Cover page
Cover page - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2020 | |
Entity File Number | 0-23081 | |
Entity Registrant Name | FARO TECHNOLOGIES, INC | |
Entity Central Index Key | 0000917491 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | FL | |
Entity Tax Identification Number | 59-3157093 | |
Entity Address, Address Line One | 250 Technology Park, | |
Entity Address, City or Town | Lake Mary, | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32746 | |
City Area Code | 407 | |
Local Phone Number | 333-9911 | |
Title of 12(b) Security | Common Stock, par value $.001 | |
Trading Symbol | FARO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 17,782,205 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 173,700 | $ 133,634 |
Short-term investments | 0 | 24,870 |
Accounts receivable, net | 48,113 | 76,162 |
Inventories, net | 53,425 | 58,554 |
Prepaid expenses and other current assets | 20,795 | 28,996 |
Total current assets | 296,033 | 322,216 |
Non-current assets: | ||
Property, plant and equipment, net | 22,507 | 26,954 |
Operating lease right-of-use asset | 14,684 | 18,418 |
Goodwill | 49,184 | 49,704 |
Intangible assets, net | 12,744 | 14,471 |
Service and sales demonstration inventory, net | 34,130 | 33,349 |
Deferred income tax assets, net | 21,153 | 18,766 |
Other long-term assets | 2,872 | 2,964 |
Total assets | 453,307 | 486,842 |
Current liabilities: | ||
Accounts payable | 12,067 | 13,718 |
Accrued liabilities | 42,975 | 38,072 |
Income taxes payable | 1,258 | 5,182 |
Lease liability | 4,904 | 6,674 |
Total current liabilities | 101,135 | 105,965 |
Unearned service revenues - less current portion | 19,582 | 20,578 |
Lease liability - less current portion | 11,651 | 13,698 |
Deferred income tax liabilities | 285 | 357 |
Income taxes payable - less current portion | 12,058 | 13,177 |
Other long-term liabilities | 35 | 1,075 |
Total liabilities | 144,746 | 154,850 |
Commitments and contingencies - See Note 13 | ||
Shareholders’ equity: | ||
Common Stock, Value, Issued | 19 | 19 |
Additional paid-in capital | 273,325 | 267,868 |
Retained earnings | 89,124 | 112,879 |
Accumulated other comprehensive loss | (22,865) | (17,399) |
Treasury Stock, Value | (31,042) | (31,375) |
Total shareholders’ equity | 308,561 | 331,992 |
Total liabilities and shareholders’ equity | 453,307 | 486,842 |
Current portion of unearned service revenues | ||
Current liabilities: | ||
Current portion of unearned service revenues | 36,480 | 39,211 |
Customer deposits | 36,480 | 39,211 |
Customer deposits | ||
Current liabilities: | ||
Current portion of unearned service revenues | 3,451 | 3,108 |
Customer deposits | $ 3,451 | $ 3,108 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 19,168,021 | 17,769,580 |
Common stock, shares outstanding (in shares) | 18,988,379 | 17,576,618 |
Treasury stock, shares (in shares) | 1,398,441 | 1,411,761 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Sales | $ 60,564 | $ 93,491 | $ 140,079 | $ 187,108 |
Cost of Sales | 31,668 | 42,751 | 67,310 | 83,349 |
Gross Profit | 28,896 | 50,740 | 72,769 | 103,759 |
Operating Expenses | ||||
Selling, general and administrative | 30,036 | 45,007 | 66,360 | 86,027 |
Research and development | 10,186 | 10,626 | 20,601 | 22,267 |
Restructuring costs | 636 | 0 | 14,324 | 0 |
Total operating expenses | 40,858 | 55,633 | 101,285 | 108,294 |
Loss from operations | (11,962) | (4,893) | (28,516) | (4,535) |
Other expense | ||||
Interest expense, net | 212 | 240 | 246 | 96 |
Other expense, net | 117 | 1,689 | 590 | 1,884 |
Loss before income tax benefit | (12,291) | (6,822) | (29,352) | (6,515) |
Income tax benefit | (3,359) | (417) | (5,597) | (262) |
Net loss | $ (8,932) | $ (6,405) | $ (23,755) | $ (6,253) |
Net (loss) income per share - Basic (in dollars per share) | $ (0.50) | $ (0.37) | $ (1.34) | $ (0.36) |
Net (loss) income per share - Diluted (in dollars per share) | $ (0.50) | $ (0.37) | $ (1.34) | $ (0.36) |
Weighted average shares - Basic (in shares) | 17,747,739 | 17,333,996 | 17,710,014 | 17,323,479 |
Weighted average shares - Diluted (in shares) | 17,747,739 | 17,333,996 | 17,710,014 | 17,323,479 |
Product | ||||
Sales | $ 42,259 | $ 71,045 | $ 98,784 | $ 142,622 |
Cost of Sales | 21,333 | 30,505 | 44,399 | 58,456 |
Service | ||||
Sales | 18,305 | 22,446 | 41,295 | 44,486 |
Cost of Sales | $ 10,335 | $ 12,246 | $ 22,911 | $ 24,893 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (8,932) | $ (6,405) | $ (23,755) | $ (6,253) |
Currency translation adjustments, net of income taxes | (1,688) | 1,263 | (5,466) | (301) |
Comprehensive loss | $ (10,620) | $ (5,142) | $ (29,221) | $ (6,554) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities: | ||
Net loss | $ (23,755) | $ (6,253) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 7,209 | 9,322 |
Stock-based compensation | 4,345 | 5,316 |
Provisions for bad debts, net of recoveries | 680 | 2 |
Loss on disposal of assets | 299 | 348 |
Provision for excess and obsolete inventory | 479 | 1,481 |
Deferred income tax benefit | (2,404) | (11) |
Impairment charge on equity method investment | 0 | 1,535 |
Decrease (Increase) in: | ||
Accounts receivable | 26,180 | 14,442 |
Inventories | 892 | (9,687) |
Prepaid expenses and other current assets | 11,347 | 2,282 |
Increase (Decrease) in: | ||
Accounts payable and accrued liabilities | (1,395) | (1,466) |
Income taxes payable | (5,058) | (3,119) |
Net cash provided by operating activities | 16,064 | 17,744 |
Investing activities: | ||
Purchases of property and equipment | (1,533) | (3,693) |
Proceeds from sale of investments | 25,000 | 0 |
Proceeds from asset sales | 643 | 0 |
Payments for intangible assets | (673) | (1,233) |
Net cash provided by (used in) investing activities | 23,437 | (4,926) |
Financing activities: | ||
Payments on finance leases | (160) | (187) |
Payments of contingent consideration for acquisitions | 0 | (250) |
Payments for taxes related to net share settlement of equity awards | (2,409) | (1,440) |
Proceeds from issuance of stock related to stock option exercises | 3,854 | 735 |
Net cash provided by (used in) financing activities | 1,285 | (1,142) |
Effect of exchange rate changes on cash and cash equivalents | (720) | 145 |
Increase in cash and cash equivalents | 40,066 | 11,821 |
Cash and cash equivalents, beginning of period | 133,634 | 108,783 |
Cash and cash equivalents, end of period | 173,700 | 120,604 |
Customer deposits | ||
Increase (Decrease) in: | ||
Increase (decrease) in contract with customer, liability | 384 | (446) |
Current portion of unearned service revenues | ||
Increase (Decrease) in: | ||
Increase (decrease) in contract with customer, liability | $ (3,139) | $ 3,998 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Common Stock in Treasury |
Beginning Balance (in shares) at Dec. 31, 2018 | 17,253,011 | |||||||
Beginning Balance at Dec. 31, 2018 | $ 376,609 | $ 19 | $ 251,329 | $ 175,353 | $ (18,483) | $ (31,609) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 152 | 152 | ||||||
Currency translation adjustment | (1,564) | (1,564) | ||||||
Stock-based compensation | 2,564 | 2,564 | ||||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 64,864 | |||||||
Common stock issued, net of shares withheld for employee taxes | (846) | (1,053) | 207 | |||||
Ending Balance (in shares) at Mar. 31, 2019 | 17,317,875 | |||||||
Ending Balance at Mar. 31, 2019 | $ 376,588 | $ 19 | 252,840 | 175,178 | (20,047) | (31,402) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201409Member | |||||||
Beginning Balance (in shares) at Dec. 31, 2018 | 17,253,011 | |||||||
Beginning Balance at Dec. 31, 2018 | $ 376,609 | $ 19 | 251,329 | 175,353 | (18,483) | (31,609) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (6,253) | |||||||
Currency translation adjustment | (301) | |||||||
Ending Balance (in shares) at Jun. 30, 2019 | 17,339,062 | |||||||
Ending Balance at Jun. 30, 2019 | 374,339 | $ 19 | 255,706 | 168,773 | (18,784) | (31,375) | ||
Beginning Balance (in shares) at Mar. 31, 2019 | 17,317,875 | |||||||
Beginning Balance at Mar. 31, 2019 | 376,588 | $ 19 | 252,840 | 175,178 | (20,047) | (31,402) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (6,405) | (6,405) | ||||||
Currency translation adjustment | 1,263 | 1,263 | ||||||
Stock-based compensation | 2,752 | 2,752 | ||||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 21,187 | |||||||
Common stock issued, net of shares withheld for employee taxes | 141 | 114 | 27 | |||||
Ending Balance (in shares) at Jun. 30, 2019 | 17,339,062 | |||||||
Ending Balance at Jun. 30, 2019 | $ 374,339 | $ 19 | 255,706 | 168,773 | (18,784) | (31,375) | ||
Beginning Balance (in shares) at Dec. 31, 2019 | 17,576,618 | 17,576,618 | ||||||
Beginning Balance at Dec. 31, 2019 | $ 331,992 | $ (327) | $ 19 | 267,868 | 112,879 | $ (327) | (17,399) | (31,375) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (14,823) | (14,823) | ||||||
Currency translation adjustment | (3,778) | (3,778) | ||||||
Stock-based compensation | 2,178 | 2,178 | ||||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 141,561 | |||||||
Common stock issued, net of shares withheld for employee taxes | 1,221 | 894 | 327 | |||||
Ending Balance (in shares) at Mar. 31, 2020 | 17,718,179 | |||||||
Ending Balance at Mar. 31, 2020 | $ 316,790 | $ 19 | 270,940 | 98,056 | (21,177) | (31,048) | ||
Beginning Balance (in shares) at Dec. 31, 2019 | 17,576,618 | 17,576,618 | ||||||
Beginning Balance at Dec. 31, 2019 | $ 331,992 | $ (327) | $ 19 | 267,868 | 112,879 | $ (327) | (17,399) | (31,375) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (23,755) | |||||||
Currency translation adjustment | $ (5,466) | |||||||
Ending Balance (in shares) at Jun. 30, 2020 | 18,988,379 | 17,769,580 | ||||||
Ending Balance at Jun. 30, 2020 | $ 308,561 | $ 19 | 273,325 | 89,124 | (22,865) | (31,042) | ||
Beginning Balance (in shares) at Mar. 31, 2020 | 17,718,179 | |||||||
Beginning Balance at Mar. 31, 2020 | 316,790 | $ 19 | 270,940 | 98,056 | (21,177) | (31,048) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (8,932) | (8,932) | ||||||
Currency translation adjustment | (1,688) | (1,688) | ||||||
Stock-based compensation | 2,167 | 2,167 | ||||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 51,401 | |||||||
Common stock issued, net of shares withheld for employee taxes | $ 224 | 218 | 6 | |||||
Ending Balance (in shares) at Jun. 30, 2020 | 18,988,379 | 17,769,580 | ||||||
Ending Balance at Jun. 30, 2020 | $ 308,561 | $ 19 | $ 273,325 | $ 89,124 | $ (22,865) | $ (31,042) |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | DESCRIPTION OF BUSINESS FARO Technologies, Inc. and its subsidiaries (collectively “FARO,” the “Company,” “us,” “we” or “our”) design, develop, manufacture, market and support software driven, three-dimensional (“3D”) measurement and imaging solutions. This technology permits high-precision 3D measurement, imaging and comparison of parts and complex structures within production and quality assurance processes. Our devices are used for inspection of components and assemblies, rapid prototyping, reverse engineering, documenting large volume or structures in 3D, surveying and construction, as well as for investigation and reconstruction of accident sites or crime scenes. We sell the majority of our products through a direct sales force across a broad number of customers in a range of manufacturing, industrial, architecture, surveying, building information modeling, construction, public safety forensics, cultural heritage, and other applications. Our FaroArm ® , FARO ScanArm ® , FARO Laser Tracker TM , FARO Laser Projector, and their companion CAM2 ® , BuildIT, and BuildIT Projector software solutions, provide for Computer-Aided Design (“CAD”) based inspection, factory-level statistical process control, high-density surveying, and laser-guided assembly and production. Together, these products integrate the measurement, quality inspection, and reverse engineering functions with CAD and 3D software to improve productivity, enhance product quality, and decrease rework and scrap in the manufacturing process, mainly supporting applications in the automotive, aerospace, metal and machine fabrication and other industrial manufacturing markets. Our FARO Focus and FARO ScanPlan, and their companion FARO SCENE, BuildIT, FARO As-Built TM , and FARO Zone public safety forensics software offerings, are utilized for a wide variety of 3D modeling, documentation and high-density surveying applications primarily in the architecture, engineering and construction and public safety markets. Our FARO ScanArm ® and its companion SCENE software also enable a fully digital workflow used to capture real world geometry for the purpose of empowering design, enabling innovation, and speeding up the design cycle. Since the fourth quarter of 2016 to the fourth quarter of 2019, we had operated in five verticals—3D Manufacturing, Construction Building Information Modeling (“Construction BIM”), Public Safety Forensics, 3D Design and Photonics—and had three reporting segments—3D Manufacturing, Construction BIM and Emerging Verticals. As discussed in our Quarterly Report on Form 10-Q for the third quarter of 2019, our new management team, led by our new Chief Executive Officer (“CEO”), formulated and began to implement a new comprehensive strategic plan for our business. As part of our strategic planning process, we identified areas of our business that needed enhanced focus or change in order to improve our efficiency and cost structure. In the fourth quarter of 2019, we reassessed and redefined our go-to-market strategy, refocused our marketing engagement with our customers and re-evaluated our hardware product portfolio. In the second quarter of 2020, we disposed of our Photonics business and 3D Design related assets obtained from our acquisition of Opto-Tech SRL and its subsidiary Open Technologies SRL (collectively, “Open Technologies”). As part of our new strategic plan, and based on the recommendation of our CEO, who is also our Chief Operating Decision Maker (“CODM”), in the fourth quarter of 2019, we eliminated our vertical structure and began reorganizing the Company into a functional structure. Our executive leadership team is now comprised of functional leaders in areas such as sales, marketing, operations, research and development and general and administrative, and resources are allocated to each function at a consolidated unit level. We no longer have separate business units, or segment managers or vertical leaders who report to the CODM with respect to operations, operating results or planning for levels or components below the total Company level. Instead, our CODM now allocates resources and evaluates performance on a Company-wide basis. Based on these changes, commencing with the fourth quarter of 2019, we are now reporting as one reporting segment that develops, manufactures, markets, supports and sells CAD-based quality assurance products integrated with CAD-based inspection and statistical process control software and 3D documentation systems. Our reporting segment sells into a variety of end markets, including automotive, aerospace, metal and machine fabrication, architecture, engineering, construction and public safety. Reclassification and Related Changes to Presentation Certain prior year amounts have been reclassified in the accompanying condensed consolidated financial statements to conform to the current period presentation: • Commencing with the third quarter of 2019, depreciation and amortization expenses are being reported in the accompanying statements of operations to reflect departmental costs. Previously, those expenses were reported as a separate line item under operating expenses. Amounts related to depreciation and amortization expenses for the three and six months ended June 30, 2019 have been reclassified throughout this Quarterly Report on Form 10-Q to reflect this reclassification of depreciation and amortization expenses and to conform to the current period presentation, as set forth in the following table; • Selling and marketing expenses and general and administrative expenses are now being reported in the accompanying statements of operations together in one line as Selling, general and administrative. Previously, those expenses were reported as two separate line items under operating expenses. Amounts related to selling, general and administrative expenses for the three and six months ended June 30, 2019 have been reclassified throughout this Quarterly Report on Form 10-Q to reflect this reclassification of selling, general and administrative expenses and to conform to the current period presentation, as set forth in the following table; • Software maintenance revenue is now being reported in the accompanying statements of operations as a component of product sales. Previously, these revenues were reported in service sales. Amounts related to software maintenance revenue for the three and six months ended June 30, 2019 have been reclassified throughout this Quarterly Report on Form 10-Q to reflect this reclassification of software maintenance revenue and to conform to the current period presentation, as set forth in the following table; and • Software maintenance cost of sales is now being reported in the accompanying statements of operations as a component of product cost of sales. Previously, these cost of sales was reported in service cost of sales. Amounts related to software maintenance cost of sales for the three and six months ended June 30, 2019 have been reclassified throughout this Quarterly Report on Form 10-Q to reflect this reclassification of software maintenance cost of sales and to conform to the current period presentation, as set forth in the following table. For the three months ended, June 30, 2019 As Reported Depreciation and Amortization Adjustment Selling, General and Administrative Adjustment Software Maintenance and Other Adjustments As Adjusted Sales Product $ 67,992 $ — $ — $ 3,053 $ 71,045 Service 25,499 — — (3,053) 22,446 Total sales $ 93,491 $ — $ — $ — $ 93,491 Cost of Sales Product $ 29,037 $ 796 $ — $ 672 $ 30,505 Service 12,135 783 — (672) 12,246 Total cost of sales $ 41,172 $ 1,579 $ — $ — $ 42,751 Operating Expenses Selling, general and administrative $ — $ 1,459 $ 43,548 $ — $ 45,007 Selling and marketing 29,124 — (29,124) — — General and administrative 14,424 — (14,424) — — Depreciation and amortization 4,573 (4,573) — — — Research and development 9,091 1,535 — — 10,626 Total operating expenses $ 57,212 $ (1,579) $ — $ — $ 55,633 For the six months ended, June 30, 2019 As Reported Depreciation and Amortization Adjustment Selling, General and Administrative Adjustment Software Maintenance and Other Adjustments As Adjusted Sales Product $ 136,792 $ — $ — $ 5,830 $ 142,622 Service 50,316 — — (5,830) 44,486 Total sales $ 187,108 $ — $ — $ — $ 187,108 Cost of Sales Product $ 55,165 $ 1,972 $ — $ 1,319 $ 58,456 Service 24,605 1,607 — (1,319) 24,893 Total cost of sales $ 79,770 $ 3,579 $ — $ — $ 83,349 Operating Expenses Selling, general and administrative $ — $ 2,502 $ 83,525 $ — $ 86,027 Selling and marketing 55,877 — (55,877) — — General and administrative 27,648 — (27,648) — — Depreciation and amortization 9,322 (9,322) — — — Research and development 19,026 3,241 — — 22,267 Total operating expenses $ 111,873 $ (3,579) $ — $ — $ 108,294 The following table summarizes total stock-based compensation expense for each of the line items on our condensed consolidated statement of operations: Three Months Ended Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Cost of Sales Product $ 41 $ 160 $ 195 $ 313 Service 52 108 169 188 Total cost of sales $ 93 $ 268 $ 364 $ 501 Operating Expenses Selling, general and administrative $ 1,617 $ 2,172 $ 3,140 $ 4,306 Research and development 459 312 841 509 Total operating expenses $ 2,076 $ 2,484 $ 3,981 $ 4,815 COVID-19 and Impact On Our Business Our business is significantly vulnerable to the economic effects of pandemics and other public health crises, including the ongoing novel coronavirus (“COVID-19”) outbreak that has surfaced in virtually every country of our global operating footprint. During the second quarter of 2020, we experienced a significant decline in the demand for our products and services across all of our served markets as a result of the impact of the spread of COVID-19. Although COVID-19 has negatively impacted demand for our products and services overall, the global pandemic also has provided us with the opportunity to adapt to a virtual environment and to capitalize on our existing virtual sales demonstration infrastructure which we have had in place for several years. There has been an increase in the attendance of our virtual training and product information seminars as our customers take advantage of the opportunity to remotely participate and to better understand the capabilities of our products and software offerings. We continue to assess the ongoing impact of COVID-19 on our business results and remain committed to taking actions to address the health and safety of our employees and customers, as well as the negative effects from demand disruption and production impacts, including, but not limited to, the following: • Operating our business with a focus on our employee health and safety, which includes minimizing travel, remote work policies, maintaining employee distancing and enhanced sanitation of all of our facilities; • Monitoring of our liquidity, reduction of supply flows into our manufacturing facilities, disciplined inventory management, and scrutinization of our capital expenditures; and • Continuously reviewing our financial strategy to strengthen financial flexibility in these volatile financial markets. We continue to maintain a strong capital structure with a cash balance of $173.7 million and no debt as of June 30, 2020. We believe that our liquidity position is adequate to meet our projected needs in the reasonably foreseeable future. Future developments, such as the potential resurgence of COVID-19 in countries that have begun to recover from the early impact of the pandemic and actions taken by governments in response to future resurgence, that are highly uncertain and not able to be predicted will determine the extent to which the COVID-19 outbreak continues to impact the Company’s results of operations and financial conditions. See Item 1A, Risk Factors, included in Part II of this Quarterly Report on Form 10-Q for an additional discussion of risks related to COVID-19. |
Principles of Consolidation
Principles of Consolidation | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | PRINCIPLES OF CONSOLIDATIONOur condensed consolidated financial statements include the accounts of FARO Technologies, Inc. and its subsidiaries, all of which are wholly-owned. All intercompany transactions and balances have been eliminated. The financial statements of our foreign subsidiaries are translated into U.S. dollars using exchange rates in effect at period-end for assets and liabilities and average exchange rates during each reporting period for results of operations. Adjustments resulting from financial statement translations are reflected as a separate component of accumulated other comprehensive loss. Foreign currency transaction gains and losses are included in net loss. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements and notes thereto have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements include all normal recurring accruals and adjustments considered necessary by management for a fair presentation in conformity with U.S. GAAP. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The condensed consolidated results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of results that may be expected for the year ending December 31, 2020 or any future period. The information included in this Quarterly Report on Form 10-Q, including the interim condensed consolidated financial statements and the accompanying notes, should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. The accompanying December 31, 2019 condensed consolidated balance sheet has been derived from those audited consolidated financial statements. |
Impact of Recently Issued Accou
Impact of Recently Issued Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Impact of Recently Issued Accounting Pronouncements | IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Impact of Recently Issued Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which amends and aims to simplify accounting disclosure requirements regarding a number of topics including: intraperiod tax allocation, accounting for deferred taxes when there are changes in consolidation of certain investments, tax basis step up in an acquisition and the application of effective rate changes during interim periods, amongst other improvements. This standard is effective for fiscal years beginning after December 15, 2020 and allows for early adoption. We are currently assessing the impact of this new standard on our condensed consolidated financial statements. Impact of Recently Adopted Accounting Standards In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , was issued by the FASB in July 2018 and allows for a cumulative-effect adjustment transition method of adoption. The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those years. We adopted ASU 2016-02 effective as of January 1, 2019 utilizing the cumulative-effect adjustment transition method of adoption, which resulted in the recognition on our condensed consolidated balance sheet as of March 31, 2019 of $18.9 million of right-of-use assets for operating leases, $19.9 million of lease liability for operating leases, $0.9 million of property and equipment, net for finance leases and $0.9 million of lease liability for finance leases under which we function as a lessee. We elected certain practical expedients available under the transition provisions to (i) allow aggregation of non-lease components with the related lease components when evaluating accounting treatment, (ii) apply the modified retrospective adoption method, utilizing the simplified transition option, which allows us to continue to apply the legacy guidance in FASB ASC Topic 840, including its disclosure requirements, in the comparative periods presented in the year of adoption, and (iii) use hindsight in determining the lease term (that is, when considering our options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of our right-of-use assets. The adoption of ASU 2016-02 also required us to include any initial direct costs, which are incremental costs that would not have been incurred had the lease not been obtained, in the right-of-use assets. The recognition of these costs in connection with our adoption of this guidance did not have a material impact on our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13, and subsequent related amendments to ASU 2016-13, replaced the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. We performed an analysis to identify the Company's financial instruments which would be impacted by the promulgated amendment and identified both our trade receivables and our U.S. Treasury Bill investments. We adopted ASU 2016-13 prospectively, effective January 1, 2020, by evaluating the qualitative and quantitative characteristics of our credit-based customer portfolio. We extend credit to a customer based on an evaluation of the customer’s financial condition and, generally, collateral is not required. Trade receivables are generally due within 30 to 90 days and accounts outstanding longer than the contractual payment terms are considered past due. As part of our analysis, we calculated an allowance for all trade receivables based on our review of historical trends and future expectations for the regions we sell within, current outstanding customer balances, and the length of time balances have been outstanding. We also evaluated an allowance for our U.S. Treasury Bill investments but as they were low risk and short-term, these allowances were approximated to be zero. The adoption of ASU 2016-13 did not have a material impact on our condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which is intended to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the current guidance, performance of Step 2 requires us to calculate the implied fair value of goodwill by following procedures that would be required to determine the fair value of assets acquired and liabilities assumed in a business combination. Under the new guidance, we will perform our goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value up to the amount of the goodwill allocated to the reporting unit. The new guidance also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform Step 2 of the goodwill impairment test if it fails the qualitative assessment. As a result, all reporting units will be subject to the same impairment assessment. We will still have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. We early adopted this guidance in fiscal 2019. The adoption of ASU 2017-04 did not did not have a material impact on our condensed consolidated financial statements. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | REVENUES The following tables present our revenues by sales type as presented in our condensed consolidated statements of operations disaggregated by the timing of transfer of goods or services (in thousands, unaudited): For the Three Months Ended June 30, 2020 2019 Product sales Product transferred to customers at a point in time $ 39,209 $ 68,202 Product transferred to customers over time 3,050 2,843 $ 42,259 $ 71,045 For the Six Months Ended June 30, 2020 2019 Product sales Product transferred to customers at a point in time $ 92,764 $ 137,176 Product transferred to customers over time 6,020 5,446 $ 98,784 $ 142,622 For the Three Months Ended June 30, 2020 2019 Service sales Service transferred to customers at a point in time $ 6,649 $ 11,609 Service transferred to customers over time 11,656 10,837 $ 18,305 $ 22,446 For the Six Months Ended June 30, 2020 2019 Service sales Service transferred to customers at a point in time $ 17,644 $ 23,290 Service transferred to customers over time 23,651 21,196 $ 41,295 $ 44,486 The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in thousands, unaudited): For the Three Months Ended June 30, 2020 2019 Total sales to external customers United States $ 24,445 $ 35,161 EMEA (1) 16,720 30,030 Other APAC (1) 10,582 15,387 China 7,485 8,961 Other Americas (1) 1,332 3,952 $ 60,564 $ 93,491 For the Six Months Ended June 30, 2020 2019 Total sales to external customers United States $ 57,536 $ 71,009 EMEA (1) 40,410 61,130 Other APAC (1) 26,069 30,429 China 12,233 17,256 Other Americas (1) 3,831 7,284 $ 140,079 $ 187,108 (1) Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific, excluding China (Other APAC); and Canada, Mexico, and Brazil (Other Americas). For revenue related to our measurement and imaging equipment and related software, we allocate the contract price to performance obligations based on our best estimate of the standalone selling price. We make this allocation estimate utilizing data from the sale of our applicable products and services to customers separately in similar circumstances, with the exception of software licenses. With respect to software licenses, we use the residual method for allocating the contract price to performance obligations. Revenue related to our measurement and imaging equipment and related software is generally recognized upon shipment from our facilities or when delivered to the customer location, as determined by the agreed upon shipping terms, at which time we are entitled to payment and title and control has passed to the customer. Software arrangements generally include short-term maintenance that is considered post-contract support (“PCS”), which is considered to be a separate performance obligation. We generally establish a standalone sales price for this PCS component based on our maintenance renewal rate. Maintenance renewals, when sold, are recognized on a straight-line basis over the term of the maintenance agreement. Payments for products and services are collected within a short period of time following transfer of control or commencement of delivery of services, as applicable. Further, customers frequently purchase extended warranties with the purchase of measurement equipment and related software. Warranties are considered a performance obligation when services are transferred to a customer over time, and, as such, we recognize revenue on a straight-line basis over the warranty term. Extended warranty sales primarily include contract periods that extend between one month and three years. We capitalize commission expenses related to deliverables transferred to a customer over time and amortize such costs ratably over the term of the contract. As of June 30, 2020, the deferred cost asset related to deferred commissions was approximately $3.0 million. For classification purposes, $2.0 million and $1.0 million are comprised within the Prepaid expenses and other current assets and Other long-term assets, respectively, on our condensed consolidated balance sheet as of June 30, 2020 . As of December 31, 2019, the deferred cost asset related to deferred commissions was approximately $3.1 million. For classification purposes, $2.1 million and $1.0 million were comprised within the Prepaid expenses and other current assets and Other long-term assets, respectively, on our condensed consolidated balance sheet as of December 31, 2019. The unearned service revenue liabilities reported on our condensed consolidated balance sheets reflect the contract liabilities to satisfy the remaining performance obligations for extended warranties and software maintenance. The current portion of unearned service revenues on our condensed consolidated balance sheets is what we expect to recognize to revenue within twelve months after the applicable balance sheet date relating to extended warranty and software maintenance contract liabilities. The unearned service revenues - less current portion on our condensed consolidated balance sheets is what we expect to recognize to revenue extending beyond twelve months after the applicable balance sheet date relating to extended warranty and software maintenance contract liabilities. During the three and six months ended June 30, 2020, we recognized $9.8 million and $22.0 million of revenue that was deferred on our condensed consolidated balance sheet as of December 31, 2019 . During the three and six months ended June 30, 2019, we recognized $8.8 million and $19.7 million of revenue that was deferred on our consolidated balance sheet as of December 31, 2018. The nature of certain of our contracts gives rise to variable consideration, which may be constrained, primarily related to an allowance for sales returns and contracts with certain government customers. We are required to estimate the contract asset related to sales returns and record a corresponding adjustment to Cost of Sales. Our allowance for sales returns was approximately $0.1 million as of both June 30, 2020 and June 30, 2019. Shipping and handling fees billed to customers in a sales transaction are recorded in Product Sales and shipping and handling costs incurred are recorded in Cost of Sales. We exclude from Sales any value-added sales and other taxes that we collect concurrently with revenue-producing activities. |
Short-term Investments
Short-term Investments | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term Investments | SHORT-TERM INVESTMENTSWe carried no short-term investments at June 30, 2020. Short-term investments at December 31, 2019 were composed of U.S. Treasury Bills totaling $24.8 million, consisting of $8.9 million that matured on March 12, 2020 and $15.9 million that matured on June 11, 2020. The interest rates on the U.S. Treasury Bills held on December 31, 2019 that matured on March 12, 2020 and June 11, 2020 were 1.8%, and 1.4%, respectively. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | ACCOUNTS RECEIVABLE Accounts receivable consist of the following: As of As of As of As of Accounts receivable $ 52,151 $ 79,611 Allowance for credit losses (4,038) (3,449) Total $ 48,113 $ 76,162 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories are stated at the lower of cost or net realizable value using the first-in first-out ("FIFO") method. We have three principal categories of inventory: 1) manufactured product to be sold; 2) sales demonstration inventory - completed product used to support our sales force for demonstrations and held for sale; and 3) service inventory - completed product and parts used to support our service department and held for sale. Shipping and handling costs are classified as a component of Cost of Sales in our condensed consolidated statements of operations. Sales demonstration inventory is held by our sales representatives for up to three years, at which time it would be refurbished and transferred to finished goods as used equipment, stated at the lower of cost or net realizable value. We expect these refurbished units to remain in finished goods inventory and sold within 12 months at prices that produce reduced gross margins. Service inventory is used to provide a temporary replacement product to a customer covered by a premium warranty when the customer’s unit requires service or repair and as training equipment. Service inventory is available for sale; however, management does not expect service inventory to be sold within 12 months and, as such, classifies this inventory as a long-term asset. Service inventory that we utilize for training or repairs and which we deem as no longer available for sale is transferred to fixed assets at the lower of cost or net realizable value and depreciated over its remaining life, typically three years. Inventories consist of the following: As of June 30, 2020 As of December 31, 2019 Raw materials $ 33,151 $ 36,956 Finished goods 20,274 21,598 Inventories, net $ 53,425 $ 58,554 Service and sales demonstration inventory, net $ 34,130 $ 33,349 |
Loss Per Share
Loss Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Loss Per Share | LOSS PER SHARE Basic loss per share is computed by dividing net loss by the weighted average number of shares outstanding. Diluted loss per share is computed by also considering the impact of potential common stock on net loss and the weighted average number of shares outstanding. Our potential common stock consists of employee stock options, restricted stock units and performance-based awards. Our potential common stock is included in the diluted earnings per share calculation when adding such potential common stock would not be anti-dilutive. Performance-based awards are included in the computation of diluted earnings per share only to the extent that the underlying performance conditions (and any applicable market condition) (i) are satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive under the treasury stock method. When we report a net loss for the period presented, the calculation of diluted net loss per share excludes our potential common stock, as the effect would be anti-dilutive. For the three and six months ended June 30, 2020, there were approximately 767,458 shares issuable upon the exercise of options and the contingent vesting of performance-based restricted stock units that were excluded from the dilutive calculations, as they were anti-dilutive. For the three and six months ended June 30, 2019, there were approximately 702,202 shares issuable upon the exercise of options that were excluded from the dilutive calculations, as they were anti-dilutive. A reconciliation of the number of common shares used in the calculation of basic and diluted loss per share is presented below: Three Months Ended June 30, 2020 June 30, 2019 Shares Per-Share Shares Per-Share Basic loss per share 17,747,739 $ (0.50) 17,333,996 $ (0.37) Effect of dilutive securities — — — — Diluted loss per share 17,747,739 $ (0.50) 17,333,996 $ (0.37) Six Months Ended June 30, 2020 June 30, 2019 Shares Per-Share Shares Per-Share Basic loss per share 17,710,014 $ (1.34) 17,323,479 $ (0.36) Effect of dilutive securities — — — — Diluted loss per share 17,710,014 $ (1.34) 17,323,479 $ (0.36) |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consist of the following: As of June 30, 2020 As of December 31, 2019 Accrued compensation and benefits $ 12,501 $ 15,366 Accrued restructuring costs 7,072 — Accrued warranties 1,622 2,090 Professional and legal fees 2,220 1,793 Taxes other than income 2,765 4,077 General services administration contract contingent liability (see Note 13) 12,891 11,886 Other accrued liabilities 3,904 2,860 $ 42,975 $ 38,072 Activity related to accrued warranties was as follows: Six Months Ended June 30, 2020 June 30, 2019 Balance, beginning of period $ 2,090 $ 2,571 Provision for warranty expense 1,174 1,855 Fulfillment of warranty obligations (1,642) (1,982) Balance, end of period $ 1,622 $ 2,444 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Our financial instruments include cash and cash equivalents, short-term investments, accounts receivable, customer deposits, accounts payable and accrued liabilities. The carrying amounts of such financial instruments approximate their fair value due to the short-term nature of these instruments. Liabilities measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations: As of June 30, 2020 Level 1 Level 2 Level 3 Liabilities: Contingent consideration (1) $ — $ — $ 733 Total $ — $ — $ 733 As of December 31, 2019 Level 1 Level 2 Level 3 Liabilities: Contingent consideration (1) $ — $ — $ 733 Total $ — $ — $ 733 |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING In the first quarter of 2020, our Board of Directors approved a global restructuring plan (the “Restructuring Plan”), which is intended to support our strategic plan in an effort to improve operating performance and ensure that we are appropriately structured and resourced to deliver increased and sustainable value to our shareholders and customers. Key activities under the Restructuring Plan include a continued focus on efficiency and cost-saving efforts, which includes decreasing total headcount by approximately 500 employees upon the completion of the Restructuring Plan. These activities are expected to be substantially completed by the end of 2021. Pre-tax charges of approximately $49 million were recorded in the fourth quarter of 2019 in connection with the implementation of our new strategic plan and included the following: • $21.2 million impairment of goodwill; • $12.8 million charge, increasing our reserve for excess and obsolete inventory; • $10.5 million impairment of intangible assets associated with recent acquisitions; • $1.4 million impairment of intangible assets related to capitalized patents; • $3.4 million impairment of other assets and other charges. In connection with the Restructuring Plan, we recorded a pre-tax charge of approximately $13.7 million during the first quarter 2020 and $0.6 million during the second quarter primarily consisting of severance and related benefits, professional fees and other related charges and costs related to the disposal of our Photonics business and 3D Design related assets. We received $0.6 million in cash payments for the disposal of our Photonics business and 3D Design related assets in the current quarter. We estimate total additional pre-tax charges of $12 million to $22 million for the remainder of fiscal year 2020. At this time, we are continuing to evaluate the future key activities by which these additional charges will originate. Actual results, including the costs of the Restructuring Plan, may differ materially from our expectations, resulting in our inability to realize the expected benefits of the Restructuring Plan and our new strategic plan and negatively impacting our ability to execute our future plans and strategies, which could have a material adverse effect on our business, financial condition and results of operations. In connection with the Restructuring Plan, we paid $0.9 million during the first quarter 2020 and $4.5 million during the second quarter of 2020 primarily consisting of severance and related benefits. We expect an additional $11 million to $15 million of cash payments to be made for the remainder of fiscal year 2020 related to the Restructuring Plan. Activity related to the accrued restructuring charge and cash payments during the first half of 2020 was as follows: Severance and other benefits Professional fees and other related charges Total Balance at February 14, 2020 $ — $ — $ — Additions charged to expense 12,400 1,574 13,974 Cash payments (5,379) (1,523) (6,902) Balance at June 30, 2020 7,021 51 7,072 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Purchase Commitments — We enter into purchase commitments for products and services in the ordinary course of business. These purchases generally cover production requirements for 60 to 120 days as well as materials necessary to service customer units through the product lifecycle and for warranty commitments. As of June 30, 2020, we had approximately $48.1 million in purchase commitments that are expected to be delivered within the next 12 months. Legal Proceedings — We are not involved in any legal proceedings, including routine litigation arising in the normal course of business, that we believe will have a material adverse effect on our business, financial condition or results of operations. U.S. Government Contracting Matter — We have sold our products and related services to the U.S. Government (the “Government”) under General Services Administration (“GSA”) Federal Supply Schedule contracts (the “GSA Contracts”) since 2002 and are currently selling our products and related services to the Government under two such GSA Contracts. Each GSA Contract is subject to extensive legal and regulatory requirements and includes, among other provisions, a price reduction clause (the “Price Reduction Clause”), which generally requires us to reduce the prices billed to the Government under the GSA Contracts to correspond to the lowest prices billed to certain benchmark customers. Late in the fourth quarter of 2018, during an internal review we preliminarily determined that certain of our pricing practices may have resulted in the Government being overcharged under the Price Reduction Clauses of the GSA Contracts (the “GSA Matter”). As a result, we performed remediation efforts, including but not limited to, the identification of additional controls and procedures to ensure future compliance with the pricing and other requirements of the GSA Contracts. We also retained outside legal counsel and forensic accountants to assist with these efforts and to conduct a comprehensive review of our pricing and other practices under the GSA Contracts (the “Review”). On February 14, 2019, we reported the GSA Matter to the GSA and its Office of Inspector General. As a result of the GSA Matter, for the fourth quarter 2018, we reduced our total sales by a $4.8 million estimated cumulative sales adjustment, representative of the last six years of estimated overcharges to the Government under the GSA Contracts. In addition, for the fourth quarter of 2018, we recorded $0.5 million of imputed interest related to the estimated cumulative sales adjustment, which increased Interest expense, net and resulted in an estimated total liability of $5.3 million for the GSA Matter. This adjustment was based on our preliminary review as of February 20, 2019, the date of our Annual Report on Form 10-K for the year ended December 31, 2018. In addition, in first quarter 2019, we recorded an additional $0.1 million of imputed interest related to the estimated cumulative sales adjustment. On July 15, 2019, we submitted a report to the GSA and its Office of Inspector General setting forth the findings of the Review conducted by our outside legal counsel and forensic accountants. Based on the results of the Review, we reduced our total sales for second quarter 2019 by an incremental $5.8 million sales adjustment, reflecting an estimated aggregate overcharge of $10.6 million under the GSA Contracts for the period from July 2011 to March 2019. In addition, we recorded an incremental $0.7 million of imputed interest related to the estimated cumulative sales adjustment for the remainder of 2019, which increased Interest expense, net and resulted in a $6.5 million total incremental increase in the estimated total liability for the GSA Matter. In January 2020, we received requests for additional information from the GSA and its Office of Inspector General to which we corresponded through June 2020. As a result of this continuing investigation, we reduced our total sales for the second quarter 2020 by an incremental $0.6 million sales adjustment, reflecting an estimated aggregate overcharge of $11.2 million under the GSA Contracts for the period from July 2011 to June 2020. We are working with the GSA in responding to any additional inquiries arising from the investigation. We recorded an incremental $0.2 million of imputed interest related to the estimated cumulative sales adjustment for the second quarter of 2020. As of the date of the filing of this Quarterly Report on Form 10-Q, we have recorded an aggregate estimated total liability for the GSA Matter of $12.9 million. We intend to cooperate fully with this and any other Government inquiries. The Government’s review of, or investigation into, this matter could result in civil and criminal penalties, administrative sanctions, and contract remedies being imposed on us, including but not limited to, termination of the GSA Contracts, repayments of amounts already received under the GSA Contracts, forfeiture of profits, damages, suspension of payments, fines, and suspension or debarment from doing business with the Government and possibly U.S. state and local governments. We may also be subject to litigation and recovery under the federal False Claims Act and possibly similar state laws, which could include claims for treble damages, penalties, fees and costs. As a result, we cannot reasonably predict the outcome of the Government’s review of, or investigation into, this matter at this time or the resulting future financial impact on us. Any of these outcomes could have a material adverse effect on our reputation, our sales, results of operations, cash flows and financial condition, and the trading price of our common stock. In addition, we have incurred, and will continue to incur, legal and related costs in connection with the Review and the Government’s response to this matter. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | LEASES We have operating and finance leases for manufacturing facilities, corporate offices, research and development facilities, sales and training facilities, vehicles, and certain equipment under which we assume the role of lessee. We do not lease assets as a lessor. Our leases have remaining lease terms of less than one year to approximately seven years, some of which include options to extend the leases for up to eight years, and some of which include options to terminate the leases within three months. We do not participate in any material subleasing activity. We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use (“ROU”) asset, Lease liability, and Lease liability - less current portion in our condensed consolidated balance sheets. Finance leases are included in Property and equipment, net, Lease liability, and Lease liability - less current portion in our condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized on the commencement date of the lease based on the present value of lease payments over the lease term. Variable lease payments that depend on an index or rate include the variable portion when calculating ROU assets and lease liabilities. Variable lease payments that do not depend on an index or rate are expensed as incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available on the commencement date of the lease to determine the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU assets also include any lease payments made and lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option at the time the lease is commenced. Lease expense for lease payments is recognized on a straight-line basis over the lease term. While we have lease agreements with lease and non-lease components, we account for the lease and non-lease components as a single lease component. The components of lease expense were as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended Operating lease cost $ 2,006 $ 2,029 $ 4,061 $ 3,997 Finance lease cost: Amortization of ROU assets $ 78 $ 98 $ 160 $ 190 Interest on lease liabilities $ 8 $ 12 $ 17 $ 24 Total finance lease cost $ 86 $ 110 $ 177 $ 214 We recognize lease payments made for short-term leases where terms are 12 months or less as the payments are incurred. Our short-term lease cost for the three months ended June 30, 2020 and June 30, 2019 were both less than $0.1 million. Our short-term lease cost for the six months ended June 30, 2020 and June 30, 2019 was less than $0.1 million and $0.1 million, respectively. Supplemental balance sheet information related to leases was as follows: As of As of June 30, 2020 December 31, 2019 Operating leases: Operating lease right-of-use asset $ 14,684 $ 18,418 Current operating lease liability $ 4,591 $ 6,349 Operating lease liability - less current portion 11,422 13,272 Total operating lease liability $ 16,013 $ 19,621 Finance leases: Property and equipment, at cost $ 1,786 $ 1,870 Accumulated depreciation (1,301) (1,150) Property and equipment, net $ 485 $ 720 Current finance lease liability $ 313 $ 325 Finance lease liability - less current portion 229 426 Total finance lease liability $ 542 $ 751 Weighted Average Remaining Lease Term (in years): Operating leases 4.41 4.48 Finance leases 2.12 2.48 Weighted Average Discount Rate: Operating leases 5.31 % 5.10 % Finance leases 5.06 % 5.09 % Supplemental cash flow information related to leases was as follows: Six Months Ended Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 4,141 $ 4,110 Operating cash flows from finance leases $ 17 $ 24 Financing cash flows from finance leases $ 160 $ 187 ROU assets obtained in exchange for lease obligations: Operating leases $ 424 $ 5,916 Maturities of lease liabilities are as follows: Year Ending December 31, Operating leases Finance leases 2020 (excluding the first 6 months) $ 3,354 $ 168 2021 4,203 300 2022 3,269 82 2023 2,886 38 2024 2,699 12 Thereafter 2,354 — Total lease payments $ 18,765 $ 600 Less imputed interest (2,752) (58) Total $ 16,013 $ 542 |
Leases | LEASES We have operating and finance leases for manufacturing facilities, corporate offices, research and development facilities, sales and training facilities, vehicles, and certain equipment under which we assume the role of lessee. We do not lease assets as a lessor. Our leases have remaining lease terms of less than one year to approximately seven years, some of which include options to extend the leases for up to eight years, and some of which include options to terminate the leases within three months. We do not participate in any material subleasing activity. We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use (“ROU”) asset, Lease liability, and Lease liability - less current portion in our condensed consolidated balance sheets. Finance leases are included in Property and equipment, net, Lease liability, and Lease liability - less current portion in our condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized on the commencement date of the lease based on the present value of lease payments over the lease term. Variable lease payments that depend on an index or rate include the variable portion when calculating ROU assets and lease liabilities. Variable lease payments that do not depend on an index or rate are expensed as incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available on the commencement date of the lease to determine the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU assets also include any lease payments made and lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option at the time the lease is commenced. Lease expense for lease payments is recognized on a straight-line basis over the lease term. While we have lease agreements with lease and non-lease components, we account for the lease and non-lease components as a single lease component. The components of lease expense were as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended Operating lease cost $ 2,006 $ 2,029 $ 4,061 $ 3,997 Finance lease cost: Amortization of ROU assets $ 78 $ 98 $ 160 $ 190 Interest on lease liabilities $ 8 $ 12 $ 17 $ 24 Total finance lease cost $ 86 $ 110 $ 177 $ 214 We recognize lease payments made for short-term leases where terms are 12 months or less as the payments are incurred. Our short-term lease cost for the three months ended June 30, 2020 and June 30, 2019 were both less than $0.1 million. Our short-term lease cost for the six months ended June 30, 2020 and June 30, 2019 was less than $0.1 million and $0.1 million, respectively. Supplemental balance sheet information related to leases was as follows: As of As of June 30, 2020 December 31, 2019 Operating leases: Operating lease right-of-use asset $ 14,684 $ 18,418 Current operating lease liability $ 4,591 $ 6,349 Operating lease liability - less current portion 11,422 13,272 Total operating lease liability $ 16,013 $ 19,621 Finance leases: Property and equipment, at cost $ 1,786 $ 1,870 Accumulated depreciation (1,301) (1,150) Property and equipment, net $ 485 $ 720 Current finance lease liability $ 313 $ 325 Finance lease liability - less current portion 229 426 Total finance lease liability $ 542 $ 751 Weighted Average Remaining Lease Term (in years): Operating leases 4.41 4.48 Finance leases 2.12 2.48 Weighted Average Discount Rate: Operating leases 5.31 % 5.10 % Finance leases 5.06 % 5.09 % Supplemental cash flow information related to leases was as follows: Six Months Ended Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 4,141 $ 4,110 Operating cash flows from finance leases $ 17 $ 24 Financing cash flows from finance leases $ 160 $ 187 ROU assets obtained in exchange for lease obligations: Operating leases $ 424 $ 5,916 Maturities of lease liabilities are as follows: Year Ending December 31, Operating leases Finance leases 2020 (excluding the first 6 months) $ 3,354 $ 168 2021 4,203 300 2022 3,269 82 2023 2,886 38 2024 2,699 12 Thereafter 2,354 — Total lease payments $ 18,765 $ 600 Less imputed interest (2,752) (58) Total $ 16,013 $ 542 |
Principles of Consolidation (Po
Principles of Consolidation (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | Our condensed consolidated financial statements include the accounts of FARO Technologies, Inc. and its subsidiaries, all of which are wholly-owned. All intercompany transactions and balances have been eliminated. |
Foreign Currency Translation | The financial statements of our foreign subsidiaries are translated into U.S. dollars using exchange rates in effect at period-end for assets and liabilities and average exchange rates during each reporting period for results of operations. Adjustments resulting from financial statement translations are reflected as a separate component of accumulated other comprehensive loss. Foreign currency transaction gains and losses are included in net loss. |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements and notes thereto have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements include all normal recurring accruals and adjustments considered necessary by management for a fair presentation in conformity with U.S. GAAP. |
Use of Estimates | Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Impact of Recently Adopted and Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which amends and aims to simplify accounting disclosure requirements regarding a number of topics including: intraperiod tax allocation, accounting for deferred taxes when there are changes in consolidation of certain investments, tax basis step up in an acquisition and the application of effective rate changes during interim periods, amongst other improvements. This standard is effective for fiscal years beginning after December 15, 2020 and allows for early adoption. We are currently assessing the impact of this new standard on our condensed consolidated financial statements. Impact of Recently Adopted Accounting Standards In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , was issued by the FASB in July 2018 and allows for a cumulative-effect adjustment transition method of adoption. The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those years. We adopted ASU 2016-02 effective as of January 1, 2019 utilizing the cumulative-effect adjustment transition method of adoption, which resulted in the recognition on our condensed consolidated balance sheet as of March 31, 2019 of $18.9 million of right-of-use assets for operating leases, $19.9 million of lease liability for operating leases, $0.9 million of property and equipment, net for finance leases and $0.9 million of lease liability for finance leases under which we function as a lessee. We elected certain practical expedients available under the transition provisions to (i) allow aggregation of non-lease components with the related lease components when evaluating accounting treatment, (ii) apply the modified retrospective adoption method, utilizing the simplified transition option, which allows us to continue to apply the legacy guidance in FASB ASC Topic 840, including its disclosure requirements, in the comparative periods presented in the year of adoption, and (iii) use hindsight in determining the lease term (that is, when considering our options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of our right-of-use assets. The adoption of ASU 2016-02 also required us to include any initial direct costs, which are incremental costs that would not have been incurred had the lease not been obtained, in the right-of-use assets. The recognition of these costs in connection with our adoption of this guidance did not have a material impact on our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13, and subsequent related amendments to ASU 2016-13, replaced the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. We performed an analysis to identify the Company's financial instruments which would be impacted by the promulgated amendment and identified both our trade receivables and our U.S. Treasury Bill investments. We adopted ASU 2016-13 prospectively, effective January 1, 2020, by evaluating the qualitative and quantitative characteristics of our credit-based customer portfolio. We extend credit to a customer based on an evaluation of the customer’s financial condition and, generally, collateral is not required. Trade receivables are generally due within 30 to 90 days and accounts outstanding longer than the contractual payment terms are considered past due. As part of our analysis, we calculated an allowance for all trade receivables based on our review of historical trends and future expectations for the regions we sell within, current outstanding customer balances, and the length of time balances have been outstanding. We also evaluated an allowance for our U.S. Treasury Bill investments but as they were low risk and short-term, these allowances were approximated to be zero. The adoption of ASU 2016-13 did not have a material impact on our condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which is intended to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the current guidance, performance of Step 2 requires us to calculate the implied fair value of goodwill by following procedures that would be required to determine the fair value of assets acquired and liabilities assumed in a business combination. Under the new guidance, we will perform our goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value up to the amount of the goodwill allocated to the reporting unit. The new guidance also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform Step 2 of the goodwill impairment test if it fails the qualitative assessment. As a result, all reporting units will be subject to the same impairment assessment. We will still have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. We early adopted this guidance in fiscal 2019. The adoption of ASU 2017-04 did not did not have a material impact on our condensed consolidated financial statements. |
Inventory | Inventories are stated at the lower of cost or net realizable value using the first-in first-out ("FIFO") method. We have three principal categories of inventory: 1) manufactured product to be sold; 2) sales demonstration inventory - completed product used to support our sales force for demonstrations and held for sale; and 3) service inventory - completed product and parts used to support our service department and held for sale. Shipping and handling costs are classified as a component of Cost of Sales in our condensed consolidated statements of operations. Sales demonstration inventory is held by our sales representatives for up to three years, at which time it would be refurbished and transferred to finished goods as used equipment, stated at the lower of cost or net realizable value. We expect these refurbished units to remain in finished goods inventory and sold within 12 months at prices that produce reduced gross margins. Service inventory is used to provide a temporary replacement product to a customer covered by a premium warranty when the customer’s unit requires service or repair and as training equipment. Service inventory is available for sale; however, management does not expect service inventory to be sold within 12 months and, as such, classifies this inventory as a long-term asset. Service inventory that we utilize for training or repairs and which we deem as no longer available for sale is transferred to fixed assets at the lower of cost or net realizable value and depreciated over its remaining life, typically three years. |
Description of Business (Tables
Description of Business (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | For the six months ended, June 30, 2019 As Reported Depreciation and Amortization Adjustment Selling, General and Administrative Adjustment Software Maintenance and Other Adjustments As Adjusted Sales Product $ 136,792 $ — $ — $ 5,830 $ 142,622 Service 50,316 — — (5,830) 44,486 Total sales $ 187,108 $ — $ — $ — $ 187,108 Cost of Sales Product $ 55,165 $ 1,972 $ — $ 1,319 $ 58,456 Service 24,605 1,607 — (1,319) 24,893 Total cost of sales $ 79,770 $ 3,579 $ — $ — $ 83,349 Operating Expenses Selling, general and administrative $ — $ 2,502 $ 83,525 $ — $ 86,027 Selling and marketing 55,877 — (55,877) — — General and administrative 27,648 — (27,648) — — Depreciation and amortization 9,322 (9,322) — — — Research and development 19,026 3,241 — — 22,267 Total operating expenses $ 111,873 $ (3,579) $ — $ — $ 108,294 |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables present our revenues by sales type as presented in our condensed consolidated statements of operations disaggregated by the timing of transfer of goods or services (in thousands, unaudited): For the Three Months Ended June 30, 2020 2019 Product sales Product transferred to customers at a point in time $ 39,209 $ 68,202 Product transferred to customers over time 3,050 2,843 $ 42,259 $ 71,045 For the Six Months Ended June 30, 2020 2019 Product sales Product transferred to customers at a point in time $ 92,764 $ 137,176 Product transferred to customers over time 6,020 5,446 $ 98,784 $ 142,622 For the Three Months Ended June 30, 2020 2019 Service sales Service transferred to customers at a point in time $ 6,649 $ 11,609 Service transferred to customers over time 11,656 10,837 $ 18,305 $ 22,446 For the Six Months Ended June 30, 2020 2019 Service sales Service transferred to customers at a point in time $ 17,644 $ 23,290 Service transferred to customers over time 23,651 21,196 $ 41,295 $ 44,486 The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in thousands, unaudited): For the Three Months Ended June 30, 2020 2019 Total sales to external customers United States $ 24,445 $ 35,161 EMEA (1) 16,720 30,030 Other APAC (1) 10,582 15,387 China 7,485 8,961 Other Americas (1) 1,332 3,952 $ 60,564 $ 93,491 For the Six Months Ended June 30, 2020 2019 Total sales to external customers United States $ 57,536 $ 71,009 EMEA (1) 40,410 61,130 Other APAC (1) 26,069 30,429 China 12,233 17,256 Other Americas (1) 3,831 7,284 $ 140,079 $ 187,108 (1) Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific, excluding China (Other APAC); and Canada, Mexico, and Brazil (Other Americas). |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consist of the following: As of As of As of As of Accounts receivable $ 52,151 $ 79,611 Allowance for credit losses (4,038) (3,449) Total $ 48,113 $ 76,162 |
Financing Receivable, Allowance for Credit Loss | Activity related to the allowance for credit losses was as follows: Six Months Ended June 30, 2020 Beginning balance of the allowance for credit losses $ (3,449) Current period provision for expected credit losses (1,237) Recoveries of amounts previously written off 648 Ending balance of the allowance for credit losses $ (4,038) |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of the following: As of June 30, 2020 As of December 31, 2019 Raw materials $ 33,151 $ 36,956 Finished goods 20,274 21,598 Inventories, net $ 53,425 $ 58,554 Service and sales demonstration inventory, net $ 34,130 $ 33,349 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of Number of Common Shares Used in Calculation of Basic and Diluted Earnings Per Share (EPS) | A reconciliation of the number of common shares used in the calculation of basic and diluted loss per share is presented below: Three Months Ended June 30, 2020 June 30, 2019 Shares Per-Share Shares Per-Share Basic loss per share 17,747,739 $ (0.50) 17,333,996 $ (0.37) Effect of dilutive securities — — — — Diluted loss per share 17,747,739 $ (0.50) 17,333,996 $ (0.37) Six Months Ended June 30, 2020 June 30, 2019 Shares Per-Share Shares Per-Share Basic loss per share 17,710,014 $ (1.34) 17,323,479 $ (0.36) Effect of dilutive securities — — — — Diluted loss per share 17,710,014 $ (1.34) 17,323,479 $ (0.36) |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: As of June 30, 2020 As of December 31, 2019 Accrued compensation and benefits $ 12,501 $ 15,366 Accrued restructuring costs 7,072 — Accrued warranties 1,622 2,090 Professional and legal fees 2,220 1,793 Taxes other than income 2,765 4,077 General services administration contract contingent liability (see Note 13) 12,891 11,886 Other accrued liabilities 3,904 2,860 $ 42,975 $ 38,072 |
Schedule of Activity Related to Accrued Warranties | Activity related to accrued warranties was as follows: Six Months Ended June 30, 2020 June 30, 2019 Balance, beginning of period $ 2,090 $ 2,571 Provision for warranty expense 1,174 1,855 Fulfillment of warranty obligations (1,642) (1,982) Balance, end of period $ 1,622 $ 2,444 |
Fair Value of Financial Measure
Fair Value of Financial Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Liabilities measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations: As of June 30, 2020 Level 1 Level 2 Level 3 Liabilities: Contingent consideration (1) $ — $ — $ 733 Total $ — $ — $ 733 As of December 31, 2019 Level 1 Level 2 Level 3 Liabilities: Contingent consideration (1) $ — $ — $ 733 Total $ — $ — $ 733 |
Restructuring and Related Activ
Restructuring and Related Activities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | : Severance and other benefits Professional fees and other related charges Total Balance at February 14, 2020 $ — $ — $ — Additions charged to expense 12,400 1,574 13,974 Cash payments (5,379) (1,523) (6,902) Balance at June 30, 2020 7,021 51 7,072 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Lease cost and Supplemental Cash Flow Information Related to Leases | The components of lease expense were as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended Operating lease cost $ 2,006 $ 2,029 $ 4,061 $ 3,997 Finance lease cost: Amortization of ROU assets $ 78 $ 98 $ 160 $ 190 Interest on lease liabilities $ 8 $ 12 $ 17 $ 24 Total finance lease cost $ 86 $ 110 $ 177 $ 214 Supplemental cash flow information related to leases was as follows: Six Months Ended Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 4,141 $ 4,110 Operating cash flows from finance leases $ 17 $ 24 Financing cash flows from finance leases $ 160 $ 187 ROU assets obtained in exchange for lease obligations: Operating leases $ 424 $ 5,916 |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: As of As of June 30, 2020 December 31, 2019 Operating leases: Operating lease right-of-use asset $ 14,684 $ 18,418 Current operating lease liability $ 4,591 $ 6,349 Operating lease liability - less current portion 11,422 13,272 Total operating lease liability $ 16,013 $ 19,621 Finance leases: Property and equipment, at cost $ 1,786 $ 1,870 Accumulated depreciation (1,301) (1,150) Property and equipment, net $ 485 $ 720 Current finance lease liability $ 313 $ 325 Finance lease liability - less current portion 229 426 Total finance lease liability $ 542 $ 751 Weighted Average Remaining Lease Term (in years): Operating leases 4.41 4.48 Finance leases 2.12 2.48 Weighted Average Discount Rate: Operating leases 5.31 % 5.10 % Finance leases 5.06 % 5.09 % |
Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities are as follows: Year Ending December 31, Operating leases Finance leases 2020 (excluding the first 6 months) $ 3,354 $ 168 2021 4,203 300 2022 3,269 82 2023 2,886 38 2024 2,699 12 Thereafter 2,354 — Total lease payments $ 18,765 $ 600 Less imputed interest (2,752) (58) Total $ 16,013 $ 542 |
Finance Lease, Liability, Maturity | Maturities of lease liabilities are as follows: Year Ending December 31, Operating leases Finance leases 2020 (excluding the first 6 months) $ 3,354 $ 168 2021 4,203 300 2022 3,269 82 2023 2,886 38 2024 2,699 12 Thereafter 2,354 — Total lease payments $ 18,765 $ 600 Less imputed interest (2,752) (58) Total $ 16,013 $ 542 |
Description of Business (Detail
Description of Business (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 48 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segment | Jun. 30, 2019USD ($) | Dec. 31, 2019segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Number of reportable segments | segment | 1 | 5 | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Sales | $ 60,564 | $ 93,491 | $ 140,079 | $ 187,108 | |
Cost of Sales | 31,668 | 42,751 | 67,310 | 83,349 | |
Selling, general and administrative | 30,036 | 45,007 | 66,360 | 86,027 | |
Selling and marketing | 0 | 0 | |||
General and administrative | 0 | 0 | |||
Depreciation and amortization | 0 | 0 | |||
Research and development | 10,186 | 10,626 | 20,601 | 22,267 | |
Total operating expenses | 40,858 | 55,633 | 101,285 | 108,294 | |
Previously Reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Sales | 93,491 | 187,108 | |||
Cost of Sales | 41,172 | 79,770 | |||
Selling, general and administrative | 0 | 0 | |||
Selling and marketing | 29,124 | 55,877 | |||
General and administrative | 14,424 | 27,648 | |||
Depreciation and amortization | 4,573 | 9,322 | |||
Research and development | 9,091 | 19,026 | |||
Total operating expenses | 57,212 | 111,873 | |||
Restatement Adjustment | Depreciation and Amortization Adjustment | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Cost of Sales | 1,579 | 3,579 | |||
Selling, general and administrative | 1,459 | 2,502 | |||
Selling and marketing | 0 | 0 | |||
General and administrative | 0 | 0 | |||
Depreciation and amortization | (4,573) | (9,322) | |||
Research and development | 1,535 | 3,241 | |||
Total operating expenses | (1,579) | (3,579) | |||
Restatement Adjustment | Selling, general and administrative | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Selling, general and administrative | 43,548 | 83,525 | |||
Selling and marketing | (29,124) | (55,877) | |||
General and administrative | (14,424) | (27,648) | |||
Depreciation and amortization | 0 | 0 | |||
Research and development | 0 | 0 | |||
Total operating expenses | 0 | 0 | |||
Restatement Adjustment | Software Maintenance and Other Adjustments | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Sales | 0 | 0 | |||
Cost of Sales | 0 | 0 | |||
Product | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Sales | 42,259 | 71,045 | 98,784 | 142,622 | |
Cost of Sales | 21,333 | 30,505 | 44,399 | 58,456 | |
Product | Previously Reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Sales | 67,992 | 136,792 | |||
Cost of Sales | 29,037 | 55,165 | |||
Product | Restatement Adjustment | Depreciation and Amortization Adjustment | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Cost of Sales | 796 | 1,972 | |||
Product | Restatement Adjustment | Software Maintenance and Other Adjustments | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Sales | 3,053 | 5,830 | |||
Cost of Sales | 672 | 1,319 | |||
Service | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Sales | 18,305 | 22,446 | 41,295 | 44,486 | |
Cost of Sales | $ 10,335 | 12,246 | $ 22,911 | 24,893 | |
Service | Previously Reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Sales | 25,499 | 50,316 | |||
Cost of Sales | 12,135 | 24,605 | |||
Service | Restatement Adjustment | Depreciation and Amortization Adjustment | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Cost of Sales | 783 | 1,607 | |||
Service | Restatement Adjustment | Software Maintenance and Other Adjustments | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Sales | (3,053) | (5,830) | |||
Cost of Sales | $ (672) | $ (1,319) |
Description of Business (Compen
Description of Business (Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Cost of Sales | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share-based compensation expense | $ 93 | $ 268 | $ 364 | $ 501 |
Cost of Sales | Product | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share-based compensation expense | 41 | 160 | 195 | 313 |
Cost of Sales | Service | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share-based compensation expense | 52 | 108 | 169 | 188 |
Operating Expenses | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share-based compensation expense | 2,076 | 2,484 | 3,981 | 4,815 |
Selling, general and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share-based compensation expense | 1,617 | 2,172 | 3,140 | 4,306 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share-based compensation expense | $ 459 | $ 312 | $ 841 | $ 509 |
Impact of Recently Issued Acc_2
Impact of Recently Issued Accounting Pronouncements - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Operating lease right-of-use asset | $ 14,684 | $ 18,418 | |
Operating lease liability | $ 16,013 | $ 19,621 | |
Accounting Standards Update 2016-02 | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Operating lease right-of-use asset | $ 18,900 | ||
Operating lease liability | 19,900 | ||
Accounting Standards Update 2016-02 | Property, Plant and Equipment | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Operating lease liability | 900 | ||
Accounting Standards Update 2016-02 | Finance Leases | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Operating lease liability | $ 900 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Sales | $ 60,564 | $ 93,491 | $ 140,079 | $ 187,108 |
United States | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Sales | 24,445 | 35,161 | 57,536 | 71,009 |
EMEA | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Sales | 16,720 | 30,030 | 40,410 | 61,130 |
Other APAC | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Sales | 10,582 | 15,387 | 26,069 | 30,429 |
China | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Sales | 7,485 | 8,961 | 12,233 | 17,256 |
Other Americas | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Sales | 1,332 | 3,952 | 3,831 | 7,284 |
Product sales | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Sales | 42,259 | 71,045 | 98,784 | 142,622 |
Product sales | Product transferred to customers at a point in time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Sales | 39,209 | 68,202 | 92,764 | 137,176 |
Product sales | Product transferred to customers over time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Sales | 3,050 | 2,843 | 6,020 | 5,446 |
Service sales | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Sales | 18,305 | 22,446 | 41,295 | 44,486 |
Service sales | Product transferred to customers at a point in time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Sales | 6,649 | 11,609 | 17,644 | 23,290 |
Service sales | Product transferred to customers over time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Sales | $ 11,656 | $ 10,837 | $ 23,651 | $ 21,196 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||||
Recognized service revenue | $ 9.8 | $ 8.8 | $ 22 | $ 19.7 | |
Refund liability | 0.1 | $ 0.1 | $ 0.1 | $ 0.1 | |
Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
Extended product warranty term | 1 month | ||||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Extended product warranty term | 3 years | ||||
Commissions | |||||
Disaggregation of Revenue [Line Items] | |||||
Capitalized contract cost, gross | 3 | $ 3 | $ 3.1 | ||
Prepaid expenses and other current assets | Commissions | |||||
Disaggregation of Revenue [Line Items] | |||||
Capitalized contract cost, gross | 2 | 2 | 2.1 | ||
Other long-term assets | Commissions | |||||
Disaggregation of Revenue [Line Items] | |||||
Capitalized contract cost, gross | $ 1 | $ 1 | $ 1 |
Short-term Investments - Narrat
Short-term Investments - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Securities Purchased Under Agreements to Resell and Other Short Term Investment Securities [Line Items] | ||
Short-term investments | $ 0 | $ 24,870 |
US Treasury Bill Securities | ||
Securities Purchased Under Agreements to Resell and Other Short Term Investment Securities [Line Items] | ||
Short-term investments | 24,800 | |
U.S. Treasury Security, Maturing on March 12, 2020 | US Treasury Bill Securities | ||
Securities Purchased Under Agreements to Resell and Other Short Term Investment Securities [Line Items] | ||
Short-term investments | $ 8,900 | |
Interest rate on U.S. Treasury Bills | 1.80% | |
U.S. Treasury Security, Maturing on June 11, 2020 | US Treasury Bill Securities | ||
Securities Purchased Under Agreements to Resell and Other Short Term Investment Securities [Line Items] | ||
Short-term investments | $ 15,900 | |
Interest rate on U.S. Treasury Bills | 1.40% |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Accounts receivable | $ 52,151 | $ 79,611 |
Allowance for credit losses | (4,038) | (3,449) |
Total | $ 48,113 | $ 76,162 |
Accounts Receivable - Credit Lo
Accounts Receivable - Credit Loss (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Receivables [Abstract] | |
Beginning balance of the allowance for credit losses | $ (3,449) |
Current period provision for expected credit losses | (1,237) |
Recoveries of amounts previously written off | 648 |
Ending balance of the allowance for credit losses | $ (4,038) |
Inventories - Additional Inform
Inventories - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Line Items] | |
Demonstration inventory shelf life (in years) | 3 years |
Refurbished demonstration inventory selling period (in months) | 12 months |
Service Inventory | |
Property, Plant and Equipment [Line Items] | |
Inventory, remaining useful life (in years) | 3 years |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 33,151 | $ 36,956 |
Finished goods | 20,274 | 21,598 |
Inventories, net | 53,425 | 58,554 |
Service and sales demonstration inventory, net | $ 34,130 | $ 33,349 |
Loss Per Share - Reconciliation
Loss Per Share - Reconciliation of Number of Common Shares Used in Calculation of Basic and Diluted Earnings Per Share (EPS) (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities (in shares) | 767,458 | 702,202 | 767,458 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Basic loss per share (in shares) | 17,747,739 | 17,333,996 | 17,710,014 | 17,323,479 |
Effect of dilutive securities (in shares) | 0 | 0 | 0 | 0 |
Diluted loss (in shares) | 17,747,739 | 17,333,996 | 17,710,014 | 17,323,479 |
Basic loss (in dollars per share) | $ (0.50) | $ (0.37) | $ (1.34) | $ (0.36) |
Effect of dilutive securities (in dollars per share) | 0 | 0 | 0 | 0 |
Diluted loss (in dollars per share) | $ (0.50) | $ (0.37) | $ (1.34) | $ (0.36) |
Accrued Liabilities - Summary (
Accrued Liabilities - Summary (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||||
Accrued compensation and benefits | $ 12,501 | $ 15,366 | ||
Accrued restructuring costs | 7,072 | 0 | ||
Accrued warranties | 1,622 | 2,090 | $ 2,444 | $ 2,571 |
Professional and legal fees | 2,220 | 1,793 | ||
Taxes other than income | 2,765 | 4,077 | ||
General services administration contract contingent liability (see Note 13) | 12,891 | 11,886 | ||
Other accrued liabilities | 3,904 | 2,860 | ||
Accrued liabilities | $ 42,975 | $ 38,072 |
Accrued Liabilities - Activity
Accrued Liabilities - Activity Related to Accrued Warranties (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Balance, beginning of period | $ 2,090 | $ 2,571 |
Provision for warranty expense | 1,174 | 1,855 |
Fulfillment of warranty obligations | (1,642) | (1,982) |
Balance, end of period | $ 1,622 | $ 2,444 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Liabilities: | |||
Payment of contingent consideration for acquisitions | $ 0 | $ 250 | |
Level 1 | Fair Value, Measurements, Recurring | |||
Liabilities: | |||
Contingent consideration | 0 | $ 0 | |
Total | 0 | 0 | |
Level 2 | Fair Value, Measurements, Recurring | |||
Liabilities: | |||
Contingent consideration | 0 | 0 | |
Total | 0 | 0 | |
Level 3 | Fair Value, Measurements, Recurring | |||
Liabilities: | |||
Contingent consideration | 733 | 733 | |
Total | 733 | $ 733 | |
Monte Carlo Simulation Valuation Model | |||
Liabilities: | |||
Undiscounted maximum payment under the contingent consideration arrangements | $ 1,200 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) $ in Thousands | Feb. 14, 2020USD ($)headcount | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) |
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring costs | $ 636 | $ 0 | $ 14,324 | $ 0 | ||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Photonics and 3D Design | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Proceeds from divestiture of businesses | 600 | |||||||
Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Incurred cost | $ 49,000 | |||||||
Restructuring costs | $ 13,974 | |||||||
Payments for restructuring | 6,902 | |||||||
Professional fees and other related charges | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Expected number of positions eliminated | headcount | 500 | |||||||
Incurred cost | 600 | $ 13,700 | ||||||
Restructuring costs | 1,574 | |||||||
Payments for restructuring | $ 1,523 | |||||||
Professional fees and other related charges | Goodwill | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring costs | 21,200 | |||||||
Professional fees and other related charges | Excess and Obsolete Inventory | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring costs | 12,800 | |||||||
Professional fees and other related charges | Acquired Assets | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring costs | 10,500 | |||||||
Professional fees and other related charges | Capitalized Patents | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring costs | 1,400 | |||||||
Professional fees and other related charges | Other Assets | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring costs | $ 3,400 | |||||||
Professional fees and other related charges | Minimum | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Expected cost | 12,000 | 12,000 | ||||||
Restructuring and related cost, cash | $ 11,000 | |||||||
Professional fees and other related charges | Maximum | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Expected cost | 22,000 | $ 22,000 | ||||||
Restructuring and related cost, cash | $ 15,000 | |||||||
Employee Severance | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Payments for restructuring | $ 4,500 | $ 900 |
Restructuring - Activity (Detai
Restructuring - Activity (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||||
Additions charged to expense | $ 636 | $ 0 | $ 14,324 | $ 0 | |
Restructuring Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Balance at February 14, 2020 | $ 0 | 7,072 | |||
Additions charged to expense | 13,974 | ||||
Cash payments | (6,902) | ||||
Balance at June 30, 2020 | 7,072 | ||||
Severance and other benefits | Restructuring Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Balance at February 14, 2020 | 0 | 7,021 | |||
Additions charged to expense | 12,400 | ||||
Cash payments | (5,379) | ||||
Balance at June 30, 2020 | 7,021 | ||||
Professional fees and other related charges | Restructuring Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Balance at February 14, 2020 | 0 | $ 51 | |||
Additions charged to expense | 1,574 | ||||
Cash payments | (1,523) | ||||
Balance at June 30, 2020 | $ 51 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 7 Months Ended | 93 Months Ended | 108 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | |
Commitments and Contingencies [Line Items] | ||||||||
Purchase commitment, due in next twelve months | $ 48.1 | $ 48.1 | $ 48.1 | |||||
Minimum | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Length of purchase commitments, (in days) | 60 days | |||||||
Maximum | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Length of purchase commitments, (in days) | 120 days | |||||||
Government Contract | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Charges to income from price adjustment clauses | $ 4.8 | |||||||
GSA matter and imputed interest | $ 0.1 | 0.5 | $ 0.2 | $ 0.7 | ||||
Total estimated liability from price adjustment clauses | 12.9 | $ 5.3 | $ 12.9 | 12.9 | ||||
Reduction in sales, adjustment | $ 0.6 | $ 5.8 | ||||||
Estimated aggregate overcharge in contracts | $ 10.6 | $ 11.2 | ||||||
Other Expense | Government Contract | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Total estimated liability from price adjustment clauses | $ 6.5 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Lessee, Lease, Description [Line Items] | ||||
Renewal term | 8 years | |||
Termination window | 3 months | |||
Short term lease cost | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Term of contract | 1 year | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Term of contract | 7 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease cost | $ 2,006 | $ 2,029 | $ 4,061 | $ 3,997 |
Finance lease cost: | ||||
Amortization of ROU assets | 78 | 98 | 160 | 190 |
Interest on lease liabilities | 8 | 12 | 17 | 24 |
Total finance lease cost | $ 86 | $ 110 | $ 177 | $ 214 |
Leases Supplemental Balance She
Leases Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Operating leases: | ||
Operating lease right-of-use asset | $ 14,684 | $ 18,418 |
Current operating lease liability | 4,591 | 6,349 |
Operating lease liability - less current portion | 11,422 | 13,272 |
Total operating lease liability | 16,013 | 19,621 |
Finance leases: | ||
Property and equipment, at cost | 1,786 | 1,870 |
Accumulated depreciation | (1,301) | (1,150) |
Property and equipment, net | 485 | 720 |
Current finance lease liability | 313 | 325 |
Finance lease liability - less current portion | 229 | 426 |
Total finance lease liability | $ 542 | $ 751 |
Weighted Average Remaining Lease Term (in years): | ||
Operating leases | 4 years 4 months 28 days | 4 years 5 months 23 days |
Finance leases | 2 years 1 month 13 days | 2 years 5 months 23 days |
Weighted Average Discount Rate: | ||
Operating leases | 5.31% | 5.10% |
Finance leases | 5.06% | 5.09% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 4,141 | $ 4,110 |
Operating cash flows from finance leases | 17 | 24 |
Financing cash flows from finance leases | 160 | 187 |
ROU assets obtained in exchange for lease obligations: | ||
Operating leases | $ 424 | $ 5,916 |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Operating leases | ||
2020 (excluding the first 6 months) | $ 3,354 | |
2021 | 4,203 | |
2022 | 3,269 | |
2023 | 2,886 | |
2024 | 2,699 | |
Thereafter | 2,354 | |
Total lease payments | 18,765 | |
Less imputed interest | (2,752) | |
Total | 16,013 | $ 19,621 |
Financing leases | ||
2020 (excluding the first 6 months) | 168 | |
2021 | 300 | |
2022 | 82 | |
2023 | 38 | |
2024 | 12 | |
Thereafter | 0 | |
Total lease payments | 600 | |
Less imputed interest | (58) | |
Total | $ 542 | $ 751 |