27, 2022 | |||||||||||||||||
Prepayment of outstanding term loan | $ 10,000,000 | |||||||||||||||||
One-time fee, paid | $ 150,000 | |||||||||||||||||
Credit facility, interest rate | 8.12% | 8.12% | ||||||||||||||||
Former WFB Facility | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Long-term line of credit | 7,000,000 | |||||||||||||||||
Credit facility, maximum borrowing capacity | $ 25,000,000 | |||||||||||||||||
Repayment of outstanding letter of credit | $ 7,000,000 | |||||||||||||||||
Credit facility, interest rate | 5.10% | |||||||||||||||||
Credit facility, commitment as security for various letters of credit | $ 1,300,000 | |||||||||||||||||
Long-term debt | 7,000,000 | |||||||||||||||||
Former WFB Facility | Letter of Credit | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Credit facility, maximum borrowing capacity | 5,000,000 | |||||||||||||||||
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 collateralized | $ 1,500,000 | |||||||||||||||||
Repayment of outstanding letter of credit | 3,600,000 | |||||||||||||||||
Letter of Credit | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Credit facility, commitment as security for various letters of credit | $ 800,000 | $ 2,600,000 | ||||||||||||||||
Foreign Line of Credit | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Credit facility, commitment as security for various letters of credit | $ 19,000,000 | |||||||||||||||||
2020 DNI Loan | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Fees paid to DNI | $ 0 | |||||||||||||||||
2020 DNI Loan | Subsequent Event | ||||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||||
Long-term line of credit | $ 18,500,000 | ₩ 22.4 | ||||||||||||||||
Credit agreement, expiration date | Mar. 11, 2022 | |||||||||||||||||
Stated interest rate | 4.60% | 4.60% |
Debt - Schedule of Short-Term D
Debt - Schedule of Short-Term Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Oct. 01, 2018 | |
Debt Instrument [Line Items] | |||
Interest rate | 3.50% | ||
Debt | $ 15,779 | $ 24,762 | |
Industrial Bank of Korea, Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt | $ 1,982 | ||
Industrial Bank of Korea, Credit Facility | Minimum | |||
Debt Instrument [Line Items] | |||
Maturity Date, Start | Jan. 2, 2019 | ||
Interest rate | 3.96% | ||
Industrial Bank of Korea, Credit Facility | Maximum | |||
Debt Instrument [Line Items] | |||
Maturity Date, End | May 15, 2019 | ||
Interest rate | 4.36% | ||
Industrial Bank of Korea, Trade Finance | |||
Debt Instrument [Line Items] | |||
Debt | $ 1,920 | ||
Industrial Bank of Korea, Trade Finance | Minimum | |||
Debt Instrument [Line Items] | |||
Maturity Date, Start | Feb. 18, 2019 | ||
Interest rate | 5.31% | ||
Industrial Bank of Korea, Trade Finance | Maximum | |||
Debt Instrument [Line Items] | |||
Maturity Date, End | Feb. 25, 2019 | ||
Interest rate | 6.08% | ||
Shinhan Bank, General Loan | |||
Debt Instrument [Line Items] | |||
Maturity Date | Mar. 30, 2019 | ||
Interest rate | 6.06% | ||
Debt | $ 2,862 | ||
NongHyup Bank, Credit facility | |||
Debt Instrument [Line Items] | |||
Maturity Date | Sep. 30, 2020 | ||
Debt | $ 2,091 | $ 2,053 | |
NongHyup Bank, Credit facility | Minimum | |||
Debt Instrument [Line Items] | |||
Maturity Date, Start | Jan. 7, 2019 | ||
Interest rate | 3.50% | 3.71% | |
NongHyup Bank, Credit facility | Maximum | |||
Debt Instrument [Line Items] | |||
Maturity Date, End | Apr. 29, 2019 | ||
Interest rate | 4.50% | 4.50% | |
The Export-Import Bank of Korea, Export Development Loan | |||
Debt Instrument [Line Items] | |||
Maturity Date | Jul. 1, 2020 | Jul. 1, 2019 | |
Interest rate | 2.75% | 3.44% | |
Debt | $ 5,182 | $ 6,439 | |
The Export-Import Bank of Korea, Import Development Loan | |||
Debt Instrument [Line Items] | |||
Maturity Date | Feb. 14, 2019 | ||
Interest rate | 4.31% | ||
Debt | $ 850 | ||
Korea Development Bank, General loan | |||
Debt Instrument [Line Items] | |||
Maturity Date | Aug. 8, 2020 | Aug. 8, 2019 | |
Interest rate | 3.00% | 3.48% | |
Debt | $ 4,319 | $ 4,472 | |
Korea Development Bank, Credit facility | |||
Debt Instrument [Line Items] | |||
Maturity Date | Aug. 7, 2020 | ||
Debt | $ 2,460 | $ 1,489 | |
Korea Development Bank, Credit facility | Minimum | |||
Debt Instrument [Line Items] | |||
Maturity Date, Start | Feb. 7, 2019 | ||
Interest rate | 3.00% | 3.64% | |
Korea Development Bank, Credit facility | Maximum | |||
Debt Instrument [Line Items] | |||
Maturity Date, End | Mar. 6, 2019 | ||
Interest rate | 3.15% | 3.91% | |
LGUPlus, General loan | |||
Debt Instrument [Line Items] | |||
Maturity Date | Jun. 17, 2020 | Jun. 17, 2019 | |
Interest rate | 0.00% | 0.00% | |
Debt | $ 1,727 | $ 1,789 | |
Shoko Chukin Bank General Loan | |||
Debt Instrument [Line Items] | |||
Maturity Date | Jun. 28, 2019 | ||
Interest rate | 1.33% | ||
Debt | $ 906 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Changes In Accumulated Other Comprehensive Income (Loss) by Component, Net of Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance, Stockholders' equity | $ 77,854 | $ 73,767 |
Actuarial gain (loss) for pension plan | (1,793) | |
Foreign currency translation adjustments | (1,939) | (2,051) |
Non-controlling interest | (15) | (12) |
Ending Balances, Stockholders' equity | 106,548 | 77,854 |
Accumulated other comprehensive income (loss) | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance, Stockholders' equity | (192) | 1,871 |
Ending Balances, Stockholders' equity | $ (3,939) | $ (192) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | May 22, 2018shares | Jan. 04, 2017USD ($)shares | Dec. 31, 2019USD ($)CompensationPlan$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Jan. 01, 2019shares | Feb. 28, 2017shares |
Stockholders Equity [Line Items] | ||||||
Number of share-based compensation plans | CompensationPlan | 1 | |||||
Common stock, shares authorized | shares | 36,000,000 | 36,000,000 | ||||
Option exercise price | $ / shares | $ 7.22 | $ 6.49 | ||||
Closing stock price (in USD per share) | $ / shares | $ 8.86 | |||||
Aggregate intrinsic value, exercised | $ | $ 200,000 | $ 600,000 | ||||
Unrecognized compensation cost related to unvested stock based payments | $ | $ 6,300,000 | |||||
Unrecognized compensation cost related to unvested stock based payments, weighted average recognition period | 3 years | |||||
Restricted Stock Units | ||||||
Stockholders Equity [Line Items] | ||||||
Grant-date fair value of awards granted | $ | $ 500,000 | 300,000 | ||||
Fair value of awards vested | $ | 400,000 | 400,000 | ||||
Employee Stock Purchase Plan (ESPP) | ||||||
Stockholders Equity [Line Items] | ||||||
Percentage of outstanding shares | 1.00% | |||||
Common stock issued or transferred, maximum | shares | 2,000,000 | |||||
Stock option award to purchase | shares | 250,000 | |||||
Percentage of purchase price of shares, lower of the fair market value of common stock | 85.00% | |||||
Share-based compensation expense | $ | $ 149,000 | $ 14,000 | ||||
Expected term (years) | 6 months | |||||
Volatility | 66.04% | |||||
Risk free interest rate | 2.31% | |||||
2017 Plan [Member] | ||||||
Stockholders Equity [Line Items] | ||||||
Expiration period of options | 10 years | |||||
Vesting period | 4 years | |||||
Common stock, shares authorized | shares | 663,473 | 600,000 | ||||
Percentage of outstanding shares | 4.00% | |||||
Maximum shares granted per individual | shares | 4,000,000 | |||||
Maximum cash paid from grants per individual | $ | $ 10,000,000 | |||||
Common stock issued or transferred, maximum | shares | 8,000,000 | |||||
2017 Plan [Member] | 10 percent stockholder | ||||||
Stockholders Equity [Line Items] | ||||||
Minimum Stock Option Exercise Price Ten Percent Owners | 110.00% | |||||
2017 Plan [Member] | Minimum [Member] | ||||||
Stockholders Equity [Line Items] | ||||||
Expiration period of options | 7 years | |||||
2017 Plan [Member] | Maximum [Member] | ||||||
Stockholders Equity [Line Items] | ||||||
Expiration period of options | 10 years |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stockholders Equity [Line Items] | ||
Stock-based compensation | $ 3,508 | $ 2,080 |
Cost of Revenue | ||
Stockholders Equity [Line Items] | ||
Stock-based compensation | 41 | 18 |
Research and Product Development | ||
Stockholders Equity [Line Items] | ||
Stock-based compensation | 267 | 134 |
Selling, Marketing, General and Administrative | ||
Stockholders Equity [Line Items] | ||
Stock-based compensation | $ 3,200 | $ 1,928 |
Stockholders' Equity - Summar_3
Stockholders' Equity - Summary of Assumptions used to Value Options Grants (Details) - Stock Options | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement Assumptions Used To Estimate Fair Values Of Share Options Granted [Line Items] | ||
Expected term (years) | 5 years 10 months 6 days | 4 years 10 months 17 days |
Volatility | 65.72% | 81.87% |
Risk free interest rate | 1.99% | 2.74% |
Stockholders' Equity - Summar_4
Stockholders' Equity - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Options Outstanding | ||
Options outstanding at beginning of period (in options) | 1,744 | 1,213 |
Granted (in options) | 470 | 836 |
Canceled/Forfeited (in options) | (128) | (155) |
Expired (in options) | (39) | |
Exercised (in options) | (35) | (150) |
Options outstanding at end of period (in options) | 2,012 | 1,744 |
Options outstanding vested and expected to vest at end of period | 2,012 | 1,744 |
Options outstanding vested and exercisable at end of period | 946 | 488 |
Weighted Average Exercise Price | ||
Options outstanding at beginning of period (in USD per share) | $ 8 | $ 6.50 |
Granted (in USD per share) | 10.36 | 9.86 |
Canceled/Forfeited (in USD per share) | 9.83 | 8 |
Expired (in USD per share) | 8.32 | |
Exercised (in USD per share) | 6.22 | 6.08 |
Options outstanding at end of period (in USD per share) | 8.47 | 8 |
Vested and expected to vest at end of period (in USD per share) | 8.47 | 8 |
Vested and exercisable at end of period (in USD per share) | $ 7.47 | $ 6.77 |
Weighted Average Remaining Contractual Term (years) | ||
Stock options outstanding | 7 years 4 months 9 days | 8 years 7 months 24 days |
Vested and expected to vest ending balance | 7 years 4 months 9 days | 8 years 7 months 24 days |
Vested and exercisable ending balance | 5 years 8 months 26 days | 7 years 6 months 3 days |
Aggregate intrinsic value | ||
Options outstanding at end of period | $ 2,418 | $ 10,378 |
Vested and expected to vest at end of period | 2,418 | 10,378 |
Vested and exercisable at end of period | $ 1,684 | $ 3,497 |
Stockholders' Equity - Summar_5
Stockholders' Equity - Summary of Restricted Stock Unit Awards Activity (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
RSU Outstanding | ||
Non-vested as at beginning of period | 4,000 | 5,000 |
Granted | 40,000 | 35,000 |
Canceled/Forfeited | 0 | 0 |
Vested | (33,000) | (36,000) |
Non-vested as at end of period | 11,000 | 4,000 |
Weighted Average Grant Date Fair Value | ||
Non-vested as at beginning of period | $ 7.50 | $ 7.43 |
Granted | 12.77 | 9.66 |
Canceled/Forfeited | 0 | 0 |
Vested | 13.11 | 9.56 |
Non-vested as at end of period | $ 10.05 | $ 7.50 |
Net Income (Loss) Per Share - C
Net Income (Loss) Per Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | ||
Net loss attributable to DASAN Zhone Solutions, Inc. | $ (13,457) | $ 2,767 |
Denominator: | ||
Basic (in shares) | 19,403 | 16,482 |
Effect of dilutive securities: | ||
Stock options, restricted stock units and share awards | 264 | |
Diluted (in shares) | 19,403 | 16,746 |
Basic (in dollar per share) | $ (0.69) | $ 0.17 |
Diluted (in dollar per share) | $ (0.69) | $ 0.17 |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Antidilutive Securities Excluded from Computation of Earning Per Share (Details) - Stock options and unvested restricted shares - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of loss per share calculation, shares | 2,023 | 1,747 |
Weighted average exercise price of outstanding stock options and unvested restricted shares | $ 8.42 | $ 7.91 |
Income Taxes - Geographical Bre
Income Taxes - Geographical Breakdown of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes [Line Items] | ||
Income (loss) before income taxes | $ (9,678) | $ 4,560 |
Domestic | ||
Income Taxes [Line Items] | ||
Income (loss) before income taxes | (11,069) | (3,003) |
Foreign | ||
Income Taxes [Line Items] | ||
Income (loss) before income taxes | $ 1,391 | $ 7,563 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense Applicable to Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | ||
State | $ 16 | $ 13 |
Foreign | 2,439 | 1,509 |
Total current tax provision | 2,455 | 1,522 |
Deferred: | ||
Federal | 12 | |
Foreign | 1,130 | 190 |
Total deferred tax provision (benefit) | 1,130 | 202 |
Total tax provision (benefit) | $ 3,585 | $ 1,724 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Expected Tax Provision (Benefit) to Actual Tax Provision (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Expected tax provision (benefit) at statutory rate | $ (2,032) | $ 953 |
State taxes, net of Federal effect | 13 | 297 |
State change in deferreds | 1,927 | |
Foreign rate differential | 2,751 | 129 |
Valuation allowance | 557 | (906) |
Permanent differences | 544 | 297 |
Other permanent items | 1,178 | |
Tax credit carry-forwards | (212) | (280) |
Tax expense adjustments after tax return for prior period | 37 | 74 |
Others | (18) | |
Total tax provision (benefit) | $ 3,585 | $ 1,724 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating loss, capital loss, and tax credit carryforwards | $ 23,195 | $ 12,621 |
Fixed assets and intangible assets | 1,057 | 1,451 |
Inventory and other reserves | 1,368 | 1,998 |
Operating lease liability | 1,684 | |
Other (mainly accrued expenses) | 2,552 | 2,042 |
Gross deferred tax assets | 29,856 | 18,112 |
Less valuation allowance | (26,827) | (15,360) |
Deferred tax liabilities: | ||
Operating lease right-of-use-asset | (1,407) | |
Gross deferred tax liabilities | (1,407) | |
Total net deferred tax assets | $ 1,622 | $ 2,752 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Line Items] | |||
Change in deferred tax valuation allowance | $ 11,500,000 | $ (900,000) | |
Minimum cumulative change in ownership percentage for annual use of net operating losses and tax credit carryforwards | 50.00% | ||
Minimum cumulative change in ownership percentage for annual use of net operating losses and tax credit carryforwards period | 3 years | ||
Unrecognized tax benefits | $ 1,036,000 | 807,000 | $ 380,000 |
Unrecognized tax benefits that, if recognized, would reduce effective tax rate | 0 | ||
Interest and penalty (benefit) provision | 0 | $ 0 | |
Federal | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 38,000,000 | ||
Operating loss carryforwards, expiration start year | 2030 | ||
Research credit carry forward | $ 1,200,000 | ||
Research tax credit carryforward, expiration start year | 2036 | ||
Federal | Indefinite Period | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 12,600,000 | ||
State | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 29,400,000 | ||
Operating loss carryforwards, expiration start year | 2021 | ||
Research credit carry forward | $ 1,600,000 | ||
Research tax credit carryforward expiration, description | The California credit carryforwards do not expire and the Georgia credit carryforwards will expire beginning in 2026. | ||
State | Georgia | |||
Income Taxes [Line Items] | |||
Research tax credit carryforward, expiration start year | 2026 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Beginning and Ending Unrecognized Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits, beginning balance | $ 807 | $ 380 |
Increases related to current year tax positions | 229 | 427 |
Unrecognized tax benefits, ending balance | $ 1,036 | $ 807 |
Income Taxes - Open Tax Years f
Income Taxes - Open Tax Years for Major Jurisdictions (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Federal | Minimum | |
Income Taxes [Line Items] | |
Open tax years | 2016 |
Federal | Maximum | |
Income Taxes [Line Items] | |
Open tax years | 2019 |
California and Canada | Minimum | |
Income Taxes [Line Items] | |
Open tax years | 2015 |
California and Canada | Maximum | |
Income Taxes [Line Items] | |
Open tax years | 2019 |
Brazil | Minimum | |
Income Taxes [Line Items] | |
Open tax years | 2014 |
Brazil | Maximum | |
Income Taxes [Line Items] | |
Open tax years | 2019 |
Germany | Minimum | |
Income Taxes [Line Items] | |
Open tax years | 2015 |
Germany | Maximum | |
Income Taxes [Line Items] | |
Open tax years | 2019 |
Japan | Minimum | |
Income Taxes [Line Items] | |
Open tax years | 2014 |
Japan | Maximum | |
Income Taxes [Line Items] | |
Open tax years | 2019 |
Korea | Minimum | |
Income Taxes [Line Items] | |
Open tax years | 2017 |
Korea | Maximum | |
Income Taxes [Line Items] | |
Open tax years | 2019 |
United Kingdom | Minimum | |
Income Taxes [Line Items] | |
Open tax years | 2016 |
United Kingdom | Maximum | |
Income Taxes [Line Items] | |
Open tax years | 2019 |
Vietnam | Minimum | |
Income Taxes [Line Items] | |
Open tax years | 2017 |
Vietnam | Maximum | |
Income Taxes [Line Items] | |
Open tax years | 2019 |
Non-Controlling Interests - Sch
Non-Controlling Interests - Schedule of Non-controlling Interests (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||
Beginning balance, non-controlling interests | $ 615 | |
Net income attributable to non-controlling interests | 194 | $ 69 |
Purchase of non-controlling interests | (951) | |
Ending balance, non-controlling interests | 615 | |
Non-controlling interest | ||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||
Beginning balance, non-controlling interests | 615 | 534 |
Net income attributable to non-controlling interests | 194 | 69 |
Foreign currency translation adjustments (Other Comprehensive Income) | 15 | 12 |
Purchase of non-controlling interests | $ (824) | |
Ending balance, non-controlling interests | $ 615 |
Non-Controlling Interests - Add
Non-Controlling Interests - Additional Information (Details) - USD ($) | Jul. 31, 2019 | Dec. 31, 2019 |
Minority Interest [Line Items] | ||
Purchase of interest in subsidiary | $ 951,000 | |
Additional paid-in capital | ||
Minority Interest [Line Items] | ||
Purchase of interest in subsidiary | 127,000 | |
Non-controlling interest | ||
Minority Interest [Line Items] | ||
Purchase of interest in subsidiary | 824,000 | |
Dasan Network Solutions JAPAN, Inc. | ||
Minority Interest [Line Items] | ||
Remaining non controlling interest percentage acquired | 30.94% | |
Payments to acquire remaining non controlling | $ 950,000 | |
Purchase of interest in subsidiary | 950,000 | |
Dasan Network Solutions JAPAN, Inc. | Additional paid-in capital | ||
Minority Interest [Line Items] | ||
Purchase of interest in subsidiary | 127,000 | |
Dasan Network Solutions JAPAN, Inc. | Non-controlling interest | ||
Minority Interest [Line Items] | ||
Purchase of interest in subsidiary | $ 823,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Research and product development | $ 38,516 | $ 35,306 |
DASAN | Majority Shareholder | ||
Related Party Transaction [Line Items] | ||
Guarantee fee, percent | 0.90% | |
DASAN | Majority Shareholder | Sales And Purchases To And From Related Parties | ||
Related Party Transaction [Line Items] | ||
Outstanding from related party borrowings | $ 9,100 | $ 14,100 |
CHASAN Networks Co., Ltd. | Affiliated Entity | Loan Agreement | Dasan Network Solutions, Inc. (DNS) | Junior Lien | ||
Related Party Transaction [Line Items] | ||
Manufacturing and development fee, percent | 7.00% | |
Tomato Soft (Xi'an) Ltd. | ||
Related Party Transaction [Line Items] | ||
Research and product development | $ 700 |
Related Party Transactions - Sa
Related Party Transactions - Sales and Purchases To and From Related Parties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Sales | $ 2,513 | $ 5,630 |
Cost of revenue | 1,906 | 4,696 |
Interest expense | 400 | 400 |
Sales And Purchases To And From Related Parties | ||
Related Party Transaction [Line Items] | ||
Sales | 2,513 | 5,630 |
Cost of revenue | 1,906 | 4,696 |
Manufacturing (Cost of revenue) | 1,220 | 1,240 |
Research and product development | 597 | 592 |
Selling, marketing, general and administrative | 3,768 | 4,268 |
Interest expense | 459 | 435 |
Other Expenses | 341 | 343 |
DASAN | Majority Shareholder | Sales And Purchases To And From Related Parties | ||
Related Party Transaction [Line Items] | ||
Sales | 2,471 | 4,633 |
Cost of revenue | 1,825 | 3,892 |
Selling, marketing, general and administrative | 3,768 | 4,262 |
Interest expense | 459 | 435 |
Other Expenses | $ 341 | $ 343 |
Tomato Soft Ltd. | Affiliated Entity | Sales And Purchases To And From Related Parties | ||
Related Party Transaction [Line Items] | ||
DNI direct ownership interest | 100.00% | 100.00% |
Manufacturing (Cost of revenue) | $ 117 | $ 121 |
Tomato Soft (Xi'an) Ltd. | Affiliated Entity | Sales And Purchases To And From Related Parties | ||
Related Party Transaction [Line Items] | ||
DNI direct ownership interest | 100.00% | 100.00% |
Research and product development | $ 526 | $ 520 |
CHASAN Networks Co., Ltd. | Affiliated Entity | Sales And Purchases To And From Related Parties | ||
Related Party Transaction [Line Items] | ||
DNI direct ownership interest | 100.00% | 100.00% |
Manufacturing (Cost of revenue) | $ 1,103 | $ 1,119 |
Research and product development | $ 71 | $ 72 |
J-Mobile Corporation | Affiliated Entity | Sales And Purchases To And From Related Parties | ||
Related Party Transaction [Line Items] | ||
DNI direct ownership interest | 91.50% | |
Sales | $ 42 | |
Cost of revenue | $ 81 | |
Dasan France | Affiliated Entity | Sales And Purchases To And From Related Parties | ||
Related Party Transaction [Line Items] | ||
DNI direct ownership interest | 100.00% | |
Sales | $ 203 | |
Cost of revenue | $ 177 | |
Handysoft Inc | Affiliated Entity | Sales And Purchases To And From Related Parties | ||
Related Party Transaction [Line Items] | ||
DNI direct ownership interest | 17.63% | |
Sales | $ 794 | |
Cost of revenue | 627 | |
Selling, marketing, general and administrative | $ 6 |
Related Party Transactions - Ba
Related Party Transactions - Balances of Receivables and Payables with Related Parties (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Loans payable | $ 36,517 | $ 45,904 | |
Receivables And Payables With Related Parties | |||
Related Party Transaction [Line Items] | |||
Account receivables | 583 | ||
Other receivables | 32 | 65 | |
Deposits for lease | [1] | 709 | 735 |
Loans payable | 9,096 | 14,142 | |
Accounts payable | 96 | 1,743 | |
Other payables | 1,530 | 1,281 | |
Accrued and other liabilities | [2] | 119 | 169 |
DASAN | Majority Shareholder | Receivables And Payables With Related Parties | |||
Related Party Transaction [Line Items] | |||
Other receivables | 32 | ||
Deposits for lease | [1] | 709 | 735 |
Loans payable | 9,096 | 14,142 | |
Accounts payable | 1,000 | ||
Other payables | 1,475 | 1,231 | |
Accrued and other liabilities | [2] | $ 119 | $ 169 |
Tomato Soft Ltd. | Affiliated Entity | Receivables And Payables With Related Parties | |||
Related Party Transaction [Line Items] | |||
DNI ownership interest | 100.00% | 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 interest | 100.00% | 100.00% | |
Other payables | $ 45 | $ 41 | |
Handysoft Inc | Affiliated Entity | Receivables And Payables With Related Parties | |||
Related Party Transaction [Line Items] | |||
DNI ownership interest | 14.77% | ||
Account receivables | $ 303 | ||
Accounts payable | $ 654 | ||
CHASAN Networks Co., Ltd. | Affiliated Entity | Receivables And Payables With Related Parties | |||
Related Party Transaction [Line Items] | |||
DNI ownership interest | 100.00% | 100.00% | |
Accounts payable | $ 96 | $ 89 | |
Dasan France | Affiliated Entity | Receivables And Payables With Related Parties | |||
Related Party Transaction [Line Items] | |||
DNI ownership interest | 100.00% | 100.00% | |
Account receivables | $ 280 | ||
Other receivables | $ 65 | ||
[1] | Included in other assets related to deposits for lease in the consolidated balance sheets as of December 31, 2019 and 2018. | ||
[2] | Included in accrued and other liabilities in the consolidated balance sheet as of December 31, 2019 and 2018. |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 5,212 |
Variable lease cost | 644 |
Short-term lease cost | 404 |
Total net lease cost | $ 6,260 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||
Lease expense | $ 4.3 | |
Non-cash asset impairment charge | $ 0.7 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Operating Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 4,932 |
ROU assets obtained in exchange for operating lease obligations | $ 3,812 |
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 Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Assets: | ||
Right-of-use assets from operating leases | $ 20,469 | $ 22,500 |
Liabilities: | ||
Operating lease liabilities - current | 4,201 | |
Operating lease liabilities - non-current | 18,154 | |
Total operating lease liabilities | $ 22,355 | $ 22,500 |
Weighted average remaining lease term | 2 years 2 months 19 days | |
Weighted average discount rate | 4.80% |
Leases - Maturity of Operating
Leases - Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
2020 | $ 5,287 | |
2021 | 4,655 | |
2022 | 4,211 | |
2023 | 3,795 | |
2024 | 3,320 | |
Thereafter | 3,457 | |
Total operating lease payments | 24,725 | |
Less: imputed interest | (2,370) | |
Total minimum lease payments | $ 22,355 | $ 22,500 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Purchase Commitment | |
Guarantee Obligations [Line Items] | |
Number of notice days required to notice in advance for cancellation of orders | 30 days |
Amount of non-cancellable purchase commitments outstanding | $ 4.3 |
Performance Guarantee | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | $ 9.2 |
Commitments and Contingencies_2
Commitments and Contingencies - Payment Guarantees to Third Parties (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Guarantee Obligations [Line Items] | |
Product warranty term | 2 years |
Payment Guarantee | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | $ 58,621 |
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | |
Guarantee Obligations [Line Items] | |
DNI ownership interest | 44.30% |
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Credit facility from Industrial Bank of Korea | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | $ 8,400 |
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Purchasing Card from Industrial Bank of Korea | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 2,073 |
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Korea Development Bank, Credit facility | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 8,400 |
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Korea Development Bank, General loan | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 5,182 |
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | NongHyup Bank, Credit facility | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 6,000 |
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Borrowings from Korea Development Bank | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 3,700 |
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Payment Guarantee from Shinhan Bank | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 3,000 |
Dasan Network Solutions, Inc. (DNS) | Payment Guarantee | Shinhan Bank, General Loan | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 1,658 |
PNC Bank N.A. | Payment Guarantee | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 4,649 |
Citi Bank | Payment Guarantee | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 253 |
Seoul Guarantee Insurance Co. | Payment Guarantee | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 6,009 |
Industrial Bank of Korea | Payment Guarantee | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 836 |
Korea Development Bank | Payment Guarantee | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 3,124 |
NongHyup Bank | Payment Guarantee | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 2,266 |
Woori Bank | Payment Guarantee | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 1,626 |
Shinhan Bank | Payment Guarantee | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 683 |
Shinhan Bank | Payment Guarantee | Purchasing Card | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | 583 |
AXA Insurance Company | Payment Guarantee | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | $ 179 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Discretionary contribution made to 401(k) plan | $ 0 | $ 0 |
Defined contribution plan, employer contribution, percent of employees' gross pay, per quarter | 8.33% | |
Defined contribution expense | $ 1,300,000 | |
Defined benefit plan, accumulated benefit obligation | 17,700,000 | |
Net periodic benefit cost over the next fiscal year | 19,000 | |
Defined benefit plan, expects to make contributions | 0 | |
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, insurance contract amount | $ 3,300,000 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Net Periodic Benefit Cost Related to Plans (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Compensation And Retirement Disclosure [Abstract] | |
Service Cost | $ 219 |
Interest Cost | 265 |
Net periodic benefit cost | $ 484 |
Employee Benefit Plans - Reconc
Employee Benefit Plans - Reconciliation of Changes in Plan Assets and Benefit Obligation (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Defined Benefit Pension Plans And Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Assumed with acquisition | $ 16,191 |
Service cost | 219 |
Interest cost | 265 |
Benefits paid | (456) |
Actuarial (gains) losses | 1,793 |
Foreign exchange impact | (341) |
Benefit obligation, December 31 | 17,671 |
Underfunded status, December 31 | $ 17,671 |
Employee Benefit Plans - Sche_2
Employee Benefit Plans - Schedule of Benefit Payments which Reflect Expected Future Service are Expected To Be Paid (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2020 | $ 602 |
2021 | 647 |
2022 | 687 |
2023 | 720 |
2024 | 699 |
2025 - 2029 | $ 3,496 |
Employee Benefit Plans - Sche_3
Employee Benefit Plans - Schedule of Gross Amounts Recognized Net of Tax in Accumulated Other Comprehensive Loss (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Compensation And Retirement Disclosure [Abstract] | |
Net loss | $ 1,793 |
Net periodic benefit cost | $ 1,793 |
Employee Benefit Plans - Weight
Employee Benefit Plans - Weighted Average Assumptions Used In Determining Periodic Net Cost and Benefit Obligation Information Related to Plans (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Net periodic benefit cost : | |
Discount rate | 0.90% |
Rate of compensation increase | 1.70% |
Benefit obligation: | |
Discount rate | 0.90% |
Rate of compensation increase | 1.70% |
Enterprise-Wide Information - R
Enterprise-Wide Information - Revenue by Geography (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue from External Customer [Line Items] | ||
Net revenue | $ 306,882 | $ 282,348 |
United States | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 36,383 | 50,795 |
Canada | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 4,690 | 4,413 |
Total North America | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 41,073 | 55,208 |
Latin America | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 23,774 | 27,596 |
Europe, Middle East, Africa | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 78,375 | 34,741 |
Korea | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 79,124 | 76,006 |
Other Asia Pacific | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 84,536 | 88,797 |
Total International | ||
Revenue from External Customer [Line Items] | ||
Net revenue | $ 265,809 | $ 227,140 |
Enterprise-Wide Information -_2
Enterprise-Wide Information - Revenue by Products and Services (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue from External Customer [Line Items] | ||
Net revenue | $ 306,882 | $ 282,348 |
Products | ||
Revenue from External Customer [Line Items] | ||
Net revenue | 286,292 | 269,269 |
Services | ||
Revenue from External Customer [Line Items] | ||
Net revenue | $ 20,590 | $ 13,079 |
Enterprise-Wide Information - P
Enterprise-Wide Information - Property, Plant and Equipment, Net of Accumulated Depreciation (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | $ 6,769 | $ 5,518 |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 2,809 | 3,036 |
Korea | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 2,020 | 1,543 |
Japan and Vietnam | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 1,074 | 910 |
Taiwan and India | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 24 | 29 |
Germany | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | $ 842 | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | Mar. 05, 2020USD ($) | Mar. 02, 2020USD ($)ft²$ / ft² | Dec. 31, 2019USD ($) | Mar. 05, 2020KRW (₩) |
Subsequent Event [Line Items] | ||||
Base monthly rent payments due under subleases | $ 24,725,000 | |||
March 2020 DNI Loan | ||||
Subsequent Event [Line Items] | ||||
Term loan, security description | (i) DNS California, a wholly-owned, direct subsidiary of the Company and the sole stockholder of DNS Korea, agreed to pledge the outstanding shares of DNS Korea to DNI and (ii) DNS Korea granted a security interest in its personal property assets, accounts receivable and intellectual property assets to DNI. | |||
Subsequent Event | March 2020 DNI Loan | ||||
Subsequent Event [Line Items] | ||||
Term loan | $ 18,500,000 | ₩ 22,400,000,000 | ||
Term loan, interest payable | semi-annually | |||
Term loan, annual rate | 4.60% | |||
Credit agreement, expiration date | Mar. 11, 2022 | |||
Term loan, principal payments due | $ 0 | |||
Term loan, covenant terms | The March 2020 DNI Loan includes certain covenants consisting of financial reporting obligations, a maintenance covenant whereby DNS Korea agreed to maintain a minimum stockholders’ equity value in an amount equal to or greater than KRW 43.3 billion ($35.8 million USD), and customary events of default. If an event of default occurs and is not remedied within the applicable cure period, DNI will be entitled to take various actions, including requiring the immediate repayment of all outstanding amounts under the March 2020 DNI Loan and selling the shares or assets of DNS Korea. | |||
Term loan covenant, minimum stockholders’ equity value | $ 35,800,000 | ₩ 43,300,000,000 | ||
Subsequent Event | Sublease Agreements | ||||
Subsequent Event [Line Items] | ||||
Area of sublease | ft² | 16,333 | |||
Sublease commence month and year | 2020-03 | |||
Sublease termination date | Nov. 30, 2025 | |||
Option to extend term of sublease | The Company does not have any option to extend the term of either of the Subleases. | |||
Existence of Option to extend term of sublease | false | |||
Base monthly rent payments due under subleases | $ 21,777 | |||
Sublease annual increase per rentable square foot per annum | $ / ft² | 0.50 |