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 | |||
Emerging Growth Company | o |
ITEM 1. | Financial Statements |
April 1, 2017 | December 31, 2016 | |||||||
(Unaudited) | (See Note 1) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 26,318 | $ | 50,359 | ||||
Marketable securities | 25,215 | 27,748 | ||||||
Accounts receivable, net | 64,188 | 51,336 | ||||||
Inventory | 46,538 | 44,545 | ||||||
Deferred cost of revenue | 40,454 | 34,763 | ||||||
Prepaid expenses and other current assets | 11,911 | 10,571 | ||||||
Total current assets | 214,624 | 219,322 | ||||||
Property and equipment, net | 18,144 | 17,984 | ||||||
Goodwill | 116,175 | 116,175 | ||||||
Intangible assets, net | — | 813 | ||||||
Other assets | 816 | 1,181 | ||||||
Total assets | $ | 349,759 | $ | 355,475 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 24,520 | $ | 23,827 | ||||
Accrued liabilities | 77,015 | 69,715 | ||||||
Deferred revenue | 44,416 | 27,854 | ||||||
Total current liabilities | 145,951 | 121,396 | ||||||
Long-term portion of deferred revenue | 20,876 | 20,237 | ||||||
Other long-term liabilities | 775 | 878 | ||||||
Total liabilities | 167,602 | 142,511 | ||||||
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 April 1, 2017 and December 31, 2016 | — | — | ||||||
Common stock, $0.025 par value; 100,000,000 shares authorized; 54,956,348 shares issued and 49,626,531 shares outstanding as of April 1, 2017, and 54,722,135 shares issued and 49,392,318 shares outstanding as of December 31, 2016 | 1,374 | 1,368 | ||||||
Additional paid-in capital | 839,018 | 836,563 | ||||||
Accumulated other comprehensive loss | (599 | ) | (656 | ) | ||||
Accumulated deficit | (617,650 | ) | (584,325 | ) | ||||
Treasury stock, 5,329,817 shares as of April 1, 2017 and December 31, 2016 | (39,986 | ) | (39,986 | ) | ||||
Total stockholders’ equity | 182,157 | 212,964 | ||||||
Total liabilities and stockholders’ equity | $ | 349,759 | $ | 355,475 |
Three Months Ended | ||||||||
April 1, 2017 | March 26, 2016 | |||||||
Revenue: | ||||||||
Systems | 91,605 | 91,680 | ||||||
Services | 25,913 | 6,695 | ||||||
Total revenue | 117,518 | 98,375 | ||||||
Cost of revenue: | ||||||||
Systems (1) | 57,373 | 47,693 | ||||||
Services (1) | 25,768 | 5,200 | ||||||
Total cost of revenue | 83,141 | 52,893 | ||||||
Gross profit | 34,377 | 45,482 | ||||||
Operating expenses: | ||||||||
Research and development (1) | 33,808 | 22,773 | ||||||
Sales and marketing (1) | 22,429 | 19,062 | ||||||
General and administrative (1) | 10,257 | 12,684 | ||||||
Amortization of intangible assets | — | 1,701 | ||||||
Restructuring charges | 699 | — | ||||||
Total operating expenses | 67,193 | 56,220 | ||||||
Loss from operations | (32,816 | ) | (10,738 | ) | ||||
Interest and other income (expense), net: | ||||||||
Interest income | 88 | 211 | ||||||
Interest expense | (44 | ) | (164 | ) | ||||
Other income (expense), net | 120 | 83 | ||||||
Loss before provision for income taxes | (32,652 | ) | (10,608 | ) | ||||
Provision for income taxes | 673 | 121 | ||||||
Net loss | $ | (33,325 | ) | $ | (10,729 | ) | ||
Net loss per common share: | ||||||||
Basic and diluted | $ | (0.67 | ) | $ | (0.22 | ) | ||
Weighted-average number of shares used to | ||||||||
compute net loss per common share: | ||||||||
Basic and diluted | 49,525 | 48,591 | ||||||
Net loss | $ | (33,325 | ) | $ | (10,729 | ) | ||
Other comprehensive income (loss), net of tax: | ||||||||
Unrealized gains (losses) on available-for-sale marketable securities, net | (4 | ) | 65 | |||||
Foreign currency translation adjustments, net | 61 | (18 | ) | |||||
Total other comprehensive income (loss), net of tax | 57 | 47 | ||||||
Comprehensive loss | $ | (33,268 | ) | $ | (10,682 | ) | ||
(1) Includes stock-based compensation as follows: | ||||||||
Cost of revenue: | ||||||||
Systems | $ | 116 | $ | 90 | ||||
Services | 56 | 37 | ||||||
Research and development | 1,326 | 1,047 | ||||||
Sales and marketing | 1,111 | 822 | ||||||
General and administrative | 931 | 725 |
Three Months Ended | ||||||||
April 1, 2017 | March 26, 2016 | |||||||
Operating activities: | ||||||||
Net loss | $ | (33,325 | ) | $ | (10,729 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 2,463 | 1,955 | ||||||
Loss on retirement of property and equipment | 80 | — | ||||||
Amortization of intangible assets | 813 | 3,364 | ||||||
Amortization of premiums related to available-for-sale securities | (5 | ) | 114 | |||||
Stock-based compensation | 3,540 | 2,721 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | (12,852 | ) | 3,351 | |||||
Inventory | (1,993 | ) | 6,540 | |||||
Deferred cost of revenue | (5,691 | ) | 810 | |||||
Prepaid expenses and other assets | (968 | ) | (576 | ) | ||||
Accounts payable | 276 | (8,459 | ) | |||||
Accrued liabilities | 7,110 | 8,471 | ||||||
Deferred revenue | 17,201 | (2,195 | ) | |||||
Other long-term liabilities | (103 | ) | (98 | ) | ||||
Net cash provided by (used in) operating activities | (23,454 | ) | 5,269 | |||||
Investing activities: | ||||||||
Purchases of property and equipment | (2,106 | ) | (1,453 | ) | ||||
Purchases of marketable securities | (8,732 | ) | — | |||||
Maturities of marketable securities | 11,266 | 7,020 | ||||||
Net cash provided by investing activities | 428 | 5,567 | ||||||
Financing activities: | ||||||||
Proceeds from exercise of stock options | 13 | 14 | ||||||
Payments for repurchases of common stock | — | (12,809 | ) | |||||
Taxes paid for awards vested under equity incentive plans | (1,093 | ) | (251 | ) | ||||
Net cash used in financing activities | (1,080 | ) | (13,046 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 65 | (51 | ) | |||||
Net decrease in cash and cash equivalents | (24,041 | ) | (2,261 | ) | ||||
Cash and cash equivalents at beginning of period | 50,359 | 23,626 | ||||||
Cash and cash equivalents at end of period | $ | 26,318 | $ | 21,365 |
a. | Accounting for Income Taxes - The primary impact of the adoption was the recognition of excess tax benefits and tax deficiencies through the statement of operations when the awards vest or are settled rather than through paid-in capital. The new guidance eliminates the requirement to delay the recognition of excess tax benefits until it reduces current taxes payable and requires the |
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. The Company adopted this guidance prospectively beginning on January 1, 2017. The adoption of ASU 2016-09 as it relates to this matter had no impact to the Company’s consolidated financial statements. |
c. | Forfeitures - The Company has historically recognized stock-based compensation expense net of estimated forfeitures on all unvested awards and elected to continuously do so with the adoption of this new guidance. Hence, the adoption of ASU 2016-09 as it relates to this matter had no impact to the Company’s consolidated financial statements. |
d. | Minimum Statutory Tax Withholding Requirements - ASU 2016-09 allows companies to withhold an amount up to the employee’s maximum individual tax rate in the relevant jurisdiction without resulting in liability classification of the award. The Company adopted this guidance using a modified retrospective approach. The adoption had no impact on the January 1, 2017 accumulated deficit as the Company had no outstanding liability awards that would otherwise qualify for equity classification under this new guidance. |
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. The Company has historically presented the taxes paid related to net share settlement of equity awards as a financing activity on the statements of cash flows. Hence, the adoption of ASU 2016-09 as it relates to this matter had no impact to the Company’s consolidated financial statements. |
April 1, 2017 | December 31, 2016 | |||||||
Cash and cash equivalents: | ||||||||
Cash | $ | 17,675 | $ | 34,340 | ||||
Money market funds | 8,197 | 15,020 | ||||||
Corporate debt securities | 446 | — | ||||||
Commercial paper | — | 999 | ||||||
Total cash and cash equivalents | 26,318 | 50,359 | ||||||
Marketable securities: | ||||||||
Corporate debt securities | 10,843 | 17,272 | ||||||
Commercial paper | 10,174 | 6,275 | ||||||
U.S. government agency securities | 4,198 | 4,201 | ||||||
Total marketable securities | 25,215 | 27,748 | ||||||
Total cash, cash equivalents and marketable securities | $ | 51,533 | $ | 78,107 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Corporate debt securities | $ | 10,851 | $ | — | $ | (8 | ) | $ | 10,843 | |||||||
Commercial paper | 10,174 | — | — | 10,174 | ||||||||||||
U.S. government agency securities | 4,200 | — | (2 | ) | 4,198 | |||||||||||
Total marketable securities | $ | 25,225 | $ | — | $ | (10 | ) | $ | 25,215 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Corporate debt securities | $ | 17,279 | $ | 1 | $ | (8 | ) | $ | 17,272 | |||||||
Commercial paper | 6,275 | — | — | 6,275 | ||||||||||||
U.S. government agency securities | 4,200 | 1 | — | 4,201 | ||||||||||||
Total marketable securities | $ | 27,754 | $ | 2 | $ | (8 | ) | $ | 27,748 |
Amortized Cost | Fair Value | |||||||
Due in 1 year or less | $ | 25,225 | $ | 25,215 |
As of April 1, 2017 | Level 1 | Level 2 | Total | |||||||||
Money market funds | $ | 8,197 | $ | — | $ | 8,197 | ||||||
Corporate debt securities | — | 11,289 | 11,289 | |||||||||
Commercial paper | — | 10,174 | 10,174 | |||||||||
U.S. government agency securities | — | 4,198 | 4,198 | |||||||||
Total | $ | 8,197 | $ | 25,661 | $ | 33,858 |
As of December 31, 2016 | Level 1 | Level 2 | Total | |||||||||
Money market funds | $ | 15,020 | $ | — | $ | 15,020 | ||||||
Corporate debt securities | — | 17,272 | 17,272 | |||||||||
Commercial paper | — | 7,274 | 7,274 | |||||||||
U.S. government agency securities | — | 4,201 | 4,201 | |||||||||
Total | $ | 15,020 | $ | 28,747 | $ | 43,767 |
April 1, 2017 | December 31, 2016 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||||
Core developed technology | $ | 68,964 | $ | (68,964 | ) | $ | — | $ | 68,964 | $ | (68,151 | ) | $ | 813 | ||||||||||
Customer relationships | 54,740 | (54,740 | ) | — | 54,740 | (54,740 | ) | — | ||||||||||||||||
Total intangible assets, excluding goodwill | $ | 123,704 | $ | (123,704 | ) | $ | — | $ | 123,704 | $ | (122,891 | ) | $ | 813 |
April 1, 2017 | December 31, 2016 | |||||||
Accounts receivable | $ | 66,142 | $ | 52,792 | ||||
Allowance for doubtful accounts | (477 | ) | (518 | ) | ||||
Product return reserve | (1,477 | ) | (938 | ) | ||||
Accounts receivable, net | $ | 64,188 | $ | 51,336 |
April 1, 2017 | December 31, 2016 | |||||||
Raw materials | $ | 1,502 | $ | 1,827 | ||||
Finished goods | 45,036 | 42,718 | ||||||
Total inventory | $ | 46,538 | $ | 44,545 |
April 1, 2017 | December 31, 2016 | |||||||
Test equipment | $ | 44,466 | $ | 43,580 | ||||
Computer equipment and software | 31,785 | 30,306 | ||||||
Furniture and fixtures | 2,709 | 2,831 | ||||||
Leasehold improvements | 6,827 | 6,898 | ||||||
Total | 85,787 | 83,615 | ||||||
Accumulated depreciation and amortization | (67,643 | ) | (65,631 | ) | ||||
Property and equipment, net | $ | 18,144 | $ | 17,984 |
April 1, 2017 | December 31, 2016 | |||||||
Advance customer payments | $ | 22,946 | $ | 20,726 | ||||
Accrued compensation and related benefits | 22,193 | 19,541 | ||||||
Accrued warranty and retrofit | 10,778 | 12,214 | ||||||
Accrued professional and consulting fees | 9,952 | 8,205 | ||||||
Accrued excess and obsolete inventory at contract manufacturers | 2,415 | 1,327 | ||||||
Accrued customer rebates | 1,425 | 1,931 | ||||||
Accrued insurance | 756 | 804 | ||||||
Accrued restructuring charges | 699 | — | ||||||
Income taxes payable | 20 | 231 | ||||||
Accrued other | 5,831 | 4,736 | ||||||
Total accrued liabilities | $ | 77,015 | $ | 69,715 |
April 1, 2017 | December 31, 2016 | |||||||
Current: | ||||||||
Product and services | $ | 41,152 | $ | 24,472 | ||||
Extended warranty | 3,264 | 3,382 | ||||||
44,416 | 27,854 | |||||||
Non-current: | ||||||||
Product and services | 38 | 22 | ||||||
Extended warranty | 20,838 | 20,215 | ||||||
20,876 | 20,237 | |||||||
Total deferred revenue | $ | 65,292 | $ | 48,091 |
Three Months Ended | ||||||||
April 1, 2017 | March 26, 2016 | |||||||
Balance at beginning of period | $ | 12,214 | $ | 9,564 | ||||
Provision for warranty and retrofit charged to cost of revenue | 1,862 | 580 | ||||||
Utilization of reserve | (3,298 | ) | (619 | ) | ||||
Adjustments to pre-existing reserve | — | (373 | ) | |||||
Balance at end of period | $ | 10,778 | $ | 9,152 |
Three Months Ended | ||||||||
April 1, 2017 | March 26, 2016 | |||||||
Numerator: | ||||||||
Net loss | $ | (33,325 | ) | $ | (10,729 | ) | ||
Denominator: | ||||||||
Weighted-average common shares outstanding | 49,525 | 48,591 | ||||||
Basic and diluted net loss per common share | $ | (0.67 | ) | $ | (0.22 | ) | ||
Potentially dilutive shares, weighted average | 6,145 | 5,500 |
Three Months Ended | |||||||||||||||||||||||
April 1, 2017 | March 26, 2016 | ||||||||||||||||||||||
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 | $ | (6 | ) | $ | (650 | ) | $ | (656 | ) | $ | (94 | ) | $ | (101 | ) | $ | (195 | ) | |||||
Other comprehensive income (loss) | (4 | ) | 61 | 57 | 65 | (18 | ) | 47 | |||||||||||||||
Balance at end of period | $ | (10 | ) | $ | (589 | ) | $ | (599 | ) | $ | (29 | ) | $ | (119 | ) | $ | (148 | ) |
Three Months Ended | ||||||||
April 1, 2017 | March 26, 2016 | |||||||
Provision for income taxes | $ | 673 | $ | 121 | ||||
Effective tax rate | (2.1 | )% | (1.1 | )% |
Three Months Ended April 1, 2017 | ||||
Liability at beginning of period | $ | — | ||
Restructuring charges for the period | 699 | |||
Cash payments | — | |||
Liability at end of period | $ | 699 |
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | Systems — includes revenue derived from the sale of access systems and cloud-based software products. |
• | Services — includes revenue from professional services, software support services for access systems, extended warranty and training services. |
Three Months Ended | |||||||||||||||
April 1, 2017 | March 26, 2016 | Variance in Dollars | Variance in Percent | ||||||||||||
Revenue: | |||||||||||||||
Systems | $ | 91,605 | $ | 91,680 | $ | (75 | ) | — | % | ||||||
Services | 25,913 | 6,695 | 19,218 | 287 | % | ||||||||||
Total revenue | $ | 117,518 | $ | 98,375 | $ | 19,143 | 19 | % | |||||||
Percent of total revenue: | |||||||||||||||
Systems | 78 | % | 93 | % | |||||||||||
Services | 22 | % | 7 | % | |||||||||||
Total | 100 | % | 100 | % |
Three Months Ended | |||||||||||||||
April 1, 2017 | March 26, 2016 | Variance in Dollars | Variance in Percent | ||||||||||||
Cost of revenue: | |||||||||||||||
Systems | $ | 57,373 | $ | 47,693 | $ | 9,680 | 20 | % | |||||||
Services | 25,768 | 5,200 | 20,568 | 396 | % | ||||||||||
Total cost of revenue | $ | 83,141 | $ | 52,893 | $ | 30,248 | 57 | % |
Three Months Ended | |||||||||||||||
April 1, 2017 | March 26, 2016 | Variance in Dollars | Variance in Percent | ||||||||||||
Gross profit: | |||||||||||||||
Systems | $ | 34,232 | $ | 43,987 | $ | (9,755 | ) | (22 | )% | ||||||
Services | 145 | 1,495 | (1,350 | ) | (90 | )% | |||||||||
Total gross profit | $ | 34,377 | $ | 45,482 | $ | (11,105 | ) | (24 | )% | ||||||
Gross margin: | |||||||||||||||
Systems | 37 | % | 48 | % | |||||||||||
Services | 1 | % | 22 | % | |||||||||||
Total gross margin | 29 | % | 46 | % |
Three Months Ended | |||||||||||||||
April 1, 2017 | March 26, 2016 | Variance in Dollars | Variance in Percent | ||||||||||||
Research and development | $ | 33,808 | $ | 22,773 | $ | 11,035 | 48 | % | |||||||
Percent of total revenue | 29 | % | 23 | % |
Three Months Ended | |||||||||||||||
April 1, 2017 | March 26, 2016 | Variance in Dollars | Variance in Percent | ||||||||||||
Sales and marketing | $ | 22,429 | $ | 19,062 | $ | 3,367 | 18 | % | |||||||
Percent of total revenue | 19 | % | 19 | % |
Three Months Ended | |||||||||||||||
April 1, 2017 | March 26, 2016 | Variance in Dollars | Variance in Percent | ||||||||||||
General and administrative | $ | 10,257 | $ | 12,684 | $ | (2,427 | ) | (19 | )% | ||||||
Percent of total revenue | 9 | % | 13 | % |
Three Months Ended | |||||||||||||||
April 1, 2017 | March 26, 2016 | Variance in Dollars | Variance in Percent | ||||||||||||
Amortization of intangible asset | $ | — | $ | 1,701 | $ | (1,701 | ) | (100 | )% | ||||||
Percent of total revenue | — | % | 2 | % |
Three Months Ended | |||||||||||||||
April 1, 2017 | March 26, 2016 | Variance in Dollars | Variance in Percent | ||||||||||||
Restructuring charges | $ | 699 | $ | — | $ | 699 | 100 | % | |||||||
Percent of total revenue | 1 | % | — | % |
Three Months Ended | |||||||||||||||
April 1, 2017 | March 26, 2016 | Variance in Dollars | Variance in Percent | ||||||||||||
Provision for income taxes | $ | 673 | $ | 121 | $ | 552 | 456 | % | |||||||
Effective tax rate | (2.1 | )% | (1.1 | )% |
Three Months Ended | ||||||
April 1, 2017 | March 26, 2016 | |||||
USD | 90 | % | 89 | % | ||
RMB | 6 | % | 6 | % | ||
GBP | 3 | % | 4 | % | ||
BRL | 1 | % | 1 | % | ||
100 | % | 100 | % |
ITEM 4. | Controls and Procedures |
• | our ability to predict our revenue and reduce and control product costs; |
• | our ability to increase our sales to larger CSPs globally; |
• | the capital spending patterns of CSPs and any decrease or delay in capital spending by CSPs due to macro-economic conditions, regulatory 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 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 margins; |
• | 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. |
• | 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 ability 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; |
• | our ability to scale our services business in order to gain desired efficiencies; |
• | changes in shipment volume; |
• | changes in or increased reliance on 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 contractual liquidated damages obligations. |
• | 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. |
• | 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. |
• | differing regulatory requirements, including tax laws, trade laws, data privacy 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; |
• | exposure to effects of fluctuations in currency exchange rates if, over time, international customer contracts are increasingly denominated in local currencies; |
• | 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, and compensation, 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 organizational change; |
• | manage a larger organization; |
• | accelerate and/or refocus research and development activities; |
• | expand our manufacturing, supply chain and distribution capacity; |
• | increase our sales and marketing efforts; |
• | broaden our customer-support and services capabilities; |
• | maintain or increase operational efficiencies; |
• | scale support operations in a cost-effective manner; |
• | implement appropriate operational and financial systems; and |
• | maintain effective financial disclosure controls and procedures. |
• | 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 acquired businesses; |
• | 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; |
• | development efforts that do not meet our requirements because of language, cultural or other differences associated with international operations, resulting in errors or delays; and |
• | uncertainty with regards to actions the Trump administration may take with respect to international trade agreements and U.S. tax provisions related to international commerce that could adversely affect our international operations. |
• | 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. |
Exhibit Number | Description | |
10.1* | Separation Agreement and General Release of All Claims by and between Calix, Inc. and William Atkins dated March 31, 2017. | |
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 |
* Indicates management contract or compensatory plan or arrangement. |
CALIX, INC. (Registrant) | |||
Date: May 10, 2017 | By: | /s/ Carl Russo | |
Carl Russo | |||
Chief Executive Officer (Principal Executive Officer) | |||
Date: May 10, 2017 | By: | /s/ William J. Atkins | |
William J. Atkins | |||
EVP and Chief Financial Officer (Principal Financial Officer) | |||
Date: May 10, 2017 | By: | /s/ Sheila Cheung | |
Sheila Cheung | |||
Vice President, Finance and Accounting (Principal Accounting Officer) |
Exhibit Number | Description | |
10.1* | Separation Agreement and General Release of All Claims by and between Calix, Inc. and William Atkins dated March 31, 2017. | |
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 |
* Indicates management contract or compensatory plan or arrangement. |
• | Where the disclosure is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or |
• | Where the disclosure is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. See 18 U.S.C. § 1833(b)(1)). |
Grant Date | Type | Exercise Price Per Share | Pre-Acceleration Vested Shares | Accelerated Shares | Total Vested Shares |
3/25/2014 | Option | $8.61 | 243,750 | 56,250 | 300,000 |
2/2/2016 | PSU | $0.00 | 0 | 25,000 | 25,000 |
COMPANY: | EMPLOYEE: | |
CALIX NETWORKS, INC. | ||
By: /s/ Natalie Hodge | Name: William J. Atkins | |
Name: Natalie Hodge | Signature: /s/ William J. Atkins | |
Title: HRIS Analyst I | Date: January 1, 2014 | |
Date: December 16, 2013 | Address: ############# | |
Address: 1035 North McDowell Blvd. Petaluma, CA 94954 |
Title | Date | Identifying Number or Brief Description | ||
X | No inventions or improvements |
0 | Additional Sheets Attached |
Date: | |||
(Employee’s Signature) | |||
(Type/Print Employee’s Name) |
Date: | |||
(Employee’s Signature) | |||
WILLIAM ATKINS | |||
(Type/Print Employee’s Name) |
1. | I have reviewed this quarterly report on Form 10-Q of Calix, Inc. for the quarter ended April 1, 2017; |
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 10, 2017 | /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 April 1, 2017; |
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 10, 2017 | /s/ William J. Atkins | |||
William J. Atkins | ||||
EVP and Chief Financial Officer |
Date: May 10, 2017 | /s/ Carl Russo | |||
Carl Russo | ||||
Chief Executive Officer |
Date: May 10, 2017 | /s/ William J. Atkins | |||
William J. Atkins | ||||
EVP and Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Apr. 01, 2017 |
May 03, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CALIX, INC | |
Entity Central Index Key | 0001406666 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 01, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 49,875,750 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Apr. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 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 (in dollars per share) | $ 0.025 | $ 0.025 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 54,956,348 | 54,722,135 |
Common stock, shares outstanding | 49,626,531 | 49,392,318 |
Treasury stock, shares | 5,329,817 | 5,329,817 |
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 01, 2017 |
Mar. 26, 2016 |
|
Systems | ||
Stock-based compensation | $ 116 | $ 90 |
Services | ||
Stock-based compensation | 56 | 37 |
Research and development | ||
Stock-based compensation | 1,326 | 1,047 |
Sales and marketing | ||
Stock-based compensation | 1,111 | 822 |
General and administrative | ||
Stock-based compensation | $ 931 | $ 725 |
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 01, 2017 |
Mar. 26, 2016 |
|
Operating activities: | ||
Net loss | $ (33,325) | $ (10,729) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 2,463 | 1,955 |
Loss on retirement of property and equipment | 80 | 0 |
Amortization of intangible assets | 813 | 3,364 |
Amortization of premiums related to available-for-sale securities | (5) | 114 |
Stock-based compensation | 3,540 | 2,721 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (12,852) | 3,351 |
Inventory | (1,993) | 6,540 |
Deferred cost of revenue | (5,691) | 810 |
Prepaid expenses and other assets | (968) | (576) |
Accounts payable | 276 | (8,459) |
Accrued liabilities | 7,110 | 8,471 |
Deferred revenue | 17,201 | (2,195) |
Other long-term liabilities | (103) | (98) |
Net cash provided by (used in) operating activities | (23,454) | 5,269 |
Investing activities: | ||
Purchases of property and equipment | (2,106) | (1,453) |
Purchases of marketable securities | (8,732) | 0 |
Maturities of marketable securities | 11,266 | 7,020 |
Net cash provided by investing activities | 428 | 5,567 |
Financing activities: | ||
Proceeds from exercise of stock options | 13 | 14 |
Payments for repurchases of common stock | 0 | (12,809) |
Taxes paid for awards vested under equity incentive plans | (1,093) | (251) |
Net cash used in financing activities | (1,080) | (13,046) |
Effect of exchange rate changes on cash and cash equivalents | 65 | (51) |
Net decrease in cash and cash equivalents | (24,041) | (2,261) |
Cash and cash equivalents at beginning of period | 50,359 | 23,626 |
Cash and cash equivalents at end of period | $ 26,318 | $ 21,365 |
Company and Basis of Presentation |
3 Months Ended |
---|---|
Apr. 01, 2017 | |
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 platforms, systems and software for fiber- and copper-based network architectures and a pioneer in software defined access that enables communications service providers (“CSPs”) to transform their networks and enhance how they connect to their residential and business subscribers. The Company develops and sells carrier-class hardware and software products, referred to as the Calix portfolio that are designed to enhance and transform CSP access networks to meet the changing demands of subscribers rapidly and cost-effectively. 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. 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, 2016 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 Annual Report on Form 10-K for the year ended December 31, 2016. 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 five more days in the three months ended April 1, 2017 than in the three months ended March 26, 2016. 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. Prior Period Recast The Company’s revenue from services for the three months ended April 1, 2017 represents more than 10% of its total revenue; hence, the revenue derived from services along with its associated cost of revenue are presented separately in the accompanying Condensed Consolidated Statements of Comprehensive Loss. Services include professional services, software support services for access systems, extended warranty and training services. Accordingly, revenue and cost of revenue for the three months ended March 26, 2016 are recast solely to conform with the current period presentation. The recast does not affect total revenue, total cost of revenue and operating expenses, loss from operations, or net loss. |
Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||
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Apr. 01, 2017 | |||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||
Significant Accounting Policies | Significant Accounting Policies The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2016. The Company’s significant accounting policies did not change during the three months ended April 1, 2017, except for those impacted by the newly adopted accounting standards below. Newly Adopted Accounting Standards Stock-Based Compensation 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 simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted ASU 2016-09 in the first quarter of fiscal 2017 and had the following impact:
Inventory 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. The Company adopted ASU 2015-11 prospectively beginning on January 1, 2017. The adoption of this standard had no material impact on the Company’s consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted Leases In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires recognition of an asset and liability for lease arrangements longer than twelve months. 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 expects its assets and liabilities to increase as a result of the adoption of this standard. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. Revenue from Contracts with Customers 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. ASU 2015-14 permits early adoption of the new revenue standard, but not before its original effective date. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”) which further clarifies guidance related to identifying performance obligations and licensing implementation guidance contained in ASU 2014-09. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”) which addresses narrow-scope improvements to the guidance on collectibility, non-cash consideration, and completed contracts at transition and provides a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. The new standard permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The Company has not yet determined which transition method it will adopt. Its determination will depend on a number of factors, such as the significance of the impact of the new standard on its financial results, system readiness and its ability to accumulate and analyze the information necessary to assess the impact on prior period financial statements, as necessary. The standard will be effective for the Company in the first quarter of fiscal 2018, with early adoption permitted for annual reporting period beginning in the first quarter of fiscal 2017. The Company is not planning to early adopt, and accordingly, it will adopt the new standard effective January 1, 2018. The Company is in the initial stages of its evaluation of the impact of the new standard on its accounting policies, processes, and system requirements. The Company has assigned internal resources in addition to the engagement of third party service providers to assist in its evaluation. Additionally, the Company expects to make investments in new systems or enhancement of existing systems to enable timely and accurate reporting under the new standard. While the Company continues to perform further assessment of all potential impacts under the new standard, the Company expects the timing of revenue recognition to be accelerated for certain performance obligations related to certain revenue arrangements which are currently deferred until customer acceptance. Depending on the outcome of the Company’s final evaluation, the timing of when revenue is recognized could change significantly for those revenue arrangements under the new standard. As part of its preliminary evaluation, the Company also considered the impact of the guidance in ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers with respect to capitalization and amortization of incremental costs of obtaining a contract. As a result of this new guidance, the Company may need to capitalize additional costs of obtaining a contract, including sales commissions, as the new cost guidance requires the capitalization of all incremental costs incurred to obtain a contract with a customer that it would not have incurred if the contract had not been obtained, provided it expects to recover the costs. Accordingly, the Company may need to defer certain sales commissions and amortize them over the period that the related revenue is recognized. While the Company continues to assess all the potential impacts of the new standard, including the areas described above, and anticipates this standard could have a material impact on its consolidated financial statements, the Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its consolidated financial statements at this time. 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 April 1, 2017 and March 26, 2016. These two customers together represented 55% and 29% of the Company’s total revenue for the three months ended April 1, 2017 and March 26, 2016, respectively. Each of these two customers represented 10% or more of the Company’s accounts receivable as of April 1, 2017 and December 31, 2016. |
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, commercial paper, and U.S. government agency securities. 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, commercial paper, and U.S. government agency securities 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 April 1, 2017 and has determined that no investments with unrealized losses are other-than-temporarily impaired. No investments have been in a continuous loss position for greater than one year. Cash, cash equivalents and marketable securities consisted of the following (in thousands):
The carrying amounts of the Company’s money market funds approximate their fair values due to their nature, duration and short maturities. As of April 1, 2017, the amortized cost and fair value of marketable securities were as follows (in thousands):
As of December 31, 2016, the amortized cost and fair value of marketable securities were as follows (in thousands):
As of April 1, 2017, 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 The Company measures its cash equivalents and marketable securities at fair value on a recurring basis. 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. The Company utilizes the following three-tier value hierarchy which prioritizes the inputs used in measuring fair value: 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 April 1, 2017 and December 31, 2016, 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, commercial paper and U.S. government agency securities 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 April 1, 2017 and March 26, 2016. |
Goodwill and Intangible Assets |
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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. 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. The Company evaluates goodwill on an annual basis at the end of the second quarter of each year. Management has determined that the Company operates 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 25, 2016. 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 25, 2016. 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 2016 annual impairment test that would more likely than not indicate that the carrying value of goodwill may have been impaired as of April 1, 2017. Therefore, there was no impairment to the carrying value of the Company’s goodwill as of April 1, 2017. Intangible Assets Intangible assets are carried at cost, less accumulated amortization. The details of intangible assets as of April 1, 2017 and December 31, 2016 are disclosed in the following table (in thousands):
Amortization expense was $0.8 million and $3.4 million for the three months ended April 1, 2017 and March 26, 2016, respectively. |
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):
Advance customer payments as of April 1, 2017 and December 31, 2016 primarily included $21.5 million and $20.3 million, respectively, which the Company received as payments in advance of completion of final customer acceptance of the products and services provided in connection with network improvement projects for a customer. 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 or not yet earned. |
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, 2016 are disclosed in the Company’s Annual Report on Form 10-K, and have not changed materially during the three months ended April 1, 2017. 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 and Retrofit The Company provides a standard warranty for its hardware products. Hardware generally has a one-, three-, or five-year standard warranty from the date of shipment. Under certain circumstances, the Company also provides fixes on specifically identified performance failures for products that are outside of the standard warranty period and recognizes estimated costs related to retrofit activities upon identification of such product failures. The Company accrues for potential warranty and retrofit claims based on the Company’s historical product failure rates and historical costs incurred in correcting product failures along with other relevant information related to any specifically identified product failures. The Company’s warranty and retrofit 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 and retrofit reserves in the periods as indicated 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. The Company is not currently a party to any legal proceedings that, if determined adversely to the Company, in management’s opinion, are currently expected to individually or in the aggregate have a material adverse effect on the Company’s business, operating results or financial condition taken as a whole. 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) agreements with the Company’s officers, directors, and certain 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):
Potentially dilutive shares have been excluded from the computation of diluted net loss per common share when their effect is antidilutive. These antidilutive shares were primarily from stock options, restricted stock units and performance restricted stock units. For each of the periods presented where the Company reported a net loss, 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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Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Equity Incentive Plans The Company currently maintains two equity incentive plans, 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 Annual Report on Form 10-K filed with the SEC on February 28, 2017. 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”), and performance restricted stock units (“PRSUs”). Stock Options During the three months ended April 1, 2017, no stock options were granted. During the three months ended April 1, 2017, 2,000 stock options were exercised at a weighted-average exercise price of $6.54 per share. As of April 1, 2017, unrecognized stock-based compensation expense of $3.2 million related to stock options, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 2.8 years. Restricted Stock Units During the three months ended April 1, 2017, 203,100 RSUs were granted with a weighted-average grant date fair value of $7.00 per share. During the three months ended April 1, 2017, 52,161 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 $0.3 million were remitted to the relevant taxing authorities during the three months ended April 1, 2017. As of April 1, 2017, 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. In 2016, the Company granted PRSUs to its executives with a one-year performance period and a subsequent two-year service period. The performance target for these particular performance-based awards 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 of the Company’s board of directors, each PRSU award shall vest with 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 April 1, 2017, 300,000 PRSUs vested and were converted into 180,052 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 $0.8 million were remitted to the relevant taxing authorities during the three months ended April 1, 2017. As of April 1, 2017, unrecognized stock-based compensation expense of $0.7 million related to PRSUs, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 1.4 years. 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 were 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. In July 2016, the Compensation Committee of the Company’s board of directors approved a change in those six-month period commencement dates to May 15 and November 15 of each year, effective May 15, 2017. The ending date of the ESPP offering period which commenced on November 2, 2016 will be extended until May 14, 2017 as a result of this change. The price of common stock purchased under the 2010 ESPP 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 April 1, 2017, there were 119,228 shares available for issuance under the ESPP. There were no shares purchased under the ESPP during the three months ended April 1, 2017. As of April 1, 2017, unrecognized stock-based compensation expense of $0.2 million related to the ESPP is expected to be recognized over a remaining service period of 1.5 months. Stock-Based Compensation Expense Stock-based compensation expense associated with stock options, RSUs, PRSUs, 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 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. In February 2017, the Compensation Committee of the Company’s board of directors determined that the performance condition related to PRSUs granted to executives in 2016 was met based on the Company’s actual revenue recognized during fiscal 2016. 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. This stock repurchase program commenced in May 2015 and was completed in March 2016. Under this program, stock was purchasable 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”) and any open market purchases were to 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) were to be made at management’s discretion at prices management considered to be attractive and in the best interests of the Company and its stockholders. In March 2016, the Company 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 Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The table below summarizes the changes in accumulated other comprehensive 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 loss to “Other income (expense)” in the accompanying Condensed Consolidated Statements of Comprehensive Loss. |
Credit Facility |
3 Months Ended |
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Apr. 01, 2017 | |
Line of Credit Facility [Abstract] | |
Credit Facility | Credit Facility 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, with any borrowings limited to a maximum consolidated leverage ratio of consolidated funded indebtedness to consolidated EBITDA (as defined in the Credit Agreement). In addition, the Credit Agreement 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 consolidated leverage ratio of consolidated funded indebtedness to consolidated EBITDA (as defined in the Credit Agreement). 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 Agreement includes affirmative and negative covenants applicable to the Company that are typical for credit facilities of this type. Furthermore, the Credit Agreement requires the Company 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 April 1, 2017, the Company was in compliance with these requirements. The Credit Agreement 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 April 1, 2017, no revolving loans were drawn under the Credit Agreement and, based on the consolidated leverage ratio requirements that limit available funds under the Credit Agreement, the Company has no funds available for borrowing under the Credit Agreement as of April 1, 2017. |
Income Taxes |
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Apr. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 April 1, 2017 and March 26, 2016 consisted primarily of foreign income taxes. The effective tax rate for the three months ended April 1, 2017 and March 26, 2016 was determined using an estimated annual effective tax rate adjusted for discrete items, if any, that occurred during the respective periods. The Company’s effective tax rate for the three months ended April 1, 2017 and March 26, 2016 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. The Company’s 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 it operates, 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 it conducts business. |
Restructuring Charges |
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Apr. 01, 2017 | ||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||
Restructuring Charges | Restructuring Charges The Company adopted a restructuring plan in March 2017. This restructuring plan realigns the Company’s business, increasing its focus towards its investments in innovative software defined access systems and software, while reducing its cost structure in traditional systems business. The Company began to take action under this plan beginning in March 2017 and recognized approximately $0.7 million of restructuring charges for the three months ended April 1, 2017 consisting primarily of severance and other one-time termination benefits, presented separately under operating expenses in the accompanying Condensed Consolidated Statements of Comprehensive Loss. The following table summarizes the activities related to the restructuring charges pursuant to the above restructuring plan (in thousands):
The Company currently estimates that this plan will result in pre-tax restructuring charges totaling up to $6.8 million with approximately up to $6.1 million of additional charges expected to be recognized during the rest of fiscal 2017. These charges are primarily cash-based. |
Significant Accounting Policies (Policies) |
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Apr. 01, 2017 | |||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||
Recent Accounting Pronouncements | Newly Adopted Accounting Standards Stock-Based Compensation 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 simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted ASU 2016-09 in the first quarter of fiscal 2017 and had the following impact:
Inventory 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. The Company adopted ASU 2015-11 prospectively beginning on January 1, 2017. The adoption of this standard had no material impact on the Company’s consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted Leases In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires recognition of an asset and liability for lease arrangements longer than twelve months. 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 expects its assets and liabilities to increase as a result of the adoption of this standard. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. Revenue from Contracts with Customers 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. ASU 2015-14 permits early adoption of the new revenue standard, but not before its original effective date. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”) which further clarifies guidance related to identifying performance obligations and licensing implementation guidance contained in ASU 2014-09. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”) which addresses narrow-scope improvements to the guidance on collectibility, non-cash consideration, and completed contracts at transition and provides a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. The new standard permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The Company has not yet determined which transition method it will adopt. Its determination will depend on a number of factors, such as the significance of the impact of the new standard on its financial results, system readiness and its ability to accumulate and analyze the information necessary to assess the impact on prior period financial statements, as necessary. The standard will be effective for the Company in the first quarter of fiscal 2018, with early adoption permitted for annual reporting period beginning in the first quarter of fiscal 2017. The Company is not planning to early adopt, and accordingly, it will adopt the new standard effective January 1, 2018. The Company is in the initial stages of its evaluation of the impact of the new standard on its accounting policies, processes, and system requirements. The Company has assigned internal resources in addition to the engagement of third party service providers to assist in its evaluation. Additionally, the Company expects to make investments in new systems or enhancement of existing systems to enable timely and accurate reporting under the new standard. While the Company continues to perform further assessment of all potential impacts under the new standard, the Company expects the timing of revenue recognition to be accelerated for certain performance obligations related to certain revenue arrangements which are currently deferred until customer acceptance. Depending on the outcome of the Company’s final evaluation, the timing of when revenue is recognized could change significantly for those revenue arrangements under the new standard. As part of its preliminary evaluation, the Company also considered the impact of the guidance in ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers with respect to capitalization and amortization of incremental costs of obtaining a contract. As a result of this new guidance, the Company may need to capitalize additional costs of obtaining a contract, including sales commissions, as the new cost guidance requires the capitalization of all incremental costs incurred to obtain a contract with a customer that it would not have incurred if the contract had not been obtained, provided it expects to recover the costs. Accordingly, the Company may need to defer certain sales commissions and amortize them over the period that the related revenue is recognized. While the Company continues to assess all the potential impacts of the new standard, including the areas described above, and anticipates this standard could have a material impact on its consolidated financial statements, the Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its consolidated financial statements at this time. |
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 April 1, 2017, the amortized cost and fair value of marketable securities were as follows (in thousands):
As of December 31, 2016, 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 April 1, 2017, 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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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 April 1, 2017 and December 31, 2016, based on the three-tier fair value hierarchy (in thousands):
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Goodwill and Intangible Assets (Tables) |
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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 April 1, 2017 and December 31, 2016 are disclosed in the following table (in thousands):
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Balance Sheet Details (Tables) |
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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) |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product warranty activities | Changes in the Company’s warranty and retrofit reserves in the periods as indicated were as follows (in thousands):
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Net Loss per Common Share (Tables) |
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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 Loss (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive income details | The table below summarizes the changes in accumulated other comprehensive loss by component for the periods indicated (in thousands):
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Income Taxes (Tables) |
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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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Restructuring Charges (Tables) |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | The following table summarizes the activities related to the restructuring charges pursuant to the above restructuring plan (in thousands):
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Significant Accounting Policies (Details) |
3 Months Ended | |
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Apr. 01, 2017 |
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Largest Two Customers | Customer Concentration Risk | Revenue | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 55.00% | 29.00% |
Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands |
Apr. 01, 2017 |
Dec. 31, 2016 |
Mar. 26, 2016 |
Dec. 31, 2015 |
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Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 26,318 | $ 50,359 | $ 21,365 | $ 23,626 |
Marketable securities | 25,215 | 27,748 | ||
Total cash, cash equivalents and marketable securities | 51,533 | 78,107 | ||
Corporate debt securities | ||||
Cash and Cash Equivalents [Line Items] | ||||
Marketable securities | 10,843 | 17,272 | ||
Commercial paper | ||||
Cash and Cash Equivalents [Line Items] | ||||
Marketable securities | 10,174 | 6,275 | ||
U.S. government agency securities | ||||
Cash and Cash Equivalents [Line Items] | ||||
Marketable securities | 4,198 | 4,201 | ||
Cash | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 17,675 | 34,340 | ||
Money market funds | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 8,197 | 15,020 | ||
Corporate debt securities | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 446 | 0 | ||
Commercial paper | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 0 | $ 999 |
Cash, Cash Equivalents and Marketable Securities - Amortized Cost and Fair Value (Details) - USD ($) $ in Thousands |
Apr. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 25,225 | $ 27,754 |
Gross Unrealized Gains | 0 | 2 |
Gross Unrealized Losses | (10) | (8) |
Fair Value | 25,215 | 27,748 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 10,851 | 17,279 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (8) | (8) |
Fair Value | 10,843 | 17,272 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 10,174 | 6,275 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 10,174 | 6,275 |
U.S. government agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 4,200 | 4,200 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (2) | 0 |
Fair Value | $ 4,198 | $ 4,201 |
Cash, Cash Equivalents and Marketable Securities - Contractual Maturity (Details) $ in Thousands |
Apr. 01, 2017
USD ($)
|
---|---|
Cash and Cash Equivalents [Abstract] | |
Marketable securities due in 1 year or less, amortized cost | $ 25,225 |
Marketable securities due in 1 year or less, fair value | $ 25,215 |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
Apr. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 25,215 | $ 27,748 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 33,858 | 43,767 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 8,197 | 15,020 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 25,661 | 28,747 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 10,843 | 17,272 |
Corporate debt securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 11,289 | 17,272 |
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 | 11,289 | 17,272 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 10,174 | 6,275 |
Commercial paper | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 10,174 | 7,274 |
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 | 10,174 | 7,274 |
U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 4,198 | 4,201 |
U.S. government agency securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 4,198 | 4,201 |
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 | 4,198 | 4,201 |
Money market funds | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 8,197 | 15,020 |
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 | 8,197 | 15,020 |
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 ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 01, 2017 |
Mar. 26, 2016 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 813 | $ 3,364 |
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands |
Apr. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 123,704 | $ 123,704 |
Accumulated Amortization | (123,704) | (122,891) |
Net | 0 | 813 |
Core developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 68,964 | 68,964 |
Accumulated Amortization | (68,964) | (68,151) |
Net | 0 | 813 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 54,740 | 54,740 |
Accumulated Amortization | (54,740) | (54,740) |
Net | $ 0 | $ 0 |
Balance Sheet Details - Accounts Receivable (Details) - USD ($) $ in Thousands |
Apr. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Summary of accounts receivable, net | ||
Accounts receivable | $ 66,142 | $ 52,792 |
Allowance for doubtful accounts | (477) | (518) |
Product return reserve | (1,477) | (938) |
Accounts receivable, net | $ 64,188 | $ 51,336 |
Balance Sheet Details - Inventory (Details) - USD ($) $ in Thousands |
Apr. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Summary of inventory, net | ||
Raw materials | $ 1,502 | $ 1,827 |
Finished goods | 45,036 | 42,718 |
Total inventory | $ 46,538 | $ 44,545 |
Balance Sheet Details - Property and Equipment, net (Details) - USD ($) $ in Thousands |
Apr. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Summary of property and equipment, net | ||
Property and equipment, gross | $ 85,787 | $ 83,615 |
Accumulated depreciation and amortization | (67,643) | (65,631) |
Property and equipment, net | 18,144 | 17,984 |
Test equipment | ||
Summary of property and equipment, net | ||
Property and equipment, gross | 44,466 | 43,580 |
Computer equipment and software | ||
Summary of property and equipment, net | ||
Property and equipment, gross | 31,785 | 30,306 |
Furniture and fixtures | ||
Summary of property and equipment, net | ||
Property and equipment, gross | 2,709 | 2,831 |
Leasehold improvements | ||
Summary of property and equipment, net | ||
Property and equipment, gross | $ 6,827 | $ 6,898 |
Balance Sheet Details - Accrued Liabilities (Details) - USD ($) $ in Thousands |
Apr. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Summary of accrued liabilities | ||
Advance customer payments | $ 22,946 | $ 20,726 |
Accrued compensation and related benefits | 22,193 | 19,541 |
Accrued warranty and retrofit | 10,778 | 12,214 |
Accrued professional and consulting fees | 9,952 | 8,205 |
Accrued excess and obsolete inventory at contract manufacturers | 2,415 | 1,327 |
Accrued customer rebates | 1,425 | 1,931 |
Accrued insurance | 756 | 804 |
Accrued restructuring charges | 699 | 0 |
Income taxes payable | 20 | 231 |
Accrued other | 5,831 | 4,736 |
Total accrued liabilities | $ 77,015 | $ 69,715 |
Balance Sheet Details - Deferred Revenue (Details) - USD ($) $ in Thousands |
Apr. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | $ 44,416 | $ 27,854 |
Deferred revenue, noncurrent | 20,876 | 20,237 |
Deferred revenue | 65,292 | 48,091 |
Revenue Contract | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | 21,500 | 20,300 |
Product and services | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | 41,152 | 24,472 |
Deferred revenue, noncurrent | 38 | 22 |
Extended warranty | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | 3,264 | 3,382 |
Deferred revenue, noncurrent | $ 20,838 | $ 20,215 |
Commitments and Contingencies - Textual (Details) |
3 Months Ended |
---|---|
Apr. 01, 2017 | |
Commitments and Contingencies [Line Items] | |
Warranty period | 3 years |
Minimum | |
Commitments and Contingencies [Line Items] | |
Warranty period | 1 year |
Maximum | |
Commitments and Contingencies [Line Items] | |
Warranty period | 5 years |
Commitments and Contingencies - Product Warranty Activities (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 01, 2017 |
Mar. 26, 2016 |
|
Product warranty activities [Roll Forward] | ||
Balance at beginning of period | $ 12,214 | $ 9,564 |
Provision for warranty and retrofit charged to cost of revenue | 1,862 | 580 |
Utilization of reserve | (3,298) | (619) |
Adjustments to pre-existing reserve | 0 | (373) |
Balance at end of period | $ 10,778 | $ 9,152 |
Net Loss per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 01, 2017 |
Mar. 26, 2016 |
|
Numerator: | ||
Net loss | $ (33,325) | $ (10,729) |
Denominator: | ||
Weighted-average common shares outstanding (in shares) | 49,525 | 48,591 |
Basic and diluted net loss per common share (in dollars per share) | $ (0.67) | $ (0.22) |
Potentially dilutive shares, weighted average (in shares) | 6,145 | 5,500 |
Stockholders' Equity - Textual (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Apr. 01, 2017
USD ($)
Plan
$ / shares
shares
|
Mar. 26, 2016
USD ($)
|
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of equity incentive plans | Plan | 2 | ||||
Stock options granted (in shares) | 0 | ||||
Stock options exercised (in shares) | 2,000 | ||||
Weighted-average exercise price per share, stock options (in dollars per share) | $ / shares | $ 6.54 | ||||
Unrecognized stock-based compensation expense, stock options | $ | $ 3,200 | ||||
Weighted-average amortization period | 2 years 9 months 15 days | ||||
Taxes paid for awards vested under equity incentive plans | $ | $ 1,093 | $ 251 | |||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average amortization period | 2 years 4 months 17 days | ||||
Awards granted (in shares) | 203,100 | ||||
Weighted-average grant date fair value per share (in dollars per share) | $ / shares | $ 7.00 | ||||
Awards vested (in shares) | 52,161 | ||||
Taxes paid for awards vested under equity incentive plans | $ | $ 300 | ||||
Unrecognized stock-based compensation expense | $ | $ 12,600 | ||||
Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average amortization period | 1 month 15 days | ||||
Unrecognized stock-based compensation expense | $ | $ 200 | ||||
ESPP, maximum employee payroll deduction percentage | 15.00% | ||||
ESPP, maximum number of shares per employee (in shares) | 2,000 | ||||
ESPP, discounted purchase price percentage | 85.00% | ||||
Offering period | 6 months | ||||
Shares available for issuance under the ESPP (in shares) | 119,228 | ||||
Performance Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average amortization period | 1 year 4 months 7 days | ||||
Awards vested (in shares) | 300,000 | ||||
Shares of stock issued upon conversion of units (in shares) | 180,052 | ||||
Taxes paid for awards vested under equity incentive plans | $ | $ 800 | ||||
Unrecognized stock-based compensation expense | $ | $ 700 | ||||
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 | ||||
Performance Restricted Stock Units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance period | 1 year | 2 years | 2 years | 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 | 2 years | 3 years | 3 years | 3 years | |
Target performance rate | 200.00% | ||||
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 ($) |
11 Months Ended | |
---|---|---|
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 (in shares) | 5,329,817 | |
Average price per share (in dollars per share) | $ 7.50 |
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 01, 2017 |
Mar. 26, 2016 |
|
Accumulated Other Comprehensive Loss [Roll Forward] | ||
Balance at beginning of period | $ 212,964 | |
Other comprehensive income (loss) | 57 | $ 47 |
Balance at end of period | 182,157 | |
Unrealized Gains and Losses on Available-for-Sale Marketable Securities | ||
Accumulated Other Comprehensive Loss [Roll Forward] | ||
Balance at beginning of period | (6) | (94) |
Other comprehensive income (loss) | (4) | 65 |
Balance at end of period | (10) | (29) |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Loss [Roll Forward] | ||
Balance at beginning of period | (650) | (101) |
Other comprehensive income (loss) | 61 | (18) |
Balance at end of period | (589) | (119) |
Total | ||
Accumulated Other Comprehensive Loss [Roll Forward] | ||
Balance at beginning of period | (656) | (195) |
Balance at end of period | $ (599) | $ (148) |
Credit Facility (Details) |
3 Months Ended | |
---|---|---|
Apr. 01, 2017
USD ($)
quarterly_payment
|
Jul. 29, 2013
USD ($)
|
|
Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 50,000,000.0 | |
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 | quarterly_payment | 20 | |
Commitment fee percentage | 0.25% | |
Borrowings under the credit facility | $ 0 | |
Outstanding revolving loans | $ 0 | |
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% | |
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 (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 01, 2017 |
Mar. 26, 2016 |
|
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 673 | $ 121 |
Effective tax rate | (2.10%) | (1.10%) |
Restructuring Charges (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 01, 2017 |
Mar. 26, 2016 |
|
Restructuring Reserve [Roll Forward] | ||
Restructuring charges for the period | $ 699 | $ 0 |
Expected restructuring charges | 6,800 | |
Expected additional charges | 6,100 | |
Employee Severance | ||
Restructuring Reserve [Roll Forward] | ||
Liability at beginning of period | 0 | |
Restructuring charges for the period | 699 | |
Cash payments | 0 | |
Liability at end of period | $ 699 |
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