Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 28, 2019 | Jul. 26, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 28, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | HARMONIC INC | |
Entity Central Index Key | 0000851310 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 89,609,067 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 58,064 | $ 65,989 |
Accounts receivable, net | 70,571 | 81,795 |
Inventories | 27,659 | 25,638 |
Prepaid expenses and other current assets | 29,209 | 23,280 |
Total current assets | 185,503 | 196,702 |
Property and equipment, net | 19,312 | 22,321 |
Operating lease right-of-use assets | 30,386 | |
Goodwill | 240,335 | 240,618 |
Intangibles, net | 8,640 | 12,817 |
Other long-term assets | 42,545 | 38,377 |
Total assets | 526,721 | 510,835 |
Current liabilities: | ||
Other debts and finance lease obligations, current | 1,379 | 7,175 |
Accounts payable | 31,849 | 33,778 |
Income taxes payable | 989 | 1,099 |
Deferred revenue | 47,330 | 41,592 |
Accrued and other current liabilities | 56,764 | 52,761 |
Total current liabilities | 138,311 | 136,405 |
Convertible notes, long-term | 118,070 | 114,808 |
Other debts and finance lease obligations, long-term | 16,697 | 12,684 |
Income taxes payable, long-term | 266 | 460 |
Other non-current liabilities | 41,311 | 18,228 |
Total liabilities | 314,655 | 282,585 |
Commitments and contingencies (Note 17) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.001 par value, 150,000 shares authorized; 89,074 and 87,057 shares issued and outstanding at June 28, 2019 and December 31, 2018, respectively | 89 | 87 |
Additional paid-in capital | 2,302,798 | 2,296,795 |
Accumulated deficit | (2,089,167) | (2,067,416) |
Accumulated other comprehensive loss | (1,654) | (1,216) |
Total stockholders’ equity | 212,066 | 228,250 |
Total liabilities and stockholders’ equity | $ 526,721 | $ 510,835 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 28, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 89,074,000 | 87,057,000 |
Common stock, shares outstanding | 89,074,000 | 87,057,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | ||
Total Net Revenue | [1] | $ 84,865 | $ 99,160 | $ 164,971 | $ 189,287 |
Total cost of revenue | 40,937 | 47,557 | 79,194 | 90,501 | |
Total gross profit | 43,928 | 51,603 | 85,777 | 98,786 | |
Operating expenses: | |||||
Research and development | 21,313 | 21,542 | 42,714 | 44,999 | |
Selling, general and administrative | 29,319 | 27,988 | 57,330 | 59,151 | |
Amortization of intangibles | 784 | 800 | 1,572 | 1,604 | |
Restructuring and related charges | 276 | 631 | 333 | 1,717 | |
Total operating expenses | 51,692 | 50,961 | 101,949 | 107,471 | |
Income (loss) from operations | (7,764) | 642 | (16,172) | (8,685) | |
Interest expense, net | (2,956) | (2,863) | (5,862) | (5,620) | |
Other income (expense), net | (428) | 199 | (739) | (333) | |
Loss before income taxes | (11,148) | (2,022) | (22,773) | (14,638) | |
Provision for income taxes | 697 | 891 | 378 | 1,969 | |
Net loss | $ (11,845) | $ (2,913) | $ (23,151) | $ (16,607) | |
Net loss per share: | |||||
Basic and diluted | $ (0.13) | $ (0.03) | $ (0.26) | $ (0.20) | |
Shares used in per share calculation: | |||||
Basic and diluted | 88,931 | 85,304 | 88,554 | 84,616 | |
Appliance & Integration [Member] | |||||
Total Net Revenue | $ 54,417 | $ 68,434 | $ 106,782 | $ 132,420 | |
Total cost of revenue | 29,312 | 36,662 | 56,366 | 67,238 | |
SaaS & Service [Member] | |||||
Total Net Revenue | 30,448 | 30,726 | 58,189 | 56,867 | |
Total cost of revenue | $ 11,625 | $ 10,895 | $ 22,828 | $ 23,263 | |
[1] | Revenue is attributed to countries based on the location of the customer. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Net loss | $ (11,845) | $ (2,913) | $ (23,151) | $ (16,607) |
Other comprehensive income (loss) before tax: | ||||
Loss (gains) reclassified into earnings | (101) | 0 | 56 | 0 |
Change in foreign currency translation adjustments: | 857 | (4,758) | (443) | (3,024) |
Other comprehensive income (loss) before tax | 756 | (4,758) | (387) | (3,024) |
Less: Provision for (benefit from) income taxes | (55) | 369 | 51 | 369 |
Other comprehensive income (loss), net of tax | 811 | (5,127) | (438) | (3,393) |
Total comprehensive loss | $ (11,034) | $ (8,040) | $ (23,589) | $ (20,000) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | |
Common Stock, Beginning at Dec. 31, 2017 | 82,554 | |||||
Balance at Dec. 31, 2017 | $ 218,343 | $ 83 | $ 2,272,690 | $ (2,057,812) | $ 3,382 | |
Cumulative effect to retained earnings related to adoption of Topic 718 | Accounting Standards Update 2014-09 [Member] | 11,431 | 11,431 | ||||
Common Stock, Ending at Jan. 01, 2018 | 82,554 | |||||
Balance at Jan. 01, 2018 | 229,774 | $ 83 | 2,272,690 | (2,046,381) | 3,382 | |
Common Stock, Beginning at Dec. 31, 2017 | 82,554 | |||||
Balance at Dec. 31, 2017 | 218,343 | $ 83 | 2,272,690 | (2,057,812) | 3,382 | |
Net loss | (16,607) | (16,607) | ||||
Other comprehensive loss, net of tax | (3,393) | (3,393) | ||||
Issuance of common stock under option, stock award and purchase plans, Shares | 2,885 | |||||
Issuance of common stock under option, stock award and purchase plans, Value | 2,312 | $ 2 | 2,310 | |||
Additional Paid-in Capital, Stock-based compensation | 8,649 | 8,649 | ||||
Common Stock, Ending at Jun. 29, 2018 | 85,439 | |||||
Balance at Jun. 29, 2018 | 220,735 | $ 85 | 2,283,649 | (2,062,988) | (11) | |
Common Stock, Beginning at Dec. 31, 2018 | 87,057 | |||||
Balance at Dec. 31, 2018 | 228,250 | $ 87 | 2,296,795 | (2,067,416) | (1,216) | |
Cumulative effect to retained earnings related to adoption of Topic 718 | Accounting Standards Update 2016-09 [Member] | [1] | 1,400 | 1,400 | |||
Common Stock, Ending at Jan. 01, 2019 | 87,057 | |||||
Balance at Jan. 01, 2019 | 229,650 | $ 87 | 2,296,795 | (2,066,016) | (1,216) | |
Common Stock, Beginning at Dec. 31, 2018 | 87,057 | |||||
Balance at Dec. 31, 2018 | 228,250 | $ 87 | 2,296,795 | (2,067,416) | (1,216) | |
Net loss | (23,151) | |||||
Other comprehensive loss, net of tax | (438) | (438) | ||||
Issuance of common stock under option, stock award and purchase plans, Shares | 2,017 | |||||
Issuance of common stock under option, stock award and purchase plans, Value | 1,319 | $ 2 | 1,317 | |||
Additional Paid-in Capital, Stock-based compensation | 4,686 | 4,686 | ||||
Common Stock, Ending at Jun. 28, 2019 | 89,074 | |||||
Balance at Jun. 28, 2019 | $ 212,066 | $ 89 | $ 2,302,798 | $ (2,089,167) | $ (1,654) | |
[1] | See Note 2, “Recent Accounting Pronouncements” for more information on the adoption of Accounting Standard Update (“ASU”) No. 2018-07, Compensation-Stock Compensation (“Topic 718”): Improvements to Nonemployee Share-Based Payment Accounting issued by the Financial Accounting Standards Board. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 28, 2019 | Jun. 29, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (23,151) | $ (16,607) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Amortization of intangibles | 4,162 | 4,194 |
Depreciation | 5,716 | 6,771 |
Stock-based compensation | 4,623 | 8,769 |
Amortization of discount on convertible debt and issuance cost | 3,262 | 2,954 |
Amortization of non-cash warrant | 48 | 395 |
Restructuring, asset impairment and loss on retirement of fixed assets | 101 | 93 |
Deferred income taxes, net | (145) | 530 |
Foreign currency adjustments | (325) | (1,042) |
Provision for excess and obsolete inventories | 384 | 822 |
Allowance for doubtful accounts and returns | 500 | 623 |
Other non-cash adjustments, net | 303 | 64 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 10,699 | (13,572) |
Inventories | (2,440) | 2,000 |
Prepaid expenses and other assets | (1,526) | 1,897 |
Accounts payable | (1,752) | (4,187) |
Deferred revenue | 4,989 | 9,378 |
Income taxes payable | (292) | 503 |
Accrued and other liabilities | (9,802) | (337) |
Net cash provided by (used in) operating activities | (4,646) | 3,248 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,939) | (3,181) |
Net cash used in investing activities | (2,939) | (3,181) |
Cash flows from financing activities: | ||
Proceeds from other debts and finance leases | 4,503 | 0 |
Repayment of other debts and finance leases | (6,162) | (6,176) |
Proceeds from common stock issued to employees | 2,147 | 2,366 |
Payment of tax withholding obligations related to net share settlements of restricted stock units | (828) | (54) |
Net cash used in financing activities | (340) | (3,864) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | (588) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (7,925) | (4,385) |
Cash, cash equivalents and restricted cash at beginning of period | 65,989 | 58,757 |
Cash, cash equivalents and restricted cash at end of period | 58,064 | 54,372 |
Supplemental disclosures of cash flow information: | ||
Income tax payments, net | 860 | 750 |
Interest payments, net | 2,495 | 2,545 |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | ||
Capital expenditures incurred but not yet paid | 78 | 491 |
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | ||
Total cash, cash equivalents and restricted cash | $ 65,989 | $ 58,757 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 28, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) which Harmonic Inc. (“Harmonic,” or the “Company”) considers necessary to present fairly the results of operations for the interim periods covered and the consolidated financial condition of the Company at the date of the balance sheets. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (“SEC”) on March 1, 2019 (the “2018 Form 10-K”). The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2019, or any other future period. The Company’s fiscal quarters are based on 13-week periods, except for the fourth quarter, which ends on December 31. The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheet as of December 31, 2018 was derived from audited financial statements, and the unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the SEC for interim reporting. As permitted under those requirements, certain footnotes or other financial information that are normally required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company’s reported financial positions or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. If estimates or assumptions differ from actual results, subsequent periods are adjusted to reflect more current information. Reclassifications Certain prior period balances have been reclassified to conform to the current period’s presentation. These reclassifications did not have a material impact on previously reported financial statements. Beginning in the first quarter of fiscal 2019, the Company revised the classification of total revenue in the Condensed Consolidated Statements of Operations from the two previous categories, “Product” and “Service”, to two new categories, “Appliance and integration” and “SaaS and service”. The Company has also reclassified revenue into the two new categories for all prior periods to conform to the current period’s presentation. This reclassification within revenue did not have an impact on total revenue or any segment revenue for any periods presented. Significant Accounting Policies The Company’s significant accounting policies are described in Note 2 to its audited Consolidated Financial Statements included in the 2018 Form 10-K. There have been no significant changes to these policies during the six months ended June 28, 2019 other than those disclosed in Note 2, “Recent Accounting Pronouncements”. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 28, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements Accounting Standards Codification (ASC) Topic 842, “Leases” On January 1, 2019, the Company adopted ASC 842, Leases (“Topic 842”), using the modified retrospective method, applying Topic 842 to all leases existing at the date of initial application. The Company elected to use the effective date as the date of initial application. Consequently, prior period balances and disclosures have not been restated. The Company elected certain practical expedients, which among other things, allowed the Company to carry forward prior conclusions about lease identification and classification. Adoption of the standard resulted in the balance sheet recognition of additional lease assets and liabilities of approximately $23.3 million ; however, the adoption of the standard did not have an impact on the Company’s beginning retained earnings, results from operations or cash flows. See Note 4, “Leases” for additional information. ASU No. 2018-07, Compensation-Stock Compensation (Topic 718) In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (“Topic 718”): Improvements to Nonemployee Share-Based Payment Accounting. The new ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The Company adopted this new standard in the first quarter of fiscal 2019, and the adoption resulted in an adjustment of $1.4 million as the cumulative effect adjustment to opening retained earnings relating to the accounting of warrants which were previously granted to Comcast. This represents the cumulative impact of the remeasurement of unvested Comcast warrants on the date of adoption. See Note 15, “Warrants” for additional information. ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This new standard requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. Costs for implementation activities in the application development stage can be capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed. The costs capitalized are expensed over the term of the hosting arrangement. The amendments in the new ASU also require the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The Company early adopted this new standard in the third quarter of fiscal 2018 and applied it prospectively to all implementation costs incurred after the date of adoption. The adoption of this standard did not have a significant impact on the Company’s Consolidated Financial Statements for the year ended December 31, 2018. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets and certain other instruments. For trade receivables and other instruments, the Company will be required to use a new forward-looking “expected loss” model. Additionally, credit losses on available-for-sale debt securities should be recorded through an allowance for credit losses limited to the amount by which fair value is below amortized cost. The new ASU will be effective for the Company beginning in the first quarter of fiscal 2020 and early adoption is permitted. The adoption of the new ASU is not expected to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new ASU removes Step 2 of the goodwill impairment test and requires the assessment of fair value of individual assets and liabilities of a reporting unit to measure goodwill impairments. Goodwill impairment will then be the amount by which a reporting unit's carrying value exceeds its fair value. The new ASU will be effective for the Company beginning in the first quarter of fiscal 2020 on a prospective basis, and early adoption is permitted. The adoption of the new ASU is not expected to have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, which removes, modifies and adds to the disclosure requirements on fair value measurements in Topic 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. This guidance will become effective for the Company in fiscal years beginning after December 15, 2019, including interim periods within that reporting period. Early adoption is permitted upon issuance of this updated guidance. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this updated guidance and delay adoption of the additional disclosures until their effective date. The Company does not currently hold any level 3 assets or liabilities which require recurring measurements and the Company expects the impact to its disclosure will be relatively limited. In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General Subtopic 715-20 - Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, which is designed to improve the effectiveness of disclosures by removing and adding disclosures related to defined benefit plans. The new ASU is effective for the Company for fiscal years ending after December 15, 2020, and early adoption is permitted. The Company is currently evaluating the impact of adopting the new ASU on its consolidated financial statements. |
Revenue
Revenue | 6 Months Ended |
Jun. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUE The Company’s principal sources of revenue are from the sale of hardware, software, hardware and software maintenance contracts, and end-to-end solutions, encompassing design, manufacture, test, integration and installation of products. The Company also derives recurring revenue from subscriptions, which are comprised of subscription fees from customers utilizing the Company’s cloud-based video processing solutions. Beginning in the first quarter of fiscal 2019, the Company revised the classification of total revenue in the Condensed Consolidated Statement of Operations from the two previous categories, “Product” and “Service”, to two new categories, “Appliance and integration” and “SaaS and service”. The “Appliance and integration” revenue category includes hardware, licenses and professional services and is reflective of non-recurring revenue, while the “SaaS and service” category includes usage fees for the Company’s SaaS platform and support revenue stream from the Company’s appliance-based customers and reflects the Company’s recurring revenue stream. Significant Judgments . The Company has revenue arrangements that include promises to transfer multiple products and services to a customer. The Company may exercise significant judgment when determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together. The Company allocates the transaction price to all separate performance obligations based on the relative standalone selling prices (“SSP”) of each obligation. The Company’s best evidence for SSP is the price the Company charges for that good or service when the Company sells it separately in similar circumstances to similar customers. If goods or services are not always sold separately, the Company uses the best estimate of SSP in the allocation of the transaction price. The objective of determining the best estimate of SSP is to estimate the price at which the Company would transact a sale if the product or service were sold on a standalone basis. The Company’s process for determining the best estimate of SSP involves management’s judgment, and considers multiple factors including, but not limited to, major product groupings, geographies, gross margin objectives and pricing practices. Pricing practices taken into consideration include contractually stated prices, discounts and applicable price lists. These factors may vary over time, depending upon the unique facts and circumstances related to each deliverable. If the facts and circumstances underlying the factors considered change or should future facts and circumstances lead the Company to consider additional factors, the Company’s best estimate of SSP may also change. Contract Balances. Deferred revenue represents the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. The Company’s payment terms vary by the type and location of its customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer. Contract assets exist when the Company has satisfied a performance obligation but does not have an unconditional right to consideration (e.g., because the entity first must satisfy another performance obligation in the contract before it is entitled to invoice the customer). Contract assets and deferred revenue consisted of the following (in thousands): As of June 28, December 31, Contract assets $ 4,163 $ 3,834 Deferred revenue 51,891 46,922 Contract assets and Deferred revenue (long-term) are reported as components of “Prepaid expenses and other current assets” and “Other non-current liabilities”, respectively, on the Condensed Consolidated Balance Sheets. See Note 8, “Balance Sheet Components” for additional information. During the three months ended June 28, 2019 and June 29, 2018 , the Company recognized revenue of $10.1 million and $15.0 million , respectively, that was included in the deferred revenue balance at the beginning of each fiscal year. During the six months ended June 28, 2019 and June 29, 2018 , the Company recognized revenue of $31.3 million and $35.4 million , respectively, that was included in the deferred revenue balance at the beginning of each fiscal year. The Company elected the practical expedient under Topic 606 to not disclose the transaction price allocated to remaining performance obligations, since the majority of the Company’s arrangements have original expected durations of one year or less, or the invoicing corresponds to the value of the Company’s performance completed to date. See Note 16, “Segment Information” for disaggregated revenue information. |
Lease
Lease | 6 Months Ended |
Jun. 28, 2019 | |
Leases [Abstract] | |
Lessee, Operating Leases | LEASES Under Topic 842, operating lease expense is generally recognized evenly over the term of the lease. The Company has operating leases primarily consisting of facilities with remaining lease terms of one year to eleven years. The lease term represents the non-cancelable period of the lease. For certain leases, the Company has an option to extend the lease term. These renewal options are not considered in the remaining lease term unless it is reasonably certain that the Company will exercise such options. The Company elected certain practical expedients under Topic 842 which are: (i) to not record leases with an initial term of twelve months or less on the balance sheet; (ii) to combine the lease and non-lease components in determining the lease liabilities and right-of-use assets, and (iii) to carry forward prior conclusions about lease identification and classification. The Company’s lease contracts do not provide an implicit borrowing rate, hence the Company determined the incremental borrowing rate based on information available at lease commencement to determine the present value of lease liability. The Company uses the parent entity’s incremental borrowing rates as the treasury operations are managed centrally by the parent entity and, consequently, the pricing of leases at a subsidiary level is typically significantly influenced by the credit risk evaluated at the parent or consolidated group level on the basis of guarantees or other payment mechanisms that allow the lessor to look beyond just the subsidiary for payment. During the second quarter of fiscal 2019, the Company entered into a lease for a new facility which is intended to become the Company’s new headquarters in 2020. The new lease commenced in May 2019, as the facility was made available to the Company for constructing leasehold improvements. The lease was assessed under Topic 842 to be an operating lease and has a term of approximately eleven years . The new lease resulted in the balance sheet recognition of $10.3 million in “Operating lease right-of use assets”, $4.0 million in “Prepaid expenses and other current assets”, $14.0 million in “Other non-current liabilities”, and $0.3 million in “Accrued and other current liabilities”. The components of lease expense are as follows (in thousands): Three months ended Six months ended June 28, 2019 June 28, 2019 Operating lease cost $ 2,231 $ 4,227 Variable lease cost 744 1,523 Total lease cost $ 2,975 $ 5,750 Supplemental cash flow information related to leases are as follows (in thousands): Three months ended Six months ended June 28, 2019 June 28, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 2,494 $ 4,624 ROU assets obtained in exchange for operating lease obligations $ 10,305 $ 10,305 Other information related to leases are as follows: Six months ended June 28, 2019 Operating leases Weighted-average remaining lease term (years) 7.1 years Weighted-average discount rate 6.7 % Future minimum lease payments under non-cancelable operating leases as of June 28, 2019 are as follows (in thousands): Years ending December 31, 2019 (remaining six months) $ 5,624 2020 9,525 2021 5,819 2022 4,444 2023 4,206 Thereafter 20,577 Total future minimum lease payments $ 50,195 Less: imputed interest (11,259 ) Total $ 38,936 Future minimum lease payments under non-cancelable operating leases as of December 31, 2018, as defined under the previous lease accounting guidance of ASC Topic 840, were as follows (in thousands): Years ending December 31, 2019 $ 13,515 2020 10,139 2021 4,088 2022 2,523 2023 2,220 Thereafter 6,694 Total future minimum lease payments $ 39,179 |
Investments in Equity Securitie
Investments in Equity Securities | 6 Months Ended |
Jun. 28, 2019 | |
Investments, All Other Investments [Abstract] | |
Investments in Equity Securities | INVESTMENTS IN EQUITY SECURITIES EDC In 2014, the Company acquired an 18.4% interest in Encoding.com, Inc. (“EDC”), a privately held video transcoding service company headquartered in San Francisco, California, for $3.5 million by purchasing EDC’s Series B preferred stock. EDC is considered a VIE but the Company determined that it is not the primary beneficiary of EDC. As a result, EDC is measured at its cost minus impairment, if any. The Company determined that there were no indicators at June 28, 2019 that the EDC investment was impaired. The Company’s maximum exposure to loss from the EDC’s investment at June 28, 2019 and December 31, 2018, was limited to its investment cost of $3.6 million , including $0.1 million of transaction costs. |
Derivative and Hedging Activiti
Derivative and Hedging Activities | 6 Months Ended |
Jun. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure | DERIVATIVES AND HEDGING ACTIVITIES The Company uses forward contracts to manage exposures to foreign currency exchange rates. The Company’s primary objective in holding derivative instruments is to reduce the volatility of earnings and cash flows associated with fluctuations in foreign currency exchange rates and the Company does not use derivative instruments for trading purposes. The use of derivative instruments exposes the Company to credit risk to the extent that the counterparties may be unable to meet their contractual obligations. As such, the potential risk of loss with any one counterparty is closely monitored by the Company. Derivatives Not Designated as Hedging Instruments (Balance Sheet Hedges) The Company’s balance sheet hedges consist of foreign currency forward contracts that generally mature within three months, are carried at fair value, and are used to minimize the short-term impact of foreign currency exchange rate fluctuation on cash and certain trade and inter-company receivables and payables. Changes in the fair value of these foreign currency forward contracts are recognized in “Other expense, net” in the Condensed Consolidated Statement of Operations and are largely offset by the changes in the fair value of the assets or liabilities being hedged. Losses on the non-designated derivative instruments recognized during the periods presented were as follows (in thousands): Three months ended Six months ended Financial Statement Location June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Derivatives not designated as hedging instruments: Losses recognized in income Other expense, net $ (44 ) $ (1,268 ) $ (609 ) $ (1,382 ) The U.S. dollar equivalents of all outstanding notional amounts of foreign currency forward contracts are summarized as follows (in thousands): June 28, 2019 December 31, 2018 Derivatives not designated as hedging instruments: Purchase $ 33,716 $ 28,975 The locations and fair value amounts of the Company’s derivative instruments reported in its Condensed Consolidated Balance Sheets are as follows (in thousands): Asset Derivatives Derivative Liabilities Balance Sheet Location June 28, 2019 December 31, 2018 Balance Sheet Location June 28, 2019 December 31, 2018 Derivatives not designated as hedging instruments: Foreign currency contracts Prepaid expenses and other current assets $ — $ — Accrued and other current liabilities $ 313 $ 333 Total derivatives $ — $ — $ 313 $ 333 Offsetting of Derivative Assets and Liabilities The Company recognizes all derivative instruments on a gross basis in the Condensed Consolidated Balance Sheets. However, the arrangements with its counterparties allows for net settlement, which are designed to reduce credit risk by permitting net settlement with the same counterparty. As of June 28, 2019 , information related to the offsetting arrangements was as follows (in thousands): Gross Amounts of Derivatives Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets Net Amounts of Derivatives Presented in the Condensed Consolidated Balance Sheets Derivative assets $ — — $ — Derivative liabilities $ 313 — $ 313 In co nnection with foreign currency derivatives entered in Israel, the Company’s subsidiaries in Israel are required to maintain a compensating balance with their bank at the end of each m onth. The compensating balance arrangements do not legally restrict the use of cash. As of June 28, 2019 , the total compensating balance maintained was $1.0 million . |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The authoritative accounting guidance establishes a framework for measuring fair value and requires disclosure about the fair value measurements of assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. This guidance requires the Company to classify and disclose assets and liabilities measured at fair value on a recurring basis, as well as fair value measurements of assets and liabilities measured on a nonrecurring basis in periods subsequent to initial measurement, in a three-tier fair value hierarchy as described below. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The guidance describes three levels of inputs that may be used to measure fair value: • Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets. • Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The forward exchange contracts are classified as Level 2 because they are valued using quoted market prices and other observable data for similar instruments in an active market. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Total As of June 28, 2019 Accrued and other current liabilities Derivative liabilities $ — $ 313 $ — $ 313 Total liabilities measured and recorded at fair value $ — $ 313 $ — $ 313 Level 1 Level 2 Level 3 Total As of December 31, 2018 Accrued and other current liabilities Derivative liabilities $ — $ 333 $ — $ 333 Total liabilities measured and recorded at fair value $ — $ 333 $ — $ 333 The Company’s liability for the TVN VDP (as defined below) was $1.4 million and $2.4 million as of June 28, 2019 and December 31, 2018, respectively. This amount is not included in the table above because its fair value at inception, based on Level 3 inputs, was determined during the fourth quarter of fiscal 2016. The fair value of this liability has not been subsequently remeasured based on the applicable accounting guidance. See Note 10, “Restructuring and related charges-TVN VDP,” for additional information on the Company’s TVN VDP liabilities. The carrying value of the Company’s financial instruments, including cash equivalents, restricted cash, accounts receivable, accounts payable and accrued and other current liabilities, approximate fair value due to their short maturities. The Company uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The fair value of the Company’s convertible notes is influenced by interest rates, the Company’s stock price and stock market volatility. The fair value of the Company’s convertible notes was approximately $150.0 million and $136.5 million as of June 28, 2019 and December 31, 2018, respectively, and represents a Level 2 valuation. The Company’s other debts assumed from the Thomson Video Networks (“TVN”) acquisition are classified within Level 2 because these borrowings are not actively traded and the majority of them have a variable interest rate structure based upon market rates currently available to the Company for debt with similar terms and maturities, therefore, the carrying value of these debts approximate its fair value. The other debts, excluding finance leases, outstanding as of June 28, 2019 and December 31, 2018 were in the aggregate of $18.0 million and $19.7 million , respectively. (See Note 11, “Convertible Notes, Other debts and Finance Leases” for additional information). During the six months ended June 28, 2019 , there were no nonrecurring fair value measurements of assets and liabilities subsequent to initial recognition. |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | BALANCE SHEET COMPONENTS The following tables provide details of selected balance sheet components (in thousands): June 28, 2019 December 31, 2018 Accounts receivable, net: Accounts receivable $ 73,349 $ 85,292 Less: allowances for doubtful accounts and sales returns (2,778 ) (3,497 ) Total $ 70,571 $ 81,795 June 28, 2019 December 31, 2018 Inventories: Raw materials $ 1,199 $ 1,705 Work-in-process 1,052 991 Finished goods 15,308 12,267 Service-related spares 10,100 10,675 Total $ 27,659 $ 25,638 June 28, 2019 December 31, 2018 Prepaid expenses and other current assets: Deferred cost of revenue $ 8,153 $ 3,671 Prepaid expenses 7,998 4,834 Contract assets (1) 4,163 3,834 Capitalized sales commissions 1,168 1,098 French R&D tax credits receivable — 7,305 Other 7,727 2,538 Total $ 29,209 $ 23,280 (1) Contract assets reflect the satisfied performance obligations for which the Company does not yet have an unconditional right to consideration. June 28, 2019 December 31, 2018 Property and equipment, net: Machinery and equipment $ 74,675 $ 75,094 Capitalized software 33,375 32,696 Leasehold improvements 14,963 14,951 Furniture and fixtures 6,045 6,049 Property and equipment, gross 129,058 128,790 Less: accumulated depreciation and amortization (109,746 ) (106,469 ) Total $ 19,312 $ 22,321 June 28, 2019 December 31, 2018 Other long-term assets: French R&D tax credits receivable (2) $ 21,830 $ 19,249 Deferred tax assets 8,932 8,695 Equity investment 3,593 3,593 Other 8,190 6,840 Total $ 42,545 $ 38,377 (2) The Company’s TVN subsidiary in France (the “TVN French Subsidiary”) participates in the French Crédit d’Impôt Recherche program (the “R&D tax credits”) which allows companies to monetize eligible research expenses. The R&D tax credits can be used to offset against income tax payable to the French government in each of the four years after being incurred, or if not utilized, are recoverable in cash. The amount of R&D tax credits recoverable are subject to audit by the French government. The R&D tax credits receivable at June 28, 2019 were approximately $21.8 million and are expected to be recoverable from 2020 through 2023. June 28, 2019 December 31, 2018 Accrued and other current liabilities: Accrued employee compensation and related expenses $ 16,694 $ 21,451 Operating lease liability (short-term) 10,519 — Accrued warranty 4,802 4,869 Contingent inventory reserves 2,263 2,500 Accrued TVN VDP, current (3) 1,285 1,585 Accrued Avid litigation settlement, current — 1,500 Others 21,201 20,856 Total $ 56,764 $ 52,761 (3) See Note 10, “Restructuring and related charges-TVN VDP,” for additional information on the Company’s TVN VDP liabilities. June 28, 2019 December 31, 2018 Other non-current liabilities: Operating lease liability (long-term) $ 27,009 $ — Deferred revenue (long-term) 4,561 5,330 Others 9,741 12,898 Total $ 41,311 $ 18,228 |
Goodwill and Identified Intangi
Goodwill and Identified Intangible Assets | 6 Months Ended |
Jun. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Identified Intangible Assets | GOODWILL AND IDENTIFIED INTANGIBLE ASSETS Goodwill Goodwill represents the difference between the purchase price and the estimated fair value of the identifiable assets acquired and liabilities assumed. Goodwill is allocated among and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. The Company has two reporting units, Video and Cable Access. The Company tests for goodwill impairment at the reporting unit level on an annual basis, or more frequently if events or changes in circumstances indicate that the asset is more likely than not impaired. The Company’s annual goodwill impairment test is performed in the fiscal fourth quarter, with a testing date at the end of October. In evaluating goodwill for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value (including goodwill). If the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then no further testing is required. However, if the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the two-step goodwill impairment test is performed to identify a potential goodwill impairment and measure the amount of impairment to be recognized, if any. The two-step impairment test involves estimating the fair value of all assets and liabilities of the reporting unit, including the implied fair value of goodwill, through either estimated discounted future cash flows or market-based methodologies. No impairment indicators were identified as of June 28, 2019 . The changes in the carrying amount of goodwill for the six months ended June 28, 2019 were as follows (in thousands): Video Cable Access Total Balance as of December 31, 2018 $ 179,839 $ 60,779 $ 240,618 Foreign currency translation adjustment, net (282 ) (1 ) (283 ) Balance as of June 28, 2019 $ 179,557 $ 60,778 $ 240,335 Intangible Assets, Net The following is a summary of intangible assets, net (in thousands): June 28, 2019 December 31, 2018 Weighted Average Remaining Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed core technology 0.7 $ 31,708 $ (28,167 ) $ 3,541 $ 31,707 $ (25,576 ) $ 6,131 Customer relationships/contracts 1.7 44,628 (39,632 ) 4,996 44,650 (38,146 ) 6,504 Trademarks and trade names 0.7 618 (515 ) 103 623 (441 ) 182 Maintenance agreements and related relationships n/a 5,500 (5,500 ) — 5,500 (5,500 ) — Order backlog n/a 3,104 (3,104 ) — 3,112 (3,112 ) — Total identifiable intangibles, net $ 85,558 $ (76,918 ) $ 8,640 $ 85,592 $ (72,775 ) $ 12,817 Amortization expense for the identifiable purchased intangible assets for the three and six months ended June 28, 2019 and June 29, 2018 was allocated as follows (in thousands): Three months ended Six months ended June 28, June 29, June 28, June 29, Included in cost of revenue $ 1,295 $ 1,295 $ 2,590 $ 2,590 Included in operating expenses 784 800 1,572 1,604 Total amortization expense $ 2,079 $ 2,095 $ 4,162 $ 4,194 The estimated future amortization expense of purchased intangible assets with definite lives is as follows (in thousands): Cost of Revenue Operating Expenses Total Year ended December 31, 2019 (remaining six months) $ 2,590 $ 1,576 $ 4,166 2020 951 3,023 3,974 2021 — 500 500 Total future amortization expense $ 3,541 $ 5,099 $ 8,640 |
Restructuring and Related Charg
Restructuring and Related Charges | 6 Months Ended |
Jun. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Charges | RESTRUCTURING AND RELATED CHARGES The Company has implemented several restructuring plans in an effort to better align its resources with its business strategy. The goal of these plans was to bring operational expenses to appropriate levels relative to its net revenues, while simultaneously implementing extensive company-wide expense control programs. These restructuring plans have primarily been comprised of excess facilities, severance payments and termination benefits related to headcount reductions. In the three and six months ended June 28, 2019 , the Company recorded an aggregate amount of $0.1 million and $0.4 million , respectively, of restructuring and related charges for severance and employee benefits for certain employees, primarily in one specific function within the Video segment. The activities associated with the charges were substantially completed in the first quarter of fiscal 2019. The Company made $0.3 million in payments in the six months ended June 28, 2019 , with the remaining $0.1 million liability outstanding as of June 28, 2019 . The Company initiated restructuring plans during fiscal 2018 and prior years. During fiscal 2018, the Company revised certain estimates made in connection with the prior restructuring plans and recorded credits of $0.2 million . As of June 28, 2019 , total liabilities related to the prior restructuring plans were $3.0 million . The Company accounts for its restructuring plans under the authoritative guidance for exit or disposal activities. The restructuring and related charges are included in “Cost of revenue” and “Operating expenses - Restructuring and related charges” in the Condensed Consolidated Statements of Operations. The following table summarizes the restructuring and related charges (in thousands): Three months ended Six months ended June 28, June 29, June 28, June 29, Restructuring and related charges in: Cost of revenue $ 91 $ 115 $ 392 $ 877 Operating expenses - Restructuring and related charges 276 631 333 1,717 Total restructuring and related charges $ 367 $ 746 $ 725 $ 2,594 As of June 28, 2019 and December 31, 2018, the Company’s total restructuring liability was $3.4 million and $5.3 million , respectively, of which $3.1 million and $3.3 million , respectively, were reported as a component of “Accrued and other current liabilities”, and the remaining $0.3 million and $2.0 million , respectively, were reported as a component of “Other non-current liabilities” on the Company’s Condensed Consolidated Balance Sheets. The following table summarizes the activities related to the Company’s restructuring plans during the six months ended June 28, 2019 (in thousands): Excess facilities Severance and benefits TVN VDP (1) Others Total Balance at December 31, 2018 $ 2,926 $ — $ 2,409 $ — $ 5,335 Charges for current period — 433 27 241 701 Adjustments to restructuring provisions 47 — (23 ) — 24 Cash payments (955 ) (284 ) (979 ) — (2,218 ) Others (382 ) — (24 ) — (406 ) Balance at June 28, 2019 $ 1,636 $ 149 $ 1,410 $ 241 $ 3,436 (1) “TVN VDP” consists of restructuring-related costs in connection with the TVN acquisition that included global workforce reductions, exiting certain operating facilities and disposing of excess assets and an employee voluntary departure plan in France. TVN VDP The amount recorded for the six months ended June 28, 2019 was immaterial. The amount recorded for the six months ended June 29, 2018 was $0.5 million . The TVN VDP liability balance as of June 28, 2019 was $1.4 million , payable through 2020. |
Convertible Notes, Other Debts
Convertible Notes, Other Debts And Finance Lease | 6 Months Ended |
Jun. 28, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes, Other Debts And Capital Leases | CONVERTIBLE NOTES, OTHER DEBTS AND FINANCE LEASES 4.00% Convertible Senior Notes In December 2015, the Company issued $128.25 million in aggregate principal amount of 4.00% Senior Convertible Notes due 2020 (the “offering” or “Notes”, as applicable) pursuant to an indenture (the “Indenture”), dated December 14, 2015, by and between the Company and U.S. Bank National Association, as trustee. The Notes bear interest at a rate of 4.00% per year, payable in cash on June 1 and December 1 of each year and the Notes will mature on December 1, 2020 unless earlier repurchased or converted. The Notes will be convertible into cash, shares of the Company’s common stock, par value $0.001 (“Common Stock”), or a combination thereof, at the Company’s election, at an initial conversion rate of 173.9978 shares of Common Stock per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $5.75 per share). The conversion rate, and thus the effective conversion price, may be adjusted under certain circumstances, including in connection with conversions made following certain fundamental changes and under other circumstances, in each case, as set forth in the Indenture. Prior to the close of business on the business day immediately preceding September 1, 2020, the Notes will be convertible only under the following circumstances: (1) during any fiscal quarter (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price of the Notes on each applicable trading day; (2) during the five business day period after any 5 consecutive trading day period (the “measurement period ”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. Commencing on September 1, 2020 until the close of business on the second scheduled trading day immediately preceding the maturity date, the Notes will be convertible in multiples of $1,000 principal amount regardless of the foregoing circumstances. If a fundamental change occurs, holders of the Notes may require the Company to purchase all or any portion of their Notes for cash at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. Concurrent with the closing of the offering, the Company used $49.9 million of the net proceeds to repurchase 11.1 million shares of the Company’s common stock from purchasers of Notes in the offering in privately negotiated transactions. In addition, the Company incurred approximately $4.1 million of debt issuance cost, resulting in net proceeds to the Company of approximately $74.2 million , which was used to fund the TVN acquisition. In accordance with the accounting guidance on embedded conversion features, the conversion feature associated with the Notes was valued at $26.1 million and bifurcated from the host debt instrument and recorded in stockholders’ equity. The resulting debt discount on the Notes is being amortized to interest expense at the effective interest rate over the contractual term of the Notes. The following table presents the components of the Notes as of June 28, 2019 and December 31, 2018 (in thousands, except for years and percentages): June 28, 2019 December 31, 2018 Liability: Principal amount $ 128,250 $ 128,250 Less: Debt discount, net of amortization (9,085 ) (11,996 ) Less: Debt issuance costs, net of amortization (1,095 ) (1,446 ) Carrying amount $ 118,070 $ 114,808 Remaining amortization period (years) 1.4 1.9 Effective interest rate on liability component 9.94 % 9.94 % Carrying amount of equity component $ 26,062 $ 26,062 The following table presents interest expense recognized for the Notes (in thousands): Three months ended Six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Contractual interest expense $ 1,282 $ 1,282 $ 2,565 $ 2,565 Amortization of debt discount 1,479 1,340 2,912 2,637 Amortization of debt issuance costs 178 161 350 317 Total interest expense recognized $ 2,939 $ 2,783 $ 5,827 $ 5,519 Other Debts and Finance Leases The Company has a variety of debt and credit facilities in France to satisfy the financing requirements of TVN operations. These arrangements are summarized in the table below (in thousands): June 28, 2019 December 31, 2018 Financing from French government agencies related to various government incentive programs (1) $ 17,218 $ 18,783 Term loans 759 914 Obligations under finance leases 99 162 Total debt obligations 18,076 19,859 Less: current portion (1,379 ) (7,175 ) Long-term portion $ 16,697 $ 12,684 (1) As of June 28, 2019 and December 31, 2018, loans backed by French R&D tax credit receivables were $15.1 million and $16.7 million , respectively. As of June 28, 2019 , the TVN French Subsidiary had an aggregate of $21.8 million of R&D tax credit receivables from the French government from 2020 through 2023. See Note 8, “Balance Sheet Components” for additional information. These tax loans have a fixed rate of 0.6% , plus EURIBOR 1 month + 1.3% and mature between 2020 through 2022. The remaining loans of $2.1 million at June 28, 2019 , primarily relate to financial support from French government agencies for R&D innovation projects at minimal interest rates, and these loans mature between 2019 through 2025. Future minimum repayments The table below presents the future minimum repayments of debts and finance lease obligations for TVN as of June 28, 2019 (in thousands): Years ending December 31, Finance lease obligations Other Debt obligations 2019 (remaining six months) $ 77 $ 946 2020 22 6,563 2021 — 5,297 2022 — 4,791 2023 — 153 Thereafter — 227 Total $ 99 $ 17,977 Line of Credit On September 27, 2017, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank (the “Bank”). The Loan Agreement provides for a secured revolving credit facility in an aggregate principal amount of up to $15.0 million . Under the terms of the Loan Agreement, the principal amount of loans, plus the face amount of any outstanding letters of credit, at any time cannot exceed up to 85% of the Company’s eligible receivables. Under the terms of the Loan Agreement, the Company may also request letters of credit from the Bank. The proceeds of any loans under the Loan Agreement will be used for working capital and general corporate purposes. Loans under the Loan Agreement will bear interest, at the Company’s option, and subject to certain conditions, at an annual rate of either a prime rate or a LIBOR rate plus an applicable margin of 2.25% . There will be no applicable margin for prime rate advances when the Company is in compliance with the liquidity requirement of at least $20.0 million in the aggregate of consolidated cash plus availability under the Loan Agreement (the “Liquidity Requirement”) and a 0.25% margin for prime rate advances when the Company is not in compliance with the Liquidity Requirement. The Company may not request LIBOR advances when it is not in compliance with the Liquidity Requirement. Interest on each advance is due and payable monthly and the principal balance is due at maturity. The Company’s obligations under the revolving credit facility are secured by a security interest on substantially all of its assets, excluding intellectual property. The Loan Agreement contains customary affirmative and negative covenants. The Company must comply with financial covenants requiring it to maintain (i) a short-term asset to short-term liabilities ratio of at least 1.10 to 1.00 and (ii) a minimum adjusted EBITDA, in the amounts and for the periods as set forth in the Loan Agreement. The Company must also maintain a minimum liquidity amount, comprised of unrestricted cash held at accounts with the Bank plus proceeds available to be drawn under the Loan Agreement, equal to at least $10.0 million at all times. As of June 28, 2019 , the Company was in compliance with the covenants under the Loan Agreement. As of June 28, 2019 , the Company has committed $2.1 million towards security for letters of credit issued under the Loan Agreement. There were no other borrowings under the Loan Agreement as of June 28, 2019 . |
Employee Benefit Plans and Stoc
Employee Benefit Plans and Stock-based Compensation | 6 Months Ended |
Jun. 28, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Benefit Plans and Stock-based compensation | EMPLOYEE BENEFIT PLANS AND STOCK-BASED COMPENSATION Equity Award Plans The Company’s stock benefit plans include the 2002 Employee Stock Purchase Plan (“ESPP”) and current active stock plans adopted in 1995 and 2002. See Note 12, “Employee Benefit Plans and Stock-based Compensation” of Notes to Consolidated Financial Statements in the 2018 Form 10-K for details pertaining to each plan. The Company’s stockholders approved an amendment to the ESPP at the 2019 annual meeting of stockholders (the “2019 Annual Meeting”) to increase the number of shares of common stock reserved for issuance under the ESPP by 1,000,000 shares. The Company’s stockholders also approved an amendment to the 1995 Stock Plan at the 2019 Annual Meeting to increase the number of shares of common stock reserved for issuance thereunder by 3,500,000 shares. As of June 28, 2019 , there were 1.8 million and 5.2 million shares of common stock reserved for future grants under the Company’s ESPP and active stock plans, respectively. Stock Option Activities The following table summarizes the Company’s stock option activities and related information during the six months ended June 28, 2019 (in thousands, except per share amounts and terms): Stock Options Outstanding Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance at December 31, 2018 3,068 $ 5.76 Exercised (39 ) 3.75 Canceled or expired (379 ) 6.14 Balance at June 28, 2019 2,650 5.73 2.2 $ 1,690.3 As of June 28, 2019 Vested and expected to vest 2,650 5.73 2.2 $ 1,690.3 Exercisable 2,645 5.74 2.2 $ 1,684.4 The aggregate intrinsic value disclosed above represents the difference between the exercise price of the options and the fair value of the Company’s common stock. There were no employee stock options granted in the six months ended June 28, 2019 . There were no realized tax benefits attributable to stock options exercised in jurisdictions where this expense is deductible for tax purposes for the six months ended June 28, 2019 and June 29, 2018 , respectively. Restricted Stock Units (“RSUs”) Activities The following table summarizes the Company’s RSUs activities and related information during the six months ended June 28, 2019 (in thousands, except per share amounts): Restricted Stock Units Outstanding Number Weighted Balance at December 31, 2018 3,403 $ 3.99 Granted 2,501 5.67 Vested (1,600 ) 3.97 Forfeited (45 ) 4.72 Balance at June 28, 2019 4,259 4.99 Performance- and Market-based awards In the second quarter of 2019, the Company granted 85,000 performance-based RSUs (“PRSUs”) to certain key executives that are expected to vest during a period of one to two years from the date of grant. The vesting condition for the PRSUs include achievement of certain financial operating goals. The stock-based compensation recognized for the PRSUs for the three months ended June 28, 2019 was $0.1 million . The unrecognized stock-based compensation of the PRSUs as of June 28, 2019 was $0.4 million . No PRSUs had vested as of June 28, 2019 . In the second quarter of 2019, the Company granted 200,000 market-based RSUs (“MRSUs”) under the 1995 Stock Plan to a key executive that is expected to vest during a three -year period. The vesting condition for the MRSUs include performance of the Company’s total shareholder return (“TSR”) relative to the TSR of the NASDAQ Telecommunication Index. The aggregate grant-date fair value of these shares was estimated to be $1.1 million using a Monte-Carlo simulation valuation method. The stock-based compensation recognized for the MRSUs for the three months ended June 28, 2019 was $0.1 million . The unrecognized stock-based compensation of the MRSUs as of June 28, 2019 was $1.0 million . No MRSUs had vested as of June 28, 2019 . French Retirement Benefit Plan The Company assumed obligations under a defined benefit pension plan in connection with the acquisition of TVN in 2016. The plan is unfunded and there are no contributions required by laws or funding regulations, discretionary contributions or non-cash contributions expected to be made. The table below presents the components of net periodic benefit costs (in thousands): Three months ended Six months ended June 28, 2019 June 29, 2018 June 28, June 29, Service cost $ 57 $ 63 $ 114 $ 126 Interest cost 19 19 39 38 Net periodic benefit cost $ 76 $ 82 $ 153 $ 164 The present value of the Company’s pension obligation as of June 28, 2019 was $5.0 million , of which $0.1 million was reported as a component of “Accrued and other current liabilities” and $4.9 million was reported as a component of “Other non-current liabilities” on the Company’s Condensed Consolidated Balance Sheets. The present value of the Company’s pension obligation as of December 31, 2018 was $4.9 million . 401(k) Plan The Company has a retirement/savings plan for its U.S. employees, which qualifies as a thrift plan under Section 401(k) of the Internal Revenue Code. This plan allows participants to contribute up to the applicable Internal Revenue Code limitations under the plan. The Company has made discretionary contributions to the plan of 25% of the first 4% contributed by eligible participants, up to a maximum contribution per participant of $1,000 per year. The contributions for the six months ended June 28, 2019 and June 29, 2018 were $208,000 and $214,000 , respectively. Stock-based Compensation The following table summarizes stock-based compensation for all plans (in thousands): Three months ended Six months ended June 28, June 29, June 28, June 29, Stock-based compensation in: Cost of revenue $ 195 $ 448 $ 420 $ 963 Research and development expense 582 818 1,198 2,622 Selling, general and administrative expense 1,733 1,746 3,005 5,184 Total stock-based compensation in operating expense 2,315 2,564 4,203 7,806 Total stock-based compensation $ 2,510 $ 3,012 $ 4,623 $ 8,769 As of June 28, 2019 , total unrecognized stock-based compensation cost related to unvested RSUs was $18.3 million and is expected to be recognized over a weighted-average period of approximately 1.66 years. Valuation Assumptions The Company estimates the fair value of employee stock options and stock purchase rights under the ESPP using a Black-Scholes option valuation model. The value of the stock purchase rights under the ESPP consists of: (1) the 15% discount on the purchase of the stock; (2) 85% of the fair value of the call option; and (3) 15% of the fair value of the put option. The call option and put option were valued using the Black-Scholes option pricing model. ESPP Purchase Period Ending July 1, July 2, Expected term (years) 0.5 0.5 Volatility 43 % 60 % Risk-free interest rate 2.5 % 1.7 % Expected dividends 0.0 % 0.0 % Estimated weighted average fair value per share at purchase date $1.31 $1.34 The expected term of the stock purchase rights under the ESPP represents the period of time from the beginning of the offering period to the purchase date. The Company uses its historical volatility for a period equivalent to the expected term of the options to estimate the expected volatility. The risk-free interest rate assumption is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term. The Company has not paid and does not plan to pay any cash dividends in the foreseeable future. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company reported the following operating results for the periods presented (in thousands): Three months ended Six months ended June 28, June 29, June 28, June 29, Loss before income taxes $ (11,148 ) $ (2,022 ) $ (22,773 ) $ (14,638 ) Provision for (benefit from) income taxes 697 891 378 1,969 Effective income tax rate (6.3 )% (44.1 )% (1.7 )% (13.5 )% The Company operates in multiple jurisdictions and its profits are taxed pursuant to the tax laws of these jurisdictions. The Company’s effective income tax rate may be affected by changes in, or interpretations of tax laws and tax agreements in any given jurisdiction, utilization of net operating loss and tax credit carry forwards, changes in geographical mix of income and expense, and changes in management’s assessment of matters such as the ability to realize deferred tax assets. The Company’s effective tax rate varies from year to year primarily due to the absence of several onetime, discrete items that benefited or decremented the tax rates in the previous years. The Company's effective income tax rate of (1.7)% for the six months ended June 28, 2019 was different from the U.S. federal statutory rate of 21% , primarily due to geographical mix of income and losses, full valuation allowance against U.S. federal, California and other states deferred tax assets, foreign withholding taxes and income taxes on earnings from operations in foreign tax jurisdictions . In addition, during the six months ended June 28, 2019 , the Company recorded a one-time benefit of approximately $0.8 million due to a valuation allowance release for one of its foreign subsidiaries. This release of valuation allowance was due to changes in forecasted taxable income resulting from the Company receiving a favorable tax ruling during the quarter. The Company's effective income tax rate of (13.5)% for the six months ended June 29, 2018 was different from the U.S. federal statutory rate of 21% , primarily due to the Company’s geographical income mix and favorable tax rates associated with certain earnings from operations in lower-tax jurisdictions, the increase in the valuation allowance against U.S. federal, California and other state deferred tax assets, detriment from non-deductible stock-based compensation, and the net of various discrete tax adjustments . For the six months ended June 29, 2018 , the discrete adjustments to the Company's tax expense were primarily withholding taxes. The Company files U.S. federal and state, and foreign income tax returns in jurisdictions with varying statutes of limitations during which such tax returns may be audited and adjusted by the relevant tax authorities. The 2015 through 2018 tax years generally remain subject to examination by U.S. federal and most state tax authorities. In significant foreign jurisdictions, the 2013 through 2018 tax years generally remain subject to examination by their respective tax authorities. If, upon the conclusion of an audit, the ultimate determination of taxes owed in the jurisdictions under audit is for an amount in excess of the tax provision the Company has recorded in the applicable period, the Company’s overall tax expense, effective tax rate, operating results and cash flow could be materially and adversely impacted in the period of adjustment. On July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. v. Commissioner, 145 T.C. No.3 (2015) related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. A final decision was entered by the U.S. Tax Court on December 1, 2015 (the “2015 Decision”). On February 19, 2016, the U.S. Internal Revenue Service filed a notice of appeal in Altera Corp. v. Commissioner, 145 T.C. No. 3 (2015), to the Ninth Circuit Court of Appeals. The Ninth Circuit was to decide whether a regulation that mandates that stock-based compensation costs related to the intangible development activity of a qualified cost sharing arrangement (a “QCSA”) must be included in the joint cost pool of the QCSA (the “all costs rule”) is consistent with the arm’s length standard as set forth in Section 482 of the Internal Revenue Code. On June 7, 2019, the Ninth Circuit overturned the earlier Tax Court decision and ruled to include share-based compensation in the cost sharing pool. The company continues to include share-based compensation in the cost base consistent with the Ninth Circuit’s ruling. As of June 28, 2019 , the total amount of gross unrecognized tax benefits, including interest and penalties, was approximately $17.3 million , of which $16.0 million would affect the Company’s effective tax rate if the benefits are eventually recognized, subject to valuation allowance considerations. The Company recognizes interest and penalties related to unrecognized tax positions in income tax expense. The Company had $25 thousand of gross interest and penalties accrued as of June 28, 2019 . The Company will continue to review its tax positions and provide for, or reverse, unrecognized tax benefits as issues arise. For the six months ended June 28, 2019 , the Company released $0.7 million of unrecognized tax benefits due to closures of tax audits in foreign jurisdictions. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 28, 2019 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | NET LOSS PER SHARE The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except per share amounts): Three months ended Six months ended June 28, June 29, June 28, June 29, Numerator: Net loss $ (11,845 ) $ (2,913 ) $ (23,151 ) $ (16,607 ) Denominator: Weighted average number of common shares outstanding Basic and diluted 88,931 85,304 88,554 84,616 Net loss per share: Basic and diluted $ (0.13 ) $ (0.03 ) $ (0.26 ) $ (0.20 ) Basic net loss per share was the same as diluted net loss per share for the three and six months ended June 28, 2019 and June 29, 2018 , as the inclusion of potential common shares outstanding would have been anti-dilutive due to the Company’s net losses for the periods presented. The following table sets forth the potential weighted common shares outstanding that were excluded from the computation of basic and diluted net loss per share calculations (in thousands): Three months ended Six months ended June 28, June 29, June 28, June 29, Stock options 2,664 3,234 2,803 3,469 RSUs 2,668 3,326 2,534 2,766 Stock purchase rights under the ESPP 509 541 499 689 Warrants (1) 1,954 782 1,954 782 Total (2) 7,795 7,883 7,790 7,706 (1) On September 26, 2016, in connection with the execution of a product supply agreement pursuant to which an affiliate of Comcast Corporation (together with Comcast Corporation, “Comcast”) may, in its sole discretion, purchase from the Company licenses to certain of the Company’s software products, the Company granted Comcast a warrant to purchase shares of its common stock. (See Note 15, “Warrants” and Note 18, “Subsequent Event” for additional information). (2) Excluded from the table above are the Notes, which are convertible under certain conditions into an aggregate of 22,304,348 shares of common stock. (See Note 11, “Convertible Notes, Other Debts and Finance Leases” for additional information on the Notes). Since the Company’s intent is to settle the principal amount of the Notes in cash, the treasury stock method is being used to calculate any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share when the Company’s average market price of its common stock for a given period exceeds the conversion price of $5.75 per share. |
Warrants
Warrants | 6 Months Ended |
Jun. 28, 2019 | |
Equity [Abstract] | |
Warrants Disclosure | WARRANTS On September 26, 2016, the Company granted a warrant to purchase shares of common stock (the “Warrant”) to Comcast pursuant to which Comcast may, subject to certain vesting provisions, purchase up to 7,816,162 shares of the Company’s common stock subject to adjustment in accordance with the terms of the Warrant, for a per share exercise price of $4.76 . Comcast may exercise the Warrant for cash or on a net share basis. The Warrant expires on September 26, 2023 or the prior consummation of a change of control of the Company. Comcast’s right to purchase 781,617 shares vested as of the Warrant issuance date as an incentive to enter into the software license product supply agreement. Comcast’s right to purchase 1,172,425 shares vested as of July 31, 2018 upon the acceptance and completion of field trials. Comcast’s right to purchase an additional 781,617 shares will vest upon Comcast’s election for enterprise license pricing for the Company’s CableOS software products. Such pricing would obligate Comcast to make certain total payments to the Company over the term of the product supply agreement. Comcast’s rights to purchase additional shares in specified tranches vest when Comcast exceeds specified cumulative purchase amounts from the Company under the product supply agreement and, for certain tranches, such purchases are made within specified time periods. The Warrant is considered an incentive for Comcast to purchase certain of the Company’s products. Therefore, the value of the vested Warrant is recorded as an asset, which is recognized as a reduction in the Company’s net revenues in proportion to the pertinent sales to Comcast. The Warrant is considered indexed to the Company’s common stock and classified as stockholders’ equity based on its terms. Accordingly, the vested Warrant amounts are included in “Additional paid-in capital”. Prior to adoption of new accounting guidance on January 1, 2019, changes in fair value of the warrant shares were being marked to market until final vesting, and any adjustment as such was being recorded in revenue. The change in fair value together with vested warrant shares was being amortized to revenue using a ratio of revenue recognized from the customer in the period compared to total revenue expected from the customer. The value of the Warrant was recorded as a reduction in the Company’s net revenues to the extent such value did not exceed net revenues from pertinent sales to Comcast. In the first quarter of fiscal 2019, due to the adoption of Topic 718 as disclosed in Note 2, “Recent Accounting Pronouncements”, the fair value of unvested warrant shares is no longer required to be marked to market. As a result, the charge to revenue for warrant shares no longer includes the change in fair value of the warrant shares. In fiscal 2018, the fair value of the Warrant was determined using the Black-Scholes option pricing model. The assumptions utilized in the Black-Scholes model included the risk-free interest rate, expected volatility, and expected life in years. The risk-free interest rate was based on the U.S. Treasury yield curve rates with maturity terms similar to the expected life of the Warrant. Expected volatility was determined utilizing historical volatility over a period of time equal to the expected life of the Warrant. Expected life was equal to the remaining contractual term of the Warrant. The dividend yield was assumed to be zero since the Company had not historically declared dividends and did not have any plans to declare dividends in the future. During the three and six months ended June 28, 2019 , the Company recorded $23 thousand and $48 thousand , respectively, as a reduction to net revenues in connection with amortization of the Warrant. During the three and six months ended June 29, 2018 , the Company recorded $0.3 million and $0.4 million , respectively, as a reduction to net revenues in connection with amortization of the Warrant. On July 9, 2019, in connection with Comcast’s election of enterprise license pricing for the Company’s CableOS software, all of the remaining milestones and thresholds required to fulfill each of the vesting requirements of the Warrant were deemed satisfied and achieved or otherwise waived such that all Warrant shares were fully vested and exercisable as of July 1, 2019. Refer to Note 18, “Subsequent Event”, for more information. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 28, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Operating segments are defined as components of an enterprise that engages in business activities for which separate financial information is available and evaluated by the Company’s Chief Operating Decision Maker (the “CODM”), which for Harmonic is its Chief Executive Officer, in deciding how to allocate resources and assess performance. Based on our internal reporting structure, the Company consists of two operating segments: Video and Cable Access. The operating segments were determined based on the nature of the products offered. The Video segment sells video processing and production and playout solutions and services worldwide to broadcast and media companies, streaming new media companies, cable operators, and satellite and telecommunications (“telco”) Pay-TV service providers. The Cable Access segment sells cable access solutions and related services to cable operators globally. The following table provides summary financial information by reportable segment (in thousands): Three months ended Six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Video Revenue $ 71,625 $ 79,208 $ 138,801 $ 150,956 Gross profit 41,444 43,558 80,046 84,784 Operating income 4,459 6,239 6,427 8,234 Cable Access Revenue $ 13,240 $ 19,952 $ 26,170 $ 38,331 Gross profit 4,063 9,903 9,131 18,432 Operating income (loss) (7,266 ) 256 (13,088 ) (1,368 ) Total Revenue $ 84,865 $ 99,160 $ 164,971 $ 189,287 Gross profit 45,507 53,461 89,177 103,216 Operating income (loss) (2,807 ) 6,495 (6,661 ) 6,866 A reconciliation of the Company’s consolidated segment operating income (loss) to consolidated loss before income taxes is as follows (in thousands): Three months ended Six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Total segment operating income (loss) $ (2,807 ) $ 6,495 $ (6,661 ) $ 6,866 Unallocated corporate expenses (368 ) (746 ) (726 ) (2,588 ) Stock-based compensation (2,510 ) (3,012 ) (4,623 ) (8,769 ) Amortization of intangibles (2,079 ) (2,095 ) (4,162 ) (4,194 ) Loss from operations (7,764 ) 642 (16,172 ) (8,685 ) Non-operating expense, net (3,384 ) (2,664 ) (6,601 ) (5,953 ) Loss before income taxes $ (11,148 ) $ (2,022 ) $ (22,773 ) $ (14,638 ) Unallocated Corporate Expenses Together with amortization of intangibles and stock-based compensation, the Company does not allocate restructuring and related charges, TVN acquisition and integration-related costs, and certain other non-recurring charges to the operating income (loss) for each segment because management does not include this information in the measurement of the performance of the operating segments. A measure of assets by segment is not applicable as segment assets are not included in the discrete financial information provided to the CODM. Geographic Information Three months ended Six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Net Revenue (in thousands) (1) United States $ 35,710 $ 40,468 $ 65,825 $ 82,244 Other Countries 49,155 58,692 99,146 107,043 Total $ 84,865 $ 99,160 $ 164,971 $ 189,287 (1) Revenue is attributed to countries based on the location of the customer. Market Information Three months ended Six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Market (in thousands) Service Provider $ 43,438 $ 54,142 $ 87,650 $ 106,359 Broadcast and Media 41,427 45,018 77,321 82,928 Total $ 84,865 $ 99,160 $ 164,971 $ 189,287 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Warranties The Company accrues for estimated warranty costs at the time of product shipment. Management periodically reviews the estimated fair value of its warranty liability and records adjustments based on the terms of warranties provided to customers, historical and anticipated warranty claims experience, and estimates of the timing and cost of warranty claims. Activity for the Company’s warranty accrual, which is included in “Accrued and other current liabilities”, is summarized below (in thousands): Three months ended Six months ended June 28, June 29, June 28, June 29, Balance at beginning of period $ 4,587 $ 4,522 $ 4,869 $ 4,381 Accrual for current period warranties 1,570 1,714 2,973 3,450 Warranty costs incurred (1,355 ) (1,589 ) (3,040 ) (3,184 ) Balance at end of period $ 4,802 $ 4,647 $ 4,802 $ 4,647 Purchase Obligations The Company relies on a limited number of contract manufacturers and suppliers to provide manufacturing services for a substantial majority of its products. The Company had approximately $46.1 million of non-cancelable commitments to purchase inventories and other commitments as of June 28, 2019 . Standby Letters of Credit and Guarantees As of June 28, 2019 and December 31, 2018, the Company has outstanding bank guarantees and standby letters of credit in aggregate of $2.5 million and $2.3 million , respectively, consisting of building leases and performance bonds issued to customers. During 2017, one of the Company’s subsidiaries entered into a $2.0 million credit facility with a foreign bank for the purpose of issuing performance guarantees. The credit facility is secured by a $2.2 million guarantee issued by the Company. There were no amounts outstanding under this credit facility as of June 28, 2019 and December 31, 2018, respectively. Indemnification Harmonic is obligated to indemnify its officers and the members of its Board of Directors (the “Board”) pursuant to its bylaws and contractual indemnity agreements. Harmonic also indemnifies some of its suppliers and most of its customers for specified intellectual property matters pursuant to certain contractual arrangements, subject to certain limitations. The scope of these indemnities varies, but, in some instances, includes indemnification for damages and expenses (including reasonable attorneys’ fees). There have been no amounts accrued in respect of these indemnification provisions through June 28, 2019 . Legal proceedings In October 2011, Avid Technology, Inc. (“Avid”) filed a complaint in the United States District Court for the District of Delaware alleging that the Company’s MediaGrid product infringes two patents held by Avid. A jury trial on this complaint commenced on January 23, 2014 and, on February 4, 2014, the jury returned a unanimous verdict in favor of the Company, rejecting Avid’s infringement allegations in their entirety. In January 2015, Avid filed an appeal with respect to the jury’s verdict with the Federal Circuit. In January 2016, the Federal Circuit issued an order vacating the verdict of noninfringement and remanding the case to the trial court for a new trial on infringement. In June 2012, Avid served a subsequent complaint in the United States District Court for the District of Delaware alleging that the Company’s Spectrum product infringes one patent held by Avid. The complaint sought injunctive relief and unspecified damages. In September 2013, the U.S. Patent Trial and Appeal Board (“PTAB”) authorized an inter partes review to be instituted as to claims 1-16 of the patent asserted in this second complaint. In July 2014, the PTAB issued a decision finding claims 1-10 invalid and claims 11-16 not invalid. The Company filed an appeal with respect to the PTAB’s decision on claims 11-16 in September 2014, and the Federal Circuit affirmed the PTAB’s decision in April 2016. In July 2017, the court issued a scheduling order consolidating both cases and setting the trial date for November 6, 2017. On October 19, 2017, the parties agreed to settle the consolidated cases by entering into a settlement and patent portfolio cross-license agreement, and the cases were dismissed with prejudice. In connection with the agreement, the Company recorded a $6.0 million litigation settlement expense in “Selling, general and administrative expenses” in the Company’s 2017 Consolidated Statement of Operations. Of the associated $6.0 million liability, $2.5 million was paid in October 2017, $1.5 million was paid in the second quarter of 2019, and $2.0 million will be paid in the third quarter of 2020. From time to time, the Company is involved in lawsuits as well as subject to various legal proceedings, claims, threats of litigation, and investigations in the ordinary course of business, including claims of alleged infringement of third-party patents and other intellectual property rights, commercial, employment, and other matters. The Company assesses potential liabilities in connection with each lawsuit and threatened lawsuits and accrues an estimated loss for these loss contingencies if both of the following conditions are met: information available prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. While certain matters to which the Company is a party specify the damages claimed, such claims may not represent reasonably probable losses. Given the inherent uncertainties of litigation, the ultimate outcome of these matters cannot be predicted at this time, nor can the amount of possible loss or range of loss, if any, be reasonably estimated. |
Subsequent Event (Notes)
Subsequent Event (Notes) | 6 Months Ended |
Jun. 28, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENT On July 9, 2019, Comcast elected enterprise license pricing for the Company’s CableOS software under the product supply agreement. In connection with the election, which is effective as of July 1, 2019 (the “Effective Date”), Comcast committed to $175 million in software license fees over the four -year term of the enterprise license, subject to certain incentive credits that may be earned by Comcast pursuant to other purchases of CableOS-related products. Comcast will pay the initial $50 million of the enterprise license fees in 2019. In consideration for the election commitments and certain other purchase commitments, the Company deemed that all of the remaining milestones and thresholds required to fulfill each of the vesting requirements of the Warrant were satisfied and achieved or otherwise waived such that all Warrant shares were fully vested and exercisable as of the Effective Date. The remaining terms of the Warrant have not been modified or amended. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 28, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company’s reported financial positions or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. If estimates or assumptions differ from actual results, subsequent periods are adjusted to reflect more current information. |
Reclassification | Reclassifications Certain prior period balances have been reclassified to conform to the current period’s presentation. These reclassifications did not have a material impact on previously reported financial statements. Beginning in the first quarter of fiscal 2019, the Company revised the classification of total revenue in the Condensed Consolidated Statements of Operations from the two previous categories, “Product” and “Service”, to two new categories, “Appliance and integration” and “SaaS and service”. The Company has also reclassified revenue into the two new categories for all prior periods to conform to the current period’s presentation. This reclassification within revenue did not have an impact on total revenue or any segment revenue for any periods presented. |
Significant Accounting Policies | The Company’s significant accounting policies are described in Note 2 to its audited Consolidated Financial Statements included in the 2018 Form 10-K. There have been no significant changes to these policies during the six months ended June 28, 2019 other than those disclosed in Note 2, “Recent Accounting Pronouncements”. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements Accounting Standards Codification (ASC) Topic 842, “Leases” On January 1, 2019, the Company adopted ASC 842, Leases (“Topic 842”), using the modified retrospective method, applying Topic 842 to all leases existing at the date of initial application. The Company elected to use the effective date as the date of initial application. Consequently, prior period balances and disclosures have not been restated. The Company elected certain practical expedients, which among other things, allowed the Company to carry forward prior conclusions about lease identification and classification. Adoption of the standard resulted in the balance sheet recognition of additional lease assets and liabilities of approximately $23.3 million ; however, the adoption of the standard did not have an impact on the Company’s beginning retained earnings, results from operations or cash flows. See Note 4, “Leases” for additional information. ASU No. 2018-07, Compensation-Stock Compensation (Topic 718) In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (“Topic 718”): Improvements to Nonemployee Share-Based Payment Accounting. The new ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The Company adopted this new standard in the first quarter of fiscal 2019, and the adoption resulted in an adjustment of $1.4 million as the cumulative effect adjustment to opening retained earnings relating to the accounting of warrants which were previously granted to Comcast. This represents the cumulative impact of the remeasurement of unvested Comcast warrants on the date of adoption. See Note 15, “Warrants” for additional information. ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This new standard requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. Costs for implementation activities in the application development stage can be capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed. The costs capitalized are expensed over the term of the hosting arrangement. The amendments in the new ASU also require the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The Company early adopted this new standard in the third quarter of fiscal 2018 and applied it prospectively to all implementation costs incurred after the date of adoption. The adoption of this standard did not have a significant impact on the Company’s Consolidated Financial Statements for the year ended December 31, 2018. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets and certain other instruments. For trade receivables and other instruments, the Company will be required to use a new forward-looking “expected loss” model. Additionally, credit losses on available-for-sale debt securities should be recorded through an allowance for credit losses limited to the amount by which fair value is below amortized cost. The new ASU will be effective for the Company beginning in the first quarter of fiscal 2020 and early adoption is permitted. The adoption of the new ASU is not expected to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new ASU removes Step 2 of the goodwill impairment test and requires the assessment of fair value of individual assets and liabilities of a reporting unit to measure goodwill impairments. Goodwill impairment will then be the amount by which a reporting unit's carrying value exceeds its fair value. The new ASU will be effective for the Company beginning in the first quarter of fiscal 2020 on a prospective basis, and early adoption is permitted. The adoption of the new ASU is not expected to have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, which removes, modifies and adds to the disclosure requirements on fair value measurements in Topic 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. This guidance will become effective for the Company in fiscal years beginning after December 15, 2019, including interim periods within that reporting period. Early adoption is permitted upon issuance of this updated guidance. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this updated guidance and delay adoption of the additional disclosures until their effective date. The Company does not currently hold any level 3 assets or liabilities which require recurring measurements and the Company expects the impact to its disclosure will be relatively limited. In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General Subtopic 715-20 - Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, which is designed to improve the effectiveness of disclosures by removing and adding disclosures related to defined benefit plans. The new ASU is effective for the Company for fiscal years ending after December 15, 2020, and early adoption is permitted. The Company is currently evaluating the impact of adopting the new ASU on its consolidated financial statements. |
Derivatives and Hedging Activities | The Company uses forward contracts to manage exposures to foreign currency exchange rates. The Company’s primary objective in holding derivative instruments is to reduce the volatility of earnings and cash flows associated with fluctuations in foreign currency exchange rates and the Company does not use derivative instruments for trading purposes. The use of derivative instruments exposes the Company to credit risk to the extent that the counterparties may be unable to meet their contractual obligations. As such, the potential risk of loss with any one counterparty is closely monitored by the Company. Derivatives Not Designated as Hedging Instruments (Balance Sheet Hedges) The Company’s balance sheet hedges consist of foreign currency forward contracts that generally mature within three months, are carried at fair value, and are used to minimize the short-term impact of foreign currency exchange rate fluctuation on cash and certain trade and inter-company receivables and payables. Changes in the fair value of these foreign currency forward contracts are recognized in “Other expense, net” in the Condensed Consolidated Statement of Operations and are largely offset by the changes in the fair value of the assets or liabilities being hedged. Offsetting of Derivative Assets and Liabilities The Company recognizes all derivative instruments on a gross basis in the Condensed Consolidated Balance Sheets. However, the arrangements with its counterparties allows for net settlement, which are designed to reduce credit risk by permitting net settlement with the same counterparty. |
Fair Value of Financial Instruments | The Company uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The fair value of the Company’s convertible notes is influenced by interest rates, the Company’s stock price and stock market volatility. The authoritative accounting guidance establishes a framework for measuring fair value and requires disclosure about the fair value measurements of assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. This guidance requires the Company to classify and disclose assets and liabilities measured at fair value on a recurring basis, as well as fair value measurements of assets and liabilities measured on a nonrecurring basis in periods subsequent to initial measurement, in a three-tier fair value hierarchy as described below. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The guidance describes three levels of inputs that may be used to measure fair value: • Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets. • Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The forward exchange contracts are classified as Level 2 because they are valued using quoted market prices and other observable data for similar instruments in an active market. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Goodwill and Intangible Assets, Goodwill | Goodwill represents the difference between the purchase price and the estimated fair value of the identifiable assets acquired and liabilities assumed. Goodwill is allocated among and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. The Company has two reporting units, Video and Cable Access. The Company tests for goodwill impairment at the reporting unit level on an annual basis, or more frequently if events or changes in circumstances indicate that the asset is more likely than not impaired. The Company’s annual goodwill impairment test is performed in the fiscal fourth quarter, with a testing date at the end of October. In evaluating goodwill for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value (including goodwill). If the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then no further testing is required. However, if the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the two-step goodwill impairment test is performed to identify a potential goodwill impairment and measure the amount of impairment to be recognized, if any. The two-step impairment test involves estimating the fair value of all assets and liabilities of the reporting unit, including the implied fair value of goodwill, through either estimated discounted future cash flows or market-based methodologies. No impairment indicators were identified as of June 28, 2019 . |
Share-based Compensation Expense | The expected term of the stock purchase rights under the ESPP represents the period of time from the beginning of the offering period to the purchase date. The Company uses its historical volatility for a period equivalent to the expected term of the options to estimate the expected volatility. The risk-free interest rate assumption is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term. The Company has not paid and does not plan to pay any cash dividends in the foreseeable future. The Company estimates the fair value of employee stock options and stock purchase rights under the ESPP using a Black-Scholes option valuation model. The value of the stock purchase rights under the ESPP consists of: (1) the 15% discount on the purchase of the stock; (2) 85% of the fair value of the call option; and (3) 15% of the fair value of the put option. The call option and put option were valued using the Black-Scholes option pricing model. |
Segment Information | Operating segments are defined as components of an enterprise that engages in business activities for which separate financial information is available and evaluated by the Company’s Chief Operating Decision Maker (the “CODM”), which for Harmonic is its Chief Executive Officer, in deciding how to allocate resources and assess performance. Based on our internal reporting structure, the Company consists of two operating segments: Video and Cable Access. The operating segments were determined based on the nature of the products offered. Unallocated Corporate Expenses Together with amortization of intangibles and stock-based compensation, the Company does not allocate restructuring and related charges, TVN acquisition and integration-related costs, and certain other non-recurring charges to the operating income (loss) for each segment because management does not include this information in the measurement of the performance of the operating segments. A measure of assets by segment is not applicable as segment assets are not included in the discrete financial information provided to the CODM. |
Warranties and Indemnification | The Company accrues for estimated warranty costs at the time of product shipment. Management periodically reviews the estimated fair value of its warranty liability and records adjustments based on the terms of warranties provided to customers, historical and anticipated warranty claims experience, and estimates of the timing and cost of warranty claims. Harmonic is obligated to indemnify its officers and the members of its Board of Directors (the “Board”) pursuant to its bylaws and contractual indemnity agreements. Harmonic also indemnifies some of its suppliers and most of its customers for specified intellectual property matters pursuant to certain contractual arrangements, subject to certain limitations. The scope of these indemnities varies, but, in some instances, includes indemnification for damages and expenses (including reasonable attorneys’ fees). |
Revenue | Significant Judgments . The Company has revenue arrangements that include promises to transfer multiple products and services to a customer. The Company may exercise significant judgment when determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together. The Company allocates the transaction price to all separate performance obligations based on the relative standalone selling prices (“SSP”) of each obligation. The Company’s best evidence for SSP is the price the Company charges for that good or service when the Company sells it separately in similar circumstances to similar customers. If goods or services are not always sold separately, the Company uses the best estimate of SSP in the allocation of the transaction price. The objective of determining the best estimate of SSP is to estimate the price at which the Company would transact a sale if the product or service were sold on a standalone basis. The Company’s process for determining the best estimate of SSP involves management’s judgment, and considers multiple factors including, but not limited to, major product groupings, geographies, gross margin objectives and pricing practices. Pricing practices taken into consideration include contractually stated prices, discounts and applicable price lists. These factors may vary over time, depending upon the unique facts and circumstances related to each deliverable. If the facts and circumstances underlying the factors considered change or should future facts and circumstances lead the Company to consider additional factors, the Company’s best estimate of SSP may also change. |
Revenue Revenue (Tables)
Revenue Revenue (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Contract assets and Deferred Revenue | Contract assets and deferred revenue consisted of the following (in thousands): As of June 28, December 31, Contract assets $ 4,163 $ 3,834 Deferred revenue 51,891 46,922 |
Lease (Tables)
Lease (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Leases [Abstract] | |
Components of Lease Expenses | The components of lease expense are as follows (in thousands): Three months ended Six months ended June 28, 2019 June 28, 2019 Operating lease cost $ 2,231 $ 4,227 Variable lease cost 744 1,523 Total lease cost $ 2,975 $ 5,750 Supplemental cash flow information related to leases are as follows (in thousands): Three months ended Six months ended June 28, 2019 June 28, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 2,494 $ 4,624 ROU assets obtained in exchange for operating lease obligations $ 10,305 $ 10,305 Other information related to leases are as follows: Six months ended June 28, 2019 Operating leases Weighted-average remaining lease term (years) 7.1 years Weighted-average discount rate 6.7 % |
Future Minimum Lease Payments under non-cancellable Operating Leases | Future minimum lease payments under non-cancelable operating leases as of June 28, 2019 are as follows (in thousands): Years ending December 31, 2019 (remaining six months) $ 5,624 2020 9,525 2021 5,819 2022 4,444 2023 4,206 Thereafter 20,577 Total future minimum lease payments $ 50,195 Less: imputed interest (11,259 ) Total $ 38,936 |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under non-cancelable operating leases as of December 31, 2018, as defined under the previous lease accounting guidance of ASC Topic 840, were as follows (in thousands): Years ending December 31, 2019 $ 13,515 2020 10,139 2021 4,088 2022 2,523 2023 2,220 Thereafter 6,694 Total future minimum lease payments $ 39,179 |
Derivative and Hedging Activi_2
Derivative and Hedging Activities (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments gain and losses by Statement of Operations locations | Losses on the non-designated derivative instruments recognized during the periods presented were as follows (in thousands): Three months ended Six months ended Financial Statement Location June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Derivatives not designated as hedging instruments: Losses recognized in income Other expense, net $ (44 ) $ (1,268 ) $ (609 ) $ (1,382 ) |
Schedule of Notional Amounts of Outstanding Derivative Positions | The U.S. dollar equivalents of all outstanding notional amounts of foreign currency forward contracts are summarized as follows (in thousands): June 28, 2019 December 31, 2018 Derivatives not designated as hedging instruments: Purchase $ 33,716 $ 28,975 |
Schedule of Derivatives Instruments Balance Sheet Location | The locations and fair value amounts of the Company’s derivative instruments reported in its Condensed Consolidated Balance Sheets are as follows (in thousands): Asset Derivatives Derivative Liabilities Balance Sheet Location June 28, 2019 December 31, 2018 Balance Sheet Location June 28, 2019 December 31, 2018 Derivatives not designated as hedging instruments: Foreign currency contracts Prepaid expenses and other current assets $ — $ — Accrued and other current liabilities $ 313 $ 333 Total derivatives $ — $ — $ 313 $ 333 |
Changes in fair values of non-designated foreign currency forward contracts | As of June 28, 2019 , information related to the offsetting arrangements was as follows (in thousands): Gross Amounts of Derivatives Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets Net Amounts of Derivatives Presented in the Condensed Consolidated Balance Sheets Derivative assets $ — — $ — Derivative liabilities $ 313 — $ 313 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value Based on Three-Tier Fair Value Hierarchy | The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Total As of June 28, 2019 Accrued and other current liabilities Derivative liabilities $ — $ 313 $ — $ 313 Total liabilities measured and recorded at fair value $ — $ 313 $ — $ 313 Level 1 Level 2 Level 3 Total As of December 31, 2018 Accrued and other current liabilities Derivative liabilities $ — $ 333 $ — $ 333 Total liabilities measured and recorded at fair value $ — $ 333 $ — $ 333 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounts Receivable, Net | The following tables provide details of selected balance sheet components (in thousands): June 28, 2019 December 31, 2018 Accounts receivable, net: Accounts receivable $ 73,349 $ 85,292 Less: allowances for doubtful accounts and sales returns (2,778 ) (3,497 ) Total $ 70,571 $ 81,795 |
Inventories | June 28, 2019 December 31, 2018 Inventories: Raw materials $ 1,199 $ 1,705 Work-in-process 1,052 991 Finished goods 15,308 12,267 Service-related spares 10,100 10,675 Total $ 27,659 $ 25,638 |
Prepaid, and Other Current Assets | June 28, 2019 December 31, 2018 Prepaid expenses and other current assets: Deferred cost of revenue $ 8,153 $ 3,671 Prepaid expenses 7,998 4,834 Contract assets (1) 4,163 3,834 Capitalized sales commissions 1,168 1,098 French R&D tax credits receivable — 7,305 Other 7,727 2,538 Total $ 29,209 $ 23,280 (1) Contract assets reflect the satisfied performance obligations for which the Company does not yet have an unconditional right to consideration. |
Property, Plant and Equipment | June 28, 2019 December 31, 2018 Property and equipment, net: Machinery and equipment $ 74,675 $ 75,094 Capitalized software 33,375 32,696 Leasehold improvements 14,963 14,951 Furniture and fixtures 6,045 6,049 Property and equipment, gross 129,058 128,790 Less: accumulated depreciation and amortization (109,746 ) (106,469 ) Total $ 19,312 $ 22,321 |
Other Long Term Assets | June 28, 2019 December 31, 2018 Other long-term assets: French R&D tax credits receivable (2) $ 21,830 $ 19,249 Deferred tax assets 8,932 8,695 Equity investment 3,593 3,593 Other 8,190 6,840 Total $ 42,545 $ 38,377 |
Accrued Liabilities | June 28, 2019 December 31, 2018 Accrued and other current liabilities: Accrued employee compensation and related expenses $ 16,694 $ 21,451 Operating lease liability (short-term) 10,519 — Accrued warranty 4,802 4,869 Contingent inventory reserves 2,263 2,500 Accrued TVN VDP, current (3) 1,285 1,585 Accrued Avid litigation settlement, current — 1,500 Others 21,201 20,856 Total $ 56,764 $ 52,761 (3) See Note 10, “Restructuring and related charges-TVN VDP,” for additional information on the Company’s TVN VDP liabilities. |
Other Non-current Liabilities | June 28, 2019 December 31, 2018 Other non-current liabilities: Operating lease liability (long-term) $ 27,009 $ — Deferred revenue (long-term) 4,561 5,330 Others 9,741 12,898 Total $ 41,311 $ 18,228 |
Goodwill and Identified Intan_2
Goodwill and Identified Intangible Assets (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the six months ended June 28, 2019 were as follows (in thousands): Video Cable Access Total Balance as of December 31, 2018 $ 179,839 $ 60,779 $ 240,618 Foreign currency translation adjustment, net (282 ) (1 ) (283 ) Balance as of June 28, 2019 $ 179,557 $ 60,778 $ 240,335 |
Summary of Goodwill and Identified Intangible Assets | The following is a summary of intangible assets, net (in thousands): June 28, 2019 December 31, 2018 Weighted Average Remaining Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed core technology 0.7 $ 31,708 $ (28,167 ) $ 3,541 $ 31,707 $ (25,576 ) $ 6,131 Customer relationships/contracts 1.7 44,628 (39,632 ) 4,996 44,650 (38,146 ) 6,504 Trademarks and trade names 0.7 618 (515 ) 103 623 (441 ) 182 Maintenance agreements and related relationships n/a 5,500 (5,500 ) — 5,500 (5,500 ) — Order backlog n/a 3,104 (3,104 ) — 3,112 (3,112 ) — Total identifiable intangibles, net $ 85,558 $ (76,918 ) $ 8,640 $ 85,592 $ (72,775 ) $ 12,817 |
Amortization Expense for Identifiable Purchased Intangible Assets | Amortization expense for the identifiable purchased intangible assets for the three and six months ended June 28, 2019 and June 29, 2018 was allocated as follows (in thousands): Three months ended Six months ended June 28, June 29, June 28, June 29, Included in cost of revenue $ 1,295 $ 1,295 $ 2,590 $ 2,590 Included in operating expenses 784 800 1,572 1,604 Total amortization expense $ 2,079 $ 2,095 $ 4,162 $ 4,194 |
Estimated Future Amortization Expense of Purchased Intangible Assets | The estimated future amortization expense of purchased intangible assets with definite lives is as follows (in thousands): Cost of Revenue Operating Expenses Total Year ended December 31, 2019 (remaining six months) $ 2,590 $ 1,576 $ 4,166 2020 951 3,023 3,974 2021 — 500 500 Total future amortization expense $ 3,541 $ 5,099 $ 8,640 |
Restructuring and Related Cha_2
Restructuring and Related Charges (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Summary of restructuring activities | The following table summarizes the restructuring and related charges (in thousands): Three months ended Six months ended June 28, June 29, June 28, June 29, Restructuring and related charges in: Cost of revenue $ 91 $ 115 $ 392 $ 877 Operating expenses - Restructuring and related charges 276 631 333 1,717 Total restructuring and related charges $ 367 $ 746 $ 725 $ 2,594 |
Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the activities related to the Company’s restructuring plans during the six months ended June 28, 2019 (in thousands): Excess facilities Severance and benefits TVN VDP (1) Others Total Balance at December 31, 2018 $ 2,926 $ — $ 2,409 $ — $ 5,335 Charges for current period — 433 27 241 701 Adjustments to restructuring provisions 47 — (23 ) — 24 Cash payments (955 ) (284 ) (979 ) — (2,218 ) Others (382 ) — (24 ) — (406 ) Balance at June 28, 2019 $ 1,636 $ 149 $ 1,410 $ 241 $ 3,436 (1) “TVN VDP” consists of restructuring-related costs in connection with the TVN acquisition that included global workforce reductions, exiting certain operating facilities and disposing of excess assets and an employee voluntary departure plan in France. |
Convertible Notes, Other Debt_2
Convertible Notes, Other Debts And Finance Lease (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table presents the components of the Notes as of June 28, 2019 and December 31, 2018 (in thousands, except for years and percentages): June 28, 2019 December 31, 2018 Liability: Principal amount $ 128,250 $ 128,250 Less: Debt discount, net of amortization (9,085 ) (11,996 ) Less: Debt issuance costs, net of amortization (1,095 ) (1,446 ) Carrying amount $ 118,070 $ 114,808 Remaining amortization period (years) 1.4 1.9 Effective interest rate on liability component 9.94 % 9.94 % Carrying amount of equity component $ 26,062 $ 26,062 |
Convertible Debt Interest | The following table presents interest expense recognized for the Notes (in thousands): Three months ended Six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Contractual interest expense $ 1,282 $ 1,282 $ 2,565 $ 2,565 Amortization of debt discount 1,479 1,340 2,912 2,637 Amortization of debt issuance costs 178 161 350 317 Total interest expense recognized $ 2,939 $ 2,783 $ 5,827 $ 5,519 |
Schedule of Other Debt and Capital Leases | The Company has a variety of debt and credit facilities in France to satisfy the financing requirements of TVN operations. These arrangements are summarized in the table below (in thousands): June 28, 2019 December 31, 2018 Financing from French government agencies related to various government incentive programs (1) $ 17,218 $ 18,783 Term loans 759 914 Obligations under finance leases 99 162 Total debt obligations 18,076 19,859 Less: current portion (1,379 ) (7,175 ) Long-term portion $ 16,697 $ 12,684 (1) As of June 28, 2019 and December 31, 2018, loans backed by French R&D tax credit receivables were $15.1 million and $16.7 million , respectively. As of June 28, 2019 , the TVN French Subsidiary had an aggregate of $21.8 million of R&D tax credit receivables from the French government from 2020 through 2023. See Note 8, “Balance Sheet Components” for additional information. These tax loans have a fixed rate of 0.6% , plus EURIBOR 1 month + 1.3% and mature between 2020 through 2022. The remaining loans of $2.1 million at June 28, 2019 , primarily relate to financial support from French government agencies for R&D innovation projects at minimal interest rates, and these loans mature between 2019 through 2025. |
Schedule of Maturities of Long-term Debt | The table below presents the future minimum repayments of debts and finance lease obligations for TVN as of June 28, 2019 (in thousands): Years ending December 31, Finance lease obligations Other Debt obligations 2019 (remaining six months) $ 77 $ 946 2020 22 6,563 2021 — 5,297 2022 — 4,791 2023 — 153 Thereafter — 227 Total $ 99 $ 17,977 |
Employee Benefit Plans and St_2
Employee Benefit Plans and Stock-based Compensation (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Options Outstanding | The following table summarizes the Company’s stock option activities and related information during the six months ended June 28, 2019 (in thousands, except per share amounts and terms): Stock Options Outstanding Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance at December 31, 2018 3,068 $ 5.76 Exercised (39 ) 3.75 Canceled or expired (379 ) 6.14 Balance at June 28, 2019 2,650 5.73 2.2 $ 1,690.3 As of June 28, 2019 Vested and expected to vest 2,650 5.73 2.2 $ 1,690.3 Exercisable 2,645 5.74 2.2 $ 1,684.4 |
Summary of Restricted Stock Units Outstanding | The following table summarizes the Company’s RSUs activities and related information during the six months ended June 28, 2019 (in thousands, except per share amounts): Restricted Stock Units Outstanding Number Weighted Balance at December 31, 2018 3,403 $ 3.99 Granted 2,501 5.67 Vested (1,600 ) 3.97 Forfeited (45 ) 4.72 Balance at June 28, 2019 4,259 4.99 |
Schedule of Defined Benefit Plans Obligations | The table below presents the components of net periodic benefit costs (in thousands): Three months ended Six months ended June 28, 2019 June 29, 2018 June 28, June 29, Service cost $ 57 $ 63 $ 114 $ 126 Interest cost 19 19 39 38 Net periodic benefit cost $ 76 $ 82 $ 153 $ 164 |
Summary of Stock-Based Compensation Expense | Stock-based Compensation The following table summarizes stock-based compensation for all plans (in thousands): Three months ended Six months ended June 28, June 29, June 28, June 29, Stock-based compensation in: Cost of revenue $ 195 $ 448 $ 420 $ 963 Research and development expense 582 818 1,198 2,622 Selling, general and administrative expense 1,733 1,746 3,005 5,184 Total stock-based compensation in operating expense 2,315 2,564 4,203 7,806 Total stock-based compensation $ 2,510 $ 3,012 $ 4,623 $ 8,769 |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | ESPP Purchase Period Ending July 1, July 2, Expected term (years) 0.5 0.5 Volatility 43 % 60 % Risk-free interest rate 2.5 % 1.7 % Expected dividends 0.0 % 0.0 % Estimated weighted average fair value per share at purchase date $1.31 $1.34 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before income tax | The Company reported the following operating results for the periods presented (in thousands): Three months ended Six months ended June 28, June 29, June 28, June 29, Loss before income taxes $ (11,148 ) $ (2,022 ) $ (22,773 ) $ (14,638 ) Provision for (benefit from) income taxes 697 891 378 1,969 Effective income tax rate (6.3 )% (44.1 )% (1.7 )% (13.5 )% |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Earnings Per Share [Abstract] | |
Numerators and Denominators of Basic and Diluted Net Income (Loss) Per Share Computations | The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except per share amounts): Three months ended Six months ended June 28, June 29, June 28, June 29, Numerator: Net loss $ (11,845 ) $ (2,913 ) $ (23,151 ) $ (16,607 ) Denominator: Weighted average number of common shares outstanding Basic and diluted 88,931 85,304 88,554 84,616 Net loss per share: Basic and diluted $ (0.13 ) $ (0.03 ) $ (0.26 ) $ (0.20 ) |
Anti-dilutive Securities | The following table sets forth the potential weighted common shares outstanding that were excluded from the computation of basic and diluted net loss per share calculations (in thousands): Three months ended Six months ended June 28, June 29, June 28, June 29, Stock options 2,664 3,234 2,803 3,469 RSUs 2,668 3,326 2,534 2,766 Stock purchase rights under the ESPP 509 541 499 689 Warrants (1) 1,954 782 1,954 782 Total (2) 7,795 7,883 7,790 7,706 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting Information, by Segment | The following table provides summary financial information by reportable segment (in thousands): Three months ended Six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Video Revenue $ 71,625 $ 79,208 $ 138,801 $ 150,956 Gross profit 41,444 43,558 80,046 84,784 Operating income 4,459 6,239 6,427 8,234 Cable Access Revenue $ 13,240 $ 19,952 $ 26,170 $ 38,331 Gross profit 4,063 9,903 9,131 18,432 Operating income (loss) (7,266 ) 256 (13,088 ) (1,368 ) Total Revenue $ 84,865 $ 99,160 $ 164,971 $ 189,287 Gross profit 45,507 53,461 89,177 103,216 Operating income (loss) (2,807 ) 6,495 (6,661 ) 6,866 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | A reconciliation of the Company’s consolidated segment operating income (loss) to consolidated loss before income taxes is as follows (in thousands): Three months ended Six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Total segment operating income (loss) $ (2,807 ) $ 6,495 $ (6,661 ) $ 6,866 Unallocated corporate expenses (368 ) (746 ) (726 ) (2,588 ) Stock-based compensation (2,510 ) (3,012 ) (4,623 ) (8,769 ) Amortization of intangibles (2,079 ) (2,095 ) (4,162 ) (4,194 ) Loss from operations (7,764 ) 642 (16,172 ) (8,685 ) Non-operating expense, net (3,384 ) (2,664 ) (6,601 ) (5,953 ) Loss before income taxes $ (11,148 ) $ (2,022 ) $ (22,773 ) $ (14,638 ) |
Revenue from External Customers by Geographic Areas | Three months ended Six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Net Revenue (in thousands) (1) United States $ 35,710 $ 40,468 $ 65,825 $ 82,244 Other Countries 49,155 58,692 99,146 107,043 Total $ 84,865 $ 99,160 $ 164,971 $ 189,287 (1) Revenue is attributed to countries based on the location of the customer. |
Revenue from External Customers by Products and Services | Market Information Three months ended Six months ended June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018 Market (in thousands) Service Provider $ 43,438 $ 54,142 $ 87,650 $ 106,359 Broadcast and Media 41,427 45,018 77,321 82,928 Total $ 84,865 $ 99,160 $ 164,971 $ 189,287 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Warranty Accrual Included in Accrued Liabilities | Activity for the Company’s warranty accrual, which is included in “Accrued and other current liabilities”, is summarized below (in thousands): Three months ended Six months ended June 28, June 29, June 28, June 29, Balance at beginning of period $ 4,587 $ 4,522 $ 4,869 $ 4,381 Accrual for current period warranties 1,570 1,714 2,973 3,450 Warranty costs incurred (1,355 ) (1,589 ) (3,040 ) (3,184 ) Balance at end of period $ 4,802 $ 4,647 $ 4,802 $ 4,647 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - Narratives (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jun. 28, 2019 | Jun. 28, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 30,386 | $ 30,386 | |
Operating Lease, Liability | 38,936 | 38,936 | |
Impact of Topic 842 on Statement of Cash Flow | 2,494 | 4,624 | |
Accounting Standards Update 2016-02 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 23,300 | ||
Operating Lease, Liability | 23,300 | ||
Cumulative Effect on Retained Earnings, Net of Tax | 0 | ||
Impact of Topic 842 on Statement of Cash Flow | 0 | ||
Accounting Standards Update 2018-07 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative Effect on Retained Earnings, Net of Tax | $ 1,400 | ||
Level 3 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total assets measured and recorded at fair value | 0 | 0 | |
Financial Liabilities Fair Value Disclosure | $ 0 | $ 0 |
Revenue Narratives (Details)
Revenue Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Contract with Customer, Liability, Revenue Recognized | $ 10.1 | $ 15 | $ 31.3 | $ 35.4 |
Revenue, Practical Expedient, Initial Application and Transition, Nondisclosure of Transaction Price Allocation to Remaining Performance Obligation [true false] | true | |||
Maximum [Member] | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenue, Remaining Performance Obligation, Optional Exemption, Remaining Duration | 1 year | 1 year |
Revenue Contract Assets and Def
Revenue Contract Assets and Deferred Revenue (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Jun. 29, 2018 |
Prepaid Expenses and Other Current Assets [Member] | ||
Capitalized Contract Cost [Line Items] | ||
Contract assets | $ 4,163 | $ 3,834 |
Other Noncurrent Liabilities [Member] | ||
Capitalized Contract Cost [Line Items] | ||
Deferred revenue | $ 51,891 | $ 46,922 |
Lease - Narratives (Details)
Lease - Narratives (Details) $ in Thousands | 3 Months Ended |
Jun. 28, 2019USD ($) | |
Operating Leased Assets [Line Items] | |
Operating lease right-of-use assets | $ 30,386 |
Operating Lease, Liability, Current | 10,519 |
Operating Lease, Liability, Noncurrent | $ 27,009 |
Minimum [Member] | Leaseholds and Leasehold Improvements [Member] | |
Operating Leased Assets [Line Items] | |
Lessee, Operating Lease, Term of Contract | 1 year |
Maximum [Member] | Leaseholds and Leasehold Improvements [Member] | |
Operating Leased Assets [Line Items] | |
Lessee, Operating Lease, Term of Contract | 11 years |
Lessee, Operating Lease, Initial Term Not Capitalized | 12 months |
Harmonic Headquarter Lease Commencing May 2019 [Member] | Leaseholds and Leasehold Improvements [Member] | |
Operating Leased Assets [Line Items] | |
Lessee, Operating Lease, Term of Contract | 11 years |
Operating lease right-of-use assets | $ 10,300 |
Harmonic Headquarter Lease Commencing May 2019 [Member] | Prepaid Expenses and Other Current Assets [Member] | Leaseholds and Leasehold Improvements [Member] | |
Operating Leased Assets [Line Items] | |
Lease Incentive Receivable, Current | 4,000 |
Harmonic Headquarter Lease Commencing May 2019 [Member] | Other Noncurrent Liabilities [Member] | Leaseholds and Leasehold Improvements [Member] | |
Operating Leased Assets [Line Items] | |
Operating Lease, Liability, Current | 14,000 |
Harmonic Headquarter Lease Commencing May 2019 [Member] | Accrued Liabilities [Member] | Leaseholds and Leasehold Improvements [Member] | |
Operating Leased Assets [Line Items] | |
Operating Lease, Liability, Noncurrent | $ 300 |
Lease - Lease Information (Deta
Lease - Lease Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 28, 2019USD ($) | Jun. 28, 2019USD ($) | |
Leases [Abstract] | ||
Operating lease cost | $ 2,231 | $ 4,227 |
Variable lease cost | 744 | 1,523 |
Total lease cost | 2,975 | 5,750 |
Operating cash flows from operating leases | 2,494 | 4,624 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 10,305 | $ 10,305 |
Weighted-average remaining lease term (years), Operating leases | 7 years 1 month 12 days | 7 years 1 month 12 days |
Weighted-average discount rate, Operating leases | 6.70% | 6.70% |
Lease - Future Minimum Lease Pa
Lease - Future Minimum Lease Payments from non-cancellable Operating Leases (Details) $ in Thousands | Jun. 28, 2019USD ($) |
Leases [Abstract] | |
2019 (remaining six months) | $ 5,624 |
2020 | 9,525 |
2021 | 5,819 |
2022 | 4,444 |
2023 | 4,206 |
Thereafter | 20,577 |
Total future minimum lease payments | 50,195 |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (11,259) |
Operating Lease, Liability | $ 38,936 |
Leases Future Mimimum Lease Pay
Leases Future Mimimum Lease Payments under Non Cancellable Operating Lease as of December 31, 2018 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 13,515 |
2020 | 10,139 |
2021 | 4,088 |
2022 | 2,523 |
2023 | 2,220 |
Thereafter | 6,694 |
Total future minimum lease payments | $ 39,179 |
Investments in Equity Securit_2
Investments in Equity Securities (Details) - Variable Interest Entity, Not Primary Beneficiary [Member] - EDC [Member] - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 28, 2019 | Dec. 31, 2018 | Oct. 22, 2014 | |
Schedule of Cost-method Investments [Line Items] (Deprecated 2018-01-31) | |||
Noncontrolling Interest, Ownership Percentage by Parent | 18.40% | ||
Cost Method Investments Original Cost | $ 3.5 | ||
Cost-method Investments, Other than Temporary Impairment | $ 0 | ||
Maximum Exposure to Loss from Investment | 3.6 | $ 3.6 | |
Variable Interest Entity, Transaction Costs, Amount | $ 0.1 | $ 0.1 |
Derivatives and Hedging Activit
Derivatives and Hedging Activities - Additional Information (Details) $ in Millions | 6 Months Ended |
Jun. 28, 2019USD ($) | |
Not Designated as Hedging Instrument [Member] | Forward Contracts [Member] | |
Derivative [Line Items] | |
Derivative, Term of Contract | 3 months |
Israel [Member] | |
Derivative [Line Items] | |
Compensating Balance, Amount | $ 1 |
Derivative and Hedging Activi_3
Derivative and Hedging Activities gain losses in Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Other Nonoperating Income (Expense) [Member] | Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Gains (losses) recognized in income | $ (44) | $ (1,268) | $ (609) | $ (1,382) |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities Notional Amounts (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 |
Long [Member] | Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Purchase - Derivative Assets | $ 33,716 | $ 28,975 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities Assets Liabilities Balance Sheet Location (Details) - Foreign Exchange Contract [Member] - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | $ 0 | $ 0 |
Derivative Liability, Current | 313 | 333 |
Not Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | 0 | 0 |
Not Designated as Hedging Instrument [Member] | Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Current | $ 313 | $ 333 |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities Asset and Liability Offset (Details) $ in Thousands | Jun. 28, 2019USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Asset, Gross Amounts of Derivatives | $ 0 |
Derivative Assets, Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets | 0 |
Net Amounts of Derivative Assets Presented in the Condensed Consolidated Balance Sheets | 0 |
Derivative Liabilities, Gross Amounts of Derivatives | 313 |
Derivative Liabilities, Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets | 0 |
Net Amounts of Derivatives Liability Presented in the Condensed Consolidated Balance Sheets | $ 313 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value Based on Three-Tier Fair Value Hierarchy (Detail) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | $ 313 | $ 333 |
Foreign exchange forward contracts [Member] | Fair Value, Measurements, Recurring [Member] | Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 313 | 333 |
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 0 | 0 |
Level 1 [Member] | Foreign exchange forward contracts [Member] | Fair Value, Measurements, Recurring [Member] | Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 0 | |
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 313 | 333 |
Level 2 [Member] | Foreign exchange forward contracts [Member] | Fair Value, Measurements, Recurring [Member] | Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 313 | 333 |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 0 | |
Total liabilities measured and recorded at fair value | 0 | |
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | $ 0 | 0 |
Level 3 [Member] | Foreign exchange forward contracts [Member] | Fair Value, Measurements, Recurring [Member] | Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narratives (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible Debt, Fair Value Disclosures | $ 150,000 | $ 136,500 |
Other Debts, Excluding Finance Leases | 18,000 | 19,700 |
Fair Value, Measurements, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 0 | |
Total assets measured and recorded at fair value | 0 | |
TVN [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Postemployment Benefits Liability | 1,400 | $ 2,400 |
Other Debts, Excluding Finance Leases | $ 17,977 |
Balance Sheet Components - Acco
Balance Sheet Components - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Accounts receivable | $ 73,349 | $ 85,292 |
Less: allowances for doubtful accounts and sales returns | (2,778) | (3,497) |
Accounts Receivable, Net, Current | $ 70,571 | $ 81,795 |
Balance Sheet Components - Inve
Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,199 | $ 1,705 |
Work-in-process | 1,052 | 991 |
Finished goods | 15,308 | 12,267 |
Service-related spares | 10,100 | 10,675 |
Inventory, Net | $ 27,659 | $ 25,638 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses And Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Deferred cost of revenue | $ 8,153 | $ 3,671 | |
Prepaid expenses | 7,998 | 4,834 | |
Contract assets(1) | [1] | 4,163 | 3,834 |
Capitalized sales commissions | 1,168 | 1,098 | |
French R&D tax credits receivable | 0 | 7,305 | |
Other | 7,727 | 2,538 | |
Prepaid Expense and Other Assets, Current | $ 29,209 | $ 23,280 | |
[1] | Contract assets reflect the satisfied performance obligations for which the Company does not yet have an unconditional right to consideration. |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 129,058 | $ 128,790 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (109,746) | (106,469) |
Property, Plant and Equipment, Net | 19,312 | 22,321 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 74,675 | 75,094 |
Capitalized Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 33,375 | 32,696 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 14,963 | 14,951 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 6,045 | $ 6,049 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Long Term Assets (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
French R&D tax credits receivable(2) | [1] | $ 21,830 | $ 19,249 |
Deferred tax assets | 8,932 | 8,695 | |
Equity investment | 3,593 | 3,593 | |
Other | 8,190 | 6,840 | |
Other Assets, Noncurrent | $ 42,545 | $ 38,377 | |
[1] | The Company’s TVN subsidiary in France (the “TVN French Subsidiary”) participates in the French Crédit d’Impôt Recherche program (the “R&D tax credits”) which allows companies to monetize eligible research expenses. The R&D tax credits can be used to offset against income tax payable to the French government in each of the four years after being incurred, or if not utilized, are recoverable in cash. The amount of R&D tax credits recoverable are subject to audit by the French government. The R&D tax credits receivable at June 28, 2019 were approximately $21.8 million and are expected to be recoverable from 2020 through 2023. |
Balance Sheet Components Additi
Balance Sheet Components Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 28, 2019 | Dec. 31, 2018 | ||
French R&D tax credits receivable, noncurrent | [1] | $ 21,830 | $ 19,249 |
TVN [Member] | Research Tax Credit Carryforward [Member] | |||
The number of years R&D tax credits can be used to offset against income tax payable after incurred | 4 years | ||
Other Noncurrent Assets [Member] | TVN [Member] | Research Tax Credit Carryforward [Member] | |||
French R&D tax credits receivable, noncurrent | $ 21,800 | ||
[1] | The Company’s TVN subsidiary in France (the “TVN French Subsidiary”) participates in the French Crédit d’Impôt Recherche program (the “R&D tax credits”) which allows companies to monetize eligible research expenses. The R&D tax credits can be used to offset against income tax payable to the French government in each of the four years after being incurred, or if not utilized, are recoverable in cash. The amount of R&D tax credits recoverable are subject to audit by the French government. The R&D tax credits receivable at June 28, 2019 were approximately $21.8 million and are expected to be recoverable from 2020 through 2023. |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |||
Accrued employee compensation and related expenses | $ 16,694 | $ 21,451 | |
Operating lease liability (short-term) | 10,519 | ||
Accrued warranty | 4,802 | 4,869 | |
Contingent inventory reserves | 2,263 | 2,500 | |
Accrued TVN VDP, current (3) | [1] | 1,285 | 1,585 |
Accrued Avid litigation settlement, current | 0 | 1,500 | |
Others | 21,201 | 20,856 | |
Accrued Liabilities, Current | $ 56,764 | $ 52,761 | |
[1] | See Note 10, “Restructuring and related charges-TVN VDP,” for additional information on the Company’s TVN VDP liabilities. |
Balance Sheet Components - Ot_2
Balance Sheet Components - Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Operating lease liability (long-term) | $ 27,009 | |
Deferred revenue (long-term) | 4,561 | $ 5,330 |
Others | 9,741 | 12,898 |
Other Liabilities, Noncurrent | $ 41,311 | $ 18,228 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets - Narratives (Details) | 6 Months Ended |
Jun. 28, 2019ReportingUnit | |
Goodwill [Line Items] | |
Number of Reporting Units | 2 |
Goodwill and Identified Intan_3
Goodwill and Identified Intangible Assets - Changes in Carrying Amount of Goodwill (Detail) $ in Thousands | 6 Months Ended |
Jun. 28, 2019USD ($) | |
Goodwill [Line Items] | |
Balance at beginning of period | $ 240,618 |
Foreign currency translation adjustment | (283) |
Balance at end of period | 240,335 |
Video [Member] | |
Goodwill [Line Items] | |
Balance at beginning of period | 179,839 |
Foreign currency translation adjustment | (282) |
Balance at end of period | 179,557 |
Cable Access [Member] | |
Goodwill [Line Items] | |
Balance at beginning of period | 60,779 |
Foreign currency translation adjustment | (1) |
Balance at end of period | $ 60,778 |
Goodwill and Identified Intan_4
Goodwill and Identified Intangible Assets - Summary of Goodwill and Identified Intangible Assets (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 28, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 85,558 | $ 85,592 |
Accumulated Amortization | (76,918) | (72,775) |
Total future amortization expense | $ 8,640 | 12,817 |
Developed Core Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 8 months 12 days | |
Gross Carrying Amount | $ 31,708 | 31,707 |
Accumulated Amortization | (28,167) | (25,576) |
Total future amortization expense | $ 3,541 | 6,131 |
Customer relationships/contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 1 year 8 months 12 days | |
Gross Carrying Amount | $ 44,628 | 44,650 |
Accumulated Amortization | (39,632) | (38,146) |
Total future amortization expense | $ 4,996 | 6,504 |
Trademarks and Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 8 months 12 days | |
Gross Carrying Amount | $ 618 | 623 |
Accumulated Amortization | (515) | (441) |
Total future amortization expense | 103 | 182 |
Maintenance Agreements and Related Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,500 | 5,500 |
Accumulated Amortization | (5,500) | (5,500) |
Total future amortization expense | 0 | 0 |
Order Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,104 | 3,112 |
Accumulated Amortization | (3,104) | (3,112) |
Total future amortization expense | $ 0 | $ 0 |
Goodwill and Identified Intan_5
Goodwill and Identified Intangible Assets - Amortization Expense for Identifiable Purchased Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Included in cost of revenue | $ 1,295 | $ 1,295 | $ 2,590 | $ 2,590 |
Included in operating expenses | 784 | 800 | 1,572 | 1,604 |
Total amortization expense | $ 2,079 | $ 2,095 | $ 4,162 | $ 4,194 |
Goodwill and Identified Intan_6
Goodwill and Identified Intangible Assets - Estimated Future Amortization Expense of Purchased Intangible Assets (Detail) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
2019 (remaining six months) | $ 4,166 | |
2020 | 3,974 | |
2021 | 500 | |
Total future amortization expense | 8,640 | $ 12,817 |
Cost of Revenue [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
2019 (remaining six months) | 2,590 | |
2020 | 951 | |
2021 | 0 | |
Total future amortization expense | 3,541 | |
Operating Expense [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
2019 (remaining six months) | 1,576 | |
2020 | 3,023 | |
2021 | 500 | |
Total future amortization expense | $ 5,099 |
Restructuring and Related Cha_3
Restructuring and Related Charges - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | Dec. 31, 2018 | ||
Restructuring Cost and Reserve [Line Items] | ||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ 76 | $ 82 | $ 153 | $ 164 | ||
Restructuring charges | 701 | |||||
Payments for Restructuring | 2,218 | |||||
Restructuring Reserve | 3,436 | 3,436 | $ 5,335 | |||
Adjustments to restructuring liability | (24) | |||||
Restructuring Reserve, Current | 3,100 | 3,100 | 3,300 | |||
Restructuring Reserve, Noncurrent | 300 | 300 | 2,000 | |||
Facility Closing [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Payments for Restructuring | 955 | |||||
Restructuring Reserve | 1,636 | 1,636 | 2,926 | |||
Adjustments to restructuring liability | (47) | |||||
Facility Closing [Member] | Harmonic 2017 Restructuring Plan [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Adjustments to restructuring liability | 200 | |||||
Facility Closing [Member] | Prior Restructuring Plans [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Reserve | 3,000 | 3,000 | ||||
Employee Severance [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 433 | |||||
Payments for Restructuring | 284 | |||||
Restructuring Reserve | 149 | 149 | 0 | |||
Employee Severance [Member] | Harmonic 2019 Restructuring Plan [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 100 | 400 | ||||
Payments for Restructuring | 300 | |||||
Restructuring Reserve | 100 | 100 | ||||
TVN Voluntary Departure Plan [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | [1] | 27 | ||||
Payments for Restructuring | [1] | 979 | ||||
Restructuring Reserve | [1] | 1,410 | 1,410 | 2,409 | ||
Adjustments to restructuring liability | [1] | 23 | ||||
TVN [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ 500 | |||||
Postemployment Benefits Liability | $ 1,400 | $ 1,400 | $ 2,400 | |||
[1] | “TVN VDP” consists of restructuring-related costs in connection with the TVN acquisition that included global workforce reductions, exiting certain operating facilities and disposing of excess assets and an employee voluntary departure plan in France. |
Restructuring and Related Cha_4
Restructuring and Related Charges Restructuring and Related Charges, COS & OPEX (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Restructuring and Related Activities [Abstract] | ||||
Cost of revenue - restructuring and related charges | $ 91 | $ 115 | $ 392 | $ 877 |
Operating expenses - Restructuring and related charges | 276 | 631 | 333 | 1,717 |
Restructuring Charges | $ 367 | $ 746 | $ 725 | $ 2,594 |
Restructuring and Related Cha_5
Restructuring and Related Charges Schedule of Restructuring Cost by Types (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 28, 2019 | Jun. 28, 2019 | ||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve | $ 5,335 | ||
Charges for current period | 701 | ||
Adjustments to restructuring provisions | 24 | ||
Cash payments | (2,218) | ||
Others | (406) | ||
Restructuring Reserve | $ 3,436 | 3,436 | |
Facility Closing [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve | 2,926 | ||
Adjustments to restructuring provisions | 47 | ||
Cash payments | (955) | ||
Others | (382) | ||
Restructuring Reserve | 1,636 | 1,636 | |
Employee Severance [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve | 0 | ||
Charges for current period | 433 | ||
Cash payments | (284) | ||
Restructuring Reserve | 149 | 149 | |
TVN Voluntary Departure Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve | [1] | 2,409 | |
Charges for current period | [1] | 27 | |
Adjustments to restructuring provisions | [1] | (23) | |
Cash payments | [1] | (979) | |
Others | [1] | (24) | |
Restructuring Reserve | [1] | 1,410 | 1,410 |
Other Restructuring [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Charges for current period | 241 | ||
Cash payments | 0 | ||
Restructuring Reserve | 241 | 241 | |
Harmonic 2019 Restructuring Plan [Member] | Employee Severance [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Charges for current period | 100 | 400 | |
Cash payments | (300) | ||
Restructuring Reserve | $ 100 | $ 100 | |
[1] | “TVN VDP” consists of restructuring-related costs in connection with the TVN acquisition that included global workforce reductions, exiting certain operating facilities and disposing of excess assets and an employee voluntary departure plan in France. |
Convertible Notes, Other Debt_3
Convertible Notes, Other Debts And Finance Lease - Narratives (Details) $ / shares in Units, shares in Millions | Dec. 14, 2015shares | Jun. 28, 2019USD ($)$ / shares | Dec. 31, 2015USD ($)day$ / shares | Dec. 31, 2018USD ($)$ / shares | Sep. 27, 2017USD ($) | |
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | |||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||
Debt Instrument, Face Amount | $ 128,250,000 | $ 128,250,000 | $ 128,250,000 | |||
Debt Instrument, Convertible, Conversion Ratio | 173.9978 | |||||
Debt Conversion, Converted Instrument, Amount | $ 1,000 | |||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 5.75 | $ 5.75 | ||||
Debt Issuance Cost, Gross, Noncurrent | $ 4,100,000 | |||||
Percentage Of Principal Amount Of Convertible Notes Is Equal To Repurchase Price | 100.00% | |||||
Carrying amount of equity component | $ 26,062,000 | 26,062,000 | ||||
Financing from French government agencies related to various government incentive programs (1) | [1] | 17,218,000 | 18,783,000 | |||
Letters of Credit Outstanding, Amount | 2,500,000 | 2,300,000 | ||||
Stock price greater or equal 130 percent of Note Conversion Price [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Convertible, Threshold Trading Days | day | 20 | |||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | day | 30 | |||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 130.00% | |||||
Note price less than 98 percent of stock price times conversion rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Convertible, Threshold Trading Days | day | 5 | |||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | day | 5 | |||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 98.00% | |||||
Privately Negotiated Transactions [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from Convertible Debt | $ 49,900,000 | |||||
Stock Repurchased and Retired During Period, Shares | shares | 11.1 | |||||
TVN [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from Convertible Debt | $ 74,200,000 | |||||
Income Taxes Receivable | $ 21,800,000 | |||||
Loans Backed By French Research And Development Tax Credit Receivables [Member] | TVN [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 0.60% | |||||
Financing from French government agencies related to various government incentive programs (1) | [1] | $ 15,100,000 | $ 16,700,000 | |||
Debt Instrument, Basis Spread on Variable Rate | 1.30% | |||||
Loans From French Government For R&D Innovation Projects [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Financing from French government agencies related to various government incentive programs (1) | [1] | $ 2,100,000 | ||||
Revolving Credit Facility [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Minimum Net Worth Required for Compliance | 20,000,000 | |||||
Minimum Liquidity Amount | 10,000,000 | |||||
Letters of Credit Outstanding, Amount | 2,100,000 | |||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 | |||||
London Interbank Offered Rate (LIBOR) | Revolving Credit Facility [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | |||||
Euribor | Loans Backed By French Research And Development Tax Credit Receivables [Member] | TVN [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Adjusted EURIBOR Rate, Term | 1 month | |||||
Comply with Liquidity Requirement [Member] | Prime Rate | Revolving Credit Facility [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 0.00% | |||||
Not Comply with Liquidity Requirement [Member] | Prime Rate | Revolving Credit Facility [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 0.25% | |||||
Maximum [Member] | Revolving Credit Facility [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Current Borrowing Capacity | $ 15,000,000 | |||||
Outstanding Borrowing Limit Based on Eligible Receivables, Percentage | 85.00% | |||||
Minimum [Member] | Revolving Credit Facility [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Covenant Ratio of Short Term Asset to Short Term Liabilities | 110.00% | |||||
[1] | As of June 28, 2019 and December 31, 2018, loans backed by French R&D tax credit receivables were $15.1 million and $16.7 million, respectively. As of June 28, 2019, the TVN French Subsidiary had an aggregate of $21.8 million of R&D tax credit receivables from the French government from 2020 through 2023. See Note 8, “Balance Sheet Components” for additional information. These tax loans have a fixed rate of 0.6%, plus EURIBOR 1 month + 1.3% and mature between 2020 through 2022. The remaining loans of $2.1 million at June 28, 2019, primarily relate to financial support from French government agencies for R&D innovation projects at minimal interest rates, and these loans mature between 2019 through 2025. |
Convertible Notes, Other Debt_4
Convertible Notes, Other Debts And Capital Leases - Convertible Note Roll Forward (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 28, 2019 | Dec. 31, 2018 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Principal amount | $ 128,250 | $ 128,250 | $ 128,250 |
Less: Debt discount, net of amortization | (9,085) | (11,996) | |
Less: Debt issuance costs, net of amortization | (1,095) | (1,446) | |
Carrying amount | $ 118,070 | $ 114,808 | |
Remaining amortization period (years) | 1 year 4 months 24 days | 1 year 10 months 24 days | |
Effective interest rate on liability component | 9.94% | 9.94% | |
Carrying amount of equity component | $ 26,062 | $ 26,062 |
Convertible Notes, Other Debt_5
Convertible Notes, Other Debts And Finance Leases - Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Debt Disclosure [Abstract] | ||||
Contractual interest expense | $ 1,282 | $ 1,282 | $ 2,565 | $ 2,565 |
Amortization of debt discount | 1,479 | 1,340 | 2,912 | 2,637 |
Amortization of debt issuance costs | 178 | 161 | 350 | 317 |
Total interest expense recognized | $ 2,939 | $ 2,783 | $ 5,827 | $ 5,519 |
Convertible Notes , Other Debts
Convertible Notes , Other Debts And Finance Leases - Other Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Financing from French government agencies related to various government incentive programs (1) | [1] | $ 17,218 | $ 18,783 |
Term loans | 759 | 914 | |
Obligations under finance leases | 99 | 162 | |
Total debt obligations | 18,076 | 19,859 | |
Less: current portion | (1,379) | (7,175) | |
Long-term portion | $ 16,697 | $ 12,684 | |
[1] | As of June 28, 2019 and December 31, 2018, loans backed by French R&D tax credit receivables were $15.1 million and $16.7 million, respectively. As of June 28, 2019, the TVN French Subsidiary had an aggregate of $21.8 million of R&D tax credit receivables from the French government from 2020 through 2023. See Note 8, “Balance Sheet Components” for additional information. These tax loans have a fixed rate of 0.6%, plus EURIBOR 1 month + 1.3% and mature between 2020 through 2022. The remaining loans of $2.1 million at June 28, 2019, primarily relate to financial support from French government agencies for R&D innovation projects at minimal interest rates, and these loans mature between 2019 through 2025. |
Convertible Notes, Other Debt_6
Convertible Notes, Other Debts And Finance Leases - Debt Maturities (Details) - TVN [Member] $ in Thousands | Jun. 28, 2019USD ($) |
Debt Instrument [Line Items] | |
Finance Leases, 2019 (remaining six months) | $ 77 |
Finance Leases, 2020 | 22 |
Finance Leases, Total | 99 |
Other debt obligations - 2019 (remaining six months) | 946 |
Other debt obligations - 2020 | 6,563 |
Other debt obligations - 2021 | 5,297 |
Other debt obligations - 2022 | 4,791 |
Other debt obligations - 2023 | 153 |
Other debt obligations - thereafter | 227 |
Other debt obligations Total | $ 17,977 |
Employee Benefit Plans and St_3
Employee Benefit Plans and Stock-based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options | $ 0 | $ 0 | |||
Defined Benefit Plan, Benefit Obligation | $ 5,000,000 | 5,000,000 | $ 4,900,000 | ||
Liability, Defined Benefit Pension Plan, Current | 100,000 | 100,000 | |||
Liability, Defined Benefit Pension Plan, Noncurrent | 4,900,000 | $ 4,900,000 | |||
Discretionary contributions of plan | 25.00% | ||||
Percent of employees' gross pay eligible for matching | 4.00% | ||||
Maximum contribution amount per participant | $ 1,000 | ||||
Contributions in period | 208,000 | 214,000 | |||
Dividends, Share-based Compensation, Cash | 0 | ||||
Total stock-based compensation | $ 2,510,000 | $ 3,012,000 | $ 4,623,000 | $ 8,769,000 | |
Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 1,000,000 | ||||
Common Stock, Capital Shares Reserved for Future Issuance | 1,800,000 | 1,800,000 | |||
Discount Percentage On Purchase Of Stock | 15.00% | ||||
Employee Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 3,500,000 | ||||
Common Stock, Capital Shares Reserved for Future Issuance | 5,200,000 | 5,200,000 | |||
Grants in Period, Number of Shares | 0 | ||||
Performance Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 85,000 | ||||
Total stock-based compensation | $ 100,000 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 400,000 | $ 400,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 0 | ||||
Market-based awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 200,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Awards, Grants in Period, Fair Value | $ 1,100,000 | ||||
Total stock-based compensation | 100,000 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 1,000,000 | 1,000,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 0 | ||||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 18,300,000 | $ 18,300,000 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 7 months 28 days | ||||
TVN [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Payment for Pension and Other Postretirement Benefits | $ 0 | ||||
Call Option [Member] | Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of fair market value of Common Stock to purchase shares | 85.00% | ||||
Put Option [Member] | Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of fair market value of Common Stock to purchase shares | 15.00% | ||||
Minimum [Member] | Performance Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | ||||
Maximum [Member] | Performance Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 2 years |
Employee Benefit Plans and St_4
Employee Benefit Plans and Stock-based Compensation - Summary of Stock Options Outstanding (Detail) - Employee Stock Option [Member] $ / shares in Units, shares in Thousands | 6 Months Ended |
Jun. 28, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Beginning balance | shares | 3,068 |
Weighted Average Exercise Price, Beginning balance | $ / shares | $ 5.76 |
Number of Shares, Options exercised | shares | (39) |
Weighted Average Exercise Price, Options exercised | $ / shares | $ 3.75 |
Canceled or expired | shares | (379) |
Canceled or Expired, Weighted Average Exercise Price | $ / shares | $ 6.14 |
Number of Shares, Ending balance | shares | 2,650 |
Weighted Average Exercise Price, Ending balance | $ / shares | $ 5.73 |
Weighted Average Remaining Contractual Term | 2 years 2 months 12 days |
Aggregate Intrinsic Value | $ | $ 1,690,300 |
Number of Shares, Vested and expected to vest | shares | 2,650 |
Weighted Average Exercise Price, Vested and expected to vest | $ / shares | $ 5.73 |
Weighted Average Remaining Contractual Term (Years), Vested and expected to vest | 2 years 2 months 12 days |
Aggregate Intrinsic Value, Vested and expected to vest | $ | $ 1,690,300 |
Number of Shares, Exercisable | shares | 2,645 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 5.74 |
Weighted Average Remaining Contractual Term (Years), Exercisable | 2 years 2 months 12 days |
Aggregate Intrinsic Value, Exercisable | $ | $ 1,684,400 |
Employee Benefit Plans and St_5
Employee Benefit Plans and Stock-based Compensation - Summary of Restricted Stock Units Outstanding (Detail) - Restricted Stock Units Outstanding [Member] shares in Thousands | 6 Months Ended |
Jun. 28, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Units, Beginning balance | shares | 3,403 |
Weighted Average Grant Date Fair Value, Beginning balance | $ / shares | $ 3.99 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 2,501 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 5.67 |
Number of Units, Shares released | shares | (1,600) |
Vested in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 3.97 |
Number of Units, Forfeited or cancelled | shares | (45) |
Weighted Average Grant Date Fair Value, Forfeited or cancelled | $ / shares | $ 4.72 |
Number of Units, Ending balance | shares | 4,259 |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares | $ 4.99 |
Employee Benefit Plans and St_6
Employee Benefit Plans and Stock-based Compensation - Summary of Projected Benefit Obligation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Employee Benefits and Share-based Compensation, Noncash [Abstract] | ||||
Service cost | $ 57 | $ 63 | $ 114 | $ 126 |
Interest cost | 19 | 19 | 39 | 38 |
Net periodic benefit cost included in operating loss | $ 76 | $ 82 | $ 153 | $ 164 |
Employee Benefit Plans and St_7
Employee Benefit Plans and Stock-based compensation - Stock-based Compensation in Opex (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 2,510 | $ 3,012 | $ 4,623 | $ 8,769 |
Cost of Revenue [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | 195 | 448 | 420 | 963 |
Research and Development Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | 582 | 818 | 1,198 | 2,622 |
Selling, General and Administrative Expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | 1,733 | 1,746 | 3,005 | 5,184 |
Operating Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 2,315 | $ 2,564 | $ 4,203 | $ 7,806 |
Employee Benefit Plans and St_8
Employee Benefit Plans and Stock-based Compensation - Summary of Stock Awards Valuation Assumptions (Details) - Employee Stock Purchase Plan - $ / shares | 6 Months Ended | |
Jul. 01, 2019 | Jun. 29, 2018 | |
Purchase Period July 2, 2018 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 6 months | |
Volatility | 60.00% | |
Risk-free interest rate | 1.70% | |
Expected dividends | 0.00% | |
Estimated weighted average fair value per share at purchase date | $ 1.34 | |
Scenario, Forecast [Member] | Purchase Period July 1, 2019 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 6 months | |
Volatility | 43.00% | |
Risk-free interest rate | 2.50% | |
Expected dividends | 0.00% | |
Estimated weighted average fair value per share at purchase date | $ 1.31 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Loss before income taxes | $ (11,148) | $ (2,022) | $ (22,773) | $ (14,638) |
Provision for (benefit from) income taxes | $ 697 | $ 891 | $ 378 | $ 1,969 |
Effective income tax rate | (6.30%) | (44.10%) | (1.70%) | (13.50%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Income Tax Contingency [Line Items] | ||||
Effective income tax rate | (6.30%) | (44.10%) | (1.70%) | (13.50%) |
Federal statutory income tax rate | 21.00% | 21.00% | ||
Unrecognized Tax Benefits | $ 17,300 | $ 17,300 | ||
Unrecognized tax benefits that would impact the provision for income taxes | 16,000 | 16,000 | ||
Interest and possible penalties related to uncertain tax positions | $ 25 | 25 | ||
Unrecognized Tax Benefit Decrease | 700 | |||
One foreign subsidiary | ||||
Income Tax Contingency [Line Items] | ||||
One-time benefit due to valuation allowance release | $ 800 |
Net Loss Per Share - Numerators
Net Loss Per Share - Numerators and Denominators of Basic and Diluted Net Income (Loss) Per Share Computations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Numerator: | ||||
Net loss | $ (11,845) | $ (2,913) | $ (23,151) | $ (16,607) |
Denominator: | ||||
Basic and diluted | 88,931 | 85,304 | 88,554 | 84,616 |
Net loss per share: | ||||
Basic and diluted | $ (0.13) | $ (0.03) | $ (0.26) | $ (0.20) |
Net Loss Per Share - Anti-dilut
Net Loss Per Share - Anti-dilutive Securities (Detail) - $ / shares | 3 Months Ended | 6 Months Ended | ||||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | Dec. 31, 2015 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Potentially dilutive equity awards outstanding | [1] | 7,795,000 | 7,883,000 | 7,790,000 | 7,706,000 | |
Debt Instrument, Convertible, Conversion Price | $ 5.75 | $ 5.75 | $ 5.75 | |||
Stock Option | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Potentially dilutive equity awards outstanding | 2,664,000 | 3,234,000 | 2,803,000 | 3,469,000 | ||
Restricted Stock Units (RSUs) | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Potentially dilutive equity awards outstanding | 2,668,000 | 3,326,000 | 2,534,000 | 2,766,000 | ||
Employee Stock Purchase Plan | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Potentially dilutive equity awards outstanding | 509,000 | 541,000 | 499,000 | 689,000 | ||
Warrant | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Potentially dilutive equity awards outstanding | [2] | 1,954,000 | 782,000 | 1,954,000 | 782,000 | |
Convertible Debt Securities | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Potentially dilutive equity awards outstanding | 22,304,348 | |||||
[1] | Excluded from the table above are the Notes, which are convertible under certain conditions into an aggregate of 22,304,348 shares of common stock. (See Note 11, “Convertible Notes, Other Debts and Finance Leases” for additional information on the Notes). Since the Company’s intent is to settle the principal amount of the Notes in cash, the treasury stock method is being used to calculate any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share when the Company’s average market price of its common stock for a given period exceeds the conversion price of $5.75 per share. | |||||
[2] | On September 26, 2016, in connection with the execution of a product supply agreement pursuant to which an affiliate of Comcast Corporation (together with Comcast Corporation, “Comcast”) may, in its sole discretion, purchase from the Company licenses to certain of the Company’s software products, the Company granted Comcast a warrant to purchase shares of its common stock. (See Note 15, “Warrants” and Note 18, “Subsequent Event” for additional information). |
Warrants (Details)
Warrants (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 28, 2019USD ($) | Jun. 29, 2018USD ($) | Jun. 28, 2019USD ($) | Jun. 29, 2018USD ($) | Jul. 09, 2019shares | Dec. 31, 2018Measurement_Input | Jul. 31, 2018shares | Sep. 26, 2016$ / sharesshares | |
Class of Warrant or Right [Line Items] | ||||||||
Warrants, Exercise Price of Warrants | $ / shares | $ 4.76 | |||||||
Reduction to net revenues - amortization of the Warrant | $ | $ 48 | $ 395 | ||||||
Comcast Product Supply Agreement [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Right to purchase shares vested | 781,617 | |||||||
Comcast Milestones Achievement [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Right to purchase shares vested | 1,172,425 | |||||||
Measurement Input, Expected Dividend Rate [Member] | Comcast Warrant Vesting Tranche July 31, 2018 [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Warrants and Rights Outstanding, Measurement Input | Measurement_Input | 0 | |||||||
Maximum [Member] | Comcast Warrant Expires September 26, 2023 [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Warrant Grant to Purchase Shares of Common Stock | 7,816,162 | |||||||
Revenue from Contract with Customer [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Reduction to net revenues - amortization of the Warrant | $ | $ 23 | $ 300 | $ 48 | $ 395 | ||||
Subsequent Event [Member] | Comcast’s Election for Enterprise License Pricing [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Right to purchase shares vested | 781,617 |
Segment Information - Summary F
Segment Information - Summary Financial Infomation by reportable segments (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 28, 2019USD ($) | Jun. 29, 2018USD ($) | Jun. 28, 2019USD ($)segment | Jun. 29, 2018USD ($) | ||
Segment Reporting Information [Line Items] | |||||
Total Net Revenue | [1] | $ 84,865 | $ 99,160 | $ 164,971 | $ 189,287 |
Gross Profit | 43,928 | 51,603 | 85,777 | 98,786 | |
Operating Income (Loss) | (7,764) | 642 | $ (16,172) | (8,685) | |
Number of Reportable Segments | segment | 2 | ||||
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Net Revenue | 84,865 | 99,160 | $ 164,971 | 189,287 | |
Gross Profit | 45,507 | 53,461 | 89,177 | 103,216 | |
Operating Income (Loss) | (2,807) | 6,495 | (6,661) | 6,866 | |
Operating Segments [Member] | Video [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Net Revenue | 71,625 | 79,208 | 138,801 | 150,956 | |
Gross Profit | 41,444 | 43,558 | 80,046 | 84,784 | |
Operating Income (Loss) | 4,459 | 6,239 | 6,427 | 8,234 | |
Operating Segments [Member] | Cable Access [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Net Revenue | 13,240 | 19,952 | 26,170 | 38,331 | |
Gross Profit | 4,063 | 9,903 | 9,131 | 18,432 | |
Operating Income (Loss) | $ (7,266) | $ 256 | $ (13,088) | $ (1,368) | |
[1] | Revenue is attributed to countries based on the location of the customer. |
Segment Information Segment Inc
Segment Information Segment Income or Loss Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | $ (7,764) | $ 642 | $ (16,172) | $ (8,685) |
Unallocated Corporate Expenses | (51,692) | (50,961) | (101,949) | (107,471) |
Stock-based compensation | (2,510) | (3,012) | (4,623) | (8,769) |
Amortization of intangibles | (2,079) | (2,095) | (4,162) | (4,194) |
Nonoperating Income (Expense) | (3,384) | (2,664) | (6,601) | (5,953) |
Loss before income taxes | (11,148) | (2,022) | (22,773) | (14,638) |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | (2,807) | 6,495 | (6,661) | 6,866 |
Corporate, Non-Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Unallocated Corporate Expenses | $ (368) | $ (746) | $ (726) | $ (2,588) |
Segment - Geographic Informatio
Segment - Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | ||
Segment Reporting Information [Line Items] | |||||
Net Revenue | [1] | $ 84,865 | $ 99,160 | $ 164,971 | $ 189,287 |
UNITED STATES | |||||
Segment Reporting Information [Line Items] | |||||
Net Revenue | [1] | 35,710 | 40,468 | 65,825 | 82,244 |
Other countries | |||||
Segment Reporting Information [Line Items] | |||||
Net Revenue | [1] | $ 49,155 | $ 58,692 | $ 99,146 | $ 107,043 |
[1] | Revenue is attributed to countries based on the location of the customer. |
Segment Information Segment - M
Segment Information Segment - Market Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | ||
Revenue from External Customer [Line Items] | |||||
Net Revenue | [1] | $ 84,865 | $ 99,160 | $ 164,971 | $ 189,287 |
Service Provider [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Net Revenue | 43,438 | 54,142 | 87,650 | 106,359 | |
Broadcast and Media [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Net Revenue | $ 41,427 | $ 45,018 | $ 77,321 | $ 82,928 | |
[1] | Revenue is attributed to countries based on the location of the customer. |
Commitments and Contingencies -
Commitments and Contingencies - Summary of Warranty Accrual Included in Accrued Liabilities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Balance at beginning of period | $ 4,587 | $ 4,522 | $ 4,869 | $ 4,381 |
Accrual for current period warranties | 1,570 | 1,714 | 2,973 | 3,450 |
Warranty costs incurred | (1,355) | (1,589) | (3,040) | (3,184) |
Balance at end of period | $ 4,802 | $ 4,647 | $ 4,802 | $ 4,647 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Oct. 24, 2017USD ($) | Oct. 30, 2011Patents | Dec. 31, 2017USD ($) | Jun. 28, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 29, 2017USD ($) |
Other Commitments [Line Items] | ||||||
Non-cancelable purchase commitments | $ 46.1 | |||||
Maximum amount of potential future payments under the company's financial guarantees | 2.5 | $ 2.3 | ||||
Indemnification [Member] | ||||||
Other Commitments [Line Items] | ||||||
Accrual for indemnification provisions | 0 | |||||
Avid [Member] | ||||||
Other Commitments [Line Items] | ||||||
Loss Contingency, Patents Allegedly Infringed, Number | Patents | 2 | |||||
Estimated Litigation Liability | $ 6 | |||||
Payments for litigation settlement | $ 2.5 | |||||
Avid [Member] | Selling, General and Administrative Expenses [Member] | ||||||
Other Commitments [Line Items] | ||||||
Litigation Settlement, Expense | $ 6 | |||||
Settled Litigation Payment Second Quarter of 2019 [Member] | Avid [Member] | ||||||
Other Commitments [Line Items] | ||||||
Estimated Litigation Liability, Noncurrent | 1.5 | |||||
Settled Litigation Payment Third Quarter of 2020 [Member] | Avid [Member] | ||||||
Other Commitments [Line Items] | ||||||
Estimated Litigation Liability, Noncurrent | 2 | |||||
Foreign Line of Credit [Member] | Performance Guarantee [Member] | Guarantee Obligations [Member] | ||||||
Other Commitments [Line Items] | ||||||
Line of Credit Facility, Current Borrowing Capacity | 2 | |||||
Domestic Line of Credit [Member] | Performance Guarantee [Member] | Guarantee Obligations [Member] | ||||||
Other Commitments [Line Items] | ||||||
Bank Guarantees and Standby Letters of Credit | $ 2.2 | |||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 | $ 0 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | Dec. 31, 2019 | Jul. 09, 2019 | Jul. 01, 2019 | ||
Subsequent Event [Line Items] | ||||||||
Total Net Revenue | [1] | $ 84,865 | $ 99,160 | $ 164,971 | $ 189,287 | |||
License and Maintenance [Member] | Comcast [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Enterprise license term | 4 years | |||||||
Total Net Revenue | $ 50,000 | |||||||
Plan | License and Maintenance [Member] | Comcast [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Committed software license fees from Comcast enterprise license agreement | $ 175,000 | |||||||
[1] | Revenue is attributed to countries based on the location of the customer. |
Uncategorized Items - hlit-2019
Label | Element | Value |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | $ 274,000 |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | $ 0 |