x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 68-0438710 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
Large Accelerated Filer | o | Accelerated Filer | x | ||||
Non-accelerated filer | o | (Do not check if a smaller reporting Company) | Smaller Reporting Company | o |
ITEM 1. | Financial Statements |
March 26, 2016 | December 31, 2015 | |||||||
(Unaudited) | (See Note 1) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 21,365 | $ | 23,626 | ||||
Marketable securities | 42,895 | 49,964 | ||||||
Accounts receivable, net | 43,804 | 47,155 | ||||||
Inventory | 41,127 | 47,667 | ||||||
Deferred cost of revenue | 4,108 | 4,918 | ||||||
Prepaid expenses and other current assets | 9,972 | 9,470 | ||||||
Total current assets | 163,271 | 182,800 | ||||||
Property and equipment, net | 16,515 | 17,149 | ||||||
Goodwill | 116,175 | 116,175 | ||||||
Intangible assets, net | 3,254 | 6,618 | ||||||
Other assets | 1,202 | 1,144 | ||||||
Total assets | $ | 300,417 | $ | 323,886 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 11,144 | $ | 19,603 | ||||
Accrued liabilities | 43,801 | 35,512 | ||||||
Deferred revenue | 9,802 | 12,124 | ||||||
Total current liabilities | 64,747 | 67,239 | ||||||
Long-term portion of deferred revenue | 19,696 | 19,569 | ||||||
Other long-term liabilities | 1,196 | 1,293 | ||||||
Total liabilities | 85,639 | 88,101 | ||||||
Commitments and contingencies (See Note 7) | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.025 par value; 5,000,000 shares authorized; no shares issued and outstanding as of March 26, 2016 and December 31, 2015 | — | — | ||||||
Common stock, $0.025 par value; 100,000,000 shares authorized; 53,110,593 shares issued and 47,780,776 shares outstanding as of March 26, 2016, and 53,049,781 shares issued and 49,509,251 shares outstanding as of December 31, 2015 | 1,328 | 1,326 | ||||||
Additional paid-in capital | 821,236 | 818,754 | ||||||
Accumulated other comprehensive loss | (148 | ) | (195 | ) | ||||
Accumulated deficit | (567,652 | ) | (556,923 | ) | ||||
Treasury stock, 5,329,817 shares and 3,540,530 shares as of March 26, 2016 and December 31, 2015, respectively | (39,986 | ) | (27,177 | ) | ||||
Total stockholders’ equity | 214,778 | 235,785 | ||||||
Total liabilities and stockholders’ equity | $ | 300,417 | $ | 323,886 |
Three Months Ended | ||||||||
March 26, 2016 | March 28, 2015 | |||||||
Revenue | $ | 98,375 | $ | 91,038 | ||||
Cost of revenue: | ||||||||
Products and services (1) | 51,230 | 46,460 | ||||||
Amortization of intangible assets | 1,663 | 2,088 | ||||||
Total cost of revenue | 52,893 | 48,548 | ||||||
Gross profit | 45,482 | 42,490 | ||||||
Operating expenses: | ||||||||
Research and development (1) | 22,773 | 21,914 | ||||||
Sales and marketing (1) | 19,062 | 19,759 | ||||||
General and administrative (1) | 12,684 | 10,152 | ||||||
Amortization of intangible assets | 1,701 | 2,552 | ||||||
Total operating expenses | 56,220 | 54,377 | ||||||
Loss from operations | (10,738 | ) | (11,887 | ) | ||||
Interest and other income (expense), net: | ||||||||
Interest income | 211 | 379 | ||||||
Interest expense | (164 | ) | (379 | ) | ||||
Other income (expense), net | 83 | 48 | ||||||
Loss before provision for income taxes | (10,608 | ) | (11,839 | ) | ||||
Provision for income taxes | 121 | 91 | ||||||
Net loss | $ | (10,729 | ) | $ | (11,930 | ) | ||
Net loss per common share: | ||||||||
Basic and diluted | $ | (0.22 | ) | $ | (0.23 | ) | ||
Weighted-average number of shares used to | ||||||||
compute net loss per common share: | ||||||||
Basic and diluted | 48,591 | 51,732 | ||||||
Net loss | $ | (10,729 | ) | (11,930 | ) | |||
Other comprehensive income (loss), net of tax: | ||||||||
Unrealized gains on available-for-sale | ||||||||
marketable securities, net | 65 | 39 | ||||||
Foreign currency translation adjustments, net | (18 | ) | (30 | ) | ||||
Total other comprehensive income (loss), net of tax | 47 | 9 | ||||||
Comprehensive loss | $ | (10,682 | ) | $ | (11,921 | ) | ||
(1) Includes stock-based compensation as follows: | ||||||||
Cost of revenue | $ | 127 | $ | 175 | ||||
Research and development | 1,047 | 1,212 | ||||||
Sales and marketing | 822 | 1,425 | ||||||
General and administrative | 725 | 850 |
Three Months Ended | ||||||||
March 26, 2016 | March 28, 2015 | |||||||
Operating activities: | ||||||||
Net loss | $ | (10,729 | ) | $ | (11,930 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 1,955 | 2,480 | ||||||
Loss on retirement of property and equipment | — | 10 | ||||||
Amortization of intangible assets | 3,364 | 4,640 | ||||||
Amortization of premiums related to available-for-sale securities | 114 | 287 | ||||||
Stock-based compensation | 2,721 | 3,662 | ||||||
Changes in operating assets and liabilities: | ||||||||
Restricted cash | — | 295 | ||||||
Accounts receivable, net | 3,351 | (8,256 | ) | |||||
Inventory | 6,540 | 6,115 | ||||||
Deferred cost of revenue | 810 | 3,318 | ||||||
Prepaid expenses and other assets | (576 | ) | 1,974 | |||||
Accounts payable | (8,459 | ) | (10,836 | ) | ||||
Accrued liabilities | 8,471 | 54 | ||||||
Deferred revenue | (2,195 | ) | (3,651 | ) | ||||
Other long-term liabilities | (98 | ) | (59 | ) | ||||
Net cash provided by (used in) operating activities | 5,269 | (11,897 | ) | |||||
Investing activities: | ||||||||
Purchases of property and equipment | (1,453 | ) | (1,742 | ) | ||||
Purchases of marketable securities | — | (17,004 | ) | |||||
Maturities of marketable securities | 7,020 | 11,450 | ||||||
Net cash provided by (used in) investing activities | 5,567 | (7,296 | ) | |||||
Financing activities: | ||||||||
Proceeds from exercise of stock options | 14 | 564 | ||||||
Payments for repurchases of common stock | (12,809 | ) | — | |||||
Taxes paid for awards vested under equity incentive plans | (251 | ) | (506 | ) | ||||
Net cash provided by (used in) financing activities | (13,046 | ) | 58 | |||||
Effect of exchange rate changes on cash and cash equivalents | (51 | ) | (76 | ) | ||||
Net decrease in cash and cash equivalents | (2,261 | ) | (19,211 | ) | ||||
Cash and cash equivalents at beginning of period | 23,626 | 48,829 | ||||||
Cash and cash equivalents at end of period | $ | 21,365 | $ | 29,618 |
a. | Accounting for Income Taxes: ASU 2016-09 requires recognition of all of the tax effects related to share-based payments at settlement (or expiration) through the statement of operations. Under the current GAAP, tax benefits in excess of compensation cost (“windfalls”) are recorded in equity, and tax deficiencies (“shortfalls”) are recorded in equity to the extent of previous windfalls, and then to the statement of operations. ASU 2016-09 is required to be applied prospectively to all excess tax benefits and tax deficiencies resulting from settlements after the date of adoption. ASU 2016-09 also removes the requirement to delay recognition of a windfall tax benefit until it reduces current taxes payable. Under the new guidance, the benefit will be recorded when it arises, subject to normal valuation allowance considerations. This change is required to be applied on a modified retrospective basis, with a cumulative-effect adjustment to opening retained earnings. |
b. | Classification of Excess Tax Benefits on the Statement of Cash Flows: ASU 2016-09 requires all tax-related cash flows resulting from share-based payments to be reported as operating activities on the statement of cash flows, a change from the current requirement to present windfall tax benefits as an inflow from financing activities and an outflow from operating activities. Either prospective or retrospective transition of this change in cash flow presentation is permitted. |
c. | Forfeitures: ASU 2016-09 allows companies to make an accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. Estimates of forfeitures will still be required in certain circumstances, such as at the time of modification of an award or issuance of a replacement award in a business combination. If elected, the change to recognize forfeitures when they occur needs to be adopted using a modified retrospective approach, with a cumulative effect adjustment recorded to opening retained earnings. |
d. | Minimum Statutory Tax Withholding Requirements: ASU 2016-09 allows companies to withhold an amount up to the employees’ maximum individual tax rate in the relevant jurisdiction without resulting in liability classification of the award. This provision is required to be adopted using a modified retrospective approach, with a cumulative-effect adjustment to opening retained earnings for any outstanding liability awards that qualify for equity classification under the ASU. |
e. | Classification of Employee Taxes Paid on the Statement of Cash Flows When an Employer Withholds Shares for Tax-Withholding Purposes: ASU 2016-09 clarifies that all cash payments made to taxing authorities on the employees’ behalf for withheld shares should be presented as financing activities on the statement of cash flows. This change should be applied retrospectively. |
March 26, 2016 | December 31, 2015 | |||||||
Cash and cash equivalents: | ||||||||
Cash | $ | 10,861 | $ | 13,378 | ||||
Money market funds | 10,504 | 10,248 | ||||||
Total cash and cash equivalents | 21,365 | 23,626 | ||||||
Marketable securities: | ||||||||
Corporate debt securities | 28,722 | 35,799 | ||||||
U.S. government agency securities | 10,524 | 10,520 | ||||||
Commercial paper | 3,649 | 3,645 | ||||||
Total marketable securities | 42,895 | 49,964 | ||||||
Total cash, cash equivalents and marketable securities | $ | 64,260 | $ | 73,590 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Corporate debt securities | $ | 28,745 | $ | 2 | $ | (25 | ) | $ | 28,722 | |||||||
U.S. government agency securities | 10,530 | — | (6 | ) | 10,524 | |||||||||||
Commercial paper | 3,649 | — | — | 3,649 | ||||||||||||
Total marketable securities | $ | 42,924 | $ | 2 | $ | (31 | ) | $ | 42,895 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Corporate debt securities | $ | 35,869 | $ | 2 | $ | (72 | ) | $ | 35,799 | |||||||
U.S. government agency securities | 10,544 | — | (24 | ) | 10,520 | |||||||||||
Commercial paper | 3,645 | — | — | 3,645 | ||||||||||||
Total marketable securities | $ | 50,058 | $ | 2 | $ | (96 | ) | $ | 49,964 |
Amortized Cost | Fair Value | |||||||
Due in 1 year or less | $ | 42,924 | $ | 42,895 |
As of March 26, 2016 | Level 1 | Level 2 | Total | |||||||||
Money market funds | $ | 10,504 | $ | — | $ | 10,504 | ||||||
Corporate debt securities | — | 28,722 | 28,722 | |||||||||
U.S. government agency securities | — | 10,524 | 10,524 | |||||||||
Commercial paper | — | 3,649 | 3,649 | |||||||||
Total | $ | 10,504 | $ | 42,895 | $ | 53,399 |
As of December 31, 2015 | Level 1 | Level 2 | Total | |||||||||
Money market funds | $ | 10,248 | $ | — | $ | 10,248 | ||||||
Corporate debt securities | — | 35,799 | 35,799 | |||||||||
U.S. government agency securities | — | 10,520 | 10,520 | |||||||||
Commercial paper | — | 3,645 | 3,645 | |||||||||
Total | $ | 10,248 | $ | 49,964 | $ | 60,212 |
March 26, 2016 | December 31, 2015 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||||
Core developed technology | $ | 68,964 | $ | (65,710 | ) | $ | 3,254 | $ | 68,964 | $ | (64,047 | ) | $ | 4,917 | ||||||||||
Customer relationships | 54,740 | (54,740 | ) | — | 54,740 | (53,039 | ) | 1,701 | ||||||||||||||||
Total intangible assets, excluding goodwill | $ | 123,704 | $ | (120,450 | ) | $ | 3,254 | $ | 123,704 | $ | (117,086 | ) | $ | 6,618 |
Period | Expected Amortization Expense | |||
Remainder of 2016 | $ | 2,441 | ||
2017 | 813 | |||
Total | $ | 3,254 |
March 26, 2016 | December 31, 2015 | |||||||
Accounts receivable | $ | 44,776 | $ | 48,319 | ||||
Allowance for doubtful accounts | (417 | ) | (501 | ) | ||||
Product return reserve | (555 | ) | (663 | ) | ||||
Accounts receivable, net | $ | 43,804 | $ | 47,155 |
March 26, 2016 | December 31, 2015 | |||||||
Raw materials | $ | 2,048 | $ | 2,209 | ||||
Finished goods | 39,079 | 45,458 | ||||||
Total inventory | $ | 41,127 | $ | 47,667 |
March 26, 2016 | December 31, 2015 | |||||||
Test equipment | $ | 39,914 | $ | 39,035 | ||||
Computer equipment and software | 27,957 | 27,736 | ||||||
Furniture and fixtures | 2,096 | 1,833 | ||||||
Leasehold improvements | 6,554 | 6,554 | ||||||
Total | 76,521 | 75,158 | ||||||
Accumulated depreciation and amortization | (60,006 | ) | (58,009 | ) | ||||
Property and equipment, net | $ | 16,515 | $ | 17,149 |
March 26, 2016 | December 31, 2015 | |||||||
Accrued compensation and related benefits | $ | 17,019 | $ | 13,809 | ||||
Accrued warranty | 9,152 | 9,564 | ||||||
Accrued professional and consulting fees | 7,392 | 2,813 | ||||||
Accrued customer rebates | 1,269 | 784 | ||||||
Accrued excess and obsolete inventory at contract manufacturers | 1,038 | 1,011 | ||||||
Advance customer payments | 971 | 1,094 | ||||||
Accrued non income related taxes | 914 | 905 | ||||||
Accrued business travel expenses | 854 | 580 | ||||||
Accrued insurance | 791 | — | ||||||
Accrued rent | 396 | 381 | ||||||
Accrued freight | 345 | 486 | ||||||
Income taxes payable | 287 | 322 | ||||||
Accrued hosting services | 240 | 466 | ||||||
Accrued other | 3,133 | 3,297 | ||||||
Total accrued liabilities | $ | 43,801 | $ | 35,512 |
March 26, 2016 | December 31, 2015 | |||||||
Current: | ||||||||
Product and services | $ | 6,536 | $ | 8,937 | ||||
Extended warranty | 3,266 | 3,187 | ||||||
9,802 | 12,124 | |||||||
Non-current: | ||||||||
Product and services | 45 | 58 | ||||||
Extended warranty | 19,651 | 19,511 | ||||||
19,696 | 19,569 | |||||||
Total deferred revenue | $ | 29,498 | $ | 31,693 |
Three Months Ended | ||||||||
March 26, 2016 | March 28, 2015 | |||||||
Balance at beginning of period | $ | 9,564 | $ | 9,553 | ||||
Warranty charged to cost of revenue | 580 | 1,068 | ||||||
Utilization of warranty | (619 | ) | (998 | ) | ||||
Adjustments to pre-existing warranty | (373 | ) | — | |||||
Balance at end of period | $ | 9,152 | $ | 9,623 |
Three Months Ended | ||||||||
March 26, 2016 | March 28, 2015 | |||||||
Numerator: | ||||||||
Net loss | $ | (10,729 | ) | $ | (11,930 | ) | ||
Denominator: | ||||||||
Weighted-average common shares outstanding | 48,591 | 51,732 | ||||||
Basic and diluted net loss per common share | $ | (0.22 | ) | $ | (0.23 | ) | ||
Potentially dilutive shares, weighted average | 5,500 | 5,625 |
Three Months Ended | |||||||||||||||||||||||
March 26, 2016 | March 28, 2015 | ||||||||||||||||||||||
Unrealized Gains and Losses on Available-for-Sale Marketable Securities | Foreign Currency Translation Adjustments | Total | Unrealized Gains and Losses on Available-for-Sale Marketable Securities | Foreign Currency Translation Adjustments | Total | ||||||||||||||||||
Balance at beginning of period | $ | (94 | ) | $ | (101 | ) | $ | (195 | ) | $ | (58 | ) | $ | 138 | $ | 80 | |||||||
Other comprehensive income (loss) | 65 | (18 | ) | 47 | 39 | (30 | ) | 9 | |||||||||||||||
Balance at end of period | $ | (29 | ) | $ | (119 | ) | $ | (148 | ) | $ | (19 | ) | $ | 108 | $ | 89 |
Three Months Ended | ||||||||
March 26, 2016 | March 28, 2015 | |||||||
Provision for income taxes | $ | 121 | $ | 91 | ||||
Effective tax rate | (1.1 | )% | (0.8 | )% |
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
a. | Accounting for Income Taxes: ASU 2016-09 requires recognition of all of the tax effects related to share-based payments at settlement (or expiration) through the statement of operations. Under the current GAAP, tax benefits in excess of compensation cost (“windfalls”) are recorded in equity, and tax deficiencies (“shortfalls”) are recorded in equity to the extent of previous windfalls, and then to the statement of operations. ASU 2016-09 is required to be applied prospectively to all excess tax benefits and tax deficiencies resulting from settlements after the date of adoption. ASU 2016-09 also removes the requirement to delay recognition of a windfall tax benefit until it reduces current taxes payable. Under the new guidance, the benefit will be recorded when it arises, subject to normal valuation allowance considerations. This change is required to be applied on a modified retrospective basis, with a cumulative-effect adjustment to opening retained earnings. |
b. | Classification of Excess Tax Benefits on the Statement of Cash Flows: ASU 2016-09 requires all tax-related cash flows resulting from share-based payments to be reported as operating activities on the statement of cash flows, a change from the current requirement to present windfall tax benefits as an inflow from financing activities and an outflow from operating activities. Either prospective or retrospective transition of this change in cash flow presentation is permitted. |
c. | Forfeitures: ASU 2016-09 allows companies to make an accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. Estimates of forfeitures will still be required in certain circumstances, such as at the time of modification of an award or issuance of a replacement award in a business combination. If elected, the change to recognize forfeitures when they occur needs to be adopted using a modified retrospective approach, with a cumulative effect adjustment recorded to opening retained earnings. |
d. | Minimum Statutory Tax Withholding Requirements: ASU 2016-09 allows companies to withhold an amount up to the employees’ maximum individual tax rate in the relevant jurisdiction without resulting in liability classification of the award. This provision is required to be adopted using a modified retrospective approach, with a cumulative-effect adjustment to opening retained earnings for any outstanding liability awards that qualify for equity classification under the ASU. |
e. | Classification of Employee Taxes Paid on the Statement of Cash Flows When an Employer Withholds Shares for Tax-Withholding Purposes: ASU 2016-09 clarifies that all cash payments made to taxing authorities on the employees’ behalf for withheld shares should be presented as financing activities on the statement of cash flows. This change should be applied retrospectively. |
Three Months Ended | |||||||||||||||
March 26, 2016 | March 28, 2015 | Variance in Dollars | Variance in Percent | ||||||||||||
Revenue | $ | 98,375 | $ | 91,038 | $ | 7,337 | 8 | % |
Three Months Ended | |||||||||||||||
March 26, 2016 | March 28, 2015 | Variance in Dollars | Variance in Percent | ||||||||||||
Cost of revenue: | |||||||||||||||
Products and services | $ | 51,230 | $ | 46,460 | $ | 4,770 | 10 | % | |||||||
Amortization of intangible assets | 1,663 | 2,088 | (425 | ) | (20 | )% | |||||||||
Total cost of revenue | $ | 52,893 | $ | 48,548 | $ | 4,345 | 9 | % | |||||||
Gross profit | $ | 45,482 | $ | 42,490 | $ | 2,992 | 7 | % | |||||||
Gross margin | 46 | % | 47 | % |
Three Months Ended | |||||||||||||||
March 26, 2016 | March 28, 2015 | Variance in Dollars | Variance in Percent | ||||||||||||
Research and development | $ | 22,773 | $ | 21,914 | $ | 859 | 4 | % | |||||||
Percent of total revenue | 23 | % | 24 | % |
Three Months Ended | |||||||||||||||
March 26, 2016 | March 28, 2015 | Variance in Dollars | Variance in Percent | ||||||||||||
Sales and marketing | $ | 19,062 | $ | 19,759 | $ | (697 | ) | (4 | )% | ||||||
Percent of total revenue | 19 | % | 22 | % |
Three Months Ended | |||||||||||||||
March 26, 2016 | March 28, 2015 | Variance in Dollars | Variance in Percent | ||||||||||||
General and administrative | $ | 12,684 | $ | 10,152 | $ | 2,532 | 25 | % | |||||||
Percent of total revenue | 13 | % | 11 | % |
Three Months Ended | |||||||||||||||
March 26, 2016 | March 28, 2015 | Variance in Dollars | Variance in Percent | ||||||||||||
Amortization of intangible assets | $ | 1,701 | $ | 2,552 | $ | (851 | ) | (33 | )% | ||||||
Percent of total revenue | 2 | % | 3 | % |
Three Months Ended | |||||||||||||||
March 26, 2016 | March 28, 2015 | Variance in Dollars | Variance in Percent | ||||||||||||
Provision for income taxes | $ | 121 | $ | 91 | $ | 30 | 33 | % | |||||||
Effective tax rate | (1.1 | )% | (0.8 | )% |
ITEM 4. | Controls and Procedures |
• | our ability to predict our revenue and plan our expenses appropriately; |
• | our ability to increase our sales to larger North American as well as international CSPs; |
• | the capital spending patterns of CSPs and any decrease or delay in capital spending by CSPs due to macro-economic conditions, regulatory implementation or uncertainties, or other reasons; |
• | the impact of government-sponsored programs on our customers; |
• | intense competition; |
• | our ability to develop new products or enhancements that support technological advances and meet changing CSP requirements; |
• | our ability to achieve market acceptance of our products and CSPs' willingness to deploy our new products; |
• | the concentration of our customer base; |
• | the length and unpredictability of our sales cycles and the timing of orders; |
• | our focus on CSPs with limited revenue potential; |
• | our lack of long-term, committed-volume purchase contracts with our customers; |
• | our exposure to the credit risks of our customers; |
• | fluctuations in our gross margin; |
• | the interoperability of our products with CSP networks; |
• | our dependence on sole-, single- and limited-source suppliers; |
• | our ability to manage our relationships with our contract manufacturers and suppliers; |
• | our ability to forecast our manufacturing requirements and manage our inventory; |
• | our products' compliance with industry standards; |
• | our ability to expand our international operations; |
• | our ability to protect our intellectual property and the cost of doing so; |
• | the quality of our products, including any undetected hardware defects or bugs in our software; |
• | our ability to estimate future warranty obligations due to product failure rates; |
• | our ability to obtain necessary third-party technology licenses at reasonable costs; |
• | the regulatory and physical impacts of climate change and other natural events; |
• | the attraction and retention of qualified employees and key management personnel; |
• | our ability to build and sustain the proper information technology infrastructure; and |
• | our ability to maintain proper and effective internal controls. |
• | the successful development of new products; |
• | our ability to anticipate CSP and market requirements and changes in technology and industry standards; |
• | our ability to differentiate our products from our competitors' offerings based on performance, cost-effectiveness or other factors; |
• | our ongoing ability to successfully integrate acquired product lines and customer bases into our business; |
• | our ability to gain customer acceptance of our products; and |
• | our ability to market and sell our products. |
• | changes in customer, geographic or product mix, including the mix of configurations within each product group; |
• | increased price competition, including the impact of customer discounts and rebates; |
• | our inability to reduce and control product costs; |
• | changes in component pricing; |
• | changes in contract manufacturer rates; |
• | charges incurred due to inventory holding periods if parts ordering does not correctly anticipate product demand; |
• | introduction of new products; |
• | an increase in revenue mix toward services, which typically have lower margins; |
• | changes in shipment volume; |
• | changes in distribution channels; |
• | increased expansion efforts into new or emerging markets; |
• | increased warranty costs; |
• | excess and obsolete inventory and inventory holding charges; |
• | expediting costs incurred to meet customer delivery requirements; and |
• | potential costs associated with liquidated damages obligations under customer contractual terms. |
• | differing regulatory requirements, including tax laws, trade laws, labor regulations, tariffs, export quotas, custom duties or other trade restrictions; |
• | liability or damage to our reputation resulting from corruption or unethical business practices in some countries; |
• | fluctuation in currency exchange rates; |
• | longer collection periods and difficulties in collecting accounts receivable; |
• | greater difficulty supporting and localizing our products; |
• | different or unique competitive pressures as a result of, among other things, the presence of local equipment suppliers; |
• | challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, compensation and benefits and compliance programs; |
• | limited or unfavorable intellectual property protection; |
• | risk of change in international political or economic conditions, terrorist attacks or acts of war; and |
• | restrictions on the repatriation of earnings. |
• | manage a larger organization; |
• | expand our manufacturing and distribution capacity; |
• | increase our sales and marketing efforts; |
• | broaden our customer-support capabilities; |
• | implement appropriate operational and financial systems; and |
• | maintain effective financial disclosure controls and procedures. |
• | cost associated with fixing software or hardware defects; |
• | high service and warranty expenses; |
• | high inventory obsolescence expense; |
• | delays in collecting accounts receivable; |
• | payment of liquidated damages for performance failures; and |
• | declining sales to existing customers. |
• | expenses and distractions, including diversion of management time related to litigation; |
• | expenses and distractions related to potential claims resulting from any possible future acquisitions, whether or not they are completed; |
• | retaining and integrating employees from any businesses we may acquire; |
• | issuance of dilutive equity securities or incurrence of debt; |
• | integrating various accounting, management, information, human resource and other systems to permit effective management; |
• | incurring possible write-offs, impairment charges, contingent liabilities, amortization expense of intangible assets or impairment of goodwill and intangible assets with finite useful lives; |
• | difficulties integrating and supporting acquired products or technologies; |
• | unexpected capital expenditure requirements; |
• | insufficient revenues to offset increased expenses associated with the acquisition; and |
• | opportunity costs associated with committing capital to such acquisitions. |
• | difficulty hiring and retaining appropriate engineering resources due to intense competition for such resources and resulting wage inflation; |
• | the knowledge transfer related to our technology and exposure to misappropriation of intellectual property or confidential information, including information that is proprietary to us, our customers and third parties; |
• | heightened exposure to changes in the economic, security and political conditions of China; |
• | fluctuation in currency exchange rates and tax risks associated with international operations; and |
• | development efforts that do not meet our requirements because of language, cultural or other differences associated with international operations, resulting in errors or delays. |
• | quarterly variations in our results of operations or those of our competitors; |
• | failure to meet any guidance that we have previously provided regarding our anticipated results; |
• | changes in earnings estimates or recommendations by securities analysts; |
• | failure to meet securities analysts’ estimates; |
• | announcements by us or our competitors of new products, significant contracts, commercial relationships, acquisitions or capital commitments; |
• | developments with respect to intellectual property rights; |
• | our ability to develop and market new and enhanced products on a timely basis; |
• | our commencement of, or involvement in, litigation and developments relating to such litigation; |
• | changes in governmental regulations; and |
• | a slowdown in the communications industry or the general economy. |
• | a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; |
• | no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; |
• | the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; |
• | the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; |
• | a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; |
• | the requirement that a special meeting of stockholders may be called only by the chairman of the board of directors, the chief executive officer or the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and |
• | advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of us. |
Fiscal Month Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet be Purchased Under the Program | ||||||
January 1, 2016 - January 23, 2016 | 489,459 | $7.54 | 489,459 | $9,135 | ||||||
January 24, 2016 - February 20, 2016 | 637,053 | $7.20 | 637,053 | $4,547 | ||||||
February 21, 2016 - March 26, 2016 | 662,775 | $6.84 | 662,775 | $14 | ||||||
1,789,287 | $7.16 | 1,789,287 |
Exhibit Number | Description | |
3.1 | Amended and Restated Certificate of Incorporation of Calix, Inc. (filed as Exhibit 3.3 to Amendment No. 7 to Calix's Registration Statement on Form S-1 filed with the SEC on March 23, 2010 (File No. 333-163252) and incorporated by reference herein). | |
3.2 | Amended and Restated Bylaws of Calix, Inc. (filed as Exhibit 3.5 to Amendment No. 7 to Calix's Registration Statement on Form S-1 filed with the SEC on March 23, 2010 (File No. 333-163252) and incorporated by reference herein). | |
31.1 | Certification of Chief Executive Officer of Calix, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer of Calix, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer of Calix, Inc. Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
CALIX, INC. (Registrant) | |||
Date: May 4, 2016 | By: | /s/ Carl Russo | |
Carl Russo | |||
Chief Executive Officer (Principal Executive Officer) | |||
Date: May 4, 2016 | By: | /s/ William J. Atkins | |
William J. Atkins | |||
Chief Financial Officer (Principal Financial Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Calix, Inc. for the quarter ended March 26, 2016; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 4, 2016 | /s/ Carl Russo | |||
Carl Russo | ||||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Calix, Inc. for the quarter ended March 26, 2016; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 4, 2016 | /s/ William J. Atkins | |||
William J. Atkins | ||||
Chief Financial Officer |
Date: May 4, 2016 | /s/ Carl Russo | |||
Carl Russo | ||||
Chief Executive Officer |
Date: May 4, 2016 | /s/ William J. Atkins | |||
William J. Atkins | ||||
Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 26, 2016 |
Apr. 25, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CALIX, INC | |
Entity Central Index Key | 0001406666 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 26, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 47,924,395 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Mar. 26, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.025 | $ 0.025 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.025 | $ 0.025 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 53,110,593 | 53,049,781 |
Common stock, shares outstanding | 47,780,776 | 49,509,251 |
Treasury stock, shares | 5,329,817 | 3,540,530 |
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 26, 2016 |
Mar. 28, 2015 |
|
Operating activities: | ||
Net loss | $ (10,729) | $ (11,930) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,955 | 2,480 |
Loss on retirement of property and equipment | 0 | 10 |
Amortization of intangible assets | 3,364 | 4,640 |
Amortization of premiums related to available-for-sale securities | 114 | 287 |
Stock-based compensation | 2,721 | 3,662 |
Changes in operating assets and liabilities: | ||
Restricted cash | 0 | 295 |
Accounts receivable, net | 3,351 | (8,256) |
Inventory | 6,540 | 6,115 |
Deferred cost of revenue | 810 | 3,318 |
Prepaid expenses and other assets | (576) | 1,974 |
Accounts payable | (8,459) | (10,836) |
Accrued liabilities | 8,471 | 54 |
Deferred revenue | (2,195) | (3,651) |
Other long-term liabilities | (98) | (59) |
Net cash provided by (used in) operating activities | 5,269 | (11,897) |
Investing activities: | ||
Purchases of property and equipment | (1,453) | (1,742) |
Purchases of marketable securities | 0 | (17,004) |
Maturities of marketable securities | 7,020 | 11,450 |
Net cash provided by (used in) investing activities | 5,567 | (7,296) |
Financing activities: | ||
Proceeds from exercise of stock options | 14 | 564 |
Payments for repurchases of common stock | (12,809) | 0 |
Taxes paid for awards vested under equity incentive plans | (251) | (506) |
Net cash provided by (used in) financing activities | (13,046) | 58 |
Effect of exchange rate changes on cash and cash equivalents | (51) | (76) |
Net decrease in cash and cash equivalents | (2,261) | (19,211) |
Cash and cash equivalents at beginning of period | 23,626 | 48,829 |
Cash and cash equivalents at end of period | $ 21,365 | $ 29,618 |
Company and Basis of Presentation |
3 Months Ended |
---|---|
Mar. 26, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company and Basis of Presentation | Company and Basis of Presentation Company Calix, Inc. (together with its subsidiaries, “Calix,” the “Company,” “our,” “we,” or “us”) was incorporated in August 1999, and is a Delaware corporation. The Company is a leading global provider of broadband communications access systems and software for fiber- and copper-based network architectures that enable communications service providers ("CSPs") to transform their networks and connect to their residential and business subscribers. The Company enables CSPs to provide a wide range of revenue-generating services, from basic voice and data to advanced broadband services, over legacy and next-generation access networks. The Company focuses solely on CSP access networks, the portion of the network that governs available bandwidth and determines the range and quality of services that can be offered to subscribers. The Company develops and sells carrier-class hardware and software products, referred to as the Unified Access portfolio, which are designed to enhance and transform CSP access networks to meet the changing demands of subscribers rapidly and cost-effectively. Basis of Presentation The accompanying unaudited condensed consolidated financial statements, including the accounts of Calix, Inc. and its wholly-owned subsidiaries, have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. generally accepted accounting principles (“GAAP”) can be condensed or omitted. In the opinion of management, the financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s financial position and operating results. All significant intercompany balances and transactions have been eliminated in consolidation. The Condensed Consolidated Balance Sheet at December 31, 2015 has been derived from the audited financial statements at that date. The results of the Company’s operations can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year or any future periods. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements included in the Company’s Form 10-K for the year ended December 31, 2015. The Company's fiscal year begins on January 1st and ends on December 31st. Quarterly periods are based on a 4-4-5 fiscal calendar with the first, second and third fiscal quarters ending on the 13th Saturday of each fiscal period. As a result, the Company had one fewer day in the three months ended March 26, 2016 than in the three months ended March 28, 2015. The preparation of financial statements in conformity with GAAP for interim financial reporting requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||
Significant Accounting Policies | Significant Accounting Policies The Company’s significant accounting policies are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015. Our significant accounting policies did not change during the three months ended March 26, 2016. Concentration of Customer Risk The Company had two customers that each accounted for more than 10% of its total revenue for the three months ended March 26, 2016 and one of these customers accounted for more than 10% of the Company’s total revenue for the three months ended March 28, 2015. These two customers represented 29% and 26% of the Company’s total revenue for the three months ended March 26, 2016 and March 28, 2015, respectively, and one of these customers represented 10% of the Company’s accounts receivable as of March 26, 2016. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which includes provisions intended to simplify the following aspects related to how share-based payments are accounted for and presented in the financial statements:
ASU 2016-09 will be effective for the Company beginning in the first quarter of fiscal 2017. Early application is permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which increases transparency and comparability among companies by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 requires a lessee to recognize in its balance sheet a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current GAAP. ASU 2016-02 retains a distinction between finance leases (i.e. capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. ASU 2016-02 will be effective for the Company beginning in the first quarter of fiscal 2019. Early application is permitted, and it is required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory ("ASU 2015-11"), which requires measurement of inventory at lower of cost and net realizable value, versus lower of cost or market. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 will be effective for the Company beginning in the first quarter of fiscal 2017. Early application is permitted, and the guidance should be applied prospectively. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which provides guidance for revenue recognition. ASU 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. Additionally, it supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts, and creates new Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under the previous guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. On August 12, 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date ("ASU 2015-14") to defer the effective date of ASU 2014-09 by one year. As a result, the standard will be effective for the Company in the first quarter of fiscal 2018. ASU 2015-14 permits early adoption of the new revenue standard, but not before its original effective date. The Company is currently assessing the method of adoption and the potential impact of adopting this new guidance on its consolidated financial statements. |
Cash, Cash Equivalents and Marketable Securities |
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Cash and Cash Equivalents [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities The Company has invested its excess cash primarily in money market funds and highly liquid marketable securities such as corporate debt instruments, U.S. government agency securities and commercial paper. The Company considers all investments with maturities of three months or less when purchased to be cash equivalents. Marketable securities represent highly liquid corporate debt instruments, U.S. government agency securities and commercial paper with maturities greater than 90 days at date of purchase. Marketable securities with maturities greater than one year are classified as current because management considers all marketable securities to be available for current operations. Cash equivalents are stated at amounts that approximate fair value based on quoted market prices. Marketable securities are recorded at their fair values. The Company’s investments have been classified and accounted for as available-for-sale. Such investments are recorded at fair value and unrealized holding gains and losses are reported as a separate component of accumulated other comprehensive income (loss) in the stockholders’ equity until realized. Realized gains and losses on sales of marketable securities, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive income (loss) to results of operations as other income (expense). The Company, to date, has not determined that any of the unrealized losses on its investments are considered to be other-than-temporary. The Company reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made. In making this judgment, the Company evaluates, among other things: the duration and extent to which the fair value of a security is less than its cost; the financial condition of the issuer and any changes thereto; and the Company’s intent and ability to hold its investment for a period of time sufficient to allow for any anticipated recovery in market value, or whether the Company will more likely than not be required to sell the security before recovery of its amortized cost basis. The Company has evaluated its investments as of March 26, 2016 and has determined that no investments with unrealized losses are other-than-temporarily impaired. No investments have been in a continuous loss position greater than one year. Cash, cash equivalents and marketable securities consisted of the following (in thousands):
The carrying amounts of our money market funds approximate their fair values due to their nature, duration and short maturities. As of March 26, 2016, the amortized cost and fair value of marketable securities were as follows (in thousands):
As of December 31, 2015, the amortized cost and fair value of marketable securities were as follows (in thousands):
As of March 26, 2016, the amortized cost and fair value of marketable securities by contractual maturity were as follows (in thousands):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements In accordance with Accounting Standard Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, (“ASC Topic 820”), the Company measures its cash equivalents and marketable securities at fair value on a recurring basis. ASC Topic 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC Topic 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Observable inputs other than quoted prices included in Level 1 for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-driven valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 – Unobservable inputs to the valuation derived from fair valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The following table sets forth the Company's financial assets measured at fair value on a recurring basis as of March 26, 2016 and December 31, 2015, based on the three-tier fair value hierarchy (in thousands):
The fair values of money market funds classified as Level 1 were derived from quoted market prices as active markets for these instruments exist. The fair values of corporate debt securities, U.S. government agency securities and commercial paper classified as Level 2 were derived from quoted market prices for similar instruments indexed to prevailing market yield rates. The Company has no Level 3 financial assets. The Company did not have any transfers between Level 1 and Level 2 of the fair value hierarchy during the three months ended March 26, 2016 and March 28, 2015. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill was recorded as a result of the Company's acquisitions of Occam Networks, Inc. (“Occam”) in February 2011 and Optical Solutions, Inc. ("OSI") in February 2006. This goodwill is not deductible for tax purposes, and there have been no adjustments to goodwill since the acquisition dates. Goodwill is not amortized but instead is subject to an annual impairment test or more frequently if events or changes in circumstances indicate that it may be impaired. We evaluate goodwill on an annual basis at the end of the second quarter of each year. Management has determined that we operate as a single reporting unit and, therefore, evaluates goodwill impairment at the enterprise level. Management assessed qualitative factors to determine whether it was more likely than not (that is, a likelihood of more than 50 percent) that the fair value of the Company was less than its carrying amount, including goodwill, as of June 27, 2015. In assessing the qualitative factors, management considered the impact of these key factors: macro-economic conditions, industry and market environment, overall financial performance of the Company, cash flow from operating activities, market capitalization and stock price. Management concluded that the fair value of the Company was more likely than not greater than its carrying amount as of June 27, 2015. As such, it was not necessary to perform the two-step goodwill impairment test at the time. There have been no significant events or changes in circumstances subsequent to the 2015 annual impairment test that would more likely than not indicate that the carrying value of goodwill may have been impaired as of March 26, 2016. Therefore, there was no impairment to the carrying value of the Company's goodwill as of March 26, 2016. Intangible Assets Intangible assets are carried at cost, less accumulated amortization. The details of intangible assets as of March 26, 2016 and December 31, 2015 are disclosed in the following table (in thousands):
Amortization expense was $3.4 million and $4.6 million for the three months ended March 26, 2016 and March 28, 2015, respectively. As of March 26, 2016, expected future amortization expense for the fiscal years indicated is as follows (in thousands):
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Balance Sheet Details |
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Balance Sheet Related Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Details | Balance Sheet Details Accounts receivable, net consisted of the following (in thousands):
Inventory consisted of the following (in thousands):
Property and equipment, net consisted of the following (in thousands):
Accrued liabilities consisted of the following (in thousands):
Deferred revenue consisted of the following (in thousands):
Deferred cost of revenue consisted of costs incurred for products and services for which revenues have been deferred. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Commitments The Company’s principal commitments consist of obligations under operating leases for office space and non-cancelable outstanding purchase obligations. These commitments as of December 31, 2015 are disclosed in our Annual Report on Form 10-K, and have not changed materially during the three months ended March 26, 2016. Contingencies The Company evaluates the circumstances regarding outstanding and potential litigation and other contingencies on a quarterly basis to determine whether there is at least a reasonable possibility that a loss exists requiring accrual or disclosure, and if so, whether an estimate of the possible loss or range of loss can be made, or whether such an estimate cannot be made. When a loss is probable and reasonably estimable, the Company accrues for such amount based on its estimate of the probable loss considering information available at the time. When a loss is reasonably possible, the Company discloses the estimated possible loss or range of loss in excess of amounts accrued if material. Except as otherwise disclosed below, the Company does not believe that there was a reasonable possibility that a material loss may have been incurred during the period presented with respect to the matters disclosed. Accrued Warranty The Company provides a warranty for its hardware products. Hardware generally has a one, three or five-year warranty from the date of shipment. The Company accrues for potential warranty claims based on the Company’s historical product failure rates and historical costs incurred in correcting product failures. The Company's warranty accruals are based on estimates of losses that are probable based on information available. The adequacy of the accrual is reviewed on a periodic basis and adjusted, if necessary, based on additional information as it becomes available. Changes in the Company’s warranty reserve were as follows (in thousands):
Litigation From time to time, the Company is involved in various legal proceedings arising from the normal course of business activities. On September 16, 2010, the Company, two direct, wholly-owned subsidiaries of the Company, and Occam entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”). In response to the announcement of the Merger Agreement on October 6, 2010, a purported class action complaint was filed by stockholders of Occam in the Delaware Court of Chancery styled as Steinhardt v. Howard-Anderson, et al. (Case No. 5878-VCL). On November 24, 2010, these stockholders filed an amended complaint (the “amended Steinhardt complaint”). The amended Steinhardt complaint named Occam (which has since been merged into Calix) and the members of the Occam board of directors as defendants. The amended Steinhardt complaint did not name Calix as a defendant. The amended Steinhardt complaint sought injunctive relief rescinding the merger transaction and an award of damages in an unspecified amount, as well as plaintiffs' costs, attorney's fees, and other relief. The merger transaction was completed on February 22, 2011 (the “Effective Date”). On January 6, 2012, the Delaware court ruled on a motion for sanctions brought by the defendants against certain of the lead plaintiffs. The Delaware court found that lead plaintiffs Michael Steinhardt, Steinhardt Overseas Management, L.P., and Ilex Partners, L.L.C., collectively the “Steinhardt Plaintiffs,” had engaged in improper trading of Calix shares, and dismissed the Steinhardt Plaintiffs from the case with prejudice. The court further held that the Steinhardt Plaintiffs are: (i) barred from receiving any recovery from the litigation, (ii) required to self-report to the SEC, (iii) directed to disclose their improper trading in any future application to serve as lead plaintiff, and (iv) ordered to disgorge trading profits of $0.5 million, to be distributed to the remaining members of the class of former Occam stockholders. The Delaware court also granted the motion of the remaining lead plaintiffs, Herbert Chen and Derek Sheeler, for class certification, and certified Messrs. Chen and Sheeler as class representatives. The certified class is a non-opt-out class consisting of all owners of Occam common stock whose shares were converted to shares of Calix on the date of the merger transaction, with the exception of the defendants in the Delaware action and their affiliates. Chen and Sheeler, on behalf of the class of similarly situated former Occam stockholders, continued to seek an award of damages in an unspecified amount. Fact discovery in the case initially closed on April 30, 2013. On June 11, 2013, the plaintiffs filed their Second Amended Class Action Complaint for Breach of Fiduciary Duty (“Second Amended Complaint”). The Second Amended Complaint adds Occam's former CFO as a defendant, and alleges that each of the defendants breached their fiduciary duties by failing to attempt to obtain the best purchase price for Occam and failing to disclose certain allegedly material facts about the merger transaction in the preliminary proxy statement and prospectus included in the Registration Statement on Form S-4 filed with the SEC on November 2, 2010. On July 17, 2013, attorneys representing all of the defendants named in the Second Amended Complaint filed Defendants' Opening Brief in Support of Their Motion for Summary Judgment, arguing that all defendants are entitled to summary judgment on all counts of the Second Amended Complaint. Plaintiffs' answering brief to the motion for summary judgment was filed on September 3, 2013, and defendants' reply brief was filed on October 4, 2013. A hearing on the motion for summary judgment was held on December 6, 2013. On April 8, 2014, the Delaware Court of Chancery issued an Opinion granting in part and denying in part the Defendants’ Motion for Summary Judgment. The ruling granted summary judgment on all claims as to Occam, the corporate entity, and accordingly, Occam was dismissed as a defendant in the action. The court also granted summary judgment in favor of those defendants who served solely as directors of Occam with respect to all claims alleging improper actions in connection with the Occam sale process. The court left in place the process-based claims against Occam’s former CEO and CFO, and declined to grant summary judgment on separate claims that the director and officer defendants breached their fiduciary duties by issuing a proxy statement for Occam’s stockholder vote that allegedly contained misleading disclosures and had material omissions. On June 12, 2014, the plaintiffs filed a Motion to Compel Production of Documents by Defendants and Jefferies & Company, Inc. ("Jefferies") and For Sanctions Against Defendants. This motion sought additional documents from defendants and from Jefferies, Occam’s former financial advisor, and requested that the court impose severe sanctions, up to and including a finding of liability against defendants. Defendants have rejected the suggestion that any additional documents should be produced and vigorously opposed the imposition of any sanctions. On September 3, 2014, the court denied the motion without prejudice as to defendants, directed counsel for the defendants to provide an affidavit clarifying the prior conduct of discovery, and ordered discovery into defendants’ document collection and review methodologies. The court also ordered Jefferies to produce additional documents. Plaintiffs then filed a motion requesting leave to amend their complaint to add Jefferies and Wilson Sonsini Goodrich & Rosati, P.C. ("Wilson Sonsini"), Occam’s counsel and former defense counsel in this lawsuit, as defendants. That motion was heard by the Court on March 23, 2015. At the hearing the Court vacated the existing April 20, 2015 trial date and indicated it would set a new trial date after ruling on the motion requesting leave to add additional parties. On July 16, 2015, the Court denied plaintiffs’ motion for leave to amend their complaint to add Jefferies as a defendant, but granted plaintiffs’ motion for leave to amend their complaint to add Wilson Sonsini as a defendant. On July 22, 2015, plaintiffs filed their Third Amended Complaint adding Wilson Sonsini as a defendant in the lawsuit. Defendants filed their answers to the Third Amended Complaint on September 8, 2015. Trial on the matter commenced on April 11, 2016 before the Delaware Court of Chancery. On April 14, 2016, the parties entered into a memorandum of understanding of a settlement in principle (“Settlement”) to resolve all of the claims pending before the Delaware Court of Chancery and related claims. The Settlement terms provide that neither the Company nor any of its officers or directors would be required to make any contribution to the settlement consideration of $35 million to be paid for the benefit of the plaintiff class. The Company did not previously accrue any estimated loss in connection with this action and, as a result of the Settlement, will not recognize any loss related to this action. Further, the Company has incurred certain defense costs (as discussed in more detail below) for which its insurance carriers denied coverage or that are otherwise in excess of coverage. These costs were recorded as operating expense in the Company’s Consolidated Statement of Comprehensive Income (Loss) in the periods incurred. In connection with the Settlement (and separate from the settlement consideration), the Company would also receive a cash payment of approximately $4.5 million in partial recovery of such costs. The Settlement is subject to the approval of the Delaware Court of Chancery. As of March 26, 2016, the Company had not recorded any amounts related to this Settlement. Upon approval of the settlement, the Company expects to recognize the $4.5 million in partial recovery of out-of-pocket costs. See additional discussion in Note 13, “Subsequent Event.” The Company and the defendants have denied and continue to deny each and all of the claims alleged in the litigation, and the Settlement does not assign or reflect any admission of fault, wrongdoing or liability as to any defendant. Since the closing of the merger, the Company has advanced defense costs related to this lawsuit. The Company has obligations, under certain circumstances, to hold harmless and indemnify each of the former Occam directors and officers named as defendants in this action against judgments, fines, settlements and expenses related to claims against such directors and officers to the fullest extent permitted under Delaware law and Occam's bylaws and certificate of incorporation. In addition, under the engagement letter between Occam and Jefferies, the Company has obligations, under certain circumstances, to hold harmless and indemnify Jefferies against judgments, fines, settlements and expenses related to Jefferies’ engagement by Occam. The Company has paid fees and expenses incurred by Jefferies in connection with this matter pursuant to Jefferies indemnity demand under this agreement. The Company has incurred significant legal fees and costs defending this lawsuit and during the fiscal quarter ended March 26, 2016, the Company’s defense costs exhausted its available Directors & Officers liability insurance coverage. As described above, the legal proceedings have been protracted as plaintiffs continue to seek additional discovery following the court’s order re-opening discovery and, most recently, with the addition of Wilson Sonsini as a defendant in the action. The Company has also continued to incur certain expenses that were not covered by insurance, including the Company’s costs associated with the Jefferies indemnification obligations. For the fiscal quarter ended March 26, 2016, the Company recorded litigation defense costs and expenses in excess of its insurance coverage of $3.6 million as operating expense in the accompanying Condensed Consolidated Statements of Comprehensive Loss. The Company is not currently a party to any other legal proceedings that, if determined adversely to the Company, would individually or in the aggregate have a material adverse effect on the Company's business, operating results or financial condition. Guarantees The Company from time to time enters into contracts that require it to indemnify various parties against claims from third parties. These contracts primarily relate to (i) certain real estate leases, under which the Company may be required to indemnify property owners for environmental and other liabilities, and other claims arising from the Company’s use of the applicable premises, (ii) certain agreements with the Company’s officers, directors, and employees, under which the Company may be required to indemnify such persons for liabilities arising out of their relationship with the Company, (iii) contracts under which the Company may be required to indemnify customers against third-party claims that a Company product infringes a patent, copyright, or other intellectual property right and (iv) procurement or license agreements, under which the Company may be required to indemnify licensors or vendors for certain claims that may be brought against them arising from the Company’s acts or omissions with respect to the supplied products or technology. Because any potential obligation associated with these types of contractual provisions are not quantified or stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, the Company has not been required to make payments under these obligations, and no liabilities have been recorded for these obligations in the accompanying Condensed Consolidated Balance Sheets. |
Net Loss per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss per Common Share | Net Loss per Common Share The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated (in thousands, except per share data):
For the three months ended March 28, 2015, unvested restricted stock awards are included in the calculation of weighted-average common shares outstanding because such shares are participating securities; however, the impact was immaterial. All restricted stock awards completed their vesting on July 20, 2015. Potentially dilutive shares have been excluded from the computation of diluted net loss per common share because their effect would be antidilutive. These antidilutive shares were primarily from stock options, restricted stock units and performance restricted stock awards. We have incurred a net loss for all periods presented, and therefore the effect of all potentially dilutive securities would be antidilutive, and as a result diluted net loss per common share is the same as basic net loss per common share. |
Stockholders' Equity |
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Mar. 26, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Equity Incentive Plans The Company maintains three equity incentive plans, the 2000 Stock Plan, the 2002 Stock Plan and the 2010 Equity Incentive Award Plan (together, the “Plans”). These plans were approved by the stockholders and are described in the Company’s Form 10-K filed with the SEC on February 26, 2016. The Company also maintains a Long Term Incentive Program, under the 2010 Equity Incentive Award Plan. Under the Long Term Incentive Program, certain key employees of the Company are eligible for equity awards based on the Company’s stock price performance. To date, awards granted under the Plans consist of stock options, restricted stock units ("RSUs"), restricted stock awards ("RSAs"), and performance restricted stock units ("PRSUs"). Stock Options During the three months ended March 26, 2016, the Company did not grant stock options. During the three months ended March 26, 2016, 2,312 stock options were exercised at a weighted-average exercise price of $5.85 per share. As of March 26, 2016, unrecognized stock-based compensation expense of $2.9 million related to stock options, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 2.1 years. Restricted Stock Units During the three months ended March 26, 2016, 111,875 RSUs were granted with a weighted-average grant date fair value of $7.42 per share. During the three months ended March 26, 2016, 31,943 RSUs vested, net of shares withheld at the then-current value equivalent to the employees' minimum statutory obligation for applicable income and other employment taxes, and were converted to an equivalent number of shares of common stock. Taxes withheld from employees of $0.1 million were remitted to the relevant taxing authorities during the three months ended March 26, 2016. As of March 26, 2016, unrecognized stock-based compensation expense of $12.6 million related to RSUs, net of estimated forfeitures, was expected to be recognized over a weighted-average period of 2.4 years. Performance Restricted Stock Units In 2012, 2013 and 2014, the Company granted PRSUs to its executives with two-year and three-year performance periods. The performance criterion is based on the relative total shareholder return (“TSR”) of Calix common stock as compared to the TSR of the Company’s peer group and accounted for as a market condition. The TSR is calculated by dividing (a) the average closing trading price for the 90-day period ending on the last day of the applicable performance period by (b) the average closing trading price for the 90-day period immediately preceding the first day of the applicable performance period. This TSR is then used to derive the achievement ratio, which is then multiplied by the number of units in the grant to derive the common stock to be issued for each performance period, which may equal from zero percent (0%) to two hundred percent (200%) of the target award. During the three months ended March 26, 2016, the Company granted 550,000 PRSUs to its executives with a weighted-average grant date fair value of $7.42 per share. These particular performance-based awards contain a one-year performance period and a subsequent two-year service period. The performance target is based on the Company's revenue during the performance period and accounted for as a performance condition. After the one-year performance period, if the performance target is met and subject to certification by the Compensation Committee, each PRSU award shall vest in respect to 50% of the PRSUs subject to the award in February 2017, 25% in February 2018 and 25% in February 2019, subject to the executive’s continuous service with the Company from the grant date through the respective vesting dates. If the performance target is not met, all PRSUs granted under this award shall be immediately forfeited and canceled without vesting of any shares. During the three months ended March 26, 2016, 44,992 PRSUs vested and were converted into 26,557 shares of common stock, net of shares withheld at the then-current value equivalent to the employees' minimum statutory obligation for applicable income and other employment taxes. Taxes withheld from employees of $0.1 million were remitted to the relevant taxing authorities during the three months ended March 26, 2016. As of March 26, 2016, unrecognized stock-based compensation expense of $3.4 million related to PRSUs, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 1.6 year. Employee Stock Purchase Plan The Company’s Amended and Restated Employee Stock Purchase Plan (“ESPP”) allows employees to purchase shares of the Company’s common stock through payroll deductions of up to 15 percent of their annual compensation subject to certain Internal Revenue Code limitations. In addition, no participant may purchase more than 2,000 shares of common stock in each offering period. Prior to 2015, the offering periods under the 2010 ESPP are six-month periods commencing on June 1 and December 1 of each year. In January 2015, the Compensation Committee of the Company’s Board of Directors approved a change in those six-month period commencement dates to November 2 and May 2 of each year, effective November 2, 2015. The price of common stock purchased under the plan is 85 percent of the lower of the fair market value of the common stock on the commencement date and the end date of each six-month offering period. As of March 26, 2016, there were 1,129,139 shares available for issuance under the ESPP. There were no shares purchased under the ESPP during the three months ended March 26, 2016. As of March 26, 2016, unrecognized stock-based compensation expense of $0.2 million related to the ESPP is expected to be recognized over a remaining service period of 1 month. Stock-Based Compensation Expense Stock-based compensation expense associated with stock options, RSUs, PRSUs, RSAs, and purchase rights under the ESPP is measured at the grant date based on the fair value of the award, and is recognized, net of forfeitures, as expense over the remaining requisite service period on a straight-line basis. The Company values RSUs and RSAs at the closing market price of the Company’s common stock on the date of grant. Stock-based compensation expense associated with PRSUs with graded vesting features and which contain both a performance and a service condition is measured based on the closing market price of the Company’s common stock on the date of grant, and is recognized, net of forfeitures, as expense over the requisite service period using the graded vesting attribution method. Compensation expense is only recognized if the Company has determined that it is probable that the performance condition will be met. The Company reassesses the probability of vesting at each reporting period and adjusts compensation expense based on its probability assessment. The fair value of PRSUs with a market condition is estimated on the date of award, using a Monte Carlo simulation model to estimate the TSR of the Company's stock in relation to the peer group over each performance period. Compensation cost on PRSUs with a market condition is not adjusted for subsequent changes in the Company's stock performance or the level of ultimate vesting. Stock Repurchase On April 26, 2015, the Company's Board of Directors approved a program to repurchase up to $40 million of its common stock from time to time. Stock may be purchased under this program in open market or private transactions, through block trades, and/or pursuant to any trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended ("Exchange Act"). Any open market purchases will be made in accordance with the limitations set out in Rule 10b-18 of the Exchange Act. The decision to consummate any repurchases (including any decision to adopt a 10b5-1 plan for this purpose) will be made at management’s discretion at prices management considers to be attractive and in the best interests of the company and its stockholders. The stock repurchase commenced in May 2015 and the program was completed in March 2016. During the three months ended March 26, 2016, the Company repurchased 1,789,287 shares of common stock for $12.8 million at an average price of $7.16 per share. As of March 26, 2016, the Company has completed the $40 million stock repurchase program and has repurchased a total of 5,329,817 shares of common stock from May 2015 to March 2016 at an average price of $7.50 per share. The Company uses the cost method to account for common stock repurchases held in treasury. The price paid for the stock is charged to the treasury stock account shown separately within stockholders' equity as a contra-equity account. |
Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The table below summarizes the changes in accumulated other comprehensive income (loss) by component for the periods indicated (in thousands).
Realized gains and losses on sales of available-for-sale marketable securities, if any, are reclassified from accumulated other comprehensive income (loss) to "Other income (expense)" in the accompanying Condensed Consolidated Statements of Comprehensive Loss. |
Credit Facility |
3 Months Ended |
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Mar. 26, 2016 | |
Line of Credit Facility [Abstract] | |
Credit Facility | Credit Facility The Company had a revolving credit facility ("Prior Credit Facility") of $30.0 million with Silicon Valley Bank based upon a percentage of eligible accounts receivable, which matured on June 30, 2013. After the Prior Credit Facility matured on June 30, 2013, the Company cash collateralized any outstanding letters of credit with Silicon Valley Bank. During the first quarter of 2015, Silicon Valley Bank subsequently released the $0.3 million cash restricted for collateralizing the outstanding letters of credit reported as "restricted cash" in the Company's Consolidated Balance Sheet as of December 31, 2014. The Company entered into a credit agreement with Bank of America, N.A. on July 29, 2013 (as amended on December 23, 2015, the “Credit Agreement”). The Credit Agreement is structured such that other financial institutions can at a later time become party to the Credit Agreement through an amendment via a syndication process (collectively, together with Bank of America, N.A., the "Lenders"). The Credit Agreement provides for a revolving facility in the aggregate principal amount of up to $50.0 million, which includes a $20.0 million sublimit for the issuance of letters of credit and a $10.0 million sublimit for a swingline facility. Subject to customary conditions, up to $25.0 million of the revolving facility may be converted to a term loan facility at any time prior to the maturity of the revolving facility. The revolving facility matures on September 30, 2018. The credit facility is secured by substantially all of the assets of the Company, including its intellectual property. Proceeds of the credit facility may be used for general corporate purposes and permitted acquisitions. Loans under the credit facility bear interest at an annual rate equal to the base rate plus 0.75% to 1.25% or LIBOR plus 2.00% to 2.50% based on a leverage ratio of consolidated funded indebtedness to consolidated Adjusted EBITDA, as customarily defined and amended. Interest on the revolving facility is due quarterly, and any outstanding interest and principal is due on the maturity date of the revolving facility. The Company is required to repay principal on a term loan in twenty equal quarterly payments from the date the Company enters into a term loan, and all outstanding principal and accrued interest is due on the revolving facility maturity date. Swingline loans must be repaid on the earlier of (i) ten business days after a loan is made and (ii) the revolving facility maturity date. The Company is also required to pay commitment fees of 0.25% per year on any unused portions of this facility. The credit facility includes affirmative and negative covenants applicable to the Company that are typical for credit facilities of this type. Furthermore, the credit agreement requires us to maintain certain financial covenants, including a maximum consolidated leverage ratio, and a minimum consolidated liquidity ratio of cash, cash equivalents and accounts receivable to consolidated funded indebtedness. As of March 26, 2016, the Company was in compliance with these requirements. The credit facility also includes customary events of default, the occurrence and continuation of which would provide the Lenders with the right to demand immediate repayment of any principal and unpaid interest under the credit facility, and to exercise remedies against us and the collateral securing the loans under the credit facility. As of March 26, 2016, no revolving loans were drawn under the Credit Agreement, as amended. The Company incurred debt issuance costs that were directly attributable to the original issuance and amendment of this credit facility of $0.3 million in 2013 and $0.1 million in 2015, respectively. These costs are amortized over the extended term of the credit facility. As of March 26, 2016, the unamortized balance of debt issuance costs of $0.2 million were included within "Other assets" in the Company's Condensed Consolidated Balance Sheets. |
Income Taxes |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The following table presents the provision for income taxes from continuing operations and the effective tax rates for the periods indicated (in thousands, except percentages):
The income tax provision for the three months ended March 26, 2016 and March 28, 2015 consisted primarily of foreign income taxes. The effective tax rate for the three months ended March 26, 2016 and March 28, 2015 was determined using an estimated annual effective tax rate adjusted for discrete items, if any, that occurred during the respective period. The Company’s effective tax rate for the three months ended March 26, 2016 and March 28, 2015 is impacted by the change in foreign income tax expense. Deferred tax assets are recognized if realization of such assets is more likely than not. The Company has established and continues to maintain a full valuation allowance against its net deferred tax assets, with the exception of certain foreign deferred tax assets, as the Company does not believe that realization of those assets is more likely than not. Our effective tax rate may be subject to fluctuation during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of forecasted pre-tax earnings in the various jurisdictions in which we operate, valuation allowances against deferred tax assets, the recognition or de-recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. |
Subsequent Event |
3 Months Ended |
---|---|
Mar. 26, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On April 14, 2016, the parties in the class action litigation captioned Chen v. Howard-Anderson, et al. (C.A. No. 5878-VCL) entered into a memorandum of understanding of a settlement in principle (“Settlement”) to resolve the claims pending before the Delaware Court of Chancery and related claims. This litigation, relating to the Company’s acquisition of Occam Networks, Inc., is described in further detail in Note 7. If the Settlement becomes final, the total settlement consideration paid for the benefit of the settlement class would be $35 million. Under the Settlement terms, the Company would not be responsible for contributing any portion of the settlement consideration. The Company did not previously accrue any estimated loss in connection with this action and, as a result of the Settlement, will not recognize any loss related to this action. Further, as disclosed in Note 7, the Company incurred certain defense costs for which its insurance carriers denied coverage. These costs were recorded as operating expense in the Company’s Consolidated Statement of Comprehensive Income (Loss) in the periods incurred. In connection with the Settlement, the Company will receive approximately $4.5 million in partial recovery of such costs. The Settlement is subject to approval by the court of notice to the class and settlement hearing before the court. The Company and the defendants have denied and continue to deny each and all of the claims alleged in the litigation, and the Settlement does not assign or reflect any admission of fault, wrongdoing or liability as to any defendant. |
Significant Accounting Policies (Policies) |
3 Months Ended | ||||||||||||||||||||
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Mar. 26, 2016 | |||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which includes provisions intended to simplify the following aspects related to how share-based payments are accounted for and presented in the financial statements:
ASU 2016-09 will be effective for the Company beginning in the first quarter of fiscal 2017. Early application is permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which increases transparency and comparability among companies by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 requires a lessee to recognize in its balance sheet a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current GAAP. ASU 2016-02 retains a distinction between finance leases (i.e. capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. ASU 2016-02 will be effective for the Company beginning in the first quarter of fiscal 2019. Early application is permitted, and it is required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory ("ASU 2015-11"), which requires measurement of inventory at lower of cost and net realizable value, versus lower of cost or market. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 will be effective for the Company beginning in the first quarter of fiscal 2017. Early application is permitted, and the guidance should be applied prospectively. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which provides guidance for revenue recognition. ASU 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. Additionally, it supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts, and creates new Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under the previous guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. On August 12, 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date ("ASU 2015-14") to defer the effective date of ASU 2014-09 by one year. As a result, the standard will be effective for the Company in the first quarter of fiscal 2018. ASU 2015-14 permits early adoption of the new revenue standard, but not before its original effective date. The Company is currently assessing the method of adoption and the potential impact of adopting this new guidance on its consolidated financial statements. |
Cash, Cash Equivalents and Marketable Securities (Tables) |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of cash and cash equivalents | Cash, cash equivalents and marketable securities consisted of the following (in thousands):
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Amortized cost and fair value of marketable securities | As of March 26, 2016, the amortized cost and fair value of marketable securities were as follows (in thousands):
As of December 31, 2015, the amortized cost and fair value of marketable securities were as follows (in thousands):
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Amortized cost and fair value of marketable securities by contractual maturity | As of March 26, 2016, the amortized cost and fair value of marketable securities by contractual maturity were as follows (in thousands):
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Fair Value Measurements (Tables) |
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Mar. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of fair values of financial assets | The following table sets forth the Company's financial assets measured at fair value on a recurring basis as of March 26, 2016 and December 31, 2015, based on the three-tier fair value hierarchy (in thousands):
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Goodwill and Intangible Assets (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 26, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of intangible assets | Intangible assets are carried at cost, less accumulated amortization. The details of intangible assets as of March 26, 2016 and December 31, 2015 are disclosed in the following table (in thousands):
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Expected future amortization | As of March 26, 2016, expected future amortization expense for the fiscal years indicated is as follows (in thousands):
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Balance Sheet Details (Tables) |
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Mar. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of accounts receivable, net | Accounts receivable, net consisted of the following (in thousands):
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Summary of inventory | Inventory consisted of the following (in thousands):
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Summary of property and equipment, net | Property and equipment, net consisted of the following (in thousands):
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Summary of accrued liabilities | Accrued liabilities consisted of the following (in thousands):
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Summary of deferred revenue | Deferred revenue consisted of the following (in thousands):
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Commitments and Contingencies (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 26, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product warranty activities | Changes in the Company’s warranty reserve were as follows (in thousands):
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Net Loss per Common Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net loss per share | The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated (in thousands, except per share data):
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Accumulated Other Comprehensive Income (Loss) (Tables) |
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Mar. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive income details | The table below summarizes the changes in accumulated other comprehensive income (loss) by component for the periods indicated (in thousands).
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Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of income taxes | The following table presents the provision for income taxes from continuing operations and the effective tax rates for the periods indicated (in thousands, except percentages):
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Significant Accounting Policies - Concentration Risk (Details) - Customer Concentration Risk - customer |
3 Months Ended | |
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Mar. 26, 2016 |
Mar. 28, 2015 |
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Revenue | ||
Concentration Risk [Line Items] | ||
Number of major customers | 2 | 1 |
Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Number of major customers | 1 | |
Largest Two Customers | Revenue | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 29.00% | 26.00% |
Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands |
Mar. 26, 2016 |
Dec. 31, 2015 |
Mar. 28, 2015 |
Dec. 31, 2014 |
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Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 21,365 | $ 23,626 | $ 29,618 | $ 48,829 |
Marketable securities | 42,895 | 49,964 | ||
Total cash, cash equivalents and marketable securities | 64,260 | 73,590 | ||
Corporate debt securities | ||||
Cash and Cash Equivalents [Line Items] | ||||
Marketable securities | 28,722 | 35,799 | ||
U.S. government agency securities | ||||
Cash and Cash Equivalents [Line Items] | ||||
Marketable securities | 10,524 | 10,520 | ||
Commercial paper | ||||
Cash and Cash Equivalents [Line Items] | ||||
Marketable securities | 3,649 | 3,645 | ||
Cash | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 10,861 | 13,378 | ||
Money market funds | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 10,504 | $ 10,248 |
Cash, Cash Equivalents and Marketable Securities - Amortized Cost and Fair Value (Details) - USD ($) $ in Thousands |
Mar. 26, 2016 |
Dec. 31, 2015 |
---|---|---|
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 42,924 | $ 50,058 |
Gross Unrealized Gains | 2 | 2 |
Gross Unrealized Losses | (31) | (96) |
Fair Value | 42,895 | 49,964 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 28,745 | 35,869 |
Gross Unrealized Gains | 2 | 2 |
Gross Unrealized Losses | (25) | (72) |
Fair Value | 28,722 | 35,799 |
U.S. government agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 10,530 | 10,544 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (6) | (24) |
Fair Value | 10,524 | 10,520 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 3,649 | 3,645 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 3,649 | $ 3,645 |
Cash, Cash Equivalents and Marketable Securities - Contractual Maturity (Details) $ in Thousands |
Mar. 26, 2016
USD ($)
|
---|---|
Cash and Cash Equivalents [Abstract] | |
Marketable securities due in 1 year or less, amortized cost | $ 42,924 |
Marketable securities due in 1 year or less, fair value | $ 42,895 |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
Mar. 26, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 42,895 | $ 49,964 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 53,399 | 60,212 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 10,504 | 10,248 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 42,895 | 49,964 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 28,722 | 35,799 |
Corporate debt securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 28,722 | 35,799 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 28,722 | 35,799 |
U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 10,524 | 10,520 |
U.S. government agency securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 10,524 | 10,520 |
U.S. government agency securities | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
U.S. government agency securities | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 10,524 | 10,520 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 3,649 | 3,645 |
Commercial paper | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 3,649 | 3,645 |
Commercial paper | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 3,649 | 3,645 |
Money market funds | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 10,504 | 10,248 |
Money market funds | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 10,504 | 10,248 |
Money market funds | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 0 | $ 0 |
Goodwill and Intangible Assets - Textual (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 26, 2016 |
Mar. 28, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, impairment loss | $ 0 | |
Amortization expense | $ 3,364,000 | $ 4,640,000 |
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 26, 2016 |
Dec. 31, 2015 |
---|---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 123,704 | $ 123,704 |
Accumulated Amortization | (120,450) | (117,086) |
Net | 3,254 | 6,618 |
Core developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 68,964 | 68,964 |
Accumulated Amortization | (65,710) | (64,047) |
Net | 3,254 | 4,917 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 54,740 | 54,740 |
Accumulated Amortization | (54,740) | (53,039) |
Net | $ 0 | $ 1,701 |
Goodwill and Intangible Assets - Expected Future Amortization (Details) - USD ($) $ in Thousands |
Mar. 26, 2016 |
Dec. 31, 2015 |
---|---|---|
Expected future amortization | ||
Remainder of 2016 | $ 2,441 | |
2017 | 813 | |
Net | $ 3,254 | $ 6,618 |
Balance Sheet Details - Accounts Receivable (Details) - USD ($) $ in Thousands |
Mar. 26, 2016 |
Dec. 31, 2015 |
---|---|---|
Summary of accounts receivable, net | ||
Accounts receivable | $ 44,776 | $ 48,319 |
Allowance for doubtful accounts | (417) | (501) |
Product return reserve | (555) | (663) |
Accounts receivable, net | $ 43,804 | $ 47,155 |
Balance Sheet Details - Inventory (Details) - USD ($) $ in Thousands |
Mar. 26, 2016 |
Dec. 31, 2015 |
---|---|---|
Summary of inventory, net | ||
Raw materials | $ 2,048 | $ 2,209 |
Finished goods | 39,079 | 45,458 |
Total inventory | $ 41,127 | $ 47,667 |
Balance Sheet Details - Property and Equipment, net (Details) - USD ($) $ in Thousands |
Mar. 26, 2016 |
Dec. 31, 2015 |
---|---|---|
Summary of property and equipment, net | ||
Property and equipment, gross | $ 76,521 | $ 75,158 |
Accumulated depreciation and amortization | (60,006) | (58,009) |
Property and equipment, net | 16,515 | 17,149 |
Test equipment | ||
Summary of property and equipment, net | ||
Property and equipment, gross | 39,914 | 39,035 |
Computer equipment and software | ||
Summary of property and equipment, net | ||
Property and equipment, gross | 27,957 | 27,736 |
Furniture and fixtures | ||
Summary of property and equipment, net | ||
Property and equipment, gross | 2,096 | 1,833 |
Leasehold improvements | ||
Summary of property and equipment, net | ||
Property and equipment, gross | $ 6,554 | $ 6,554 |
Balance Sheet Details - Accrued Liabilities (Details) - USD ($) $ in Thousands |
Mar. 26, 2016 |
Dec. 31, 2015 |
---|---|---|
Summary of accrued liabilities | ||
Accrued compensation and related benefits | $ 17,019 | $ 13,809 |
Accrued warranty | 9,152 | 9,564 |
Accrued professional and consulting fees | 7,392 | 2,813 |
Accrued customer rebates | 1,269 | 784 |
Accrued excess and obsolete inventory at contract manufacturers | 1,038 | 1,011 |
Advance customer payments | 971 | 1,094 |
Accrued non income related taxes | 914 | 905 |
Accrued business travel expenses | 854 | 580 |
Accrued insurance | 791 | 0 |
Accrued rent | 396 | 381 |
Accrued freight | 345 | 486 |
Accrued hosting services | 287 | 322 |
Income taxes payable | 240 | 466 |
Accrued other | 3,133 | 3,297 |
Total accrued liabilities | $ 43,801 | $ 35,512 |
Balance Sheet Details - Deferred Revenue (Details) - USD ($) $ in Thousands |
Mar. 26, 2016 |
Dec. 31, 2015 |
---|---|---|
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | $ 9,802 | $ 12,124 |
Deferred revenue, noncurrent | 19,696 | 19,569 |
Deferred revenue | 29,498 | 31,693 |
Product and services | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | 6,536 | 8,937 |
Deferred revenue, noncurrent | 19,651 | 19,511 |
Extended warranty | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | 3,266 | 3,187 |
Deferred revenue, noncurrent | $ 45 | $ 58 |
Commitments and Contingencies - Textual (Details) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Apr. 14, 2016
USD ($)
|
Jan. 06, 2012
USD ($)
|
Sep. 16, 2010
Subsidiary
|
Mar. 26, 2016
USD ($)
|
|
Commitments and Contingencies [Line Items] | ||||
Warranty period | 3 years | |||
Number of subsidiaries | Subsidiary | 2 | |||
Trading profits | $ 0.5 | |||
Minimum | ||||
Commitments and Contingencies [Line Items] | ||||
Warranty period | 1 year | |||
Maximum | ||||
Commitments and Contingencies [Line Items] | ||||
Warranty period | 5 years | |||
Pending Litigation | Chen v. Howard-Anderson, et al. | ||||
Commitments and Contingencies [Line Items] | ||||
Litigation defense costs and expenses in excess of insurance coverage | $ 3.6 | |||
Pending Litigation | Subsequent Event | Chen v. Howard-Anderson, et al. | ||||
Commitments and Contingencies [Line Items] | ||||
Settlement consideration to be paid, if settlement becomes final | $ 35.0 | |||
Recovery of settlement costs | $ 4.5 |
Commitments and Contingencies - Product Warranty Activities (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 26, 2016 |
Mar. 28, 2015 |
|
Product warranty activities [Roll Forward] | ||
Balance at beginning of period | $ 9,564 | $ 9,553 |
Warranty charged to cost of revenue | 580 | 1,068 |
Utilization of warranty | (619) | (998) |
Adjustments to pre-existing warranty | (373) | 0 |
Balance at end of period | $ 9,152 | $ 9,623 |
Net Loss per Common Share - Basic and Diluted Shares Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 26, 2016 |
Mar. 28, 2015 |
|
Numerator: | ||
Net loss | $ (10,729) | $ (11,930) |
Denominator: | ||
Weighted-average common shares outstanding (in shares) | 48,591 | 51,732 |
Basic and diluted net loss per common share (in dollars per share) | $ (0.22) | $ (0.23) |
Potentially dilutive shares, weighted average (in shares) | 5,500 | 5,625 |
Stockholders' Equity - Textual (Details) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 26, 2016
USD ($)
Plan
$ / shares
shares
|
Mar. 28, 2015
USD ($)
|
Dec. 31, 2012 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of equity incentive plans | Plan | 3 | ||
Stock options granted | 0 | ||
Stock options exercised | 2,312 | ||
Weighted-average exercise price per share, stock options | $ / shares | $ 5.85 | ||
Unrecognized stock-based compensation expense, stock options | $ | $ 2,900,000 | ||
Weighted-average amortization period | 2 years 1 month | ||
Taxes paid for awards vested under equity incentive plans | $ | $ 251,000 | $ 506,000 | |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average amortization period | 2 years 5 months | ||
Awards granted | 111,875 | ||
Weighted-average grant date fair value per share | $ / shares | $ 7.42 | ||
Awards vested | 31,943 | ||
Taxes paid for awards vested under equity incentive plans | $ | $ 100,000 | ||
Unrecognized stock-based compensation expense | $ | $ 12,600,000 | ||
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards granted | 0 | ||
Awards vested | 0 | ||
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average amortization period | 1 month | ||
Unrecognized stock-based compensation expense | $ | $ 200,000 | ||
ESPP, maximum employee payroll deduction percentage | 15.00% | ||
ESPP, maximum number of shares per employee | 2,000 | ||
ESPP, discounted purchase price percentage | 85.00% | ||
Shares available for issuance under the ESPP | 1,129,139 | ||
Shares issued under the ESPP | 0 | ||
Performance Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average amortization period | 1 year 7 months | ||
Awards granted | 550,000 | ||
Weighted-average grant date fair value per share | $ / shares | $ 7.42 | ||
Taxes paid for awards vested under equity incentive plans | $ | $ 100,000 | ||
Unrecognized stock-based compensation expense | $ | $ 3,400,000 | ||
Period of average closing trading price ending on the last day of applicable performance period | 90 days | ||
Period of average closing trading price preceding first day of performance period | 90 days | ||
Shares converted into common stock | 44,992 | ||
Performance Restricted Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance period | 1 year | 2 years | |
Target performance rate | 0.00% | ||
Performance Restricted Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance period | 3 years | ||
Target performance rate | 200.00% | ||
Transition And Separation Agreement with Roger Weingarth | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value recognized for accelerated stock awards | $ | $ 0 | ||
Common Stock | Performance Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares of stock issued upon conversion of units | 26,557 | ||
Period one - February 2017 | Performance Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 50.00% | ||
Period two - February 2018 | Performance Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 25.00% | ||
Period three - February 2019 | Performance Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 25.00% |
Stockholders' Equity - Stock Repurchase (Details) - Common Stock - USD ($) |
3 Months Ended | 11 Months Ended | |
---|---|---|---|
Mar. 26, 2016 |
Mar. 26, 2016 |
Apr. 26, 2015 |
|
Equity, Class of Treasury Stock [Line Items] | |||
Stock repurchase program, authorized amount | $ 40,000,000 | ||
Number of shares repurchased | 1,789,287 | 5,329,817 | |
Shares repurchased, value | $ 12,800,000 | ||
Average price per share | $ 7.16 | $ 7.50 |
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 26, 2016 |
Mar. 28, 2015 |
|
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | $ 235,785 | |
Balance at end of period | 214,778 | |
Unrealized Gains and Losses on Available-for-Sale Marketable Securities | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (94) | $ (58) |
Other comprehensive income (loss) | 65 | 39 |
Balance at end of period | (29) | (19) |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (101) | 138 |
Other comprehensive income (loss) | (18) | (30) |
Balance at end of period | (119) | 108 |
Total | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (195) | 80 |
Other comprehensive income (loss) | 47 | 9 |
Balance at end of period | $ (148) | $ 89 |
Credit Facility - Textual (Details) |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 29, 2013
USD ($)
|
Jun. 30, 2013
USD ($)
|
Mar. 26, 2016
USD ($)
payment
|
Mar. 28, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 50,000,000.0 | |||||
Maturity date | Sep. 30, 2018 | |||||
Restricted cash released | $ 0 | $ (295,000) | ||||
Initiation date | Jul. 29, 2013 | |||||
Interest rate description | Loans under the credit facility bear interest at an annual rate equal to the base rate plus 0.75% to 1.25% or LIBOR plus 2.00% to 2.50% based on a leverage ratio of consolidated funded indebtedness to consolidated Adjusted EBITDA (customarily defined). | |||||
Frequency of payment and payment terms | Interest on the revolving facility is due quarterly, and any outstanding interest and principal is due on the maturity date of the revolving facility. | |||||
Number of payments to repay principal | payment | 20 | |||||
Commitment fee percentage | 0.25% | |||||
Outstanding revolving loans | $ 0 | |||||
Borrowings under the credit facility | 0 | |||||
Debt issuance costs paid | $ 100,000 | $ 300,000 | ||||
Unamortized debt issuance costs | $ 200,000 | |||||
Base Rate | Minimum | ||||||
Credit Facility [Line Items] | ||||||
Interest rate margin | 0.75% | |||||
Base Rate | Maximum | ||||||
Credit Facility [Line Items] | ||||||
Interest rate margin | 1.25% | |||||
LIBOR | Minimum | ||||||
Credit Facility [Line Items] | ||||||
Interest rate margin | 2.00% | |||||
LIBOR | Maximum | ||||||
Credit Facility [Line Items] | ||||||
Interest rate margin | 2.50% | |||||
Prior Credit Facility | ||||||
Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 30,000,000 | |||||
Maturity date | Jun. 30, 2013 | |||||
Letter of Credit | ||||||
Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 20,000,000.0 | |||||
Swingline Facility | ||||||
Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 10,000,000.0 | |||||
Repayment period (swingline loans) | 10 days | |||||
Term Loan | ||||||
Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 25,000,000.0 |
Income Taxes - Schedule of Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 26, 2016 |
Mar. 28, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 121 | $ 91 |
Effective tax rate | (1.10%) | (0.80%) |
Subsequent Event (Details) - Pending Litigation - Chen v. Howard-Anderson, et al. - Subsequent Event $ in Millions |
Apr. 14, 2016
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Settlement consideration to be paid, if settlement becomes final | $ 35.0 |
Recovery of settlement costs | $ 4.5 |
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