x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware (State or other jurisdiction of incorporation or organization) | 20-4645388 (I.R.S. Employer Identification No.) | |
1420 N. McDowell Blvd. Petaluma, California | 94954 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | x | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Item 1. | Financial Statements (Unaudited) |
March 31, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 13,016 | $ | 28,452 | |||
Accounts receivable, net of allowances of $2,345 and $1,808 at March 31, 2016 and December 31, 2015, respectively | 47,056 | 46,099 | |||||
Inventory | 45,576 | 40,800 | |||||
Prepaid expenses and other assets | 7,237 | 6,417 | |||||
Total current assets | 112,885 | 121,768 | |||||
Property and equipment, net | 32,963 | 32,118 | |||||
Goodwill | 3,745 | 3,745 | |||||
Intangibles, net | 2,036 | 2,220 | |||||
Other assets | 6,891 | 5,677 | |||||
Total assets | $ | 158,520 | $ | 165,528 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 24,293 | $ | 25,569 | |||
Accrued liabilities | 23,427 | 19,292 | |||||
Deferred revenues, current | 5,575 | 3,915 | |||||
Warranty obligations, current (includes $2,832 and $2,601 measured at fair value at March 31, 2016 and December 31, 2015, respectively) | 6,651 | 7,072 | |||||
Borrowings under revolving credit facility | 20,000 | 17,000 | |||||
Total current liabilities | 79,946 | 72,848 | |||||
Long-term liabilities: | |||||||
Deferred revenues, noncurrent | 27,723 | 25,115 | |||||
Warranty obligations, noncurrent (includes $3,657 and $3,581 measured at fair value at March 31, 2016 and December 31, 2015, respectively) | 23,008 | 23,475 | |||||
Other liabilities | 2,283 | 2,641 | |||||
Total liabilities | 132,960 | 124,079 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.00001 par value, 10,000 shares authorized; none issued and outstanding | — | — | |||||
Common stock, $0.00001 par value, 100,000 shares authorized; 46,365 and 45,821 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | — | — | |||||
Additional paid-in capital | 227,832 | 224,732 | |||||
Accumulated deficit | (201,868 | ) | (183,073 | ) | |||
Accumulated other comprehensive loss | (404 | ) | (210 | ) | |||
Total stockholders’ equity | 25,560 | 41,449 | |||||
Total liabilities and stockholders’ equity | $ | 158,520 | $ | 165,528 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net revenues | $ | 64,121 | $ | 86,653 | |||
Cost of revenues | 52,361 | 58,629 | |||||
Gross profit | 11,760 | 28,024 | |||||
Operating expenses: | |||||||
Research and development | 13,066 | 13,430 | |||||
Sales and marketing | 10,215 | 11,937 | |||||
General and administrative | 7,567 | 8,205 | |||||
Total operating expenses | 30,848 | 33,572 | |||||
Loss from operations | (19,088 | ) | (5,548 | ) | |||
Other income (expense), net: | |||||||
Interest expense | (152 | ) | (78 | ) | |||
Other income (expense) | 681 | (527 | ) | ||||
Total other income (expense), net | 529 | (605 | ) | ||||
Loss before income taxes | (18,559 | ) | (6,153 | ) | |||
Provision for income taxes | (236 | ) | (167 | ) | |||
Net loss | $ | (18,795 | ) | $ | (6,320 | ) | |
Net loss per share, basic and diluted | $ | (0.41 | ) | $ | (0.14 | ) | |
Shares used in computing net loss per share, basic and diluted | 46,209 | 43,950 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net loss | $ | (18,795 | ) | $ | (6,320 | ) | |
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustments | (194 | ) | (316 | ) | |||
Comprehensive loss | $ | (18,989 | ) | $ | (6,636 | ) |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (18,795 | ) | $ | (6,320 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 2,680 | 2,532 | |||||
Provision for doubtful accounts | 537 | — | |||||
Net loss on disposal of assets | 25 | 191 | |||||
Non-cash interest expense | 28 | 39 | |||||
Stock-based compensation | 2,999 | 2,988 | |||||
Revaluation of contingent consideration liability | — | 104 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (1,494 | ) | (751 | ) | |||
Inventory | (4,776 | ) | (13,156 | ) | |||
Prepaid expenses and other assets | (2,062 | ) | (2,069 | ) | |||
Accounts payable, accrued and other liabilities | 2,229 | 2,305 | |||||
Warranty obligations | (888 | ) | 223 | ||||
Deferred revenues | 4,268 | 2,416 | |||||
Net cash used in operating activities | (15,249 | ) | (11,498 | ) | |||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (3,348 | ) | (3,611 | ) | |||
Net cash used in investing activities | (3,348 | ) | (3,611 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from borrowings under revolving credit facility | 10,000 | — | |||||
Payments under revolving credit facility | (7,000 | ) | — | ||||
Payments of deferred financing costs | (55 | ) | — | ||||
Proceeds from issuance of common stock under employee stock plans | 101 | 677 | |||||
Net cash provided by financing activities | 3,046 | 677 | |||||
Effect of exchange rate changes on cash | 115 | (473 | ) | ||||
Net decrease in cash and cash equivalents | (15,436 | ) | (14,905 | ) | |||
Cash and cash equivalents—Beginning of period | 28,452 | 42,032 | |||||
Cash and cash equivalents—End of period | $ | 13,016 | $ | 27,127 | |||
Supplemental disclosures of non-cash investing and financing activities: | |||||||
Purchases of fixed and intangible assets included in accounts payable | $ | 1,691 | $ | 1,269 |
March 31, 2016 | December 31, 2015 | ||||||
Raw materials | $ | 1,193 | $ | 2,202 | |||
Finished goods | 44,383 | 38,598 | |||||
Total inventory | $ | 45,576 | $ | 40,800 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Warranty obligations, beginning of period | $ | 30,547 | $ | 33,940 | |||
Accruals for warranties issued during period | 708 | 1,105 | |||||
Changes in estimates | 158 | 58 | |||||
Settlements | (1,719 | ) | (1,151 | ) | |||
Increase due to accretion expense | 384 | 161 | |||||
Other | (419 | ) | 50 | ||||
Warranty obligations, end of period | $ | 29,659 | $ | 34,163 | |||
Less current portion | $ | (6,651 | ) | $ | (7,550 | ) | |
Noncurrent | $ | 23,008 | $ | 26,613 |
• | Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of such assets or liabilities do not entail a significant degree of judgment. |
• | Level 2—Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. |
• | Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
Fair Value Hierarchy | March 31, 2016 | December 31, 2015 | |||||||
Assets: | |||||||||
Foreign currency forward contracts | Level 2 | $ | 9 | $ | 86 | ||||
Liabilities: | |||||||||
Foreign currency forward contracts | Level 2 | $ | 29 | $ | 9 | ||||
Warranty obligations | Level 3 | 6,489 | 6,182 | ||||||
Contingent consideration | Level 3 | 473 | 473 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Balance at beginning of period | $ | 6,182 | $ | 3,562 | |||
Accruals for warranties issued during period | 695 | 1,047 | |||||
Changes in estimates | (199 | ) | — | ||||
Settlements | (154 | ) | (36 | ) | |||
Increase due to accretion expense | 384 | 161 | |||||
Other | (419 | ) | 49 | ||||
Balance at end of period | $ | 6,489 | $ | 4,783 |
Balance—December 31, 2015 | $ | 473 | |
Revaluations | — | ||
Balance—March 31, 2016 | $ | 473 |
Item Measured at Fair Value | Valuation Technique | Description of Significant Unobservable Input | Percent Used (Weighted-Average) | |||
Warranty obligations for microinverters sold since January 1, 2014 | Discounted cash flows | Profit element and risk premium | 17% | |||
Credit-adjusted risk-free rate | 27% | |||||
Contingent consideration liability | Probability-weighted discounted cash flows | Risk-adjusted discount rate | 17% |
March 31, 2016 | December 31, 2015 | ||||||||||||||||||||||
Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||
Goodwill | $ | 3,745 | $ | — | $ | 3,745 | $ | 3,745 | $ | — | $ | 3,745 | |||||||||||
Other indefinite-lived intangibles | $ | 286 | $ | — | $ | 286 | $ | 286 | $ | — | $ | 286 | |||||||||||
Intangible assets with finite lives: | |||||||||||||||||||||||
Customer relationships | $ | 900 | $ | (225 | ) | $ | 675 | $ | 900 | $ | (180 | ) | $ | 720 | |||||||||
Patents and licensed technology | 1,665 | (590 | ) | 1,075 | 1,665 | (451 | ) | 1,214 | |||||||||||||||
Total | $ | 2,565 | $ | (815 | ) | $ | 1,750 | $ | 2,565 | $ | (631 | ) | $ | 1,934 |
Year | (In thousands) | |||
2016 (remaining 9 months) | $ | 551 | ||
2017 | 610 | |||
2018 | 409 | |||
2019 | 180 | |||
Total | $ | 1,750 |
Number of Shares Outstanding | Weighted- Average Exercise Price per Share | |||||
Outstanding at December 31, 2015 | 8,173 | $ | 5.36 | |||
Granted | 1,644 | 2.12 | ||||
Exercised | (347 | ) | 0.29 | |||
Canceled | (341 | ) | 7.28 | |||
Outstanding at March 31, 2016 | 9,129 | 4.90 |
RSUs | Weighted Average Fair Value per Share at Grant Date | |||||
Outstanding at December 31, 2015 | 1,313 | $ | 9.31 | |||
Granted | 4 | 2.14 | ||||
Vested | (197 | ) | 9.35 | |||
Canceled | (95 | ) | 4.44 | |||
Outstanding at March 31, 2016 | 1,025 | 9.73 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Cost of revenues | $ | 307 | $ | 264 | |||
Research and development | 1,126 | 1,079 | |||||
Sales and marketing | 612 | 765 | |||||
General and administrative | 954 | 880 | |||||
Total | $ | 2,999 | $ | 2,988 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Stock options and restricted stock units | $ | 2,484 | $ | 2,526 | |||
Employee stock purchase plan | 515 | 462 | |||||
Total | $ | 2,999 | $ | 2,988 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Weighted average grant date fair value | $ | 1.28 | $ | 6.89 | |||
Expected term (in years) | 4.6 | 4.6 | |||||
Expected volatility | 77.4 | % | 71.1 | % | |||
Annual risk-free rate of return | 1.2 | % | 1.3 | % | |||
Dividend yield | 0.0 | % | 0.0 | % |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Numerator: | |||||||
Net loss | $ | (18,795 | ) | $ | (6,320 | ) | |
Denominator: | |||||||
Weighted average common shares outstanding | 46,209 | 43,950 | |||||
Net loss per share, basic and diluted | $ | (0.41 | ) | $ | (0.14 | ) |
Three Months Ended March 31, | |||||
2016 | 2015 | ||||
Employee stock options | 8,160 | 8,627 | |||
Restricted stock units | 1,164 | 1,433 | |||
Warrants to purchase common stock | 111 | 111 | |||
Total | 9,435 | 10,171 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended March 31, | Change in | |||||||||||||
2016 | 2015 | $ | % | |||||||||||
(dollars in thousands) | ||||||||||||||
Net revenues | $ | 64,121 | $ | 86,653 | $ | (22,532 | ) | (26 | )% |
Three Months Ended March 31, | Change in | |||||||||||||
2016 | 2015 | $ | % | |||||||||||
(dollars in thousands) | ||||||||||||||
Cost of revenues | $ | 52,361 | $ | 58,629 | $ | (6,268 | ) | (11 | )% | |||||
Gross profit | 11,760 | 28,024 | (16,264 | ) | (58 | )% | ||||||||
Gross margin | 18.3 | % | 32.3 | % |
Three Months Ended March 31, | Change in | |||||||||||||
2016 | 2015 | $ | % | |||||||||||
(dollars in thousands) | ||||||||||||||
Research and development | $ | 13,066 | $ | 13,430 | $ | (364 | ) | (3 | )% |
Three Months Ended March 31, | Change in | |||||||||||||
2016 | 2015 | $ | % | |||||||||||
(dollars in thousands) | ||||||||||||||
Sales and marketing | $ | 10,215 | $ | 11,937 | $ | (1,722 | ) | (14 | )% |
Three Months Ended March 31, | Change in | |||||||||||||
2016 | 2015 | $ | % | |||||||||||
(dollars in thousands) | ||||||||||||||
General and administrative | $ | 7,567 | $ | 8,205 | $ | (638 | ) | (8 | )% |
Three Months Ended March 31, | Change in | ||||||||||||
2016 | 2015 | $ | % | ||||||||||
(dollars in thousands) | |||||||||||||
Other income (expense), net | $ | 529 | $ | (605 | ) | $ | 1,134 | n/m |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
(In thousands) | |||||||
Net cash used in operating activities | $ | (15,249 | ) | $ | (11,498 | ) | |
Net cash used in investing activities | (3,348 | ) | (3,611 | ) | |||
Net cash provided by financing activities | 3,046 | 677 | |||||
Effect of exchange rate changes on cash | 115 | (473 | ) | ||||
Net decrease in cash and cash equivalents | (15,436 | ) | (14,905 | ) |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
• | market acceptance of solar PV systems based on our product platform; |
• | cost competitiveness, reliability and performance of solar PV systems compared to conventional and non-solar renewable energy sources and products; |
• | availability and amount of government subsidies and incentives to support the development and deployment of solar energy solutions; |
• | the extent to which the electric power industry and broader energy industries are deregulated to permit broader adoption of solar electricity generation; |
• | the cost and availability of key raw materials and components used in the production of solar PV systems; |
• | prices of traditional utility-provided energy sources; |
• | levels of investment by end-users of solar energy products, which tend to decrease when economic growth slows; and |
• | the emergence, continuance or success of, or increased government support for, other alternative energy generation technologies and products. |
• | changes in customer, geographic or product mix; |
• | increased price competition, including the impact of customer and competitor discounts and rebates; |
• | our ability to reduce and control product costs, including our ability to make product cost reductions in a timely manner to offset declines in our product prices; |
• | warranty costs and reserves, including changes resulting from changes in estimates related to the long-term performance of our products, product replacement costs and warranty claim rates; |
• | loss of cost savings due to changes in component or raw material pricing or charges incurred due to inventory holding periods if product demand is not correctly anticipated; |
• | introduction of new products; |
• | ordering patterns from our distributors; |
• | price reductions on older products to sell remaining inventory; |
• | our ability to reduce production costs, such as through technology innovations, in order to offset price declines in our products over time; |
• | changes in shipment volume; |
• | changes in distribution channels; |
• | excess and obsolete inventory and inventory holding charges; |
• | expediting costs incurred to meet customer delivery requirements; and |
• | fluctuations in foreign currency exchange rates. |
• | fund our operations; |
• | invest in our research and development efforts by hiring additional technical and other personnel; |
• | expand our operations into new product markets and new geographies; |
• | acquire complementary businesses, products, services or technologies; or |
• | otherwise pursue our strategic plans and respond to competitive pressures. |
• | our ability to produce microinverter systems that compete favorably against other solutions on the basis of price, quality, reliability and performance; |
• | our ability to timely introduce and complete new designs and timely qualify and certify our products; |
• | whether installers, system owners and solar financing providers will continue to adopt our microinverter systems, which is a relatively new technology with a limited history with respect to reliability and performance; |
• | whether installers, system owners and solar financing providers will be willing to purchase microinverter systems from us given our limited operating history; |
• | the ability of prospective system owners to obtain long-term financing for solar PV installations based on our product platform on acceptable terms or at all; |
• | our ability to develop products that comply with local standards and regulatory requirements, as well as potential in-country manufacturing requirements; and |
• | our ability to develop and maintain successful relationships with our customers and suppliers. |
• | manage a larger organization; |
• | expand third-party manufacturing, testing and distribution capacity; |
• | build additional custom manufacturing test equipment; |
• | manage an increasing number of relationships with customers, suppliers and other third parties; |
• | increase our sales and marketing efforts; |
• | train and manage a growing employee base; |
• | broaden our customer support capabilities; |
• | implement new and upgrade existing operational and financial systems; and |
• | enhance our financial disclosure controls and procedures. |
• | acceptance of microinverters in markets in which they have not traditionally been used; |
• | our ability to compete in new product markets to which we are not accustomed; |
• | our ability to manage an increasing manufacturing capacity and production; |
• | willingness of our potential customers to incur a higher upfront capital investment than may be required for competing solutions; |
• | our ability to develop solutions to address the requirements of the larger commercial and utility-scale markets; |
• | timely qualification and certification of new products for larger commercial and utility-scale installations; |
• | our ability to reduce production costs in order to price our products competitively over time; |
• | availability of government subsidies and economic incentives for solar energy solutions; |
• | accurate forecasting and effective management of inventory levels in line with anticipated product demand; and |
• | our customer service capabilities and responsiveness. |
• | differing regulatory requirements, including tax laws, trade laws, labor, safety, local content, recycling and consumer protection regulations, tariffs, export quotas, customs duties or other trade restrictions; |
• | limited or unfavorable intellectual property protection; |
• | risk of change in international political or economic conditions; |
• | restrictions on the repatriation of earnings; |
• | fluctuations in the value of foreign currencies and interest rates; |
• | difficulties and increased expenses in complying with a variety of U.S. and foreign laws, regulations and trade standards, including the Foreign Corrupt Practices Act; |
• | potentially longer sales cycles; |
• | higher volume requirements; |
• | increased customer concentrations; |
• | warranty expectations and product return policies; and |
• | cost, performance and compatibility requirements. |
• | obtain from a third party claiming infringement a license to sell or use the relevant technology, which may not be available on reasonable terms, or at all; |
• | stop manufacturing, selling, incorporating or using our products that embody the asserted intellectual property; |
• | pay substantial monetary damages; |
• | indemnify our customers pursuant to indemnification obligations under some of our customer contracts; or |
• | expend significant resources to redesign the products that use the infringing technology and to develop or acquire non-infringing technology. |
• | fluctuations in demand for our products; |
• | the timing, volume and product mix of sales of our products, which may have different average selling prices or profit margins; |
• | changes in our pricing and sales policies or the pricing and sales policies of our competitors; |
• | our ability to design, manufacture and deliver products to our customers in a timely and cost-effective manner and that meet customer requirements; |
• | our ability to manage our relationships with our contract manufacturers, customers and suppliers; |
• | quality control or yield problems in our manufacturing operations; |
• | the anticipation, announcement or introductions of new or enhanced products by our competitors and ourselves; |
• | reductions in the retail price of electricity; |
• | changes in laws, regulations and policies applicable to our business and products, particularly those relating to government incentives for solar energy applications; |
• | unanticipated increases in costs or expenses; |
• | the amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our business operations; |
• | the impact of government-sponsored programs on our customers; |
• | our exposure to the credit risks of our customers, particularly in light of the fact that some of our customers are relatively new entrants to the solar market without long operating or credit histories; |
• | our ability to estimate future warranty obligations due to product failure rates, claim rates or replacement costs; |
• | our ability to forecast our customer demand and manufacturing requirements, and manage our inventory; |
• | fluctuations in our gross profit; |
• | our ability to predict our revenue and plan our expenses appropriately; and |
• | fluctuations in foreign currency exchange rates. |
• | providing for a classified board of directors with staggered, three-year terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors; |
• | not providing for cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; |
• | authorizing our board of directors to issue, without stockholder approval, preferred stock rights senior to those of common stock, which could be used to significantly dilute the ownership of a hostile acquiror; |
• | prohibiting stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; |
• | requiring the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then outstanding shares of voting stock, voting as a single class, to amend provisions of our certificate of incorporation relating to the management of our business, our board of directors, stockholder action by written consent, advance notification of stockholder nominations and proposals, forum selection and the liability of our directors, or to amend our bylaws, which may inhibit the ability of stockholders or an acquiror to effect such amendments to facilitate changes in management or an unsolicited takeover attempt; |
• | requiring special meetings of stockholders may only be called by our chairman of the board, if any, our chief executive officer, our president or a majority of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and |
• | requiring advance notification of stockholder nominations and proposals, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
ENPHASE ENERGY, INC. | |||
By: | /s/ Kris Sennesael | ||
Kris Sennesael | |||
Vice President and Chief Financial Officer |
Exhibit Number | Description | |
3.1 | Amended and Restated Certificate of Incorporation of Enphase Energy, Inc.(1) | |
3.2 | Amended and Restated Bylaws of Enphase Energy, Inc.(2) | |
4.1 | Specimen Common Stock Certificate of Enphase Energy, Inc.(3) | |
4.2 | 2010 Amended and Restated Investors’ Rights Agreement by and between Enphase Energy, Inc. and the investors listed on Exhibit A thereto, dated March 15, 2010, as amended.(3) | |
4.3 | Form of June 2011 Warrant to Purchase Common Stock of Enphase Energy, Inc., pursuant to that certain Amended and Restated Subordinated Convertible Loan Facility and Security Agreement.(3) | |
4.4 | Form of November 2011 Warrant to Purchase Common Stock of Enphase Energy, Inc., pursuant to that certain Amended and Restated Subordinated Convertible Loan Facility and Security Agreement.(3) | |
10.1+ | Summary of 2016 Performance Bonus Program.(4) | |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). | |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). | |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer 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 Document. |
(1) | Previously filed as Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-35480), filed with the Securities and Exchange Commission on April 6, 2012, and incorporated by reference herein. |
(2) | Previously filed as Exhibit 3.5 to Amendment No. 7 to the Registration Statement on Form S-1/A (File No. 333-174925), filed with the Securities and Exchange Commission on March 12, 2012, and incorporated by reference herein. |
(3) | Previously filed as the like-numbered exhibit to the Registration Statement on Form S-1/A (File No. 333-174925), and incorporated herein by reference. |
(4) | Previously filed as the like-numbered exhibit to the Current Report on Form 8-K (File No. 001-35480), filed with the Securities and Exchange Commission on April 1, 2016, and incorporated by reference herein. |
* | The certifications attached as Exhibit 32.1 accompany this quarterly report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by Enphase Energy, Inc. for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
+ | Management compensatory plan or agreement. |
1. | I have reviewed this Form 10-Q of Enphase Energy, Inc.; |
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(s) 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 15(d)-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(s) 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. |
/s/ Paul B. Nahi | |
Paul B. Nahi | |
President and Chief Executive Officer | |
(Principal Executive Officer) |
1. | I have reviewed this Form 10-Q of Enphase Energy, Inc.; |
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(s) 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 15(d)-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(s) 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. |
/s/ Kris Sennesael | |
Kris Sennesael | |
Vice President and Chief Financial Officer | |
(Principal Financial Officer) |
/s/ Paul B. Nahi | /s/ Kris Sennesael | |
Paul B. Nahi President and Chief Executive Officer | Kris Sennesael Vice President and Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2016 |
Apr. 30, 2016 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | Enphase Energy, Inc. | |
Entity Central Index Key | 0001463101 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 46,696,242 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowances, accounts receivable | $ 2,345 | $ 1,808 |
Warranty obligations, current at fair value | 2,832 | 2,601 |
Warranty obligations, non-current at fair value | $ 3,657 | $ 3,581 |
Preferred stock, par value (in usd per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 46,365,000 | 45,821,000 |
Common stock, shares outstanding (in shares) | 46,365,000 | 45,821,000 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Income Statement [Abstract] | ||
Net revenues | $ 64,121 | $ 86,653 |
Cost of revenues | 52,361 | 58,629 |
Gross profit | 11,760 | 28,024 |
Operating expenses: | ||
Research and development | 13,066 | 13,430 |
Sales and marketing | 10,215 | 11,937 |
General and administrative | 7,567 | 8,205 |
Total operating expenses | 30,848 | 33,572 |
Loss from operations | (19,088) | (5,548) |
Other income (expense), net: | ||
Interest expense | (152) | (78) |
Other income (expense) | 681 | (527) |
Total other income (expense), net | 529 | (605) |
Loss before income taxes | (18,559) | (6,153) |
Provision for income taxes | (236) | (167) |
Net loss | $ (18,795) | $ (6,320) |
Net loss per share, basic and diluted (in usd per share) | $ (0.41) | $ (0.14) |
Shares used in computing net loss per share, basic and diluted | 46,209 | 43,950 |
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (18,795) | $ (6,320) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (194) | (316) |
Comprehensive loss | $ (18,989) | $ (6,636) |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
3 Months Ended |
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Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | Description of Business Enphase Energy, Inc. and subsidiaries (the “Company”) delivers simple, innovative and reliable energy management solutions that advance the worldwide potential of renewable energy. Our semiconductor-based microinverter system converts direct current (DC) electricity to alternating current (AC) electricity at the individual solar module level, and brings a system-based, high technology approach to solar energy generation leveraging our design expertise across power electronics, semiconductors, networking, and cloud-based software technologies. Since inception, the Company has shipped approximately 11.0 million microinverters representing over 2.8 gigawatts of solar PV generating capacity, and more than 460,000 Enphase residential and commercial systems have been deployed in over 100 countries. Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the U.S, or GAAP. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in the consolidation. Unaudited Interim Financial Information These accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, considered necessary to present fairly the Company's financial condition, results of operations, comprehensive income (loss) and cash flows for the interim periods indicated. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the operating results for the full year. Certain information and footnote disclosures typically included in annual consolidated financial statements have been condensed or omitted. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. There have been no material changes in the Company’s significant accounting policies during the three months ended March 31, 2016, as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Reference is made to the disclosures therein for a summary of all of the Company’s significant accounting policies. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Significant estimates and assumptions reflected in the financial statements include revenue recognition, inventory valuation, accrued warranty obligations and stock bonus program. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ materially from management’s estimates using different assumptions or under different conditions. Recently Issued Accounting Pronouncements Not Yet Effective In May 2014, the FASB issued ASU 2014-09 (Topic 606), “Revenue from Contracts with Customers,” which will replace most existing revenue recognition guidance under U.S. GAAP. The updated standard’s core principle is that revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The standard generally requires an entity to identify performance obligations in its contracts, estimate the amount of variable consideration to be received in the transaction price, allocate the transaction price to each separate performance obligation, and recognize revenue as obligations are satisfied. In addition, the updated standard requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In 2015, the FASB issued guidance to defer the effective date to fiscal years beginning after December 15, 2017 with early adoption for fiscal years beginning December 15, 2016. The guidance permits the use of either a retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is currently evaluating the impact of adoption on the consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern.” The update provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The amendments in this update are effective for the annual period ending after December 15, 2016 and for annual and interim periods thereafter. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which requires most entities to measure most inventories at the lower of cost or net realizable value ("NRV"). This simplifies the evaluation from the current method of lower of cost or market, where market is based on one of three measures (i.e. replacement cost, net realizable value, or net realizable value less a normal profit margin). ASU 2015-11 does not apply to inventories measured under the last-in, first-out method or the retail inventory method, and defines NRV as the “estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted for any interim and annual financial statements that have not yet been issued. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Changes to the current guidance include the accounting for equity investments, the presentation and disclosure requirements for financial instruments, and the assessment of valuation allowance on deferred tax assets related to available-for-sale securities. In addition, ASU 2016-01 establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial liabilities for which the fair value option has been elected. Under this guidance, an entity would be required to separately present in other comprehensive income the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. ASU 2016-01 is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which will simplify the income tax consequences, accounting for forfeitures and classification on the Statements of Consolidated Cash Flows. ASU 2016-09 is effective for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of adoption on the consolidated financial statements. |
INVENTORY |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORY | INVENTORY Inventory as of March 31, 2016 and December 31, 2015 consists of the following (in thousands):
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WARRANTY OBLIGATIONS |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANTY OBLIGATIONS | WARRANTY OBLIGATIONS The Company’s warranty activities during the three months ended March 31, 2016 and 2015 were as follows (in thousands):
As of March 31, 2016, the $29.7 million in warranty obligations included $6.5 million measured at fair value (see Note 4, Fair Value Measurements). |
FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy at March 31, 2016 and December 31, 2015 (in thousands):
Derivative Instruments The Company utilizes foreign currency forward contracts from time to time to reduce the impact of foreign currency fluctuations arising from both sales and purchases denominated in Euros and the British Pound Sterling. At March 31, 2016 and December 31, 2015, the notional amounts of the Company’s foreign currency forward contracts outstanding were $1.0 million and $2.4 million, respectively. For the three months ended March 31, 2016 and 2015, gains and losses from foreign currency forward contracts recorded in other income (expense), net were insignificant. Fair Value Option for Warranty Obligations Related to Microinverters Sold Since January 1, 2014 The Company’s warranty obligations related to microinverters sold since January 1, 2014 provide the Company the right, but not the requirement, to assign its warranty obligations to a third-party. Under Accounting Standards Codification (“ASC”) 825—Financial Instruments, (“fair value option”), an entity may choose to elect the fair value option for such warranties at the time it first recognizes the eligible item. The Company made an irrevocable election to account for all eligible warranty obligations associated with microinverters sold since January 1, 2014 at fair value. This election was made to reflect the underlying economics of the time value of money for an obligation that will be settled over an extended period of up to 25 years. The Company estimates the fair value of warranty obligations by calculating the warranty obligations in the same manner as for sales prior to January 1, 2014 and applying an expected present value technique to that result. The expected present value technique, an income approach, converts future amounts into a single current discounted amount. In addition to the key estimates of failure rates, claim rates and replacement costs, the Company used certain Level 3 inputs which are unobservable and significant to the overall fair value measurement. Such additional assumptions included a discount rate based on the Company’s credit-adjusted risk-free rate and compensation comprised of a profit element and risk premium required of a market participant to assume the obligation. The following table provides information regarding changes in nonfinancial liabilities related to the Company’s warranty obligations measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods indicated (in thousands):
Contingent Consideration Liability The following table provides information regarding changes in financial liabilities related to the contingent consideration liability arising from a previous acquisition measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2016 (in thousands):
Quantitative and Qualitative Information about Level 3 Fair Value Measurements As of March 31, 2016, the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows:
Sensitivity of Level 3 Inputs Warranty Obligations Each of the significant unobservable inputs is independent of the other. The profit element and risk premium are estimated based on requirements of a third-party participant willing to assume the Company’s warranty obligations. The credit-adjusted risk free rate (“discount rate”) is determined by reference to the Company’s own credit standing at the fair value measurement date. Increasing or decreasing the profit element and risk premium input by 100 basis points would not have a material impact on the fair value measurement of the liability. Increasing the discount rate by 100 basis points would result in a $0.2 million reduction of the liability. Decreasing the discount rate by 100 basis points would result in a $0.2 million increase to the liability. Contingent Consideration Liability Changes in assumed probability adjustments with respect to achievement of target metrics can materially impact the fair value measurement of contingent consideration as of the acquisition date and for each subsequent period. Assumptions about the probability and amount of payout require less subjectivity over the course of the earnout period as management refines estimates based on actual events. Due to the short duration of the remaining earnout period, increasing or decreasing the risk-adjusted discount rate by 100 basis points would not have a material impact on the fair value measurement of the contingent consideration liability. |
GOODWILL AND INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The following table presents the details of the Company’s goodwill and purchased intangible assets as of March 31, 2016 and December 31, 2015(in thousands):
In July 2014, the Company purchased certain patents related to system interconnection and photovoltaic AC module construction. The patents are being amortized over their legal life of 3 years. The customer relationship intangible resulted from the Company’s NPS acquisition and is being amortized on a straight-line basis over its estimated useful life of 5 years. In October 2015, the Company licensed certain technology related to ASIC development for a 3 year term, which is also its estimated useful life. For the three months ended March 31, 2016, amortization expense related to intangible assets was $0.2 million. As of March 31, 2016, estimated future amortization expense related to finite-lived intangible assets was as follows:
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REVOLVING CREDIT FACILITY |
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Mar. 31, 2016 | |
Short-term Debt [Abstract] | |
REVOLVING CREDIT FACILITY | The Company maintains a $50.0 million revolving credit facility with Wells Fargo Bank, N.A. (“Wells Fargo”). On December 18, 2015, the Company entered into an amended and restated revolving credit agreement with Wells Fargo (the “Revolver”) which extended the maturity date to November 7, 2019 and added an uncommitted accordion feature that could increase the size of the facility by $25.0 million, subject to the satisfaction of certain conditions. Availability under the Revolver is subject to a borrowing base calculation that limits availability to a percentage of eligible domestic accounts receivable plus a percentage of the value of eligible domestic inventory, less certain reserves. Borrowings under the Revolver bear interest in cash at an annual rate equal to, at the Company’s option, either LIBOR or a “base rate” that is comprised of, among other things, the prime rate, plus a margin that is between 1.0% and 3.75% depending on the currency borrowed and the specific term of repayment. The Revolver requires the Company to pay a commitment fee between 0.25% and 0.375% based on the average daily unused portion of the revolving credit commitment. The Revolver is secured by a pledge of substantially all assets of the Company other than intellectual property and contains customary affirmative and negative covenants (including restrictions on the Company’s ability to make dividend payments) and events of default. In addition, the Revolver requires the Company to maintain at least $15.0 million of liquidity at all times, consisting of cash, cash equivalents, and availability on the Revolver. Of this $15.0 million liquidity requirement, at least $5.0 million must be undrawn availability. The Company was in compliance with such covenants as of March 31, 2016. As of March 31, 2016, outstanding borrowings under the Revolver were $20.0 million. After taking into account the liquidity requirement, the remaining borrowing availability was $15.9 million. The weighted-average interest rate related to the outstanding balance was 3.2%. |
COMMITMENTS AND CONTINGENCIES |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contingencies —The Company is not currently involved in any material legal proceedings. The Company may become involved in various legal proceedings and claims that arise in the ordinary course of business. Such matters are subject to uncertainty and there can be no assurance that such legal proceedings will not have a material adverse effect on its business, results of operations, financial position or cash flows. |
STOCK-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company has adopted certain equity incentive and stock purchase plans as described in the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Equity Awards Activity Stock Options The following is a summary of stock option activity for the three months ended March 31, 2016 (in thousands, except per share data):
The intrinsic value of options exercised in the three months ended March 31, 2016 was $0.7 million. As of March 31, 2016, the intrinsic value of options outstanding was $3.8 million based on the closing price of the Company’s stock as of March 31, 2016. Restricted Stock Units The following is a summary of restricted stock unit activity for the three months ended March 31, 2016 (in thousands, except per share data):
The total fair value of restricted stock units that vested in the three months ended March 31, 2016 was $0.4 million. As of March 31, 2016, the intrinsic value of restricted stock units outstanding was $2.4 million based on the closing price of the Company’s stock as of March 31, 2016. Stock-Based Compensation Expense Compensation cost for all stock-based awards expected to vest is measured at fair value on the date of grant and recognized ratably over the requisite service period. The following table summarizes the components of total stock-based compensation expense included in the condensed consolidated statements of operations for the periods presented (in thousands):
The following table summarizes the various types of stock-based compensation for the periods presented (in thousands):
The following table presents the weighted-average grant date fair value of options granted for the periods presented and the assumptions used to estimate those values using a Black-Scholes option pricing model:
As of March 31, 2016, there was approximately $17.0 million of total unrecognized compensation cost related to unvested equity awards expected to be recognized over a weighted-average period of 2.6 years. |
INCOME TAXES |
3 Months Ended |
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Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company has used the discrete tax approach in calculating the tax expense for the three months ended March 31, 2016 and 2015 due to the fact that a relatively small change in the Company’s projected pre-tax net income (loss) could result in a volatile effective tax rate. Under the discrete method, the Company determines its tax (expense) benefit based upon actual results as if the interim period was an annual period. The tax provisions recorded were primarily related to income taxes in jurisdictions outside of the U.S. |
NET LOSS PER SHARE |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE | NET LOSS PER SHARE The following table presents the computation of basic and diluted net loss per share for the periods presented (in thousands, except per share data):
As the Company incurred a net loss for all periods presented, potential dilutive securities from employee stock options, restricted stock units and warrants have been excluded from the diluted net loss per share computations because the effect of including such shares would have been anti-dilutive. The following table sets forth the potentially dilutive securities excluded from the computation of the diluted net loss per share (in thousands):
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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies) |
3 Months Ended |
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Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the U.S, or GAAP. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in the consolidation. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information These accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, considered necessary to present fairly the Company's financial condition, results of operations, comprehensive income (loss) and cash flows for the interim periods indicated. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the operating results for the full year. Certain information and footnote disclosures typically included in annual consolidated financial statements have been condensed or omitted. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Significant estimates and assumptions reflected in the financial statements include revenue recognition, inventory valuation, accrued warranty obligations and stock bonus program. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ materially from management’s estimates using different assumptions or under different conditions. |
Recently Issued Accounting Pronouncements Not Yet Effective | Recently Issued Accounting Pronouncements Not Yet Effective In May 2014, the FASB issued ASU 2014-09 (Topic 606), “Revenue from Contracts with Customers,” which will replace most existing revenue recognition guidance under U.S. GAAP. The updated standard’s core principle is that revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The standard generally requires an entity to identify performance obligations in its contracts, estimate the amount of variable consideration to be received in the transaction price, allocate the transaction price to each separate performance obligation, and recognize revenue as obligations are satisfied. In addition, the updated standard requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In 2015, the FASB issued guidance to defer the effective date to fiscal years beginning after December 15, 2017 with early adoption for fiscal years beginning December 15, 2016. The guidance permits the use of either a retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is currently evaluating the impact of adoption on the consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern.” The update provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The amendments in this update are effective for the annual period ending after December 15, 2016 and for annual and interim periods thereafter. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which requires most entities to measure most inventories at the lower of cost or net realizable value ("NRV"). This simplifies the evaluation from the current method of lower of cost or market, where market is based on one of three measures (i.e. replacement cost, net realizable value, or net realizable value less a normal profit margin). ASU 2015-11 does not apply to inventories measured under the last-in, first-out method or the retail inventory method, and defines NRV as the “estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted for any interim and annual financial statements that have not yet been issued. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Changes to the current guidance include the accounting for equity investments, the presentation and disclosure requirements for financial instruments, and the assessment of valuation allowance on deferred tax assets related to available-for-sale securities. In addition, ASU 2016-01 establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial liabilities for which the fair value option has been elected. Under this guidance, an entity would be required to separately present in other comprehensive income the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. ASU 2016-01 is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which will simplify the income tax consequences, accounting for forfeitures and classification on the Statements of Consolidated Cash Flows. ASU 2016-09 is effective for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of adoption on the consolidated financial statements. |
Income Taxes | The Company has used the discrete tax approach in calculating the tax expense for the three months ended March 31, 2016 and 2015 due to the fact that a relatively small change in the Company’s projected pre-tax net income (loss) could result in a volatile effective tax rate. Under the discrete method, the Company determines its tax (expense) benefit based upon actual results as if the interim period was an annual period. |
INVENTORY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Inventory | Inventory as of March 31, 2016 and December 31, 2015 consists of the following (in thousands):
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WARRANTY OBLIGATIONS (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Warranty Activities | The Company’s warranty activities during the three months ended March 31, 2016 and 2015 were as follows (in thousands):
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FAIR VALUE MEASUREMENTS (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy at March 31, 2016 and December 31, 2015 (in thousands):
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Schedule of Changes in Nonfinancial Liabilities Related to Warrant Obligations Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs | The following table provides information regarding changes in nonfinancial liabilities related to the Company’s warranty obligations measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods indicated (in thousands):
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Summary of Changes in Financial Liabilities Related to Contingent Consideration Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs | The following table provides information regarding changes in financial liabilities related to the contingent consideration liability arising from a previous acquisition measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2016 (in thousands):
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Summary of Significant Unobservable Inputs used in the Fair Value Measurement of Liabilities Designated as Level 3 | As of March 31, 2016, the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows:
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill and Intangible Assets | The following table presents the details of the Company’s goodwill and purchased intangible assets as of March 31, 2016 and December 31, 2015(in thousands):
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Schedule of Estimated Future Amortization Expense Related to Finite-Lived Intangible Assets | For the three months ended March 31, 2016, amortization expense related to intangible assets was $0.2 million. As of March 31, 2016, estimated future amortization expense related to finite-lived intangible assets was as follows:
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STOCK-BASED COMPENSATION (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | The following is a summary of stock option activity for the three months ended March 31, 2016 (in thousands, except per share data):
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Summary of Restricted Stock Unit Activity | The following is a summary of restricted stock unit activity for the three months ended March 31, 2016 (in thousands, except per share data):
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Summary of the Components of Total Stock-Based Compensation Expense | The following table summarizes the components of total stock-based compensation expense included in the condensed consolidated statements of operations for the periods presented (in thousands):
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Summary of Stock-Based Compensation Associated with Each Type of Award | The following table summarizes the various types of stock-based compensation for the periods presented (in thousands):
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Summary of the Weighted-Average Grant Date Fair Value of Options Granted | The following table presents the weighted-average grant date fair value of options granted for the periods presented and the assumptions used to estimate those values using a Black-Scholes option pricing model:
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NET LOSS PER SHARE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Net Loss Per Share | The following table presents the computation of basic and diluted net loss per share for the periods presented (in thousands, except per share data):
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Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share | The following table sets forth the potentially dilutive securities excluded from the computation of the diluted net loss per share (in thousands):
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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) system in Thousands, microinverter in Millions, watt in Billions |
Mar. 31, 2016
system
country
watt
microinverter
|
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Microinverter [Member] | |
Product Information [Line Items] | |
Number Of Product Shipped | microinverter | 11.0 |
Number Of Watts | watt | 2.8 |
Residential And Commercial Systems [Member] | |
Product Information [Line Items] | |
Number Of Product Deployed | system | 460 |
Number Of Countries In Which Product Is Deployed | country | 100 |
INVENTORY - Summary of Inventory (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
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Schedule of inventory | ||
Raw materials | $ 1,193 | $ 2,202 |
Finished goods | 44,383 | 38,598 |
Total inventory | $ 45,576 | $ 40,800 |
WARRANTY OBLIGATIONS - Summary of Warranty Activities (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||
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Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Mar. 31, 2015 |
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Changes in the Company's product warranty liability | |||||
Warranty obligations, beginning of period | $ 30,547 | $ 33,940 | |||
Accruals for warranties issued during period | 708 | 1,105 | |||
Changes in estimates | 158 | 58 | |||
Settlements | (1,719) | (1,151) | |||
Increase due to accretion expense | 384 | 161 | |||
Other | (419) | 50 | |||
Warranty obligations, end of period | $ 30,547 | $ 33,940 | $ 29,700 | $ 30,547 | $ 34,163 |
Less current portion | (6,651) | (7,072) | (7,550) | ||
Noncurrent | $ 23,008 | $ 23,475 | $ 26,613 |
WARRANTY OBLIGATIONS - Narrative (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
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Product Warranty Liability [Line Items] | ||||
Warranty obligations, end of period | $ 29,700 | $ 30,547 | $ 34,163 | $ 33,940 |
Recurring | Warranty obligations for microinverters sold since January 1, 2014 | Level 3 | ||||
Product Warranty Liability [Line Items] | ||||
Fair value liabilities | $ 6,489 | $ 6,182 | $ 4,783 | $ 3,562 |
FAIR VALUE MEASUREMENTS - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
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Level 2 | ||||
Assets: | ||||
Foreign currency forward contracts | $ 9 | $ 86 | ||
Liabilities: | ||||
Foreign currency forward contracts | 29 | 9 | ||
Level 3 | Warranty obligations | ||||
Liabilities: | ||||
Fair value liabilities | 6,489 | 6,182 | $ 4,783 | $ 3,562 |
Level 3 | Contingent consideration | ||||
Liabilities: | ||||
Fair value liabilities | $ 473 | $ 473 |
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2016 |
Dec. 31, 2015 |
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Discounted cash flows | Recurring | Level 3 | Contingent consideration | ||
Derivative [Line Items] | ||
Decrease to fair value measurement as a result of 100 basis point increase | $ 0.2 | |
Increase to fair value measurement as a result of 100 basis point decrease | 0.2 | |
Not designated as hedging instrument | Foreign exchange forward | ||
Derivative [Line Items] | ||
Notional amount of foreign currency | $ 1.0 | $ 2.4 |
FAIR VALUE MEASUREMENTS - Schedule of Changes in Nonfinancial Liabilities Related to Warrant Obligations Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Details) - Level 3 - Recurring - Warranty obligations - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of period | $ 6,182 | $ 3,562 |
Accruals for warranties issued during period | 695 | 1,047 |
Changes in estimates | (199) | 0 |
Settlements | (154) | (36) |
Increase due to accretion expense | 384 | 161 |
Other | (419) | 49 |
Balance at end of period | $ 6,489 | $ 4,783 |
FAIR VALUE MEASUREMENTS - Summary of Changes in Financial Liabilities Related to Contingent Consideration Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Details) - Next Phase Solar, Inc. - Contingent consideration - Recurring - Level 3 $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of period | $ 473 |
Revaluations | 0 |
Balance at end of period | $ 473 |
FAIR VALUE MEASUREMENTS - Summary of Significant Unobservable Inputs used in the Fair Value Measurement of Liabilities Designated as Level 3 (Details) - Discounted cash flows - Recurring - Level 3 |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Warranty obligations for microinverters sold since January 1, 2014 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Profit element and risk premium | 17.00% |
Credit-adjusted risk-free rate | 27.00% |
Contingent consideration liability | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Risk-adjusted discount rate | 17.00% |
GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill, gross | $ 3,745 | $ 3,745 |
Goodwill | 3,745 | 3,745 |
Other indefinite-lived intangibles | 286 | 286 |
Intangible assets with finite lives: | ||
Intangibles assets with finite lives, gross | 2,565 | 2,565 |
Intangibles assets with finite lives, accumulated amortization | (815) | (631) |
Total | 1,750 | 1,934 |
Customer relationships | ||
Intangible assets with finite lives: | ||
Intangibles assets with finite lives, gross | 900 | 900 |
Intangibles assets with finite lives, accumulated amortization | (225) | (180) |
Total | 675 | 720 |
Patents and licensed technology | ||
Intangible assets with finite lives: | ||
Intangibles assets with finite lives, gross | 1,665 | 1,665 |
Intangibles assets with finite lives, accumulated amortization | (590) | (451) |
Total | $ 1,075 | $ 1,214 |
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2015 |
Dec. 31, 2014 |
Jul. 31, 2014 |
Mar. 31, 2016 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense related to intangible assets | $ 0.2 | |||
Customer relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Useful life | 5 years | |||
Patents and licensed technology | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Useful life | 3 years | |||
ASIC development | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Useful life | 3 years |
GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense Related to Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2016 (remaining 9 months) | $ 551 | |
2017 | 610 | |
2018 | 409 | |
2019 | 180 | |
Total | $ 1,750 | $ 1,934 |
REVOLVING CREDIT FACILITY - Narrative (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
Dec. 18, 2015 |
|
Short-term Debt [Line Items] | |||
Outstanding borrowings | $ 20,000,000 | $ 17,000,000 | |
Line of Credit | Wells Fargo Bank | Revolving credit facility | |||
Short-term Debt [Line Items] | |||
Credit line facility | 50,000,000.0 | ||
Credit line facility, accordion feature | $ 25,000,000.0 | ||
Amount of liquidity required for debt compliance | 15,000,000.0 | ||
Amount of undrawn credit for debt compliance | 5,000,000.0 | ||
Outstanding borrowings | 20,000,000 | ||
Remaining borrowing capacity | $ 15,900,000 | ||
Weighted average interest rate | 3.20% | ||
Line of Credit | Wells Fargo Bank | Revolving credit facility | LIBOR | Minimum | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Unused capacity, commitment fee percentage | 0.25% | ||
Line of Credit | Wells Fargo Bank | Revolving credit facility | LIBOR | Maximum | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate | 3.75% | ||
Unused capacity, commitment fee percentage | 0.375% |
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2016
$ / shares
shares
| |
Number of Shares Outstanding | |
Outstanding, beginning balance (in shares) | shares | 8,173 |
Granted (in shares) | shares | 1,644 |
Exercised (in shares) | shares | (347) |
Canceled (in shares) | shares | (341) |
Outstanding, ending balance (in shares) | shares | 9,129 |
Weighted- Average Exercise Price per Share | |
Outstanding, beginning balance (in usd per share) | $ / shares | $ 5.36 |
Granted (in usd per share) | $ / shares | 2.12 |
Exercised (in usd per share) | $ / shares | 0.29 |
Canceled (in usd per share) | $ / shares | 7.28 |
Outstanding, ending balance (in usd per share) | $ / shares | $ 4.90 |
STOCK-BASED COMPENSATION - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Intrinsic value of options exercised during period | $ 0.7 |
Intrinsic value of options outstanding | 3.8 |
Total unrecognized compensation cost | $ 17.0 |
Weighted-average recognition period for unrecognized compensation cost | 2 years 7 months 21 days |
Restricted stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of stock vested during period | $ 0.4 |
Intrinsic value of restricted stock units outstanding | $ 2.4 |
STOCK-BASED COMPENSATION - Summary of Restricted Stock Unit Activity (Details) - Restricted stock units shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2016
$ / shares
shares
| |
RSUs | |
Outstanding, beginning balance (in shares) | shares | 1,313 |
Granted (in shares) | shares | 4 |
Vested (in shares) | shares | (197) |
Canceled (in shares) | shares | (95) |
Outstanding, ending balance (in shares) | shares | 1,025 |
Weighted Average Fair Value per Share at Grant Date | |
Outstanding, beginning balance (in usd per share) | $ / shares | $ 9.31 |
Granted (in usd per share) | $ / shares | 2.14 |
Vested (in usd per share) | $ / shares | 9.35 |
Canceled (in usd per share) | $ / shares | 4.44 |
Outstanding, ending balance (in usd per share) | $ / shares | $ 9.73 |
STOCK-BASED COMPENSATION - Summary of Stock-Based Compensation Associated with Each Type of Award (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 2,999 | $ 2,988 |
Stock options and restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 2,484 | 2,526 |
Employee stock purchase plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 515 | $ 462 |
STOCK-BASED COMPENSATION - Summary of the Weighted-Average Grant Date Fair Value of Options Granted (Details) - Stock options - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
The fair value of each option granted during the periods | ||
Weighted average grant date fair value (in usd per share) | $ 1.28 | $ 6.89 |
Expected term (in years) | 4 years 7 months 6 days | 4 years 7 months 6 days |
Expected volatility | 77.40% | 71.10% |
Annual risk-free rate of return | 1.20% | 1.30% |
Dividend yield | 0.00% | 0.00% |
NET LOSS PER SHARE - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Numerator: | ||
Net loss | $ (18,795) | $ (6,320) |
Denominator: | ||
Weighted average common shares outstanding for basic calculation (in shares) | 46,209 | 43,950 |
Net loss per share, basic and diluted (in usd per share) | $ (0.41) | $ (0.14) |
NET LOSS PER SHARE - Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
The potential common shares outstanding that were excluded from the computation of diluted net loss per share attributable to common stockholders | ||
Total (in shares) | 9,435 | 10,171 |
Employee stock options | ||
The potential common shares outstanding that were excluded from the computation of diluted net loss per share attributable to common stockholders | ||
Total (in shares) | 8,160 | 8,627 |
Restricted stock units | ||
The potential common shares outstanding that were excluded from the computation of diluted net loss per share attributable to common stockholders | ||
Total (in shares) | 1,164 | 1,433 |
Warrants to purchase common stock | ||
The potential common shares outstanding that were excluded from the computation of diluted net loss per share attributable to common stockholders | ||
Total (in shares) | 111 | 111 |
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