Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 04, 2019 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2019 | |
Entity File Number | 001-36083 | |
Entity Registrant Name | Applied Optoelectronics, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 76-0533927 | |
Entity Address, Address Line One | 13139 Jess Pirtle Blvd. | |
Entity Address, City or Town | Sugar Land | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77478 | |
City Area Code | 281 | |
Local Phone Number | 295-1800 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | AAOI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 20,111,843 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001158114 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 69,994 | $ 55,646 |
Restricted cash | 2,382 | 2,358 |
Accounts receivable - trade, net of allowance of $30 and $32, respectively | 29,709 | 30,534 |
Inventories | 82,118 | 93,256 |
Prepaid income tax | 759 | 1,188 |
Prepaid expenses and other current assets | 5,685 | 11,293 |
Total current assets | 190,647 | 194,275 |
Property, plant and equipment, net | 245,535 | 234,211 |
Land use rights, net | 5,551 | 5,814 |
Operating right of use asset | 7,738 | |
Intangible assets, net | 4,072 | 3,977 |
Deferred income tax assets | 29,362 | 21,714 |
Other assets, net | 973 | 6,849 |
TOTAL ASSETS | 483,878 | 466,840 |
Current liabilities | ||
Current portion of notes payable and long-term debt | 15,803 | 23,589 |
Accounts payable | 28,074 | 29,910 |
Bank acceptance payable | 4,080 | 4,628 |
Current lease liability | 924 | |
Accrued liabilities | 15,542 | 19,291 |
Total current liabilities | 64,423 | 77,418 |
Notes payable and long-term debt, less current portion | 32,373 | 60,328 |
Convertible senior notes | 76,835 | |
Non-current lease liability | 7,962 | |
TOTAL LIABILITIES | 181,593 | 137,746 |
Stockholders' equity: | ||
Preferred Stock; 5,000 shares authorized at $0.001 par value; no shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | ||
Common Stock; 45,000 shares authorized at $0.001 par value; 20,061 and 19,810 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 20 | 20 |
Additional paid-in capital | 300,725 | 292,480 |
Accumulated other comprehensive income | (3,832) | 602 |
Retained earnings | 5,372 | 35,992 |
TOTAL STOCKHOLDERS' EQUITY | 302,285 | 329,094 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 483,878 | $ 466,840 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts | $ 30 | $ 32 |
Preferred Stock par value | $ 0.001 | $ 0.001 |
Preferred Stock shares authorized | 5,000 | 5,000 |
Preferred Stock shares issued | 0 | 0 |
Preferred Stock shares outstanding | 0 | 0 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 45,000 | 45,000 |
Common stock shares issued | 20,061 | 19,810 |
Common stock shares outstanding | 20,061 | 19,810 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue, net | $ 46,084 | $ 56,386 | $ 142,214 | $ 209,447 |
Cost of goods sold | 34,108 | 38,849 | 107,349 | 132,211 |
Gross profit | 11,976 | 17,537 | 34,865 | 77,236 |
Operating expenses | ||||
Research and development | 10,466 | 14,180 | 32,802 | 38,561 |
Sales and marketing | 2,518 | 2,370 | 7,444 | 7,221 |
General and administrative | 9,988 | 10,591 | 31,312 | 29,945 |
Total operating expenses | 22,972 | 27,141 | 71,558 | 75,727 |
Income (loss) from operations | (10,996) | (9,604) | (36,693) | 1,509 |
Other income (expense) | ||||
Interest income | 347 | 86 | 729 | 223 |
Interest expense | (1,517) | (274) | (4,003) | (624) |
Other income, net | 1,446 | 766 | 1,742 | 1,320 |
Total other income (expense), net | 276 | 578 | (1,532) | 919 |
Income (loss) before income taxes | (10,720) | (9,026) | (38,225) | 2,428 |
Income tax benefit | 1,940 | 5,294 | 7,605 | 3,994 |
Net income (loss) | $ (8,780) | $ (3,732) | $ (30,620) | $ 6,422 |
Earnings Per Share | ||||
Basic | $ (0.44) | $ (0.19) | $ (1.54) | $ 0.33 |
Diluted | $ (0.44) | $ (0.19) | $ (1.54) | $ 0.32 |
Weighted average shares used to compute net income (loss) per share: | ||||
Basic | 20,022,520 | 19,707,036 | 19,939,605 | 19,597,181 |
Diluted | 20,022,520 | 19,707,036 | 19,939,605 | 20,038,657 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) | $ (8,780) | $ (3,732) | $ (30,620) | $ 6,422 |
Loss on foreign currency translation adjustment | (3,453) | (4,798) | (4,434) | (8,908) |
Comprehensive loss | $ (12,233) | $ (8,530) | $ (35,054) | $ (2,486) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY - USD ($) shares in Thousands, $ in Thousands | Common stock | Additional paid-in capital | Accumulated other comprehensive gain (loss) | Retained earnings | Total |
Beginning balance, value at Dec. 31, 2017 | $ 19 | $ 285,376 | $ 9,743 | $ 38,138 | $ 333,276 |
Beginning balance, shares at Dec. 31, 2017 | 19,451 | ||||
Stock options exercised, net of shares withheld for employee tax, value | (2,073) | (2,073) | |||
Stock options exercised, net of shares withheld for employee tax, in shares | 121 | ||||
Issuance of restricted stock, net of shares withheld for employee tax, value | $ 1 | (1,595) | (1,594) | ||
Issuance of restricted stock, net of shares withheld for employee tax, in shares | 186 | ||||
Share-based compensation | 8,362 | 8,362 | |||
Foreign currency translation adjustment | (8,908) | (8,908) | |||
Net income (loss) | 6,422 | 6,422 | |||
Ending balance, value at Sep. 30, 2018 | $ 20 | 290,070 | 835 | 44,560 | 335,485 |
Ending balance, shares at Sep. 30, 2018 | 19,758 | ||||
Beginning balance, value at Jun. 30, 2018 | $ 20 | 288,686 | 5,633 | 48,292 | 342,631 |
Beginning balance, shares at Jun. 30, 2018 | 19,634 | ||||
Stock options exercised, net of shares withheld for employee tax, value | (845) | (845) | |||
Stock options exercised, net of shares withheld for employee tax, in shares | 43 | ||||
Issuance of restricted stock, net of shares withheld for employee tax, value | (665) | (665) | |||
Issuance of restricted stock, net of shares withheld for employee tax, in shares | 81 | ||||
Share-based compensation | 2,894 | 2,894 | |||
Foreign currency translation adjustment | (4,798) | (4,798) | |||
Net income (loss) | (3,732) | (3,732) | |||
Ending balance, value at Sep. 30, 2018 | $ 20 | 290,070 | 835 | 44,560 | 335,485 |
Ending balance, shares at Sep. 30, 2018 | 19,758 | ||||
Beginning balance, value at Dec. 31, 2018 | $ 20 | 292,480 | 602 | 35,992 | 329,094 |
Beginning balance, shares at Dec. 31, 2018 | 19,810 | ||||
Stock options exercised, net of shares withheld for employee tax, value | 8 | 8 | |||
Stock options exercised, net of shares withheld for employee tax, in shares | 1 | ||||
Issuance of restricted stock, net of shares withheld for employee tax, value | (702) | (702) | |||
Issuance of restricted stock, net of shares withheld for employee tax, in shares | 250 | ||||
Share-based compensation | 8,939 | 8,939 | |||
Foreign currency translation adjustment | (4,434) | (4,434) | |||
Net income (loss) | (30,620) | (30,620) | |||
Ending balance, value at Sep. 30, 2019 | $ 20 | 300,725 | (3,832) | 5,372 | 302,285 |
Ending balance, shares at Sep. 30, 2019 | 20,061 | ||||
Beginning balance, value at Jun. 30, 2019 | $ 20 | 297,922 | (379) | 14,152 | 311,715 |
Beginning balance, shares at Jun. 30, 2019 | 19,951 | ||||
Stock options exercised, net of shares withheld for employee tax, value | 1 | 1 | |||
Stock options exercised, net of shares withheld for employee tax, in shares | 1 | ||||
Issuance of restricted stock, net of shares withheld for employee tax, value | (176) | (176) | |||
Issuance of restricted stock, net of shares withheld for employee tax, in shares | 109 | ||||
Share-based compensation | 2,978 | 2,978 | |||
Foreign currency translation adjustment | (3,453) | (3,453) | |||
Net income (loss) | (8,780) | (8,780) | |||
Ending balance, value at Sep. 30, 2019 | $ 20 | $ 300,725 | $ (3,832) | $ 5,372 | $ 302,285 |
Ending balance, shares at Sep. 30, 2019 | 20,061 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities: | ||
Net income (loss) | $ (30,620) | $ 6,422 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Lower of cost or market reserve adjustment to inventory | 6,615 | 5,546 |
Depreciation and amortization | 17,982 | 21,807 |
Amortization of debt issuance costs | 673 | |
Deferred income taxes, net | (7,710) | (5,734) |
Loss (gain) on disposal of assets | 10 | (5) |
Share-based compensation | 8,939 | 8,362 |
Unrealized foreign exchange gain | (220) | (580) |
Changes in operating assets and liabilities: | ||
Accounts receivable, trade | 825 | 27,822 |
Notes receivable | (3) | |
Prepaid income tax | 426 | 653 |
Inventories | 3,197 | (41,288) |
Other current assets | 5,577 | (2,013) |
Operating right of use asset | 738 | |
Accounts payable | (1,836) | 10,082 |
Accrued liabilities | (2,405) | (7,390) |
Lease liability | (777) | 1,941 |
Net cash provided by operating activities | 1,411 | 25,625 |
Investing activities: | ||
Purchase of short-term investments | (15,023) | |
Maturities of short-term investments | 9,036 | |
Purchase of property, plant and equipment | (25,982) | (52,268) |
Purchase of land use rights | (5,591) | |
Proceeds from disposal of equipment | 2 | 697 |
Deposits and prepaid for equipment | (520) | (7,533) |
Purchase of intangible assets | (497) | (343) |
Net cash used in investing activities | (26,997) | (71,025) |
Financing activities: | ||
Proceeds from issuance of notes payable and long-term debt, net of debt issuance costs | 13,661 | 35,899 |
Principal payments of long-term debt and notes payable | (42,272) | (1,883) |
Proceeds from line of credit borrowings | 59,296 | 113,266 |
Repayments of line of credit borrowings | (66,299) | (125,678) |
Proceeds from bank acceptance payable | 8,214 | |
Repayments of bank acceptance payable | (8,682) | |
Proceeds from issuance of convertible senior notes, net of debt issuance costs | 76,362 | |
Exercise of stock options | 8 | 120 |
Payments of tax withholding on behalf of employees related to share-based compensation | (702) | (3,788) |
Net cash provided by financing activities | 39,586 | 17,936 |
Effect of exchange rate changes on cash | 372 | 1,591 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 14,372 | (25,873) |
Cash, cash equivalents and restricted cash at beginning of period | 58,004 | 83,948 |
Cash, cash equivalents and restricted cash at end of period | 72,376 | 58,075 |
Cash paid for: | ||
Interest | 2,933 | 525 |
Income taxes | (329) | 8,433 |
Non-cash investing and financing activities: | ||
Net change in accounts payable related to property and equipment additions | (4,626) | $ 1,524 |
Net change in deposits and prepaid for equipment related to property and equipment additions | $ 6,370 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2019 | |
Description of Business. | |
Description of Business. | Note 1. Description of Business Business Overview Applied Optoelectronics, Inc. (“AOI” or the “Company”) is a Delaware corporation. The Company is a leading, vertically integrated provider of fiber-optic networking products, primarily for four networking end-markets: internet data center, cable television, telecommunications and fiber-to-the-home. The Company designs and manufactures a wide range of optical communications products at varying levels of integration, from components, subassemblies and modules to complete turn-key equipment. The Company has manufacturing and research and development facilities located in the U.S., Taiwan and China. In the U.S., at its corporate headquarters and manufacturing facilities in Sugar Land, Texas, the Company primarily manufactures lasers and laser components and performs research and development activities for laser component and optical module products. In addition, the Company also has a research and development facility in Duluth, Georgia. The Company operates in Taipei, Taiwan and Ningbo, China through its wholly-owned subsidiary Prime World International Holdings, Ltd. (“Prime World”, incorporated in the British Virgin Islands). Prime World operates a branch in Taipei, Taiwan, which primarily manufactures transceivers and performs research and development activities for the transceiver products. Prime World is also the parent of Global Technology, Inc. (“Global”, incorporated in the People’s Republic of China). Through Global, the Company primarily manufactures certain of its data center transceiver products, including subassemblies, as well as Cable TV Broadband (“CATV”) systems and equipment, and performs research and development activities for the CATV products. Interim Financial Statements The unaudited condensed consolidated financial statements of the Company as of September 30, 2019 and December 31, 2018 and for the three and nine months ended September 30, 2019 and September 30, 2018, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim information and with the instructions on Form 10-Q and Rule 10-01 of Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In accordance with those rules and regulations, the Company has omitted certain information and notes required by GAAP for annual consolidated financial statements. In the opinion of management, the condensed consolidated financial statements contain all adjustments, except as otherwise noted, necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented. The year-end condensed balance sheet data was derived from audited financial statements. These condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K (“Annual Report”) for the fiscal year ended December 31, 2018. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results expected for the entire fiscal year. All significant intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates in the consolidated financial statements and accompanying notes. Significant estimates and assumptions that impact these financial statements and the accompanying notes relate to, among other things, allowance for doubtful accounts, inventory reserve, product warranty costs, share-based compensation expense, estimated useful lives of property and equipment, and taxes. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Significant Accounting Policies | |
Significant Accounting Policies | Note 2. Significant Accounting Policies There have been no changes in the Company’s significant accounting policies for the three and nine months ended September 30, 2019, as compared to the significant accounting policies described in its 2018 Annual Report, except as described below. Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted in 2019 On February 25, 2016, the FASB released Accounting Standards Update (ASU) No. 2016-02, Leases, to complete its project to overhaul lease accounting. The ASU codifies ASC 842, Leases, which will replace the guidance in ASC 840. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. The Company adopted this ASU on January 1, 2019 without any impact to beginning retained earnings. Upon adoption of the new lease standard, the Company elected the package of practical expedients which allowed it to carry forward the historical lease classification on existing leases at adoption. In addition, the Company elected the short-term lease recognition exemption for all leases that qualify. The Company also elected the practical expedient to not separate lease and non-lease components for all of its leases. The Company has implemented internal controls to enable the presentation of financial information on adoption. The standard has a material impact on the Company’s consolidated balance sheet, but did not have an impact in its consolidated income statements. The most significant effects of adopting the new standard relate to the recognition of new ROU assets and lease liabilities on its balance sheet for its Taiwan branch. See Note 4, "Operating Leases" for additional information on the required disclosures related to the impact of adopting this standard. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The Company adopted this ASU on January 1, 2019 with no impact on its consolidated financial statements. Recent Accounting Pronouncements Yet to be Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments, which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings. The new standard is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Based on the composition of the Company’s investment portfolio, current market conditions, and historical credit loss activity, the adoption of ASU 2016-13 is not expected to have a material impact on its consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition | |
Revenue Recognition | Note 3. Revenue Recognition The adoption of Topic 606 represents a change in accounting principle that will provide financial statement readers with enhanced revenue recognition disclosures. In accordance with Topic 606, revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally, this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. Certain customers may receive cash and/or non-cash incentives, which are accounted for as variable consideration. To achieve this core principle, the Company applies the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to performance obligations in the contract; and (v) recognize revenue when or as the Company satisfies a performance obligation. The Company generally satisfies performance obligations at a point in time. Revenue is recognized based on the transaction price at the time the related performance obligation is satisfied by transferring a promised product or service to a customer. Disaggregation of Revenue Revenue is classified based on the location of where the product is manufactured. For additional information on the disaggregated revenues by geographical region, see Note 17, "Geographic Information.” Revenue is also classified by major product category and is presented below (in thousands): Three months ended September 30, % of % of 2019 Revenue 2018 Revenue Data Center $ 34,006 73.8% $ 38,954 69.1% CATV 8,797 19.1% 14,295 25.4% Telecom 2,868 6.2% 2,656 4.7% FTTH 39 0.1% 221 0.4% Other 374 0.8% 260 0.5% Total Revenue $ 46,084 100.0% $ 56,386 100.0% Nine months ended September 30, % of % of 2019 Revenue 2018 Revenue Data Center $ 104,311 73.3% $ 158,577 75.7% CATV 30,577 21.5% 39,047 18.6% Telecom 6,236 4.4% 10,399 5.0% FTTH 149 0.1% 498 0.2% Other 941 0.7% 926 0.4% Total Revenue $ 142,214 100.0% $ 209,447 100.0% |
Operating Leases
Operating Leases | 9 Months Ended |
Sep. 30, 2019 | |
Operating Leases | |
Operating Leases | Note 4. Operating Leases The Company leases space under non-cancelable operating leases for manufacturing facilities, research and development offices and certain storage facilities and apartments. These leases do not contain contingent rent provisions. The Company also leases certain machinery, office equipment and a vehicle under operating leases. Many of its leases include both lease (e.g. fixed payments including rent, taxes, and insurance costs) and non-lease components (e.g. common-area or other maintenance costs) which are accounted for as a single lease component as the Company has elected the practical expedient to group lease and non-lease components for all leases. Several of the leases include one or more options to renew which have been assessed and either includes or excludes from the calculation of the lease liability of the ROU asset based on management’s intentions and individual fact patterns. Several warehouses and apartments have non-cancelable lease terms of less than one-year and therefore, the Company has elected the practical expedient to exclude these short-term leases from its ROU asset and lease liabilities. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Based on the applicable lease terms and current economic environment, the Company applies a location approach for determining the incremental borrowing rate. The Components of lease expense were as follows for the periods indicated (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2019 Operating lease expense $ 287 $ 929 Short Term lease expense 20 100 Total lease expense $ 307 $ 1,029 Maturities of lease liabilities are as follows for the future one-year periods ending September 30, (in thousands): 2020 $ 1,231 2021 1,136 2022 1,077 2023 1,055 2024 1,061 2025 and thereafter 5,169 Total lease payments $ 10,729 Less imputed interest (1,843) Present value $ 8,886 The weighted average remaining lease term and discount rate for operating leases were as follows for the periods indicated: September 30, 2019 Weighted Average Remaining Lease Term (Years) 9.46 Weighted Average Discount Rate 3.13% Supplemental cash flow information related to operating leases was as follows for the periods indicated (in thousands): Nine months ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases 1,002 Operating cash flows from financing lease — Financing cash flows from financing lease — Right-of-use assets obtained in exchange for new operating lease liabilities 39 Right-of-use assets obtained in exchange for new finance lease liabilities — |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 9 Months Ended |
Sep. 30, 2019 | |
Cash, Cash Equivalents and Restricted Cash | |
Cash, Cash Equivalents and Restricted Cash | Note 5. Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statement of financial position that sum to the total of the same such amounts in the statement of cash flows (in thousands): September 30, December 31, 2019 2018 Cash and cash equivalents $ 69,994 $ 55,646 Restricted cash 2,382 2,358 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 72,376 $ 58,004 Restricted cash includes guarantee deposits for customs duties and compensating balances required for certain credit facilities. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share | |
Earnings Per Share | Note 6. Earnings Per Share Basic net income (loss) per share has been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share has been computed using the weighted-average number of shares of common stock and dilutive potential common shares from stock options, restricted stock units and senior convertible notes outstanding during the period. In periods with net losses, normally dilutive shares become anti-dilutive. Therefore, basic and diluted earnings per share are the same. The following table sets forth the computation of the basic and diluted net income (loss) per share for the periods indicated (in thousands, except per share amounts): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Numerator: Net income (loss) $ (8,780) $ (3,732) $ (30,620) $ 6,422 Denominator: Weighted average shares used to compute net income (loss) per share Basic 20,023 19,707 19,940 19,597 Effect of dilutive options and restricted stock units — — — 442 Diluted 20,023 19,707 19,940 20,039 Net income (loss) per share Basic $ (0.44) $ (0.19) $ (1.54) $ 0.33 Diluted $ (0.44) $ (0.19) $ (1.54) $ 0.32 The following potentially dilutive securities were excluded from the diluted net income (loss) per share as their effect would have been antidilutive (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Employee stock options 16 247 50 — Restricted stock units 19 231 — — Shares for convertible senior notes 4,587 — 4,587 — Total antidilutive shares 4,622 478 4,637 — |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventories | |
Inventories | Note 7. Inventories Inventories, net of inventory write-downs, consist of the following for the periods indicated (in thousands): September 30, 2019 December 31, 2018 Raw materials $ 22,392 $ 30,214 Work in process and sub-assemblies 51,089 49,192 Finished goods 8,637 13,850 Total inventories $ 82,118 $ 93,256 The lower of cost or market adjustment expensed for inventory for the three months ended September 30, 2019 and 2018 was $1.4 |
Property, Plant & Equipment
Property, Plant & Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant & Equipment | |
Property, Plant & Equipment | Note 8. Property, Plant & Equipment Property, plant and equipment consisted of the following for the periods indicated (in thousands): September 30, 2019 December 31, 2018 Land improvements $ 806 $ 806 Building and improvements 82,543 80,960 Machinery and equipment 231,976 214,718 Furniture and fixtures 5,047 5,043 Computer equipment and software 10,041 9,709 Transportation equipment 644 658 331,057 311,894 Less accumulated depreciation and amortization (110,499) (95,233) 220,558 216,661 Construction in progress 23,876 16,449 Land 1,101 1,101 Total property, plant and equipment, net $ 245,535 $ 234,211 For the three months ended September 30, 2019 and 2018, depreciation expense of property, plant and equipment was $5.9 million and $7.4 million, respectively. For the nine months ended September 30, 2019 and 2018, depreciation expense of property, plant and equipment was $17.6 million and $21.4 million, respectively. Depreciation expense of $2.3 million and $3.7 million was recorded as cost of sales for the three months ended September 30, 2019 and 2018, respectively. Depreciation expense of $7.1 million and $11.3 million was recorded as cost of sales for the nine months ended September 30, 2019 and 2018, respectively. |
Intangible Assets, net
Intangible Assets, net | 9 Months Ended |
Sep. 30, 2019 | |
Intangible Assets, net | |
Intangible Assets, net | Note 9. Intangible Assets, net Intangible assets consisted of the following for the periods indicated (in thousands): September 30, 2019 Gross Accumulated Intangible Amount amortization assets, net Patents $ 7,472 $ (3,403) $ 4,069 Trademarks 16 (13) 3 Total intangible assets $ 7,488 $ (3,416) $ 4,072 December 31, 2018 Gross Accumulated Intangible Amount amortization assets, net Patents $ 6,983 $ (3,008) $ 3,975 Trademarks 15 (13) 2 Total intangible assets $ 6,998 $ (3,021) $ 3,977 For the three months ended September 30, 2019 and 2018, amortization expense for intangible assets, included in general and administrative expenses on the income statement, was each $0.1 million . . The remaining weighted average amortization period for intangible assets is approximately 7 years. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | Note 10. Fair Value of Financial Instruments The following table represents a summary of the Company’s financial instruments measured at fair value on a recurring basis for the periods indicated (in thousands): As of September 30, 2019 As of December 31, 2018 (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents $ 69,994 $ — $ — $ 69,994 $ 55,646 $ — $ — $ 55,646 Restricted cash 2,382 — — 2,382 2,358 — — 2,358 Total assets $ 72,376 $ — $ — $ 72,376 $ 58,004 $ — $ — $ 58,004 Liabilities: Bank acceptance payable — $ 4,080 — $ 4,080 — $ 4,628 — $ 4,628 Convertible senior notes — 75,131 — 75,131 — — — — Total liabilities $ — $ 79,211 $ — $ 79,211 $ — $ 4,628 $ — $ 4,628 The carrying value amounts of accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair value because of the short-term maturity of these instruments. The carrying value amounts of debt approximate fair value due to the short-term nature of the debt since it renews frequently at current interest rates. The Company believes that the interest rates in effect at each period end represent the current market rates for similar borrowings . |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Notes Payable and Long-Term Debt | |
Notes Payable and Long-Term Debt | Note 11. Notes Payable and Long-Term Debt Notes payable and long-term debt consisted of the following for the periods indicated (in thousands): September 30, 2019 December 31, 2018 Revolving line of credit with a U.S. bank up to $25,000 with interest at LIBOR plus 1.5%, maturing April 2, 2021 $ 20,000 $ 23,104 Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.15%, maturing April 1, 2024 — 20,067 Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.3%, maturing between April 1, 2023 and December 18, 2023 — 19,164 Revolving line of credit with a Taiwan bank up to $3,222 with 2.2% interest, maturing July 31, 2020 3,222 3,256 Revolving line of credit with a Taiwan bank up to $7,000 with interest ranging from 1.5% to 3.5%, matured July 26, 2019 — 3,550 Notes payable to a finance company due in monthly installments with 3.4% interest, maturing November 30, 2021 4,653 6,331 Notes payable to a finance company due in monthly installments with 3.1% interest, maturing January 21, 2022 5,012 — Revolving line of credit with a Taiwan bank up to $2,576 with interest of 1.7%, maturing December 11, 2019 644 — Revolving line of credit with a China bank up to $19,158 with interest ranging from 4.1% to 4.6% — 8,652 Revolving line of credit with a China bank up to $25,449 with interest of 4.57%, maturing May 24, 2024 7,641 — Credit facility with a China bank up to $7,069 with interest of 5.7%, maturing June 20, 2022 7,069 — Sub-total 48,241 84,124 Less debt issuance costs, net (65) (207) Grand total 48,176 83,917 Less current portion (15,803) (23,589) Non-current portion $ 32,373 $ 60,328 Bank Acceptance Notes Payable Bank acceptance notes issued to vendors with a zero percent interest rate $ 4,080 $ 4,628 The current portion of long-term debt is the amount payable within one year of the balance sheet date of September 30, 2019. Maturities of long-term debt are as follows for the future one-year periods ending September 30, (in thousands): 2020 $ 15,803 2021 24,230 2022 8,143 2023 — 2024 — 2025 and thereafter — Total outstanding $ 48,176 On September 28, 2017, the Company entered into a Loan Agreement (“Loan Agreement”), a Promissory Note, an Addendum to the Promissory Note, a BB&T Security Agreement, a Trademark Security Agreement, and a Patent Security Agreement (together the “Credit Facility”) with Branch Banking and Trust Company (“BB&T”). The Credit Facility provides the Company with a three-year, $50 million, revolving line of credit. Borrowings under the Credit Facility will be used for general corporate purposes. The Company makes monthly payments of accrued interest with the final monthly payment being for all principal and all accrued interest not yet paid. The Company’s obligations under the Credit Facility are secured by the Company’s accounts receivable, inventory, intellectual property, and all business assets with the exception of real estate and equipment. Borrowings under the Credit Facility bear interest at a rate equal to the one-month LIBOR plus 1.50%. The Credit Facility requires the Company to maintain certain financial covenants and also contains representations and warranties, and events of default applicable to the Company that are customary for agreements of this type. On March 30, 2018, the Company executed a First Amendment to Loan Agreement, a Note Modification Agreement and Addendum to Promissory Note for $60 million, a Promissory Note and Addendum to Promissory Note for $26 million, a Promissory Note and Addendum to Promissory Note for $21.5 million, a Texas Deed of Trust and Security Agreement, an Assignment of Lease and Rent, and an Environmental Certification and Indemnity Agreement, (collectively, the “Amended Credit Facility”), with BB&T. The Amended Credit Facility amends the Company’s three-year $50 million line of credit with BB&T. The Amended Credit Facility (1) increases the principal amount of the three-year line of credit from $50 million to $60 million (the “Line of Credit”); (2) allows the Company to borrow an additional $26 million from BB&T in the form of a five-year capital expenditure loan (the “CapEx Loan”) and (3) allows the Company to borrow an additional $21.5 million in the form of a seventy-month real estate term loan (the “Term Loan”) to refinance the Company’s plant and facilities in Sugar Land, Texas. Borrowings under the Line of Credit bear interest at a rate equal to the one-month LIBOR plus a Line of Credit margin ranging between 1.40% and 2.0%. Borrowings under the CapEx Loan bear interest at a rate equal to the one-month LIBOR plus a CapEx Loan margin ranging between 1.30% and 2.0%. Borrowings under the Term Loan bear interest at a rate equal to the one-month LIBOR plus a Term Loan margin ranging between 1.15% and 2.0%. The Company is required to make monthly payments of principal and accrued interest with the final monthly payments being for all principal and accrued interest not yet paid. The Company’s obligations under the Amended Credit Facility are secured by the Company’s accounts receivable, inventory, equipment, intellectual property, real property, and virtually all business assets. On February 1, 2019, the Company executed a Second Amendment to Loan Agreement with BB&T. The original loan agreement with BB&T, executed on September 28, 2017, and a first amendment to the original loan agreement, executed on March 30, 2018, provided the Company with a three-year $60 million line of credit; a $26 million five-year CapEx Loan and a $21.5 million seventy-month real estate term loan for the Company’s plant and facilities in Sugar Land, Texas. The Second Amendment to Loan Agreement extends the CapEx Loan draw-down date from March 30, 2019 to September 30, 2019, requires the Company to provide BB&T monthly financial statements and allows additional unfinanced capital expenditures. On March 5, 2019, the Company executed a Third Amendment (the “Third Amendment”) to Loan Agreement with BB&T pursuant to which the Company has established a revolving credit line used for working capital purposes. The Third Amendment to the Loan Agreement, among other things: (i) contemplates the issuance of the Notes (as defined in Note 12 below) and the subsequent conversion of the Notes into common stock in accordance with the terms of the Indenture, including the payment of cash for any fractional shares; (ii) adjusts pricing of the unused line fee to 0.20% per annum; (iii) reduces the maximum commitment under the line of credit from $60,000,000 to $25,000,000; and (iv) provides that, so long as the Company’s utilization of the revolving credit line is not greater than 60% of the available commitment, the Company will not be required to comply with its financial covenants, including its fixed charge coverage ratio or funded debt to EBITDA covenant, and provided that, such restriction on utilization will not apply during the period of time commencing seven business days prior to the end of any fiscal quarter through seven business days after the subsequent fiscal quarter. On March 5, 2019, the Company used approximately $37.8 million of the net proceeds from the offering of the Notes to fully repay the CapEx Loan and Term Loan with BB&T. On September 30, 2019, the Company executed a Fourth Amendment (the “Fourth Amendment”) to Loan Agreement with BB&T. Under the terms of the Fourth Amendment (i) the maximum commitment under the line of credit was reduced from $25,000,000 to $20,000,000; (ii) the maturity date of the line of credit was extended from September 28, 2020 to April 2, 2021; (iii) pricing of the unused line fee was adjusted to 0.30% per annum; and (iv) the Covenant Threshold Amount test created in the Third Amendment was removed and replaced with the requirement that if, at any time during any reporting period and pursuant to the most recent loan base report received by BB&T, the principal balance outstanding under the line of credit exceeds the lesser of the approved maximum amount of the line of credit commitment amount or the collateral loan value reduced by the reserves, the Company shall immediately prepay the line of credit to the extent necessary to eliminate such excess. Such reserves shall, at any time that the fixed charge coverage ratio for the loan is less than 1.5 to 1.0, tested for the period of twelve months ended on the applicable covenant measurement date, equal to an amount equal to seventy-five percent (75%) of the lesser of the line of credit commitment amount or collateral loan value reduced by the sum of (i) the principal balance outstanding under the line of credit, (ii) the letter of credit exposure reserve, and (iii) the availability reserve as determined by BB&T from the most recent loan base report and otherwise in the sole discretion of BB&T after consideration of collections. As of September 30, 2019, the Company was in compliance with all covenants under the Loan Agreement. As of September 30, 2019, $20.0 million was outstanding under the Line of Credit. On June 19, 2018, Prime World entered into a one year revolving credit facility totaling 300 million New Taiwan dollars, or approximately $9.7 million, (the “Taiwan Credit Facility”) with Taishin International Bank in Taiwan (“Taishin”). Borrowing under the Taiwan Credit Facility would have been used for short-term working capital. Prime World could have drawn upon the Taiwan Credit Facility from June 19, 2018 until July 31, 2019. The term of each draw would have been either 90 or 120 days. Borrowings under the Taiwan Credit Facility bore interest at a rate of 2.00% for 90 day draws and 1.95% for 120 day draws. At the end of the draw term, Prime World would have been required to make payments for all principal and accrued interest. The agreements for the Taiwan Credit Facility contained representations and warranties and events of default applicable to Prime World that are customary for agreements of this type. As of September 30, 2019, the Taiwan Credit Facility has been fully repaid and the agreement has terminated. On July 23, 2019, Prime World entered into a one-year revolving credit facility totaling 100,000,000 NTD, or approximately $3.3 million, (the “NT$100M Credit Line”) and 1,000,000 USD (the “US$1M Credit Line”) with Taishin. Borrowing under the NT$100M Credit Line will be used for short-term working capital; the borrowing under the US$1M Credit Line will be strictly used for spot transactions in the foreign exchange market. The NT$100M Credit Line and US$1M Credit Line are collectively referred to as the “Credit Facility”. Prime World may draw upon the Credit Facility from July 23, 2019 through July 31, 2020. The term of each draw shall be either 90 or 120 days. Borrowings under the NT$100M Credit Line will bear interest at a rate of 2.25% for 90 day draws and 2.2% for 120 day draws; borrowings under the US$1M Credit Line will bear interest equal to the Taishin’s foreign exchange rate effective on the day of the applicable draw. At the end of the draw term Prime World will make payment for all principal and accrued interest. Prime World’s obligations under the Credit Facility will be secured by a promissory note executed between Prime World and Taishin. The agreements for the Credit Facility contain representations and warranties, and events of default applicable to Prime World that are customary for agreements of this type. As of September 30, 2019, $3.2 million was outstanding under the Credit Facility. On October 3, 2018, Prime World entered into a revolving credit facility for up to $7 million, (the “Revolving Credit Facility”) with the Development Bank of Singapore (Taiwan) Ltd. (“DBS”). Borrowing under the Revolving Credit Facility will be used for short-term working capital. Prime World may draw upon the Revolving Credit Facility from October 3, 2018 until July 26, 2019 . The term of each draw shall be either 60 or 90 days depending on the purpose of the draw. Borrowings under the Revolving Credit Facility bear interest at a rate equal to DBS’s cost of funds rate plus 1.25% for draws in U.S. Dollars and 1.35% plus the Bank’s cost of funds rate for draws in New Taiwan Dollars. DBS’s cost of fund’s rate is adjusted daily. Prime World is required to make monthly payments of accrued interest with the final monthly payment being for all principal and all accrued interest not yet paid. Prime World’s obligations under the Revolving Credit Facility is secured by promissory notes executed between Prime World and DBS at the time of each draw. The agreements for the Revolving Credit Facilit On November 29, 2018, Prime World entered into a Purchase and Sale Contract (the “Sale Contract”) and an Equipment Finance Agreement with Chailease Finance Co., Ltd. (“Chailease”) in connection with certain equipment. Pursuant to the Sale Contract, Prime World sold certain equipment to Chailease for a purchase price of NT$267,340,468, or approximately $8.7 million. Simultaneously, Prime World financed the equipment back from Chailease for a term of three-years , pursuant to the Equipment Finance Agreement. Prime World is obligated to pay an initial payment of NT$ On January 21, 2019, Prime World entered into a Second Purchase and Sale Contract (the “Second Sales Contract”), Promissory Note, and a second Equipment Finance Agreement with Chailease in connection with certain equipment. Pursuant to the Second Sales Contract, Prime World sold certain equipment to Chailease for a purchase price of NT$267,333,186, or approximately $8.7 million. Simultaneously, Prime World financed the equipment back from Chailease for a term of three-years , pursuant to the Second Equipment Finance Agreement. Prime World is obligated to pay an initial monthly payment of NT$67,333,186, or approximately $2.2 million, thereafter the monthly payments range from NT$5,570,167, or approximately $0.2 million to NT$6,082,131, or approximately $0.2 million. Based on the monthly payments made under the Second Equipment Finance Agreement, the annual interest rate is calculated to be 3.1%. Upon an event of default under the Second Equipment Finance Agreement, Prime World’s payment obligation will be secured by a promissory note to Chailease at the amount of NT$209,555,736 or approximately $6.8 million, subject to certain terms and conditions. The title of the equipment will be transferred to Prime World upon expiration of the Second Equipment Finance Agreement. As of September 30, 2019, $5.0 million was outstanding under the Second Equipment Finance Agreement. On December 11, 2018, Prime World entered into a one-year credit facility totaling New Taiwan Dollars 150 million, or approximately $4.9 million, (the “Credit Facility”) with CTBC Bank Co., Ltd. (“CTBC”). Borrowing under the Credit Facility will be used for short-term working capital. Prime World may draw upon the Credit Facility from December 11, 2018 until October 31, 2019. The term of each draw shall be up to 120 days. Under the Credit Facility borrowing in New Taiwan Dollars will bear interest at a rate equal to CTBC’s Enterprise Swap Index Rate plus 1.2%; for all foreign currency borrowing interest bear at a rate equal to CTBC’s Cost of Fund lending rate plus 1.2%. As of the execution of the Credit Facility, CTBC’s Enterprise Swap Index Rate and Cost of Funds lending rate is 0.69% and 3.40 % respectively. At the end of the draw term, Prime World is required to make payments for all principal and accrued interest. The Credit Facility contains representations and warranties, and events of default applicable to Prime World that are customary for agreements of this type. As of September 30, 2019, there was no outstanding balance under the Credit Facility. On April 11, 2019, Prime World entered into a one-year credit facility totaling NT$80 million, or approximately $2.6 million, (the “Far Eastern Credit Facility”) with Far Eastern International Bank Co., Ltd. (“Far Eastern”). Prime World may draw upon the Far Eastern Credit Facility from April 11, 2019 until April 11, 2020. The term of each draw shall be up to 180 days. Under the Far Eastern Credit Facility borrowing in New Taiwan Dollars will bear interest at a rate equal to Far Eastern’s published one-year fixed term time deposits rate, plus 0.655%; for all foreign currency borrowing, interest shall be the TAIFX3 rate for the length of time equal to the term of the loan or the next longer tenor for which rates are quoted, plus 0.7%. As of the execution of the Far Eastern Credit Facility, Far Eastern’s published one-year fixed term time deposits rate and TAIFX3 rate are 1.045 % and 2.75%, respectively. Prime World’s obligations under the Far Eastern Credit Facility will be secured by a promissory note executed between Prime World and Far Eastern. As of September 30, 2019, $0.6 million was outstanding under the Far Eastern Credit Facility. On September 21, 2018, the Company’s China subsidiary, Global, entered into a five-year revolving credit line agreement, totaling 129,000,000 Chinese Renminbi, or RMB, or approximately $18.6 million, (the “Credit Line”) and a Security Agreement with China Construction Bank Co., Ltd., in Ningbo, China (“CCB”). Borrowing under the Credit Line will be used for general corporate and capital investment purposes, including the issuance of bank acceptance notes to Global’s vendors. Global may draw upon the Credit Line between September 21, 2018 and September 17, 2023; however, the amount of available credit under the Credit Line may be reduced by CCB without notice to Global and may be decreased subject to changes of Chinese government regulations. Each draw bears interest equal to CCB’s commercial banking interest rate effective on the day of the applicable draw. Global’s obligations under the Credit Line is secured by real property owned by Global in China and mortgaged to CCB under the terms of the Security Agreement. On May 10, 2019, Global repaid the Credit Line without penalty and terminated the agreement. On September 26, 2019, $0.5 million of outstanding bank acceptance notes issued to vendors was fully repaid. On April 19, 2019, the Company’s China subsidiary, Global, entered into a twelve (12) month revolving line of credit agreement, totaling 60,000,000 RMB, or approximately $8.9 million, (the “China Merchants Credit Line”), with China Merchants Bank Co., Ltd., in Ningbo, China (“China Merchants”). The China Merchants Credit Line will be used by Global for general corporate purposes, including the issuance of bank acceptance notes to Global’s vendors. Global may draw upon the China Merchants Credit Line from April 19, 2019 until April 18, 2020 (the “Credit Period”). During the Credit Period, Global may request to draw upon the China Merchants Credit Line on an as-needed basis; however, the amount of available credit under the China Merchants Credit Line and the approval of each draw may be reduced or declined by China Merchants due to changes in Chinese government regulations and/or changes in Global’s financial and operational condition at the time of each requested draw. Each draw will bear interest equal to China Merchants’ commercial banking interest rate effective on the day of the applicable draw. Global’s obligations under the China Merchants Credit Line are unsecured. As of September 30, 2019, there was no outstanding balance under the China Merchants Credit Line and the outstanding balance of bank acceptance notes issued to vendors was $1.0 million. On April 30, 2019, the Company’s China subsidiary, Global, entered into a one-year credit facility totaling 9,900,000 RMB, or approximately $1.5 million, (the “SPD ¥9.9M Credit Facility”), with SPD. Borrowing under the SPD ¥9.9M Credit Facility will be used for short-term working capital. Global may draw upon the SPD ¥9.9M Credit Facility from April 30, 2019 until May 9, 2019. Borrowing under the SPD ¥9.9M Credit Facility will mature on April 30, 2020 and will bear interest equal to SPD’s published twelve (12) month prime loan rate in effect on the date of the draw, plus 0.2475%. Under the SPD ¥9.9M Credit Facility, Global will make monthly payments of accrued interest and the principal shall be repaid upon maturity. Global’s obligations under the SPD ¥9.9M Credit Facility are unsecured. The SPD ¥9.9M Credit Facility has been replaced by the SPD Credit Line on May 24, 2019. On May 7, 2019, the Company’s China subsidiary, Global, entered into a one-year credit facility totaling 30,000,000 RMB, or approximately $4.5 million, (the “SPD ¥30M Credit Facility”), with SPD. Borrowing under the SPD ¥30M Credit Facility will be used to repay Global’s outstanding loans with China Construction Bank. Borrowing under the SPD ¥30M Credit Facility will mature on May 7, 2020 and will bear interest equal to the Bank’s published twelve (12) month prime loan rate in effect on the date of the draw, plus 0.2475%. As of the execution of the Credit Facility agreement, the Bank’s published 12 months prime loan rate is 4.32%. Under the SPD ¥30M Credit Facility, Global will make monthly payments of accrued interest; principal shall be repaid upon maturity. Global’s obligations under the SPD ¥30M Credit Facility are unsecured. The SPD ¥30M Credit Facility has been replaced by the SPD Credit Line on May 24, 2019. On May 8, 2019, the Company’s China subsidiary, Global, entered into a six-month credit facility totaling 2,000,000 USD (the “$2M Credit Facility”) with SPD. Borrowing under the $2M Credit Facility will be used to repay Global’s outstanding loans with CCB and for general corporate purposes. Borrowing under the $2M Credit Facility will mature on November 7, 2019 and will bear interest equal to SPD’s published six (6) month LIBOR in effect on the date of the draw, plus 1.48%. As of the execution of the $2M Credit Facility agreement, the SPD published 6 months LIBOR rate was 2.59438%. Under the $2M Credit Facility, Global will make quarterly payments of accrued interest; principal shall be repaid upon maturity. Global’s obligations under the $2M Credit Facility are unsecured. The $2M Credit Facility also contains rights and obligations, representations and warranties, and events of default applicable to the Company that are customary for agreements of this type. The $2M Credit Facility has been replaced by the SPD Credit Line on May 24, 2019. On May 24, 2019, the Company’s China subsidiary, Global, entered into a five-year revolving credit line agreement, totaling 180,000,000 RMB (the “SPD Credit Line”), or approximately $25.4 million, and a mortgage security agreement (the “Security Agreement”), with SPD. Borrowing under the SPD Credit Line will be used for general corporate and capital investment purposes, including the issuance of bank acceptance notes to Global’s vendors. The total SPD Credit Line of 180 million RMB is inclusive of all credit facilities previously entered into with SPD including: a 30 million RMB credit facility entered into on May 7, 2019; and a 9.9 million RMB credit facility entered into on April 30, 2019. Global may draw upon the SPD Credit Line on an as-needed basis at any time during the 5-year term; however, draws under the SPD Credit Line may become due and repayable to SPD at SPD’s discretion due to changes in Chinese government regulations and/or changes in Global’s financial and operational condition. Each draw will bear interest equal to SPD’s commercial banking interest rate effective on the day of the applicable draw. Global’s obligations under the SPD Credit Line will be secured by real property owned by Global and mortgaged to the Bank under the terms of the Security Agreement. The agreements for the SPD Credit Line and the Security Agreement also contain rights and obligations, representations and warranties, and events of default applicable to the Company that are customary for agreements of this type. As of September 30, 2019, $7.6 million was outstanding under the SPD Credit Line and the outstanding balance of bank acceptance notes issued to vendors was $1.8 million. On June 21, 2019, the Company’s China subsidiary, Global, entered into a 18 month credit facility totaling 100,000,000 RMB (the “¥100M Credit Facility”), or approximately $14.1 million, with China Zheshang Bank Co., Ltd., in Ningbo City, China (“CZB”). Borrowing under the ¥100M Credit Facility will be used by Global for general corporate purposes. Global may draw upon the ¥100M Credit Facility from June 21, 2019 until January 4, 2021 (the “¥100M Credit Period”). During the ¥100M Credit Period, Global may request to draw upon the ¥100M Credit Facility on an as-needed basis; however, draws under the ¥100M Credit Facility may become due and repayable to CZB at CZB’s discretion due to changes in Chinese government regulations and/or changes in Global’s financial and operational condition. Each draw will bear interest equal to CZB’s commercial banking interest rate effective on the day of the applicable draw. Global’s obligations under the ¥100M Credit Facility will be secured by real property owned by Global and mortgaged to CZB under the terms of the Real Estate Security Agreement. The agreements for the ¥100M Credit Facility and the Real Estate Security Agreement also contain rights and obligations, representations and warranties, and events of default applicable to the Company that are customary for agreements of this type. On June 21, 2019, the Company’s China subsidiary, Global, entered into a three-year credit facility totaling 50,000,000 RMB (the “¥50M Credit Facility”), or approximately $7.1 million, with China Zheshang Bank Co., Ltd., in Ningbo City, China (“CZB”). Borrowing under the ¥50M Credit Facility will be used by Global for general corporate purposes. Global may draw upon the ¥50M Credit Facility from June 21, 2019 until June 20, 2022 (the “¥50M Credit Period”). During the ¥50M Credit Period, Global may request to draw upon the Credit Facility on an as-needed basis; however, draws under the ¥50M Credit Facility may become due and repayable to CZB at CZB’s discretion due to changes in Chinese government regulations and/or changes in Global’s financial and operational condition. Each draw will bear interest equal to CZB’s commercial banking interest rate effective on the day of the applicable draw. Global’s obligations under the ¥50M Credit Facility will be secured by machinery and equipment owned by Global and mortgaged to CZB under the terms of the Machinery and Equipment Security Agreement. The agreements for the ¥50M Credit Facility and the Machinery and Equipment Security Agreement also contain rights and obligations, representations and warranties, and events of default applicable to the Company that are customary for agreements of this type. As of September 30, 2019, $7.1 million was outstanding under the ¥50M Credit Facility and the outstanding balance of bank acceptance notes issued to vendors was $1.3 million. As of September 30, 2019 and December 31, 2018, the Company had $57.3 million and $69.4 million of unused borrowing capacity, respectively. One-month LIBOR rates were 2.0% and 2.5% at September 30, 2019 and December 31, 2018, respectively. As of September 30, 2019 and December 31, 2018, there was $1.3 million and $1.4 million of restricted cash, investments or security deposits associated with the loan facilities, respectively. |
Convertible Senior Notes
Convertible Senior Notes | 9 Months Ended |
Sep. 30, 2019 | |
Convertible Senior Notes | |
Convertible Senior Notes | Note 12. Convertible Senior Notes On March 5, 2019, the Company issued $80.5 million of 5% convertible senior notes due 2024 (the “Notes”). The Notes were issued pursuant to an indenture, dated as of March 5, 2019 (the “Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee, paying agent, and conversion agent (the “Trustee”). The Notes bear interest at a rate of 5.00% per year, payable in cash semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2019. The Notes will mature on March 15, 2024, unless earlier repurchased, redeemed or converted in accordance with their terms. The sale of the Notes generated net proceeds of $76.4 million, after deducting the Initial Purchasers’ discounts and offering expenses payable by the Company. The Company used approximately $37.8 million of the net proceeds from the offering to fully repay the CapEx Loan and Term Loan with BB&T and the remainder will be used for general corporate purposes. The following table presents the carrying value of the Notes for the periods indicated (in thousands): September 30, December 31, 2019 2018 Principal $ 80,500 $ — Unamortized debt issuance costs (3,665) — Net carrying amount $ 76,835 $ — The Notes are convertible at the option of holders of the Notes at any time until the close of business on the scheduled trading day immediately preceding the maturity date. Upon conversion, holders of the Notes will receive shares of the Company’s common stock, together, if applicable, with cash in lieu of any fractional share, at the then-applicable conversion rate. The initial conversion rate is 56.9801 shares of the Company’s common stock per $1,000 principal amount of Notes (representing an initial conversion price of approximately $17.55 per share of common stock, which represents an initial conversion premium of approximately 30% above the closing price of $13.50 per share of the Company’s common stock on February 28, 2019), subject to customary adjustments. If a make-whole fundamental change (as defined in the Indenture) occurs, and in connection with certain other conversions before March 15, 2022, the Company will in certain circumstances increase the conversion rate for a specified period of time. Initially there are no guarantors of the Notes, but the Notes will be fully and unconditionally guaranteed, on a senior, unsecured basis by certain of the Company’s future domestic subsidiaries. The Notes are the Company’s senior, unsecured obligations and are equal in right of payment with existing and future senior, unsecured indebtedness, senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Notes and effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness. The Note Guarantee (as defined in the Indenture) of each future guarantor, if any, will be such guarantor’s senior, unsecured obligations and are equal in right of payment with existing and future senior, unsecured indebtedness, senior in right of payment to such future guarantor’s existing and future indebtedness that is expressly subordinated to the Notes and effectively subordinated to such future guarantor’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness. Holders may require the Company to repurchase their Notes upon the occurrence of a fundamental change (as defined in the Indenture) at a cash purchase price equal to the principal amount thereof plus accrued and unpaid interest, if any. The Company may not redeem the Notes prior to March 15, 2022. On or after March 15, 2022, the Company may redeem for cash all or part of the Notes if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such redemption notice. The redemption price is equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. In addition, calling any Note for redemption will constitute a “make-whole fundamental change” with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. The Indenture contains covenants that limit the Company’s ability and the ability of our subsidiaries to, among other things: (i) incur or guarantee additional indebtedness or issue disqualified stock; and (ii) create or incur liens. The Company incurred approximately $4.1 million in transaction costs in connection with the issuance of the Notes. These costs were recognized as a reduction of the carrying amount of the Notes utilizing the effective interest method and are being amortized over the term of the notes. The following table sets forth interest expense information related to the Notes (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Contractual interest expense 984 — 2,270 — Amortization of debt issuance costs 207 — 473 — Total interest cost $ 1,191 $ — $ 2,743 $ — Effective interest rate 5.1% 0% 5.1% 0% |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Accrued Liabilities | |
Accrued Liabilities | Note 13. Accrued Liabilities Accrued liabilities consisted of the following for the periods indicated (in thousands): September 30, 2019 December 31, 2018 Accrued payroll $ 9,177 $ 10,772 Accrued rent — 1,200 Accrued employee benefits 2,312 2,862 Accrued state and local taxes 971 1,088 Accrued interest 197 163 Advance payments 279 426 Accrued product warranty 799 995 Accrued commission expenses 434 398 Accrued professional fees 336 315 Accrued capital expenditures 458 371 Accrued other 579 701 Total accrued liabilities $ 15,542 $ 19,291 |
Other Income and Expense
Other Income and Expense | 9 Months Ended |
Sep. 30, 2019 | |
Other Income and Expense. | |
Other Income and Expense | Note 14. Other Income and Expense Other income and (expense) consisted of the following for the periods indicated (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Foreign exchange transaction gain 322 549 305 798 Government subsidy income 1,138 202 1,360 471 Other non-operating (loss) gain (14) 15 87 46 Gain (loss) on disposal of assets — — (10) 5 Total other income, net $ 1,446 $ 766 $ 1,742 $ 1,320 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-Based Compensation | |
Share-Based Compensation | Note 15. Share-Based Compensation Equity Plans The Company’s board of directors and stockholders approved the following equity plans: ● the 1998 Share Incentive Plan ● the 2000 Share Incentive Plan ● the 2004 Share Incentive Plan ● the 2006 Share Incentive Plan ● the 2013 Equity Incentive Plan (“2013 Plan”) The Company issued stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) to employees, consultants and non-employee directors. Stock option awards generally vest over a four year period and have a maximum term of ten years. Stock options under these plans have been granted with an exercise price equal to the fair market value on the date of the grant. Nonqualified and Incentive Stock Options, RSAs and RSUs may be granted from these plans. Prior to the Company’s initial public offering in September 2013, the fair market value of the Company’s stock had been historically determined by the board of directors and from time to time with the assistance of third party valuation specialists. Stock Options Options have been granted to the Company’s employees under the five incentive plans and generally become exercisable as to 25% of the shares on the first anniversary date following the date of grant and 12.5% on a semi-annual basis thereafter. All options expire ten years after the date of grant. The following is a summary of option activity (in thousands, except per share data): Weighted Weighted Weighted Average Average Average Share Price Weighted Remaining Aggregate Number of Exercise on Date of Average Contractual Intrinsic shares Price Exercise Fair Value Life Value (in thousands, except price data) Outstanding, January 1, 2019 287 $ 10.19 $ 5.31 $ 1,503 Exercised (1) 6.60 $ 12.91 3.95 8 Forfeited (1) 11.35 5.50 1 Outstanding, September 30, 2019 285 $ 10.20 $ 5.31 3.87 431 Exercisable, September 30, 2019 285 $ 10.20 3.87 431 Vested and expected to vest 285 $ 10.20 3.87 $ 431 As of September 30, 2019, there was no unrecognized stock option expense. Restricted Stock Units/Awards The following is a summary of RSU/RSA activity (in thousands, except per share data): Weighted Average Share Weighted Aggregate Number of Price on Date Average Fair Intrinsic shares of Release Value Value (in thousands, except price data) Outstanding at January 1, 2019 826 $ 32.07 $ 12,744 Granted 431 13.42 5,787 Released (345) $ 12.68 26.69 4,378 Cancelled/Forfeited (37) 26.64 415 Outstanding, September 30, 2019 875 25.22 9,819 Vested and expected to vest 875 $ 25.22 $ 9,819 As of September 30, 2019, there was $19.9 million of unrecognized compensation expense related to these RSUs and RSAs. This expense is expected to be recognized over 2.1 years. Share-Based Compensation Employee share-based compensation expenses recognized for the periods indicated (in thousands): Three months ended Nine months ended September 30, September 30, 2019 2018 2019 2018 Share-based compensation - by expense type Cost of goods sold $ 196 $ 205 $ 584 $ 593 Research and development 647 624 1,943 1,876 Sales and marketing 275 181 824 669 General and administrative 1,860 1,884 5,588 5,224 Total share-based compensation expense $ 2,978 $ 2,894 $ 8,939 $ 8,362 Three months ended Nine months ended September 30, September 30, 2019 2018 2019 2018 Share-based compensation - by award type Employee stock options $ — $ 12 $ — $ 12 Restricted stock units 2,978 2,882 8,939 8,350 Total share-based compensation expense $ 2,978 $ 2,894 $ 8,939 $ 8,362 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes | |
Income Taxes | Note 16. Income Taxes The Company’s tax provision or benefit from income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. The Company’s quarterly tax provision, and its quarterly estimate of its annual effective tax rate, are subject to significant variation due to several factors, including variability in accurately predicting its pre-tax income and loss and the mix of jurisdictions to which they relate, tax law developments and relative changes in permanent tax benefits or expenses. The Company’s effective tax rate for the three months ended September 30, 2019 and 2018 was 17.6% and 58.7%, respectively. For the three months ended September 30, 2019, the effective tax rate varied from the federal statutory rate of 21% primarily due to the level and mix of earnings among tax jurisdictions, share-based compensation, and tax benefits related to research and development. For the three months ended September 30, 2018, the effective tax rate varied from the federal statutory rate of 21% primarily due to the level and mix of earnings among tax jurisdictions, share-based compensation, tax benefits related to research and development and recognition of the U.S. global intangible low-taxed income ("GILTI"). The Company’s effective tax rate for the nine months ended September 30, 2019 and 2018 was 19.9% and (164.5%) respectively. For the nine months ended September 30, 2019, the effective tax rate varied from the federal statutory rate of 21% primarily due to the level and mix of earnings among tax jurisdictions, share-based compensation, and tax benefits related to research and development. For the nine months ended September 30, 2018, the effective tax rate varied from the federal statutory rate of 21% primarily due to the level and mix of earnings among tax jurisdictions, share-based compensation, tax benefits related to research and development, recognition of the U.S. GILTI and an overall net tax benefit from certain tax reform measurement-period adjustments. As of September 30, 2019, the Company has accumulated undistributed earnings generated by its foreign subsidiaries of approximately $26 million. Because $26 million of such earnings have previously been subject to the one-time transition tax on foreign earnings required by the Tax Cut of Jobs Act of 2017 (the “Tax Act”), any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of its foreign investments would generally be limited to foreign and state taxes. The Company intends, however, to indefinitely reinvest these earnings and expects future U.S. cash generation to be sufficient to meet future U.S. cash needs. |
Geographic Information
Geographic Information | 9 Months Ended |
Sep. 30, 2019 | |
Geographic Information | |
Geographic Information | Note 17. Geographic Information The Company operates in one reportable segment. The Company’s Chief Executive Officer, who is considered to be the chief operating decision maker, manages the Company’s operations as a whole and reviews financial information presented on a consolidated basis, accompanied by information about product revenue, for purposes of evaluating financial performance and allocating resources. The following tables set forth the Company’s revenue and asset information by geographic region. Revenue is classified based on the location of where the product is manufactured. Long-lived assets in the tables below comprise only property, plant, equipment and intangible assets (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Revenues: United States $ 2,898 $ 2,927 $ 6,547 $ 10,258 Taiwan 28,390 29,883 74,519 92,056 China 14,796 23,576 61,148 107,133 $ 46,084 $ 56,386 $ 142,214 $ 209,447 As of the period ended September 30, December 31, 2019 2018 Long-lived assets: United States $ 94,420 $ 88,815 Taiwan 65,008 65,451 China 95,730 89,736 $ 255,158 $ 244,002 |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Contingencies | |
Contingencies | Note 18. Contingencies Litigation Overview From time to time, the Company may be subject to legal proceedings and litigation arising in the ordinary course of business, including, but not limited to, inquiries, investigations, audits and other regulatory proceedings, such as described below. The Company records a loss provision when it believes it is both probable that a liability has been incurred and the amount can be reasonably estimated. Unless otherwise disclosed, the Company is unable to estimate the possible loss or range of loss for the legal proceeding described below. Except for the lawsuits described below, the Company believes that there are no claims or actions pending or threatened against it, the ultimate disposition of which would have a material adverse effect on it. Class Action and Shareholder Derivative Litigation On August 5, 2017, a lawsuit was filed in the U.S. District Court for the Southern District of Texas against the Company and two of its officers in Mona Abouzied v. Applied Optoelectronics, Inc., Chih-Hsiang (Thompson) Lin, and Stefan J. Murry, et al. case as a class action pursuant to Federal Rule of Civil Procedure 23 and seeking appointment of Plaintiffs as class representatives and Levi & Korsinsky as class counsel. On July 12, 2019, the Company filed a response in opposition to the motion for class certification, and on August 26, 2019, Plaintiffs filed their Reply Brief. The Court has not yet ruled on the pending motion for class certification. The case is currently in the discovery phase, and fact discovery is scheduled to be completed by June 1, 2020. At this stage, we are not yet able to determine the likelihood of loss, if any, arising from this matter. On August 7, 2018, Plaintiff Lei Jin filed a purported derivative action on behalf of nominal defendant Applied Optoelectronics, Inc. in the U.S. District Court for the Southern District of Texas against the Company’s chief executive officer, chief financial officer and board of directors (Case No. 4:18-cv-02713). This case was consolidated with a later filed derivative lawsuit filed by Plaintiff Yiu Kwong Ng in the U.S. District Court for the Southern District of Texas (Case No. 4:18-cv-4751). The allegations in the consolidated derivative complaints are substantially similar to those underlying the Abouzied Taneja Taneja On October 1, 2018, a lawsuit was filed in the U.S. District Court for the Southern District of Texas against the Company and two of its officers in Gaurav Taneja v. Applied Optoelectronics, Inc., Thompson Lin, and Stefan Murry Davin Pokoik v. Applied Optoelectronics, Inc., Chih-Hsiang Lin, and Stefan J. Murry Stephen McGrath v. Applied Optoelectronics, Inc., Chih-Hsiang Lin, and Stefan J. Murry Books and Records Request On April 10, 2019, stockholder David Bono filed a complaint in the Delaware Court of Chancery against the Company seeking to inspect certain corporate books and records pursuant to Section 220 of the Delaware General Corporation Law. The lawsuit is styled David Bono v. Applied Optoelectronics, Inc. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events. | |
Subsequent Events | Note 19. Subsequent Events The Company has evaluated subsequent events through the date the financial statements were available to be issued. On October 24, 2019, the Company filed a new universal shelf Registration Statement on Form S-3 with the SEC. Once the new S-3 filed on October 24, 2019 is declared effective by the SEC, it will replace its Form S-3 Registration Statement which was filed with the SEC on October 17, 2016 and declared effective on November 1, 2016. Pursuant to the new S-3 registration statement, the Company will have the ability to sell certain securities of the Company in one or more public offerings up to an aggregate public offering price of |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Significant Accounting Policies | |
Business Overview | Business Overview Applied Optoelectronics, Inc. (“AOI” or the “Company”) is a Delaware corporation. The Company is a leading, vertically integrated provider of fiber-optic networking products, primarily for four networking end-markets: internet data center, cable television, telecommunications and fiber-to-the-home. The Company designs and manufactures a wide range of optical communications products at varying levels of integration, from components, subassemblies and modules to complete turn-key equipment. The Company has manufacturing and research and development facilities located in the U.S., Taiwan and China. In the U.S., at its corporate headquarters and manufacturing facilities in Sugar Land, Texas, the Company primarily manufactures lasers and laser components and performs research and development activities for laser component and optical module products. In addition, the Company also has a research and development facility in Duluth, Georgia. The Company operates in Taipei, Taiwan and Ningbo, China through its wholly-owned subsidiary Prime World International Holdings, Ltd. (“Prime World”, incorporated in the British Virgin Islands). Prime World operates a branch in Taipei, Taiwan, which primarily manufactures transceivers and performs research and development activities for the transceiver products. Prime World is also the parent of Global Technology, Inc. (“Global”, incorporated in the People’s Republic of China). Through Global, the Company primarily manufactures certain of its data center transceiver products, including subassemblies, as well as Cable TV Broadband (“CATV”) systems and equipment, and performs research and development activities for the CATV products. |
Interim Financial Statements | Interim Financial Statements The unaudited condensed consolidated financial statements of the Company as of September 30, 2019 and December 31, 2018 and for the three and nine months ended September 30, 2019 and September 30, 2018, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim information and with the instructions on Form 10-Q and Rule 10-01 of Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In accordance with those rules and regulations, the Company has omitted certain information and notes required by GAAP for annual consolidated financial statements. In the opinion of management, the condensed consolidated financial statements contain all adjustments, except as otherwise noted, necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented. The year-end condensed balance sheet data was derived from audited financial statements. These condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K (“Annual Report”) for the fiscal year ended December 31, 2018. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results expected for the entire fiscal year. All significant intercompany accounts and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates in the consolidated financial statements and accompanying notes. Significant estimates and assumptions that impact these financial statements and the accompanying notes relate to, among other things, allowance for doubtful accounts, inventory reserve, product warranty costs, share-based compensation expense, estimated useful lives of property and equipment, and taxes. |
Revenue Recognition | The adoption of Topic 606 represents a change in accounting principle that will provide financial statement readers with enhanced revenue recognition disclosures. In accordance with Topic 606, revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally, this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. Certain customers may receive cash and/or non-cash incentives, which are accounted for as variable consideration. To achieve this core principle, the Company applies the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to performance obligations in the contract; and (v) recognize revenue when or as the Company satisfies a performance obligation. The Company generally satisfies performance obligations at a point in time. Revenue is recognized based on the transaction price at the time the related performance obligation is satisfied by transferring a promised product or service to a customer. Disaggregation of Revenue Revenue is classified based on the location of where the product is manufactured. For additional information on the disaggregated revenues by geographical region, see Note 17, "Geographic Information.” |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted in 2019 On February 25, 2016, the FASB released Accounting Standards Update (ASU) No. 2016-02, Leases, to complete its project to overhaul lease accounting. The ASU codifies ASC 842, Leases, which will replace the guidance in ASC 840. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. The Company adopted this ASU on January 1, 2019 without any impact to beginning retained earnings. Upon adoption of the new lease standard, the Company elected the package of practical expedients which allowed it to carry forward the historical lease classification on existing leases at adoption. In addition, the Company elected the short-term lease recognition exemption for all leases that qualify. The Company also elected the practical expedient to not separate lease and non-lease components for all of its leases. The Company has implemented internal controls to enable the presentation of financial information on adoption. The standard has a material impact on the Company’s consolidated balance sheet, but did not have an impact in its consolidated income statements. The most significant effects of adopting the new standard relate to the recognition of new ROU assets and lease liabilities on its balance sheet for its Taiwan branch. See Note 4, "Operating Leases" for additional information on the required disclosures related to the impact of adopting this standard. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The Company adopted this ASU on January 1, 2019 with no impact on its consolidated financial statements. Recent Accounting Pronouncements Yet to be Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments, which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings. The new standard is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Based on the composition of the Company’s investment portfolio, current market conditions, and historical credit loss activity, the adoption of ASU 2016-13 is not expected to have a material impact on its consolidated financial statements. |
Earnings Per Share | Basic net income (loss) per share has been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share has been computed using the weighted-average number of shares of common stock and dilutive potential common shares from stock options, restricted stock units and senior convertible notes outstanding during the period. In periods with net losses, normally dilutive shares become anti-dilutive. Therefore, basic and diluted earnings per share are the same. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition | |
Schedule of revenue classified by major product category | Revenue is also classified by major product category and is presented below (in thousands): Three months ended September 30, % of % of 2019 Revenue 2018 Revenue Data Center $ 34,006 73.8% $ 38,954 69.1% CATV 8,797 19.1% 14,295 25.4% Telecom 2,868 6.2% 2,656 4.7% FTTH 39 0.1% 221 0.4% Other 374 0.8% 260 0.5% Total Revenue $ 46,084 100.0% $ 56,386 100.0% Nine months ended September 30, % of % of 2019 Revenue 2018 Revenue Data Center $ 104,311 73.3% $ 158,577 75.7% CATV 30,577 21.5% 39,047 18.6% Telecom 6,236 4.4% 10,399 5.0% FTTH 149 0.1% 498 0.2% Other 941 0.7% 926 0.4% Total Revenue $ 142,214 100.0% $ 209,447 100.0% |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Operating Leases | |
Summary of components of lease expense | The Components of lease expense were as follows for the periods indicated (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2019 Operating lease expense $ 287 $ 929 Short Term lease expense 20 100 Total lease expense $ 307 $ 1,029 |
Summary of maturities of our lease liabilities for all operating leases | Maturities of lease liabilities are as follows for the future one-year periods ending September 30, (in thousands): 2020 $ 1,231 2021 1,136 2022 1,077 2023 1,055 2024 1,061 2025 and thereafter 5,169 Total lease payments $ 10,729 Less imputed interest (1,843) Present value $ 8,886 |
Summary of weighted average remaining lease terms and discount rates | September 30, 2019 Weighted Average Remaining Lease Term (Years) 9.46 Weighted Average Discount Rate 3.13% |
Summary of cash flow information | Supplemental cash flow information related to operating leases was as follows for the periods indicated (in thousands): Nine months ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases 1,002 Operating cash flows from financing lease — Financing cash flows from financing lease — Right-of-use assets obtained in exchange for new operating lease liabilities 39 Right-of-use assets obtained in exchange for new finance lease liabilities — |
Cash, Cash Equivalents and Re_2
Cash, Cash Equivalents and Restricted Cash (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Cash, Cash Equivalents and Restricted Cash | |
Schedule of cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statement of financial position that sum to the total of the same such amounts in the statement of cash flows (in thousands): September 30, December 31, 2019 2018 Cash and cash equivalents $ 69,994 $ 55,646 Restricted cash 2,382 2,358 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 72,376 $ 58,004 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share | |
Schedule of Computation basic and diluted net loss per share | The following table sets forth the computation of the basic and diluted net income (loss) per share for the periods indicated (in thousands, except per share amounts): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Numerator: Net income (loss) $ (8,780) $ (3,732) $ (30,620) $ 6,422 Denominator: Weighted average shares used to compute net income (loss) per share Basic 20,023 19,707 19,940 19,597 Effect of dilutive options and restricted stock units — — — 442 Diluted 20,023 19,707 19,940 20,039 Net income (loss) per share Basic $ (0.44) $ (0.19) $ (1.54) $ 0.33 Diluted $ (0.44) $ (0.19) $ (1.54) $ 0.32 |
Schedule of potentially dilutive securities | The following potentially dilutive securities were excluded from the diluted net income (loss) per share as their effect would have been antidilutive (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Employee stock options 16 247 50 — Restricted stock units 19 231 — — Shares for convertible senior notes 4,587 — 4,587 — Total antidilutive shares 4,622 478 4,637 — |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventories | |
Schedule of inventories | Inventories, net of inventory write-downs, consist of the following for the periods indicated (in thousands): September 30, 2019 December 31, 2018 Raw materials $ 22,392 $ 30,214 Work in process and sub-assemblies 51,089 49,192 Finished goods 8,637 13,850 Total inventories $ 82,118 $ 93,256 |
Property, Plant & Equipment (Ta
Property, Plant & Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant & Equipment | |
Schedule of property, plant and equipment | Property, plant and equipment consisted of the following for the periods indicated (in thousands): September 30, 2019 December 31, 2018 Land improvements $ 806 $ 806 Building and improvements 82,543 80,960 Machinery and equipment 231,976 214,718 Furniture and fixtures 5,047 5,043 Computer equipment and software 10,041 9,709 Transportation equipment 644 658 331,057 311,894 Less accumulated depreciation and amortization (110,499) (95,233) 220,558 216,661 Construction in progress 23,876 16,449 Land 1,101 1,101 Total property, plant and equipment, net $ 245,535 $ 234,211 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Intangible Assets, net | |
Intangible Assets, net | Intangible assets consisted of the following for the periods indicated (in thousands): September 30, 2019 Gross Accumulated Intangible Amount amortization assets, net Patents $ 7,472 $ (3,403) $ 4,069 Trademarks 16 (13) 3 Total intangible assets $ 7,488 $ (3,416) $ 4,072 December 31, 2018 Gross Accumulated Intangible Amount amortization assets, net Patents $ 6,983 $ (3,008) $ 3,975 Trademarks 15 (13) 2 Total intangible assets $ 6,998 $ (3,021) $ 3,977 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments | |
Schedule of assets and liabilities at fair value | The following table represents a summary of the Company’s financial instruments measured at fair value on a recurring basis for the periods indicated (in thousands): As of September 30, 2019 As of December 31, 2018 (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents $ 69,994 $ — $ — $ 69,994 $ 55,646 $ — $ — $ 55,646 Restricted cash 2,382 — — 2,382 2,358 — — 2,358 Total assets $ 72,376 $ — $ — $ 72,376 $ 58,004 $ — $ — $ 58,004 Liabilities: Bank acceptance payable — $ 4,080 — $ 4,080 — $ 4,628 — $ 4,628 Convertible senior notes — 75,131 — 75,131 — — — — Total liabilities $ — $ 79,211 $ — $ 79,211 $ — $ 4,628 $ — $ 4,628 |
Notes Payable and Long-Term D_2
Notes Payable and Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Notes Payable and Long-Term Debt | |
Schedule of notes payable and long-term debt | Notes payable and long-term debt consisted of the following for the periods indicated (in thousands): September 30, 2019 December 31, 2018 Revolving line of credit with a U.S. bank up to $25,000 with interest at LIBOR plus 1.5%, maturing April 2, 2021 $ 20,000 $ 23,104 Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.15%, maturing April 1, 2024 — 20,067 Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.3%, maturing between April 1, 2023 and December 18, 2023 — 19,164 Revolving line of credit with a Taiwan bank up to $3,222 with 2.2% interest, maturing July 31, 2020 3,222 3,256 Revolving line of credit with a Taiwan bank up to $7,000 with interest ranging from 1.5% to 3.5%, matured July 26, 2019 — 3,550 Notes payable to a finance company due in monthly installments with 3.4% interest, maturing November 30, 2021 4,653 6,331 Notes payable to a finance company due in monthly installments with 3.1% interest, maturing January 21, 2022 5,012 — Revolving line of credit with a Taiwan bank up to $2,576 with interest of 1.7%, maturing December 11, 2019 644 — Revolving line of credit with a China bank up to $19,158 with interest ranging from 4.1% to 4.6% — 8,652 Revolving line of credit with a China bank up to $25,449 with interest of 4.57%, maturing May 24, 2024 7,641 — Credit facility with a China bank up to $7,069 with interest of 5.7%, maturing June 20, 2022 7,069 — Sub-total 48,241 84,124 Less debt issuance costs, net (65) (207) Grand total 48,176 83,917 Less current portion (15,803) (23,589) Non-current portion $ 32,373 $ 60,328 Bank Acceptance Notes Payable Bank acceptance notes issued to vendors with a zero percent interest rate $ 4,080 $ 4,628 |
Maturities of notes payable and long-term debt | Maturities of long-term debt are as follows for the future one-year periods ending September 30, (in thousands): 2020 $ 15,803 2021 24,230 2022 8,143 2023 — 2024 — 2025 and thereafter — Total outstanding $ 48,176 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Convertible Senior Notes | |
Schedule of carrying value of the Convertible Senior Notes | The following table presents the carrying value of the Notes for the periods indicated (in thousands): September 30, December 31, 2019 2018 Principal $ 80,500 $ — Unamortized debt issuance costs (3,665) — Net carrying amount $ 76,835 $ — |
Schedule of interest expense | The following table sets forth interest expense information related to the Notes (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Contractual interest expense 984 — 2,270 — Amortization of debt issuance costs 207 — 473 — Total interest cost $ 1,191 $ — $ 2,743 $ — Effective interest rate 5.1% 0% 5.1% 0% |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accrued Liabilities | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following for the periods indicated (in thousands): September 30, 2019 December 31, 2018 Accrued payroll $ 9,177 $ 10,772 Accrued rent — 1,200 Accrued employee benefits 2,312 2,862 Accrued state and local taxes 971 1,088 Accrued interest 197 163 Advance payments 279 426 Accrued product warranty 799 995 Accrued commission expenses 434 398 Accrued professional fees 336 315 Accrued capital expenditures 458 371 Accrued other 579 701 Total accrued liabilities $ 15,542 $ 19,291 |
Other Income and Expense (Table
Other Income and Expense (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other Income and Expense. | |
Schedule of other income and expense | Other income and (expense) consisted of the following for the periods indicated (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Foreign exchange transaction gain 322 549 305 798 Government subsidy income 1,138 202 1,360 471 Other non-operating (loss) gain (14) 15 87 46 Gain (loss) on disposal of assets — — (10) 5 Total other income, net $ 1,446 $ 766 $ 1,742 $ 1,320 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-Based Compensation | |
Summary of option activity | The following is a summary of option activity (in thousands, except per share data): Weighted Weighted Weighted Average Average Average Share Price Weighted Remaining Aggregate Number of Exercise on Date of Average Contractual Intrinsic shares Price Exercise Fair Value Life Value (in thousands, except price data) Outstanding, January 1, 2019 287 $ 10.19 $ 5.31 $ 1,503 Exercised (1) 6.60 $ 12.91 3.95 8 Forfeited (1) 11.35 5.50 1 Outstanding, September 30, 2019 285 $ 10.20 $ 5.31 3.87 431 Exercisable, September 30, 2019 285 $ 10.20 3.87 431 Vested and expected to vest 285 $ 10.20 3.87 $ 431 |
Summary of RSU/RSA activity | The following is a summary of RSU/RSA activity (in thousands, except per share data): Weighted Average Share Weighted Aggregate Number of Price on Date Average Fair Intrinsic shares of Release Value Value (in thousands, except price data) Outstanding at January 1, 2019 826 $ 32.07 $ 12,744 Granted 431 13.42 5,787 Released (345) $ 12.68 26.69 4,378 Cancelled/Forfeited (37) 26.64 415 Outstanding, September 30, 2019 875 25.22 9,819 Vested and expected to vest 875 $ 25.22 $ 9,819 |
Schedule of employee stock-based compensation expenses | Employee share-based compensation expenses recognized for the periods indicated (in thousands): Three months ended Nine months ended September 30, September 30, 2019 2018 2019 2018 Share-based compensation - by expense type Cost of goods sold $ 196 $ 205 $ 584 $ 593 Research and development 647 624 1,943 1,876 Sales and marketing 275 181 824 669 General and administrative 1,860 1,884 5,588 5,224 Total share-based compensation expense $ 2,978 $ 2,894 $ 8,939 $ 8,362 Three months ended Nine months ended September 30, September 30, 2019 2018 2019 2018 Share-based compensation - by award type Employee stock options $ — $ 12 $ — $ 12 Restricted stock units 2,978 2,882 8,939 8,350 Total share-based compensation expense $ 2,978 $ 2,894 $ 8,939 $ 8,362 |
Geographic Information (Tables)
Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Geographic Information | |
Revenue information by geographic region | The following tables set forth the Company’s revenue and asset information by geographic region. Revenue is classified based on the location of where the product is manufactured. Long-lived assets in the tables below comprise only property, plant, equipment and intangible assets (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Revenues: United States $ 2,898 $ 2,927 $ 6,547 $ 10,258 Taiwan 28,390 29,883 74,519 92,056 China 14,796 23,576 61,148 107,133 $ 46,084 $ 56,386 $ 142,214 $ 209,447 |
Long-lived assets by geographic region | The following tables set forth the Company’s revenue and asset information by geographic region. Revenue is classified based on the location of where the product is manufactured. Long-lived assets in the tables below comprise only property, plant, equipment and intangible assets (in thousands): As of the period ended September 30, December 31, 2019 2018 Long-lived assets: United States $ 94,420 $ 88,815 Taiwan 65,008 65,451 China 95,730 89,736 $ 255,158 $ 244,002 |
Description of Business (Detail
Description of Business (Details) | Sep. 30, 2019item |
Description of Business. | |
Number of networking end markets | 4 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Significant Accounting Policies | |
Lease, Practical Expedients, Package [true false] | true |
Lease, Practical Expedient, Lessor Single Lease Component [true false] | true |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue | ||||
Revenues | $ 46,084 | $ 56,386 | $ 142,214 | $ 209,447 |
Percentage of Revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Data Center | ||||
Disaggregation of Revenue | ||||
Revenues | $ 34,006 | $ 38,954 | $ 104,311 | $ 158,577 |
Percentage of Revenue | 73.80% | 69.10% | 73.30% | 75.70% |
CATV | ||||
Disaggregation of Revenue | ||||
Revenues | $ 8,797 | $ 14,295 | $ 30,577 | $ 39,047 |
Percentage of Revenue | 19.10% | 25.40% | 21.50% | 18.60% |
Telecom | ||||
Disaggregation of Revenue | ||||
Revenues | $ 2,868 | $ 2,656 | $ 6,236 | $ 10,399 |
Percentage of Revenue | 6.20% | 4.70% | 4.40% | 5.00% |
FTTH | ||||
Disaggregation of Revenue | ||||
Revenues | $ 39 | $ 221 | $ 149 | $ 498 |
Percentage of Revenue | 0.10% | 0.40% | 0.10% | 0.20% |
Other | ||||
Disaggregation of Revenue | ||||
Revenues | $ 374 | $ 260 | $ 941 | $ 926 |
Percentage of Revenue | 0.80% | 0.50% | 0.70% | 0.40% |
Before Topic 606 | ||||
Disaggregation of Revenue | ||||
Revenues | $ 56,386 | $ 209,447 |
Operating Leases - Lease Expens
Operating Leases - Lease Expense (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Operating Leases | ||
Options to renew | true | |
Lease, Practical Expedients, Package [true false] | true | |
Lease, Practical Expedient, Lessor Single Lease Component [true false] | true | true |
Components of lease expense | ||
Operating lease expense | $ 287 | $ 929 |
Short Term lease expense | 20 | 100 |
Total lease expense | $ 307 | $ 1,029 |
Operating Leases - Maturities o
Operating Leases - Maturities of lease liabilities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Leases | |
2020 | $ 1,231 |
2021 | 1,136 |
2022 | 1,077 |
2023 | 1,055 |
2024 | 1,061 |
2025 and thereafter | 5,169 |
Total lease payments | 10,729 |
Less imputed interest | (1,843) |
Present value | $ 8,886 |
Operating Leases - Weighted Ave
Operating Leases - Weighted Average (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Weighted Average Remaining Lease Term And Discount Rate For Operating Leases Abstract | |
Weighted Average Remaining Lease Term (Years) | 9 years 5 months 15 days |
Weighted Average Discount Rate | 3.13% |
Supplemental Cash Flow Information Related To Operating Leases Abstract | |
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases | $ 1,002 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 39 |
Cash, Cash Equivalents and Re_3
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Cash, Cash Equivalents and Restricted Cash | ||||
Cash and cash equivalents | $ 69,994 | $ 55,646 | ||
Restricted Cash | 2,382 | 2,358 | ||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 72,376 | $ 58,004 | $ 58,075 | $ 83,948 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||
Net income (loss) | $ (8,780) | $ (3,732) | $ (30,620) | $ 6,422 |
Weighted average shares used to compute net income (loss) per share | ||||
Basic | 20,022,520 | 19,707,036 | 19,939,605 | 19,597,181 |
Effect of dilutive options and restricted stock units | 442,000 | |||
Diluted | 20,022,520 | 19,707,036 | 19,939,605 | 20,038,657 |
Net income (loss) per share | ||||
Basic | $ (0.44) | $ (0.19) | $ (1.54) | $ 0.33 |
Diluted | $ (0.44) | $ (0.19) | $ (1.54) | $ 0.32 |
Earnings Per Share - Potentiall
Earnings Per Share - Potentially Dilutive Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | |
Potentially dilutive securities excluded from EPS | 4,622 | 478 | 4,637 |
Employee stock options | |||
Potentially dilutive securities excluded from EPS | 16 | 247 | 50 |
Restricted stock units | |||
Potentially dilutive securities excluded from EPS | 19 | 231 | |
Shares for convertible senior notes | |||
Potentially dilutive securities excluded from EPS | 4,587 | 4,587 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventories | ||
Raw materials | $ 22,392 | $ 30,214 |
Work in process and sub-assemblies | 51,089 | 49,192 |
Finished goods | 8,637 | 13,850 |
Total inventories | $ 82,118 | $ 93,256 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Inventories | ||||
Lower of cost or market reserve adjustment for inventory | $ 1,400 | $ 3,200 | $ 6,615 | $ 5,546 |
Property, Plant & Equipment (De
Property, Plant & Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Property, plant and equipment, gross | $ 331,057 | $ 311,894 |
Less accumulated depreciation and amortization | (110,499) | (95,233) |
Property, plant and equipment after accumulated depreciation and amortization, excluding construction in progress and land | 220,558 | 216,661 |
Construction in progress | 23,876 | 16,449 |
Land | 1,101 | 1,101 |
Total property, plant and equipment, net | 245,535 | 234,211 |
Land improvements | ||
Property, plant and equipment, gross | 806 | 806 |
Building and improvements | ||
Property, plant and equipment, gross | 82,543 | 80,960 |
Machinery and equipment | ||
Property, plant and equipment, gross | 231,976 | 214,718 |
Furniture and fixtures | ||
Property, plant and equipment, gross | 5,047 | 5,043 |
Computer equipment and software | ||
Property, plant and equipment, gross | 10,041 | 9,709 |
Transportation equipment | ||
Property, plant and equipment, gross | $ 644 | $ 658 |
Property, Plant & Equipment - N
Property, Plant & Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant & Equipment | ||||
Depreciation expense | $ 5.9 | $ 7.4 | $ 17.6 | $ 21.4 |
Cost of Sales, depreciation | $ 2.3 | $ 3.7 | $ 7.1 | $ 11.3 |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Gross Amount | $ 7,488 | $ 6,998 |
Accumulated amortization | (3,416) | (3,021) |
Amortization expense for intangible assets | 4,072 | 3,977 |
Patents | ||
Gross Amount | 7,472 | 6,983 |
Accumulated amortization | (3,403) | (3,008) |
Amortization expense for intangible assets | 4,069 | 3,975 |
Trademarks | ||
Gross Amount | 16 | 15 |
Accumulated amortization | (13) | (13) |
Amortization expense for intangible assets | $ 3 | $ 2 |
Intangible Assets, net - Narrat
Intangible Assets, net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Amortization expense for intangible assets | $ 0.1 | $ 0.1 | $ 0.4 | $ 0.4 |
License | ||||
Weighted average amortization period | 7 years |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Liabilities: | ||
Bank acceptance payable | $ 4,080 | $ 4,628 |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Cash and cash equivalents | 69,994 | 55,646 |
Restricted cash | 2,382 | 2,358 |
Total assets | 72,376 | 58,004 |
Liabilities: | ||
Bank acceptance payable | 4,080 | 4,628 |
Convertible senior notes | 75,131 | |
Total liabilities | 79,211 | 4,628 |
Level 1 | Fair Value, Measurements, Recurring | ||
Assets: | ||
Cash and cash equivalents | 69,994 | 55,646 |
Restricted cash | 2,382 | 2,358 |
Total assets | 72,376 | 58,004 |
Level 2 | Fair Value, Measurements, Recurring | ||
Liabilities: | ||
Bank acceptance payable | 4,080 | 4,628 |
Convertible senior notes | 75,131 | |
Total liabilities | $ 79,211 | $ 4,628 |
Notes Payable and Long-Term D_3
Notes Payable and Long-Term Debt (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Notes payable and long-term debt | $ 48,241 | $ 84,124 |
Less debt issuance costs, net | (65) | (207) |
Grand Total | 48,176 | 83,917 |
Less current portion | (15,803) | (23,589) |
Non-current portion | 32,373 | 60,328 |
Bank acceptance notes issued to vendors with a zero percent interest rate | $ 4,080 | 4,628 |
Term loan 1 | ||
Notes payable and long-term debt | 20,067 | |
Term loan 1 | London Interbank Offered Rate (LIBOR) | ||
Basis spread on variable rate | 1.15% | |
Term loan 2 | ||
Notes payable and long-term debt | 19,164 | |
Term loan 2 | London Interbank Offered Rate (LIBOR) | ||
Basis spread on variable rate | 1.30% | |
Note payable 1 | ||
Notes payable and long-term debt | $ 4,653 | 6,331 |
Stated interest rate | 3.40% | |
Note payable 2 | ||
Notes payable and long-term debt | $ 5,012 | |
Stated interest rate | 3.10% | |
Bank Acceptance Notes Payable | ||
Notes payable and long-term debt | $ 1,300 | |
Stated interest rate | 0.00% | |
Credit facility | ||
Notes payable and long-term debt | $ 7,069 | |
Revolving line of credit maximum borrowing capacity | $ 7,069 | |
Stated interest rate | 5.70% | |
Revolving Line of Credit | ||
Notes payable and long-term debt | $ 20,000 | |
Revolving Line of Credit | Revolving Line of Credit 1 | ||
Notes payable and long-term debt | 20,000 | 23,104 |
Revolving line of credit maximum borrowing capacity | $ 25,000 | |
Revolving Line of Credit | Revolving Line of Credit 1 | London Interbank Offered Rate (LIBOR) | ||
Basis spread on variable rate | 1.50% | |
Revolving Line of Credit | Revolving Line of Credit 2 | ||
Notes payable and long-term debt | $ 3,222 | 3,256 |
Revolving line of credit maximum borrowing capacity | $ 3,222 | |
Stated interest rate | 2.20% | |
Revolving Line of Credit | Revolving Line of Credit 3 | ||
Notes payable and long-term debt | 3,550 | |
Revolving line of credit maximum borrowing capacity | $ 7,000 | |
Revolving Line of Credit | Revolving Line of Credit 4 | ||
Notes payable and long-term debt | 644 | |
Revolving line of credit maximum borrowing capacity | $ 2,576 | |
Stated interest rate | 1.70% | |
Revolving Line of Credit | Revolving Line of Credit 5 | ||
Notes payable and long-term debt | $ 8,652 | |
Revolving line of credit maximum borrowing capacity | $ 19,158 | |
Revolving Line of Credit | Revolving Line of Credit 6 | ||
Notes payable and long-term debt | 7,641 | |
Revolving line of credit maximum borrowing capacity | $ 25,449 | |
Stated interest rate | 4.57% | |
Revolving Line of Credit | Minimum | Revolving Line of Credit 3 | ||
Stated interest rate | 1.50% | |
Revolving Line of Credit | Minimum | Revolving Line of Credit 5 | ||
Stated interest rate | 4.10% | |
Revolving Line of Credit | Maximum | Revolving Line of Credit 3 | ||
Stated interest rate | 3.50% | |
Revolving Line of Credit | Maximum | Revolving Line of Credit 5 | ||
Stated interest rate | 4.60% |
Notes Payable and Long-Term D_4
Notes Payable and Long-Term Debt - Debt Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Maturities of notes payable and long-term debt | ||
2020 | $ 15,803 | |
2021 | 24,230 | |
2022 | 8,143 | |
Total outstanding | $ 48,176 | $ 83,917 |
Notes Payable and Long-Term D_5
Notes Payable and Long-Term Debt - Term Debt - Narrative (Details) | Sep. 30, 2019USD ($) | Sep. 26, 2019USD ($) | Jul. 23, 2019TWD ($) | Jun. 21, 2019CNY (¥) | May 24, 2019CNY (¥) | May 08, 2019USD ($) | May 07, 2019CNY (¥) | Apr. 30, 2019CNY (¥) | Apr. 19, 2019CNY (¥) | Apr. 11, 2019TWD ($) | Mar. 05, 2019USD ($)D | Feb. 01, 2019USD ($) | Jan. 21, 2019TWD ($) | Jan. 21, 2019USD ($) | Dec. 11, 2018TWD ($) | Nov. 29, 2018TWD ($) | Nov. 29, 2018USD ($) | Oct. 03, 2018USD ($) | Sep. 21, 2018CNY (¥) | Jun. 19, 2018TWD ($) | Jun. 18, 2018 | Mar. 30, 2018USD ($) | Mar. 10, 2018 | Sep. 28, 2017USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Sep. 29, 2019USD ($) | Jul. 23, 2019USD ($) | Jun. 22, 2019USD ($) | Jun. 21, 2019USD ($) | May 24, 2019USD ($) | May 07, 2019USD ($) | Apr. 30, 2019USD ($) | Apr. 19, 2019USD ($) | Apr. 11, 2019USD ($) | Mar. 04, 2019USD ($) | Jan. 21, 2019USD ($) | Dec. 11, 2018USD ($) | Nov. 29, 2018USD ($) | Sep. 21, 2018USD ($) | Jun. 19, 2018USD ($) |
Notes payable and long-term debt | $ 48,241,000 | $ 48,241,000 | $ 84,124,000 | |||||||||||||||||||||||||||||||||||||||
Repayments of outstanding balance | 66,299,000 | $ 125,678,000 | ||||||||||||||||||||||||||||||||||||||||
Unused borrowing capacity | 57,300,000 | 57,300,000 | 69,400,000 | |||||||||||||||||||||||||||||||||||||||
Restricted cash, investments or security deposit associated with loan facilities | 1,300,000 | 1,300,000 | $ 1,400,000 | |||||||||||||||||||||||||||||||||||||||
Bank Acceptance Notes Payable | ||||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | $ 1,300,000 | $ 1,300,000 | ||||||||||||||||||||||||||||||||||||||||
Stated interest rate | 0.00% | 0.00% | ||||||||||||||||||||||||||||||||||||||||
One Month LIBOR Rate | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 2.00% | 2.50% | ||||||||||||||||||||||||||||||||||||||||
Prime World | Finance Lease 2 | ||||||||||||||||||||||||||||||||||||||||||
Finance lease agreement balance | $ 5,000,000 | $ 5,000,000 | ||||||||||||||||||||||||||||||||||||||||
Prime World | Promissory note | ||||||||||||||||||||||||||||||||||||||||||
Guarantee deposit | $ 209,555,736 | $ 210,601,605 | $ 6,800,000 | $ 6,800,000 | ||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit 2 | Prime World | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 1 year | |||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 300,000,000 | $ 9,700,000 | ||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit 2 | Prime World | Minimum | ||||||||||||||||||||||||||||||||||||||||||
Draw term | 90 days | 90 days | ||||||||||||||||||||||||||||||||||||||||
Stated interest rate | 1.95% | 1.95% | ||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit 2 | Prime World | Maximum | ||||||||||||||||||||||||||||||||||||||||||
Draw term | 120 days | 120 days | ||||||||||||||||||||||||||||||||||||||||
Stated interest rate | 2.00% | 2.00% | ||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit 3 | Prime World | ||||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 7,000,000 | |||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit 3 | Prime World | Minimum | ||||||||||||||||||||||||||||||||||||||||||
Draw term | 60 days | |||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit 3 | Prime World | Maximum | ||||||||||||||||||||||||||||||||||||||||||
Draw term | 90 days | |||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit 3 | Prime World | Cost of funds rate | U.S. Dollars | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1.25% | |||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit 3 | Prime World | Cost of funds rate | NTD | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1.35% | |||||||||||||||||||||||||||||||||||||||||
Revolving line of credit agreement | Prime World | Minimum | ||||||||||||||||||||||||||||||||||||||||||
Draw term | 90 days | |||||||||||||||||||||||||||||||||||||||||
Revolving line of credit agreement | Prime World | Maximum | ||||||||||||||||||||||||||||||||||||||||||
Draw term | 120 days | |||||||||||||||||||||||||||||||||||||||||
CTBC Bank Co. Ltd. | Prime World | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 1 year | |||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 150,000,000 | $ 4,900,000 | ||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||
CTBC Bank Co. Ltd. | Prime World | Maximum | ||||||||||||||||||||||||||||||||||||||||||
Draw term | 120 days | |||||||||||||||||||||||||||||||||||||||||
CTBC Bank Co. Ltd. | Prime World | Cost of funds rate | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 3.40% | |||||||||||||||||||||||||||||||||||||||||
Base lending rate plus | 1.2 | |||||||||||||||||||||||||||||||||||||||||
CTBC Bank Co. Ltd. | Prime World | Enterprise Swap Index Rate | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 0.69% | |||||||||||||||||||||||||||||||||||||||||
Base lending rate plus | 1.2 | |||||||||||||||||||||||||||||||||||||||||
China Construction Bank | Revolving Line of Credit 4 | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 5 years | |||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | ¥ 129,000,000 | $ 18,600,000 | ||||||||||||||||||||||||||||||||||||||||
China Construction Bank | Revolving Line of Credit 4 | Bank Acceptance Notes Payable | ||||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | $ 500,000 | |||||||||||||||||||||||||||||||||||||||||
Outstanding bank acceptance notes paid | $ 500,000 | |||||||||||||||||||||||||||||||||||||||||
Chailease Finance Co. Ltd. | Prime World | Finance Lease 2 | ||||||||||||||||||||||||||||||||||||||||||
Purchase price | $ 267,333,186 | $ 8,700,000 | $ 267,340,468 | $ 8,700,000 | ||||||||||||||||||||||||||||||||||||||
Financial lease term | 3 years | 3 years | 3 years | 3 years | ||||||||||||||||||||||||||||||||||||||
Initial payment amount | $ 67,333,186 | $ 2,200,000 | $ 67,340,468 | $ 2,200,000 | ||||||||||||||||||||||||||||||||||||||
Finance lease interest rate | 3.1 | 3.1 | 3.5 | 3.5 | ||||||||||||||||||||||||||||||||||||||
Finance lease agreement balance | 4,700,000 | 4,700,000 | ||||||||||||||||||||||||||||||||||||||||
Chailease Finance Co. Ltd. | Prime World | Finance Lease 2 | Minimum | ||||||||||||||||||||||||||||||||||||||||||
Lease payment per month | $ 5,570,167 | $ 200,000 | $ 5,571,229 | $ 200,000 | ||||||||||||||||||||||||||||||||||||||
Chailease Finance Co. Ltd. | Prime World | Finance Lease 2 | Maximum | ||||||||||||||||||||||||||||||||||||||||||
Lease payment per month | $ 6,082,131 | $ 200,000 | $ 6,139,188 | $ 200,000 | ||||||||||||||||||||||||||||||||||||||
Branch Banking and Trust Company | ||||||||||||||||||||||||||||||||||||||||||
Repayments of outstanding balance | $ 37,800,000 | |||||||||||||||||||||||||||||||||||||||||
Branch Banking and Trust Company | Promissory Note One [Member] | ||||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 60,000,000 | |||||||||||||||||||||||||||||||||||||||||
Branch Banking and Trust Company | Promissory Note One [Member] | One Month LIBOR Rate | Minimum | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1.40% | |||||||||||||||||||||||||||||||||||||||||
Branch Banking and Trust Company | Promissory Note One [Member] | One Month LIBOR Rate | Maximum | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 2.00% | |||||||||||||||||||||||||||||||||||||||||
Branch Banking and Trust Company | Promissory Note Two [Member] | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 5 years | |||||||||||||||||||||||||||||||||||||||||
Branch Banking and Trust Company | Promissory Note Three [Member] | ||||||||||||||||||||||||||||||||||||||||||
Period on which utilization will not apply from business days prior to the end of any fiscal quarter | D | 7 | |||||||||||||||||||||||||||||||||||||||||
Period on which utilization will not apply to business days after the subsequent fiscal quarter | D | 7 | |||||||||||||||||||||||||||||||||||||||||
Branch Banking and Trust Company | Promissory Note Three [Member] | Third Amendment | ||||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 25,000,000 | $ 60,000,000 | ||||||||||||||||||||||||||||||||||||||||
Percentage of unused line fee | 0.20% | |||||||||||||||||||||||||||||||||||||||||
Percentage of utilization of revolving credit line upon available commitment | 60.00% | |||||||||||||||||||||||||||||||||||||||||
Branch Banking and Trust Company | Promissory Note Four [Member] | Fourth Amendment | ||||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 20,000,000 | 20,000,000 | $ 25,000,000 | |||||||||||||||||||||||||||||||||||||||
Percentage of unused line fee | 0.30% | |||||||||||||||||||||||||||||||||||||||||
Fixed charge coverage ratio | 1.50% | |||||||||||||||||||||||||||||||||||||||||
Covenant Percentage | 75.00% | |||||||||||||||||||||||||||||||||||||||||
Branch Banking and Trust Company | First Credit Facility | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 3 years | 3 years | ||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 60,000,000 | $ 50,000,000 | ||||||||||||||||||||||||||||||||||||||||
Term of loan | 3 years | |||||||||||||||||||||||||||||||||||||||||
Branch Banking and Trust Company | First Credit Facility | London Interbank Offered Rate (LIBOR) | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1.50% | |||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit | ||||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | $ 20,000,000 | 20,000,000 | ||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit | Revolving Line of Credit 1 | ||||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | 25,000,000 | 25,000,000 | ||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | 20,000,000 | $ 20,000,000 | $ 23,104,000 | |||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit | Revolving Line of Credit 1 | London Interbank Offered Rate (LIBOR) | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1.50% | |||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit | Revolving Line of Credit 2 | ||||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | 3,222,000 | $ 3,222,000 | ||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | $ 3,222,000 | $ 3,222,000 | 3,256,000 | |||||||||||||||||||||||||||||||||||||||
Stated interest rate | 2.20% | 2.20% | ||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit | Revolving Line of Credit 3 | ||||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 7,000,000 | $ 7,000,000 | ||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | $ 3,550,000 | |||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit | Revolving Line of Credit 3 | Minimum | ||||||||||||||||||||||||||||||||||||||||||
Stated interest rate | 1.50% | 1.50% | ||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit | Revolving Line of Credit 3 | Maximum | ||||||||||||||||||||||||||||||||||||||||||
Stated interest rate | 3.50% | 3.50% | ||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit | Revolving Line of Credit 4 | ||||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 2,576,000 | $ 2,576,000 | ||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | $ 644,000 | $ 644,000 | ||||||||||||||||||||||||||||||||||||||||
Stated interest rate | 1.70% | 1.70% | ||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit | Branch Banking and Trust Company | Promissory Note One [Member] | ||||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 60,000,000 | |||||||||||||||||||||||||||||||||||||||||
Capital expenditure loan | Branch Banking and Trust Company | ||||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | $ 26,000,000 | |||||||||||||||||||||||||||||||||||||||||
Capital expenditure loan | Branch Banking and Trust Company | Promissory Note Two [Member] | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 5 years | |||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | $ 26,000,000 | |||||||||||||||||||||||||||||||||||||||||
Capital expenditure loan | Branch Banking and Trust Company | Promissory Note Two [Member] | One Month LIBOR Rate | Minimum | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1.30% | |||||||||||||||||||||||||||||||||||||||||
Capital expenditure loan | Branch Banking and Trust Company | Promissory Note Two [Member] | One Month LIBOR Rate | Maximum | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 2.00% | |||||||||||||||||||||||||||||||||||||||||
Real estate term loan | Branch Banking and Trust Company | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 70 months | |||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | $ 21,500,000 | |||||||||||||||||||||||||||||||||||||||||
Real estate term loan | Branch Banking and Trust Company | Promissory Note Three [Member] | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 70 months | |||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | $ 21,500,000 | |||||||||||||||||||||||||||||||||||||||||
Real estate term loan | Branch Banking and Trust Company | Promissory Note Three [Member] | One Month LIBOR Rate | Minimum | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1.15% | |||||||||||||||||||||||||||||||||||||||||
Real estate term loan | Branch Banking and Trust Company | Promissory Note Three [Member] | One Month LIBOR Rate | Maximum | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 2.00% | |||||||||||||||||||||||||||||||||||||||||
Far Eastern Credit Facility | Prime World | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 1 year | |||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 80,000,000 | $ 2,600,000 | ||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | $ 600,000 | $ 600,000 | ||||||||||||||||||||||||||||||||||||||||
Draw term | 180 days | |||||||||||||||||||||||||||||||||||||||||
Far Eastern Credit Facility | Prime World | One-Year Fixed Term Time Deposits Rate | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 0.655% | |||||||||||||||||||||||||||||||||||||||||
Bank's cost of fund lending rate | 1.045% | |||||||||||||||||||||||||||||||||||||||||
Far Eastern Credit Facility | Prime World | TAIFX3 | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 0.70% | |||||||||||||||||||||||||||||||||||||||||
Bank's cost of fund lending rate | 2.75% | |||||||||||||||||||||||||||||||||||||||||
China Merchants Credit Line | ||||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||
China Merchants Credit Line | Bank Acceptance Notes Payable | ||||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | 1,000,000 | 1,000,000 | ||||||||||||||||||||||||||||||||||||||||
China Merchants Credit Line | Revolving line of credit agreement | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 12 months | |||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | ¥ 60,000,000 | $ 8,900,000 | ||||||||||||||||||||||||||||||||||||||||
SPD Credit Facility | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 5 years | 1 year | ||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | ¥ 9,900,000 | $ 1,500,000 | ||||||||||||||||||||||||||||||||||||||||
SPD Credit Facility | 12 month prime loan rate | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 0.2475% | |||||||||||||||||||||||||||||||||||||||||
30M Credit Facility | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 1 year | |||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | ¥ 30,000,000 | $ 4,500,000 | ||||||||||||||||||||||||||||||||||||||||
30M Credit Facility | 12 month prime loan rate | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 0.2475% | |||||||||||||||||||||||||||||||||||||||||
Bank's cost of fund lending rate | 4.32% | |||||||||||||||||||||||||||||||||||||||||
SPD Credit Line | Revolving line of credit agreement | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 5 years | |||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | 7,600,000 | ¥ 180,000,000 | 7,600,000 | $ 25,400,000 | ||||||||||||||||||||||||||||||||||||||
SPD Credit Line | Revolving line of credit agreement | Bank Acceptance Notes Payable | ||||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | 1,800,000 | 1,800,000 | ||||||||||||||||||||||||||||||||||||||||
2M Credit Facility | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 6 months | |||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 2,000,000 | |||||||||||||||||||||||||||||||||||||||||
2M Credit Facility | Six Month LIBOR Rate | ||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1.48% | |||||||||||||||||||||||||||||||||||||||||
Bank's cost of fund lending rate | 2.59438% | |||||||||||||||||||||||||||||||||||||||||
100M Credit Facility | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 18 months | |||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | ¥ 100,000,000 | $ 14,100,000 | ||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||
50M Credit Facility | ||||||||||||||||||||||||||||||||||||||||||
Term of revolving credit facility | 3 years | |||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | ¥ 50,000,000 | $ 7,100,000 | ||||||||||||||||||||||||||||||||||||||||
Notes payable and long-term debt | 7,100,000 | 7,100,000 | ||||||||||||||||||||||||||||||||||||||||
NT$100M Credit Line | Revolving line of credit agreement | Prime World | ||||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 100,000,000 | $ 3,300,000 | ||||||||||||||||||||||||||||||||||||||||
Outstanding amount | $ 3,200,000 | $ 3,200,000 | ||||||||||||||||||||||||||||||||||||||||
NT$100M Credit Line | Revolving line of credit agreement | Prime World | Minimum | ||||||||||||||||||||||||||||||||||||||||||
Draw term | 90 days | |||||||||||||||||||||||||||||||||||||||||
Stated interest rate | 2.20% | 2.20% | ||||||||||||||||||||||||||||||||||||||||
NT$100M Credit Line | Revolving line of credit agreement | Prime World | Maximum | ||||||||||||||||||||||||||||||||||||||||||
Draw term | 120 days | |||||||||||||||||||||||||||||||||||||||||
Stated interest rate | 2.25% | 2.25% | ||||||||||||||||||||||||||||||||||||||||
US$1M Credit Line | Revolving line of credit agreement | Prime World | ||||||||||||||||||||||||||||||||||||||||||
Revolving line of credit maximum borrowing capacity | $ 1,000,000 |
Convertible Senior Notes (Detai
Convertible Senior Notes (Details) | Mar. 05, 2019USD ($)item | Feb. 28, 2019$ / shares | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018 |
Debt Instrument [Line Items] | |||||
Proceeds from sale of notes after deducting the Initial Purchaser's discounts and offering expenses | $ 76,362,000 | ||||
Net carrying amount | $ 76,835,000 | 76,835,000 | |||
Interest expense | |||||
Amortization of debt issuance costs | 673,000 | ||||
Convertible senior notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 5.00% | ||||
Proceeds from sale of notes after deducting the Initial Purchaser's discounts and offering expenses | $ 76,400,000 | ||||
Repayments of capital expenditure loan and real estate term loan | 37,800,000 | ||||
Principal | $ 80,500,000 | 80,500,000 | 80,500,000 | ||
Unamortized debt issuance costs | (3,665,000) | (3,665,000) | |||
Net carrying amount | 76,835,000 | 76,835,000 | |||
Initial conversion rate | 56.9801% | ||||
Initial conversion price | $ / shares | $ 17.55 | ||||
Initial conversion premium | 30.00% | ||||
Share price | $ / shares | $ 13.50 | ||||
Percentage of sale price per share to conversion price | 130.00% | ||||
Number of trading days | item | 20 | ||||
Number of consecutive trading days | 30 | ||||
Redemption price as percentage of principal amount | 100.00% | ||||
Transaction costs | 4,100,000 | 4,100,000 | |||
Interest expense | |||||
Contractual interest expense | 984,000 | 2,270,000 | |||
Amortization of debt issuance costs | 207,000 | 473,000 | |||
Total interest cost | $ 1,191,000 | $ 2,743,000 | |||
Effective interest rate | 5.10% | 5.10% | 0.00% |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accrued Liabilities | ||
Accrued payroll | $ 9,177 | $ 10,772 |
Accrued rent | 1,200 | |
Accrued employee benefits | 2,312 | 2,862 |
Accrued state and local taxes | 971 | 1,088 |
Accrued interest | 197 | 163 |
Advance payments | 279 | 426 |
Accrued product warranty | 799 | 995 |
Accrued commission expenses | 434 | 398 |
Accrued professional fees | 336 | 315 |
Accrued capital expenditures | 458 | 371 |
Accrued other | 579 | 701 |
Total accrued liabilities | $ 15,542 | $ 19,291 |
Other Income and Expense (Detai
Other Income and Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Other Income and Expense. | ||||
Foreign exchange transaction gain | $ 322 | $ 549 | $ 305 | $ 798 |
Government subsidy income | 1,138 | 202 | 1,360 | 471 |
Other non-operating (loss) gain | (14) | 15 | 87 | 46 |
Gain (loss) on disposal of assets | (10) | 5 | ||
Total other income, net | $ 1,446 | $ 766 | $ 1,742 | $ 1,320 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($)plan | |
Minimum | |
Vesting period | 4 years |
Restricted stock units | |
Unrecognized compensation expense | $ 19.9 |
Unrecognized compensation expense recognized period | 2 years 1 month 6 days |
Employee stock options | |
Number of incentive plans | plan | 5 |
Options Expiration Period | 10 years |
Unrecognized compensation expense | $ 0 |
Employee stock options | Share-based Compensation Award, Tranche One | |
Vesting rights (as a percent) | 25.00% |
Employee stock options | Share-based Compensation Award, Tranche Two | |
Vesting rights (as a percent) | 12.50% |
2013 Plan | Restricted stock units | |
Maximum term | 10 years |
Share-Based Compensation - Opti
Share-Based Compensation - Option Activity (Details) - Employee stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2019 | |
Number of Shares | |
Outstanding, beginning balance | 287 |
Exercised | (1) |
Forfeited | (1) |
Outstanding, ending balance | 285 |
Exercisable, ending balance | 285 |
Vested and expected to vest | 285 |
Weighted Average Exercise Price | |
Outstanding, beginning balance | $ 10.19 |
Exercised | 6.60 |
Forfeited | 11.35 |
Outstanding, ending balance | 10.20 |
Exercisable, ending balance | 10.20 |
Vested and expected to vest | 10.20 |
Weighted Average Share Price on Date of Exercise | 12.91 |
Weighted Average Fair Value [Abstract] | |
Outstanding, beginning balance | 5.31 |
Exercised | 3.95 |
Forfeited | 5.50 |
Outstanding, ending balance | $ 5.31 |
Weighted Average Remaining Contractual Life | |
Outstanding, ending balance | 3 years 10 months 13 days |
Exercisable, ending balance | 3 years 10 months 13 days |
Vested and expected to vest | 3 years 10 months 13 days |
Aggregate Intrinsic Value | |
Aggregate intrinsic value, beginning balance | $ 1,503 |
Exercised | 8 |
Forfeited | 1 |
Aggregate intrinsic value, ending balance | 431 |
Exercisable, ending balance | 431 |
Vested and expected to vest | $ 431 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Units (Details) - Restricted stock units $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Number of shares | |
Outstanding, beginning balance | shares | 826 |
Granted | shares | 431 |
Released | shares | (345) |
Cancelled/Forfeited | shares | (37) |
Outstanding, ending balance | shares | 875 |
Vested and expected to vest | shares | 875 |
Weighted Average Share Price on Date of Release | $ 12.68 |
Weighted Average Fair Value | |
Outstanding, beginning balance | 32.07 |
Granted | 13.42 |
Released | 26.69 |
Cancelled/Forfeited | 26.64 |
Outstanding, ending balance | 25.22 |
Vested and expected to vest | $ 25.22 |
Aggregate Intrinsic Value [Abstract] | |
Aggregate intrinsic value, outstanding | $ | $ 12,744 |
Granted | $ | 5,787 |
Released | $ | 4,378 |
Cancelled/Forfeited | $ | 415 |
Aggregate intrinsic value, outstanding | $ | 9,819 |
Vested and expected to vest | $ | $ 9,819 |
Share-Based Compensation - Shar
Share-Based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Total share-based compensation expense | $ 2,978 | $ 2,894 | $ 8,939 | $ 8,362 |
Employee stock options | ||||
Total share-based compensation expense | 12 | 12 | ||
Restricted stock units | ||||
Total share-based compensation expense | 2,978 | 2,882 | 8,939 | 8,350 |
Cost of goods sold | ||||
Total share-based compensation expense | 196 | 205 | 584 | 593 |
Research and development. | ||||
Total share-based compensation expense | 647 | 624 | 1,943 | 1,876 |
Sales and marketing. | ||||
Total share-based compensation expense | 275 | 181 | 824 | 669 |
General and administrative. | ||||
Total share-based compensation expense | $ 1,860 | $ 1,884 | $ 5,588 | $ 5,224 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Taxes | ||||
Effective tax rate | 17.60% | 58.70% | 19.90% | (164.50%) |
Federal statutory rate | 21.00% | 21.00% | 21.00% | 21.00% |
Accumulated undistributed earnings generated by its foreign subsidiaries | $ 26 | $ 26 |
Geographic Information - Revenu
Geographic Information - Revenues (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) | |
Number of Reportable segment | item | 1 | |||
Revenues | $ 46,084 | $ 56,386 | $ 142,214 | $ 209,447 |
Before Topic 606 | ||||
Revenues | 56,386 | 209,447 | ||
United States | ||||
Revenues | 2,898 | 6,547 | ||
United States | Before Topic 606 | ||||
Revenues | 2,927 | 10,258 | ||
Taiwan | ||||
Revenues | 28,390 | 74,519 | ||
Taiwan | Before Topic 606 | ||||
Revenues | 29,883 | 92,056 | ||
China | ||||
Revenues | $ 14,796 | $ 61,148 | ||
China | Before Topic 606 | ||||
Revenues | $ 23,576 | $ 107,133 |
Geographic Information - Long L
Geographic Information - Long Lived Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Long-lived assets | $ 255,158 | $ 244,002 |
United States | ||
Long-lived assets | 94,420 | 88,815 |
Taiwan | ||
Long-lived assets | 65,008 | 65,451 |
China | ||
Long-lived assets | $ 95,730 | $ 89,736 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Oct. 24, 2019USD ($) |
Subsequent Events | |
Proceeds from Issuance or Sale of Equity [Abstract] | |
Proceeds from Issuance Initial Public Offering | $ 250 |