Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 29, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | BOVIE MEDICAL CORP | |
Entity Central Index Key | 719,135 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 33,203,517 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 40,663 | $ 9,949 |
Restricted cash | 0 | 719 |
Short term investments | 55,480 | 0 |
Trade accounts receivable, net of allowance of $311 and $204 | 4,080 | 4,857 |
Inventories, net | 6,037 | 4,274 |
Prepaid expenses and other current assets | 627 | 433 |
Current assets of discontinued operations | 0 | 2,315 |
Total current assets | 106,887 | 22,547 |
Property and equipment, net | 5,842 | 6,033 |
Purchased technology and license rights, net | 32 | 67 |
Goodwill | 185 | 185 |
Deposits | 46 | 92 |
Other assets | 122 | 67 |
Non-current assets of discontinued operations | 0 | 1,997 |
Total assets | 113,114 | 30,988 |
Current liabilities: | ||
Accounts payable | 2,348 | 1,583 |
Accrued severance and related | 95 | 1,242 |
Accrued payroll | 163 | 447 |
Current portion of mortgage note payable | 0 | 239 |
Accrued taxes and other liabilities | 19,066 | 214 |
Current liabilities of discontinued operations | 0 | 2,248 |
Total current liabilities | 21,672 | 5,973 |
Mortgage note payable, net of current portion | 0 | 2,455 |
Note payable | 140 | 140 |
Deferred tax liability | 0 | 368 |
Derivative liabilities | 0 | 20 |
Total liabilities | 21,812 | 8,956 |
STOCKHOLDERS’ EQUITY | ||
Common stock, $0.001 par value; 75,000,000 shares authorized; 33,763,019 issued and 33,620,444 outstanding as of September 30, 2018 and 75,000,000 shares authorized; 33,021,170 issued and 32,878,091 outstanding as of December 31, 2017, respectively | 33 | 33 |
Additional paid-in capital | 51,798 | 50,495 |
Retained earnings (accumulated deficit) | 39,471 | (28,496) |
Total stockholders’ equity | 91,302 | 22,032 |
Total liabilities and stockholders’ equity | $ 113,114 | $ 30,988 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 311 | $ 204 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 33,763,019 | 33,021,170 |
Common stock, shares outstanding (in shares) | 33,620,444 | 32,878,091 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 3,672 | $ 2,651 | $ 10,760 | $ 6,576 |
Cost of sales | 1,151 | 738 | 3,490 | 2,314 |
Gross profit | 2,521 | 1,913 | 7,270 | 4,262 |
Other costs and expenses: | ||||
Research and development | 613 | 487 | 1,890 | 1,600 |
Professional services | 628 | 421 | 1,815 | 1,291 |
Salaries and related costs | 2,119 | 1,826 | 5,734 | 6,016 |
Selling, general and administrative | 1,957 | 2,012 | 6,280 | 6,003 |
Total other costs and expenses | 5,317 | 4,746 | 15,719 | 14,910 |
Loss from operations | (2,796) | (2,833) | (8,449) | (10,648) |
Interest income (expense), net | 105 | (36) | 33 | (103) |
Other losses | (155) | 0 | (155) | 0 |
Change in fair value of derivative liabilities | 0 | (69) | 20 | 57 |
Total other expense, net | (50) | (105) | (102) | (46) |
Loss from continuing operations before income taxes | (2,846) | (2,938) | (8,551) | (10,694) |
Income tax (benefit) expense | (2,408) | 6 | (2,384) | 15 |
Net loss from continuing operations | (438) | (2,944) | (6,167) | (10,709) |
Income from discontinued operations, net of tax | 540 | 1,699 | 5,062 | 6,471 |
Gain on sale of the Core Business, net of tax | 69,072 | 0 | 69,072 | 0 |
Total income from discontinued operations, net of tax | 69,612 | 1,699 | 74,134 | 6,471 |
Net income (loss) | $ 69,174 | $ (1,245) | $ 67,967 | $ (4,238) |
Loss per share from continuing operations | ||||
Loss per share from continuing operations, basic | $ (0.01) | $ (0.09) | $ (0.19) | $ (0.35) |
Loss per share from continuing operations, diluted | (0.01) | (0.09) | (0.19) | (0.35) |
Income per share from discontinued operations | ||||
Income per share from discontinued operations, basic | 2.09 | 0.05 | 2.25 | 0.21 |
Income per share from discontinued operations, diluted | 1.99 | 0.05 | 2.19 | 0.21 |
Income (loss) per share | ||||
Income (loss) per share, basic | 2.08 | (0.04) | 2.06 | (0.14) |
Income (loss) per share, diluted | $ 1.98 | $ (0.04) | $ 2 | $ (0.14) |
Weighted average number of shares outstanding - basic (in shares) | 33,275 | 31,078 | 33,014 | 30,932 |
Weighted average number of shares outstanding - dilutive (in shares) | 34,934 | 31,078 | 33,952 | 30,932 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Beginning balance (in shares) at Dec. 31, 2016 | 976 | 30,860 | |||
Beginning balance, amount at Dec. 31, 2016 | $ 26,223 | $ 1 | $ 31 | $ 49,625 | $ (23,434) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Options exercised (in shares) | 21 | ||||
Options exercised | 275 | 275 | |||
Conversion of Series B convertible preferred to common stock (in shares) | (976) | 1,951 | |||
Conversion of Series B convertible preferred to common stock | 0 | $ (1) | $ 2 | (1) | |
Stock based compensation | 532 | 532 | |||
Stock exercise to acquire options and warrants (in shares) | 0 | ||||
Stock exercise to acquire options and warrants | (275) | (275) | |||
Net income (loss) | (4,238) | (4,238) | |||
Ending balance, amount at Sep. 30, 2017 | 22,517 | $ 0 | $ 33 | 50,156 | (27,672) |
Ending balance (in shares) at Sep. 30, 2017 | 0 | 32,832 | |||
Beginning balance (in shares) at Dec. 31, 2017 | 0 | 32,878 | |||
Beginning balance, amount at Dec. 31, 2017 | 22,032 | $ 0 | $ 33 | 50,495 | (28,496) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Options exercised (in shares) | 1,278 | ||||
Options exercised | 3,103 | 3,103 | |||
Warrant exercised (in shares) | 40 | ||||
Warrants exercised | 95 | 95 | |||
Stock based compensation | 1,238 | 1,238 | |||
Stock exercise to acquire options and warrants (in shares) | (576) | ||||
Stock exercise to acquire options and warrants | (3,133) | (3,133) | |||
Net income (loss) | 67,967 | 67,967 | |||
Ending balance, amount at Sep. 30, 2018 | $ 91,302 | $ 0 | $ 33 | $ 51,798 | $ 39,471 |
Ending balance (in shares) at Sep. 30, 2018 | 0 | 33,620 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net income (loss) | $ 67,967 | $ (4,238) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Gain on sale of the Core Business, net of tax | 69,072 | 0 |
Depreciation and amortization | 429 | 527 |
Gain on disposal of property and equipment, net | 0 | 3 |
Stock based compensation | 1,238 | 532 |
Change in fair value of derivative liabilities | (20) | (57) |
Unrealized gain on short term investments | (47) | 0 |
Provision for allowance for doubtful accounts | 123 | 128 |
Benefit of deferred taxes | (368) | 0 |
Changes in current assets and liabilities, net of effect of disposition: | ||
Trade receivables | 654 | 528 |
Prepaid expenses | (188) | (221) |
Inventories | (1,706) | (1,177) |
Deposits and other assets | (9) | 9 |
Accounts payable | 765 | (219) |
Accrued and other liabilities | (2,601) | (250) |
Net cash used in operating activities | (2,835) | (4,435) |
Cash flows from investing activities | ||
Purchases of property and equipment | (203) | (431) |
Proceeds from the disposition of Core business | 91,095 | 0 |
Purchases of marketable securities | (55,433) | 0 |
Net cash from investing activities | 35,459 | (431) |
Cash flows from financing activities | ||
Proceeds from stock options/warrants exercised | 65 | 0 |
Repayment of mortgage note payable | (2,694) | (179) |
Net cash used in financing activities | (2,629) | (179) |
Net change in cash, cash equivalents and restricted cash | 29,995 | (5,045) |
Cash, cash equivalents and restricted cash, beginning of period | 10,668 | 15,235 |
Cash, cash equivalents and restricted cash, end of period | 40,663 | 10,190 |
Cash paid for: | ||
Interest (income) expense, net | (33) | 103 |
Non cash investing activities: | ||
Cashless exercise of stock options/warrants | $ 3,133 | $ 275 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Unless the context otherwise indicates, the terms “we,” “our,” “us,” “Bovie,” and similar terms refer to Bovie Medical Corporation and its consolidated subsidiaries. We reclassified the financial results of the Core business to discontinued operations and from segment results for all periods presented. The accompanying unaudited consolidated financial statements have been prepared based upon SEC rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, please refer to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017 . These financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year. |
DISPOSITION OF THE CORE BUSINES
DISPOSITION OF THE CORE BUSINESS | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSITION OF THE CORE BUSINESS | DISPOSITION OF THE CORE BUSINESS On August 30, 2018, we closed on a previously disclosed definitive asset purchase agreement with Specialty Surgical Instrumentation Inc., a Tennessee Corporation and wholly-owned subsidiary of Symmetry Surgical Inc. (“Symmetry”), pursuant to which the Company divested and sold the Company's electrosurgical "Core" business segment and related intellectual property, including the Bovie ® brand and trademarks, to Symmetry for gross proceeds of $97 million in cash. In connection with the asset purchase agreement, we entered into a previously disclosed Electro Surgical Disposables and Accessories, Cauteries and Other Products Supply Agreement with Symmetry for a four-year term, whereby we will manufacture certain Core products and sell them to Symmetry at agreed upon prices. Any revenue, costs and expenses resulting from this agreement are netted and reported in our Consolidated Statements of Operations as Other gains or losses. Additionally, in connection with the asset purchase agreement, we entered into a previously disclosed Manufacture and Supply Agreement with Symmetry for a ten-year term, whereby we will manufacture certain products and sell them to Symmetry at agreed upon prices. Revenue, costs and expenses resulting from this agreement are reported in our Consolidated Statements as income or loss from operations of our OEM reporting segment. We concluded that the divestiture of the Core business met the criteria for discontinued operations set forth in ASC No. 205, Presentation of Financial Statements . The table below summarizes the cash consideration and the carrying values of disposed assets at the disposition date of August 30, 2018 included as part of discontinued operations: (In thousands) Gross consideration from the sale of the Core Business $ 97,000 Closing and transaction costs 5,905 Net proceeds from sale of the Core Business before taxes $ 91,095 Book value of the Core Business Current assets: Inventories, net 2,195 Prepaid expenses and other current assets 57 Total current assets 2,252 Property and equipment, net of depreciation 375 Brand name and trademark 1,510 Purchased technology and license rights, net of depreciation 112 Total non-current assets 1,997 Total assets $ 4,249 Current liabilities: Accrued inventory liability 2,305 Total current liabilities 2,305 Total book value of the Core Business $ 6,554 Net gain on sale of the Core Business before taxes 84,541 Income tax expense 15,469 Net gain on sale of the Core Business after income taxes $ 69,072 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost or market. Cost is determined on a first in, first out basis. Finished goods and work-in-process inventories include material, labor and overhead costs. Factory overhead costs are allocated to inventory manufactured in-house based upon labor hours. Inventories consisted of the following: (In thousands) September 30, December 31, Raw materials $ 5,032 $ 5,163 Finished goods 1,998 1,024 Gross inventories 7,030 6,187 Less: reserve for obsolescence (993 ) (1,913 ) Net inventories of continuing operations 6,037 4,274 Finished goods of discontinued operations — 2,252 Net inventories of continuing and discontinued operations $ 6,037 $ 6,526 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets consisted of the following: (In thousands) September 30, December 31, Brand name and trademark (life indefinite) of discontinued operations $ — $ 1,510 Purchased technology (5-17 year lives) $ 1,447 $ 1,401 Purchased technology (5-17 year lives) of discontinued operations, net — 112 Less: accumulated amortization (1,415 ) (1,334 ) Purchased technology, net $ 32 $ 179 Goodwill $ 185 $ 185 The Bovie brand name and trademarks were included in the definitive asset purchase agreement with Specialty Surgical Instrumentation Inc., as previously disclosed. Goodwill results from our acquisition of Bovie Bulgaria, EOOD. Amortization of purchased technology was $27,000 and $81,000 for the three and nine months ended September 30, 2018 and 2017 , respectively. Amortization expense is classified within selling, general and administration expenses in the consolidated statements of operations. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The purpose of this ASU is to reduce the cost and complexity of evaluating goodwill for impairment. It eliminates the need for entities to calculate the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under this ASU, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted, however we have chosen not to do so. The amendment is not expected to have a material impact on our financial condition or results of operations. ASU No. 2016-18, Restricted Cash Flows provides guidance on the presentation of restricted cash and restricted cash equivalents, which are now included with cash and cash equivalents when reconciling the beginning and ending cash amounts shown on the statements of cash flows. Using the retrospective transition method required under the standard, the Company has adjusted the presentation of its Condensed Consolidated Statements of Cash Flows for all periods presented. The adoption of ASU No. 2016-18 did not have any other impact on the Company’s Consolidated Financial Statements. The following table provides additional detail by financial statement line item of the ASU 2016-18 impact in our Consolidated Statement of Cash Flows for the nine months ended September 30, 2017 : (In thousands) As Reported (Pre-Adoption) ASU 2016-18 Reported (Post Adoption) Nine Months Ended September 30, 2017 Net change in cash, cash equivalents and restricted cash $ (5,045 ) $ — $ (5,045 ) Cash, cash equivalents and restricted cash, beginning of period 14,456 779 15,235 Cash, cash equivalents and restricted cash, end of period $ 9,411 $ 779 $ 10,190 ASU No. 2014-09 (ASC 606), Revenue from Contracts with Customers became effective for us beginning with the first quarter of 2018, and adopted the new accounting standard using the modified retrospective transition approach. The modified retrospective transition approach recognized any changes from the beginning of the year of initial application through retained earnings with no restatement of comparative periods. We record revenue under ASC 606 at a single point in time, when control is transferred to the customer, which is consistent with past practice. We will continue to apply our current business processes, policies, systems and controls to support recognition and disclosure under the new standard. Based on the results of the evaluation, we have determined that the adoption of the new standard presents no material impact on our consolidated financial statements. Application of the transition requirements of the new standard did not have a material impact on opening retained earnings. We have disaggregated revenue by segment and geography in Note 13 Geographic and Segment Information. Based on the current state of our business, management does not see a material reason to disaggregate further. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE We compute basic earnings per share (“basic EPS”) by dividing the net income or loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding. The following table provides the computation of basic and diluted earnings per share. Three Months Ended Nine Months Ended (in thousands, except per share data) 2018 2017 2018 2017 Numerator: Net loss from continuing operations $ (438 ) $ (2,944 ) $ (6,167 ) $ (10,709 ) Total income from discontinued operations, net of tax 69,612 1,699 74,134 6,471 Net income (loss) $ 69,174 $ (1,245 ) $ 67,967 $ (4,238 ) Denominator: Weighted average shares used to compute basic income (loss) 33,275 31,078 33,014 30,932 Effect of dilutive securities: Stock options 1,659 — 938 — Denominator for dilutive income (loss) per share 34,934 31,078 33,952 30,932 Loss per share from continuing operations Basic $ (0.01 ) $ (0.09 ) $ (0.19 ) $ (0.35 ) Diluted $ (0.01 ) $ (0.09 ) $ (0.19 ) $ (0.35 ) Income per share from discontinued operations Basic $ 2.09 $ 0.05 $ 2.25 $ 0.21 Diluted $ 1.99 $ 0.05 $ 2.19 $ 0.21 Income (loss) per share Basic $ 2.08 $ (0.04 ) $ 2.06 $ (0.14 ) Diluted $ 1.98 $ (0.04 ) $ 2.00 $ (0.14 ) Anti-dilutive instruments excluded from diluted loss per common share: Warrants — 7 — 13 Options — 373 — 771 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Under our stock option plans, our board of directors may grant options to purchase common shares to our key employees, officers, directors and consultants. We account for stock options in accordance with FASB ASC Topic 718, Compensation - Stock Compensation , with option expense amortized over the vesting period based on the trinomial lattice option-pricing model fair value on the grant date, which includes a number of estimates that affect the amount of our expense. We expensed approximately $489,000 and $1,238,000 in stock-based compensation during the three and nine months ended September 30, 2018 , respectively, as compared with $191,000 and $532,000 for the three and nine months ended September 30, 2017 , respectively. The status of our stock options and stock awards are summarized as follows: Number of options Weighted average exercise price Outstanding at December 31, 2017 4,860,157 $ 3.00 Granted 225,000 4.08 Exercised (1,277,615 ) 2.43 Canceled and forfeited (225,841 ) 5.62 Outstanding at September 30, 2018 3,581,701 $ 3.08 Common shares required to be issued upon the exercise of stock options and warrants would be issued from our authorized and unissued shares. We calculated the fair value of issued options utilizing a trinomial lattice with an expected life calculated via the simplified method as we do not have sufficient history to determine actual expected life. 2018 Grants Option value $ 1.46 - $ 3.07 Risk-free rate 1.9% - 2.5 % Expected dividend yield — Expected volatility 60.9% - 68.8 % Expected term (in years) 6 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s income tax benefit from continuing operations was $2.4 million and $2.4 million with an effective tax rate of 82.9% and 26.4% for the three and nine months ended September 30, 2018 , respectively, as compared to an expense of $6,000 and $15,000 with an effective tax rate of 0.0% for the three and nine months ended September 30, 2017 , respectively. The increase in the Company’s tax rate for the three and nine months ended September 30, 2018 as compared to the three months and nine months ended September 30, 2017 , is primarily due to the Company’s ability to offset the 2018 operating loss from continuing operations against the taxable income generated by the extraordinary gain recognized by the income and asset sale reflected in discontinued operations. The Company recognized tax expense of $0.3 million and $1.2 million within net income from discontinued operations for the three and nine months ended September 30, 2018 , respectively. The Company recognized tax expense of $13.2 million and $15.5 million within the gain on sale of the Core Business for the three and nine months ended September 30, 2018 , respectively. Management expects the gain from the sale of the Core business segment to Symmetry will utilize substantially all of the historical Federal net operating loss carryover of $24.7 million , state(s) net operating loss carryover of $21.2 million , and research and development credit carryover of $1.3 million . As a result, the valuation allowance on these deferred tax assets was released during the third quarter of 2018 and the Company recorded a tax benefit of $7.8 million from the release of the valuation allowance. The tax benefit of $7.8 million is netted against the tax expenses within net income from discontinued operations and within the gain from asset sales. Pursuant to guidance under ASC 740, for the nine months ended September 30, 2018, continuing operations includes a current benefit of $2.4 million , which reflects the Company’s ability to fully utilize the net operating loss expected to be generated from continuing operations in the 2018 tax year. As a result of historical losses, exclusive of discontinued operations, the Company recorded a valuation allowance on the net deferred tax asset with a finite life and does not anticipate recording an income tax benefit related to these deferred tax assets beyond the 2018 tax year. The Company will reassess the realization of deferred tax assets each reporting period and will be able to reduce the valuation allowance to the extent the financial results of continuing operations improve and it becomes more likely than not that the deferred tax assets will be realizable. As Management expects the Company to continue to generate loss in the foreseeable future after 2018, the Company will continue to record a valuation allowance on the remaining deferred tax assets at the end of 2018. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Property and Rental Agreements In March 2014, we signed a lease for offices located in Purchase, New York. In December 2017, we decided to consolidate operations in the Purchase, NY office with the facility in Clearwater, Florida. Based on this, we determined the office in Purchase, NY was no longer necessary and decided to cease all activity at the location. In August 2018 we negotiated a termination of the remainder of the lease, releasing us from any future obligation. In October 2015, pursuant to our acquisition of Bovie Bulgaria, we are obligated to pay a lease of $5,980 per month, expiring in December 2021, for 18,745 square feet of office, research and manufacturing space in Sofia, Bulgaria. The following is a schedule of approximate future minimum lease payments under operating leases as of September 30, 2018 : (In thousands) 2018 (remaining three months) $ 18 2019 72 2020 72 2021 72 Total $ 234 On August 30, 2018, the Company paid the remaining mortgage balance of $2.5 million , releasing us from any and all obligations to the Bank of Tampa. Litigation The medical device industry is characterized by frequent claims and litigation, and we are and may become subject to various claims, lawsuits and proceedings in the ordinary course of our business, including claims by current or former employees, distributors and competitors, and with respect to our products and product liability claims, lawsuits and proceedings. We are involved in a number of legal actions relating to the use of our J-Plasma technology. The outcomes of these legal actions are not within our complete control and may not be known for prolonged periods of time. In the opinion of management, the Company has meritorious defenses, and such claims are adequately covered by insurance, or are not expected, individually or in the aggregate, to result in a material, adverse effect on our financial condition. However, in the event that damages exceed the aggregate coverage limits of our policy or if our insurance carriers disclaim coverage, we believe it is possible that costs associated with these claims could have a material adverse impact on our consolidated earnings, financial position or cash flows. Purchase Commitments At September 30, 2018 , we had purchase commitments for inventories totaling approximately $5.4 million , substantially all of which is expected to be purchased by the end of 2018 . Our manufacturing services agreements requires Symmetry to provide us with a twelve-month rolling production forecast, of which four months are binding, non-cancelable orders, subject to certain termination rights. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Several relatives of Nikolay Shilev, Bovie Bulgaria’s Managing Director, are considered related parties. Teodora Shileva, Mr. Shilev’s spouse, is an employee of the Company working in the Accounting department. Antoaneta Dimitrova Shileva-Toromanova, Mr. Shilev’s sister, is the Manager of Production and Human Resources. Svetoslav Shilev, Mr. Shilev’s son, is an Engineer in the Quality Assurance department. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | FINANCIAL INSTRUMENTS Cash, Cash Equivalents and Marketable Securities: (In thousands) Adjusted Cost Unrealized Gains Fair Value (3) Cash and Cash Equivalents (1) Short-term Marketable Securities Cash $ 5,774 $ 5,774 $ 5,774 Level 1 (2) U.S. Treasury Securities, maturities less than three months $ 34,889 $ 34,889 $ 34,889 U.S. Treasury Securities, maturities greater than three months $ 55,433 $ 47 $ 55,480 $ 55,480 Total $ 96,096 $ 47 $ 96,143 $ 40,663 $ 55,480 (1) The company considers all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents. (2) The fair value of the debt securities consisting of U.S. Treasury bills is based on their quoted market prices. The fair value of these financial instruments are classified as Level 1 in the fair value hierarchy. (3) ASC 825-10 Financial Instruments, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. At the date of purchase, the Company elected the fair value option for all investments with maturities of three months or greater at the time of purchase. |
LONG TERM DEBT
LONG TERM DEBT | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
LONG TERM DEBT | LONG TERM DEBT On June 28, 2016, the Company entered into a transaction with Bank of Tampa, a Florida banking corporation (“Lender”), wherein Lender amended the terms of a mortgage loan (“the Loan”) originally executed on March 20, 2014 with a principal amount of $3,592,000 . The Initial Maturity Date of the Loan was extended to July 20, 2019 from March 19, 2017, and the Extended Maturity Date was amended to July 20, 2024 from March 20, 2022. On August 30, 2018, the Company paid the remaining mortgage balance of $2.5 million , releasing us from any and all obligations to the Bank of Tampa. |
GEOGRAPHIC AND SEGMENT INFORMAT
GEOGRAPHIC AND SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC AND SEGMENT INFORMATION | GEOGRAPHIC AND SEGMENT INFORMATION Operating segments are aggregated into reportable segments only if they exhibit similar economic characteristics. In addition to similar economic characteristics, we also consider the following factors in determining the reportable segments: the nature of business activities, the management structure directly accountable to our chief operating decision maker for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors and investors. Our reportable segments are disclosed as principally organized and managed as three operating segments: Advanced Energy, OEM and Corporate & Other. The Corporate & Other category includes certain unallocated corporate and administrative costs which were not specifically attributed to any reportable segment. Net assets are shared, therefore, not allocated to the reportable segments. The OEM segment is primarily development and manufacturing contract and product driven, all related expenses are recorded as cost of sales, therefore no segment specific operating expenses are incurred. Summarized financial information with respect to reportable segments is as follows: Three Months Ended September 30, 2018 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 2,985 $ 687 $ — $ 3,672 (Loss) income from operations (1,155 ) 368 (2,009 ) (2,796 ) Interest income, net — — 105 105 Income tax benefit — — (2,408 ) (2,408 ) Depreciation and amortization — — 58 58 Three Months Ended September 30, 2017 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 2,126 $ 525 $ — $ 2,651 (Loss) income from operations (718 ) 323 (2,438 ) (2,833 ) Interest expense, net — — (36 ) (36 ) Change in fair value of derivative liabilities — — (69 ) (69 ) Income tax expense — — 6 6 Depreciation and amortization — — 171 171 Nine Months Ended September 30, 2018 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 8,727 $ 2,033 $ — $ 10,760 (Loss) income from operations (2,525 ) 1,076 (7,000 ) (8,449 ) Interest income, net — — 33 33 Change in fair value of derivative liabilities — — 20 20 Income tax expense — — (2,384 ) (2,384 ) Depreciation and amortization — — 429 429 Nine Months Ended September 30, 2017 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 4,546 $ 2,030 $ — $ 6,576 (Loss) income from operations (3,821 ) 1,031 (7,858 ) (10,648 ) Interest expense, net — — (103 ) (103 ) Change in fair value of derivative liabilities — — 57 57 Income tax expense — — 15 15 Depreciation and amortization — — 527 527 International sales represented approximately 24.8% and 21.2% of total revenues for the three and nine months ended September 30, 2018 , respectively, as compared with 16.6% and 11.5% of total revenues for the three and nine months ended September 30, 2017 , respectively. Substantially all of these sales are denominated in U.S. dollars. Revenue by geographic region, based on the “ship to” location on the invoice, are as follows: Three Months Ended Nine Months Ended (In thousands) 2018 2017 2018 2017 Sales by Domestic and International Domestic $ 2,763 $ 2,212 $ 8,481 $ 5,821 International 909 439 2,279 755 Total $ 3,672 $ 2,651 $ 10,760 $ 6,576 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Inventories | Inventories are stated at the lower of cost or market. Cost is determined on a first in, first out basis. Finished goods and work-in-process inventories include material, labor and overhead costs. Factory overhead costs are allocated to inventory manufactured in-house based upon labor hours. |
Recent Accounting Pronouncements | In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The purpose of this ASU is to reduce the cost and complexity of evaluating goodwill for impairment. It eliminates the need for entities to calculate the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under this ASU, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted, however we have chosen not to do so. The amendment is not expected to have a material impact on our financial condition or results of operations. ASU No. 2016-18, Restricted Cash Flows provides guidance on the presentation of restricted cash and restricted cash equivalents, which are now included with cash and cash equivalents when reconciling the beginning and ending cash amounts shown on the statements of cash flows. Using the retrospective transition method required under the standard, the Company has adjusted the presentation of its Condensed Consolidated Statements of Cash Flows for all periods presented. The adoption of ASU No. 2016-18 did not have any other impact on the Company’s Consolidated Financial Statements. The following table provides additional detail by financial statement line item of the ASU 2016-18 impact in our Consolidated Statement of Cash Flows for the nine months ended September 30, 2017 : (In thousands) As Reported (Pre-Adoption) ASU 2016-18 Reported (Post Adoption) Nine Months Ended September 30, 2017 Net change in cash, cash equivalents and restricted cash $ (5,045 ) $ — $ (5,045 ) Cash, cash equivalents and restricted cash, beginning of period 14,456 779 15,235 Cash, cash equivalents and restricted cash, end of period $ 9,411 $ 779 $ 10,190 ASU No. 2014-09 (ASC 606), Revenue from Contracts with Customers became effective for us beginning with the first quarter of 2018, and adopted the new accounting standard using the modified retrospective transition approach. The modified retrospective transition approach recognized any changes from the beginning of the year of initial application through retained earnings with no restatement of comparative periods. We record revenue under ASC 606 at a single point in time, when control is transferred to the customer, which is consistent with past practice. We will continue to apply our current business processes, policies, systems and controls to support recognition and disclosure under the new standard. Based on the results of the evaluation, we have determined that the adoption of the new standard presents no material impact on our consolidated financial statements. Application of the transition requirements of the new standard did not have a material impact on opening retained earnings. We have disaggregated revenue by segment and geography in Note 13 Geographic and Segment Information. Based on the current state of our business, management does not see a material reason to disaggregate further. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures. |
DISPOSITION OF THE CORE BUSIN_2
DISPOSITION OF THE CORE BUSINESS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Cash consideration and fair value of assets disposed | The table below summarizes the cash consideration and the carrying values of disposed assets at the disposition date of August 30, 2018 included as part of discontinued operations: (In thousands) Gross consideration from the sale of the Core Business $ 97,000 Closing and transaction costs 5,905 Net proceeds from sale of the Core Business before taxes $ 91,095 Book value of the Core Business Current assets: Inventories, net 2,195 Prepaid expenses and other current assets 57 Total current assets 2,252 Property and equipment, net of depreciation 375 Brand name and trademark 1,510 Purchased technology and license rights, net of depreciation 112 Total non-current assets 1,997 Total assets $ 4,249 Current liabilities: Accrued inventory liability 2,305 Total current liabilities 2,305 Total book value of the Core Business $ 6,554 Net gain on sale of the Core Business before taxes 84,541 Income tax expense 15,469 Net gain on sale of the Core Business after income taxes $ 69,072 |
Operating activity related to the Core business | The table below summarizes the cash consideration and the carrying values of disposed assets at the disposition date of August 30, 2018 included as part of discontinued operations: (In thousands) Gross consideration from the sale of the Core Business $ 97,000 Closing and transaction costs 5,905 Net proceeds from sale of the Core Business before taxes $ 91,095 Book value of the Core Business Current assets: Inventories, net 2,195 Prepaid expenses and other current assets 57 Total current assets 2,252 Property and equipment, net of depreciation 375 Brand name and trademark 1,510 Purchased technology and license rights, net of depreciation 112 Total non-current assets 1,997 Total assets $ 4,249 Current liabilities: Accrued inventory liability 2,305 Total current liabilities 2,305 Total book value of the Core Business $ 6,554 Net gain on sale of the Core Business before taxes 84,541 Income tax expense 15,469 Net gain on sale of the Core Business after income taxes $ 69,072 |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New accounting pronouncement, early adoption | The following table provides additional detail by financial statement line item of the ASU 2016-18 impact in our Consolidated Statement of Cash Flows for the nine months ended September 30, 2017 : (In thousands) As Reported (Pre-Adoption) ASU 2016-18 Reported (Post Adoption) Nine Months Ended September 30, 2017 Net change in cash, cash equivalents and restricted cash $ (5,045 ) $ — $ (5,045 ) Cash, cash equivalents and restricted cash, beginning of period 14,456 779 15,235 Cash, cash equivalents and restricted cash, end of period $ 9,411 $ 779 $ 10,190 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consisted of the following: (In thousands) September 30, December 31, Raw materials $ 5,032 $ 5,163 Finished goods 1,998 1,024 Gross inventories 7,030 6,187 Less: reserve for obsolescence (993 ) (1,913 ) Net inventories of continuing operations 6,037 4,274 Finished goods of discontinued operations — 2,252 Net inventories of continuing and discontinued operations $ 6,037 $ 6,526 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following: (In thousands) September 30, December 31, Brand name and trademark (life indefinite) of discontinued operations $ — $ 1,510 Purchased technology (5-17 year lives) $ 1,447 $ 1,401 Purchased technology (5-17 year lives) of discontinued operations, net — 112 Less: accumulated amortization (1,415 ) (1,334 ) Purchased technology, net $ 32 $ 179 Goodwill $ 185 $ 185 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Basic and diluted earnings per share | The following table provides the computation of basic and diluted earnings per share. Three Months Ended Nine Months Ended (in thousands, except per share data) 2018 2017 2018 2017 Numerator: Net loss from continuing operations $ (438 ) $ (2,944 ) $ (6,167 ) $ (10,709 ) Total income from discontinued operations, net of tax 69,612 1,699 74,134 6,471 Net income (loss) $ 69,174 $ (1,245 ) $ 67,967 $ (4,238 ) Denominator: Weighted average shares used to compute basic income (loss) 33,275 31,078 33,014 30,932 Effect of dilutive securities: Stock options 1,659 — 938 — Denominator for dilutive income (loss) per share 34,934 31,078 33,952 30,932 Loss per share from continuing operations Basic $ (0.01 ) $ (0.09 ) $ (0.19 ) $ (0.35 ) Diluted $ (0.01 ) $ (0.09 ) $ (0.19 ) $ (0.35 ) Income per share from discontinued operations Basic $ 2.09 $ 0.05 $ 2.25 $ 0.21 Diluted $ 1.99 $ 0.05 $ 2.19 $ 0.21 Income (loss) per share Basic $ 2.08 $ (0.04 ) $ 2.06 $ (0.14 ) Diluted $ 1.98 $ (0.04 ) $ 2.00 $ (0.14 ) Anti-dilutive instruments excluded from diluted loss per common share: Warrants — 7 — 13 Options — 373 — 771 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock options and stock awards | The status of our stock options and stock awards are summarized as follows: Number of options Weighted average exercise price Outstanding at December 31, 2017 4,860,157 $ 3.00 Granted 225,000 4.08 Exercised (1,277,615 ) 2.43 Canceled and forfeited (225,841 ) 5.62 Outstanding at September 30, 2018 3,581,701 $ 3.08 |
Schedule of option fair value assumptions | 2018 Grants Option value $ 1.46 - $ 3.07 Risk-free rate 1.9% - 2.5 % Expected dividend yield — Expected volatility 60.9% - 68.8 % Expected term (in years) 6 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments under operating leases | The following is a schedule of approximate future minimum lease payments under operating leases as of September 30, 2018 : (In thousands) 2018 (remaining three months) $ 18 2019 72 2020 72 2021 72 Total $ 234 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Marketable Securities: (In thousands) Adjusted Cost Unrealized Gains Fair Value (3) Cash and Cash Equivalents (1) Short-term Marketable Securities Cash $ 5,774 $ 5,774 $ 5,774 Level 1 (2) U.S. Treasury Securities, maturities less than three months $ 34,889 $ 34,889 $ 34,889 U.S. Treasury Securities, maturities greater than three months $ 55,433 $ 47 $ 55,480 $ 55,480 Total $ 96,096 $ 47 $ 96,143 $ 40,663 $ 55,480 (1) The company considers all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents. (2) The fair value of the debt securities consisting of U.S. Treasury bills is based on their quoted market prices. The fair value of these financial instruments are classified as Level 1 in the fair value hierarchy. (3) ASC 825-10 Financial Instruments, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. At the date of purchase, the Company elected the fair value option for all investments with maturities of three months or greater at the time of purchase. |
GEOGRAPHIC AND SEGMENT INFORM_2
GEOGRAPHIC AND SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of reporting information by segment | Summarized financial information with respect to reportable segments is as follows: Three Months Ended September 30, 2018 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 2,985 $ 687 $ — $ 3,672 (Loss) income from operations (1,155 ) 368 (2,009 ) (2,796 ) Interest income, net — — 105 105 Income tax benefit — — (2,408 ) (2,408 ) Depreciation and amortization — — 58 58 Three Months Ended September 30, 2017 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 2,126 $ 525 $ — $ 2,651 (Loss) income from operations (718 ) 323 (2,438 ) (2,833 ) Interest expense, net — — (36 ) (36 ) Change in fair value of derivative liabilities — — (69 ) (69 ) Income tax expense — — 6 6 Depreciation and amortization — — 171 171 Nine Months Ended September 30, 2018 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 8,727 $ 2,033 $ — $ 10,760 (Loss) income from operations (2,525 ) 1,076 (7,000 ) (8,449 ) Interest income, net — — 33 33 Change in fair value of derivative liabilities — — 20 20 Income tax expense — — (2,384 ) (2,384 ) Depreciation and amortization — — 429 429 Nine Months Ended September 30, 2017 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 4,546 $ 2,030 $ — $ 6,576 (Loss) income from operations (3,821 ) 1,031 (7,858 ) (10,648 ) Interest expense, net — — (103 ) (103 ) Change in fair value of derivative liabilities — — 57 57 Income tax expense — — 15 15 Depreciation and amortization — — 527 527 |
Schedule of revenue by geographic area | Revenue by geographic region, based on the “ship to” location on the invoice, are as follows: Three Months Ended Nine Months Ended (In thousands) 2018 2017 2018 2017 Sales by Domestic and International Domestic $ 2,763 $ 2,212 $ 8,481 $ 5,821 International 909 439 2,279 755 Total $ 3,672 $ 2,651 $ 10,760 $ 6,576 |
DISPOSITION OF THE CORE BUSIN_3
DISPOSITION OF THE CORE BUSINESS - CASH CONSIDERATION AND FAIR VALUE OF ASSETS DISPOSED (Details) - USD ($) $ in Thousands | Aug. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gross consideration from the sale of the Core Business | $ 97,000 | $ 91,095 | $ 0 | |||
Closing and transaction costs | 5,905 | |||||
Gross consideration from the sale of the Core Business | 91,095 | |||||
Core business disposition, current assets | ||||||
Inventories, net | 2,195 | $ 0 | 0 | $ 2,252 | ||
Prepaid expenses and other current assets | 57 | |||||
Total current assets | 2,252 | 0 | 0 | 2,315 | ||
Property and equipment, net of depreciation | 375 | |||||
Non-current assets of discontinued operations | 1,997 | 0 | 0 | 1,997 | ||
Total assets | 4,249 | |||||
Accrued inventory liability | 2,305 | |||||
Total current liabilities | 2,305 | 0 | 0 | $ 2,248 | ||
Total book value of the Core Business | 6,554 | |||||
Net gain on sale of the Core Business before taxes | (84,541) | |||||
Income tax expense, gain on disposal of the Core business | 15,469 | 13,200 | 15,469 | |||
Gain on sale of the Core Business, net of tax | 69,072 | $ 69,072 | $ 0 | $ 69,072 | $ 0 | |
Purchased technology and license rights, net of depreciation | ||||||
Core business disposition, current assets | ||||||
Intangible assets | 112 | |||||
Brand name and trademark | ||||||
Core business disposition, current assets | ||||||
Intangible assets | $ 1,510 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Aug. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 5,032 | $ 5,163 | |
Finished goods | 1,998 | 1,024 | |
Gross inventories | 7,030 | 6,187 | |
Less: reserve for obsolescence | (993) | (1,913) | |
Net inventories of continuing and discontinued operations | 6,037 | 4,274 | |
Finished goods of discontinued operations | 0 | $ 2,195 | 2,252 |
Net inventories of continuing and discontinued operations | $ 6,037 | $ 6,526 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Purchased technology, net | $ 32 | $ 32 | $ 67 | ||
Goodwill | 185 | 185 | 185 | ||
Amortization of Intangible Assets | 27 | $ 27 | 81 | $ 81 | |
Brand name and trademark | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Brand name and trademark | 0 | 0 | 1,510 | ||
Purchased technology and license rights, net of depreciation | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Purchased technology | 1,447 | 1,447 | 1,401 | ||
Less: accumulated amortization | (1,415) | (1,415) | (1,334) | ||
Purchased technology, net | 32 | $ 32 | 179 | ||
Purchased technology and license rights, net of depreciation | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset, useful life (in years) | 5 years | ||||
Purchased technology and license rights, net of depreciation | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset, useful life (in years) | 17 years | ||||
Purchased technology and license rights, net of depreciation | Core | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Purchased technology | $ 0 | $ 0 | $ 112 |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Net change in cash, cash equivalents and restricted cash | $ 29,995 | $ (5,045) |
Cash, cash equivalents and restricted cash, beginning of period | 10,668 | 15,235 |
Cash, cash equivalents and restricted cash, end of period | $ 40,663 | 10,190 |
Adjustments for New Accounting Principle, Early Adoption [Member] | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Net change in cash, cash equivalents and restricted cash | 0 | |
Cash, cash equivalents and restricted cash, beginning of period | 779 | |
Cash, cash equivalents and restricted cash, end of period | 779 | |
Previously reported | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Net change in cash, cash equivalents and restricted cash | (5,045) | |
Cash, cash equivalents and restricted cash, beginning of period | 14,456 | |
Cash, cash equivalents and restricted cash, end of period | $ 9,411 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net loss from continuing operations | $ (438) | $ (2,944) | $ (6,167) | $ (10,709) |
Total income from discontinued operations, net of tax | 69,612 | 1,699 | 74,134 | 6,471 |
Net income (loss) | $ 69,174 | $ (1,245) | $ 67,967 | $ (4,238) |
Denominator: | ||||
Weighted average shares used to compute basic income (loss) | 33,275 | 31,078 | 33,014 | 30,932 |
Effect of dilutive securities - stock options (in shares) | 1,659 | 0 | 938 | 0 |
Denominator for dilutive income (loss) per share | 34,934 | 31,078 | 33,952 | 30,932 |
Earnings per share, basic | ||||
Loss per share from continuing operations, basic | $ (0.01) | $ (0.09) | $ (0.19) | $ (0.35) |
Income per share from discontinued operations, basic | 2.09 | 0.05 | 2.25 | 0.21 |
Income (loss) per share, basic | 2.08 | (0.04) | 2.06 | (0.14) |
Earnings per share, diluted | ||||
Loss per share from continuing operations, diluted | (0.01) | (0.09) | (0.19) | (0.35) |
Income per share from discontinued operations, diluted | 1.99 | 0.05 | 2.19 | 0.21 |
Income (loss) per share, diluted | $ 1.98 | $ (0.04) | $ 2 | $ (0.14) |
Warrants | ||||
Anti-dilutive securities excluded from diluted loss per share | ||||
Anti-dilutive securities excluded from diluted loss per share | 0 | 7 | 0 | 13 |
Options | ||||
Anti-dilutive securities excluded from diluted loss per share | ||||
Anti-dilutive securities excluded from diluted loss per share | 0 | 373 | 0 | 771 |
STOCK-BASED COMPENSATION - NARR
STOCK-BASED COMPENSATION - NARRATIVE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Stock based compensation | $ 489 | $ 191 | $ 1,238 | $ 532 |
STOCK-BASED COMPENSATION - SUMM
STOCK-BASED COMPENSATION - SUMMARY OF STOCK OPTIONS (Details) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding, beginning of period (in shares) | shares | 4,860,157 |
Granted (in shares) | shares | 225,000 |
Exercised (in shares) | shares | (1,277,615) |
Canceled and forfeited (in shares) | shares | (225,841) |
Outstanding, end of period (in shares) | shares | 3,581,701 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 3 |
Granted (in dollars per share) | $ / shares | 4.08 |
Exercised (in dollars per share) | $ / shares | 2.43 |
Canceled and forfeited (in dollars per shares) | $ / shares | 5.62 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 3.08 |
STOCK-BASED COMPENSATION - FAIR
STOCK-BASED COMPENSATION - FAIR VALUE ASSUMPTIONS (Details) | 9 Months Ended |
Sep. 30, 2018$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected dividend yield (as a percent) | 0.00% |
Expected term (in years) | 6 years |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Option value (in dollars per share) | $ 1.46 |
Risk-free rate (as a percent) | 1.90% |
Expected volatility (as a percent) | 60.90% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Option value (in dollars per share) | $ 3.07 |
Risk-free rate (as a percent) | 2.50% |
Expected volatility (as a percent) | 68.80% |
INCOME TAXES - EFFECTIVE TAX RA
INCOME TAXES - EFFECTIVE TAX RATE (Details) - USD ($) $ in Thousands | Aug. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Operating Loss Carryforwards [Line Items] | |||||
Income tax (benefit) expense | $ (2,408) | $ 6 | $ (2,384) | $ 15 | |
Effective income tax rate, percent (as a percent) | 82.90% | 0.00% | 26.40% | 0.00% | |
Income tax expense, discontinued operations | $ 300 | $ 1,200 | |||
Income tax expense, gain on disposal of the Core business | $ 15,469 | 13,200 | 15,469 | ||
Tax credit carryforward, valuation allowance | 7,800 | 7,800 | |||
Domestic Tax Authority | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | 24,700 | 24,700 | |||
State and Local Jurisdiction | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | 21,200 | 21,200 | |||
Research and Development Tax Credit Carryforward | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax credit carryforward, amount | $ 1,300 | $ 1,300 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - FUTURE MINIMUM LEASE PAYMENTS (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Future minimum lease payments under operating leases | |
2018 (remaining three months) | $ 18 |
2,019 | 72 |
2,020 | 72 |
2,021 | 72 |
Total | $ 234 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - NARRATIVE (Details) | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Oct. 31, 2015USD ($)ft² | |
Other Commitments [Line Items] | ||||
Repayment of mortgage note payable | $ 2,694,000 | $ 179,000 | ||
Purchase commitments for inventories | 5,404,000 | |||
Accrued severance and related | $ 95,000 | $ 1,242,000 | ||
Sophia, Bulgaria | ||||
Other Commitments [Line Items] | ||||
Area of real estate property (in square feet) | ft² | 18,745 | |||
Monthly cost of office space | $ 5,980 |
FINANCIAL INSTRUMENTS (Details)
FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Cash | $ 5,774 | |
Adjusted Cost | 96,096 | |
Unrealized Gains | 47 | |
Fair Value | 96,143 | |
Short-term Marketable Securities | 55,480 | $ 0 |
Cash and cash equivalents | 40,663 | $ 9,949 |
U.S. Treasury Securities, maturities less than three months | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 34,889 | |
Fair Value | 34,889 | |
Cash equivalents | 34,889 | |
U.S. Treasury Securities, maturities greater than three months | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 55,433 | |
Unrealized Gains | 47 | |
Fair Value | 55,480 | |
Short-term Marketable Securities | $ 55,480 |
LONG TERM DEBT - NARRATIVE (Det
LONG TERM DEBT - NARRATIVE (Details) - USD ($) $ in Thousands | Aug. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 28, 2016 |
Debt Instrument [Line Items] | ||||
Repayment of mortgage note payable | $ 2,694 | $ 179 | ||
Mortgages | ||||
Debt Instrument [Line Items] | ||||
Mortgage loan, principal amount | $ 3,592 | |||
Repayment of mortgage note payable | $ 2,500 |
GEOGRAPHIC AND SEGMENT INFORM_3
GEOGRAPHIC AND SEGMENT INFORMATION - REPORTABLE SEGMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 3,672 | $ 2,651 | $ 10,760 | $ 6,576 |
(Loss) income from operations | (2,796) | (2,833) | (8,449) | (10,648) |
Interest income (expense), net | 105 | (36) | 33 | (103) |
Change in fair value of derivative liabilities | 0 | (69) | 20 | 57 |
Income tax (benefit) expense | (2,408) | 6 | (2,384) | 15 |
Depreciation and amortization | 58 | 171 | 429 | 527 |
Operating Segments | Advanced Energy | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 2,985 | 2,126 | 8,727 | 4,546 |
(Loss) income from operations | (1,155) | (718) | (2,525) | (3,821) |
Interest income (expense), net | 0 | 0 | 0 | 0 |
Change in fair value of derivative liabilities | 0 | 0 | 0 | |
Income tax (benefit) expense | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Operating Segments | OEM | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 687 | 525 | 2,033 | 2,030 |
(Loss) income from operations | 368 | 323 | 1,076 | 1,031 |
Interest income (expense), net | 0 | 0 | 0 | 0 |
Change in fair value of derivative liabilities | 0 | 0 | 0 | |
Income tax (benefit) expense | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Corporate (Other) | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
(Loss) income from operations | (2,009) | (2,438) | (7,000) | (7,858) |
Interest income (expense), net | 105 | (36) | 33 | (103) |
Change in fair value of derivative liabilities | (69) | 20 | 57 | |
Income tax (benefit) expense | (2,408) | 6 | (2,384) | 15 |
Depreciation and amortization | $ 58 | $ 171 | $ 429 | $ 527 |
GEOGRAPHIC AND SEGMENT INFORM_4
GEOGRAPHIC AND SEGMENT INFORMATION - GEOGRAPHIC (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 3,672 | $ 2,651 | $ 10,760 | $ 6,576 |
Domestic | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 2,763 | 2,212 | 8,481 | 5,821 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Sales | $ 909 | $ 439 | $ 2,279 | $ 755 |
GEOGRAPHIC AND SEGMENT INFORM_5
GEOGRAPHIC AND SEGMENT INFORMATION - NARRATIVE (Details) - segment | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting [Abstract] | ||||
Number of operating segments (in segments) | 3 | |||
Geographic concentration risk | Sales Revenue | International customers | ||||
Concentration Risk [Line Items] | ||||
Concentration receivable risk (as a percent) | 24.80% | 16.60% | 21.20% | 11.50% |