Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-35061 | |
Entity Registrant Name | NeoPhotonics Corp | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-3253730 | |
Entity Address, Address Line One | 2911 Zanker Road | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95134 | |
City Area Code | 408 | |
Local Phone Number | 232-9200 | |
Title of 12(b) Security | Common Stock, $0.0025 par value | |
Trading Symbol | NPTN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 48,241,131 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001227025 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 61,396 | $ 58,185 |
Short-term investments | 7,607 | 7,481 |
Restricted cash | 10,827 | 11,053 |
Accounts receivable, net of allowance for doubtful accounts | 65,245 | 74,751 |
Inventories | 48,668 | 52,159 |
Assets held for sale | 0 | 2,971 |
Prepaid expenses and other current assets | 23,921 | 26,605 |
Total current assets | 217,664 | 233,205 |
Property, plant and equipment, net | 85,125 | 100,090 |
Operating lease right-of-use assets | 16,037 | |
Purchased intangible assets, net | 2,315 | 3,018 |
Goodwill | 1,115 | 1,115 |
Other long-term assets | 3,088 | 3,148 |
Total assets | 325,344 | 340,576 |
Current liabilities: | ||
Accounts payable | 58,306 | 58,403 |
Notes payable and short-term borrowing | 0 | 4,795 |
Current portion of long-term debt | 3,054 | 2,897 |
Accrued and other current liabilities | 42,414 | 50,288 |
Total current liabilities | 103,774 | 116,383 |
Long-term debt, net of current portion | 44,771 | 50,454 |
Operating lease liabilities, noncurrent | 17,054 | |
Other noncurrent liabilities | 9,748 | 13,499 |
Total liabilities | 175,347 | 180,336 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0025 par value, 10,000 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock, $0.0025 par value, 100,000 shares authorized, As of September 30, 2019, 48,017 shares issued and outstanding; as of December 31, 2018, 46,378 shares issued and outstanding | 120 | 116 |
Additional paid-in capital | 577,088 | 564,722 |
Accumulated other comprehensive loss | (10,594) | (7,126) |
Accumulated deficit | (416,617) | (397,472) |
Total stockholders’ equity | 149,997 | 160,240 |
Total liabilities and stockholders’ equity | $ 325,344 | $ 340,576 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0025 | $ 0.0025 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0025 | $ 0.0025 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 48,017,000 | 46,378,000 |
Common stock, shares outstanding (in shares) | 48,017,000 | 46,378,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 92,392 | $ 81,748 | $ 253,448 | $ 231,436 |
Cost of goods sold | 66,193 | 62,815 | 195,837 | 187,849 |
Gross profit | 26,199 | 18,933 | 57,611 | 43,587 |
Operating expenses: | ||||
Research and development | 13,688 | 13,177 | 42,164 | 40,308 |
Sales and marketing | 3,832 | 4,351 | 12,058 | 12,366 |
General and administrative | 7,403 | 8,592 | 22,330 | 23,509 |
Amortization of purchased intangible assets | 0 | 118 | 119 | 357 |
Asset sale related costs | 12 | 251 | 388 | 344 |
Restructuring charges | 3 | 1,133 | 261 | 1,786 |
Gain on asset sale | 0 | 0 | (817) | 0 |
Total operating expenses | 24,938 | 27,622 | 76,503 | 78,670 |
Income (loss) from operations | 1,261 | (8,689) | (18,892) | (35,083) |
Interest income | 95 | 85 | 293 | 300 |
Interest expense | (483) | (540) | (1,472) | (2,007) |
Other income (expense), net | 2,960 | 1,310 | 2,452 | 1,891 |
Total interest and other income (expense), net | 2,572 | 855 | 1,273 | 184 |
Income (loss) before income taxes | 3,833 | (7,834) | (17,619) | (34,899) |
Income tax provision | (1,561) | (291) | (1,526) | (2,009) |
Net income (loss) | $ 2,272 | $ (8,125) | $ (19,145) | $ (36,908) |
Basic net income (loss) per share (in dollars per share) | $ 0.05 | $ (0.18) | $ (0.41) | $ (0.82) |
Diluted net income (loss) per share (in dollars per share) | $ 0.05 | $ (0.18) | $ (0.41) | $ (0.82) |
Weighted average shares used to compute basic net income (loss) per share (in shares) | 47,666 | 45,476 | 46,949 | 44,804 |
Weighted average shares used to compute diluted net income (loss) per share (in shares) | 48,615 | 45,476 | 46,949 | 44,804 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 2,272 | $ (8,125) | $ (19,145) | $ (36,908) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of zero tax | (4,615) | (5,588) | (3,468) | (7,968) |
Unrealized gains on available-for-sale securities, net of zero tax | 0 | 0 | 0 | 1 |
Total other comprehensive loss | (4,615) | (5,588) | (3,468) | (7,967) |
Comprehensive loss | $ (2,343) | $ (13,713) | $ (22,613) | $ (44,875) |
Condenced Consolidated Statemen
Condenced Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Impact of adoption of new accounting standard ASU 2016-16 | $ (1,824) | $ (1,824) | |||
Beginning balance (in shares) at Dec. 31, 2017 | 44,219 | ||||
Beginning balance at Dec. 31, 2017 | 194,451 | $ 111 | $ 545,953 | $ 398 | (352,011) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive income (loss) | (44,875) | (7,967) | (36,908) | ||
Issuance of common stock upon exercise of stock options (in shares) | 591 | ||||
Issuance of common stock upon exercise of stock options | 2,563 | $ 1 | 2,562 | ||
Issuance of common stock under employee stock purchase plan (in shares) | 234 | ||||
Issuance of common stock under employee stock purchase plan | 1,243 | $ 1 | 1,242 | ||
Issuance of common stock for vested restricted stock units (in shares) | 916 | ||||
Issuance of common stock for vested restricted stock units | 0 | $ 2 | (2) | ||
Tax withholding related to vesting of restricted stock units (in shares) | (120) | ||||
Tax withholding related to vesting of restricted stock units | (747) | (747) | |||
Stock-based compensation costs | 10,363 | 10,363 | |||
Ending Balance (in shares) at Sep. 30, 2018 | 45,840 | ||||
Ending balance at Sep. 30, 2018 | 161,174 | $ 115 | 559,371 | (7,569) | (390,743) |
Beginning balance (in shares) at Jun. 30, 2018 | 44,906 | ||||
Beginning balance at Jun. 30, 2018 | 169,458 | $ 112 | 553,945 | (1,981) | (382,618) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive income (loss) | (13,713) | (5,588) | (8,125) | ||
Issuance of common stock upon exercise of stock options (in shares) | 403 | ||||
Issuance of common stock upon exercise of stock options | 1,861 | $ 1 | 1,860 | ||
Issuance of common stock under employee stock purchase plan (in shares) | 0 | ||||
Issuance of common stock under employee stock purchase plan | 0 | $ 0 | 0 | ||
Issuance of common stock for vested restricted stock units (in shares) | 604 | ||||
Issuance of common stock for vested restricted stock units | 0 | $ 2 | (2) | ||
Tax withholding related to vesting of restricted stock units (in shares) | (73) | ||||
Tax withholding related to vesting of restricted stock units | (471) | (471) | |||
Stock-based compensation costs | 4,039 | 4,039 | |||
Ending Balance (in shares) at Sep. 30, 2018 | 45,840 | ||||
Ending balance at Sep. 30, 2018 | 161,174 | $ 115 | 559,371 | (7,569) | (390,743) |
Beginning balance (in shares) at Dec. 31, 2018 | 46,378 | ||||
Beginning balance at Dec. 31, 2018 | 160,240 | $ 116 | 564,722 | (7,126) | (397,472) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive income (loss) | (22,613) | (3,468) | (19,145) | ||
Offering costs | (46) | (46) | |||
Issuance of common stock in exchange for research and development services (in shares) | 276 | ||||
Issuance of common stock in exchange for research and development services | 1,500 | $ 1 | 1,499 | ||
Issuance of common stock upon exercise of stock options (in shares) | 265 | ||||
Issuance of common stock upon exercise of stock options | 969 | 969 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 254 | ||||
Issuance of common stock under employee stock purchase plan | 1,235 | $ 1 | 1,234 | ||
Issuance of common stock for vested restricted stock units (in shares) | 996 | ||||
Issuance of common stock for vested restricted stock units | 0 | $ 2 | (2) | ||
Tax withholding related to vesting of restricted stock units (in shares) | (152) | ||||
Tax withholding related to vesting of restricted stock units | (705) | (705) | |||
Stock-based compensation costs | 9,417 | 9,417 | |||
Ending Balance (in shares) at Sep. 30, 2019 | 48,017 | ||||
Ending balance at Sep. 30, 2019 | 149,997 | $ 120 | 577,088 | (10,594) | (416,617) |
Beginning balance (in shares) at Jun. 30, 2019 | 47,152 | ||||
Beginning balance at Jun. 30, 2019 | 147,984 | $ 118 | 572,734 | (5,979) | (418,889) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive income (loss) | (2,343) | (4,615) | 2,272 | ||
Offering costs | (46) | (46) | |||
Issuance of common stock in exchange for research and development services (in shares) | 276 | ||||
Issuance of common stock in exchange for research and development services | 1,500 | $ 1 | 1,499 | ||
Issuance of common stock upon exercise of stock options (in shares) | 98 | ||||
Issuance of common stock upon exercise of stock options | 397 | 397 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 0 | ||||
Issuance of common stock under employee stock purchase plan | 0 | $ 0 | 0 | ||
Issuance of common stock for vested restricted stock units (in shares) | 573 | ||||
Issuance of common stock for vested restricted stock units | 0 | $ 1 | (1) | ||
Tax withholding related to vesting of restricted stock units (in shares) | (82) | ||||
Tax withholding related to vesting of restricted stock units | (378) | (378) | |||
Stock-based compensation costs | 2,883 | 2,883 | |||
Ending Balance (in shares) at Sep. 30, 2019 | 48,017 | ||||
Ending balance at Sep. 30, 2019 | $ 149,997 | $ 120 | $ 577,088 | $ (10,594) | $ (416,617) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (19,145) | $ (36,908) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 23,956 | 23,551 |
Stock-based compensation expense | 9,294 | 10,527 |
Deferred taxes | 0 | (42) |
Others | 333 | 327 |
Loss (gain) on sale of assets and other write-offs | (693) | 304 |
Loss on foreign currency hedges | 0 | 2,220 |
Allowance for doubtful accounts | (17) | (144) |
Write-down of inventories | 6,750 | 3,200 |
Amortization of operating lease right-of-use assets | 1,320 | 0 |
Foreign currency remeasurement | (2,534) | (4,192) |
Issuance of common stock in exchange for research and development services | 1,500 | 0 |
Change in assets and liabilities, net of effects of asset sale: | ||
Accounts receivable | 9,462 | 519 |
Inventories | (4,049) | 5,482 |
Prepaid expenses and other assets | 1,978 | 5,957 |
Accounts payable | (1,096) | (4,958) |
Accrued and other liabilities | (8,670) | 3,154 |
Net cash provided by operating activities | 18,389 | 8,997 |
Cash flows from investing activities | ||
Purchase of property, plant and equipment | (6,247) | (14,377) |
Proceeds from sale of property, plant and equipment and other assets | 2,138 | 32 |
Purchase of marketable securities | (126) | (880) |
Proceeds from sale of marketable securities | 0 | 5,000 |
Proceeds from maturity of marketable securities | 0 | 750 |
Settlement of foreign currency hedges | 0 | (1,776) |
Net cash used in investing activities | (4,235) | (11,251) |
Cash flows from financing activities | ||
Proceeds from exercise of stock options and issuance of stock under ESPP | 2,204 | 3,801 |
Offering costs | (46) | 0 |
Tax withholding on restricted stock units | (705) | (747) |
Proceeds from bank loans, net of debt issuance costs | 5,000 | 29,358 |
Repayment of bank loans | (12,312) | (57,323) |
Proceeds from issuance of notes payable | 0 | 4,795 |
Repayment of notes payable | (4,806) | (2,568) |
Repayment of finance lease liabilities | (60) | 0 |
Proceeds from government grants | 0 | 1,228 |
Net cash used in financing activities | (10,725) | (21,456) |
Effect of exchange rates on cash, cash equivalents and restricted cash | (444) | (560) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 2,985 | (24,270) |
Cash, cash equivalents and restricted cash at the beginning of the period | 69,238 | 81,564 |
Cash, cash equivalents and restricted cash at the end of the period | 72,223 | 57,294 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Decrease (increase) in unpaid property, plant and equipment | $ (1,278) | $ 8,916 |
Basis of presentation and signi
Basis of presentation and significant accounting policies | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation and significant accounting policies | Basis of presentation and significant accounting policies Basis of Presentation and Consolidation The condensed consolidated financial statements of NeoPhotonics Corporation (“NeoPhotonics” or the “Company”) as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 , have been prepared in accordance with the instructions on Form 10-Q 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 normally provided in the Company’s annual consolidated financial statements. In the opinion of management, the condensed consolidated financial statements contain all adjustments, consisting only of normal recurring items, except as otherwise noted, necessary for the fair presentation of the Company’s financial position and results of operations for the interim periods. The year-end condensed consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”). 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 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 intercompany accounts and transactions have been eliminated. Going Concern Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , requires an entity to disclose information about its potential inability to continue as a going concern when conditions and events indicate that it is probable that the entity may be unable to meet its obligations as they become due within one year. Management has assessed the Company’s ability to continue as a going concern within one year of the filing date of this Quarterly Report on Form 10-Q with the SEC in November 2019. The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As of September 30, 2019 , the Company’s working capital was $113.9 million , including available cash, cash equivalents, short-term investments and restricted cash of approximately $79.8 million . In the first nine months of 2019, the Company had operating losses of $18.9 million and net cash provided by operations of $18.4 million . The Company had an accumulated deficit of approximately $416.6 million as of September 30, 2019 . In September 2017, the Company entered into a revolving line of credit agreement with Wells Fargo Bank, National Association ("Wells Fargo") which provides for borrowings under an accounts receivable based formula up to a maximum of $50.0 million . As of September 30, 2019 , $32.0 million was outstanding under this line. The remaining borrowing capacity as of September 30, 2019 was $12.4 million , of which $5.0 million is required to be maintained as unused borrowing capacity. Borrowings under the Wells Fargo line are not due until June 30, 2022 as long as the borrowing base is not less than the outstanding amount (Refer to Note 9). Additionally, the Company had $3.1 million of current portion of long-term debt as of September 30, 2019 , which it plans to pay out of its existing available cash. On May 16, 2019, the U.S. Commerce Department's Bureau of Industry and Security ("BIS") added Huawei and certain affiliates (collectively "Huawei") to the BIS Entity List ("Entity List"), with an effective date of May 21, 2019. This denies Huawei the ability to purchase products, software and technology that are subject to U.S. Export Administration Regulations (EAR). As Huawei has been the Company’s largest customer in recent quarters, this has a material impact on the forecasted revenue and profitability for the Company. To adjust to the revised forecast, the Company has adjusted capital expenditures, operating expenditures, project plans and incoming materials for changing demand levels. The Company has implemented changes to mitigate risks associated with the Entity List and will continue to implement actions to improve cash flow and profitability. The Company operates in an industry that makes its prospects difficult to evaluate with certainty. Future changes in China market demand or changes to the Company’s forecasts could adversely affect the Company’s results of operations, financial position or cash flows. As a result, the Company may need to increase borrowing on existing credit lines or raise additional debt or equity capital to fund its operations. Any additional debt arrangements may likely require regular interest and principal payments which could adversely affect the Company’s operations. There can be no assurance that additional debt or equity capital will be available on acceptable terms, or at all. The Company currently believes it will have sufficient resources to fund its currently planned operations and expenditures over the next twelve months without additional financing or other actions. In addition, the Company believes there are a number of ongoing and potential actions that may further strengthen its projected cash and projected financial position. Certain Significant Risks and Uncertainties The Company operates in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, any of the following areas could have a negative effect on the Company in terms of its future financial position, results of operations or cash flows: the general state of the U.S., China and world economies; the highly cyclical nature of the industries the Company serves; the loss of any of its larger customers; restrictions on the Company's ability to sell to foreign customers; ability to obtain additional financing; inability to meet certain debt covenants; fundamental changes in the technology underlying the Company’s products; the hiring, training and retention of key employees; successful and timely completion of product design efforts; and new product design introductions by competitors. Concentration In the three months ended September 30, 2019 , Huawei accounted for approximately 37% of the Company's total revenue. One other customer was greater than 10% and the Company’s top five customers represented approximately 85% of the Company’s total revenue. In the three months ended September 30, 2018 , Huawei accounted for approximately 47% of the Company's total revenue. One other customer was greater than 10% and the Company’s top five customers represented approximately 89% of the Company’s total revenue. In the nine months ended September 30, 2019 , Huawei accounted for approximately 41% of the Company's total revenue. One other customer was greater than 10% and the Company’s top five customers represented approximately 84% of the Company’s total revenue. In the nine months ended September 30, 2018 , Huawei accounted for approximately 47% of the Company's total revenue. One other customer was greater than 10% and the Company’s top five customers represented approximately 89% of the Company’s total revenue. As of September 30, 2019 and December 31, 2018 , two customers each accounted for more than 10% of the Company’s accounts receivable. Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenue and expenses during the reporting period. Significant estimates made by management include: the useful lives of property, plant and equipment and intangible assets as well as future cash flows to be generated by those assets; fair values of identifiable assets acquired and liabilities assumed in business combinations; allowances for doubtful accounts; valuation allowances for deferred tax assets; valuation of excess and obsolete inventories; warranty reserves; litigation accrual and recognition of stock-based compensation, among others. Actual results could differ from these estimates. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, other current liabilities and operating lease liabilities on the Company's condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, current portion of long-term debt and long-term debt, net of current portion on the condensed consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on observed market data and other information available at the lease commencement date. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company does not record leases on the condensed consolidated balance sheet with a term of one year or less. The Company does not separate lease and non-lease components but rather account for each separate component as a single lease component for all underlying classes of assets. Variable lease payments are expensed as incurred and are not included within the operating lease ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. Lease expense for minimum operating lease payments is recognized on a straight-line basis over the lease term. Accounting Pronouncements Recently Adopted In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-2, Leases (Topic 842) (“ASU 2016-2”). ASU 2016-2 introduces a lessee model that requires recognition of assets and liabilities arising from qualified leases on the consolidated balance sheets and consolidated statements of operations and to disclose qualitative and quantitative information about lease transactions. It is effective for interim and annual periods beginning after December 15, 2018. Certain optional practical expedients are allowed. The Company adopted this standard as of January 1, 2019, using the modified retrospective transition method by applying the new standard to all leases existing at the date of initial application and not restating comparative periods. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward historical lease classification, assessment on whether a contract was or contains a lease, and initial direct costs for any leases that existed prior to January 1, 2019. The Company also elected to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the condensed consolidated balance sheet. As a result of adopting Topic 842 on January 1, 2019, the Company recognized operating lease right-of-use assets of $17.3 million and corresponding operating lease liabilities of $20.8 million from existing leases on the Company's condensed consolidated balance sheet. Refer to Note 10 for further details. The adoption of Topic 842 had no impact on the Company's condensed consolidated statement of operations or condensed consolidated statement of cash flows. There have been no new or material changes in the Company’s significant accounting policies in the nine months ended September 30, 2019 , as compared to the significant accounting policies described in its Annual Report on Form 10-K for the year ended December 31, 2018 . Recent Accounting Pronouncements Not Yet Effective In January 2017, the FASB issued ASU 2017-4, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-4”). This standard amends the goodwill impairment test to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, up to the total amount of goodwill allocated to that reporting unit. ASU 2017-4 is effective prospectively for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for interim and annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 amends existing guidance on the impairment of financial assets and adds an impairment model that is based on expected losses rather than incurred losses and requires an entity to recognize as an allowance its estimate of expected credit losses for its financial assets. An entity will apply this guidance through a cumulative-effect adjustment to retained earnings upon adoption (a modified-retrospective approach) while a prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. It is effective for the Company’s annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted. The Company is in the process of evaluating the impact of the adoption on its consolidated financial statements and related disclosures. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Product revenue The Company develops, manufactures and sells optoelectronic products that transmit, receive, modify and switch high speed digital optical signals for communications networks. Revenue is derived primarily from the sale of hardware products. The Company sells its products worldwide, primarily to leading network equipment manufacturers. Revenue recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company generally bears all costs, risk of loss or damage and retains title to the goods up to the point of transfer of control of promised products to customers. Revenue related to the sale of consignment inventories at customer vendor managed locations is not recognized until the products are pulled from consignment inventories by customers. In instances where acceptance of the product or solutions is specified by the customer, revenue is deferred until such required acceptance criteria have been met. Shipping and handling costs are included in the cost of goods sold. The Company presents revenue net of sales taxes and any similar assessments. Nature of products Revenue from sale of hardware products is recognized upon transfer of control to the customer. The performance obligation for the sale of hardware products is satisfied at a point in time. The Company has aligned its products in two groups - High Speed Products and Network Products and Solutions. The following presents revenue by product group (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 High Speed Products $ 85,366 $ 68,519 $ 228,393 $ 197,362 Network Products and Solutions 7,026 13,229 25,055 34,074 Total revenue $ 92,392 $ 81,748 $ 253,448 $ 231,436 The following table presents the Company's revenue information by geographical region. Revenue is classified based on the ship to location requested by the customer. Such classification recognizes that for many customers, including those in North America or in Europe, designated shipping points are often in China or elsewhere in Asia (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 China $ 44,439 $ 46,134 $ 128,928 $ 133,917 Americas 22,713 22,369 56,138 52,270 Rest of world 25,240 13,245 68,382 45,249 Total revenue $ 92,392 $ 81,748 $ 253,448 $ 231,436 Deferred revenue The Company records deferred revenue when cash payments are received or due in advance of our performance. The increase in the deferred revenue balance during the three and nine months ended September 30, 2019 was immaterial, offset by approximately $0.2 million and $0.9 million of revenue recognized during the three and nine months ended September 30, 2019 , respectively, that was included in the deferred revenue balance as of December 31, 2018 . The increase in the deferred revenue balance during the three and nine months ended September 30, 2018 was immaterial, offset by approximately $0.2 million and $0.8 million of revenue recognized during the three and nine months ended September 30, 2018 , respectively, that was included in the deferred revenue balance as of December 31, 2017 . Contract assets The Company records contract assets when the revenue is recognized but the customer payment is contingent on a future event. The balance of contract assets as of September 30, 2019 and December 31, 2018 was immaterial. Refund liabilities The Company records refund liabilities when the contract permits the customer to return the product if certain circumstances arise. The balance of refund liabilities as of September 30, 2019 and December 31, 2018 |
Net income (loss) per share
Net income (loss) per share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net income (loss) per share | Net income (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 Nine Months Ended 2019 2018 2019 2018 Numerator: Net income (loss) $ 2,272 $ (8,125 ) $ (19,145 ) $ (36,908 ) Denominator: Weighted average shares used to compute per share amount: Basic 47,666 45,476 46,949 44,804 Diluted 48,615 45,476 46,949 44,804 Basic net income (loss) per share $ 0.05 $ (0.18 ) $ (0.41 ) $ (0.82 ) Diluted net income (loss) per share $ 0.05 $ (0.18 ) $ (0.41 ) $ (0.82 ) The Company has excluded the impact of the following outstanding employee stock options and restricted stock units as well as the shares expected to be issued under its employee stock purchase plan from the computation of diluted net income (loss) per share, as their effect would have been antidilutive (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Employee stock options 1,217 3,405 2,833 3,405 Restricted stock units 1,037 2,630 3,208 2,630 Market-based restricted stock units 641 665 641 665 Employee stock purchase plan 172 174 182 174 3,067 6,874 6,864 6,874 |
Cash, cash equivalents, short-t
Cash, cash equivalents, short-term investments, and restricted cash | 9 Months Ended |
Sep. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash, cash equivalents, short-term investments, and restricted cash | Cash, cash equivalents, short-term investments, and restricted cash The following table summarizes the Company’s cash, cash equivalents, short-term investments and restricted cash (in thousands): September 30, December 31, Cash and cash equivalents: Cash $ 61,396 $ 58,185 Cash equivalents — — Cash and cash equivalents $ 61,396 $ 58,185 Short-term investments $ 7,607 $ 7,481 Restricted cash $ 10,827 $ 11,053 September 30, December 31, Cash and cash equivalents $ 61,396 $ 58,185 Restricted cash 10,827 11,053 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 72,223 $ 69,238 The following table summarizes the Company’s unrealized gains and losses related to its cash equivalents and short-term investments in marketable securities designated as available-for-sale (in thousands): As of September 30, 2019 As of December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Marketable securities: Money market funds $ 7,607 $ — $ — $ 7,607 $ 7,481 $ — $ — $ 7,481 Reported as: Short-term investments $ 7,607 $ 7,481 As of September 30, 2019 and December 31, 2018 , maturities of marketable securities were less than 1 year. There were no realized gains and losses on the sale of marketable securities during the three and nine months ended September 30, 2019 and 2018. The Company did no t recognize any impairment losses on its marketable securities during the three and nine months ended September 30, 2019 or 2018 . As of September 30, 2019 , the Company did no t have any investments in marketable securities that were in an unrealized loss position for a period in excess of 12 months. |
Fair value disclosures
Fair value disclosures | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value disclosures | Fair value disclosures Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis (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 Short-term investments: Money market funds $ 7,607 $ — $ — $ 7,607 $ 7,481 $ — $ — $ 7,481 Other long-term assets: Mutual funds held in Rabbi Trust $ 569 $ — $ — $ 569 $ 465 $ — $ — $ 465 Liabilities Accrued and other current liabilities: Rusnano payment derivative $ — $ — $ — $ — $ — $ — $ 2,000 $ 2,000 The Company offers a Non-Qualified Deferred Compensation Plan (“NQDC Plan”) to a select group of its highly compensated employees. The NQDC Plan provides participants the opportunity to defer payment of certain compensation as defined in the NQDC Plan. A Rabbi Trust has been established to fund the NQDC Plan obligation, which was fully funded at September 30, 2019 . The assets held by the Rabbi Trust are substantially in the form of exchange traded mutual funds and are included in the Company’s other long-term assets on its condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018 . Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis As of September 30, 2019 and December 31, 2018 the Company had no assets or liabilities required to be measured at fair value on a nonrecurring basis. Assets and Liabilities Not Measured at Fair Value The carrying values of accounts receivable, accounts payable, notes payable and short-term borrowings approximate their fair values due to the short-term nature and liquidity of these financial instruments. The estimated fair value of the Company's long-term debt approximated its carrying value as of September 30, 2019 and December 31, 2018 |
Asset Sale
Asset Sale | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Asset Sale | Asset Sale NeoRussia In December 2018, the Company entered into an agreement with Joint Stock Company Rusnano, a related party, for Joint Stock Company Rusnano group to purchase the 100% interest in the operations of NeoPhotonics Corporation, LLC, the Company's manufacturing operations in Russia. In 2018, the Company recorded additional restructuring expense of $1.6 million related to these operations, bringing the total amount accrued for the Rusnano payment derivative to $2.0 million . As of December 31, 2018, the Company has recorded assets with a carrying value of $3.0 million as held for sale, consisting primarily of $2.5 million of property, plant and equipment and $0.5 million of prepaid expenses and other current assets. The estimated fair value less direct costs of sale approximates the related carrying value. The balance for liabilities held for sale as of December 31, 2018 was immaterial and was primarily included in accrued and other current liabilities. In April 2019, the Company completed the sale of 100% interest in the operations of NeoPhotonics Corporation, LLC, the Company's manufacturing operations in Russia to Joint Stock Company Rusnano, a related party. In connection with the sale, the Company received $2.0 million in cash, settled the $2.0 million exit fee and recognized a gain on asset sale of $0.8 million within operating expenses during the nine months ended September 30, 2019 . APAT In January 2017, the Company completed the sale of its Low Speed Transceiver Products’ assets to APAT Optoelectronics Components Co., Ltd. ("APAT OE") pursuant to an asset purchase agreement dated December 14, 2016 for consideration of approximately $25.0 million (in RMB equivalent) plus approximately $1.4 million (in RMB equivalent) post-closing transaction service fees to be received under a transition services agreement with APAT OE in which the Company provided short-term manufacturing and other specific services pursuant to such agreement. The related supply chain purchase commitments and value-added tax obligations were assumed by APAT OE. The receivable and payable balances related to the transition service arrangement were $11.6 million and $11.8 million , respectively, as of September 30, 2019 . As of December 31, 2016, the balance in assets held for sale was $13.9 million , consisting of $13.1 million in inventories and $0.8 million in property, plant and equipment. As a result of post-closing adjustments, total consideration was reduced by approximately $3.4 million for inventory. In addition, an immaterial amount of property, plant and equipment was reclassified from assets held for sale. Upon closing, assets sold to APAT OE were approximately $12.8 million , including approximately $12.1 million in inventories and $0.7 million in property, plant and equipment. The adjusted consideration received of approximately $21.6 million was subject to further reduction of up to $10.0 million for any indemnification claims. As of September 30, 2019 , the Company has a reserve of $6.5 million within accrued and other current liabilities for warranty claims. The indemnification warranties expired on June 30, 2017. The Company recognized a $2.2 million gain on the sale of these assets within operating loss in 2017. All of the Low Speed Transceiver Products were part of the Company’s Network Products and Solution product group and included the low speed optical network (PON) products for which the end-of-life plan was announced in mid-2016. |
Balance sheet components
Balance sheet components | 9 Months Ended |
Sep. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance sheet components | Balance sheet components Accounts receivable, net Accounts receivable, net, consists of the following (in thousands): September 30, 2019 December 31, 2018 Accounts receivable $ 65,096 $ 74,343 Trade notes receivable 400 672 Allowance for doubtful accounts (251 ) (264 ) $ 65,245 $ 74,751 Inventories, net Inventories, net, consist of the following (in thousands): September 30, 2019 December 31, 2018 Raw materials $ 23,316 $ 27,806 Work in process 15,485 13,044 Finished goods (1) 9,867 11,309 $ 48,668 $ 52,159 ________________________________________________________ (1) Finished goods inventory at customer vendor managed inventory locations was $3.1 million and $5.6 million as of September 30, 2019 and December 31, 2018 , respectively. Prepaid expenses and other current assets Prepaid expenses and other current assets consist of the following (in thousands): September 30, 2019 December 31, 2018 Prepaid taxes and taxes receivable $ 5,523 $ 5,461 Transition services agreement receivable (refer to Note 6) 11,609 11,999 Deposits and other prepaid expenses 2,714 3,020 Other receivable 4,075 6,125 $ 23,921 $ 26,605 Property, plant and equipment, net Purchases of property, plant and equipment unpaid as of September 30, 2019 and September 30, 2018 was $2.8 million and $1.1 million , respectively. Purchased intangible assets Purchased intangible assets consist of the following (in thousands): September 30, 2019 December 31, 2018 Gross Assets Accumulated Amortization Net Assets Gross Accumulated Net Technology and patents $ 36,609 $ (35,107 ) $ 1,502 $ 37,029 $ (34,995 ) $ 2,034 Customer relationships 14,970 (14,970 ) — 15,146 (15,026 ) 120 Leasehold interest 1,193 (380 ) 813 1,238 (374 ) 864 $ 52,772 $ (50,457 ) $ 2,315 $ 53,413 $ (50,395 ) $ 3,018 Amortization expense relating to technology and patents and the leasehold interest intangible assets is included within cost of goods sold and customer relationships within operating expenses. The following table presents details of the amortization expense of the Company’s purchased intangible assets as reported in the condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Cost of goods sold $ 185 $ 185 $ 553 $ 572 Operating expenses — 118 119 357 Total $ 185 $ 303 $ 672 $ 929 The estimated future amortization expense of purchased intangible assets as of September 30, 2019 , is as follows (in thousands): 2019 (remaining three months) $ 184 2020 736 2021 644 2022 27 2023 27 Thereafter 697 $ 2,315 Accrued and other current liabilities Accrued and other current liabilities consist of the following (in thousands): September 30, 2019 December 31, 2018 Transition services agreement payables (refer to Note 6) $ 11,757 $ 11,769 Employee-related 14,111 14,899 Asset sale related contingent liabilities (refer to Note 6) 6,505 6,751 Operating lease liabilities, current 2,067 — Accrued warranty 749 672 Deferred revenue, current 115 1,114 Income and other taxes payable 1,464 1,580 Rusnano payment derivative — 2,000 Accrued litigation settlement 150 2,645 Other accrued expenses 5,496 8,858 $ 42,414 $ 50,288 Warranty Accrual The table below summarizes the movement in the warranty accrual, which is included in accrued and other current liabilities (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Beginning balance $ 751 $ 1,592 $ 672 $ 1,334 Warranty accruals 198 (42 ) 674 487 Settlements (200 ) (351 ) (597 ) (622 ) Ending balance $ 749 $ 1,199 $ 749 $ 1,199 Other noncurrent liabilities Other noncurrent liabilities consist of the following (in thousands): September 30, 2019 December 31, 2018 Pension and other employee-related $ 4,121 $ 4,529 Deferred rent — 3,058 Government grant 2,075 2,108 Capital lease obligation — 282 Asset retirement obligations and other 3,552 3,522 $ 9,748 $ 13,499 |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In 2017, the Company initiated restructuring actions in order to focus on key growth initiatives and to move towards a lower break even revenue level through lower operating expenses and manufacturing cost reductions. Actions included a reduction in force, facilities consolidation and certain asset-related adjustments. The Company recorded restructuring charges of $0.3 million within operating expenses in the nine months ended September 30, 2019 for costs related to the sale of NeoPhotonics Russia. The Company recorded $0.1 million and $0.2 million in restructuring charges within cost of goods sold in the three and nine months ended September 30, 2018 and $1.1 million and $1.8 million in restructuring charges within operating expenses in the three and nine months ended September 30, 2018 , respectively. Restructuring activities for the nine months ended September 30, 2019 were as follows (in thousands): Employee Severance Facilities Consolidation Others Total Restructuring obligations December 31, 2018 $ 436 $ 769 $ 1,611 $ 2,816 Charges 88 — 173 261 Cash payments (524 ) (130 ) (171 ) (825 ) Settlement of Rusnano payment derivative — — (1,611 ) (1,611 ) Adoption of ASC 842 — (620 ) — (620 ) Restructuring obligations September 30, 2019 $ — $ 19 $ 2 $ 21 The current restructuring liability reported in accrued and other current liabilities in the condensed consolidated balance sheets as of September 30, 2019 was immaterial. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt The table below summarizes the carrying amounts and weighted average interest rates of the Company’s debt (in thousands, except percentages): September 30, 2019 December 31, 2018 Carrying Amount Interest Rate Carrying Interest Notes payable to suppliers $ — — $ 4,795 — Total notes payable and short-term borrowing $ — $ 4,795 Long-term debt, current and noncurrent: Borrowing under Wells Fargo Credit Facility $ 32,016 3.90 % $ 35,961 4.41 % Mitsubishi Bank loans 9,808 1.04% -1.44% 11,094 1.05% -1.45% Mitsubishi Bank and Yamanashi Chou Bank loan 6,185 1.07 % 6,898 1.10 % Finance lease liability 303 — Unaccreted discount and issuance costs (487 ) (602 ) Total long-term debt, net of unaccreted discount and issuance costs $ 47,825 $ 53,351 Reported as: Current portion of long-term debt $ 3,054 $ 2,897 Long-term debt, net of current portion 44,771 50,454 Total long-term debt, net of unaccreted discount and issuance costs $ 47,825 $ 53,351 Notes payable and short-term borrowing The Company regularly issues notes payable to its suppliers in China. These notes are supported by non-interest bearing bank acceptance drafts issued under the Company’s existing line of credit facilities and are due three to six months after issuance. As a condition of the notes payable arrangements, the Company is required to keep a compensating balance at the issuing banks that is a percentage of the total notes payable balance until the amounts are settled. As of September 30, 2019 , the Company’s subsidiary in China had two line of credit facilities with the following banking institutions: • Under the first line of credit facility with Shanghai Pudong Development Bank, the Company can borrow up to RMB 120.0 million ( $16.8 million ) for short-term loans at varying interest rates, or up to approximately RMB 240.0 million ( $33.6 million ) for bank acceptance drafts (with up to 50% compensating balance requirement). This line of credit facility expires in November 2021. In November 2017, the Company borrowed $17.0 million under this line which bore interest at 4.1% . The amount of $17.0 million under this line was repaid in May 2018. • Under the second line of credit facility with Shanghai Pudong Development Bank, which expires in November 2021, the Company can borrow up to RMB 30.0 million ( $4.2 million ) for short-term loans at varying interest rates, or up to approximately RMB 60.0 million ( $8.4 million ) for bank acceptance drafts (with up to 50% compensating balance requirement). • In December 2017, the Company's subsidiary in China entered into a third line of credit facility with China CITIC Bank in China, which expired in November 2018. The purpose of the credit facility is to provide short-term borrowings, bank acceptance drafts and letters of credits. Under this credit facility, the Company could borrow up to approximately RMB 250 million ( $35.0 million ) at varying interest rates, or up to approximately RMB 390.6 million ( $54.7 million ) for bank acceptance drafts (with up to 36% compensating balance requirement). In February 2018, the Company borrowed $17.0 million under this line which bore interest at 4.7% . The amount of $17.0 million under this line was repaid in August 2018. The Company had a line of credit facility previously with China CITIC Bank in China which expired during September 2017. In July 2017, the Company borrowed $17.0 million under this line which bore interest at LIBOR plus 2.55% . The amount of $17.0 million under this line was repaid to CITIC Bank in January 2018. Under these line of credit facilities, the non-interest bearing bank acceptance drafts issued in connection with the Company’s notes payable to its suppliers in China, had no outstanding balance at September 30, 2019 and an outstanding balance of $4.8 million as of December 31, 2018 . As of December 31, 2018 , compensating balances relating to these bank acceptance drafts and letters of credit issued to suppliers and the Company’s subsidiaries totaled $2.6 million . Compensating balances are classified as restricted cash on the Company’s condensed consolidated balance sheets. In China, when there is a case pending in judicial court, banks may choose to limit borrowing against existing credit lines, regardless of the legitimacy of the case. The Company has a dispute pending with APAT OE in judicial court (Refer to Note 12). The Company has repaid funds borrowed and does not expect to make any additional draws against its credit facilities in China until this matter is resolved. Credit facilities In September 2017, the Company entered into a revolving line of credit agreement with Wells Fargo Bank, National Association ("Wells Fargo") as the administrative agent for a lender group (the "Wells Fargo Credit Facility" or "Credit Facility"). The Wells Fargo Credit Facility provides for borrowings equal to the lower of (a) a maximum revolver amount of $50.0 million , or (b) an amount equal to 80% - 85% of eligible accounts receivable plus 100% of qualified cash balances up to $15.0 million , less certain discretionary adjustments ("Borrowing Base"). The maximum revolver amount may be increased by up to $25.0 million , subject to certain conditions. At closing, $50.0 million was available, of which $30.0 million was drawn. The Company used $20.0 million of this amount to pay the principal and interest due under the Comerica Bank Credit Facility, which has since been terminated. The Credit Facility matures on June 30, 2022 and borrowings bear interest at an interest rate option of either (a) the LIBOR rate, plus an applicable margin ranging from 1.50% to 1.75% per annum, or (b) the prime lending rate, plus an applicable margin ranging from 0.50% to 0.75% per annum. The Company is also required to pay a commitment fee equal to 0.25% of the unused portion of the Credit Facility. The Credit Facility agreement ("Agreement") requires prepayment of the borrowings to the extent the outstanding balance is greater than the lesser of (a) the most recently calculated Borrowing Base, or (b) the maximum revolver amount. The Company is required to maintain a combination of certain defined cash balances and unused borrowing capacity under the Credit Facility of at least $20.0 million , of which at least $5.0 million shall include unused borrowing capacity. The Agreement also restricts the Company's ability to dispose of assets, permit change in control, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments and make certain restricted payments. Borrowings under the Credit Facility are collateralized by substantially all of the Company's assets. On June 14, 2019, the Company entered into a First Amendment to the Credit Facility (the "Amended Credit Facility"). The Amendment removes Huawei from the list of “Eligible Accounts” as a basis for the Company’s borrowing while Huawei is on the U.S. Bureau of Industry and Security (“BIS”) “Entity List”. During the period of time while Huawei remains on the Entity List, the concentration limits of certain other customers are increased to partially offset the removal of Huawei. Additionally, until Huawei is no longer on the Entity List, the Company is required to maintain a temporary combination of certain defined unrestricted cash and unused borrowing capacity under the Credit Facility of at least $30.0 million in the U.S. and $40.0 million world-wide, of which at least $5.0 million shall include unused borrowing capacity. The Company was in compliance with the covenants of this Amended Credit Facility as of September 30, 2019 . As of September 30, 2019 , the outstanding balance under the Credit Facility was $32.0 million and the weighted average rate under the LIBOR option was 3.90% . The remaining borrowing capacity as of September 30, 2019 was $12.4 million , of which $5.0 million is required to be maintained as unused borrowing capacity. The Company repaid $5.0 million in January 2019, which was borrowed in December 2018. Mitsubishi Bank loans On February 25, 2015, the Company entered into certain loan agreements and related agreements with MUFG Bank, Ltd. (the “Mitsubishi Bank”) that provided for (i) a term loan in the aggregate principal amount of 500.0 million JPY ( $4.4 million ) (the “Term Loan A”) and (ii) a term loan in the aggregate principal amount of one billion JPY (approximately $9.3 million ) (the “Term Loan B” and together with the Term Loan A, the “2015 Mitsubishi Bank Loans”). The 2015 Mitsubishi Bank Loans are secured by a mortgage on certain real property and buildings owned by the Company’s Japanese subsidiary. Interest on the 2015 Mitsubishi Bank Loans accrues and is paid monthly based upon the annual rate of the monthly Tokyo Interbank Offer Rate (TIBOR) plus 1.40% . The Term Loan A required interest only payments until the maturity date of February 23, 2018, with a lump sum payment of the aggregate principal amount on the maturity date. The Term Loan B requires equal monthly payments of principal equal to 8.3 million JPY (approximately $0.1 million ) until the maturity date of February 25, 2025, with a lump sum payment of the balance of 8.4 million JPY (approximately $0.1 million ) on the maturity date. Interest on the Term Loan B is accrued based upon monthly TIBOR plus 1.40% and is secured by real estate collateral. In conjunction with the execution of the Bank Loans, the Company paid a loan structuring fee, including consumption tax, of 40.5 million JPY (approximately $0.4 million ). The Term Loan A of 500.0 million JPY (approximately $4.4 million ) was repaid to the Mitsubishi Bank in January 2018. The 2015 Mitsubishi Bank Loans contain customary representations and warranties and customary affirmative and negative covenants applicable to the Company’s Japanese subsidiary, including, among other things, restrictions on cessation in business, management, mergers or acquisitions. The 2015 Mitsubishi Bank Loans contain financial covenants relating to minimum net assets, maximum ordinary loss and a coverage ratio covenant. The Company was in compliance with the related covenants as of September 30, 2019 and December 31, 2018 . Outstanding principal balance for the Mitsubishi Term Loans was 541.7 million JPY (approximately $5.0 million ) as of September 30, 2019 . In March 2017, the Company entered into a loan agreement and related agreements with the Mitsubishi Bank for a term loan of 690.0 million JPY (approximately $6.4 million ) (the “2017 Mitsubishi Bank Loan”) to acquire manufacturing equipment for its Japanese subsidiary. This loan is secured by the manufacturing equipment owned by the Company's subsidiary in Japan. Interest on the 2017 Mitsubishi Bank Loan is based on the annual rate of the monthly TIBOR rate plus 1.00% . The 2017 Mitsubishi Bank Loan matures on March 29, 2024 and requires monthly interest and principal payments over 72 months commencing in April 2018. The loan contains customary covenants relating to minimum net assets, maximum ordinary loss and a coverage ratio covenant. The Company was in compliance with these covenants as of September 30, 2019 . The loan was available from March 31, 2017 to March 30, 2018 and 690.0 million JPY (approximately $6.4 million ) under this loan was fully drawn in March 2017. Outstanding principal balance for the 2017 Mitsubishi Bank Loan was approximately 517.5 million JPY (approximately $4.8 million ) as of September 30, 2019 . Mitsubishi Bank and Yamanashi Chou Bank loan In January 2018, the Company entered into a term loan agreement with Mitsubishi Bank and The Yamanashi Chou Bank, Ltd. for a term loan in the aggregate principal amount of 850.0 million JPY (approximately $7.9 million ) (the “Term Loan C”). The purpose of the Term Loan C is to obtain machinery for the core parts of the manufacturing line and payments for related expenses by the Company's subsidiary in Japan. The Term Loan C requires no additional security. The Term Loan C was available from January 29, 2018 to January 29, 2025. The full amount of the Term Loan C was drawn in January 2018. Interest on the Term Loan C is based upon the annual rate of the three months TIBOR rate plus 1.00% . The Term Loan C requires quarterly interest payments, along with the principal payments, over 82 months commencing in April 2018. The Term Loan C loan agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Japanese Subsidiary, including, among other things, restrictions on cessation in business, management, mergers or acquisitions. The Term Loan C loan agreement contains financial covenants relating to minimum net assets and maximum ordinary loss. The Company was in compliance with these covenants as of September 30, 2019 and December 31, 2018. Outstanding principal balance for the Mitsubishi Bank and Yamanashi Chou Bank Loan was approximately 667.9 million JPY (approximately $6.2 million ) as of September 30, 2019 . As of September 30, 2019 , maturities of total long-term debt were as follows (in thousands): 2019 (remaining three months) $ 814 2020 3,203 2021 3,210 2022 35,216 2023 3,115 Thereafter 2,754 $ 48,312 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company has operating leases for offices, research and development facilities and manufacturing facilities. Leases have remaining terms of less than one year to eight years , some of which include options to extend the leases and some of which may include options to terminate the leases within one year . As of September 30, 2019 and December 31, 2018, an asset recorded in property, plant and equipment under a finance lease was immaterial. The components of lease expense were as follows (in thousands): Three Months Ended Nine Months Ended 2019 2019 Operating lease cost $ 760 $ 2,270 Variable and short-term lease cost 401 1,062 Total lease cost $ 1,161 $ 3,332 Other information related to leases was as follows (in thousands, except lease term and discount rate): Nine Months Ended 2019 Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,635 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 136 Weighted average remaining lease term Operating leases 7.5 Weighted average discount rate Operating leases 6.4 % Future minimum lease payments under non-cancelable leases as of September 30, 2019 were as follows (in thousands): Operating Leases 2019 (excluding the nine months ended September 30, 2019) $ 891 2020 3,140 2021 3,094 2022 3,091 2023 3,041 Thereafter 11,202 Total future minimum lease payments 24,459 Less imputed interest (5,338 ) Total $ 19,121 Reported as of September 30, 2019: Operating Leases Accrued and other current liabilities $ 2,067 Operating lease liabilities, noncurrent 17,054 Total $ 19,121 As of December 31, 2018, the future minimum commitments under the Company’s non-cancelable operating leases and capital leases are as follows (in thousands): Operating Leases 2019 $ 3,618 2020 3,113 2021 3,059 2022 3,056 2023 3,049 Thereafter 11,437 Total future minimum lease payments $ 27,332 |
Japan pension plan
Japan pension plan | 9 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Japan pension plan | Japan pension plan The pension liability related to the Company’s Retirement Allowance Plan (“RAP”) in Japan as of September 30, 2019 was $4.1 million , of which $0.6 million was recorded in accrued and other current liabilities and the remainder in other noncurrent liabilities on the Company’s condensed consolidated balance sheet. The pension liability related to the Company’s RAP in Japan as of December 31, 2018 was $4.3 million , of which $0.3 million , was recorded in accrued and other current liabilities and the remainder in other noncurrent liabilities on the Company’s condensed consolidated balance sheet. Net periodic pension cost associated with this plan was immaterial in the three and nine months ended September 30, 2019 and 2018 |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Litigation From time to time, the Company is subject to various claims and legal proceedings, either asserted or unasserted, that arise in the ordinary course of business. The Company accrues for legal contingencies if the Company can estimate the potential liability and if the Company believes it is probable that the case will be ruled against it. If a legal claim for which the Company did not accrue is resolved against it, the Company would record the expense in the period in which the ruling was made. The Company believes that the likelihood of an ultimate amount of liability, if any, for any pending claims of any type (alone or combined) that will materially affect the Company’s financial position, results of operations or cash flows is remote. The ultimate outcome of any litigation is uncertain, however, and unfavorable outcomes could have a material negative impact on the Company’s financial condition and operating results. Regardless of outcome, litigation can have an adverse impact on the Company because of defense costs, negative publicity, diversion of management resources and other factors. In January 2010, Finisar Corporation, or Finisar, filed a complaint in the U.S. District Court for the Northern District of California, or the Court, against Source Photonics, Inc., MRV Communications, Inc., Oplink Communications, Inc. and the Company, or collectively, the co-defendants. In the complaint, Finisar alleged infringement of certain of its U.S. patents. In 2010 the Company filed an answer to the complaint and counterclaims, asserting two claims of patent infringement and additional claims. The Court dismissed without prejudice all co-defendants (including the Company) except Source Photonics, Inc., on grounds that such claims should have been asserted in four separate lawsuits, one against each defendant. This dismissal does not prevent Finisar from bringing a new similar lawsuit against the Company. In 2011 the Company and Finisar agreed to suspend their respective claims and in 2012 the Company and Finisar further agreed to toll their respective claims. While there has been no action on this matter since 2012, the Company is currently unable to predict the outcome of this dispute and therefore cannot determine the likelihood of loss nor estimate a range of possible loss. In December 2016, the Company was served with a lawsuit filed by Lestina International Ltd. (“Lestina”), in Santa Clara County, CA. The lawsuit is regarding a dispute of approximately $3.0 million related to purchase orders for the Company’s Low Speed Transceiver Products that was soon thereafter sold by the Company to APAT OE in January 2017. The purchase orders in question were included in the asset sale and were assumed liabilities by the purchaser of the business. The parties engaged in extensive negotiations and in January 2019, the parties agreed to a proposed settlement which was placed on the record of the Superior Court of Santa Clara County agreeing that NeoPhotonics Dongguan Co., Ltd. (“NeoDongguan”) (the Company’s wholly owned subsidiary located in China) would pay to Lestina a total of $2.2 million . These payments were completed in two installments paid in February and June 2019. Upon Lestina's receipt of the final payment in June 2019, Lestina shipped to NeoDongguan the remaining parts from the original purchase orders. In April 2018, APAT OE filed a lawsuit in the Qianhai Court in Shenzhen, China against NeoPhotonics (China) Co., Ltd. and NeoPhotonics Dongguan Co. Ltd. (collectively "NeoChina") and NeoPhotonics Corporation with a claim of approximately $20.0 million . The lawsuit relates to the sale of the low speed transceiver business to APAT OE from NeoChina. APAT OE claims that the business has been losing money and that APAT OE was not given all of the information about the business they purchased prior to signing the Asset Purchase Agreement. In May 2018, counsel on behalf of NeoChina filed a motion objecting to the jurisdiction, claiming that the proper jurisdiction for any dispute between these parties is the Shenzhen Court of International Arbitration (or the "Arbitration Court") and the proper parties to this dispute are NeoChina and APAT OE, pursuant to the Asset Purchase Agreement signed by APAT OE and NeoChina (or the "APA"). In June 2018 a hearing was held in the Qianhai Court in Shenzhen, China and in August 2018 the Court ruled in favor of APAT OE. In October 2018, a hearing was held in the Intermediate Court of Shenzhen (or the "Intermediate Court") on an appeal which was filed by NeoChina and in November 2018 the Intermediate Court ruled in favor of NeoChina and dismissed in totality the litigation against NeoChina, ruling that arbitration was the proper forum for such dispute resolution between the parties. The litigation continues against NeoPhotonics Corporation in Intermediate Court, where NeoPhotonics Corporation claims that there is no existing contract between APAT OE and NeoPhotonics Corporation and therefore there is no basis for litigation. The Company is unable to predict the outcome of this matter and is not currently aware of the precise amount of the ongoing claim by APAT against the remaining defendant, NeoPhotonics Corporation, in this lawsuit. In December 2018, APAT OE officially filed claims through two lawsuits against NeoChina, NeoPhotonics Corporation Limited Hong Kong (or NeoHK), Novel Centennial Limited BVI (or NeoBVI) and NeoPhotonics Corporation in the Intermediate Court in addition to a pre-trial preservation order. On the same day the Court issued the order to preserve approximately $29.0 million of NeoChina assets, which is the approximate amount of the revised claims by APAT OE against all defendants in the first lawsuit. The temporary pre-trial preservation order was made simultaneously to the filing of the two lawsuits, but the defendants were not served or aware of the lawsuit until later in January 2019. In the first lawsuit, the legal claims are the same as the ones APAT OE filed in April 2018 in Qianhai Court in Shenzhen, China (as described above). The difference is that instead of distributing claims in separate cases, APAT OE has combined its claims to one single case and added the additional defendants of NeoHK and NeoBVI and increased the claimed damages to approximately $29.0 million . In the second lawsuit, the claims are new and related to the alleged new issues related to a contract manufacturer located in the Philippines and claiming damages in the amount of RMB 50.9 million (approximately $7.6 million ). APAT OE claims that the defendants have interfered with APAT OE’s ability to sign an engagement agreement with the contract manufacturer. The defendants believe this dispute is related to and should be under the jurisdiction that was agreed to in the APA, and therefore should be properly transferred to the Shenzhen Court of International Arbitration. In March 2019 the Shenzhen Intermediate Court assigned a judge for the two lawsuits, but no hearing date has been set yet. The Company is unable to predict the outcome of this matter. In February 2019, NeoChina filed a case in the Qianhai Court in Shenzhen, China against APAT OE and Zhejiang Merchants Property Insurance Company for losses and damages caused to NeoChina from APAT OE’s previously granted property preservation. The claim is for approximately RMB 350,000 (approximately $52,000 ) in damages and legal fees and was heard in May 2019. In October 2019, NeoChina received a ruling in favor of the defendants but has filed an appeal for which a hearing date has not yet been scheduled. The Company is unable to predict the outcome of this matter. APAT Arbitration In June 2017, APAT OE filed an arbitration claim in the Shenzhen Court of International Arbitration (or the Arbitration Court) against NeoChina (collectively both of the Company’s China subsidiaries), claiming that approximately $1.5 million of the inventory that was sold to APAT OE by NeoChina in an Asset Purchase Agreement executed between the parties on December 14, 2016 was aged inventory and of no value. The arbitration was heard in the Arbitration Court in August 2017. In October 2017, NeoChina was informed that it was successful in the defense of the dispute and was also successful in its counterclaim against APAT OE. NeoChina was awarded approximately RMB 700,000 (approximately $110,000 ) in compensatory damages and attorney fees as well as having the approximately $1.5 million claim against it rejected in its entirety. In April 2018, APAT OE filed a Notice of Judicial Review of the arbitration judgment in the Shenzhen Intermediate Court in Shenzhen, China. The case was heard in May 2018, and NeoChina was successful in disputing the Judicial Review, which means that the arbitration judgment against APAT OE and in favor of NeoChina stands. In July 2018, NeoChina applied together to the Shenzhen Intermediate Court for enforcement of the previous arbitration ruling because APAT OE had refused to perform the arbitral award. In October 2018, the Court enforced the award, officially closing this arbitration matter. In July 2018, NeoChina filed an arbitration claim against APAT OE in the Arbitration Court claiming approximately USD $12.0 million in damages as related to liability under the APA. NeoChina also was granted a property preservation of APAT OE’s bank accounts. In February 2019 NeoChina applied to the Arbitration Court to reduce the claim to USD $7.1 million according to the evidence of confirmation requests received by NeoChina. A hearing occurred on September 23, 2019. No judgment has been issued to date. The Company is unable to predict the outcome of this matter. In November 2018, APAT OE filed an additional arbitration claim against NeoChina and NeoPhotonics Corporation claiming approximately USD $7.8 million for liability under the APA. In March 2019, NeoChina filed a response and counterclaim against APAT OE including a claim for attorney fees in the amount of RMB 810,000 (approximately $121,000 ). This matter is scheduled to be heard in the same hearing as the NeoChina arbitration claim referenced above, which matter was heard on September 23, 2019. No judgment has been issued to date. The Company is unable to predict the outcome of this matter. Indemnifications In the normal course of business, the Company enters into agreements that contain a variety of representations and warranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. To date, the Company has no t paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. In November 2016, Oyster Communications, Inc. filed nine patent lawsuits against several defendants in the U.S. District Court for the Eastern District of Texas, including one against Cisco Systems, Inc. ("Cisco"). One defendant successfully transferred their case to the U.S. District Court for the Northern District of California. Additional defendants requested venue changes are still pending. The Company was not named as a defendant in any of the lawsuits. In July 2017, Cisco notified the Company that it would be seeking indemnification from the Company for claims against Cisco arising from the lawsuits and the parties engaged in discussions and negotiations. In September 2018, the Company and Cisco signed a settlement agreement under which the Company agreed to pay to Cisco $300,000 , which was paid in January 2019, and $150,000 in product credits to be applied during calendar year 2019. This settlement resolves Cisco's indemnification claims against the Company in this matter. Penalty Payment Derivative In connection with a private placement transaction with Joint Stock Company "Rusnano" (formerly Open Joint Stock Company “RUSNANO"), or Rusnano, in 2012, the Company agreed to certain performance obligations including establishing a wholly-owned subsidiary in Russia and making a $30.0 million investment commitment (the "Investment Commitment") towards the Company’s Russian operations, which could be partially satisfied by cash and/or non-cash investment inside or outside of Russia and/or by way of non-cash asset transfers. The Rights Agreement as amended in 2015 (the "Amended Rights Agreement") limited the maximum amount of penalties and/or exit fee (the "Rusnano Payment") to be paid by the Company to $5.0 million in the aggregate and allowed such payment to be reduced when certain milestones were met over time. The Amended Rights Agreement also provided for an updated investment plan for the Company’s Russian subsidiaries that included non-cash transfer of licensing rights to intellectual property, non-cash transfers of existing equipment and commitments to complete the remaining investment milestones through 2019. As of December 31, 2018, the remaining Investment Commitment was approximately $6.5 million to be invested at any time on or before December 31, 2019. At any point before December 31, 2019, the Company could have elected to pay a $2.0 million exit fee to terminate any remaining obligations associated with the Investment Commitment. Rusnano had non-transferable veto rights over the Company’s Russian subsidiaries’ annual budget during the investment period and had the right to approve non-cash asset transfers to be made in satisfaction of the Investment Commitment. The Company accounted for the Rusnano Payment as an embedded derivative instrument. The fair value of the penalty payment derivative has been estimated at the date of the original common stock sale (April 27, 2012) and at each subsequent balance sheet date using a probability-weighted discounted future cash flow approach using unobservable inputs, which are classified as Level 3 within the fair value hierarchy. The primary inputs for this approach include the probability of achieving the Investment Commitment and a discount rate that approximates the Company’s incremental borrowing rate. After the initial measurement, changes in the fair value of this derivative are recorded in other income (expense), net. The estimated fair value of this derivative was $2.0 million as of December 31, 2018 . As of December 31, 2018, the derivative was reported within Accrued and other current liabilities on the Company’s condensed consolidated balance sheets. Refer to Note 6 for further details. In December 2018, the Company signed a definitive agreement with Rusnano to sell the Company’s 100% interest in NeoPhotonics Corporation, LLC, the subsidiary for the Company’s manufacturing operations in Russia, for approximately book value. The purchase price agreed to be paid by Rusnano consisted of approximately $3.0 million in cash and $1.0 million in cancellation of the remaining penalty payment that would otherwise have been owed to Rusnano as consideration for the Company's obligations to provide manufacturing process transition to NeoPhotonics Corporation, LLC. In April 2019, the Company completed the sale of 100% interest in the operations of NeoPhotonics Corporation, LLC, the Company's manufacturing operations in Russia to Joint Stock Company Rusnano, a related party. In connection with the sale, the Company received $2.0 million in cash, settled the $2.0 million exit fee and recognized a gain on asset sale of $0.8 million during the nine months ended September 30, 2019 . |
Stockholders' equity
Stockholders' equity | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ equity | Stockholders’ equity Common Stock As of September 30, 2019 , the Company had reserved 7,964,197 common stock for issuance under its equity incentive plans and 1,820,744 common stock shares for issuance under its employee stock purchase plan. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, net of related taxes, were as follows (in thousands): Foreign Currency Translation Adjustments Defined Benefit Pension Plan Adjustment Total Accumulated Other Comprehensive Income (loss) Balance as of December 31, 2018 $ (6,897 ) $ (229 ) $ (7,126 ) Other comprehensive loss, net of taxes of zero (3,468 ) — (3,468 ) Balance as of September 30, 2019 $ (10,365 ) $ (229 ) $ (10,594 ) No material amounts were reclassified out of accumulated other comprehensive income during the three and nine months ended September 30, 2019 and 2018 for realized gains or losses on available-for-sale securities. Accumulated Deficit Approximately $9.0 million of the Company’s retained earnings within its total accumulated deficit as of December 31, 2018 was subject to restriction due to the fact that the Company’s subsidiaries in China are required to set aside at least 10% of their respective accumulated profits each year end to fund statutory common reserves. |
Restricted net assets
Restricted net assets | 9 Months Ended |
Sep. 30, 2019 | |
Restricted Net Assets [Abstract] | |
Restricted net assets | Restricted net assets The Company’s consolidated subsidiaries operating in China and Japan are restricted from transferring funds or assets to its parent company in the form of cash dividends, loans or advances. As of September 30, 2019 and December 31, 2018, the Company's consolidated subsidiaries had $20.5 million and $20.9 million , respectively, of restricted net assets. This compares to the Company's consolidated net assets of $150.0 million and $160.2 million as of September 30, 2019 and December 31, 2018, respectively, which consisted of (in thousands): September 30, 2019 December 31, 2018 Cash restricted in China as a result of ongoing litigation and unfulfilled government grants $ 10,791 $ 11,018 China earnings restricted to fund statutory common reserves in China 8,792 9,005 Loan agreements in Japan requiring local subsidiaries to maintain minimum net asset levels 926 909 Total restricted net assets in the Company's consolidated subsidiaries $ 20,509 $ 20,932 |
Stock-based compensation
Stock-based compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based compensation | Stock-based compensation The following table summarizes the stock-based compensation expense recognized in the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Cost of goods sold $ 441 $ 553 $ 1,651 $ 1,832 Research and development 715 1,016 2,383 2,618 Sales and marketing 575 931 1,852 2,511 General and administrative 1,220 1,541 3,408 3,566 $ 2,951 $ 4,041 $ 9,294 $ 10,527 Determining Fair Value The Company estimated the fair value of certain stock-based awards using a Black-Scholes-Merton valuation model with the following assumptions: Three Months Ended Nine Months Ended Stock options 2019 2018 2019 2018 Weighted-average expected term (years) 6.00 0.00 6.00 6.02 Weighted-average volatility 68% —% 67% 65% Risk-free interest rate 1.82% —% 1.82%-2.27% 2.27% - 2.62% Expected dividends —% —% —% —% Stock appreciation units Weighted-average expected term (years) 1.45 1.87 1.56 1.99 Weighted-average volatility 65% 65% 63% 66% Risk-free interest rate 1.75%-2.12% 1.73% - 2.52% 1.75%-2.63% 1.03%-2.52% Expected dividends —% —% —% —% ESPP Weighted-average expected term (years) 0.00 0.00 0.69 0.71 Weighted-average volatility —% —% 60% 61% Risk-free interest rate —% —% 2.36%-2.59% 1.20%-1.93% Expected dividends —% —% —% —% Stock Options and Restricted Stock Units (RSUs) The following table summarizes the Company’s stock option and RSU activity, excluding market-based RSUs, during the nine months ended September 30, 2019 : Stock Options Restricted Stock Units Number of Shares Weighted Average Exercise Price Number of Weighted Balance as of December 31, 2018 3,202,745 $ 5.73 2,486,028 $ 7.87 Granted 103,001 4.34 1,938,591 4.87 Exercised/Converted (264,857 ) 3.66 (996,340 ) 8.70 Cancelled/Forfeited (208,277 ) 6.52 (220,524 ) 7.51 Balance as of September 30, 2019 2,832,612 5.82 3,207,755 5.82 At September 30, 2019 , the Company had $1.0 million of unrecognized stock-based compensation expense for stock options, net of estimated forfeitures, which will be recognized over the remaining weighted-average period of 1.4 years . At September 30, 2019 , the Company had $14.2 million of unrecognized stock-based compensation expense for RSUs, excluding market-based RSUs, net of estimated forfeitures, which will be recognized over the remaining weighted-average period of 2.6 years . Market-based Restricted Stock Units As of September 30, 2019 , the Company has granted 705,000 shares of market-based RSUs to certain employees. These RSUs will vest if the 30-day weighted average closing price of the Company's common stock is equal to or greater than certain price targets per share and the recipients remain in continuous service with the Company through such service period. No market-based RSUs have vested and 63,500 market-based RSUs have been cancelled through September 30, 2019 . The weighted average grant-date fair value per share of market-based RSUs granted during 2018 was approximately $5.82 per share. As of September 30, 2019 , the Company had $1.6 million of unrecognized stock-based compensation expense for these RSUs, net of estimated forfeitures, which will be recognized over the remaining weighted-average period of 1.04 years. The fair value of market-based RSUs was measured on the grant date using Monte Carlo simulation model with the following assumptions: Market-based restricted stock units Assumptions Weighted-average volatility 66% Risk-free interest rate 2.79% Expected dividends —% Stock Appreciation Units (SAU) SAUs are liability classified share-based awards. Outstanding SAUs are re-measured each reporting period at fair value until settlement. The Company did no t grant any SAUs during the three and nine months ended September 30, 2019 or 2018 . As of September 30, 2019 and December 31, 2018 , there were 169,351 and 192,872 SAUs outstanding, respectively, and related SAU liabilities were $0.5 million and $0.6 million , respectively. Employee Stock Purchase Plan (ESPP) The Company issued 253,718 shares under the ESPP during the nine months ended September 30, 2019 . As of September 30, 2019 , there was $0.1 million of unrecognized stock-based compensation expense for employee stock purchase rights that will be recognized over the remaining offering period through November 2019. In June 2019, the Company adopted an Amendment and Restatement of the ESPP to increase the number of shares authorized for issuance under the ESPP by an additional 1,500,000 |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The provision for income taxes in the periods presented is based upon the income (loss) before income taxes (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Income tax provision $ (1,561 ) $ (291 ) $ (1,526 ) $ (2,009 ) The Company’s income tax provision in the three and nine months ended September 30, 2019 and 2018 was primarily related to income taxes of the Company’s non-U.S. operations. The Company conducts its business globally and its operating income is subject to varying rates of tax in the U.S., China and Japan. Consequently, the Company’s effective tax rate is dependent upon the geographic distribution of its earnings or losses and the tax laws and regulations in each geographical region. Historically, the Company has experienced net losses in the U.S. and in the short term, expects this trend to continue. Due to historical losses in the U.S., the Company has a full valuation allowance on its U.S. federal and state deferred tax assets. Management continues to evaluate the realizability of deferred tax assets and the related valuation allowance. If management's assessment of the deferred tax assets or the corresponding valuation allowance were to change, the Company would record the related adjustment to income during the period in which management makes the determination. On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was enacted which, among other things, lowered the U.S. federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates Global Intangible Low Taxed Income ("GILTI") to tax certain foreign sourced earnings. As of December 31, 2018, the Company has concluded the accounting under the TCJA within the time period set forth in Staff Accounting Bulletin 118. There was no provision impact of TCJA on the 2018 financial statements due to full valuation allowance on U.S. deferred tax assets. In addition, the Company has elected to treat GILTI inclusion accounting impact as a current period expense. As of September 30, 2019 , the TCJA has no material impact on the financial statements due to full valuation allowance on U.S. deferred tax assets. The Company adopted ASU 2016-16 on a modified retrospective basis effective January 1, 2018. Upon adoption of this standard on January 1, 2018, the Company recorded $1.8 million to accumulated deficit balance for intra-entity transfer of an asset other than inventory in prior years. As of September 30, 2019 , there were no material changes to either the nature or the amounts of the uncertain tax positions previously determined for the year ended December 31, 2018 |
Basis of presentation and sig_2
Basis of presentation and significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The condensed consolidated financial statements of NeoPhotonics Corporation (“NeoPhotonics” or the “Company”) as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 , have been prepared in accordance with the instructions on Form 10-Q 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 normally provided in the Company’s annual consolidated financial statements. In the opinion of management, the condensed consolidated financial statements contain all adjustments, consisting only of normal recurring items, except as otherwise noted, necessary for the fair presentation of the Company’s financial position and results of operations for the interim periods. The year-end condensed consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”). 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 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 intercompany accounts and transactions have been eliminated. |
Going Concern | Going Concern Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , requires an entity to disclose information about its potential inability to continue as a going concern when conditions and events indicate that it is probable that the entity may be unable to meet its obligations as they become due within one year. Management has assessed the Company’s ability to continue as a going concern within one year of the filing date of this Quarterly Report on Form 10-Q with the SEC in November 2019. The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. |
Certain Significant Risks And Uncertainties | Certain Significant Risks and Uncertainties The Company operates in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, any of the following areas could have a negative effect on the Company in terms of its future financial position, results of operations or cash flows: the general state of the U.S., China and world economies; the highly cyclical nature of the industries the Company serves; the loss of any of its larger customers; restrictions on the Company's ability to sell to foreign customers; ability to obtain additional financing; inability to meet certain debt covenants; fundamental changes in the technology underlying the Company’s products; the hiring, training and retention of key employees; successful and timely completion of product design efforts; and new product design introductions by competitors. |
Concentration | Concentration In the three months ended September 30, 2019 , Huawei accounted for approximately 37% of the Company's total revenue. One other customer was greater than 10% and the Company’s top five customers represented approximately 85% of the Company’s total revenue. In the three months ended September 30, 2018 , Huawei accounted for approximately 47% of the Company's total revenue. One other customer was greater than 10% and the Company’s top five customers represented approximately 89% of the Company’s total revenue. In the nine months ended September 30, 2019 , Huawei accounted for approximately 41% of the Company's total revenue. One other customer was greater than 10% and the Company’s top five customers represented approximately 84% of the Company’s total revenue. In the nine months ended September 30, 2018 , Huawei accounted for approximately 47% of the Company's total revenue. One other customer was greater than 10% and the Company’s top five customers represented approximately 89% of the Company’s total revenue. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenue and expenses during the reporting period. Significant estimates made by management include: the useful lives of property, plant and equipment and intangible assets as well as future cash flows to be generated by those assets; fair values of identifiable assets acquired and liabilities assumed in business combinations; allowances for doubtful accounts; valuation allowances for deferred tax assets; valuation of excess and obsolete inventories; warranty reserves; litigation accrual and recognition of stock-based compensation, among others. Actual results could differ from these estimates. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, other current liabilities and operating lease liabilities on the Company's condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, current portion of long-term debt and long-term debt, net of current portion on the condensed consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on observed market data and other information available at the lease commencement date. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company does not record leases on the condensed consolidated balance sheet with a term of one year or less. The Company does not separate lease and non-lease components but rather account for each separate component as a single lease component for all underlying classes of assets. Variable lease payments are expensed as incurred and are not included within the operating lease ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. Lease expense for minimum operating lease payments is recognized on a straight-line basis over the lease term. |
Accounting Pronouncements Recently Adopted/Recent Accounting Pronouncements Not Yet Effective | Accounting Pronouncements Recently Adopted In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-2, Leases (Topic 842) (“ASU 2016-2”). ASU 2016-2 introduces a lessee model that requires recognition of assets and liabilities arising from qualified leases on the consolidated balance sheets and consolidated statements of operations and to disclose qualitative and quantitative information about lease transactions. It is effective for interim and annual periods beginning after December 15, 2018. Certain optional practical expedients are allowed. The Company adopted this standard as of January 1, 2019, using the modified retrospective transition method by applying the new standard to all leases existing at the date of initial application and not restating comparative periods. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward historical lease classification, assessment on whether a contract was or contains a lease, and initial direct costs for any leases that existed prior to January 1, 2019. The Company also elected to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the condensed consolidated balance sheet. As a result of adopting Topic 842 on January 1, 2019, the Company recognized operating lease right-of-use assets of $17.3 million and corresponding operating lease liabilities of $20.8 million from existing leases on the Company's condensed consolidated balance sheet. Refer to Note 10 for further details. The adoption of Topic 842 had no impact on the Company's condensed consolidated statement of operations or condensed consolidated statement of cash flows. There have been no new or material changes in the Company’s significant accounting policies in the nine months ended September 30, 2019 , as compared to the significant accounting policies described in its Annual Report on Form 10-K for the year ended December 31, 2018 . Recent Accounting Pronouncements Not Yet Effective In January 2017, the FASB issued ASU 2017-4, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-4”). This standard amends the goodwill impairment test to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, up to the total amount of goodwill allocated to that reporting unit. ASU 2017-4 is effective prospectively for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for interim and annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 amends existing guidance on the impairment of financial assets and adds an impairment model that is based on expected losses rather than incurred losses and requires an entity to recognize as an allowance its estimate of expected credit losses for its financial assets. An entity will apply this guidance through a cumulative-effect adjustment to retained earnings upon adoption (a modified-retrospective approach) while a prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. It is effective for the Company’s annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted. The Company is in the process of evaluating the impact of the adoption on its consolidated financial statements and related disclosures. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue by product group and geographical region | The following presents revenue by product group (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 High Speed Products $ 85,366 $ 68,519 $ 228,393 $ 197,362 Network Products and Solutions 7,026 13,229 25,055 34,074 Total revenue $ 92,392 $ 81,748 $ 253,448 $ 231,436 The following table presents the Company's revenue information by geographical region. Revenue is classified based on the ship to location requested by the customer. Such classification recognizes that for many customers, including those in North America or in Europe, designated shipping points are often in China or elsewhere in Asia (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 China $ 44,439 $ 46,134 $ 128,928 $ 133,917 Americas 22,713 22,369 56,138 52,270 Rest of world 25,240 13,245 68,382 45,249 Total revenue $ 92,392 $ 81,748 $ 253,448 $ 231,436 |
Net income (loss) per share (Ta
Net income (loss) per share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted net income 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 Nine Months Ended 2019 2018 2019 2018 Numerator: Net income (loss) $ 2,272 $ (8,125 ) $ (19,145 ) $ (36,908 ) Denominator: Weighted average shares used to compute per share amount: Basic 47,666 45,476 46,949 44,804 Diluted 48,615 45,476 46,949 44,804 Basic net income (loss) per share $ 0.05 $ (0.18 ) $ (0.41 ) $ (0.82 ) Diluted net income (loss) per share $ 0.05 $ (0.18 ) $ (0.41 ) $ (0.82 ) |
Schedule of potentially dilutive securities excluded from computation of diluted net income per share attributable to common stockholders | The Company has excluded the impact of the following outstanding employee stock options and restricted stock units as well as the shares expected to be issued under its employee stock purchase plan from the computation of diluted net income (loss) per share, as their effect would have been antidilutive (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Employee stock options 1,217 3,405 2,833 3,405 Restricted stock units 1,037 2,630 3,208 2,630 Market-based restricted stock units 641 665 641 665 Employee stock purchase plan 172 174 182 174 3,067 6,874 6,864 6,874 |
Cash, cash equivalents, short_2
Cash, cash equivalents, short-term investments, and restricted cash (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash, cash equivalents, short-term investments and restricted cash | The following table summarizes the Company’s cash, cash equivalents, short-term investments and restricted cash (in thousands): September 30, December 31, Cash and cash equivalents: Cash $ 61,396 $ 58,185 Cash equivalents — — Cash and cash equivalents $ 61,396 $ 58,185 Short-term investments $ 7,607 $ 7,481 Restricted cash $ 10,827 $ 11,053 September 30, December 31, Cash and cash equivalents $ 61,396 $ 58,185 Restricted cash 10,827 11,053 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 72,223 $ 69,238 |
Schedule of unrealized gains and losses related to cash equivalents and short-term investments in marketable securities | The following table summarizes the Company’s unrealized gains and losses related to its cash equivalents and short-term investments in marketable securities designated as available-for-sale (in thousands): As of September 30, 2019 As of December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Marketable securities: Money market funds $ 7,607 $ — $ — $ 7,607 $ 7,481 $ — $ — $ 7,481 Reported as: Short-term investments $ 7,607 $ 7,481 |
Fair value disclosures (Tables)
Fair value disclosures (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of financial assets | The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis (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 Short-term investments: Money market funds $ 7,607 $ — $ — $ 7,607 $ 7,481 $ — $ — $ 7,481 Other long-term assets: Mutual funds held in Rabbi Trust $ 569 $ — $ — $ 569 $ 465 $ — $ — $ 465 Liabilities Accrued and other current liabilities: Rusnano payment derivative $ — $ — $ — $ — $ — $ — $ 2,000 $ 2,000 |
Schedule of fair value of financial liabilities | The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis (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 Short-term investments: Money market funds $ 7,607 $ — $ — $ 7,607 $ 7,481 $ — $ — $ 7,481 Other long-term assets: Mutual funds held in Rabbi Trust $ 569 $ — $ — $ 569 $ 465 $ — $ — $ 465 Liabilities Accrued and other current liabilities: Rusnano payment derivative $ — $ — $ — $ — $ — $ — $ 2,000 $ 2,000 |
Balance sheet components (Table
Balance sheet components (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of accounts receivable, net | Accounts receivable, net, consists of the following (in thousands): September 30, 2019 December 31, 2018 Accounts receivable $ 65,096 $ 74,343 Trade notes receivable 400 672 Allowance for doubtful accounts (251 ) (264 ) $ 65,245 $ 74,751 |
Schedule of inventories, net | Inventories, net, consist of the following (in thousands): September 30, 2019 December 31, 2018 Raw materials $ 23,316 $ 27,806 Work in process 15,485 13,044 Finished goods (1) 9,867 11,309 $ 48,668 $ 52,159 ________________________________________________________ (1) Finished goods inventory at customer vendor managed inventory locations was $3.1 million and $5.6 million as of September 30, 2019 and December 31, 2018 , respectively. |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consist of the following (in thousands): September 30, 2019 December 31, 2018 Prepaid taxes and taxes receivable $ 5,523 $ 5,461 Transition services agreement receivable (refer to Note 6) 11,609 11,999 Deposits and other prepaid expenses 2,714 3,020 Other receivable 4,075 6,125 $ 23,921 $ 26,605 |
Schedule of purchased intangible assets | Purchased intangible assets consist of the following (in thousands): September 30, 2019 December 31, 2018 Gross Assets Accumulated Amortization Net Assets Gross Accumulated Net Technology and patents $ 36,609 $ (35,107 ) $ 1,502 $ 37,029 $ (34,995 ) $ 2,034 Customer relationships 14,970 (14,970 ) — 15,146 (15,026 ) 120 Leasehold interest 1,193 (380 ) 813 1,238 (374 ) 864 $ 52,772 $ (50,457 ) $ 2,315 $ 53,413 $ (50,395 ) $ 3,018 |
Schedule of amortization expense of purchased intangible assets | The following table presents details of the amortization expense of the Company’s purchased intangible assets as reported in the condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Cost of goods sold $ 185 $ 185 $ 553 $ 572 Operating expenses — 118 119 357 Total $ 185 $ 303 $ 672 $ 929 |
Schedule of estimated future amortization expense of purchased intangible assets | The estimated future amortization expense of purchased intangible assets as of September 30, 2019 , is as follows (in thousands): 2019 (remaining three months) $ 184 2020 736 2021 644 2022 27 2023 27 Thereafter 697 $ 2,315 |
Schedule of accrued and other current liabilities | Accrued and other current liabilities consist of the following (in thousands): September 30, 2019 December 31, 2018 Transition services agreement payables (refer to Note 6) $ 11,757 $ 11,769 Employee-related 14,111 14,899 Asset sale related contingent liabilities (refer to Note 6) 6,505 6,751 Operating lease liabilities, current 2,067 — Accrued warranty 749 672 Deferred revenue, current 115 1,114 Income and other taxes payable 1,464 1,580 Rusnano payment derivative — 2,000 Accrued litigation settlement 150 2,645 Other accrued expenses 5,496 8,858 $ 42,414 $ 50,288 |
Schedule of warranty accrual | The table below summarizes the movement in the warranty accrual, which is included in accrued and other current liabilities (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Beginning balance $ 751 $ 1,592 $ 672 $ 1,334 Warranty accruals 198 (42 ) 674 487 Settlements (200 ) (351 ) (597 ) (622 ) Ending balance $ 749 $ 1,199 $ 749 $ 1,199 |
Schedule of other noncurrent liabilities | Other noncurrent liabilities consist of the following (in thousands): September 30, 2019 December 31, 2018 Pension and other employee-related $ 4,121 $ 4,529 Deferred rent — 3,058 Government grant 2,075 2,108 Capital lease obligation — 282 Asset retirement obligations and other 3,552 3,522 $ 9,748 $ 13,499 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring and related costs | Restructuring activities for the nine months ended September 30, 2019 were as follows (in thousands): Employee Severance Facilities Consolidation Others Total Restructuring obligations December 31, 2018 $ 436 $ 769 $ 1,611 $ 2,816 Charges 88 — 173 261 Cash payments (524 ) (130 ) (171 ) (825 ) Settlement of Rusnano payment derivative — — (1,611 ) (1,611 ) Adoption of ASC 842 — (620 ) — (620 ) Restructuring obligations September 30, 2019 $ — $ 19 $ 2 $ 21 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of carrying amount and weighted average interest rate of the company's debt | The table below summarizes the carrying amounts and weighted average interest rates of the Company’s debt (in thousands, except percentages): September 30, 2019 December 31, 2018 Carrying Amount Interest Rate Carrying Interest Notes payable to suppliers $ — — $ 4,795 — Total notes payable and short-term borrowing $ — $ 4,795 Long-term debt, current and noncurrent: Borrowing under Wells Fargo Credit Facility $ 32,016 3.90 % $ 35,961 4.41 % Mitsubishi Bank loans 9,808 1.04% -1.44% 11,094 1.05% -1.45% Mitsubishi Bank and Yamanashi Chou Bank loan 6,185 1.07 % 6,898 1.10 % Finance lease liability 303 — Unaccreted discount and issuance costs (487 ) (602 ) Total long-term debt, net of unaccreted discount and issuance costs $ 47,825 $ 53,351 Reported as: Current portion of long-term debt $ 3,054 $ 2,897 Long-term debt, net of current portion 44,771 50,454 Total long-term debt, net of unaccreted discount and issuance costs $ 47,825 $ 53,351 |
Schedule of maturities of long-term debt | As of September 30, 2019 , maturities of total long-term debt were as follows (in thousands): 2019 (remaining three months) $ 814 2020 3,203 2021 3,210 2022 35,216 2023 3,115 Thereafter 2,754 $ 48,312 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of lease, cost | The components of lease expense were as follows (in thousands): Three Months Ended Nine Months Ended 2019 2019 Operating lease cost $ 760 $ 2,270 Variable and short-term lease cost 401 1,062 Total lease cost $ 1,161 $ 3,332 Other information related to leases was as follows (in thousands, except lease term and discount rate): Nine Months Ended 2019 Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,635 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 136 Weighted average remaining lease term Operating leases 7.5 Weighted average discount rate Operating leases 6.4 % |
Schedule of future minimum lease payments under non-cancellable leases | Future minimum lease payments under non-cancelable leases as of September 30, 2019 were as follows (in thousands): Operating Leases 2019 (excluding the nine months ended September 30, 2019) $ 891 2020 3,140 2021 3,094 2022 3,091 2023 3,041 Thereafter 11,202 Total future minimum lease payments 24,459 Less imputed interest (5,338 ) Total $ 19,121 |
Schedule of operating leases | Reported as of September 30, 2019: Operating Leases Accrued and other current liabilities $ 2,067 Operating lease liabilities, noncurrent 17,054 Total $ 19,121 |
Schedule of future minimum commitments under the company’s non-cancelable operating leases and capital leases | As of December 31, 2018, the future minimum commitments under the Company’s non-cancelable operating leases and capital leases are as follows (in thousands): Operating Leases 2019 $ 3,618 2020 3,113 2021 3,059 2022 3,056 2023 3,049 Thereafter 11,437 Total future minimum lease payments $ 27,332 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of accumulated other comprehensive income, net of related taxes | The components of accumulated other comprehensive loss, net of related taxes, were as follows (in thousands): Foreign Currency Translation Adjustments Defined Benefit Pension Plan Adjustment Total Accumulated Other Comprehensive Income (loss) Balance as of December 31, 2018 $ (6,897 ) $ (229 ) $ (7,126 ) Other comprehensive loss, net of taxes of zero (3,468 ) — (3,468 ) Balance as of September 30, 2019 $ (10,365 ) $ (229 ) $ (10,594 ) |
Restricted net assets (Tables)
Restricted net assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restricted Net Assets [Abstract] | |
Schdule of restrictions on net assets | As of September 30, 2019 and December 31, 2018, the Company's consolidated subsidiaries had $20.5 million and $20.9 million , respectively, of restricted net assets. This compares to the Company's consolidated net assets of $150.0 million and $160.2 million as of September 30, 2019 and December 31, 2018, respectively, which consisted of (in thousands): September 30, 2019 December 31, 2018 Cash restricted in China as a result of ongoing litigation and unfulfilled government grants $ 10,791 $ 11,018 China earnings restricted to fund statutory common reserves in China 8,792 9,005 Loan agreements in Japan requiring local subsidiaries to maintain minimum net asset levels 926 909 Total restricted net assets in the Company's consolidated subsidiaries $ 20,509 $ 20,932 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock based compensation expense | The following table summarizes the stock-based compensation expense recognized in the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Cost of goods sold $ 441 $ 553 $ 1,651 $ 1,832 Research and development 715 1,016 2,383 2,618 Sales and marketing 575 931 1,852 2,511 General and administrative 1,220 1,541 3,408 3,566 $ 2,951 $ 4,041 $ 9,294 $ 10,527 |
Schedule of share-based payment award, employee stock purchase plan, valuation assumptions | The Company estimated the fair value of certain stock-based awards using a Black-Scholes-Merton valuation model with the following assumptions: Three Months Ended Nine Months Ended Stock options 2019 2018 2019 2018 Weighted-average expected term (years) 6.00 0.00 6.00 6.02 Weighted-average volatility 68% —% 67% 65% Risk-free interest rate 1.82% —% 1.82%-2.27% 2.27% - 2.62% Expected dividends —% —% —% —% Stock appreciation units Weighted-average expected term (years) 1.45 1.87 1.56 1.99 Weighted-average volatility 65% 65% 63% 66% Risk-free interest rate 1.75%-2.12% 1.73% - 2.52% 1.75%-2.63% 1.03%-2.52% Expected dividends —% —% —% —% ESPP Weighted-average expected term (years) 0.00 0.00 0.69 0.71 Weighted-average volatility —% —% 60% 61% Risk-free interest rate —% —% 2.36%-2.59% 1.20%-1.93% Expected dividends —% —% —% —% |
Schedule of stock option and restricted stock unit activity | The following table summarizes the Company’s stock option and RSU activity, excluding market-based RSUs, during the nine months ended September 30, 2019 : Stock Options Restricted Stock Units Number of Shares Weighted Average Exercise Price Number of Weighted Balance as of December 31, 2018 3,202,745 $ 5.73 2,486,028 $ 7.87 Granted 103,001 4.34 1,938,591 4.87 Exercised/Converted (264,857 ) 3.66 (996,340 ) 8.70 Cancelled/Forfeited (208,277 ) 6.52 (220,524 ) 7.51 Balance as of September 30, 2019 2,832,612 5.82 3,207,755 5.82 |
Schedule of estimated fair value of certain stock-based awards using Black-Scholes-Merton valuation model | The fair value of market-based RSUs was measured on the grant date using Monte Carlo simulation model with the following assumptions: Market-based restricted stock units Assumptions Weighted-average volatility 66% Risk-free interest rate 2.79% Expected dividends —% |
Income taxes (Tables)
Income taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax (provisions) benefits | The provision for income taxes in the periods presented is based upon the income (loss) before income taxes (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Income tax provision $ (1,561 ) $ (291 ) $ (1,526 ) $ (2,009 ) |
Basis of presentation and sig_3
Basis of presentation and significant accounting policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | Sep. 30, 2017 | |
Concentration Risk [Line Items] | |||||||
Working capital | $ 113,900,000 | $ 113,900,000 | |||||
Cash, cash equivalents, short-term investments and restricted cash | 79,800,000 | 79,800,000 | |||||
Operating losses | (1,261,000) | $ 8,689,000 | 18,892,000 | $ 35,083,000 | |||
Net cash from operating activities | 18,389,000 | $ 8,997,000 | |||||
Accumulated deficit | 416,617,000 | 416,617,000 | $ 397,472,000 | ||||
Current portion of long-term debt | 3,054,000 | 3,054,000 | $ 2,897,000 | ||||
Operating lease right-of-use assets | 16,037,000 | 16,037,000 | $ 17,300,000 | ||||
Operating lease liability | $ 19,121,000 | $ 19,121,000 | $ 20,800,000 | ||||
Huawei Technologies | Revenue | |||||||
Concentration Risk [Line Items] | |||||||
Percentage of concentration of credit risk | 37.00% | 47.00% | 41.00% | 47.00% | |||
Top Five Customers | Revenue | |||||||
Concentration Risk [Line Items] | |||||||
Percentage of concentration of credit risk | 85.00% | 89.00% | 84.00% | 89.00% | |||
Wells Fargo Bank, National Association | Revolving Credit Facility | |||||||
Concentration Risk [Line Items] | |||||||
Credit facility, maximum borrowing amount | $ 50,000,000 | ||||||
Wells Fargo Credit Facility | Line of Credit | |||||||
Concentration Risk [Line Items] | |||||||
Credit facility, maximum borrowing amount | $ 50,000,000 | ||||||
Line of credit fair value outstanding | $ 32,000,000 | $ 32,000,000 | |||||
Unused part of credit facility | 12,400,000 | 12,400,000 | |||||
Minimum required unused borrowing capacity | $ 5,000,000 | $ 5,000,000 |
Revenue - Revenue by Product Gr
Revenue - Revenue by Product Group (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 [Line Items] | ||||
Total revenue | $ 92,392 | $ 81,748 | $ 253,448 | $ 231,436 |
High Speed Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 85,366 | 68,519 | 228,393 | 197,362 |
Network Products and Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 7,026 | $ 13,229 | $ 25,055 | $ 34,074 |
Revenue - Revenue from External
Revenue - Revenue from External Customers by Geographic Region (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 [Line Items] | ||||
Total revenue | $ 92,392 | $ 81,748 | $ 253,448 | $ 231,436 |
China | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 44,439 | 46,134 | 128,928 | 133,917 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 22,713 | 22,369 | 56,138 | 52,270 |
Rest of world | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 25,240 | $ 13,245 | $ 68,382 | $ 45,249 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | ||||
Contract with customer, liability, revenue recognized | $ 0.2 | $ 0.2 | $ 0.9 | $ 0.8 |
Net income (loss) per share - C
Net income (loss) per share - Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||
Net income (loss) | $ 2,272 | $ (8,125) | $ (19,145) | $ (36,908) |
Weighted average shares used to compute per share amount: | ||||
Basic (in shares) | 47,666 | 45,476 | 46,949 | 44,804 |
Diluted (in shares) | 48,615 | 45,476 | 46,949 | 44,804 |
Basic net income (loss) per share (in dollars per share) | $ 0.05 | $ (0.18) | $ (0.41) | $ (0.82) |
Diluted net income (loss) per share (in dollars per share) | $ 0.05 | $ (0.18) | $ (0.41) | $ (0.82) |
Net income (loss) per share - P
Net income (loss) per share - Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss per Share Attributable to Common Stockholders (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Potentially dilutive securities, excluded from computation of diluted net income (loss) per share (in shares) | 3,067 | 6,874 | 6,864 | 6,874 |
Employee stock options | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Potentially dilutive securities, excluded from computation of diluted net income (loss) per share (in shares) | 1,217 | 3,405 | 2,833 | 3,405 |
Restricted stock units | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Potentially dilutive securities, excluded from computation of diluted net income (loss) per share (in shares) | 1,037 | 2,630 | 3,208 | 2,630 |
Market-based restricted stock units | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Potentially dilutive securities, excluded from computation of diluted net income (loss) per share (in shares) | 641 | 665 | 641 | 665 |
Employee stock purchase plan | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Potentially dilutive securities, excluded from computation of diluted net income (loss) per share (in shares) | 172 | 174 | 182 | 174 |
Cash, cash equivalents, short_3
Cash, cash equivalents, short-term investments and restricted cash - Short-term Investments and Restricted Cash and Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Cash and cash equivalents: | ||||
Cash | $ 61,396 | $ 58,185 | ||
Cash equivalents | 0 | 0 | ||
Cash and cash equivalents | 61,396 | 58,185 | ||
Short-term investments | 7,607 | 7,481 | ||
Restricted cash | 10,827 | 11,053 | ||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 72,223 | $ 69,238 | $ 57,294 | $ 81,564 |
Cash, cash equivalents, short_4
Cash, cash equivalents, short-term investments and restricted cash - Summary of Unrealized Gains and Losses (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)investment | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)investment | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |||||
Impairment losses on marketable securities | $ 0 | $ 0 | $ 0 | $ 0 | |
Number of marketable securities in an unrealized loss position | investment | 0 | 0 | |||
Money market funds | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Amortized Cost | $ 7,607,000 | $ 7,607,000 | $ 7,481,000 | ||
Gross Unrealized Gains | 0 | 0 | 0 | ||
Gross Unrealized Loss | 0 | 0 | 0 | ||
Fair Value | 7,607,000 | 7,607,000 | 7,481,000 | ||
Short-term investments | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Fair Value | $ 7,607,000 | $ 7,607,000 | $ 7,481,000 |
Fair value disclosures - Assets
Fair value disclosures - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Measurements, Recurring | Rusnano payment derivative | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | $ 0 | $ 2,000,000 |
Fair Value, Measurements, Recurring | Rusnano payment derivative | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | 0 | 0 |
Fair Value, Measurements, Recurring | Rusnano payment derivative | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | 0 | 0 |
Fair Value, Measurements, Recurring | Rusnano payment derivative | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | 0 | 2,000,000 |
Fair Value, Measurements, Recurring | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | 7,607,000 | 7,481,000 |
Fair Value, Measurements, Recurring | Money market funds | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | 7,607,000 | 7,481,000 |
Fair Value, Measurements, Recurring | Money market funds | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | 0 | 0 |
Fair Value, Measurements, Recurring | Money market funds | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | 0 | 0 |
Fair Value, Measurements, Recurring | Mutual funds held in Rabbi Trust | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | 569,000 | 465,000 |
Fair Value, Measurements, Recurring | Mutual funds held in Rabbi Trust | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | 569,000 | 465,000 |
Fair Value, Measurements, Recurring | Mutual funds held in Rabbi Trust | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | 0 | 0 |
Fair Value, Measurements, Recurring | Mutual funds held in Rabbi Trust | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | 0 | 0 |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value, net asset (liability) | $ 0 | $ 0 |
Asset Sale (Details)
Asset Sale (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jan. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 30, 2019 | Dec. 31, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Restructuring charges | $ 3 | $ 1,133 | $ 261 | $ 1,786 | |||||
Assets held for sale | 0 | 0 | $ 2,971 | ||||||
Gain within operating income | 0 | $ 0 | 817 | $ 0 | $ 2,200 | ||||
Transition services agreement receivable | 11,609 | 11,609 | 11,999 | ||||||
Transition services agreement payables | 11,757 | 11,757 | 11,769 | ||||||
Other Current Liabilities | Indemnification Agreement | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Asset sale related contingent liabilities | $ 6,500 | $ 6,500 | |||||||
Joint Stock Company Rusnano | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Accrued payment derivative | $ 2,000 | ||||||||
NeoPhotonics Corporation, LLC | Disposed of by Sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Percent of interest to be disposed | 100.00% | ||||||||
Restructuring charges | $ 1,600 | ||||||||
Assets held for sale | 3,000 | ||||||||
Assets held for sale, property, plant and equipment | 2,500 | ||||||||
Assets held for sale, prepaid and other assets | $ 500 | ||||||||
Percent of ownership disposed | 100.00% | ||||||||
Consideration received pursuant to asset purchase agreement | $ 2,000 | ||||||||
Exit fee settlements | $ 2,000 | ||||||||
Low Speed Transceiver Products | Disposed of by Sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Assets held for sale | $ 13,900 | ||||||||
Assets held for sale, property, plant and equipment | 800 | ||||||||
Assets held for sale, inventory | $ 13,100 | ||||||||
Reclassification from assets held-for-sale | $ 3,400 | ||||||||
Assets sold | 12,800 | ||||||||
Low Speed Transceiver Products | Disposed of by Sale | APAT OE | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Consideration received pursuant to asset purchase agreement | 25,000 | ||||||||
Proceeds from post-closing transaction services fees under transition services agreement | 1,400 | ||||||||
Disposal group consideration adjustment | 21,600 | ||||||||
Consideration adjustment for potential indemnification claims | 10,000 | ||||||||
Low Speed Transceiver Products | Disposed of by Sale | Inventories | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Assets sold | 12,100 | ||||||||
Low Speed Transceiver Products | Disposed of by Sale | Property, Plant and Equipment | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Assets sold | $ 700 |
Balance sheet components - Acco
Balance sheet components - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Accounts receivable | $ 65,096 | $ 74,343 |
Trade notes receivable | 400 | 672 |
Allowance for doubtful accounts | (251) | (264) |
Account and trade note receivables, net | $ 65,245 | $ 74,751 |
Balance sheet components - Inve
Balance sheet components - Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 23,316 | $ 27,806 |
Work in process | 15,485 | 13,044 |
Finished goods | 9,867 | 11,309 |
Inventories | 48,668 | 52,159 |
Finished goods, at vendor managed inventory locations | $ 3,100 | $ 5,600 |
Balance sheet components - Prep
Balance sheet components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Balance Sheet Related Disclosures [Abstract] | |||
Prepaid taxes and taxes receivable | $ 5,523 | $ 5,461 | |
Transition services agreement receivable (refer to Note 6) | 11,609 | 11,999 | |
Deposits and other prepaid expenses | 2,714 | 3,020 | |
Other receivable | 4,075 | 6,125 | |
Prepaid expenses and other current assets | 23,921 | $ 26,605 | |
Capital expenditures incurred but not yet paid | $ 2,800 | $ 1,100 |
Balance sheet components - Purc
Balance sheet components - Purchased Itangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | $ 52,772 | $ 53,413 |
Accumulated Amortization | (50,457) | (50,395) |
Net Assets | 2,315 | 3,018 |
Technology and patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 36,609 | 37,029 |
Accumulated Amortization | (35,107) | (34,995) |
Net Assets | 1,502 | 2,034 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 14,970 | 15,146 |
Accumulated Amortization | (14,970) | (15,026) |
Net Assets | 0 | 120 |
Leasehold interest | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 1,193 | 1,238 |
Accumulated Amortization | (380) | (374) |
Net Assets | $ 813 | $ 864 |
Balance sheet components - Amor
Balance sheet components - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | ||||
Cost of goods sold | $ 185 | $ 185 | $ 553 | $ 572 |
Operating expenses | 0 | 118 | 119 | 357 |
Total | $ 185 | $ 303 | $ 672 | $ 929 |
Balance sheet components - Esti
Balance sheet components - Estimated Future Amortization Expense of Purchased Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
2019 (remaining three months) | $ 184 | |
2020 | 736 | |
2021 | 644 | |
2022 | 27 | |
2023 | 27 | |
Thereafter | 697 | |
Net Assets | $ 2,315 | $ 3,018 |
Balance sheet components - Accr
Balance sheet components - Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||||||
Transition services agreement payables (refer to Note 6) | $ 11,757 | $ 11,769 | ||||
Employee-related | 14,111 | 14,899 | ||||
Asset sale related contingent liabilities (refer to Note 6) | 6,505 | 6,751 | ||||
Operating lease liabilities, current | 2,067 | |||||
Accrued warranty | 749 | $ 751 | 672 | $ 1,199 | $ 1,592 | $ 1,334 |
Deferred revenue, current | 115 | 1,114 | ||||
Income and other taxes payable | 1,464 | 1,580 | ||||
Rusnano payment derivative | 0 | 2,000 | ||||
Accrued litigation settlement | 150 | 2,645 | ||||
Other accrued expenses | 5,496 | 8,858 | ||||
Accrued and other current liabilities | $ 42,414 | $ 50,288 |
Balance sheet components - Warr
Balance sheet components - Warranty Accrual (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||||
Beginning balance | $ 751 | $ 1,592 | $ 672 | $ 1,334 |
Warranty accruals | 198 | (42) | 674 | 487 |
Settlements | (200) | (351) | (597) | (622) |
Ending balance | $ 749 | $ 1,199 | $ 749 | $ 1,199 |
Balance sheet components - Othe
Balance sheet components - Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Pension and other employee-related | $ 4,121 | $ 4,529 |
Deferred rent | 0 | 3,058 |
Government grant | 2,075 | 2,108 |
Capital lease obligation | 0 | 282 |
Asset retirement obligations and other | 3,552 | 3,522 |
Other noncurrent liabilities | $ 9,748 | $ 13,499 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges incurred | $ 261 | ||
Operating expense | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges incurred | $ 1,100 | $ 300 | $ 1,800 |
Cost of goods sold | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges incurred | $ 100 | $ 200 |
Restructuring - Reserve Rollfor
Restructuring - Reserve Rollforward (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Restructuring Reserve [Roll Forward] | |
Restructuring obligations December 31, 2018 | $ 2,816 |
Charges | 261 |
Cash payments | (825) |
Settlement of Rusnano payment derivative | (1,611) |
Adoption of ASC 842 | (620) |
Restructuring obligations September 30, 2019 | 21 |
Employee Severance | |
Restructuring Reserve [Roll Forward] | |
Restructuring obligations December 31, 2018 | 436 |
Charges | 88 |
Cash payments | (524) |
Settlement of Rusnano payment derivative | 0 |
Adoption of ASC 842 | 0 |
Restructuring obligations September 30, 2019 | 0 |
Facilities Consolidation | |
Restructuring Reserve [Roll Forward] | |
Restructuring obligations December 31, 2018 | 769 |
Charges | 0 |
Cash payments | (130) |
Settlement of Rusnano payment derivative | 0 |
Adoption of ASC 842 | (620) |
Restructuring obligations September 30, 2019 | 19 |
Others | |
Restructuring Reserve [Roll Forward] | |
Restructuring obligations December 31, 2018 | 1,611 |
Charges | 173 |
Cash payments | (171) |
Settlement of Rusnano payment derivative | (1,611) |
Adoption of ASC 842 | 0 |
Restructuring obligations September 30, 2019 | $ 2 |
Debt - Components of Debt Oblig
Debt - Components of Debt Obligations and Weighted Average Interest Rate (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Short-term debt | $ 0 | $ 4,795 |
Finance lease liability | 303 | |
Unaccreted discount and issuance costs | (487) | (602) |
Total long-term debt, net of unaccreted discount and issuance costs | 47,825 | 53,351 |
Current portion of long-term debt | 3,054 | 2,897 |
Long-term debt, net of current portion | 44,771 | 50,454 |
Line of Credit | Wells Fargo Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 32,016 | $ 35,961 |
Weighted average interest rate | 3.90% | 4.41% |
Line of Credit | Mitsubishi Bank Loans | Minimum | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.04% | 1.05% |
Line of Credit | Mitsubishi Bank Loans | Maximum | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.44% | 1.45% |
Notes Payable to Banks | Mitsubishi Bank Loans | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 9,808 | $ 11,094 |
Notes Payable to Banks | Mitsubishi Bank Loans And Yamanashi Chou Bank Loans | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 6,185 | $ 6,898 |
Weighted average interest rate | 1.07% | 1.10% |
Notes payable to suppliers | Loans with Suppliers | ||
Debt Instrument [Line Items] | ||
Short-term debt | $ 0 | $ 4,795 |
Debt - Notes Payable (Details)
Debt - Notes Payable (Details) | 1 Months Ended | 9 Months Ended | |||||||
Aug. 31, 2018USD ($) | May 31, 2018USD ($) | Feb. 28, 2018USD ($) | Jan. 31, 2018USD ($) | Nov. 30, 2017USD ($) | Jul. 31, 2017USD ($) | Sep. 30, 2019USD ($)line_of_credit | Sep. 30, 2019CNY (¥)line_of_credit | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |||||||||
Short-term debt | $ 0 | $ 4,795,000 | |||||||
Notes payable to suppliers | Loans with Suppliers | |||||||||
Debt Instrument [Line Items] | |||||||||
Short-term debt | $ 0 | 4,795,000 | |||||||
Notes payable to suppliers | Loans with Suppliers | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 3 months | ||||||||
Notes payable to suppliers | Loans with Suppliers | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 6 months | ||||||||
Loans Payable | First Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Current borrowing capacity | $ 16,800,000 | ¥ 120,000,000 | |||||||
Loans Payable | Second Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Current borrowing capacity | 4,200,000 | 30,000,000 | |||||||
Bankers Acceptance | |||||||||
Debt Instrument [Line Items] | |||||||||
Restricted cash and investments, current | 2,600,000 | ||||||||
Bankers Acceptance | First Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Current borrowing capacity | $ 33,600,000 | 240,000,000 | |||||||
Percentage of compensating balance requirement for bank acceptance drafts | 50.00% | ||||||||
Bankers Acceptance | Second Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of compensating balance requirement for bank acceptance drafts | 50.00% | ||||||||
Bankers Acceptance | Loans with Suppliers | |||||||||
Debt Instrument [Line Items] | |||||||||
Short-term debt | $ 0 | $ 4,800,000 | |||||||
Short Term Loans | Second Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Current borrowing capacity | $ 8,400,000 | ¥ 60,000,000 | |||||||
Notes Payable to Banks | Notes Payable CITIC Bank | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from lines of credit | $ 17,000,000 | $ 17,000,000 | |||||||
Debt instrument, interest rate, stated percentage | 4.70% | ||||||||
Repayments of lines of credit | $ 17,000,000 | ||||||||
Debt instrument, basis spread | 2.55% | ||||||||
China | Notes payable to suppliers | First Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from lines of credit | $ 17,000,000 | ||||||||
Repayments of lines of credit | $ 17,000,000 | ||||||||
China | Bankers Acceptance | First Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest rate, stated percentage | 4.10% | ||||||||
China | Notes Payable to Banks | Notes Payable CITIC Bank | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of lines of credit | $ 17,000,000 | ||||||||
Line of Credit | China | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of debt instruments | line_of_credit | 2 | 2 | |||||||
CITIC Bank | Line of Credit | China | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility, maximum borrowing amount | $ 35,000,000 | ¥ 250,000,000 | |||||||
CITIC Bank | Bank Acceptance Drafts | China | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of compensating balance requirement for bank acceptance drafts | 36.00% | ||||||||
Credit facility, maximum borrowing amount | $ 54,700,000 | ¥ 390,600,000 |
Debt - Credit Facilities (Detai
Debt - Credit Facilities (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Jan. 31, 2019 | Sep. 30, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 14, 2019 | Dec. 31, 2018 | |
Line of Credit Facility [Line Items] | ||||||
Repayment of notes payable | $ 4,806,000 | $ 2,568,000 | ||||
Wells Fargo Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Repayments of lines of credit | $ 5,000,000 | |||||
Line of Credit | Wells Fargo Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility, maximum borrowing amount | $ 50,000,000 | |||||
Cash balance for borrowing | 100.00% | |||||
Cash balance max borrowing | $ 15,000,000 | |||||
Line of credit facility increase | 25,000,000 | |||||
Line of credit facility, outstanding | 30,000,000 | |||||
Repayment of notes payable | 20,000,000 | |||||
Line of credit facility, maximum indebtedness under debt covenant | 20,000,000 | |||||
Unused borrowing capacity | $ 5,000,000 | $ 5,000,000 | ||||
Line of credit fair value outstanding | $ 32,000,000 | |||||
Weighted average interest rate | 3.90% | 4.41% | ||||
Unused part of credit facility | $ 12,400,000 | |||||
Minimum required unused borrowing capacity | $ 5,000,000 | |||||
Line of Credit | Wells Fargo Credit Facility | U.S. | ||||||
Line of Credit Facility [Line Items] | ||||||
Liquidity Requirements under Line of Credit Facility | 30,000,000 | |||||
Line of Credit | Wells Fargo Credit Facility | World Wide | ||||||
Line of Credit Facility [Line Items] | ||||||
Liquidity Requirements under Line of Credit Facility | $ 40,000,000 | |||||
Line of Credit | Libor Plus Rate | Wells Fargo Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Weighted average interest rate | 3.90% | |||||
Line of Credit | Prime Rate | Wells Fargo Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee | 0.25% | |||||
Line of Credit | Minimum | Wells Fargo Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolver accounts receivable | 80.00% | |||||
Line of Credit | Minimum | Libor Plus Rate | Wells Fargo Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread | 1.50% | |||||
Line of Credit | Minimum | Prime Rate | Wells Fargo Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread | 0.50% | |||||
Line of Credit | Maximum | Wells Fargo Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolver accounts receivable | 85.00% | |||||
Line of Credit | Maximum | Libor Plus Rate | Wells Fargo Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread | 1.75% | |||||
Line of Credit | Maximum | Prime Rate | Wells Fargo Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread | 0.75% |
Debt - Mitsubishi Bank Loans (D
Debt - Mitsubishi Bank Loans (Details) $ in Thousands | Feb. 25, 2015USD ($) | Feb. 25, 2015JPY (¥) | Jan. 31, 2018USD ($) | Jan. 31, 2018JPY (¥) | Mar. 31, 2017USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2019JPY (¥) | Dec. 31, 2018USD ($) | Mar. 31, 2017JPY (¥) | Feb. 25, 2015JPY (¥) |
Debt Instrument [Line Items] | ||||||||||
Long-term debt | $ 47,825 | $ 53,351 | ||||||||
Notes Payable to Banks | Mitsubishi Bank Term Loan A | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt, aggregate principal amount | $ 4,400 | ¥ 500,000,000 | ||||||||
Notes Payable to Banks | Mitsubishi Bank Term Loan B | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt, aggregate principal amount | 9,300 | ¥ 1,000,000,000 | ||||||||
Debt, periodic principal payments | 100 | ¥ 8,300,000 | ||||||||
Debt, lump sum payment on the maturity date | $ 100 | ¥ 8,400,000 | ||||||||
Notes Payable to Banks | Mitsubishi Bank Term Loan B | Tokyo interbank offer rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread | 1.40% | 1.40% | ||||||||
Notes Payable to Banks | Mitsubishi Bank Loans | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loan structuring fee including consumption tax | $ 400 | ¥ 40,500,000 | ||||||||
Notes Payable to Banks | Mitsubishi Bank Loans | Tokyo interbank offer rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread | 1.40% | 1.40% | ||||||||
Notes Payable to Banks | 2015 Mitsubishi Bank Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term debt | 5,000 | ¥ 541,700,000 | ||||||||
Notes Payable to Banks | 2017 Mitsubishi Bank Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt, aggregate principal amount | $ 6,400 | ¥ 690,000,000 | ||||||||
Long-term debt | $ 4,800 | ¥ 517,500,000 | ||||||||
Debt instrument, term | 72 months | |||||||||
Line of credit facility, outstanding | $ 6,400 | ¥ 690,000,000 | ||||||||
Notes Payable to Banks | 2017 Mitsubishi Bank Loan | Tokyo interbank offer rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread | 1.00% | |||||||||
Mitsubishi Bank | Mitsubishi Bank Term Loan A | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of lines of credit | $ 4,400 | ¥ 500,000,000 |
Debt - Mitsubishi Bank and Yama
Debt - Mitsubishi Bank and Yamanashi Chou Bank Loans (Details) $ in Thousands | 1 Months Ended | ||||
Jan. 31, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2019JPY (¥) | Dec. 31, 2018USD ($) | Jan. 31, 2018JPY (¥) | |
Debt Instrument [Line Items] | |||||
Long-term debt | $ 47,825 | $ 53,351 | |||
Mitsubishi Bank and The Yamanashi Chou Bank, Ltd. | Term Loan C | |||||
Debt Instrument [Line Items] | |||||
Credit facility, maximum borrowing amount | $ 7,900 | ¥ 850,000,000 | |||
Debt instrument, term | 82 months | ||||
Long-term debt | $ 6,200 | ¥ 667,900,000 | |||
Mitsubishi Bank and The Yamanashi Chou Bank, Ltd. | Term Loan C | Tokyo interbank offer rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread | 1.00% |
Debt - Maturities of Long-Term
Debt - Maturities of Long-Term debt (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
2019 (remaining three months) | $ 814 |
2020 | 3,203 |
2021 | 3,210 |
2022 | 35,216 |
2023 | 3,115 |
Thereafter | 2,754 |
Total long-term debt, current and non-current | $ 48,312 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Lessee, Lease, Description [Line Items] | |
Termination period | 1 year |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 8 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 760 | $ 2,270 |
Variable and short-term lease cost | 401 | 1,062 |
Total lease cost | $ 1,161 | $ 3,332 |
Leases - Cash Flows (Details)
Leases - Cash Flows (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 2,635 |
Right-of-use assets obtained in exchange for lease obligations: Operating leases | $ 136 |
Weighted average remaining lease term, Operating leases | 7 years 6 months |
Weighted average discount rate, Operating leases | 6.40% |
Leases - Leases, Liability, Mat
Leases - Leases, Liability, Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2019 (excluding the nine months ended September 30, 2019) | $ 891 | |
2020 | 3,140 | |
2021 | 3,094 | |
2022 | 3,091 | |
2023 | 3,041 | |
Thereafter | 11,202 | |
Total future minimum lease payments | 24,459 | |
Less imputed interest | (5,338) | |
Total | $ 19,121 | $ 20,800 |
Leases - Balance Sheet Informat
Leases - Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Operating Leases, Accrued and other current liabilities | $ 2,067 | |
Operating Leases, Operating lease liabilities, noncurrent | 17,054 | |
Operating Leases, Total | $ 19,121 | $ 20,800 |
Leases - Minimum Lease Payments
Leases - Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases | |
2019 | $ 3,618 |
2020 | 3,113 |
2021 | 3,059 |
2022 | 3,056 |
2023 | 3,049 |
Thereafter | 11,437 |
Total future minimum lease payments | $ 27,332 |
Japan pension plan (Details)
Japan pension plan (Details) - Japan - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Defined Benefit Plan Disclosure [Line Items] | ||
Pension liability | $ 4.1 | $ 4.3 |
Pension liability included in accrued and other current liabilities | $ 0.6 | $ 0.3 |
Commitments and contingencies (
Commitments and contingencies (Details) ¥ in Thousands | Oct. 25, 2017USD ($) | Oct. 25, 2017CNY (¥) | Jun. 16, 2017USD ($) | Dec. 27, 2016USD ($) | Feb. 28, 2019USD ($) | Feb. 28, 2019CNY (¥) | Dec. 31, 2018USD ($)lawsuit | Dec. 31, 2018CNY (¥)lawsuit | Nov. 30, 2018USD ($) | Nov. 30, 2018CNY (¥) | Sep. 30, 2018USD ($) | Jul. 31, 2018USD ($) | Apr. 30, 2018USD ($) | Nov. 30, 2016lawsuit | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2010lawsuitclaim | Apr. 30, 2019USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2012USD ($) |
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Number of defendants | lawsuit | 4 | |||||||||||||||||||||||
Penalty payment derivative | $ 2,000,000 | |||||||||||||||||||||||
Gain on asset sale | $ 0 | $ 0 | $ 817,000 | $ 0 | $ 2,200,000 | |||||||||||||||||||
NeoPhotonics Corporation, LLC | Disposed of by Sale | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Consideration received pursuant to asset purchase agreement | $ 2,000,000 | |||||||||||||||||||||||
Percent of ownership disposed | 100.00% | |||||||||||||||||||||||
Exit fee settlements | $ 2,000,000 | |||||||||||||||||||||||
Gain on asset sale | $ 800,000 | 800,000 | ||||||||||||||||||||||
Russian federation | Scenario, Forecast | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Exit fees for future | $ 2,000,000 | |||||||||||||||||||||||
Embedded Derivative Financial Instruments | Maximum | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Other non-current liability | $ 5,000,000 | |||||||||||||||||||||||
Indemnification Agreement | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Payment for legal settlement | 0 | |||||||||||||||||||||||
Performance guarantee | Private Placement | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Other non-current liability | $ 6,500,000 | $ 30,000,000 | ||||||||||||||||||||||
Rusnano Group | NeoPhotonics Corporation, LLC | Disposal Group, Not Discontinued Operations | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Ownership to be disposed | 100.00% | |||||||||||||||||||||||
Consideration received pursuant to asset purchase agreement | $ 3,000,000 | |||||||||||||||||||||||
Penalty payment cancellation | $ 1,000,000 | |||||||||||||||||||||||
Oyster Communications, Inc. | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
New claims filed, number | lawsuit | 9 | |||||||||||||||||||||||
Finisar Corp | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Pending claims | claim | 2 | |||||||||||||||||||||||
Lestina International Ltd. litigation | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Damages sought, value | $ 3,000,000 | |||||||||||||||||||||||
Lawsuit Filed by Lestina International Ltd. | NeoPhotonics Dongguan Co., Ltd | Lestina International Ltd. | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Loss contingency, damages awarded, value | 2,200,000 | |||||||||||||||||||||||
APAT OE Legal Dispute | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Damages sought, value | $ 20,000,000 | |||||||||||||||||||||||
APAT OE Legal Dispute | APAT OE | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
New claims filed, number | lawsuit | 2 | 2 | ||||||||||||||||||||||
APAT OE and NeoChina | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Damages sought, value | $ 7,600,000 | ¥ 50,900 | ||||||||||||||||||||||
Assets ordered to be preserved | $ 29,000,000 | |||||||||||||||||||||||
Claim Against APAT OE and Zheijiang Merchants Property Insurance Company | NeoChina | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Damages sought, value | $ 52,000 | ¥ 350 | ||||||||||||||||||||||
APAT Arbitration | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Damages sought, value | $ 1,500,000 | $ 7,100,000 | $ 7,800,000 | $ 12,000,000 | ||||||||||||||||||||
Damages awarded to company | $ 110,000 | ¥ 700 | ||||||||||||||||||||||
Attorney fees | $ 121,000 | ¥ 810 | ||||||||||||||||||||||
Cisco Settlement Agreement | ||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||||||||||||||||||||
Loss contingency, damages awarded, value | $ 150,000 | $ 300,000 |
Stockholders' equity - Narrativ
Stockholders' equity - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2019 | |
Class of Stock [Line Items] | ||
Accumulated deficit subject to restriction | $ 9 | |
Minimum | ||
Class of Stock [Line Items] | ||
Accumulated profits | 10.00% | |
Employee stock options | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 7,964,197 | |
Employee stock purchase plan | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 1,820,744 |
Stockholders' equity - Accumula
Stockholders' equity - Accumulated Other Comprehensive Income (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 147,984,000 | $ 169,458,000 | $ 160,240,000 | $ 194,451,000 |
Other comprehensive loss, net of taxes of zero | (4,615,000) | (5,588,000) | (3,468,000) | (7,967,000) |
Ending balance | 149,997,000 | 161,174,000 | 149,997,000 | 161,174,000 |
Other comprehensive loss, tax | 0 | |||
Foreign Currency Translation Adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (6,897,000) | |||
Other comprehensive loss, net of taxes of zero | (3,468,000) | |||
Ending balance | (10,365,000) | (10,365,000) | ||
Defined Benefit Pension Plan Adjustment | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (229,000) | |||
Other comprehensive loss, net of taxes of zero | 0 | |||
Ending balance | (229,000) | (229,000) | ||
Accumulated other comprehensive income (loss) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (5,979,000) | (1,981,000) | (7,126,000) | 398,000 |
Ending balance | $ (10,594,000) | $ (7,569,000) | $ (10,594,000) | $ (7,569,000) |
Restricted net assets Restricte
Restricted net assets Restricted net assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total restricted net assets in the Company's consolidated subsidiaries | $ 20,509 | $ 20,932 |
Consolidated net assets | 150,000 | 160,200 |
Cash restricted in China as a result of ongoing litigation and unfulfilled government grants | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total restricted net assets in the Company's consolidated subsidiaries | 10,791 | 11,018 |
China earnings restricted to fund statutory common reserves in China | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total restricted net assets in the Company's consolidated subsidiaries | 8,792 | 9,005 |
Loan agreements in Japan requiring local subsidiaries to maintain minimum net asset levels | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total restricted net assets in the Company's consolidated subsidiaries | $ 926 | $ 909 |
Stock-based compensation - Summ
Stock-based compensation - Summary of Stock-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 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation | $ 2,951 | $ 4,041 | $ 9,294 | $ 10,527 |
Cost of goods sold | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation | 441 | 553 | 1,651 | 1,832 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation | 715 | 1,016 | 2,383 | 2,618 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation | 575 | 931 | 1,852 | 2,511 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation | $ 1,220 | $ 1,541 | $ 3,408 | $ 3,566 |
Stock-based compensation - Valu
Stock-based compensation - Valuation Assumptions of Stock-based Awards (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Employee stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average expected term (years) | 6 years | 0 years | 6 years | 6 years 7 days | |
Weighted-average volatility | 68.00% | 0.00% | 67.00% | 65.00% | |
Risk-free interest rate | 1.82% | 0.00% | |||
Risk-free interest rate minimum | 1.82% | 2.27% | |||
Risk-free interest rate maximum | 2.27% | 2.62% | |||
Expected dividends | 0.00% | 0.00% | 0.00% | 0.00% | |
Stock appreciation units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average expected term (years) | 1 year 5 months 12 days | 1 year 10 months 13 days | 1 year 6 months 21 days | 1 year 11 months 26 days | |
Weighted-average volatility | 65.00% | 65.00% | 63.00% | 66.00% | |
Risk-free interest rate minimum | 1.75% | 1.73% | 1.75% | 1.03% | |
Risk-free interest rate maximum | 2.12% | 2.52% | 2.63% | 2.52% | |
Expected dividends | 0.00% | 0.00% | 0.00% | 0.00% | |
Employee stock purchase plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average expected term (years) | 0 years | 0 years | 8 months 8 days | 8 months 15 days | |
Weighted-average volatility | 0.00% | 0.00% | 60.00% | 61.00% | |
Risk-free interest rate | 0.00% | 0.00% | |||
Risk-free interest rate minimum | 2.36% | 1.20% | |||
Risk-free interest rate maximum | 2.59% | 1.93% | |||
Expected dividends | 0.00% | 0.00% | 0.00% | 0.00% | |
Market-based restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average volatility | 66.00% | ||||
Risk-free interest rate | 2.79% | ||||
Expected dividends | 0.00% |
Stock-based compensation - Stoc
Stock-based compensation - Stock Options and RSUs (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Employee stock options | |
Number of Shares | |
Beginning Balance (in shares) | shares | 3,202,745 |
Granted (in shares) | shares | 103,001 |
Exercised/Converted (in shares) | shares | (264,857) |
Cancelled/Forfeited (in shares) | shares | (208,277) |
Ending Balance (in shares) | shares | 2,832,612 |
Weighted Average Exercise Price | |
Beginning Balance (in USD per share) | $ / shares | $ 5.73 |
Granted (in USD per share) | $ / shares | 4.34 |
Exercised/Converted (in USD per share) | $ / shares | 3.66 |
Cancelled/Forfeited (in USD per share) | $ / shares | 6.52 |
Ending Balance (in USD per share) | $ / shares | $ 5.82 |
Restricted stock units | |
Number of Units | |
Beginning Balance (in shares) | shares | 2,486,028 |
Granted (in shares) | shares | 1,938,591 |
Exercised/Converted (in shares) | shares | (996,340) |
Cancelled/Forfeited (in shares) | shares | (220,524) |
Ending Balance (in shares) | shares | 3,207,755 |
Weighted Average Exercise Price | |
Beginning Balance (in USD per share) | $ / shares | $ 7.87 |
Granted (in USD per share) | $ / shares | 4.87 |
Exercised/Converted (in USD per share) | $ / shares | 8.70 |
Cancelled/Forfeited (in USD per share) | $ / shares | 7.51 |
Ending Balance (in USD per share) | $ / shares | $ 5.82 |
Stock-based compensation - Narr
Stock-based compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | 21 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Sep. 30, 2019 | |
Employee stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized stock-based compensation expense | $ 1 | $ 1 | $ 1 | |||
Compensation cost not yet recognized, period for recognition | 1 year 4 months 24 days | |||||
Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized stock-based compensation expense | $ 14.2 | $ 14.2 | $ 14.2 | |||
Compensation cost not yet recognized, period for recognition | 2 years 7 months 6 days | |||||
Awards granted in the period (in shares) | 1,938,591 | |||||
Shares vested (in shares) | 996,340 | |||||
Granted (in USD per share) | $ 4.87 | |||||
Shares outstanding (in shares) | 3,207,755 | 3,207,755 | 2,486,028 | 3,207,755 | ||
Market-based restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation cost not yet recognized, period for recognition | 1 year 14 days | |||||
Awards granted in the period (in shares) | 705,000 | |||||
Shares vested (in shares) | 0 | |||||
Shares canceled (in shares) | 63,500 | |||||
Granted (in USD per share) | $ 5.82 | |||||
Unrecognized share based compensation | $ 1.6 | $ 1.6 | $ 1.6 | |||
Stock appreciation units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Awards granted in the period (in shares) | 0 | 0 | 0 | 0 | ||
Shares outstanding (in shares) | 169,351 | 169,351 | 192,872 | 169,351 | ||
SAU-related liabilities | $ 0.5 | $ 0.5 | $ 0.6 | $ 0.5 | ||
Employee stock purchase plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized stock-based compensation expense | $ 0.1 | $ 0.1 | $ 0.1 | |||
Issuence of shares (in shares) | 253,718 | |||||
Number of shares authorized for issuance (in shares) | 1,500,000 | 1,500,000 | 1,500,000 |
Income taxes - Provision for In
Income taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ (1,561) | $ (291) | $ (1,526) | $ (2,009) |
Income taxes - Additional Infor
Income taxes - Additional Information (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Adjustments to accumulated deficit for new accounting pronouncements | $ (1,824) | |
Accounting Standards Update 2016-16 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Adjustments to accumulated deficit for new accounting pronouncements | $ 1,800 |