DEI Document
DEI Document - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 26, 2018 | Jun. 30, 2017 | |
DEI [Abstract] | |||
Entity Registrant Name | Radisys Corporation | ||
Entity Central Index Key | 873,044 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 39,411,001 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 142,792,381 | ||
Entity Current Reporting Status | Yes |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||
Product | $ 99,090 | $ 176,141 | $ 155,285 |
Service | 34,678 | 36,251 | 29,308 |
Total revenue | 133,768 | 212,392 | 184,593 |
Cost of sales: | |||
Product | 84,193 | 127,771 | 107,031 |
Service | 21,098 | 20,826 | 17,548 |
Amortization of purchased technology | 7,707 | 7,707 | 7,862 |
Total cost of sales | 112,998 | 156,304 | 132,441 |
Gross margin | 20,770 | 56,088 | 52,152 |
Research and development | 23,416 | 24,068 | 25,529 |
Selling, general and administrative | 32,792 | 33,722 | 30,628 |
Intangible assets amortization | 3,006 | 5,040 | 5,040 |
Restructuring and other charges, net | 8,339 | 2,917 | 5,020 |
Loss from operations | (46,783) | (9,659) | (14,065) |
Interest expense | (1,199) | (482) | (515) |
Interest income | 179 | 189 | 96 |
Other income (expense) | (1,074) | 2,135 | 1,548 |
Loss before income tax expense | (48,877) | (7,817) | (12,936) |
Income tax expense | 3,727 | 2,434 | 1,742 |
Net loss | $ (52,604) | $ (10,251) | $ (14,678) |
Net loss per share: | |||
Basic | $ (1.35) | $ (0.27) | $ (0.40) |
Diluted | $ (1.35) | $ (0.27) | $ (0.40) |
Weighted average shares outstanding: | |||
Basic | 38,994 | 37,668 | 36,789 |
Diluted | 38,994 | 37,668 | 36,789 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 8,124 | $ 33,087 |
Accounts receivable, net | 32,820 | 38,378 |
Other receivables | 3,421 | 4,161 |
Inventories, net | 4,265 | 20,021 |
Other current assets | 3,186 | 2,990 |
Total current assets | 51,816 | 98,637 |
Property and equipment, net | 4,728 | 6,713 |
Intangible assets, net | 6,862 | 17,575 |
Long-term deferred tax assets, net | 787 | 1,117 |
Other assets | 1,836 | 4,143 |
Total assets | 66,029 | 128,185 |
Current liabilities: | ||
Accounts payable | 18,297 | 20,805 |
Accrued wages and bonuses | 3,711 | 6,572 |
Deferred revenue | 4,200 | 5,715 |
Line of credit | 16,000 | 25,000 |
Other accrued liabilities | 10,405 | 7,571 |
Total current liabilities | 52,613 | 65,663 |
Long-term liabilities: | ||
Other long-term liabilities | 6,866 | 5,966 |
Total long-term liabilities | 6,866 | 5,966 |
Total liabilities | 59,479 | 71,629 |
Commitments and contingencies (Note 13) | ||
Shareholders’ equity: | ||
Preferred stock — $0.01 par value, 5,664 shares authorized; none issued or outstanding at December 31, 2017 and December 31, 2016 | 0 | 0 |
Common stock — no par value, 100,000 shares authorized; 39,280 and 38,521 shares issued and outstanding at December 31, 2017 and December 31, 2016 | 342,219 | 339,715 |
Accumulated deficit | (336,182) | (281,600) |
Accumulated other comprehensive income (loss): | ||
Cumulative translation adjustments | 690 | (1,032) |
Unrealized loss on hedge instruments | (177) | (527) |
Total accumulated other comprehensive income (loss) | 513 | (1,559) |
Total shareholders’ equity | 6,550 | 56,556 |
Total liabilities and shareholders’ equity | $ 66,029 | $ 128,185 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (52,604) | $ (10,251) | $ (14,678) |
Other comprehensive loss: | |||
Translation adjustments | 1,722 | (952) | (1,255) |
Adjustment for fair value of hedge derivatives, net of tax | 350 | 292 | (67) |
Other comprehensive income (loss) | 2,072 | (660) | (1,322) |
Comprehensive loss | $ (50,532) | $ (10,911) | $ (16,000) |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Parenthetical [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 5,664,000 | 5,664,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 38,521,000 | 36,959,000 |
Common Stock, Shares, Outstanding | 38,521,000 | 36,959,000 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (loss) |
Beginning balance, shares at Dec. 31, 2014 | 36,532,000 | |||
Beginning balance at Dec. 31, 2014 | $ 77,776 | $ 334,024 | $ (256,671) | $ 423 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares issued pursuant to benefit plans, shares | 205,000 | |||
Shares issued pursuant to benefit plans | 331 | $ 331 | ||
Stock based compensation associated with employee benefit plans | 3,952 | $ 3,952 | ||
Vesting of restricted stock units, shares | 279,000 | |||
Restricted share forfeitures for tax settlements, shares | (57,000) | |||
Restricted share forfeitures for tax settlements | (142) | $ (142) | ||
Net adjustment for fair value of hedge derivatives, net of taxes | (67) | (67) | ||
Translation adjustments | (1,255) | (1,255) | ||
Net income (loss) | (14,678) | 0 | ||
Ending balance, shares at Dec. 31, 2015 | 36,959,000 | |||
Ending balance at Dec. 31, 2015 | 65,917 | $ 338,165 | (271,349) | (899) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares issued pursuant to benefit plans, shares | 393,000 | |||
Shares issued pursuant to benefit plans | 1,040 | $ 1,040 | ||
Stock based compensation associated with employee benefit plans | 3,797 | $ 3,797 | ||
Vesting of restricted stock units, shares | 1,799,000 | |||
Restricted share forfeitures for tax settlements, shares | (630,000) | |||
Restricted share forfeitures for tax settlements | (3,287) | $ (3,287) | ||
Net adjustment for fair value of hedge derivatives, net of taxes | 292 | 292 | ||
Translation adjustments | (952) | (952) | ||
Net income (loss) | $ (10,251) | |||
Ending balance, shares at Dec. 31, 2016 | 36,959,000 | 38,521,000 | ||
Ending balance at Dec. 31, 2016 | $ 56,556 | $ 339,715 | (281,600) | (1,559) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares issued pursuant to benefit plans, shares | 319,000 | 283,000 | ||
Shares issued pursuant to benefit plans | $ 516 | $ 516 | ||
Stock based compensation associated with employee benefit plans | 2,192 | $ 2,192 | ||
Vesting of restricted stock units, shares | 530,000 | |||
Restricted share forfeitures for tax settlements, shares | (54,000) | |||
Restricted share forfeitures for tax settlements | (204) | $ (204) | ||
Net adjustment for fair value of hedge derivatives, net of taxes | 350 | 350 | ||
Translation adjustments | 1,722 | 1,722 | ||
intellectual property tax adjustment | (1,978) | (1,978) | ||
Net income (loss) | $ (52,604) | |||
Ending balance, shares at Dec. 31, 2017 | 38,521,000 | 39,280,000 | ||
Ending balance at Dec. 31, 2017 | $ 6,550 | $ 342,219 | $ (336,182) | $ 513 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (52,604) | $ (10,251) | $ (14,678) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 17,219 | 17,256 | 18,478 |
Inventory valuation allowance and adverse purch commitment charges | 17,963 | 4,212 | 3,278 |
Deferred income taxes and uncertain tax positions | 1,645 | 124 | 106 |
Stock-based compensation expense | 2,192 | 3,797 | 3,952 |
Gain (Loss) on Disposition of Property Plant Equipment | (313) | ||
Restructuring Costs and Asset Impairment Charges | 1,743 | 40 | 225 |
Other | 327 | (815) | (217) |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | 5,463 | 22,609 | (17,121) |
Other receivables | 808 | 7,110 | (5,040) |
Inventories and deferred cost of sales | 620 | 4,890 | (13,801) |
Accounts payable | (2,237) | (22,805) | 9,853 |
Accrued wages and bonuses | (2,664) | (789) | 2,043 |
Accrued restructuring | (1,338) | 772 | (89) |
Deferred revenue | (2,786) | (14,967) | 16,682 |
Other | 3,191 | (1,334) | 1,611 |
Net cash provided by (used in) operating activities | (11,888) | 9,809 | 5,057 |
Cash flows from investing activities: | |||
Capital expenditures | (4,898) | (4,931) | (2,224) |
Net cash used in investing activities | (4,898) | (4,931) | (2,224) |
Cash flows from financing activities: | |||
Payments on line of credit | 93,000 | 98,000 | 13,500 |
Payments on line of credit | (102,000) | (88,000) | (8,500) |
Repayment of convertible subordinated notes | 0 | 0 | (18,000) |
Net resettlement of restricted shares | 516 | 1,040 | 331 |
Net resettlement of restricted shares | (204) | (3,287) | (142) |
Other financing activities | 68 | (279) | 0 |
Net cash provided by (used in) financing activities | (8,620) | 7,474 | (12,811) |
Effect of exchange rate changes on cash | 443 | (29) | (500) |
Net increase (decrease) in cash and cash equivalents | (24,963) | 12,323 | (10,478) |
Cash and cash equivalents, beginning of period | 33,087 | 20,764 | |
Cash and cash equivalents, end of period | 8,124 | 33,087 | |
Supplemental disclosure of cash flow information: | |||
Interest | 906 | 483 | 835 |
Income taxes | $ 1,262 | $ 1,349 | $ 1,289 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations Radisys Corporation (NASDAQ: RSYS), a global leader in open telecom solutions, enables service providers to drive disruption with new open architecture business models. Radisys’ innovative disaggregated and virtualized enabling technology solutions leverage open reference architectures and standards, combined with open software and hardware to power business transformation for the telecom industry, while its world-class services organization delivers systems integration expertise necessary to solve communications and content providers’ complex deployment challenges. The Company operates in two primary segments, Software-Systems and Hardware Solutions. • Software-Systems products and services are targeted at delivering differentiated solutions for service providers to enable their deployment of next generation networks and technologies. This segment is comprised of the following differentiated offerings, all of which are aimed at enabling service providers to more rapidly adopt new technologies while driving down the costs of their network infrastructure. ◦ MediaEngine products are designed into IP Communications Networks, including the IP Multimedia Subsystem ("IMS") core of telecom networks, providing the necessary media processing capabilities required for a broad range of applications including Voice over Long-Term Evolution ("VoLTE"), Voice over WiFi (“VoWifi”), cloud communication platform as a service (CPaaS), Web Real-Time Communication ("WebRTC"), multimedia conferencing, as well as the transcoding required to achieve interoperability between legacy and new generation devices using disparate audio and video codecs. Evolution of the traditional media function to an all-IP virtual network function is critical for modernization of real time voice and video services. The Company's MediaEngine OneMRF strategy helps service providers consolidate their real-time IP media processing into a vendor and application agnostic platform, which drives cost out of their service delivery platform and enables accelerated deployment and introduction of new services. The Company sells virtualized, software-only vMRF for customers who require media processing in an Intel architecture and NFV platforms. The Company's MediaEngine provides the essential media processing capability that enables service providers to deliver audio, video and other multimedia services over their all-IP networks. ◦ MobilityEngine (previously disclosed as CellEngine) portfolio provides solutions for 4G, LTE-Advance and emerging 5G standards for RAN use cases including Centralized, Virtualized and Mobile (or Multi Access as it is now known) Edge Compute (MEC). Cloud or Centralized Radio Access Network (C-RAN) disaggregates the RAN baseband unit (BBU) from traditional eNodeB enabling it to run on common generic compute platforms, making network decisions more efficient compared to traditional cellular networks. Multi Access Edge Computing (MEC) is based on open platforms and software that allows virtualized applications to be deployed closest to the network edge to meet the requirements of ultra-low latency, real time network access and context needed for 5G, streaming video and massive IoT applications. The Company's MobilityEngine portfolio helps Original Design Manufacturers (ODMs), Original Equipment Manufacturers (OEMs) and Certified Systems Professionals (CSPs) build networks for these capabilities with accelerated time to market, reduced risk and lowered Total Cost of Ownership. One of the significant network re-evolutions is the 3GPP standards defines a vertical split for Central Unit (CU) - Distributed Unit (DU) as well as horizontal split for Control Plane - User Plane (CUPS). The Company's MobilityEngine software helps support these various options for flexible, scalable and programmable network deployment paradigms. ◦ FlowEngine products target the communication service provider traffic management market and is a family of products designed to rapidly classify millions of data flows and then distribute these flows to thousands of Virtualized Network Functions ("VNF"). FlowEngine offloads the processing for packet classification and distribution, improving virtualized function utilization and making the overall Network Functions Virtualization ("NFV") architecture more efficient. A FlowEngine system consists of FlowEngine software running on a Traffic Distribution Engine ("TDE") platform. FlowEngine Software enables communication service providers to efficiently transition towards NFV and software-defined networking ("SDN") architectures allowing increased service agility and quicker time to revenue for new service offerings. FlowEngine accomplishes this by integrating a targeted subset of edge routing, data center switching, and load balancing functionality, coupled with standards based SDN protocols, enabling our customers to significantly reduce the investment necessary to efficiently process data flows in virtualized communications environments. ◦ Also included in this segment is the Company's Professional Services organization that is staffed with telecommunications experts who are available to assist our customers as they develop their own unique telecommunications products and applications as well as accelerating specific features developed across our Software-Systems product families. The Company's strategy is to enable the efficient and cost-effective adoption of our Software-Systems products as well as enabling service providers to accelerate the adoption of open-standards based solutions as part of their next generation networks aimed at significantly reducing the total cost of ownership of their network infrastructure. • Hardware Solutions leverages the Company's hardware design expertise, coupled with the Company's manufacturing, supply chain, integration and service capabilities, to enable differentiation from our competition. The Company's products include the following two primary product families: ◦ DCEngine products include open-based rack-scale systems, utilizing Open Compute Project (OCP) accepted specifications, which enable service providers to migrate their existing infrastructure to embrace the efficiencies and scale of data center environments. This product suite brings the economies of the data center and the agility of the cloud to service provider infrastructure, allowing them to accelerate the transformation to cloud based compute, storage and networking fabrics utilizing the best of commodity components, open source hardware specifications and software coupled with world class service and support. The DCEngine platform enables service providers to drive innovation and the rapid scalable delivery of virtualized network functions at the network edge, enabling new services such as storage backup, video on demand and parental controls. ◦ Embedded products which includes our ATCA, computer-on-module express (COM Express) and rack mount servers. These products are predominantly hardware-based and include both our internal designs as well as increasingly leveraging third party hardware which incorporates our management software and services capabilities. Our products enable the control and movement of data in both 3G and LTE telecom networks and provide the hardware enablement for network elements applications such as Deep Packet Inspection ("DPI"), policy management and intelligent gateways (security, femto and LTE gateways). Additionally, our products enable image processing capabilities for healthcare markets and enable cost-effective and energy-efficient computing capabilities dedicated for industrial deployments. Our professional service organization of systems architects, hardware designers, and network experts accelerates our customers' time to market on these revenue generating assets. While the Company will retain the ability to support their long-standing customer’s service needs given the extended nature of telecom deployments, many of the products within this portfolio have trended to end-of-life without future generation designs. Given the increased commoditization of hardware, coupled with the Company's strategy to drive increasing levels of our Software-Systems business, many customers had expected last time orders fulfilled over the course of 2017. As a result, going forward the Company expects to have a substantially smaller set of customers across these product lines. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Principles of Consolidation and Presentation The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company accounts and transactions have been properly eliminated in consolidation. Management Estimates The Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these Consolidated Financial Statements requires management to make estimates and judgments that may affect the amounts reported in its Consolidated Financial Statements and accompanying notes. Actual results may differ from these estimates under different assumptions or conditions. Revenue Recognition Multiple Element Arrangements A significant portion of the Company's revenue relates to product sales for which revenue is recognized upon shipment, with limited judgment required related to product returns. Title transfer for substantially all product sales occurs upon delivery of products to our customer's freight forwarders. The software elements included in certain components of Hardware Solutions systems, FlowEngine and MediaEngine products are considered to be functioning together with the non-software elements to provide the tangible product's essential functionality and these arrangements generally include multiple elements such as hardware, technical support services as well as software upgrades or enhancements on a when and if available basis. Arrangements including multiple elements require significant management judgment to evaluate the effective terms of agreements, our performance commitments and determination of fair value of the various deliverables under the arrangement. For hardware sales which may include software, ASC 605 Revenue Recognition provides a fair value hierarchy in order to determine the appropriate relative fair value for each element of an arrangement. When available, the Company uses vendor specific objective evidence (“VSOE”) to determine the estimated fair value of each element of the arrangement. In the absence of VSOE or third−party evidence ("TPE") for a delivered element, the Company then uses an estimated selling price in order to determine fair value. Estimated selling prices represent the Company's best estimate of the price at which it would transact if the deliverables were sold on a standalone basis. For technical support services, the Company generally determines its selling price based on VSOE as supported by substantive renewal rates in the related service agreements. In certain instances where VSOE cannot be established, the Company then relies upon its estimated selling price for such deliverables as TPE is generally not available due to the unique company-specific terms surrounding such service agreements. In establishing an appropriate estimated selling price for these technical support agreements, the Company considered entity specific factors such as its historical and projected costs, historical and projected revenues, and profit objectives. The Company also considered market specific factors when establishing reasonable profit objectives. Hardware Revenue from hardware products is recognized in accordance with ASC 605 Revenue Recognition . Under the Company’s standard terms and conditions of sale, the Company transfers title and risk of loss to the customer at the time product is shipped to the customer and revenue is recognized accordingly, unless customer acceptance is uncertain or significant obligations remain. The Company reduces revenue for estimated customer returns for rotation rights according to agreements with the Company's distributors. The amount of revenues derived from distributors as a percentage of revenues was 4.6% , 4.6% and 15.1% for the years ended December 31, 2017 , 2016 and 2015 . Revenues associated with distributors are generally recognized upon shipment as the Company has established a sell-to model with distributors. The Company accrues the estimated cost of product warranties, based on historical experience at the time the Company recognizes revenue. Software licenses and royalties Revenue from software licenses and royalties is recognized in accordance with ASC 985 Software . The Company recognizes software license revenue at the time of shipment or upon delivery of the software master provided that the revenue recognition criteria have been met and VSOE exists to allocate the total fee to all undelivered elements of the arrangement. The Company defers revenue on arrangements, including specified software upgrades, until the specified upgrade has been delivered. Revenue from customers for prepaid, non-refundable software royalties is recorded when the revenue recognition criteria have been met. Revenue for non-prepaid royalties is recognized at the time the Company receives reporting from customers as the Company has not established an ability to reliably estimate customer royalties prior to time contractually obligated reporting is received. Technical support services Technical support services revenue is recognized as earned on the straight-line basis over the term of the contract. The fair value of the Company’s post-contract support has been determined by renewal rates within the Company’s support agreements, the actual amounts charged to customers for renewal of their support services are based on an estimated selling price. Professional and other services Professional services revenue is recognized upon completion of certain contractual milestones and customer acceptance of the services rendered. Other services revenues include hardware repair services and custom software implementation projects. Hardware repair services revenues are recognized when the services are complete. Software implementation revenues are recognized upon completion of certain contractual milestones and customer acceptance of the services rendered or as services are performed under the percentage-of-completion method based on labor hours when the Company is reasonably able to estimate the total effort required to complete the contract. Deferred revenue Deferred revenue represents amounts received or billed for the following types of transactions: • Undelivered elements of an arrangement —Certain software sales include specified upgrades and enhancements to an existing product. Revenue for such products is deferred until the future obligation is fulfilled. Additionally, certain hardware shipments that have been delivered are deferred when customer acceptance is uncertain and revenue is recognized upon customer acceptance. • Technical support services— The Company has a number of technical support agreements with customers for hardware and software maintenance. Generally, these services are billed in advance and recognized over the term of the agreement . Cost of sales associated with deferred revenue is also deferred. These deferred costs are recognized when the associated revenue is recognized. Capitalized Software Development Costs The Company does not capitalize internal software development costs incurred in the production of computer software as the Company does not incur any material costs between the point of technological feasibility and general release of the product to customers in the future. As such software development costs are expensed as research and development (“R&D”) costs. Shipping Costs The Company’s shipping and handling costs for product sales are included under cost of sales for all periods presented. For the years ended December 31, 2017 , 2016 and 2015 shipping and handling costs represented approximately 1% to 2% of total cost of sales. Advertising Costs The Company expenses advertising costs as incurred. Advertising costs consist primarily of media, display, web, and print advertising, along with trade show costs and product demos and brochures. For the years ended December 31, 2017 , 2016 and 2015 advertising costs were $1.1 million , $1.1 million and $0.9 million . Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Accounts Receivable Trade accounts receivable are stated at invoice amount net of an allowance for doubtful accounts and do not bear interest. An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of customers to make required payments. Management reviews the allowance for doubtful accounts quarterly for reasonableness and adequacy. If the financial condition of the Company’s customers were to deteriorate resulting in an impairment of their ability to make payments, additional provisions for uncollectible accounts receivable may be required. In the event the Company determined that a smaller or larger reserve was appropriate, it would record a credit or a charge in the period in which such determination is made. In addition to specific customer reserves, the Company maintains a non-specific bad debt reserve for all customers. This non-specific bad debt reserve is calculated based on the Company's historical pattern of bad debt write-offs as a percentage of gross accounts receivable for the current rolling eight quarters, which percentage is then applied to the current gross accounts receivable. The Company’s customers are concentrated in the technology industry and the collection of its accounts receivable are directly associated with the operational results of the industry. Inventories Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) basis, or market, net of an inventory valuation allowance. The Company uses a standard cost methodology to determine the cost basis for its inventories. The Company evaluates inventory on a quarterly basis for obsolete or slow-moving items to ascertain if the recorded allowance is reasonable and adequate. Inventory is written down for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. The Company's inventory valuation allowances establish a new cost basis for inventory. Long-Lived Assets Long-lived assets, such as property and equipment and definite-life intangible assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company assesses the impairment of the assets based on the undiscounted future cash flow the assets are expected to generate compared to the carrying value of the assets. If the carrying amount of the assets is determined not to be recoverable, a write-down to fair value is recorded. Management estimates future cash flows using assumptions about expected future operating performance. Management’s estimates of future cash flows may differ from actual cash flow due to, among other things, technological changes, economic conditions or changes to the Company’s business operations. Intangible assets with estimable useful lives are amortized on a straight-line basis over their respective estimated life and reviewed for impairment when certain triggering events suggest impairment has occurred. As part of the DCEngine restructuring events in 2017, it was determined a triggering event occurred for this asset group. Through a step 1 analysis the Company concluded no impairment was necessary. No triggering event occurred in any other asset group. The Company determined that no triggering events occurred in 2016. Property and Equipment Property and equipment is recorded at historical cost and is depreciated or amortized on a straight-line basis according to the table below. In certain circumstances where the Company is aware that an asset’s life differs from the general guidelines set forth in its policy, management adjusts its depreciable life accordingly, to ensure expense is being recognized over the appropriate future periods. Ordinary maintenance and repair expenses are expensed when incurred. Machinery, equipment, furniture and fixtures 5 years Software, computer hardware and manufacturing test fixtures 3 years Engineering demonstration products and samples 1 year Leasehold improvements Lesser of the lease term or estimated useful lives Leases The Company leases all of its facilities, certain office equipment and vehicles under non-cancelable operating leases that expire at various dates through 2022 , along with options that permit renewals for additional periods. Rent escalations are considered in the determination of straight-line rent expense for operating leases. Leasehold improvements made at the inception of or during the lease are amortized over the shorter of the asset life or the lease term. Restructuring and Other Charges The Company has engaged, and may continue to engage, in restructuring and other actions, which require the Company to make significant estimates in several areas including: realizable values of assets made redundant or obsolete; expenses for severance and other employee separation costs; the ability and timing to generate sublease income, as well as the Company's ability to terminate lease obligations at the amounts estimated; and other costs. Should the actual amounts differ from the estimates, the amount of the restructuring and other charges could be materially impacted. Restructuring and other charges may include costs incurred for employee severance, acquisition or divestiture activities, excess facility costs, certain legal costs, asset related charges and other expenses associated with business integration or restructuring activities. Costs associated with exit or disposal activities are recognized when probable and estimable because the Company has a history of paying severance benefits. Warranty The Company provides for the estimated cost of product warranties at the time it recognizes revenue. Products are generally sold with warranty coverage for a period of 12 or 24 months after shipment. On a quarterly basis the Company assesses the reasonableness and adequacy of the warranty liability and adjusts such amounts as necessary. Warranty reserves are included in other accrued liabilities and other long-term liabilities in the accompanying Consolidated Balance Sheets as of December 31, 2017 and 2016 . Research and Development Research, development and engineering ("R&D") costs are expensed as incurred. R&D expenses consist primarily of salary, bonuses and benefits for product development staff, and cost of design and development supplies and equipment, net of reimbursements for non-recurring engineering services. Income Taxes Income tax accounting requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities. Valuation allowances are established to reduce deferred tax assets if it is “more likely than not” that all or a portion of the asset will not be realized due to inability to generate sufficient taxable income in the relevant period to utilize the deferred tax asset. Tax law and rate changes are reflected in the period such changes are enacted. The Company recognizes uncertain tax positions after evaluating whether certain tax positions are more likely than not to be sustained by taxing authorities. In addition, the Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. Comprehensive Income (Loss) The Company reports accumulated other comprehensive income (loss) in its Consolidated Balance Sheets. Comprehensive income (loss) includes net income (loss), translation adjustments and unrealized gains (losses) on hedging instruments net of their tax effect. The cumulative translation adjustments consist of unrealized gains (losses) for foreign currency translation. Stock-Based Compensation The Company measures stock-based compensation at the grant date, based on the fair value of the award, and recognizes expense on a straight-line basis over the employee's requisite service period. For performance-based restricted stock unit awards ("PRSUs"), the requisite service period is equal to the period of time over which performance objectives underlying the award are expected to be achieved and vested. The number of shares that ultimately vest depends on the achievement of certain performance criteria over the measurement period. For non-market based performance-based restricted stock, quarterly, we reevaluate the period during which the performance objective will be met and the number of shares expected to vest. The amount of quarterly expense recorded each period is based on our estimate of the number of awards that will ultimately vest. The Company estimates the fair value of stock options and purchase rights under our employee stock purchase plans using a Black-Scholes option-pricing model. The Black-Scholes option-pricing model incorporates several highly subjective assumptions including expected volatility, expected term and interest rates. In reaching our determination of expected volatility, we use the historic volatility of our shares of common stock. We base the expected term of our stock options on historic experience. The expected term for purchase rights under our employee stock plans is based on the 18 month offering period. The risk-free rate is based on the U.S. Treasury constant maturities in effect at the time of grant for the expected term of the option or share. The calculation includes several assumptions that require management's judgment. The expected term of the option or share is determined based on assumptions about patterns of employee exercises and represents a probability-weighted average time-period from grant until exercise of stock options, subject to information available at time of grant. Determining expected volatility generally begins with calculating historical volatility for a similar long-term period and then considers the ways in which the future is reasonably expected to differ from the past. The grant-date fair value of the PRSUs awarded in 2015 was calculated using a Monte Carlo simulation consistent with the fair value principles of Topic 718 since these awards vest based upon market conditions. Expense is recognized over a derived service period determined by the Monte Carlo simulation. If the conditions of PRSUs are met before the derived service period ends, all remaining expense will be recognized in the period the conditions are met. The input factors used in the valuation model are based on subjective future expectations combined with management's judgment. If there is a difference between the assumptions used in determining stock-based compensation cost and the actual factors which become known over time, we may change the input factors used in determining stock-based compensation costs. These changes may materially impact the results of operations in the event such changes are made. In addition, if we were to modify any awards, additional charges would be taken. See Note 16 — Employee Benefit Plans for a further discussion on stock-based compensation. Net loss per share Basic loss per share amounts are computed based on the weighted average number of common shares outstanding. Diluted net loss per share incorporates the incremental shares issuable upon the assumed exercise of stock options and incremental shares associated with the assumed vesting of restricted stock. The Company's convertible notes were fully repaid in 2015. Derivatives The Company hedges exposure to changes in exchange rates from the US Dollar to the Indian Rupee. These derivatives are recognized on the balance sheet at their fair value. Unrealized gain positions are recorded as other current assets and unrealized loss positions are recorded as other accrued liabilities. Changes in the fair values of the outstanding derivatives that are highly effective are recorded in other comprehensive loss until net income (loss) is affected by the variability of the cash flows of the hedged transaction. Hedge ineffectiveness could result when the amount of the Company’s hedge contracts exceed the Company’s forecasted or actual transactions for which the hedge contracts were designed to hedge. Once a hedge contract matures the associated gain (loss) on the contract will remain in accumulated other comprehensive income (loss) until the underlying hedged transaction affects net income (loss), at which time the gain (loss) will be recorded to the expense line item being hedged, which is primarily cost of sales, research and development and selling, general and administrative. The Company only enters into derivative contracts in order to hedge foreign currency exposure. If the Company entered into a contract for speculative reasons or if the Company’s current hedge position becomes ineffective, changes in the fair values of the derivatives would be recognized in earnings in the current period. Foreign currency translation Assets and liabilities of international operations using a functional currency other than the U.S. dollar are translated into U.S. dollars at exchange rates as of December 31, 2017 and 2016 . Income and expense accounts are translated into U.S. dollars at the average daily rates of exchange prevailing during the period. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component in shareholders’ equity. Foreign exchange transaction gains and losses are included in other income (expense), net, in the Consolidated Statements of Operations. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-02, "Leases," which requires the Company as the lessee to recognize most leases on the balance sheet thereby resulting in the recognition of lease assets and liabilities for those leases currently classified as operating leases. The accounting for leases where the Company is the lessor remains largely unchanged. ASU 2016-02 is effective for us beginning January 1, 2019 with early adoption permitted. While the Company is currently assessing the impact ASU 2016-02 will have on the consolidated financial statements, the Company expects the primary impact to the consolidated financial position upon adoption will be the recognition, on a discounted basis, of the Company's minimum commitments under noncancelable operating leases on the consolidated balance sheets resulting in the recording of right of use assets and lease obligations. Our current minimum commitments under noncancelable operating leases are disclosed in Note 13. In May 2014, FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," that will supersede all existing revenue recognition guidance under U.S. GAAP. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which was issued in August 2015, revised the effective date for this ASU to annual and interim periods beginning on or after December 15, 2017. In accordance with this standard, the Company will adopt the new standard effective January 1, 2018. The new standard permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The Company will adopt using the modified retrospective approach. The Company has completed the assessment phase and documentation of new policies and evaluation of its internal controls framework. The Company does not expect a significant change in its control environment due to the adoption of the new standard. The adoption of ASU 2014-09 will also result in additional disclosures around nature and timing of the Company’s performance obligations, deferred revenue contract liabilities, deferred contract cost assets, as well as significant judgments and practical expedients used by the Company. Upon adoption, the Company does not expect a material impact to the opening balance sheet as of January 1, 2018 related to the modified retrospective effect. Although the impact of the new standard will greatly increase the amount of required disclosures the Company expects revenue recognition for the broad portfolio of its hardware and software sales to remain largely unchanged. Aspects of the new standard expected to impact the Company include a change in the timing of certain usage-based royalties. Historically revenue was not recognized until fixed and determinable; however, the new ASU requires the Company to estimate using either the probability weighted expected amount or the most likely amount and estimate the transaction price to recognize when or as control is transferred to the customer. Additionally, for certain professional services with no VSOE under ASC 605, certain licenses would be deferred and recognized with the associated software. Under ASC 606, the determination of the performance obligations may result in a change to the recognition pattern. Such contracts represent a small subset of the Company's total portfolio, however, may shift forward the recognition of revenue. As discussed above, the adoption of the new standard is not expected to have a material impact on the opening balance sheet as of January 1, 2018. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair Value of Financial Instruments The Company measures at fair value certain financial assets and liabilities. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These two types of inputs have created the following fair-value hierarchy: Level 1— Quoted prices for identical instruments in active markets; Level 2— Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3— Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Foreign currency forward contracts are measured at fair value using models based on observable market inputs such as foreign currency exchange rates; therefore, they are classified within Level 2 of the valuation hierarchy. The following tables summarizes the fair value measurements as of December 31, 2017 and December 31, 2016 for the Company's financial instruments (in thousands): Fair Value Measurements as of December 31, 2017 Total Level 1 Level 2 Level 3 Foreign currency forward contracts 508 — 508 — Fair Value Measurements as of December 31, 2016 Total Level 1 Level 2 Level 3 Foreign currency forward contracts 94 — 94 — |
Accounts Receivable and Other R
Accounts Receivable and Other Receivables | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable and Other Receivables | Accounts Receivable and Other Receivables Accounts receivable balances consisted of the following (in thousands): December 31, December 31, Accounts receivable, gross $ 32,970 $ 38,433 Less: allowance for doubtful accounts (150 ) (55 ) Accounts receivable, net $ 32,820 $ 38,378 Accounts receivable at December 31, 2017 and 2016 consisted of sales to the Company’s customers which are generally based on standard terms and conditions. The Company recorded the following activity in allowance for doubtful accounts (in thousands): For the Years Ended December 31, 2017 2016 2015 Allowance for doubtful accounts, beginning of the year $ 55 $ 103 $ 124 Charged to costs and expenses 153 (34 ) (17 ) Less: write-offs, net of recoveries (58 ) (14 ) (4 ) Remaining allowance, end of the year $ 150 $ 55 $ 103 As of December 31, 2017 and 2016 , other receivables were $3.4 million and $4.2 million . Other receivables consisted primarily of non-trade receivables including inventory sold to the Company's contract manufacturing partner or other integration partners, on which the Company does not recognize revenue, and net receivables for value-added taxes. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in thousands): December 31, December 31, Raw materials $ 23,269 $ 24,805 Work-in-process — 12 Finished goods 4,012 5,005 27,281 29,822 Less: inventory valuation allowance (23,016 ) (9,801 ) Inventories, net $ 4,265 $ 20,021 Consigned inventory is held at third-party locations, including the Company's contract manufacturing partner and customers. The Company retains title to the inventory until purchased by the third-party. The Company’s consignment inventory with its contract manufacturer consists of inventory transferred from the Company’s prior contract manufacturer as well as inventory that has been purchased by the contract manufacturer as a result of the Company's forecasted demand. The Company is contractually obligated to purchase inventory transferred from the Company's prior contract manufacturer after the inventory ages for 365 days which was substantially complete as of December 31, 2017 . The Company is also contractually obligated to purchase inventory that has been purchased by the contract manufacturer as a result of the Company's forecasted demand when the inventory ages beyond 180 days and has no forecasted demand. All of the Company’s consignment inventory was held by its contract manufacturing partner as of December 31, 2017 and December 31, 2016. The Company records a liability for adverse purchase commitments of inventory owned by its contract manufacturing partner. See Note 13 - Commitments and Contingencies for additional information regarding the Company's adverse purchase commitment liability. The Company recorded the following charges associated with the valuation of inventory, inventory deposit and the adverse purchase commitment liability for the years ended December 31 (in thousands): 2017 2016 2015 Inventory, net $ 15,050 $ 6,120 $ 1,447 Adverse purchase commitments (A) 2,913 (1,908 ) 1,831 Net charges (B) $ 17,963 $ 4,212 $ 3,278 (A) When the Company takes possession of inventory reserved for under the adverse purchase liability (Note 13 — Commitments and Contingencies), the associated liability is transferred from other accrued liabilities to the excess and obsolete inventory valuation allowance. (B) The increase for the year ended December 31, 2017 was the result of an inventory charge taken in the current period due to DCEngine restructuring activities and the Company's decision to change contract manufacturers in Asia resulting in an acceleration of last-time buys from customers for legacy embedded product lines. The following is a summary of the change in the Company’s inventory valuation allowance for the years ended December 31 (in thousands): 2017 2016 Inventory valuation allowance, beginning of the year $ 9,801 $ 5,317 Usage: Inventory scrapped (870 ) (1,636 ) Inventory utilized (882 ) (954 ) Subtotal—usage (1,752 ) (2,590 ) Write-downs of inventory valuation and transfers to/from other liabilities (A) 14,967 7,074 Inventory valuation allowance, end of the year $ 23,016 $ 9,801 (A) Transfer to/from other liabilities is related to obsolete inventory purchased from contract manufacturers during the year which was previously reserved for as an adverse purchase commitment. (Note 9— Other Accrued and Other Long-Term Liabilities and Note 13— Commitments and Contingencies. ) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following (in thousands): December 31, December 31, Manufacturing equipment $ 15,456 $ 24,982 Office equipment and software 18,455 23,090 Leasehold improvements 2,838 2,964 Property and equipment, gross 36,749 51,036 Less: accumulated depreciation and amortization (32,021 ) (44,323 ) Property and equipment, net $ 4,728 $ 6,713 Depreciation expense associated with property and equipment for the years ended December 31, 2017 , 2016 and 2015 was $6.5 million , $4.5 million and $5.6 million . Of the $6.5 million in depreciation expense, $1.7 million is attributed to accelerated depreciation related to restructuring activities in 2017. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The following tables summarize the Company’s total purchased intangible assets (in thousands): Gross Accumulated Amortization Net December 31, 2017 Purchased technology $ 114,754 $ (110,674 ) $ 4,080 Patents 6,472 (6,472 ) — Customer lists 37,000 (37,000 ) — Trade names 11,536 (8,754 ) 2,782 Total intangible assets $ 169,762 $ (162,900 ) $ 6,862 December 31, 2016 Purchased technology $ 114,754 $ (102,967 ) $ 11,787 Patents 6,472 (6,472 ) — Customer lists 37,000 (34,784 ) 2,216 Trade names 11,536 (7,964 ) 3,572 Backlog $ 2,127 $ (2,127 ) — Total intangible assets $ 171,889 $ (154,314 ) $ 17,575 Intangible assets amortization expense was $10.7 million , $12.7 million and $12.9 million for the years ended December 31, 2017 , 2016 and 2015 . The Company’s purchased intangible assets have remaining useful lives of one to four years as of December 31, 2017 . The Company reviews for impairment all of its purchased intangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. During 2017, the Company wrote off the fully amortized intangible asset related to Backlog as this amount no longer provides a future benefit to the Company. The estimated future amortization expense of purchased intangible assets as of December 31, 2017 is as follows (in thousands): For the Years Ending December 31, Estimated Intangible Amortization Amount 2018 $ 4,870 2019 790 2020 790 2021 412 Thereafter — Total estimated future amortization expense $ 6,862 |
Restructuring and Other Charges
Restructuring and Other Charges | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | Restructuring and Other Charges The following table summarizes the Company's restructuring and other charges as presented in the Consolidated Statement of Operations (in thousands): December 31, 2017 December 31, 2016 December 31, 2015 Employee-related restructuring expenses $ 5,504 $ 2,771 $ 3,890 Lease abandonment expenses 57 — 392 Integration-related, legal and other non-recurring expenses 1,035 106 513 Fixed assets 1,743 40 225 Restructuring and other charges, net $ 8,339 $ 2,917 $ 5,020 Restructuring and other charges may include costs from events such as costs incurred for employee severance, acquisition or divestiture activities, excess facility costs, certain legal costs, asset related charges and other expenses associated with business restructuring activities. During the year ended December 31, 2017 , the Company recorded the following restructuring and other charges: • $5.5 million net expense relating to the severance for 92 employees primarily in connection with a restructuring of the Company's DCEngine product line, reducing the Company's hardware engineering presence in Shenzhen, China as well as reductions in North America due to the transition of the Company's supply chain operations to third party integration partners; an additional $0.8 million of expense will be recognized over a portion of the notified employees' respective service terms that span up to the next three quarters; • $1.7 million associated with accelerated depreciation of fixed assets related to DCE restructuring plans; • $1.0 million legal and other expense associated with contract termination costs and legal costs resulting from the Company's credit facility; and • $0.1 million lease abandonment expense associated with reductions in certain of our international sites. During the year ended December 31, 2016 , the Company recorded the following restructuring and other charges: • $2.8 million net expense relating to the severance of 74 employees primarily in connection with a reduction to the Company's hardware engineering presence in Shenzhen, China as well as reductions in North America due to the transition of the Company's supply chain operations to third party integration partners; and • $0.1 million integration-related expense principally associated with transfer-related costs resulting from resource and site consolidation actions. During the year ended December 31, 2015 , the Company recorded the following restructuring and other charges: • $3.9 million net expense relating to the severance of 130 employees primarily within Asia and North America. These actions were in connection with the restructuring of the Company's Hardware Solutions segment's research and development and sales and general administrative functions and are presented net of reductions resulting from changes in previously estimated amounts for employee severance and associated payroll costs; • $0.5 million integration-related expense principally associated with transfer-related costs resulting from resource and site consolidation actions; • $0.4 million lease abandonment expense associated with reductions in certain of our international sites; and • $0.2 million associated with fixed asset disposals related to site consolidation actions. Accrued restructuring, which is included in other accrued liabilities and other long-term liabilities in the accompanying Consolidated Balance Sheets as of December 31, 2017 and 2016 , consisted of the following (in thousands): Severance, payroll taxes and other employee benefits Facility reductions Total Balance accrued as of December 31, 2016 $ 1,347 $ 90 $ 1,437 Additions 5,670 57 5,727 Reversals (166 ) — (166 ) Expenditures (4,077 ) (147 ) (4,224 ) Balance accrued as of December 31, 2017 $ 2,774 $ — $ 2,774 The Company evaluates the adequacy of the accrued restructuring charges on a quarterly basis. Reversals are recorded in the period in which the Company determines that expected restructuring obligations are less than the amounts accrued. |
Other Accrued and Other Long-Te
Other Accrued and Other Long-Term Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Accrued and Other Long-Term Liabilities | Other Accrued and Other Long-Term Liabilities Other accrued liabilities consisted of the following (in thousands): December 31, December 31, Accrued warranty reserve $ 879 $ 1,466 Adverse purchase commitments 3,263 268 Accrued restructuring 2,774 1,437 Income tax payable 199 152 Other 3,290 4,248 Other accrued liabilities $ 10,405 $ 7,571 Other long-term liabilities consisted of the following (in thousands): December 31, December 31, Long-term income tax payable $ 5,341 $ 3,047 Long-term deferred revenue 1,108 2,380 Accrued warranty reserve 245 355 Other 172 184 Other long-term liabilities $ 6,866 $ 5,966 |
Short-Term Borrowings
Short-Term Borrowings | 12 Months Ended |
Dec. 31, 2017 | |
Short-term Debt [Abstract] | |
Short-Term Borrowings | Short-Term Borrowings Silicon Valley Bank On September 19, 2016, the Company entered into a Credit Agreement (as amended, the “Credit Agreement”) with Silicon Valley Bank (“SVB”), as administrative agent, and the other lenders party thereto. The Credit Agreement replaces the Company’s Third Amended and Restated Loan and Security Agreement with SVB, dated March 14, 2014. On September 5, 2017, the Company entered into the Third Amendment to the Credit Agreement. The following takes into account the terms per the agreement as amended on September 5, 2017. The Credit Agreement provides for a revolving loan commitment of $30.0 million and has a stated maturity date of September 19, 2019. The Credit Agreement includes a $10.0 million sub-limit for swingline loans and a $5.0 million sub-limit for letters of credit. The Credit Agreement also includes an accordion feature that allows the Company, at any time, to increase the aggregate revolving loan commitments by up to an additional $25.0 million, subject to the satisfaction of certain conditions, including obtaining the lenders’ agreement to participate in the increase. Borrowings under the Credit Agreement are subject to a borrowing base, which is a formula based upon certain eligible accounts receivable plus a non-formula amount if the Company meets certain liquidity requirements. The principal amount of revolving loans and letters of credit outstanding at any time cannot exceed the lesser of (i) the revolving commitments in effect at such time, and (ii) the sum of the Borrowing Base (as defined in the Credit Agreement) and $2.5 million . Eligible accounts receivable include 85% of certain U.S. accounts receivable and 75% of certain foreign accounts receivable ( 85% in certain cases). Outstanding borrowings under the revolving loan commitment bear interest at a per annum rate based upon the Company's Availability (as defined in the Credit Agreement), which means the quotient of the amount available for borrowings under the Credit Agreement divided by the lesser of the total commitment and the borrowing base, calculated as a daily average over the immediately preceding fiscal month. The Credit Agreement provides that the per annum interest rate commencing on June 30, 2017 when the Consolidated Adjusted EBITDA (as defined in the Credit Agreement) as measured on a trailing twelve-month basis for the immediately preceding fiscal quarter period is less than $8.0 million will be as follows: • When Availability is 70% or more, the interest rate is the prime rate (as published in Wall Street Journal) plus 0.75% ; • When Availability is 30% or more and less than 70% , the interest rate is the prime rate plus 1.00% ; and • When Availability is below 30% , the interest rate is the prime rate plus 1.25% . Commencing on June 30, 2017, if Consolidated Adjusted EBITDA as measured on a trailing twelve-month basis for the immediately preceding fiscal quarter period is equal to or greater than $8.0 million , the rate per annum will be as follows: • When Availability is 70% or more, the interest rate is the prime rate plus 0.25% ; • When Availability is 30% or more and less than 70% , the interest rate is the prime rate plus 0.50% ; and • When Availability is below 30% , the interest rate is the prime rate plus 0.75% . In addition, commencing on September 5, 2017, the applicable per annum interest rate on the revolving loans outstanding under the Credit Agreement will be increased by 0.50% until the earlier of either (i) Consolidated Adjusted EBITDA (as defined in the Credit Agreement) for two consecutive quarters is greater than or equal to $0 or (ii) the Company raises $15.0 million or more in capital from a source other than the Company or its subsidiaries. Under the Credit Agreement, the Company is required to make interest payments monthly. The Company is further required to pay $25,000 in annual administrative fees, $82,500 in annual commitment fees and a commitment fee based on the average unused portion of the revolving credit commitment, and certain other fees in connection with letters of credit. The commitment fee is determined as follows and is payable quarterly in arrears: • When Availability is 70% or more, the commitment fee is 0.35% of the average unused portion of the revolving credit commitment; • When Availability is 30% or more and less than 70% , the commitment fee is 0.325% of the average unused portion of the revolving credit commitment; and • When Availability is below 30% , the commitment fee is 0.3% of the average unused portion of the revolving credit commitment. The Company paid a total of $0.4 million loan origination (and loan modification) fees which were capitalized and will be expensed over the term of the Credit Agreement. The Credit Agreement requires that the Company comply with financial covenants requiring the Company to maintain a minimum monthly Liquidity Ratio (as defined in the Credit Agreement), measured as of the last day of the applicable month, as follows: Month Ended Minimum Liquidity Ratio 8/31/2017 1.50:1.00 1/31/2018 1.35:1.00 3/31/2018 1.50:1.00 4/30/2018 1.35:1.00 6/30/2018 1.50:1.00 Additionally, the Credit Agreement requires the Company to maintain a minimum trailing twelve months Consolidated Adjusted EBITDA in the third and fourth quarter of fiscal year 2017 and each quarter of fiscal year 2018 as follows: Quarter Ending Minimum Consolidated Adjusted EBITDA 9/30/17 ($4,500,000) 12/31/17 ($5,500,000) 3/31/18 ($5,000,000) 6/30/18 ($5,000,000) 9/30/18 $0 12/31/18 $2,000,000 The Credit Agreement also provides limits for the add-back of certain restructuring costs on a trailing twelve month basis in the calculation of Consolidated Adjusted EBITDA as follows: 12 Month Period Ended Restructuring Costs 9/30/17 $10,786,000 (inclusive of the quarter ending 9/30/17 non-cash inventory write down) 12/31/17 $10,471,000 3/31/18 $12,235,000 6/30/18 $11,000,000 9/30/18 $3,000,000 12/31/18 $2,000,000 The Credit Agreement also provides that following fiscal year 2017, SVB, as administrative agent, and the required lenders under the Credit Agreement will re-set the required minimum Consolidated Adjusted EBITDA levels for the periods tested in fiscal year 2019. All obligations under the Credit Agreement are unconditionally guaranteed by the Company's wholly owned subsidiary, Radisys International LLC. The obligations under the Credit Agreement are secured by a first priority lien on the assets of the Company and the subsidiary guarantor. If the Company acquires or forms a material U.S. subsidiary, then that subsidiary will also be required to guarantee the obligations under the Credit Agreement and grant a first priority lien on its assets. As of December 31, 2017 and 2016 , the Company had outstanding balances of $16.0 million and $25.0 million issued on its behalf under the Credit Agreement. As part of the Company’s efforts to improve its liquidity, subsequent to December 31, 2017, Radisys entered into new financing arrangements with Hale Capital Partners and CIDM LendCo, LLC. Refer to Note 19 - Subsequent Events , whereby on January 3, 2018, Radisys extinguished the aforementioned Credit Agreement with SVB and entered into a new credit agreement with Marquette Business Credit, LLC as well as issued new senior notes, which significantly improved the Company’s gross cash position. As the previous agreement with SVB has been extinguished, the Company did not complete covenants for the period ended December 31, 2017 and subsequently has excluded disclosure of unused availability under that agreement. Liquidity Outlook Over the past several quarters, the Company has experienced significant operating losses and more recently consumed significant cash from operations resulting from a material decline in its DCEngine product line. Given the uncertainty of future business from the DCEngine product line, the Company began taking action in the fourth quarter of 2017 to significantly reduce its overhead and operating expenses moving forward aimed at enabling the Company to return to profitability and free cash flow generation. These actions also included closing the new financing arrangements subsequent to December 31, 2017, which positioned the Company to implement its expense reduction actions as well as committed inventory purchases through the first half of 2018. A return to profitability and free cash flow generation is based on certain assumptions and projections, including growth from the Company’s Software-Systems business. If the Company is unable to attain certain levels of revenue growth, or meet its cost reduction targets, the Company may be out of compliance with covenants associated with the new financing arrangements which may have a material adverse effect on the Company’s liquidity. At December 31, 2017, the Company’s cash and cash equivalents amounted to $8.1 million . The Company believes its current cash and cash equivalents, the proceeds from the sale of the Notes, cash expected to be generated from operations, available borrowings under ABL Credit Agreement and availability, if required, under the Company’s $100.0 million unallocated shelf registration statement will satisfy the Company’s short and long-term expected working capital needs, capital expenditures, acquisitions, stock repurchases, and other liquidity requirements associated with the Company’s present business operations. If the Company is unable to comply with various covenants under the ABL Credit Agreement and the Note Purchase Agreement due to the timing of orders and shipments from the Company’s Software-Systems customers, delays in payment of accounts receivable or other adverse business conditions that impact the Company’s operating plans, without an amendment or waiver, the Company’s liquidity outlook could be materially and adversely affected. The Company continues to pursue a number of actions to improve its cash position including (i) minimizing capital expenditures, (ii) effectively managing working capital, (iii) seeking amendments or waivers from lenders and (iv) improving cash flows from operations. These efforts continue in earnest and the Company is considering all available strategic alternatives and financing possibilities, including, without limitation, the issuance of additional equity, the incurrence of additional secured indebtedness and the exchange or refinancing of existing obligations. |
Convertible Debt
Convertible Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Debt | Convertible Debt 2015 Convertible Senior Notes On February 17, 2015, the Company repaid at maturity the entire $18.0 million outstanding balance of the 4.5% convertible senior notes due 2015 (the "2015 convertible senior notes") in accordance with the terms thereof. No convertible senior notes were converted to common stock. The following table outlines the effective interest rate, contractually stated interest costs, and costs related to the amortization of issuance costs for the Company's 2015 convertible senior notes: Years Ended December 31, 2017 2016 2015 Effective interest rate of 2015 convertible senior notes NA NA 4.50% Contractually stated interest costs NA NA $101 Amortization of interest costs NA NA $7 |
Hedging
Hedging | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Hedging | Hedging The Company’s business activities expose it to a variety of market risks, including the effects of changes in foreign currency exchange rates. The Company manages these risks through the use of forward exchange contracts, designated as foreign-currency cash flow hedges, in an attempt to reduce the potentially adverse effects of foreign currency exchange rate fluctuations that occur in the normal course of business. As such, the Company’s hedging activities are employed solely for risk management purposes. All hedging transactions are conducted with, in the opinion of management, financially stable and reputable financial institutions. As of and for the years ended December 31, 2017 , 2016 , and 2015 the only hedge instruments executed by the Company are associated with its exposure to fluctuations in the Indian Rupee, which result from obligations such as payroll and rent paid in this currency. These derivatives are recognized on the balance sheet at their fair value. Unrealized gain positions are recorded as other current assets and unrealized loss positions are recorded as other current liabilities. Changes in the fair values of the outstanding derivatives that are highly effective are recorded in other comprehensive income until net income is affected by the variability of the cash flows of the hedged transaction. Hedge ineffectiveness could result when the amount of the Company’s hedge contracts exceed the Company’s forecasted or actual transactions for which the hedge contracts were designed to hedge. Once a hedge contract matures, the associated gain (loss) on the contract will remain in other comprehensive income until the underlying hedged transaction affects net income (loss), at which time the gain (loss) will be recorded to the expense line item being hedged, which is primarily within Cost of Sales, R&D and SG&A. The Company only enters into derivative contracts in order to hedge foreign currency exposure, which contracts do not exceed two years from inception. If the Company entered into a contract for speculative reasons or if the Company’s current hedge position becomes ineffective, changes in the fair values of the derivatives would be recognized in earnings in the current period. The Company assesses, both at the inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions have been highly effective in offsetting changes in the cash flows of hedged items and whether those derivatives are expected to remain highly effective in future periods. For the years ended December 31, 2017 , 2016 and 2015 the Company had no hedge ineffectiveness. During the year ended December 31, 2017 , the Company entered into 18 new foreign currency forward contracts, with total contractual values of $10.5 million . During the year ended December 31, 2016 , the Company entered into 45 new foreign currency forward contracts, with total contractual values of $15.4 million . A summary of the aggregate contractual or notional amounts, balance sheet location and estimated fair values of derivative financial instruments designated as cash flow hedges at December 31, 2017 is as follows (in thousands): Contractual / Notional Amount Consolidated Balance Sheet Classification Estimated Fair Value Asset (Liability) Foreign currency forward exchange contracts $ 13,018 Other assets $ 508 $ — A summary of the aggregate contractual or notional amounts, balance sheet location and estimated fair values of derivative financial instruments designated as cash flow hedges at December 31, 2016 is as follows (in thousands): Contractual / Notional Amount Consolidated Balance Sheet Classification Estimated Fair Value Asset (Liability) Foreign currency forward exchange contracts $ 16,166 Other assets $ 94 $ — There were no ineffective hedges for the years ended December 31, 2017 , 2016 and 2015 . The following table summarizes the effect of derivative instruments on the Consolidated Statements of Operations as follows (in thousands): December 31, 2017 December 31, 2016 December 31, 2015 Cost of sales $ 152 $ 281 $ 187 Research and development 211 436 305 Selling, general and administrative 70 164 135 Total derivative instrument expense $ 433 $ 881 $ 627 The following is a summary of changes to comprehensive income (loss) associated with the Company's hedging activities (in thousands): For the Years Ended December 31, 2017 2016 2015 Beginning balance of unrealized loss on forward exchange contracts $ (527 ) $ (819 ) $ (752 ) Other comprehensive loss before reclassifications (83 ) (589 ) (694 ) Amounts reclassified from other comprehensive income 433 881 627 Other comprehensive income (loss) 350 292 (67 ) Ending balance of unrealized loss on forward exchange contracts $ (177 ) $ (527 ) $ (819 ) Over the next twelve months, the Company expects to reclassify into earnings a loss of approximately $0.2 million currently recorded as other comprehensive income, as a result of the maturity of currently held forward exchange contracts. The bank counterparties in these contracts expose the Company to credit-related losses in the event of their nonperformance. However, to mitigate that risk, the Company only contracts with counterparties who meet its minimum requirements regarding counterparty credit worthiness. In addition, the Company monitors credit ratings, credit spreads and potential downgrades prior to entering into any new hedging contracts. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases Radisys is obligated under non-cancelable operating leases for certain facilities, office equipment, and vehicles. Future minimum lease payments with initial or remaining non-cancelable lease terms in excess of one year, at December 31, 2017 , were as follows (in thousands): For the Years Ending December 31, Future Minimum Lease Payments 2018 2,242 2019 1,965 2020 1,146 2021 662 2022 221 Thereafter — Total future minimum lease commitments $ 6,236 Rent expense totaled $2.1 million , $2.3 million , and $2.7 million for the years ended December 31, 2017 , 2016 , and 2015 . Adverse Purchase Commitments The Company is contractually obligated to reimburse its contract manufacturer for the cost of excess inventory used in the manufacture of the Company's products if there is no alternative use. This liability, referred to as adverse purchase commitments, is presented in other accrued liabilities in the accompanying Consolidated Balance Sheets. Estimates for adverse purchase commitments are derived from reports received on a quarterly basis from the Company's contract manufacturer. Increases to this liability are charged to cost of sales. If and when the Company takes possession of inventory reserved for in this liability, the liability is transferred from other accrued liabilities to the excess and obsolete inventory valuation allowance (Note 9 — Other Accrued and Other Long-Term Liabilities ) to the excess and obsolete inventory valuation allowance (Note 5 — Inventories ). The adverse purchase commitment liability is included in other accrued liabilities in the accompanying Consolidated Balance Sheets was $3.3 million and $0.3 million as of December 31, 2017 and December 31, 2016. Guarantees and Indemnification Obligations As permitted under Oregon law, the Company has agreements whereby it indemnifies its officers, directors and certain finance employees for certain events or occurrences while the officer, director or employee is or was serving in such capacity at the request of the Company. The term of the indemnification period is for the officer’s, director’s or employee’s lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a Director and Officer insurance policy that limits its exposure and enables the Company to recover a portion of any future amounts paid. To date, the Company has not incurred any costs associated with these indemnification agreements and, as a result, management believes the estimated fair value of these indemnification agreements is minimal. Accordingly, the Company has not recorded any liabilities for these agreements as of December 31, 2017 . The Company enters into standard indemnification agreements in its ordinary course of business. Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with patent, copyright or other intellectual property infringement claims by any third party with respect to the Company’s current products, as well as claims relating to property damage or personal injury resulting from the performance of services by us or the Company’s subcontractors. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is generally limited. Historically, the Company’s costs to defend lawsuits or settle claims relating to such indemnity agreements have been minimal and accordingly management believes the estimated fair value of these agreements is immaterial. Accrued Warranty The Company provides for the estimated cost of product warranties at the time it recognizes revenue. Products are generally sold with warranty coverage for a period of 12 or 24 months after shipment. Parts and labor are covered under the terms of the warranty agreement. The workmanship of the Company’s products produced by the contract manufacturer is covered under warranties provided by the contract manufacturer for 12 to 24 months. The warranty provision is based on historical experience by product family. The Company engages in product quality programs and processes, including actively monitoring and evaluating the quality of its components suppliers; however ongoing failure rates, material usage and service delivery costs incurred in correcting product failure, as well as specific product class failures out of the Company’s baseline experience, affect the estimated warranty obligation. If actual product failure rates, material usage or service delivery costs differ from estimates, revisions to the estimated warranty liability would be required. The following is a summary of the change in the Company’s warranty accrual reserve (in thousands): For the Years Ended December 31, 2017 2016 Warranty liability balance, beginning of the year $ 1,821 $ 2,553 Product warranty accruals 305 1,116 Adjustments for payments made (1,002 ) (1,848 ) Warranty liability balance, end of the year $ 1,124 $ 1,821 At December 31, 2017 and 2016 , $0.9 million and $1.5 million of the warranty liability balance are included in other accrued liabilities and $0.2 million and $0.4 million are included in other long-term liabilities in the accompanying Consolidated Balance Sheets. |
Basic and Diluted Net IncomePer
Basic and Diluted Net IncomePer Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Loss per Share | Basic and Diluted Loss per Share A reconciliation of the numerator and the denominator used to calculate basic and diluted loss per share is as follows (in thousands, except per share amounts): For the Years Ended December 31, 2017 2016 2015 Numerator Net loss $ (52,604 ) $ (10,251 ) $ (14,678 ) Denominator—Basic Weighted average shares used to calculate net loss per share, basic 38,994 37,668 36,789 Denominator—Diluted Weighted average shares used to calculate net loss per share, basic 38,994 37,668 36,789 Effect of dilutive restricted stock (A) — — — Effect of dilutive stock options (A) — — — Weighted average shares used to calculate net loss per share, diluted 38,994 37,668 36,789 Net loss per share: Basic $ (1.35 ) $ (0.27 ) $ (0.40 ) Diluted $ (1.35 ) $ (0.27 ) $ (0.40 ) (A) The following shares, by equity award type, were excluded from the calculation, as their effect would have been anti-dilutive (in thousands): For the Years Ended December 31, 2017 2016 2015 Stock options 3,163 3,897 2,966 Restricted stock units 428 100 151 Performance based restricted stock units (B) 621 837 1,625 Total equity award shares excluded 4,212 4,834 4,742 (B) Performance based restricted stock units are presented based on attainment of 100% of the performance goals being met. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In December 2017, the Tax Cuts and Jobs Act (the “2017 Tax Act”) was enacted. The 2017 Tax Act includes a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent for tax years beginning after December 31, 2017. The 2017 Tax Act also provides for a one-time transition tax on certain foreign earnings and the acceleration of depreciation for certain assets placed into service after September 27, 2017 as well as prospective changes beginning in 2018, including repeal of the domestic manufacturing deduction, acceleration of tax revenue recognition, capitalization of research and development expenditures, additional limitations on executive compensation and limitations on the deductibility of interest. The Company recognized the income tax effects of the 2017 Tax Act in its 2017 financial statements in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes, in the reporting period in which the 2017 Tax Act was signed into law. As such, the Company’s financial results reflect the income tax effects of the 2017 Tax Act for which the accounting under ASC Topic 740 is complete and provisional amounts for those specific income tax effects of the 2017 Tax Act for which the accounting under ASC Topic 740 is incomplete but a reasonable estimate could be determined. The changes to existing U.S. tax laws as a result of the 2017 Tax Act, which we believe have the most significant impact on the Company’s federal income taxes are as follows: Reduction of the U.S. Corporate Income Tax Rate The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the Company’s deferred tax assets and liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from 35 percent to 21 percent, resulting in a $33.1 million increase in income tax expense for the year ended December 31, 2017 and a corresponding $33.1 million decrease in gross deferred tax assets as of December 31, 2017. These adjustments were offset with a $33.1 million corresponding adjustment to the valuation allowance. Transition Tax on Foreign Earnings The Company recognized a provisional income tax expense of $1.3 million for the year ended December 31, 2017 related to the one-time transition tax on certain foreign earnings. This resulted in a corresponding decrease in deferred tax assets due to the utilization of net operating loss carryforwards. The determination of the transition tax requires further analysis regarding the amount and composition of the Company’s historical foreign earnings, which is expected to be completed in 2018. Domestic and foreign pre-tax income (loss) is as follows (in thousands): For the Years Ended December 31, 2017 2016 2015 Domestic $ (53,958 ) $ (12,040 ) $ (15,822 ) Foreign 5,081 4,223 2,886 Total pre-tax loss $ (48,877 ) $ (7,817 ) $ (12,936 ) The income tax provision consists of the following (in thousands): For the Years Ended December 31, 2017 2016 2015 Current provision: Federal $ — $ — $ — State 73 78 30 Foreign 3,692 2,225 1,772 Total current provision 3,765 2,303 1,802 Deferred provision (benefit): Federal (309 ) (86 ) 35 State (10 ) (4 ) 2 Foreign 281 221 (97 ) Total deferred provision (38 ) 131 (60 ) Total income tax provision $ 3,727 $ 2,434 $ 1,742 The income tax provision (benefit) differs from the amount computed by applying the statutory federal income tax rate to pretax income as a result of the following differences (dollar amounts in thousands): For the Years Ended December 31, 2017 2016 2015 $ % $ % $ % Statutory federal tax (benefit) rate $ (17,107 ) 35.0 % $ (2,736 ) 35.0 % $ (4,526 ) 35.0 % Increase (decrease) in rates resulting from: State taxes (749 ) 1.5 (67 ) 0.9 609 (4.7 ) Foreign dividends and unremitted earnings (638 ) 1.3 1,745 (22.3 ) 1,493 (11.5 ) Impact from U.S. tax reform 36,311 (74.3 ) — — — — Tax audit settlement 1,497 (3.1 ) — — — — Valuation allowance (16,363 ) 33.5 1,596 (20.4 ) 2,456 (19.0 ) Taxes on foreign income that differ from U.S. tax rate (1,361 ) 2.8 (901 ) 11.5 (405 ) 3.1 Executive Compensation limitation 17 — 1,005 (12.9 ) — — Non-deductible stock-based compensation expense 567 (1.2 ) 135 (1.7 ) 1,104 (8.5 ) Expiration of attributes 1,397 (2.9 ) 1,478 (18.9 ) 893 (6.9 ) Uncertain tax positions 302 (0.6 ) 120 (1.5 ) 435 (3.4 ) Other (146 ) 0.4 59 (0.8 ) (317 ) 2.4 Effective tax rate $ 3,727 (7.6 )% $ 2,434 (31.1 )% $ 1,742 (13.5 )% The components of deferred taxes consist of the following (in thousands): December 31, December 31, Deferred tax assets: Accrued warranty $ 256 $ 657 Inventory 6,114 3,631 Net operating loss carryforwards 39,534 57,294 Tax credit carryforwards 20,857 22,075 Stock-based compensation 978 1,995 Fixed assets 2,358 1,808 Goodwill and other identified intangibles 1,073 1,603 Deferred revenue 1,201 2,906 Subsidiary service accruals 4,870 1,702 Other 1,308 2,082 Total deferred tax assets 78,549 95,753 Less: valuation allowance (77,437 ) (88,566 ) Net deferred tax assets 1,112 7,187 Deferred tax liabilities: Intangible assets — (5,603 ) Other (325 ) (467 ) Total deferred tax liabilities (325 ) (6,070 ) Total net deferred tax assets $ 787 $ 1,117 At December 31, 2017 , the Company's unrecognized tax benefits associated with uncertain tax positions were $4.6 million , of which $4.4 million , if recognized, would favorably affect the effective tax rate. The Company's ongoing practice is to recognize potential accrued interest and penalties related to unrecognized tax benefits within its global operations in income tax expense. During 2017 , the Company recognized a net increase of approximately $0.2 million in potential interest and penalties associated with uncertain tax positions in the Consolidated Statements of Operations. The Company had approximately $1.0 million and $0.2 million of interest and penalties associated with uncertain tax positions at December 31, 2017 , which are excluded from the unrecognized tax benefits table below. The Company’s total amounts of unrecognized tax benefits at the beginning and end of the period are as follows (in thousands): Total Balance as of December 31, 2015 $ 3,680 Additions based on tax positions related to the current year 245 Additions for tax positions of prior years 24 Reductions for tax positions of prior years (240 ) Reductions as a result of a lapse of applicable statute of limitations (80 ) Reductions due to settlements (6 ) Other $ (74 ) Balance as of December 31, 2016 $ 3,549 Additions based on tax positions related to the current year 1,124 Additions for tax positions of prior years 146 Reductions for tax positions of prior years (278 ) Reductions as a result of a lapse of applicable statute of limitations (56 ) Other 97 Balance as of December 31, 2017 $ 4,582 The Company and its subsidiaries are subject to federal income tax as well as income tax of multiple state and foreign jurisdictions. The Company's statutes of limitations are closed for all federal and state income tax years before 2014 and 2013 respectively. The statutes of limitations for the Company's other foreign subsidiaries are closed for all income tax years before 2005. However, to the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses and credits were generated and carried forward, and make adjustments up to the net operating loss and credit carryforward amounts. It is reasonably possible that the Company's uncertain tax positions, including interest and penalties, could decrease by approximately $0.4 million in the next twelve months. The Company is currently under tax examination in India and Canada. The periods under examination in India are the Company's financial years 2005, 2006, 2008 and 2011. The examinations are in various stages of appellate proceedings and all material uncertain tax positions associated with the examination have been taken into account in the ending balance of the unrecognized tax benefits at December 31, 2017. The periods under examination in Canada are the Company's fiscal years 2013 and 2014. The Company reduced its Canadian tax attribute carryforwards and valuation allowance by $1.5 million as a settlement position related to a proposed adjustment by the Canada Revenue Agency. The Company had recorded valuation allowances of $77.4 million and $88.6 million as of December 31, 2017 and 2016 . This represents a full valuation allowance against the Company's U.S. net deferred tax assets as well as a partial valuation allowance against the Company's Canadian and Chinese net deferred tax assets. In evaluating its valuation allowance, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. At December 31, 2017 the Company had total available federal and state net operating loss carryforwards of approximately $178.3 million and $51.5 million . The federal and state net operating loss carryforwards expire between 2018 and 2037 . The net operating losses from acquisitions are stated net of limitations pursuant to Section 382 of the Internal Revenue Code. The Company also had net operating loss carryforwards of approximately $3.4 million from the United Kingdom (“U.K.”), and China. The U.K. net operating losses may be carried forward indefinitely provided certain requirements are met. The Chinese tax losses may be carried forward 5 years. The Company had federal and California research and development tax credit and other federal credit carryforwards of approximately $15.3 million at December 31, 2017 , to reduce future income tax liabilities. The federal credits expire between 2018 and 2031. The California research and development credits do not expire. The credits from acquisitions are stated net of limitations pursuant to Section 383 of the Internal Revenue Code. The Company's Canadian subsidiary also had approximately $2.8 million in investment tax credit and, $16.9 million of unclaimed scientific research and experimental expenditures to be carried forward and applied against future income in Canada. Realization of the Company's foreign deferred tax assets is dependent on generating sufficient taxable income prior to the expiration of the net operating loss and tax credit carryforwards. Although realization is not assured, management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the balance of the deferred tax assets, net of the valuation allowance, as of December 31, 2017 . The amount of the net deferred tax assets that is considered realizable, however, could be reduced if estimates of future taxable income during the carryforward periods are reduced. Should management determine that the Company would not be able to realize all or part of the net deferred tax assets in the future, adjustments to the valuation allowance for deferred tax assets may be required. In connection with the implementation of the Tax Cuts and Jobs Act, the Company had changed its indefinite reinvestment assertion and is now fully providing on the unremitted earnings of its foreign subsidiaries. In March 2016, FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting (''ASU 2016-09''). ASU 2016-09 simplifies how several aspects of share-based payments are accounted for and presented in the financial statements. ASU 2016-09 is effective for public companies for annual reporting periods beginning after December 15, 2016. The Company adopted this ASU in the first quarter of 2017. The Company had excess tax benefits for which a benefit could not be previously recognized of approximately $4.3 million . Due to the full valuation allowance against the net U.S. deferred tax assets, the Company did not recognize a net cumulative-effect adjustment to retained earnings upon adoption. In October 2016, the FASB issued Accounting standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (''ASU 2016-16''). ASU 2016-16 modifies how intra-entity transfer of assets other than inventory are accounted for and presented in the financial statements. ASU 2016-16 is effective for public companies for annual reporting periods beginning after December 15, 2017, however early adoption is allowed. The Company adopted this ASU in the first quarter of 2017. The Company recorded a $2.0 million cumulative-effect adjustment to retained earnings upon adoption. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Stock-Based Employee Benefit Plans Equity instruments are granted to employees, directors and consultants in certain instances, as defined in the respective plan agreements. Stock Options and Restricted Stock Awards On May 15, 2007, the Company's shareholders approved the 2007 Stock Plan which provides for issuance of stock options, restricted shares, restricted stock units and performance-based awards. On September 22, 2015, the Company’s shareholders approved the Amended and Restated 2007 Stock Plan (as amended, the “2007 Stock Plan”). Under the 2007 Stock Plan, 14,183,070 shares have been reserved and authorized for issuance to any non-employee directors and employees. The 2007 Stock Plan provides the Board of Directors discretion in creating employee equity incentives. Unless otherwise stipulated in the plan document, the Board of Directors determines stock option exercise prices, which may not be less than the fair value of Radisys common stock at the date of grant, vesting periods and the expiration periods which are a maximum of 10 years from the date of grant for certain awards. On August 17, 2010, the shareholders approved the Long-Term Incentive Plan ("LTIP"). The LTIP provides for the grants of awards payable in shares of common stock upon the achievement of performance goals set by the Company’s Compensation and Development Committee (“the Committee”). The number of shares of the Company’s common stock initially reserved for issuance under the LTIP is 2,000,000 shares with a maximum of 500,000 shares in any calendar year to one participant. On September 22, 2015, the Company's shareholders approved the Amended 2007 Stock Plan, which provides that shares remaining available for grant as well as shares subject to outstanding awards under the LTIP that may be forfeited upon termination of employment will be added to the shares reserved for the Amended 2007 Stock Plan. The LTIP will expire after the existing grants under the LTIP vest, or expire, at the end of their respective terms. As of December 31, 2016, all outstanding grants from the LTIP have been earned or cancelled and the LTIP had expired. On May 3, 2011 the Company registered 600,000 shares of its common stock under the Radisys Corporation Inducement Stock Plan for CCPU Employees (the "CCPU Plan"). The CCPU Plan was adopted without shareholder approval in reliance upon the exception provided under NASDAQ Listing Rule 5635(c)(4) relating to awards granted in connection with the hiring of new employees, including grants to transferred employees in connection with a merger or acquisition. Awards under the CCPU Plan are made only to employees of Continuous Computing or its subsidiaries and became effective upon the completion of the Continuous Computing acquisition. The CCPU Plan provides for the issuance of stock options, restricted shares and restricted stock units. In 2011, the Company issued 368,000 shares under the CCPU Plan and no future awards will be granted. The Company assumed the stock plans of Continuous Computing on July 8, 2011. Under the terms of the Company's merger agreement with Continuous Computing, options outstanding under these plans were converted to options to purchase shares of the Company's common stock. Options issued under these plans vest over four years from the original grant date and have an expiration date of 10 years from the original grant date. The exercise price of each converted option is equal to the product of the original exercise price and the original number of options granted divided by the number of converted options received. These stock plans have been suspended and no future awards will be granted under these plans. A total of 319,000 shares of common stock were issued under the Continuous Computing stock plans. In accordance with the Continuous Computing merger agreement, unvested options pursuant to the Continuous Computing plans were required to be converted into multiple awards on the acquisition date, with the resulting awards becoming non-contingent and contingent options of the Company. Both the non-contingent and contingent awards continue to vest under the original service conditions of the awards. However, the contingent awards contain post-vesting restrictions tied to payment of certain merger contingencies such as the earn-out and indemnification agreements. The assumed options were valued using a Black-Scholes option-pricing model. In addition, the Company utilized the Finnerty Asian Put Option Approach to estimate the discount associated with the post-vesting restrictions for the contingent options. The resulting discount applied was 10%. On March 2, 2015, the Committee approved 1,575,000 performance based restricted stock unit awards ("PRSUs") under the LTIP and 2007 Stock Plan that have performance periods starting on March 2, 2015 and ending on March 2, 2019, which provides that on the performance measurement date following the achievement of the following market condition stock price hurdles: • 50% of the awards will be earned if Radisys’ average closing stock price over a 30 -trading day period is equal to or greater than $3.45 during a 3 -year performance period. • 50% of the awards will be earned if Radisys’ average closing stock price over a 30 -trading day period is equal to or greater than $4.25 during a 4 -year performance period. These awards were earned and fully vested during 2016. On March 28, 2016, the Committee approved 605,000 PRSUs under the 2007 Stock Plan. Subsequently in 2016, the Committee approved additional grants of 165,000 subject to this plan. The awards have two separate annual performance achievement dates in 2016 and 2017 and vest upon attainment of the performance conditions tied to annual revenue and operating income metrics. 50% of these awards vested in 2017 based on achievement of performance conditions for the 2016 achievement date. On March 10, 2017, the Committee approved 669,500 PRSUs under the 2007 Stock Plan. Subsequently in 2017, the Committee approved one additional grant of 20,000 shares subject to this plan. The awards for 629,500 shares have two separate annual performance achievement dates in 2017 and 2018 and vest upon attainment of the performance conditions tied to annual revenue targets. Awards for 60,000 shares will vest upon attainment of individual sales account targets during fiscal year 2017. As of December 31, 2017 , the Company had 4,621,121 common shares available for future grant under its equity plans. The following table summarizes stock option activity for 2017 (in thousands, except average prices and weighted average remaining contractual lives): Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance, December 31, 2016 3,897 $ 3.81 4.58 $ 3,642 Granted 155 1.15 Exercised (50 ) 2.38 Forfeited (447 ) 4.16 Expired (392 ) 5.85 Balance, December 31, 2017 3,163 $ 3.40 3.06 $ 26 Options exercisable at December 31, 2017 2,648 $ 3.48 2.59 $ 4 Options vested as of December 31, 2017 and expected to vest after December 31, 2017 3,163 $ 3.40 3.06 $ 26 The aggregate intrinsic value in the table above represents the total pretax value, based on the Company's closing common stock price of $1.01 at December 31, 2017 that would have been received by the option holders had all option holders exercised their in-the-money options on December 31, 2017 . Total intrinsic value of options exercised for the years ended December 31, 2017 , 2016 and 2015 was $0.1 million , $0.4 million , and $0.1 million . The total amount of cash received from the exercise of options was $0.1 million in 2017 , $0.6 million in 2016 and $0.1 million in 2015 . As of December 31, 2017 , the Company had $0.7 million in unrecognized compensation expense related to stock options which is expected to be recognized over a weighted average period of 1.6 years . The following table summarizes non-vested stock activity for 2017 : Restricted Stock Units Performance Stock Units Restricted Shares Weighted Average Fair Value Restricted Shares Weighted Average Fair Value Balance, December 31, 2016 100 $ 3.68 837 $ 4.07 Granted 687 3.59 690 3.76 Vested (150 ) 3.95 (380 ) 4.12 Forfeited (209 ) 3.81 (525 ) 4.03 Balance, December 31, 2017 428 $ 3.67 622 $ 3.72 The total fair value of restricted stock units that vested in 2017 , 2016 and 2015 was $0.6 million , $0.5 million and $0.5 million . As of December 31, 2017 , the Company had $1.2 million in unrecognized compensation expense related to restricted stock units which is expected to be recognized over a weighted average period of 1.9 years. The PRSUs awarded in 2016 vest only on satisfaction of certain annual performance criteria during the performance period beginning on the grant date. Specifically, 50% of the award will vest on meeting defined strategic revenue targets during fiscal year 2016 and the remaining 50% will vest on meeting defined strategic revenue targets during fiscal year 2017, subject to the attainment of achieving certain operating income thresholds defined by the Company's ratified 2017 annual operating plan. The awards have two separate annual performance achievement periods in 2016 and 2017 and vest upon attainment and approval of the respective performance conditions. Expense is derived based on the Company's stock price on the grant date and estimated achievement of the performance targets. The awards associated with strategic revenues targets in 2016 were earned and subsequently released in the first quarter 2017. No awards were earned for the 2017 performance period. Certain of the PRSUs awarded in 2017 vest only on satisfaction of certain annual performance criteria during the performance period beginning on the grant date. Specifically, 50% of the award will vest on meeting defined strategic revenue targets during the fiscal year 2017 and the remaining 50% will vest on meeting defined strategic revenue targets during fiscal year 2018. The awards have two separate annual performance achievement periods in 2017 and 2018 and vest upon attainment and approval of the respective performance conditions. If targets are met during each performance achievement period, 50% of the shares becoming vested will be subject to time-based cliff-vesting after one year. No awards associated with the 2017 performance period were earned. Employee Stock Purchase Plan In December 1995, the Company established an Employee Stock Purchase Plan (“ESPP”). All employees of Radisys and its subsidiaries who customarily work 20 or more hours per week, including all officers, are eligible to participate in the ESPP. Separate offerings of common stock to eligible employees under the ESPP (an “Offering”) commence on February 15, May 15, August 15 and November 15 of each calendar year (“Enrollment Dates”) and continue for a period of 18 months. Multiple separate offerings are in operation under the ESPP at any given time. An employee may participate in only one offering at a time and may purchase shares only through payroll deductions permitted under the provisions stipulated by the ESPP. The purchase price is the lesser of 85% of the fair market value of the common stock on date of grant or that of the purchase date (“look-back feature”). Pursuant to the provisions of the ESPP, as amended, the Company is authorized to issue up to 7.2 million shares of common stock under the ESPP. At December 31, 2017 , 490,038 shares were available for issuance under the ESPP. During the second quarter of 2009, the Board of Directors approved an amendment to the Company’s ESPP to provide for a one-year holding period with respect to common stock shares purchased by participants under the ESPP. The one-year holding period took effect during the fourth quarter of 2009. Due to the holding period, the Company applies a discount to the ESPP stock compensation to reflect the decreased liquidity. The Company utilizes the Finnerty Asian Put Option Approach to estimate the discount. Inputs for the model include the length of the holding period, volatility and risk-free rate. The discount applied in the fourth quarter of 2017 , was 18.0% . In 2016 and 2015 the discount applied was 12.0% and 11.0% . The following table summarizes shares issued under the ESPP (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Shares issued pursuant to the ESPP 233 184 175 Cash received for the purchase of shares pursuant to the ESPP $ 398 $ 417 $ 322 Weighted average purchase price per share $ 1.71 $ 2.26 $ 1.84 Stock-Based Compensation Expense The Company uses the Black-Scholes model to measure the grant-date fair value of stock options and ESPP shares. The grant-date fair value of stock options that are expected to vest is recognized on a straight-line basis over the requisite service period, generally, three years. The grant date fair value of ESPP shares that are expected to vest is recognized on a straight-line basis over the requisite service period, generally, 18 months, subject to modification at the date of purchase due to the ESPP look-back feature. The estimate of the number of options, ESPP shares and restricted stock units granted under the 2007 Stock Plan expected to vest is determined based on historical experience. The Company estimates the fair value of stock options and purchase rights under the ESPP using a Black-Scholes option-pricing model. The calculation includes several assumptions that require management’s judgment. The expected term of the option or share is determined based on assumptions about patterns of employee exercises, and represents a probability-weighted average time period from grant until exercise of stock options, subject to information available at time of grant. Determining expected volatility generally begins with calculating historical volatility for a similar long-term period and then considering the ways in which the future is reasonably expected to differ from the past. The Company uses one employee population. The expected term computation is based on historical vested option exercise and is also factored by an estimate of the expected term for fully vested and outstanding options. The estimate of the expected term for options that were fully vested and outstanding was determined as the midpoint between the evaluation date and the contractual term date of the option. The risk free interest rate is based on the U.S. Treasury constant maturities in effect at the time of grant for the expected term of the option or share. The fair value of unvested stock is the market value as of the grant date. The grant-date fair value of the restricted stock units that are expected to vest is recognized on a straight-line basis over the requisite service period, which is three years. The grant date fair value of the PRSUs awarded in 2016 was calculated based on stock price on the grant date and estimated achievement of the respective performance targets. For the portion of the award that vests subject to attainment of meeting strategic revenue targets during fiscal year 2016, expense was calculated using an assumed share price of $2.74 - $4.98 and an estimate that performance targets would be attained at 100% . The grant date fair value of the PRSUs awarded in 2017 was calculated based on stock price on the grant date and estimated achievement of the respective performance targets. For the portion of the award that vests subject to attainment of meeting strategic revenue targets during fiscal year 2017, expense was calculated using an assumed share price of $3.80 and an estimate that performance targets would be attained at 100% . During 2017, management assessed that it was no longer probable that the 2016 and 2017 PRSU award targets would be achieved. This resulted in a reversal of all previously recorded 2017 stock compensation expense and thus no expense associated with these awards was recognized in the year ended December 31, 2017. The fair value calculations for stock options and ESPP shares used the following assumptions for the years ended December 31: Stock Options ESPP shares 2017 2016 2015 2017 2016 2015 Share price $0.83-2.50 $2.27-5.30 $2.06-2.80 $0.78-4.10 $2.58-4.97 $2.15-3.00 Expected life (in years) 4.19-4.51 4.44-4.46 4.39-4.41 1.5 1.5 1.5 Interest rate 1.8-1.9% 1.1-1.6% 1.3-1.6% 0.5-1.6% 0.3-0.9% 0.1-0.5% Volatility 49.0-57.4% 52.4-54.0% 53.5-54.6% 31.7-105.6% 42.6-46.2% 46.9-55.9% Dividend yield — — — — — — For the years ended December 31, 2017 , 2016 and 2015 , stock-based compensation was recognized and allocated in the Consolidated Statements of Operations as follows (in thousands): For the Years Ended December 31, 2017 2016 2015 Cost of sales $ 157 $ 354 $ 294 Research and development 387 845 867 Selling, general and administrative 1,648 2,598 2,791 Total stock-based compensation expense $ 2,192 $ 3,797 $ 3,952 401(k) Savings Plan The Company established a 401(k) Savings Plan (“401(k) Plan”), a defined contribution plan, as of January 1, 1989 and amended through January 1, 2007, in compliance with Section 401(k) and other related sections of the Internal Revenue Code and corresponding regulations issued by the Department of Treasury and Section 404(c) of Employee Retirement Income Security Act of 1974 (“ERISA”), to provide retirement benefits for its U.S employees. Under the provisions of the plan, eligible employees are allowed pre-tax contributions of up to 30% of their annual compensation or the maximum amount permitted by the applicable statutes. Additionally, eligible employees can elect to make catch-up contributions, within the limits set forth by pre-tax contributions, or to the maximum amount permitted by the applicable statutes. Pursuant to the provisions of the 401(k) Plan, the Company may contribute 50% of pre-tax contributions made by eligible employees, adjusted for loans and withdrawals, up to 6% of annual compensation for each eligible employee. The Company may elect to make supplemental contributions as periodically determined by the Board of Directors at their discretion. The contributions made by the Company on behalf of eligible employees become 100% vested after three years of service, or 33% per year after one year of service. The Company’s total contributions to the 401(k) Plan amounted to $0.9 million , $0.8 million , and $0.7 million in 2017 , 2016 and 2015 . In addition, some of the Company’s employees outside the U.S are covered by various defined contribution plans, in compliance with the statutes of respective countries. The participants pay for the 401(k) Plan administrative expenses. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company is made up of two operating segments: Software-Systems and Hardware Solutions. The Company's Chief Executive Officer, or chief operating decision maker, regularly reviews discrete financial information for purposes of allocating resources and assessing the performance of each segment: • Software-Systems. Software-Systems is comprised of three product lines: FlowEngine, MediaEngine and MobilityEngine, each of which delivers software-centric solutions to network service providers. • Hardware Solutions. Hardware Solutions includes the Company's DCEngine products and legacy embedded product portfolio which includes hardware solutions targeted for service providers. Cost of sales, research and development and selling, general and administrative expenses are allocated to Software-Systems and Hardware Solutions. Expenses, reversals, gains and losses not allocated to Software-Systems or Hardware Solutions include amortization of acquired intangible assets, stock-based compensation, restructuring and other charges, and other one-time non-recurring events. These items are allocated to corporate and other. The Company recorded the following revenues, gross margin and income (loss) from operations by operating segment for the years ended December 31, 2017 , 2016 and 2015 (in thousands): For the Years Ended December 31, 2017 2016 2015 Revenue Software-Systems $ 47,730 $ 56,783 $ 55,006 Hardware Solutions 86,038 155,609 129,587 Total revenues $ 133,768 $ 212,392 $ 184,593 For the Years Ended December 31, 2017 2016 2015 Gross margin Software-Systems $ 25,104 $ 34,488 $ 31,997 Hardware Solutions 3,530 29,660 28,311 Corporate and other (7,864 ) (8,060 ) (8,156 ) Total gross margin $ 20,770 $ 56,088 $ 52,152 For the Years Ended December 31, 2017 2016 2015 Income (loss) from operations Software-Systems $ (6,968 ) $ (18 ) $ (1,900 ) Hardware Solutions (18,571 ) 9,820 9,709 Corporate and other (21,244 ) (19,461 ) (21,874 ) Total loss from operations $ (46,783 ) $ (9,659 ) $ (14,065 ) Assets are not allocated to segments for internal reporting presentations. A portion of depreciation is allocated to the respective segment. It is impracticable for the Company to separately identify fixed assets by segment whose depreciation is included in the measure of segment profit or loss. Geographic Revenues For the Years Ended December 31, 2017 2016 2015 United States $ 59,133 $ 129,562 $ 81,933 Other North America 1,014 219 631 China 10,041 12,129 28,819 Other Asia-Pacific 18,363 25,392 41,836 Total Asia-Pacific 28,404 37,521 70,655 Netherlands 28,124 31,525 14,642 Other EMEA 17,093 13,565 16,732 Total EMEA 45,217 45,090 31,374 Foreign Countries 74,635 82,830 102,660 Total revenues $ 133,768 $ 212,392 $ 184,593 Long-lived assets by Geographic Area For the Years Ended December 31, 2017 2016 Property and equipment, net United States $ 2,974 $ 4,566 Other North America 33 129 China 163 438 India 1,558 1,580 Total Asia-Pacific 1,721 2,018 Foreign Countries 1,754 2,147 Total property and equipment, net $ 4,728 $ 6,713 Intangible assets, net United States $ 6,862 $ 17,575 Total intangible assets, net $ 6,862 $ 17,575 The following customers accounted for more than 10% of total revenues for the years ended December 31: 2017 2016 2015 Philips Healthcare 23.2% 15.7% 10.0% Verizon Wireless 20.8% 35.9% NA Nokia Solutions and Networks 12.5% NA 16.0% The following customers accounted for more than 10% of accounts receivable for the years ended December 31: 2017 2016 Philips Healthcare 19.1% 15.4% Reliance Jio Infocomm 18.7% 32.6% Nokia Solutions and Networks 14.5% NA Verizon Wireless NA 10.4% |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2017 | |
Legal Proceedings Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings In the normal course of business, the Company becomes involved in litigation. As of December 31, 2017 , in the opinion of management, Radisys had no pending litigation that would have a material effect on the Company’s financial position, results of operations or cash flows. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Silicon Valley Bank Credit Agreement On January 3, 2018, concurrently with the Company’s entry into the Note Purchase Agreement and the ABL Credit Agreement described below, the Company repaid in full and terminated the Credit Agreement, dated September 19, 2016, between the Company, as borrower, Silicon Valley Bank, as administrative agent, and the other lenders party thereto, which provided for a three-year revolving credit facility with a $30.0 million revolving loan commitment. ABL Credit Agreement On January 3, 2018, the Company entered into a Loan and Security Agreement (the “ABL Credit Agreement”) between Marquette Business Credit, LLC, as lender (the “Lender”), and the Company, as borrower. The ABL Credit Agreement provides for a revolving credit facility that provides financing of up to $20.0 million , with a $1.5 million sub-limit for letters of credit (the “ABL Facility”). Borrowings under the ABL Facility are subject to a borrowing base, which is a formula based upon certain eligible domestic accounts receivables, plus the lesser of (x) certain eligible foreign accounts receivables and (y) $20.0 million and minus certain established reserves and the amount of certain other funds held in blocked accounts. The ABL Credit Agreement matures on January 3, 2021. Outstanding borrowings under the ABL Facility bear interest at a rate per annum equal to the sum of the applicable base rate, which is the higher of (i) the prime rate then in effect and (ii) LIBOR plus 2.00% , plus, in each case, 1.00% and is payable monthly in arrears. During the continuance of a default or event of default, borrowings under the ABL Facility will bear interest at a rate 2.00% above the otherwise applicable interest rate. Under the ABL Credit Agreement, the Company is required to pay a commitment fee of 0.375% per annum based on the average unused portion of the revolving loan commitment and certain other fees in connection with the origination of the ABL Facility and the issuance of letters of credit. In connection with the early termination of the ABL Facility, the Company will also be required to pay (x) a fee equal to 2.00% of the total revolving loan commitment if termination occurs on or prior to January 3, 2019 and (y) 1.00% of the total revolving loan commitment if termination occurs after January 3, 2019 and on or prior to January 3, 2020. There is no early termination fee if the ABL Facility is terminated after January 3, 2020. The ABL Credit Agreement contains representations and warranties, covenants, indemnities and conditions, in each case, that the Company believes are customary for transactions of this type. Pursuant to the terms of the ABL Credit Agreement, the Company is required to meet certain financial and other restrictive covenants, including maintaining a minimum Fixed Charge Coverage Ratio (as defined in the ABL Credit Agreement) and not exceeding maximum capital expenditures in any fiscal year (each as defined in the ABL Credit Agreement), not exceeding certain thresholds for Cash Loss After Debt Service (as defined in the ABL Credit Agreement). Additionally, the Company is also prohibited from taking certain actions without consent of the Lender, including, without limitation, incurring additional indebtedness, entering into certain mergers or other business combination transactions, disposing of or permitting liens or other encumbrances on the Company's assets and making restricted payments, including cash dividends on shares of the Company's common stock, in each case, except as expressly permitted under the ABL Credit Agreement. The ABL Credit Agreement contains events of default that the Company believes are customary for transactions of this type. If a default occurs and is not cured within the applicable cure period or is not waived, any outstanding obligations under the ABL Credit Agreement may be accelerated. The ABL Facility is guaranteed on a senior secured basis by the Guarantors. The Company’s and the Guarantors’ obligations under the ABL Facility and any guarantee of the ABL Facility (and certain related obligations) are secured by first-priority liens on the Collateral. The Company’s and the Guarantors’ obligations under the ABL Facility and any guarantee of the ABL Facility (and certain related obligations) have first-priority in the waterfall set forth in the Intercreditor Agreement in respect of the liens on the Collateral constituting, among other things, accounts receivable, inventory and cash of the Borrower and the Guarantors (collectively, the “ABL Priority Collateral”). The Company’s and the Guarantors’ obligations under the ABL Facility and any guarantee of the ABL facility (and certain related obligations) have second-priority in the waterfall set forth in the Intercreditor Agreement in respect of the liens on the Term Priority Collateral. As described above, the Company must also maintain minimum cash balances in a restricted deposit account of $4.0 million through June 30, 2018 and $6.0 million on and after July 1, 2018, which will secure both the obligations under the Notes and the ABL Facility. Hale Capital Note Purchase Agreement On January 3, 2018, the Company also entered into a Note Purchase Agreement (the “Note Purchase Agreement”) among the Company, as borrower, the Guarantors (as defined below) from time to time party thereto, the purchasers from time to time party thereto (collectively, the “Purchasers”) and HCP-FVG, LLC, an affiliate of Hale Capital Partners LP, as collateral agent and as a Purchaser ("Hale Capital"). Pursuant to the Note Purchase Agreement, the Company issued and sold to the Purchasers senior secured promissory notes in an aggregate original principal amount of $17.0 million (the "Notes"). The Notes bear interest at a rate equal to the greater of 4.50% or the prime rate, plus 5.75% (currently 10.25% per year), payable monthly in arrears. For any interest payment date occurring on or prior to August 31, 2018, the monthly interest payment will be paid in the form of additional Notes (unless an event of default has occurred and is continuing, in which case all interest shall be paid in cash). Thereafter, the interest will be payable monthly in cash in arrears. Interest on the Notes will be computed on the basis of a 360-day year comprising twelve 30-day months. During the continuance of a default or event of default, the Notes will bear interest at a rate of 5.00% above the otherwise applicable interest rate. The maturity date of the Notes is January 3, 2021 (the “Term Maturity Date”). The Company is required to redeem the Notes in principal installments of (i) $1.5 million payable on August 31, 2018, (ii) $1.75 million payable on the last day of the fiscal quarter ending September 30, 2018, (iii) $ 1.25 million payable on the last day of the fiscal quarter ending December 31, 2018 and (iv) $1.5 million payable on the last day of each fiscal quarter beginning with the fiscal quarter ending March 31, 2019 and continuing through the last full fiscal quarter prior to the Term Maturity Date. In addition, the Company will be required to redeem all of the Notes upon a change of control and will be required to make certain mandatory redemptions of the Notes with (x) the net proceeds of any voluntary or involuntary sale or disposition of assets (including casualty losses and condemnation awards, subject to certain exceptions) and (y) 33% of the net proceeds from the issuance or sale of any equity (unless an event of default exists under the Note Purchase Agreement, in which case it will be 100% of the net proceeds), subject to certain exceptions and limitations. The Company may also redeem the Notes in whole or in part at any time. All redemptions of the Notes (whether mandatory, optional or as result of the acceleration of the Notes) are subject to a prepayment fee as follows: (i) if a prepayment is on or before January 3, 2020, 5% of the principal prepaid; and (ii) if prepayment is on or after January 4, 2020 and on or before January 2, 2021, 3% of the principal prepaid. The Note Purchase Agreement contains representations and warranties, covenants, indemnities and conditions, in each case, that the Company believes are customary for transactions of this type. Under the Note Purchase Agreement, the Company is required to meet certain financial and other restrictive covenants, including maintaining a minimum Coverage Ratio and Total Liquidity (each as defined in the Note Purchase Agreement), maintaining the amount of negative cumulative cash flow from operations below an agreed threshold, maintaining certain minimum levels of revenue and not exceeding a maximum long-term deferred revenue threshold. Additionally, the Company and its subsidiaries are also prohibited from taking certain actions without consent of the Purchasers, including, without limitation, incurring additional indebtedness, entering into certain mergers or other business combination transactions, disposing of or permitting liens or other encumbrances on their assets, making restricted payments, including cash dividends on shares of the Company's common stock, and other investments and making capital expenditures in excess of certain thresholds, in each case, except as otherwise expressly permitted under the Note Purchase Agreement. The Note Purchase Agreement contains events of default that the Company believes are customary for transactions of this type. If a default occurs and is not cured within the applicable cure period or is not waived, any outstanding obligations under the Note Purchase Agreement may be accelerated. The Notes are guaranteed on a senior secured basis by the Company’s U.S. subsidiary, Radisys International LLC (“Radisys International”). Each of its future material domestic subsidiaries will also be required to guarantee the Notes on a senior secured basis (collectively with Radisys International, the “Guarantors”). The Company’s and the Guarantors’ obligations under the Notes and any guarantee of the Notes (and certain related obligations) are secured by substantially all of the Company’s and the Guarantors’ tangible and intangible assets, subject to specified exceptions (the “Collateral”). The Company’s and the Guarantors’ obligations under the Notes and any guarantee of the Notes (and certain related obligations) have first-priority in the waterfall set forth in an intercreditor agreement entered into in connection with the Notes and the ABL Facility (the “Intercreditor Agreement”) in respect of the liens on the Collateral other than the ABL Priority Collateral (the “Term Priority Collateral”). The Company’s and the Guarantors’ obligations under the Notes and any guarantee of the Notes (and certain related obligations) have second-priority in the waterfall set forth in the Intercreditor Agreement in respect of the liens on the ABL Priority Collateral. The Company must also maintain at least $4.0 million in cash in a restricted deposit account at UMB Bank, n.a. or at a restricted deposit account designated by Hale Capital through June 30, 2018 and at least $6.0 million in cash in a restricted deposit account at UMB Bank, n.a. or at a restricted deposit account designated by Hale Capital on and after July 1, 2018. The amount in the restricted account will secure both the obligations under the Notes and the ABL Facility. The Company paid approximately $2.0 million in debt issuance fees which will be capitalized and expensed over the term of the Note Purchase Agreement. Hale Capital Warrants In connection with the issuance of the Notes, on January 3, 2017, the Company issued to an affiliate of Hale Capital and another purchaser warrants to purchase up to 6,006,667 shares of common stock at an exercise price equal to $1.00 per share on January 3, 2018 (the “Warrants”). The exercise price of the Warrants and the number of shares of common stock to be purchased upon exercise of the Warrants is subject to adjustment upon certain events, including certain price-based anti-dilution adjustments in the event of future issuances of equity securities. The term of the Warrants is seven years from January 3, 2018. The Company relied on the exemption from registration contained in Section 4(2) of the Securities Act in connection with the issuance of the Warrants. The Company has agreed to register the shares of common stock underlying the Warrants for resale under the Securities Act of 1933, as amended (the "Securities Act"). |
Significant Accounting Polici27
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation and Presentation The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company accounts and transactions have been properly eliminated in consolidation. |
Management Estimates | Management Estimates The Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these Consolidated Financial Statements requires management to make estimates and judgments that may affect the amounts reported in its Consolidated Financial Statements and accompanying notes. Actual results may differ from these estimates under different assumptions or conditions. |
Revenue Recognition | Revenue Recognition Multiple Element Arrangements A significant portion of the Company's revenue relates to product sales for which revenue is recognized upon shipment, with limited judgment required related to product returns. Title transfer for substantially all product sales occurs upon delivery of products to our customer's freight forwarders. The software elements included in certain components of Hardware Solutions systems, FlowEngine and MediaEngine products are considered to be functioning together with the non-software elements to provide the tangible product's essential functionality and these arrangements generally include multiple elements such as hardware, technical support services as well as software upgrades or enhancements on a when and if available basis. Arrangements including multiple elements require significant management judgment to evaluate the effective terms of agreements, our performance commitments and determination of fair value of the various deliverables under the arrangement. For hardware sales which may include software, ASC 605 Revenue Recognition provides a fair value hierarchy in order to determine the appropriate relative fair value for each element of an arrangement. When available, the Company uses vendor specific objective evidence (“VSOE”) to determine the estimated fair value of each element of the arrangement. In the absence of VSOE or third−party evidence ("TPE") for a delivered element, the Company then uses an estimated selling price in order to determine fair value. Estimated selling prices represent the Company's best estimate of the price at which it would transact if the deliverables were sold on a standalone basis. For technical support services, the Company generally determines its selling price based on VSOE as supported by substantive renewal rates in the related service agreements. In certain instances where VSOE cannot be established, the Company then relies upon its estimated selling price for such deliverables as TPE is generally not available due to the unique company-specific terms surrounding such service agreements. In establishing an appropriate estimated selling price for these technical support agreements, the Company considered entity specific factors such as its historical and projected costs, historical and projected revenues, and profit objectives. The Company also considered market specific factors when establishing reasonable profit objectives. Hardware Revenue from hardware products is recognized in accordance with ASC 605 Revenue Recognition . Under the Company’s standard terms and conditions of sale, the Company transfers title and risk of loss to the customer at the time product is shipped to the customer and revenue is recognized accordingly, unless customer acceptance is uncertain or significant obligations remain. The Company reduces revenue for estimated customer returns for rotation rights according to agreements with the Company's distributors. The amount of revenues derived from distributors as a percentage of revenues was 4.6% , 4.6% and 15.1% for the years ended December 31, 2017 , 2016 and 2015 . Revenues associated with distributors are generally recognized upon shipment as the Company has established a sell-to model with distributors. The Company accrues the estimated cost of product warranties, based on historical experience at the time the Company recognizes revenue. Software licenses and royalties Revenue from software licenses and royalties is recognized in accordance with ASC 985 Software . The Company recognizes software license revenue at the time of shipment or upon delivery of the software master provided that the revenue recognition criteria have been met and VSOE exists to allocate the total fee to all undelivered elements of the arrangement. The Company defers revenue on arrangements, including specified software upgrades, until the specified upgrade has been delivered. Revenue from customers for prepaid, non-refundable software royalties is recorded when the revenue recognition criteria have been met. Revenue for non-prepaid royalties is recognized at the time the Company receives reporting from customers as the Company has not established an ability to reliably estimate customer royalties prior to time contractually obligated reporting is received. Technical support services Technical support services revenue is recognized as earned on the straight-line basis over the term of the contract. The fair value of the Company’s post-contract support has been determined by renewal rates within the Company’s support agreements, the actual amounts charged to customers for renewal of their support services are based on an estimated selling price. Professional and other services Professional services revenue is recognized upon completion of certain contractual milestones and customer acceptance of the services rendered. Other services revenues include hardware repair services and custom software implementation projects. Hardware repair services revenues are recognized when the services are complete. Software implementation revenues are recognized upon completion of certain contractual milestones and customer acceptance of the services rendered or as services are performed under the percentage-of-completion method based on labor hours when the Company is reasonably able to estimate the total effort required to complete the contract. Deferred revenue Deferred revenue represents amounts received or billed for the following types of transactions: • Undelivered elements of an arrangement —Certain software sales include specified upgrades and enhancements to an existing product. Revenue for such products is deferred until the future obligation is fulfilled. Additionally, certain hardware shipments that have been delivered are deferred when customer acceptance is uncertain and revenue is recognized upon customer acceptance. • Technical support services— The Company has a number of technical support agreements with customers for hardware and software maintenance. Generally, these services are billed in advance and recognized over the term of the agreement . Cost of sales associated with deferred revenue is also deferred. These deferred costs are recognized when the associated revenue is recognized. |
Capitalized Software Development Costs | Capitalized Software Development Costs The Company does not capitalize internal software development costs incurred in the production of computer software as the Company does not incur any material costs between the point of technological feasibility and general release of the product to customers in the future. As such software development costs are expensed as research and development (“R&D”) costs. |
Shipping Costs | Shipping Costs The Company’s shipping and handling costs for product sales are included under cost of sales for all periods presented. For the years ended December 31, 2017 , 2016 and 2015 shipping and handling costs represented approximately 1% to 2% of total cost of sales. |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. Advertising costs consist primarily of media, display, web, and print advertising, along with trade show costs and product demos and brochures. For the years ended December 31, 2017 , 2016 and 2015 advertising costs were $1.1 million , $1.1 million and $0.9 million . |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are stated at invoice amount net of an allowance for doubtful accounts and do not bear interest. An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of customers to make required payments. Management reviews the allowance for doubtful accounts quarterly for reasonableness and adequacy. If the financial condition of the Company’s customers were to deteriorate resulting in an impairment of their ability to make payments, additional provisions for uncollectible accounts receivable may be required. In the event the Company determined that a smaller or larger reserve was appropriate, it would record a credit or a charge in the period in which such determination is made. In addition to specific customer reserves, the Company maintains a non-specific bad debt reserve for all customers. This non-specific bad debt reserve is calculated based on the Company's historical pattern of bad debt write-offs as a percentage of gross accounts receivable for the current rolling eight quarters, which percentage is then applied to the current gross accounts receivable. The Company’s customers are concentrated in the technology industry and the collection of its accounts receivable are directly associated with the operational results of the industry. |
Inventories | Inventories Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) basis, or market, net of an inventory valuation allowance. The Company uses a standard cost methodology to determine the cost basis for its inventories. The Company evaluates inventory on a quarterly basis for obsolete or slow-moving items to ascertain if the recorded allowance is reasonable and adequate. Inventory is written down for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. The Company's inventory valuation allowances establish a new cost basis for inventory. |
Long-Lived Assets | Long-Lived Assets Long-lived assets, such as property and equipment and definite-life intangible assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company assesses the impairment of the assets based on the undiscounted future cash flow the assets are expected to generate compared to the carrying value of the assets. If the carrying amount of the assets is determined not to be recoverable, a write-down to fair value is recorded. Management estimates future cash flows using assumptions about expected future operating performance. Management’s estimates of future cash flows may differ from actual cash flow due to, among other things, technological changes, economic conditions or changes to the Company’s business operations. Intangible assets with estimable useful lives are amortized on a straight-line basis over their respective estimated life and reviewed for impairment when certain triggering events suggest impairment has occurred. As part of the DCEngine restructuring events in 2017, it was determined a triggering event occurred for this asset group. Through a step 1 analysis the Company concluded no impairment was necessary. No triggering event occurred in any other asset group. The Company determined that no triggering events occurred in 201 |
Property and Equipment | Property and Equipment Property and equipment is recorded at historical cost and is depreciated or amortized on a straight-line basis according to the table below. In certain circumstances where the Company is aware that an asset’s life differs from the general guidelines set forth in its policy, management adjusts its depreciable life accordingly, to ensure expense is being recognized over the appropriate future periods. Ordinary maintenance and repair expenses are expensed when incurred. Machinery, equipment, furniture and fixtures 5 years Software, computer hardware and manufacturing test fixtures 3 years Engineering demonstration products and samples 1 year Leasehold improvements Lesser of the lease term or estimated useful lives |
Leases | Leases The Company leases all of its facilities, certain office equipment and vehicles under non-cancelable operating leases that expire at various dates through 2022 , along with options that permit renewals for additional periods. Rent escalations are considered in the determination of straight-line rent expense for operating leases. Leasehold improvements made at the inception of or during the lease are amortized over the shorter of the asset life or the lease term. |
Accrued Restructuring | The Company has engaged, and may continue to engage, in restructuring and other actions, which require the Company to make significant estimates in several areas including: realizable values of assets made redundant or obsolete; expenses for severance and other employee separation costs; the ability and timing to generate sublease income, as well as the Company's ability to terminate lease obligations at the amounts estimated; and other costs. Should the actual amounts differ from the estimates, the amount of the restructuring and other charges could be materially impacted. Restructuring and other charges may include costs incurred for employee severance, acquisition or divestiture activities, excess facility costs, certain legal costs, asset related charges and other expenses associated with business integration or restructuring activities. Costs associated with exit or disposal activities are recognized when probable and estimable because the Company has a history of paying severance benefits. |
Warranty | Warranty The Company provides for the estimated cost of product warranties at the time it recognizes revenue. Products are generally sold with warranty coverage for a period of 12 or 24 months after shipment. On a quarterly basis the Company assesses the reasonableness and adequacy of the warranty liability and adjusts such amounts as necessary. Warranty reserves are included in other accrued liabilities and other long-term liabilities in the accompanying Consolidated Balance Sheets as of December 31, 2017 and 2016 . |
Research and Development | Research and Development Research, development and engineering ("R&D") costs are expensed as incurred. R&D expenses consist primarily of salary, bonuses and benefits for product development staff, and cost of design and development supplies and equipment, net of reimbursements for non-recurring engineering services. |
Income Taxes | Income Taxes Income tax accounting requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities. Valuation allowances are established to reduce deferred tax assets if it is “more likely than not” that all or a portion of the asset will not be realized due to inability to generate sufficient taxable income in the relevant period to utilize the deferred tax asset. Tax law and rate changes are reflected in the period such changes are enacted. The Company recognizes uncertain tax positions after evaluating whether certain tax positions are more likely than not to be sustained by taxing authorities. In addition, the Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company reports accumulated other comprehensive income (loss) in its Consolidated Balance Sheets. Comprehensive income (loss) includes net income (loss), translation adjustments and unrealized gains (losses) on hedging instruments net of their tax effect. The cumulative translation adjustments consist of unrealized gains (losses) for foreign currency translation. |
Stock-Based Compensation | Stock-Based Compensation The Company measures stock-based compensation at the grant date, based on the fair value of the award, and recognizes expense on a straight-line basis over the employee's requisite service period. For performance-based restricted stock unit awards ("PRSUs"), the requisite service period is equal to the period of time over which performance objectives underlying the award are expected to be achieved and vested. The number of shares that ultimately vest depends on the achievement of certain performance criteria over the measurement period. For non-market based performance-based restricted stock, quarterly, we reevaluate the period during which the performance objective will be met and the number of shares expected to vest. The amount of quarterly expense recorded each period is based on our estimate of the number of awards that will ultimately vest. The Company estimates the fair value of stock options and purchase rights under our employee stock purchase plans using a Black-Scholes option-pricing model. The Black-Scholes option-pricing model incorporates several highly subjective assumptions including expected volatility, expected term and interest rates. In reaching our determination of expected volatility, we use the historic volatility of our shares of common stock. We base the expected term of our stock options on historic experience. The expected term for purchase rights under our employee stock plans is based on the 18 month offering period. The risk-free rate is based on the U.S. Treasury constant maturities in effect at the time of grant for the expected term of the option or share. The calculation includes several assumptions that require management's judgment. The expected term of the option or share is determined based on assumptions about patterns of employee exercises and represents a probability-weighted average time-period from grant until exercise of stock options, subject to information available at time of grant. Determining expected volatility generally begins with calculating historical volatility for a similar long-term period and then considers the ways in which the future is reasonably expected to differ from the past. The grant-date fair value of the PRSUs awarded in 2015 was calculated using a Monte Carlo simulation consistent with the fair value principles of Topic 718 since these awards vest based upon market conditions. Expense is recognized over a derived service period determined by the Monte Carlo simulation. If the conditions of PRSUs are met before the derived service period ends, all remaining expense will be recognized in the period the conditions are met. The input factors used in the valuation model are based on subjective future expectations combined with management's judgment. If there is a difference between the assumptions used in determining stock-based compensation cost and the actual factors which become known over time, we may change the input factors used in determining stock-based compensation costs. These changes may materially impact the results of operations in the event such changes are made. In addition, if we were to modify any awards, additional charges would be taken. See Note 16 — Employee Benefit Plans for a further discussion on stock-based compensation. |
Net Income (Loss) Per Share | Net loss per share Basic loss per share amounts are computed based on the weighted average number of common shares outstanding. Diluted net loss per share incorporates the incremental shares issuable upon the assumed exercise of stock options and incremental shares associated with the assumed vesting of restricted stock. The Company's convertible notes were fully repaid in 2015. |
Derivatives | Derivatives The Company hedges exposure to changes in exchange rates from the US Dollar to the Indian Rupee. These derivatives are recognized on the balance sheet at their fair value. Unrealized gain positions are recorded as other current assets and unrealized loss positions are recorded as other accrued liabilities. Changes in the fair values of the outstanding derivatives that are highly effective are recorded in other comprehensive loss until net income (loss) is affected by the variability of the cash flows of the hedged transaction. Hedge ineffectiveness could result when the amount of the Company’s hedge contracts exceed the Company’s forecasted or actual transactions for which the hedge contracts were designed to hedge. Once a hedge contract matures the associated gain (loss) on the contract will remain in accumulated other comprehensive income (loss) until the underlying hedged transaction affects net income (loss), at which time the gain (loss) will be recorded to the expense line item being hedged, which is primarily cost of sales, research and development and selling, general and administrative. The Company only enters into derivative contracts in order to hedge foreign currency exposure. If the Company entered into a contract for speculative reasons or if the Company’s current hedge position becomes ineffective, changes in the fair values of the derivatives would be recognized in earnings in the current period. |
Foreign Currency Translation | Foreign currency translation Assets and liabilities of international operations using a functional currency other than the U.S. dollar are translated into U.S. dollars at exchange rates as of December 31, 2017 and 2016 . Income and expense accounts are translated into U.S. dollars at the average daily rates of exchange prevailing during the period. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component in shareholders’ equity. Foreign exchange transaction gains and losses are included in other income (expense), net, in the Consolidated Statements of Operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-02, "Leases," which requires the Company as the lessee to recognize most leases on the balance sheet thereby resulting in the recognition of lease assets and liabilities for those leases currently classified as operating leases. The accounting for leases where the Company is the lessor remains largely unchanged. ASU 2016-02 is effective for us beginning January 1, 2019 with early adoption permitted. While the Company is currently assessing the impact ASU 2016-02 will have on the consolidated financial statements, the Company expects the primary impact to the consolidated financial position upon adoption will be the recognition, on a discounted basis, of the Company's minimum commitments under noncancelable operating leases on the consolidated balance sheets resulting in the recording of right of use assets and lease obligations. Our current minimum commitments under noncancelable operating leases are disclosed in Note 13. In May 2014, FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," that will supersede all existing revenue recognition guidance under U.S. GAAP. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which was issued in August 2015, revised the effective date for this ASU to annual and interim periods beginning on or after December 15, 2017. In accordance with this standard, the Company will adopt the new standard effective January 1, 2018. The new standard permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The Company will adopt using the modified retrospective approach. |
Significant Accounting Polici28
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment | Machinery, equipment, furniture and fixtures 5 years Software, computer hardware and manufacturing test fixtures 3 years Engineering demonstration products and samples 1 year Leasehold improvements Lesser of the lease term or estimated useful lives Property and equipment consisted of the following (in thousands): December 31, December 31, Manufacturing equipment $ 15,456 $ 24,982 Office equipment and software 18,455 23,090 Leasehold improvements 2,838 2,964 Property and equipment, gross 36,749 51,036 Less: accumulated depreciation and amortization (32,021 ) (44,323 ) Property and equipment, net $ 4,728 $ 6,713 |
Fair Value of Financial Instr29
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following tables summarizes the fair value measurements as of December 31, 2017 and December 31, 2016 for the Company's financial instruments (in thousands): Fair Value Measurements as of December 31, 2017 Total Level 1 Level 2 Level 3 Foreign currency forward contracts 508 — 508 — Fair Value Measurements as of December 31, 2016 Total Level 1 Level 2 Level 3 Foreign currency forward contracts 94 — 94 — |
Accounts Receivable and Other30
Accounts Receivable and Other Receivables (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts receivable balances consisted of the following (in thousands): December 31, December 31, Accounts receivable, gross $ 32,970 $ 38,433 Less: allowance for doubtful accounts (150 ) (55 ) Accounts receivable, net $ 32,820 $ 38,378 Accounts receivable at December 31, 2017 and 2016 consisted of sales to the Company’s customers which are generally based on standard terms and conditions. The Company recorded the following activity in allowance for doubtful accounts (in thousands): For the Years Ended December 31, 2017 2016 2015 Allowance for doubtful accounts, beginning of the year $ 55 $ 103 $ 124 Charged to costs and expenses 153 (34 ) (17 ) Less: write-offs, net of recoveries (58 ) (14 ) (4 ) Remaining allowance, end of the year $ 150 $ 55 $ 103 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consisted of the following (in thousands): December 31, December 31, Raw materials $ 23,269 $ 24,805 Work-in-process — 12 Finished goods 4,012 5,005 27,281 29,822 Less: inventory valuation allowance (23,016 ) (9,801 ) Inventories, net $ 4,265 $ 20,021 |
Charges Associated with Inventory | The Company recorded the following charges associated with the valuation of inventory, inventory deposit and the adverse purchase commitment liability for the years ended December 31 (in thousands): 2017 2016 2015 Inventory, net $ 15,050 $ 6,120 $ 1,447 Adverse purchase commitments (A) 2,913 (1,908 ) 1,831 Net charges (B) $ 17,963 $ 4,212 $ 3,278 |
Change in Inventory Valuation Allowance | The following is a summary of the change in the Company’s inventory valuation allowance for the years ended December 31 (in thousands): 2017 2016 Inventory valuation allowance, beginning of the year $ 9,801 $ 5,317 Usage: Inventory scrapped (870 ) (1,636 ) Inventory utilized (882 ) (954 ) Subtotal—usage (1,752 ) (2,590 ) Write-downs of inventory valuation and transfers to/from other liabilities (A) 14,967 7,074 Inventory valuation allowance, end of the year $ 23,016 $ 9,801 (A) Transfer to/from other liabilities is related to obsolete inventory purchased from contract manufacturers during the year which was previously reserved for as an adverse purchase commitment. (Note 9— Other Accrued and Other Long-Term Liabilities and Note 13— Commitments and Contingencies. ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Machinery, equipment, furniture and fixtures 5 years Software, computer hardware and manufacturing test fixtures 3 years Engineering demonstration products and samples 1 year Leasehold improvements Lesser of the lease term or estimated useful lives Property and equipment consisted of the following (in thousands): December 31, December 31, Manufacturing equipment $ 15,456 $ 24,982 Office equipment and software 18,455 23,090 Leasehold improvements 2,838 2,964 Property and equipment, gross 36,749 51,036 Less: accumulated depreciation and amortization (32,021 ) (44,323 ) Property and equipment, net $ 4,728 $ 6,713 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The following tables summarize the Company’s total purchased intangible assets (in thousands): Gross Accumulated Amortization Net December 31, 2017 Purchased technology $ 114,754 $ (110,674 ) $ 4,080 Patents 6,472 (6,472 ) — Customer lists 37,000 (37,000 ) — Trade names 11,536 (8,754 ) 2,782 Total intangible assets $ 169,762 $ (162,900 ) $ 6,862 December 31, 2016 Purchased technology $ 114,754 $ (102,967 ) $ 11,787 Patents 6,472 (6,472 ) — Customer lists 37,000 (34,784 ) 2,216 Trade names 11,536 (7,964 ) 3,572 Backlog $ 2,127 $ (2,127 ) — Total intangible assets $ 171,889 $ (154,314 ) $ 17,575 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future amortization expense of purchased intangible assets as of December 31, 2017 is as follows (in thousands): For the Years Ending December 31, Estimated Intangible Amortization Amount 2018 $ 4,870 2019 790 2020 790 2021 412 Thereafter — Total estimated future amortization expense $ 6,862 |
Restructuring and Other Charg34
Restructuring and Other Charges (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table summarizes the Company's restructuring and other charges as presented in the Consolidated Statement of Operations (in thousands): December 31, 2017 December 31, 2016 December 31, 2015 Employee-related restructuring expenses $ 5,504 $ 2,771 $ 3,890 Lease abandonment expenses 57 — 392 Integration-related, legal and other non-recurring expenses 1,035 106 513 Fixed assets 1,743 40 225 Restructuring and other charges, net $ 8,339 $ 2,917 $ 5,020 |
Schedule of Restructuring Reserve by Type of Cost | Accrued restructuring, which is included in other accrued liabilities and other long-term liabilities in the accompanying Consolidated Balance Sheets as of December 31, 2017 and 2016 , consisted of the following (in thousands): Severance, payroll taxes and other employee benefits Facility reductions Total Balance accrued as of December 31, 2016 $ 1,347 $ 90 $ 1,437 Additions 5,670 57 5,727 Reversals (166 ) — (166 ) Expenditures (4,077 ) (147 ) (4,224 ) Balance accrued as of December 31, 2017 $ 2,774 $ — $ 2,774 |
Other Accrued and Other Long-35
Other Accrued and Other Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure | Other accrued liabilities consisted of the following (in thousands): December 31, December 31, Accrued warranty reserve $ 879 $ 1,466 Adverse purchase commitments 3,263 268 Accrued restructuring 2,774 1,437 Income tax payable 199 152 Other 3,290 4,248 Other accrued liabilities $ 10,405 $ 7,571 |
Schedule of Other Long-term Liabilities | Other long-term liabilities consisted of the following (in thousands): December 31, December 31, Long-term income tax payable $ 5,341 $ 3,047 Long-term deferred revenue 1,108 2,380 Accrued warranty reserve 245 355 Other 172 184 Other long-term liabilities $ 6,866 $ 5,966 |
Convertible Debt (Tables)
Convertible Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table outlines the effective interest rate, contractually stated interest costs, and costs related to the amortization of issuance costs for the Company's 2015 convertible senior notes: Years Ended December 31, 2017 2016 2015 Effective interest rate of 2015 convertible senior notes NA NA 4.50% Contractually stated interest costs NA NA $101 Amortization of interest costs NA NA $7 |
Hedging (Tables)
Hedging (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Foreign Exchange Contracts, Statement of Financial Position | A summary of the aggregate contractual or notional amounts, balance sheet location and estimated fair values of derivative financial instruments designated as cash flow hedges at December 31, 2017 is as follows (in thousands): Contractual / Notional Amount Consolidated Balance Sheet Classification Estimated Fair Value Asset (Liability) Foreign currency forward exchange contracts $ 13,018 Other assets $ 508 $ — A summary of the aggregate contractual or notional amounts, balance sheet location and estimated fair values of derivative financial instruments designated as cash flow hedges at December 31, 2016 is as follows (in thousands): Contractual / Notional Amount Consolidated Balance Sheet Classification Estimated Fair Value Asset (Liability) Foreign currency forward exchange contracts $ 16,166 Other assets $ 94 $ — |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | There were no ineffective hedges for the years ended December 31, 2017 , 2016 and 2015 . The following table summarizes the effect of derivative instruments on the Consolidated Statements of Operations as follows (in thousands): December 31, 2017 December 31, 2016 December 31, 2015 Cost of sales $ 152 $ 281 $ 187 Research and development 211 436 305 Selling, general and administrative 70 164 135 Total derivative instrument expense $ 433 $ 881 $ 627 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The following is a summary of changes to comprehensive income (loss) associated with the Company's hedging activities (in thousands): For the Years Ended December 31, 2017 2016 2015 Beginning balance of unrealized loss on forward exchange contracts $ (527 ) $ (819 ) $ (752 ) Other comprehensive loss before reclassifications (83 ) (589 ) (694 ) Amounts reclassified from other comprehensive income 433 881 627 Other comprehensive income (loss) 350 292 (67 ) Ending balance of unrealized loss on forward exchange contracts $ (177 ) $ (527 ) $ (819 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments with initial or remaining non-cancelable lease terms in excess of one year, at December 31, 2017 , were as follows (in thousands): For the Years Ending December 31, Future Minimum Lease Payments 2018 2,242 2019 1,965 2020 1,146 2021 662 2022 221 Thereafter — Total future minimum lease commitments $ 6,236 |
Schedule of Product Warranty Liability | For the Years Ended December 31, 2017 2016 Warranty liability balance, beginning of the year $ 1,821 $ 2,553 Product warranty accruals 305 1,116 Adjustments for payments made (1,002 ) (1,848 ) Warranty liability balance, end of the year $ 1,124 $ 1,821 |
Basic and Diluted Net IncomeP39
Basic and Diluted Net IncomePer Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of the numerator and the denominator used to calculate basic and diluted loss per share is as follows (in thousands, except per share amounts): For the Years Ended December 31, 2017 2016 2015 Numerator Net loss $ (52,604 ) $ (10,251 ) $ (14,678 ) Denominator—Basic Weighted average shares used to calculate net loss per share, basic 38,994 37,668 36,789 Denominator—Diluted Weighted average shares used to calculate net loss per share, basic 38,994 37,668 36,789 Effect of dilutive restricted stock (A) — — — Effect of dilutive stock options (A) — — — Weighted average shares used to calculate net loss per share, diluted 38,994 37,668 36,789 Net loss per share: Basic $ (1.35 ) $ (0.27 ) $ (0.40 ) Diluted $ (1.35 ) $ (0.27 ) $ (0.40 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The following shares, by equity award type, were excluded from the calculation, as their effect would have been anti-dilutive (in thousands): For the Years Ended December 31, 2017 2016 2015 Stock options 3,163 3,897 2,966 Restricted stock units 428 100 151 Performance based restricted stock units (B) 621 837 1,625 Total equity award shares excluded 4,212 4,834 4,742 (B) Performance based restricted stock units are presented based on attainment of 100% of the performance goals being met. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Domestic and foreign pre-tax income (loss) is as follows (in thousands): For the Years Ended December 31, 2017 2016 2015 Domestic $ (53,958 ) $ (12,040 ) $ (15,822 ) Foreign 5,081 4,223 2,886 Total pre-tax loss $ (48,877 ) $ (7,817 ) $ (12,936 ) The income tax provision consists of the following (in thousands): For the Years Ended December 31, 2017 2016 2015 Current provision: Federal $ — $ — $ — State 73 78 30 Foreign 3,692 2,225 1,772 Total current provision 3,765 2,303 1,802 Deferred provision (benefit): Federal (309 ) (86 ) 35 State (10 ) (4 ) 2 Foreign 281 221 (97 ) Total deferred provision (38 ) 131 (60 ) Total income tax provision $ 3,727 $ 2,434 $ 1,742 |
Schedule of Effective Income Tax Rate Reconciliation | The income tax provision (benefit) differs from the amount computed by applying the statutory federal income tax rate to pretax income as a result of the following differences (dollar amounts in thousands): For the Years Ended December 31, 2017 2016 2015 $ % $ % $ % Statutory federal tax (benefit) rate $ (17,107 ) 35.0 % $ (2,736 ) 35.0 % $ (4,526 ) 35.0 % Increase (decrease) in rates resulting from: State taxes (749 ) 1.5 (67 ) 0.9 609 (4.7 ) Foreign dividends and unremitted earnings (638 ) 1.3 1,745 (22.3 ) 1,493 (11.5 ) Impact from U.S. tax reform 36,311 (74.3 ) — — — — Tax audit settlement 1,497 (3.1 ) — — — — Valuation allowance (16,363 ) 33.5 1,596 (20.4 ) 2,456 (19.0 ) Taxes on foreign income that differ from U.S. tax rate (1,361 ) 2.8 (901 ) 11.5 (405 ) 3.1 Executive Compensation limitation 17 — 1,005 (12.9 ) — — Non-deductible stock-based compensation expense 567 (1.2 ) 135 (1.7 ) 1,104 (8.5 ) Expiration of attributes 1,397 (2.9 ) 1,478 (18.9 ) 893 (6.9 ) Uncertain tax positions 302 (0.6 ) 120 (1.5 ) 435 (3.4 ) Other (146 ) 0.4 59 (0.8 ) (317 ) 2.4 Effective tax rate $ 3,727 (7.6 )% $ 2,434 (31.1 )% $ 1,742 (13.5 )% |
Schedule of Deferred Tax Assets and Liabilities | The components of deferred taxes consist of the following (in thousands): December 31, December 31, Deferred tax assets: Accrued warranty $ 256 $ 657 Inventory 6,114 3,631 Net operating loss carryforwards 39,534 57,294 Tax credit carryforwards 20,857 22,075 Stock-based compensation 978 1,995 Fixed assets 2,358 1,808 Goodwill and other identified intangibles 1,073 1,603 Deferred revenue 1,201 2,906 Subsidiary service accruals 4,870 1,702 Other 1,308 2,082 Total deferred tax assets 78,549 95,753 Less: valuation allowance (77,437 ) (88,566 ) Net deferred tax assets 1,112 7,187 Deferred tax liabilities: Intangible assets — (5,603 ) Other (325 ) (467 ) Total deferred tax liabilities (325 ) (6,070 ) Total net deferred tax assets $ 787 $ 1,117 |
Schedule of Unrecognized Tax Benefits Roll Forward | The Company’s total amounts of unrecognized tax benefits at the beginning and end of the period are as follows (in thousands): Total Balance as of December 31, 2015 $ 3,680 Additions based on tax positions related to the current year 245 Additions for tax positions of prior years 24 Reductions for tax positions of prior years (240 ) Reductions as a result of a lapse of applicable statute of limitations (80 ) Reductions due to settlements (6 ) Other $ (74 ) Balance as of December 31, 2016 $ 3,549 Additions based on tax positions related to the current year 1,124 Additions for tax positions of prior years 146 Reductions for tax positions of prior years (278 ) Reductions as a result of a lapse of applicable statute of limitations (56 ) Other 97 Balance as of December 31, 2017 $ 4,582 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes stock option activity for 2017 (in thousands, except average prices and weighted average remaining contractual lives): Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance, December 31, 2016 3,897 $ 3.81 4.58 $ 3,642 Granted 155 1.15 Exercised (50 ) 2.38 Forfeited (447 ) 4.16 Expired (392 ) 5.85 Balance, December 31, 2017 3,163 $ 3.40 3.06 $ 26 Options exercisable at December 31, 2017 2,648 $ 3.48 2.59 $ 4 Options vested as of December 31, 2017 and expected to vest after December 31, 2017 3,163 $ 3.40 3.06 $ 26 |
Schedule of Nonvested Share Activity | The following table summarizes non-vested stock activity for 2017 : Restricted Stock Units Performance Stock Units Restricted Shares Weighted Average Fair Value Restricted Shares Weighted Average Fair Value Balance, December 31, 2016 100 $ 3.68 837 $ 4.07 Granted 687 3.59 690 3.76 Vested (150 ) 3.95 (380 ) 4.12 Forfeited (209 ) 3.81 (525 ) 4.03 Balance, December 31, 2017 428 $ 3.67 622 $ 3.72 |
Schedule of Share-based Compensation, Employee Stock Purchase Plan, Activity | The following table summarizes shares issued under the ESPP (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Shares issued pursuant to the ESPP 233 184 175 Cash received for the purchase of shares pursuant to the ESPP $ 398 $ 417 $ 322 Weighted average purchase price per share $ 1.71 $ 2.26 $ 1.84 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value calculations for stock options and ESPP shares used the following assumptions for the years ended December 31: Stock Options ESPP shares 2017 2016 2015 2017 2016 2015 Share price $0.83-2.50 $2.27-5.30 $2.06-2.80 $0.78-4.10 $2.58-4.97 $2.15-3.00 Expected life (in years) 4.19-4.51 4.44-4.46 4.39-4.41 1.5 1.5 1.5 Interest rate 1.8-1.9% 1.1-1.6% 1.3-1.6% 0.5-1.6% 0.3-0.9% 0.1-0.5% Volatility 49.0-57.4% 52.4-54.0% 53.5-54.6% 31.7-105.6% 42.6-46.2% 46.9-55.9% Dividend yield — — — — — — |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | For the years ended December 31, 2017 , 2016 and 2015 , stock-based compensation was recognized and allocated in the Consolidated Statements of Operations as follows (in thousands): For the Years Ended December 31, 2017 2016 2015 Cost of sales $ 157 $ 354 $ 294 Research and development 387 845 867 Selling, general and administrative 1,648 2,598 2,791 Total stock-based compensation expense $ 2,192 $ 3,797 $ 3,952 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The Company recorded the following revenues, gross margin and income (loss) from operations by operating segment for the years ended December 31, 2017 , 2016 and 2015 (in thousands): For the Years Ended December 31, 2017 2016 2015 Revenue Software-Systems $ 47,730 $ 56,783 $ 55,006 Hardware Solutions 86,038 155,609 129,587 Total revenues $ 133,768 $ 212,392 $ 184,593 For the Years Ended December 31, 2017 2016 2015 Gross margin Software-Systems $ 25,104 $ 34,488 $ 31,997 Hardware Solutions 3,530 29,660 28,311 Corporate and other (7,864 ) (8,060 ) (8,156 ) Total gross margin $ 20,770 $ 56,088 $ 52,152 For the Years Ended December 31, 2017 2016 2015 Income (loss) from operations Software-Systems $ (6,968 ) $ (18 ) $ (1,900 ) Hardware Solutions (18,571 ) 9,820 9,709 Corporate and other (21,244 ) (19,461 ) (21,874 ) Total loss from operations $ (46,783 ) $ (9,659 ) $ (14,065 ) |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | For the Years Ended December 31, 2017 2016 2015 United States $ 59,133 $ 129,562 $ 81,933 Other North America 1,014 219 631 China 10,041 12,129 28,819 Other Asia-Pacific 18,363 25,392 41,836 Total Asia-Pacific 28,404 37,521 70,655 Netherlands 28,124 31,525 14,642 Other EMEA 17,093 13,565 16,732 Total EMEA 45,217 45,090 31,374 Foreign Countries 74,635 82,830 102,660 Total revenues $ 133,768 $ 212,392 $ 184,593 For the Years Ended December 31, 2017 2016 Property and equipment, net United States $ 2,974 $ 4,566 Other North America 33 129 China 163 438 India 1,558 1,580 Total Asia-Pacific 1,721 2,018 Foreign Countries 1,754 2,147 Total property and equipment, net $ 4,728 $ 6,713 Intangible assets, net United States $ 6,862 $ 17,575 Total intangible assets, net $ 6,862 $ 17,575 |
Schedule of Revenue by Major Customers by Reporting Segments | The following customers accounted for more than 10% of total revenues for the years ended December 31: 2017 2016 2015 Philips Healthcare 23.2% 15.7% 10.0% Verizon Wireless 20.8% 35.9% NA Nokia Solutions and Networks 12.5% NA 16.0% |
Schedules of Concentration of Risk, by Risk Factor | The following customers accounted for more than 10% of accounts receivable for the years ended December 31: 2017 2016 Philips Healthcare 19.1% 15.4% Reliance Jio Infocomm 18.7% 32.6% Nokia Solutions and Networks 14.5% NA Verizon Wireless NA 10.4% |
Significant Accounting Polici43
Significant Accounting Policies Distributor Revenue (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Distributor Revenue | 4.60% | 4.60% | 15.10% |
Significant Accounting Polici44
Significant Accounting Policies Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Advertising Expense | $ 1.1 | $ 1.1 | $ 0.9 |
Significant Accounting Polici45
Significant Accounting Policies Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Machinery, equipment, furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Software, computer hardware and manufacturing test fixtures | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Engineering demonstration products and samples | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 1 year |
Significant Accounting Polici46
Significant Accounting Policies Recent Accounting Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred Income Tax Expense (Benefit) | $ (38) | $ 131 | $ (60) | |
ASU 2016-16 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Effect on retained earnings | $ 2,000 |
Fair Value of Financial Instr47
Fair Value of Financial Instruments Fair Value Measurements (Details) - Estimate of Fair Value Measurement - Foreign currency forward contracts - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Financial Assets Fair Value Disclosure | ||
Foreign currency forward contracts | $ 508,000 | |
Financial Liabilities Fair Value Disclosure | ||
Foreign currency forward contracts | $ 94,000 | |
Level 1 | ||
Financial Assets Fair Value Disclosure | ||
Foreign currency forward contracts | 0 | |
Financial Liabilities Fair Value Disclosure | ||
Foreign currency forward contracts | 0 | |
Level 2 | ||
Financial Assets Fair Value Disclosure | ||
Foreign currency forward contracts | 508,000 | |
Financial Liabilities Fair Value Disclosure | ||
Foreign currency forward contracts | 94,000 | |
Level 3 | ||
Financial Assets Fair Value Disclosure | ||
Foreign currency forward contracts | $ 0 | |
Financial Liabilities Fair Value Disclosure | ||
Foreign currency forward contracts | $ 0 |
Accounts Receivable and Other48
Accounts Receivable and Other Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, gross | $ 32,970 | $ 38,433 | |
Less: allowance for doubtful accounts | (150) | (55) | |
Accounts receivable, net | 32,820 | 38,378 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Allowance for doubtful accounts, beginning of the year | 55 | 103 | $ 124 |
Charged to costs and expenses | 153 | (34) | (17) |
Less: write-offs, net of recoveries | (58) | (14) | (4) |
Remaining allowance, end of the year | 150 | 55 | $ 103 |
Other receivables | $ 3,421 | $ 4,161 |
Inventories - Balance Detail (D
Inventories - Balance Detail (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 23,269 | $ 24,805 | |
Work-in-process | 0 | 12 | |
Finished goods | 4,012 | 5,005 | |
Gross inventory | 27,281 | 29,822 | |
Less: inventory valuation allowance | (23,016) | (9,801) | $ (5,317) |
Inventory, Net | $ 4,265 | $ 20,021 |
Inventories - Charges Associate
Inventories - Charges Associated With the Valuation of Inventory (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |||
Inventory, net | $ 15,050 | $ 6,120 | $ 1,447 |
Adverse purchase commitments(A) | 2,913 | (1,908) | 1,831 |
Net charges (B) | $ 17,963 | $ 4,212 | $ 3,278 |
Inventories - Valuation Rollfor
Inventories - Valuation Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | ||
Inventory valuation allowance, beginning of the year | $ 9,801 | $ 5,317 |
Inventory scrapped | (870) | (1,636) |
Inventory utilized | (882) | (954) |
Subtotal—usage | (1,752) | (2,590) |
Write-downs of inventory valuation and transfers from other liabilities | 14,967 | 7,074 |
Inventory valuation allowance, end of the year | $ 23,016 | $ 9,801 |
Inventories - Narratives (Detai
Inventories - Narratives (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | ||
Age of consignment inventory purchased by contract manufacturer | 365 days | |
Age of consignment inventory purchased as a result of forecasted demand | 180 days |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 36,749 | $ 36,749 | $ 51,036 | |
Less: accumulated depreciation and amortization | (32,021) | (32,021) | (44,323) | |
Property and equipment, net | 4,728 | 4,728 | 6,713 | |
Depreciation | 6,500 | 4,500 | $ 5,600 | |
Restructuring Costs and Asset Impairment Charges | 1,700 | 1,743 | 40 | $ 225 |
Manufacturing equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 15,456 | 15,456 | 24,982 | |
Office equipment and software | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 18,455 | 18,455 | 23,090 | |
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 2,838 | $ 2,838 | $ 2,964 |
Intangible Assets Finite-Lived
Intangible Assets Finite-Lived Intangible Assets by Major Class (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross | $ 169,762 | $ 171,889 | |
Accumulated Amortization | (162,900) | (154,314) | |
Net | 6,862 | 17,575 | |
Amortization of Intangible Assets | $ 10,700 | 12,700 | $ 12,900 |
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 1 year | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||
Purchased Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | $ 114,754 | 114,754 | |
Accumulated Amortization | (110,674) | (102,967) | |
Net | 4,080 | 11,787 | |
Patents [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 6,472 | 6,472 | |
Accumulated Amortization | (6,472) | (6,472) | |
Net | 0 | 0 | |
Customer Lists [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 37,000 | 37,000 | |
Accumulated Amortization | (37,000) | (34,784) | |
Net | 0 | 2,216 | |
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 11,536 | 11,536 | |
Accumulated Amortization | (8,754) | (7,964) | |
Net | $ 2,782 | 3,572 | |
Backlog [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 2,127 | ||
Accumulated Amortization | $ (2,127) |
Intangible Assets Future Amorti
Intangible Assets Future Amortization of Finite Lived Intangibles (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,017 | $ 4,870 | |
2,018 | 790 | |
2,019 | 790 | |
2,020 | 412 | |
2,021 | 0 | |
Net | $ 6,862 | $ 17,575 |
Restructuring and Other Charg56
Restructuring and Other Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | ||||
Employee-related restructuring expenses | $ 5,504 | $ 2,771 | $ 3,890 | |
Lease abandonment expenses | 57 | 0 | 392 | |
Integration-related, legal and other non-recurring expenses | 1,035 | 106 | 513 | |
Restructuring Costs and Asset Impairment Charges | $ 1,700 | 1,743 | 40 | 225 |
Restructuring and other charges, net | $ 8,339 | $ 2,917 | $ 5,020 |
Restructuring and Other Charg57
Restructuring and Other Charges Restructuring Reserve Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||||
Integration-related, legal and other non-recurring expenses | $ 1,035 | $ 106 | $ 513 | |
Employee-related restructuring expenses | 5,504 | 2,771 | 3,890 | |
Restructuring Costs and Asset Impairment Charges | $ 1,700 | 1,743 | 40 | 225 |
Lease abandonment expenses | 57 | 0 | $ 392 | |
Restructuring Reserve [Roll Forward] | ||||
Balance accrued as of December 31, 2016 | 1,437 | |||
Additions | 5,727 | |||
Reversals | (166) | |||
Expenditures | (4,224) | |||
Balance accrued as of December 31, 2017 | 2,774 | 2,774 | 1,437 | |
Severance, Payroll Taxes and Other Employee Benefits [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance accrued as of December 31, 2016 | 1,347 | |||
Additions | 5,670 | |||
Reversals | (166) | |||
Expenditures | (4,077) | |||
Balance accrued as of December 31, 2017 | 2,774 | 2,774 | 1,347 | |
Lease Abandonment Charges [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance accrued as of December 31, 2016 | 90 | |||
Additions | 57 | |||
Reversals | 0 | |||
Expenditures | (147) | |||
Balance accrued as of December 31, 2017 | $ 0 | $ 0 | $ 90 |
Restructuring and Other Charg58
Restructuring and Other Charges Narratives (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)postion | Dec. 31, 2016USD ($)postion | Dec. 31, 2015USD ($)postion | |
Restructuring Cost and Reserve [Line Items] | |||
Severance costs | $ 5,504 | $ 2,771 | $ 3,890 |
Number of positions eliminated | postion | 92 | 74 | 130 |
Integration-related, legal and other non-recurring expenses | $ 1,035 | $ 106 | $ 513 |
Lease abandonment expenses | 57 | 0 | $ 392 |
Restructuring reserve | $ 2,774 | $ 1,437 |
Other Accrued and Other Long-59
Other Accrued and Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued Liabilities, Current | ||
Accrued warranty reserve | $ 879 | $ 1,466 |
Adverse purchase commitments | 3,263 | 268 |
Accrued restructuring | 2,774 | 1,437 |
Income tax payable | 199 | 152 |
Other | 3,290 | 4,248 |
Other accrued liabilities | 10,405 | 7,571 |
Other Liabilities, Noncurrent | ||
Long-term income tax payable | 5,341 | 3,047 |
Long-term deferred revenue | 1,108 | 2,380 |
Accrued warranty reserve | 245 | 355 |
Other | 172 | 184 |
Other long-term liabilities | $ 6,866 | $ 5,966 |
Short-Term Borrowings (Details)
Short-Term Borrowings (Details) | Sep. 05, 2017USD ($) | Sep. 19, 2016USD ($) | Jun. 30, 2017 | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Line of Credit Facility [Line Items] | ||||||||||
Minimum trailing adjusted EBITDA | $ (5,500,000) | $ (4,500,000) | ||||||||
Maximum add-back of restructuring costs in calculation of adjusted EBITDA | 10,471,000 | $ 10,786,000 | ||||||||
Line of credit | 16,000,000 | $ 25,000,000 | ||||||||
Forecasted | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Minimum trailing adjusted EBITDA | $ 2,000,000 | $ 0 | $ (5,000,000) | $ (5,000,000) | ||||||
Maximum add-back of restructuring costs in calculation of adjusted EBITDA | $ 2,000,000 | $ 3,000,000 | $ 11,000,000 | $ 12,235,000 | ||||||
Below minimum trailing adjusted EBITDA | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Minimum trailing adjusted EBITDA | 8,000,000 | |||||||||
Trade Accounts Receivable | Foreign | Maximum | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, eligible accounts receivable | 85.00% | |||||||||
2016 Debt Agreement | Swingline loan | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility current borrowings | $ 10 | |||||||||
2016 Debt Agreement | Letter of Credit | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility current borrowings | 5 | |||||||||
Line of Credit | 2016 Debt Agreement | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility current borrowings | 30 | |||||||||
Line of credit facility, maximum borrowing capacity | 25 | |||||||||
Line of credit facility, eligible accounts receivable threshold | 2,500,000 | |||||||||
Debt Instrument, Interest Rate, Increase (Decrease) | 0.50% | |||||||||
Line Of Credit Facility, Debt Covenant, Interest Rate Increase, Minimum EBITDA In Two Consecutive Quarters | $ 0 | |||||||||
Line Of Credit Facility, Debt Covenant, Interest Rate Increase, Minimum Capital Raised | $ 15,000,000 | |||||||||
Line of credit facility, annual administrative fee amount | 25,000 | |||||||||
Line of Credit facility, annual commitment fee | 82,500 | |||||||||
Deferred finance costs, net | $ 400,000 | |||||||||
Line of credit | $ 16,000,000 | $ 25,000,000 | ||||||||
Line of Credit | 2016 Debt Agreement | Availability, 70 Percent Or More | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.35% | |||||||||
Line of Credit | 2016 Debt Agreement | Availability, 70 Percent Or More | Prime Rate | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 0.75% | 0.25% | ||||||||
Line of Credit | 2016 Debt Agreement | Availability, 30 Percent Or More And Less Than 70 Percent | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.325% | |||||||||
Line of Credit | 2016 Debt Agreement | Availability, 30 Percent Or More And Less Than 70 Percent | Prime Rate | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 1.00% | 0.50% | ||||||||
Line of Credit | 2016 Debt Agreement | Availability, Below 30 Percent | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.30% | |||||||||
Line of Credit | 2016 Debt Agreement | Availability, Below 30 Percent | Prime Rate | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 1.25% | 0.75% | ||||||||
Line of Credit | 2016 Debt Agreement | 8/31/17 through 12/31/17 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Minimum liquidity ratio | 1.50 | |||||||||
Line of Credit | 2016 Debt Agreement | 1/31/2018 and 2/28/2018 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Minimum liquidity ratio | 1.35 | |||||||||
Line of Credit | 2016 Debt Agreement | 3/31/2018 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Minimum liquidity ratio | 1.50 | |||||||||
Line of Credit | 2016 Debt Agreement | 4/30/2018 and 5/31/2018 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Minimum liquidity ratio | 1.35 | |||||||||
Line of Credit | 2016 Debt Agreement | 6/30/2018 and Thereafter | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Minimum liquidity ratio | 1.50 | |||||||||
Line of Credit | 2016 Debt Agreement | Trade Accounts Receivable | Domestic | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, eligible accounts receivable | 85.00% | |||||||||
Line of Credit | 2016 Debt Agreement | Trade Accounts Receivable | Foreign | Minimum | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, eligible accounts receivable | 75.00% |
Convertible Debt (Details)
Convertible Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2014 | |
2015 Convertible Senior Notes | |||
Debt Instrument [Line Items] | |||
Convertible senior notes, current | $ 18,000 | ||
Convertible Senior Notes [Member] | 2015 Convertible Senior Notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Effective Percentage | 4.50% | 4.50% | |
Convertible Senior Notes [Member] | 2013 Convertible Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Contractually stated interest costs | $ 101 | ||
Amortization of interest costs | $ 7 |
Hedging - Narrative (Details)
Hedging - Narrative (Details) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2017USD ($)Derivatives | Dec. 31, 2016USD ($)Derivatives | |
Derivatives, Fair Value [Line Items] | |||
Maximum Length of Time Hedged in Cash Flow Hedge | 2 years | ||
Foreign currency forward contracts | |||
Derivatives, Fair Value [Line Items] | |||
Expected reclassification in the next 12 months | $ 0.2 | ||
Cash Flow Hedging | Foreign currency forward contracts | |||
Derivatives, Fair Value [Line Items] | |||
Number of derivative instruments | Derivatives | 18 | 45 | |
Notional Amount | $ 10.5 | $ 15.4 |
Hedging - Contral or Notional A
Hedging - Contral or Notional Amount (Details) - Fair Value, Measurements, Recurring - Foreign currency forward contracts - Other assets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Contractual / Notional Amount | $ 13,018 | |
Asset | $ 508 | $ 94 |
Contractual / Notional Amount | $ 16,166 |
Hedging - Derivative Instrument
Hedging - Derivative Instruments on the Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivatives, Fair Value [Line Items] | |||
Total derivative instrument expense | $ 433 | $ 881 | $ 627 |
Cost of sales | |||
Derivatives, Fair Value [Line Items] | |||
Total derivative instrument expense | 152 | 281 | 187 |
Research and development | |||
Derivatives, Fair Value [Line Items] | |||
Total derivative instrument expense | 211 | 436 | 305 |
Selling, general and administrative | |||
Derivatives, Fair Value [Line Items] | |||
Total derivative instrument expense | $ 70 | $ 164 | $ 135 |
Hedging - Changes to Comprehens
Hedging - Changes to Comprehensive Income (Loss) Associated with the Company's Hedging Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Beginning balance of unrealized loss on forward exchange contracts | $ (527) | $ (819) | |
Other comprehensive loss before reclassifications | 83 | $ 589 | 694 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 433 | 881 | 627 |
Other comprehensive income (loss) | 350 | 292 | $ (67) |
Ending balance of unrealized loss on forward exchange contracts | $ (177) | $ (527) |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
2,017 | $ 2,242 | ||
2,018 | 1,965 | ||
2,019 | 1,146 | ||
2,020 | 662 | ||
2,021 | 221 | ||
Total future minimum lease commitments | 6,236 | ||
Rent expense | $ 2,100 | $ 2,300 | $ 2,700 |
Commitments and Contingencies67
Commitments and Contingencies - Narratives (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Class of Warrant or Right [Line Items] | ||
Purchase Commitment, remaining minimum amount committed | $ 3,300 | $ 300 |
Accrued warranty reserve | 879 | 1,466 |
Accrued warranty reserve | $ 245 | $ 355 |
Minimum | ||
Class of Warrant or Right [Line Items] | ||
Warranty, Term | 12 months | |
Maximum | ||
Class of Warrant or Right [Line Items] | ||
Warranty, Term | 24 months |
Commitments and Contingencies68
Commitments and Contingencies - Accrued Warranty Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Movement in Standard Product Warranty Accrual | ||
Warranty liability balance, beginning of the year | $ 1,821 | $ 2,553 |
Product warranty accruals | 305 | 1,116 |
Adjustments for payments made | (1,002) | (1,848) |
Warranty liability balance, end of the year | $ 1,124 | $ 1,821 |
Basic and Diluted Net IncomeP69
Basic and Diluted Net IncomePer Share Earnings (Loss) Per Share Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||||||||
Net income (loss) | $ (19,631) | $ (15,411) | [1] | $ (7,554) | [1] | $ (10,008) | [1] | $ (2,638) | [1] | $ (591) | [1] | $ (2,965) | [1] | $ (4,057) | $ (52,604) | $ (10,251) | $ (14,678) |
Weighted average shares used to calculate net loss per share, basic | 38,994 | 37,668 | 36,789 | ||||||||||||||
Weighted average shares used to calculate net income (loss) per share, diluted | 38,994 | 37,668 | 36,789 | ||||||||||||||
Basic (in dollars per share) | $ (0.50) | $ (0.39) | $ (0.19) | $ (0.26) | $ (0.07) | $ (0.02) | $ (0.08) | $ (0.11) | $ (1.35) | $ (0.27) | $ (0.40) | ||||||
Diluted (in dollars per share) | $ (0.50) | $ (0.39) | $ (0.19) | $ (0.26) | $ (0.07) | $ (0.02) | $ (0.08) | $ (0.11) | $ (1.35) | $ (0.27) | $ (0.40) | ||||||
Restricted stock units | |||||||||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||||||||
Effect of dilutive equity awards (in shares) | 0 | 0 | 0 | ||||||||||||||
Employee Stock Option | |||||||||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||||||||
Effect of dilutive equity awards (in shares) | 0 | 0 | 0 | ||||||||||||||
[1] | For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 FirstQuarter SecondQuarter ThirdQuarter FourthQuarter FirstQuarter SecondQuarter ThirdQuarter FourthQuarter (In thousands, except per share data)Revenues$37,610 $35,093 $28,773 $32,292 $55,146 $61,288 $55,397 $40,561Gross margin8,222 10,008 1,195 1,345 12,784 15,445 14,246 13,613Loss from operations(9,135) (6,695) (13,926) (17,027) (2,450) (932) (2,083) (4,194)Net loss(10,008) (7,554) (15,411) (19,631) (2,965) (591) (2,638) (4,057)Loss per share: Basic$(0.26) $(0.19) $(0.39) $(0.50) $(0.08) $(0.02) $(0.07) $(0.11)Diluted$(0.26) $(0.19) $(0.39) $(0.50) $(0.08) $(0.02) $(0.07) $(0.11) |
Basic and Diluted Net IncomeP70
Basic and Diluted Net IncomePer Share Anti-Dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Total equity award shares excluded | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities | 4,212 | 4,834 | 4,742 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities | 3,163 | 3,897 | 2,966 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities | 428 | 100 | 151 |
Performance base on restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities | 621 | 837 | 1,625 |
Income Taxes Income Before Inco
Income Taxes Income Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | [1] | Jun. 30, 2016 | [1] | Mar. 31, 2016 | [1] | Sep. 30, 2015 | [1] | Jun. 30, 2015 | [1] | Mar. 31, 2015 | [1] | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | |||||||||||||||||
Total pre-tax loss | $ (17,027) | $ (13,926) | $ (6,695) | $ (9,135) | $ (2,083) | $ (932) | $ (2,450) | $ (4,194) | $ (48,877) | $ (7,817) | $ (12,936) | ||||||
Domestic | |||||||||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||||||||
Total pre-tax loss | (54,000) | (12,000) | (15,800) | ||||||||||||||
Foreign | |||||||||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||||||||
Total pre-tax loss | $ 5,100 | $ 4,200 | $ 2,900 | ||||||||||||||
[1] | For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 FirstQuarter SecondQuarter ThirdQuarter FourthQuarter FirstQuarter SecondQuarter ThirdQuarter FourthQuarter (In thousands, except per share data)Revenues$37,610 $35,093 $28,773 $32,292 $55,146 $61,288 $55,397 $40,561Gross margin8,222 10,008 1,195 1,345 12,784 15,445 14,246 13,613Loss from operations(9,135) (6,695) (13,926) (17,027) (2,450) (932) (2,083) (4,194)Net loss(10,008) (7,554) (15,411) (19,631) (2,965) (591) (2,638) (4,057)Loss per share: Basic$(0.26) $(0.19) $(0.39) $(0.50) $(0.08) $(0.02) $(0.07) $(0.11)Diluted$(0.26) $(0.19) $(0.39) $(0.50) $(0.08) $(0.02) $(0.07) $(0.11) |
Income Taxes - Current Provisio
Income Taxes - Current Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current provision: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 73 | 78 | 30 |
Foreign | 3,692 | 2,225 | 1,772 |
Total current provision | 3,765 | 2,303 | 1,802 |
Deferred provision (benefit): | |||
Federal | (309) | (86) | 35 |
State | (10) | (4) | 2 |
Foreign | 281 | 221 | (97) |
Total deferred provision | (38) | 131 | (60) |
Total income tax provision | $ 3,727 | $ 2,434 | $ 1,742 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Tax Rates and Effective Tax Rates (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Statutory federal tax (benefit) rate | $ (17,107) | $ (2,736) | $ (4,526) |
State taxes | (749) | (67) | 609 |
Foreign dividends and unremitted earnings | (638) | (1,745) | (1,493) |
Valuation allowance | (16,363) | 1,596 | 2,456 |
Taxes on foreign income that differ from U.S. tax rate | (1,361) | (901) | (405) |
Executive Compensation limitation | 17 | 1,005 | 0 |
Non-deductible stock-based compensation expense | 567 | 135 | 1,104 |
Expiration of attributes | 1,397 | 1,478 | 893 |
Uncertain tax positions | 302 | 120 | 435 |
Other | (146) | 59 | (317) |
Total income tax provision | $ 3,727 | $ 2,434 | $ 1,742 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Statutory federal tax (benefit) rate | 35.00% | 35.00% | 35.00% |
State taxes | 1.50% | 0.90% | (4.70%) |
Foreign dividends and unremitted earnings | 1.30% | (22.30%) | (11.50%) |
Valuation allowance | 33.50% | (20.40%) | (19.00%) |
Taxes on foreign income that differ from U.S. tax rate | 2.80% | 11.50% | 3.10% |
Executive Compensation limitation | (0.00%) | (12.90%) | (0.00%) |
Non-deductible stock-based compensation expense | (1.20%) | (1.70%) | (8.50%) |
Expiration of attributes | (2.90%) | (18.90%) | (6.90%) |
Uncertain tax positions | (0.60%) | (1.50%) | (3.40%) |
Other | 0.40% | (0.80%) | 2.40% |
Effective tax rate | (7.60%) | (31.10%) | (13.50%) |
Impact on tax reform | $ 36,311 | ||
Impact on tax reform, percent | (74.30%) | ||
Tax audit settlement | $ 1,497 | ||
Tax Audit Settlement, percent | (3.10%) |
Income Taxes - Deferred Tax Rec
Income Taxes - Deferred Tax Reconciliation (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Tax Assets, Net of Valuation Allowance [Abstract] | ||
Accrued warranty | $ 256 | $ 657 |
Inventory | 6,114 | 3,631 |
Net operating loss carryforwards | 39,534 | 57,294 |
Tax credit carryforwards | 20,857 | 22,075 |
Stock-based compensation | 978 | 1,995 |
Fixed assets | 2,358 | 1,808 |
Goodwill and other identified intangibles | 1,073 | 1,603 |
Deferred revenue | 1,201 | 2,906 |
Subsidiary service accruals | 4,870 | 1,702 |
Other | 1,308 | 2,082 |
Total deferred tax assets | 78,549 | 95,753 |
Less: valuation allowance | (77,437) | (88,566) |
Net deferred tax assets | 1,112 | 7,187 |
Deferred tax liabilities: | ||
Intangible assets | 0 | (5,603) |
Other | (325) | (467) |
Total deferred tax liabilities | (325) | (6,070) |
Total net deferred tax assets | $ 787 | $ 1,117 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized beginning balance | $ 3,549 | |
Additions based on tax positions related to the current year | 1,124 | $ 245 |
Additions for tax positions of prior years | 146 | 24 |
Reductions for tax positions of prior years | (278) | (240) |
Reductions as a result of a lapse of applicable statute of limitations | (56) | (80) |
Reductions due to settlements | (6) | |
Reductions due to settlements | (97) | 74 |
Ending balance | $ 4,582 | $ 3,549 |
Income Taxes - Narratives(Detai
Income Taxes - Narratives(Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | ||||
Unrecognized tax benefits | $ 4,582 | $ 3,549 | $ 3,680 | |
Unrecognized tax Benefits that would impact effective tax rate | 4,400 | |||
Unrecognized tax benefits, penalties and interest expense | 200 | |||
Uncertain tax benefits, potential change, current | 400 | |||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | 6 | |||
Valuation allowance | 77,437 | 88,566 | ||
Deferred tax assets, research | 15,300 | |||
Investment tax credit | 2,800 | |||
IRS | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | 178,300 | $ 51,500 | ||
Foreign | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | $ 3,400 | |||
Maximum | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards, expiration year | Dec. 31, 2037 | |||
CANADA | ||||
Operating Loss Carryforwards [Line Items] | ||||
Deferred tax assets, research | $ 16,900 | |||
Interest Expense [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Unrecognized tax benefits, accrued tax penalties and interest | 1,000 | |||
Penalty [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Unrecognized tax benefits, accrued tax penalties and interest | 200 | |||
ASU 2016-09 | ||||
Operating Loss Carryforwards [Line Items] | ||||
Effective Income Tax Rate Reconciliation, Share-based Compensation, Excess Tax Benefit, Amount | $ 4,300 | |||
ASU 2016-16 | ||||
Operating Loss Carryforwards [Line Items] | ||||
Effect on retained earnings | $ 2,000 | |||
Canada Revenue Agency | Foreign | ||||
Operating Loss Carryforwards [Line Items] | ||||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | $ 1,500 |
Income Taxes - Adjustments due
Income Taxes - Adjustments due to change in tax rates (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Provisional income tax expense (benefit) | $ 33.1 |
Decrease in deferred tax asset | 33.1 |
One time transition tax on certain foreign earnings | $ 1.3 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) $ / shares in Units, $ in Millions | Mar. 02, 2015$ / sharesshares | Dec. 31, 2014 | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($) | Mar. 10, 2017performance_periodshares | Mar. 28, 2016shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||||||
Common shares authorized | 100,000,000 | 100,000,000 | |||||
Common stock, shares issued | 38,521,000 | 36,959,000 | |||||
Shares issued pursuant to benefit plans, shares | 319,000 | ||||||
Granted, shares | 155,000 | ||||||
Equity plan remaining shares available for future grants | 4,621,121 | ||||||
Estimated performance target attained, percentage | 100.00% | ||||||
Cash received for the purchase of shares pursuant to the ESPP | $ | $ 0.1 | ||||||
Restricted stock award issued | $ | $ 0.6 | $ 0.5 | $ 0.5 | ||||
Employee stock purchase plan, discount rate | 18.00% | 12.00% | 11.00% | ||||
Maximum annual contribution per employee, percent | 30.00% | ||||||
Employer matching contribution, percent | 6.00% | ||||||
Employers matching contribution, annual vesting percentage | 33.00% | ||||||
Cost recognized | $ | $ 0.9 | $ 0.8 | $ 0.7 | ||||
Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share Price (usd per share) | $ / shares | $ 4.98 | ||||||
Employer matching contribution, percent | 50.00% | ||||||
Employers matching contribution, annual vesting percentage | 100.00% | ||||||
Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share Price (usd per share) | $ / shares | $ 3.80 | $ 2.74 | |||||
Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares authorized | 1,575,000 | 20,000 | 165,000 | 669,500 | 605,000 | ||
Percentage of awards vested | 50.00% | ||||||
Awards with two performance achievement dates (shares) | 629,500 | ||||||
Number of performance achievement dates | performance_period | 2 | ||||||
Awards expected to vest on achievement of individual sales target | 60,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Awards Vest Based on Defined Strategic Revenue Targets in Twenty Sixteen, Percentage | 50.00% | 50.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Awards Vest Based on Defined Strategic Revenue Targets in Twenty Eighteen, Percentage | 50.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Awards Vest Based on Defined Strategic Revenue Targets in Twenty Seventeen, Percentage | 50.00% | ||||||
Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares authorized | 7,200,000 | ||||||
Share Price (usd per share) | $ / shares | $ 1.01 | ||||||
Intrinsic value | $ | $ 0.1 | $ 0.4 | 0.1 | ||||
Cash received for the purchase of shares pursuant to the ESPP | $ | 0.1 | $ 0.6 | $ 0.1 | ||||
Compensation cost not recognized | $ | $ 0.7 | ||||||
Cost not yet recognized, recognition period | 1 year 7 months | ||||||
Shares available for grants | 490,038 | ||||||
Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Compensation cost not recognized | $ | $ 1.2 | ||||||
Cost not yet recognized, recognition period | 1 year 11 months | ||||||
2007 Stock Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares authorized | 14,183,070 | ||||||
LTIP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common shares authorized | 2,000,000 | ||||||
LTIP | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common shares authorized | 500,000 | ||||||
CCPU Inducement Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common shares authorized | 600,000 | ||||||
Common stock, shares issued | 368,000 | ||||||
2017 Plan | Performance Shares | $3.45 Average Closing Stock Price | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting percent | 50.00% | ||||||
Duration of trading period stock price must be maintained | 30 days | ||||||
Award vesting required average closing stock price per share | $ / shares | $ 3.45 | ||||||
Award performance period | 3 years | ||||||
2017 Plan | Performance Shares | $4.25 Average Closing Stock Price | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting percent | 50.00% | ||||||
Duration of trading period stock price must be maintained | 30 days | ||||||
Award vesting required average closing stock price per share | $ / shares | $ 4.25 | ||||||
Award performance period | 4 years |
Employee Benefit Plans - Stock
Employee Benefit Plans - Stock Options Rollforward (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Options | ||
Balance, December 31, 2015, shares | 3,897 | |
Granted, shares | 155 | |
Exercised, shares | (50) | |
Forfeited, shares | (447) | |
Expired, shares | (392) | |
Balance, December 31, 2016, shares | 3,163 | |
Options exercisable at December 31, 2016, shares | 2,648 | |
Options vested as of December 31, 2016 and expected to vest after December 31, 2016, shares | 3,163 | |
Weighted Average Exercise Price | ||
Balance, December 31, 2015 (usd per share) | $ 3.81 | |
Granted (usd per share) | 1.15 | |
Exercised (usd per share) | 2.38 | |
Forfeited (usd per share) | 4.16 | |
Expired (usd per share) | 5.85 | |
Balance, December 31, 2016 (usd per share) | 3.40 | |
Options exercisable at December 31, 2016 (usd per share) | 3.48 | |
Options vested as of December 31, 2016 and expected to vest after December 31, 2016 (usd per share) | $ 3.40 | |
Aggregate Intrinsic Value | $ 26,000 | $ 3,642,000 |
Options exercisable aggregate intrinsic value | 4 | |
Options vested and expected to vest at year end aggregate intrinsic value | $ 26,000 |
Employee Benefit Plans - Novest
Employee Benefit Plans - Novested Stock Rollforward (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Restricted Stock Units | |
Restricted Shares | |
Beginning balance, shares | shares | 100 |
Granted, shares | shares | 687 |
Vested, shares | shares | (150) |
Forfeited, shares | shares | (209) |
Ending balance, shares | shares | 428 |
Weighted Average Fair Value | |
Beginning balance, weighted average fair value | $ / shares | $ 3.68 |
Granted, weighted average fair value | $ / shares | 3.59 |
Vested, weighted average fair value | $ / shares | 3.95 |
Forfeited, weighted average fair value | $ / shares | 3.81 |
Ending balance, weighted average fair value | $ / shares | $ 3.67 |
Performance Stock Units | |
Restricted Shares | |
Beginning balance, shares | shares | 837 |
Granted, shares | shares | 690 |
Vested, shares | shares | (380) |
Forfeited, shares | shares | (525) |
Ending balance, shares | shares | 622 |
Weighted Average Fair Value | |
Beginning balance, weighted average fair value | $ / shares | $ 4.07 |
Granted, weighted average fair value | $ / shares | 3.76 |
Vested, weighted average fair value | $ / shares | 4.12 |
Forfeited, weighted average fair value | $ / shares | 4.03 |
Ending balance, weighted average fair value | $ / shares | $ 3.72 |
Employee Benefit Plans - ESPP (
Employee Benefit Plans - ESPP (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cash received for the purchase of shares pursuant to the ESPP | $ 100 | ||
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares issued pursuant to the ESPP | 233 | 184 | 175 |
Cash received for the purchase of shares pursuant to the ESPP | $ 398 | $ 417 | $ 322 |
Weighted average purchase price per share | $ 1.71 | $ 2.26 | $ 1.84 |
Employee Benefit Plans - Valuat
Employee Benefit Plans - Valuation Disclosures (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Options | |||
Dividend yield | 0.00% | 0.00% | |
Stock Options | Minimum | |||
Share price | $ 2.27 | $ 2.06 | $ 2.50 |
Expected life (in years) | 4 years 5 months 9 days | 4 years 4 months 21 days | 4 years 4 months 24 days |
Interest rate | 1.09% | 1.30% | 1.30% |
Volatility | 52.40% | 53.50% | 51.40% |
Stock Options | Maximum | |||
Share price | $ 5.30 | $ 2.80 | $ 3.49 |
Expected life (in years) | 4 years 5 months 16 days | 4 years 4 months 28 days | 4 years 5 months 19 days |
Interest rate | 1.58% | 1.60% | 1.50% |
Volatility | 54.00% | 54.60% | 52.50% |
ESPP shares | |||
Expected life (in years) | 1 year 6 months | 1 year 6 months | |
Dividend yield | 0.00% | 0.00% | |
ESPP shares | Minimum | |||
Share price | $ 2.58 | $ 2.15 | $ 2.55 |
Interest rate | 0.30% | 0.10% | 0.10% |
Volatility | 42.60% | 46.90% | 47.30% |
ESPP shares | Maximum | |||
Share price | $ 4.97 | $ 3 | $ 4.70 |
Interest rate | 0.90% | 0.50% | 0.30% |
Volatility | 46.20% | 55.90% | 55.60% |
Employee Benefit Plans - Stoc83
Employee Benefit Plans - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-based compensation expense | $ 2,192 | $ 3,797 | $ 3,952 |
Cost of sales | |||
Stock-based compensation expense | 157 | 354 | 294 |
Research and development | |||
Stock-based compensation expense | 387 | 845 | 867 |
Selling, general and administrative | |||
Stock-based compensation expense | $ 1,648 | $ 2,598 | $ 2,791 |
Segment Information Operating S
Segment Information Operating Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 32,292 | $ 28,773 | $ 35,093 | $ 37,610 | $ 55,397 | $ 61,288 | $ 55,146 | $ 40,561 | $ 133,768 | $ 212,392 | $ 184,593 |
Gross Profit | $ 1,345 | $ 1,195 | $ 10,008 | $ 8,222 | $ 14,246 | $ 15,445 | $ 12,784 | $ 13,613 | 20,770 | 56,088 | 52,152 |
Operating Income (Loss) | (46,783) | (9,659) | (14,065) | ||||||||
Operating Segments | Software-Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 47,730 | 56,783 | 55,006 | ||||||||
Gross Profit | 25,104 | 34,488 | 31,997 | ||||||||
Operating Income (Loss) | (6,968) | (18) | (1,900) | ||||||||
Operating Segments | Hardware Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 86,038 | 155,609 | 129,587 | ||||||||
Gross Profit | 3,530 | 29,660 | 28,311 | ||||||||
Operating Income (Loss) | (18,571) | 9,820 | 9,709 | ||||||||
Corporate and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross Profit | (7,864) | (8,060) | (8,156) | ||||||||
Operating Income (Loss) | $ (21,244) | $ (19,461) | $ (21,874) |
Segment Information Geographica
Segment Information Geographical Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 32,292 | $ 28,773 | $ 35,093 | $ 37,610 | $ 55,397 | $ 61,288 | $ 55,146 | $ 40,561 | $ 133,768 | $ 212,392 | $ 184,593 |
Property and equipment, net | 6,713 | 4,728 | 6,713 | ||||||||
Total intangible assets, net | 17,575 | 6,862 | 17,575 | ||||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 59,133 | 129,562 | 81,933 | ||||||||
Property and equipment, net | 4,566 | 2,974 | 4,566 | ||||||||
Total intangible assets, net | 17,575 | 6,862 | 17,575 | ||||||||
Other North America | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 1,014 | 219 | 631 | ||||||||
Property and equipment, net | 129 | 33 | 129 | ||||||||
China | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 10,041 | 12,129 | 28,819 | ||||||||
Property and equipment, net | 438 | 163 | 438 | ||||||||
Other Asia-Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 18,363 | 25,392 | 41,836 | ||||||||
Foreign Countries [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 74,635 | 82,830 | 102,660 | ||||||||
Property and equipment, net | 2,147 | 1,754 | 2,147 | ||||||||
Total Asia-Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 28,404 | 37,521 | 70,655 | ||||||||
Property and equipment, net | 2,018 | 1,721 | 2,018 | ||||||||
Netherlands | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 28,124 | 31,525 | 14,642 | ||||||||
Other EMEA | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 17,093 | 13,565 | 16,732 | ||||||||
Total EMEA | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 45,217 | 45,090 | $ 31,374 | ||||||||
India | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Property and equipment, net | $ 1,580 | $ 1,558 | $ 1,580 |
Segment Information Revenue by
Segment Information Revenue by Major Customer (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Sales Revenue, Net | Verizon Wireless | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 20.80% | 35.90% | |
Sales Revenue, Net | Philips Healthcare | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 23.20% | 15.70% | 10.00% |
Sales Revenue, Net | Nokia Solutions and Networks | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 12.50% | 16.00% | |
Accounts Receivable | Verizon Wireless | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 10.40% | ||
Accounts Receivable | Philips Healthcare | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 19.10% | 15.40% | |
Accounts Receivable | Nokia Solutions and Networks | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 14.50% | ||
Accounts Receivable | Reliance Jio Infocomm | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 18.70% | 32.60% |
Segment Information Accounts Re
Segment Information Accounts Receivable (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Nokia Solutions and Networks | Accounts Receivable | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 14.50% |
Subsequent Events (Hale Capital
Subsequent Events (Hale Capital Note Purchase Agreement) (Details) - Subsequent Event - Note Purchase Agreement - Senior Notes - USD ($) | Jan. 03, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Aug. 31, 2018 |
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 17,000,000 | ||||
Stated interest rate | 4.50% | ||||
Debt instrument, basis spread on variable rate | 5.75% | ||||
Stated interest rate, annual | 10.25% | ||||
Interest rate, default rate | 5.00% | ||||
Redemption covenant, sales proceeds | 33.00% | ||||
Redemption covenant, sales proceeds, if in default | 100.00% | ||||
Debt issuance costs | $ 2,000,000 | ||||
Forecasted | |||||
Debt Instrument [Line Items] | |||||
Redemption installment, payable amount | $ 1,500,000 | $ 1,250,000 | $ 1,750,000 | $ 1,500,000 | |
On Or Before January 3 2020 | |||||
Debt Instrument [Line Items] | |||||
Cancellation fee rate | 5.00% | ||||
On Or After January 4 2020 | |||||
Debt Instrument [Line Items] | |||||
Cancellation fee rate | 3.00% | ||||
Through June 30 2018 | |||||
Debt Instrument [Line Items] | |||||
Restricted cash | $ 4,000,000 | ||||
On Or After July 1 2018 | |||||
Debt Instrument [Line Items] | |||||
Restricted cash | $ 6,000,000 |
Subsequent Events (Silicon Vall
Subsequent Events (Silicon Valley and ABL Credit Agreements) (Details) - Subsequent Event | Jan. 03, 2018USD ($) |
Revolving Credit Facility | Silicon Valley Bank | |
Subsequent Event [Line Items] | |
Repayments of lines of credit | $ 30,000,000 |
Revolving Credit Facility | Marquette Business Credit LLC | |
Subsequent Event [Line Items] | |
Line of credit facility, maximum borrowing capacity | 20,000,000 |
Letter of Credit | Marquette Business Credit LLC | |
Subsequent Event [Line Items] | |
Line of credit facility, maximum borrowing capacity | 1,500,000 |
Borrowing base covenant | $ 20,000,000 |
Interest rate during period | 1.00% |
Additional interest rate, in default | 2.00% |
Line of credit facility, unused capacity, commitment fee percentage | 0.375% |
LIBOR | Letter of Credit | Marquette Business Credit LLC | |
Subsequent Event [Line Items] | |
Debt instrument, basis spread on variable rate | 2.00% |
On Or Prior to January 3 2019 | Letter of Credit | Marquette Business Credit LLC | |
Subsequent Event [Line Items] | |
Cancellation fee rate | 2.00% |
On Or After to January 3 2019 and Prior to January 3 2020 | Letter of Credit | Marquette Business Credit LLC | |
Subsequent Event [Line Items] | |
Cancellation fee rate | 1.00% |
Through June 30 2018 | Letter of Credit | Marquette Business Credit LLC | |
Subsequent Event [Line Items] | |
Restricted cash | $ 4,000,000 |
On Or After July 1 2018 | Letter of Credit | Marquette Business Credit LLC | |
Subsequent Event [Line Items] | |
Restricted cash | $ 6,000,000 |
Subsequent Events (Hale Capit90
Subsequent Events (Hale Capital Warrants) (Details) - Note Purchase Agreement - Subsequent Event | Jan. 03, 2018$ / sharesshares |
Subsequent Event [Line Items] | |
Number of securities called by warrants (in shares) | shares | 6,006,667 |
Exercise price (usd per share) | $ / shares | $ 1 |