ý | 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 | 77-0201147 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common stock, $0.001 par value | HLIT | NASDAQ Global Select Market |
Large accelerated filer | ¨ | Accelerated filer | ý |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
March 27, 2020 | December 31, 2019 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 71,712 | $ | 93,058 | |||
Accounts receivable, net | 93,058 | 88,500 | |||||
Inventories, net | 34,854 | 29,042 | |||||
Prepaid expenses and other current assets | 32,001 | 40,762 | |||||
Total current assets | 231,625 | 251,362 | |||||
Property and equipment, net | 37,091 | 22,928 | |||||
Operating lease right-of-use assets | 26,281 | 27,491 | |||||
Goodwill | 238,614 | 239,780 | |||||
Intangibles, net | 2,789 | 4,461 | |||||
Other long-term assets | 39,875 | 41,305 | |||||
Total assets | $ | 576,275 | $ | 587,327 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Other debts and finance lease obligations, current | $ | 6,343 | $ | 6,713 | |||
Accounts payable | 45,159 | 40,933 | |||||
Income taxes payable | 419 | 1,226 | |||||
Deferred revenue | 48,719 | 37,117 | |||||
Accrued and other current liabilities | 52,080 | 62,535 | |||||
Convertible notes, short-term | 44,008 | 43,375 | |||||
Total current liabilities | 196,728 | 191,899 | |||||
Convertible notes, long-term | 89,832 | 88,629 | |||||
Other debts and finance lease obligations, long-term | 10,048 | 10,511 | |||||
Income taxes payable, long-term | 180 | 178 | |||||
Other non-current liabilities | 41,388 | 41,254 | |||||
Total liabilities | 338,176 | 332,471 | |||||
Commitments and contingencies (Note 17) | |||||||
Convertible notes | 1,777 | 2,410 | |||||
Stockholders’ equity: | |||||||
Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding | — | — | |||||
Common stock, $0.001 par value, 150,000 shares authorized; 96,566 and 91,875 shares issued and outstanding at March 27, 2020 and December 31, 2019, respectively | 97 | 92 | |||||
Additional paid-in capital | 2,336,459 | 2,327,359 | |||||
Accumulated deficit | (2,093,894 | ) | (2,071,940 | ) | |||
Accumulated other comprehensive loss | (6,340 | ) | (3,065 | ) | |||
Total stockholders’ equity | 236,322 | 252,446 | |||||
Total liabilities and stockholders’ equity | $ | 576,275 | $ | 587,327 |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Revenue: | |||||||
Appliance and integration | $ | 47,752 | $ | 52,365 | |||
SaaS and service | 30,665 | 27,741 | |||||
Total net revenue | 78,417 | 80,106 | |||||
Cost of revenue: | |||||||
Appliance and integration | 26,287 | 27,054 | |||||
SaaS and service | 15,392 | 11,203 | |||||
Total cost of revenue | 41,679 | 38,257 | |||||
Total gross profit | 36,738 | 41,849 | |||||
Operating expenses: | |||||||
Research and development | 22,123 | 21,401 | |||||
Selling, general and administrative | 31,218 | 28,011 | |||||
Amortization of intangibles | 770 | 788 | |||||
Restructuring and related charges | 676 | 57 | |||||
Total operating expenses | 54,787 | 50,257 | |||||
Loss from operations | (18,049 | ) | (8,408 | ) | |||
Interest expense, net | (2,903 | ) | (2,906 | ) | |||
Other expense, net | (273 | ) | (311 | ) | |||
Loss before income taxes | (21,225 | ) | (11,625 | ) | |||
Provision for (benefit from) income taxes | 729 | (319 | ) | ||||
Net loss | $ | (21,954 | ) | $ | (11,306 | ) | |
Net loss per share: | |||||||
Basic and diluted | $ | (0.23 | ) | $ | (0.13 | ) | |
Shares used in per share calculation: | |||||||
Basic and diluted | 95,575 | 88,165 |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Net loss | $ | (21,954 | ) | $ | (11,306 | ) | |
Losses reclassified into earnings | — | 157 | |||||
Change in foreign currency translation adjustments | (3,119 | ) | (1,300 | ) | |||
Other comprehensive loss before tax | (3,119 | ) | (1,143 | ) | |||
Provision for income taxes | 156 | 106 | |||||
Other comprehensive loss, net of tax | (3,275 | ) | (1,249 | ) | |||
Total comprehensive loss | $ | (25,229 | ) | $ | (12,555 | ) |
Three Months Ended March 27, 2020 | ||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balance at December 31, 2019 | 91,875 | $ | 92 | $ | 2,327,359 | $ | (2,071,940 | ) | $ | (3,065 | ) | $ | 252,446 | |||||||||
Net loss | — | — | — | (21,954 | ) | — | (21,954 | ) | ||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (3,275 | ) | (3,275 | ) | ||||||||||||||
Issuance of common stock under option, stock award and purchase plans | 2,278 | 3 | 2,168 | — | — | 2,171 | ||||||||||||||||
Stock-based compensation | — | — | 6,301 | — | — | 6,301 | ||||||||||||||||
Exercise of warrant | 2,413 | 2 | (2 | ) | — | — | — | |||||||||||||||
Reclassification from mezzanine equity to equity for 4.00% Convertible Senior Notes due in 2020 | — | — | 633 | — | — | 633 | ||||||||||||||||
Balance at March 27, 2020 | 96,566 | $ | 97 | $ | 2,336,459 | $ | (2,093,894 | ) | $ | (6,340 | ) | $ | 236,322 |
Three Months Ended March 29, 2019 | ||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balance at December 31, 2018 | 87,057 | $ | 87 | $ | 2,296,795 | $ | (2,067,416 | ) | $ | (1,216 | ) | $ | 228,250 | |||||||||
Cumulative effect to retained earnings related to adoption of Topic 718 (1) | — | — | — | 1,400 | — | 1,400 | ||||||||||||||||
Balance at January 1, 2019 | 87,057 | 87 | 2,296,795 | (2,066,016 | ) | (1,216 | ) | 229,650 | ||||||||||||||
Net loss | — | — | — | (11,306 | ) | — | (11,306 | ) | ||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (1,249 | ) | (1,249 | ) | ||||||||||||||
Issuance of common stock under option, stock award and purchase plans | 1,727 | 2 | 1,353 | — | — | 1,355 | ||||||||||||||||
Stock-based compensation | — | — | 2,111 | — | — | 2,111 | ||||||||||||||||
Balance at March 29, 2019 | 88,784 | $ | 89 | $ | 2,300,259 | $ | (2,077,322 | ) | $ | (2,465 | ) | $ | 220,561 |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (21,954 | ) | $ | (11,306 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Amortization of intangibles | 1,655 | 2,083 | |||||
Depreciation | 2,843 | 2,846 | |||||
Stock-based compensation | 6,259 | 2,113 | |||||
Amortization of discount on convertible debt | 1,835 | 1,605 | |||||
Amortization of non-cash warrant | 434 | 25 | |||||
Restructuring, asset impairment and loss on retirement of fixed assets | 8 | 103 | |||||
Deferred income taxes, net | 653 | (538 | ) | ||||
Foreign currency adjustments | (2,066 | ) | (638 | ) | |||
Provision for excess and obsolete inventories | 234 | 254 | |||||
Provision for doubtful accounts, returns and discounts | 331 | 417 | |||||
Other non-cash adjustments, net | 113 | 287 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (5,068 | ) | 22,351 | ||||
Inventories | (6,281 | ) | (4,157 | ) | |||
Prepaid expenses and other assets | 10,579 | 1,417 | |||||
Accounts payable | (242 | ) | (8,177 | ) | |||
Deferred revenue | 12,477 | 4,750 | |||||
Income taxes payable | (768 | ) | (192 | ) | |||
Accrued and other liabilities | (12,083 | ) | (9,027 | ) | |||
Net cash provided by (used in) operating activities | (11,041 | ) | 4,216 | ||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (11,224 | ) | (1,674 | ) | |||
Net cash used in investing activities | (11,224 | ) | (1,674 | ) | |||
Cash flows from financing activities: | |||||||
Payment of convertible debt issuance costs | (35 | ) | — | ||||
Proceeds from other debts and finance leases | — | 160 | |||||
Repayment of other debts and finance leases | (406 | ) | (97 | ) | |||
Proceeds from common stock issued to employees | 3,000 | 2,012 | |||||
Payment of tax withholding obligations related to net share settlements of restricted stock units | (829 | ) | (657 | ) | |||
Net cash provided by financing activities | 1,730 | 1,418 | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (811 | ) | (33 | ) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | (21,346 | ) | 3,927 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 93,058 | 65,989 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 71,712 | $ | 69,916 | |||
Supplemental disclosures of cash flow information: | |||||||
Income tax payments, net | 408 | 490 | |||||
Interest payments, net | 1,095 | 92 | |||||
Supplemental schedule of non-cash investing and financing activities: | |||||||
Capital expenditures incurred but not yet paid | 7,620 | 91 |
As of | |||||||
March 27, 2020 | December 31, 2019 | ||||||
Contract assets | $ | 5,806 | $ | 13,969 | |||
Deferred revenue | 55,854 | 43,450 |
Three months ended | Three months ended | |||||
March 27, 2020 | March 29, 2019 | |||||
Operating lease cost | $ | 2,668 | $ | 1,996 | ||
Variable lease cost | 792 | 779 | ||||
Total lease cost | $ | 3,460 | $ | 2,775 |
Three months ended | ||||||
March 27, 2020 | March 29, 2019 | |||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 2,421 | $ | 2,130 | ||
ROU assets obtained in exchange for operating lease obligations | $ | 1,671 | $ | — |
Three months ended | |||||||||
Financial Statement Location | March 27, 2020 | March 29, 2019 | |||||||
Derivatives not designated as hedging instruments: | |||||||||
Losses recognized in operations | Other expense, net | $ | (912 | ) | $ | (565 | ) |
March 27, 2020 | December 31, 2019 | |||||||
Derivatives not designated as hedging instruments: | ||||||||
Purchase | $ | 21,783 | $ | 14,806 | ||||
Sell | $ | 4,669 | $ | 2,629 |
Asset Derivatives | Derivative Liabilities | |||||||||||||||||||
Balance Sheet Location | March 27, 2020 | December 31, 2019 | Balance Sheet Location | March 27, 2020 | December 31, 2019 | |||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||
Foreign currency contracts | Prepaid expenses and other current assets | $ | — | $ | 43 | Accrued and other current liabilities | $ | 479 | $ | 112 | ||||||||||
Total derivatives | $ | — | $ | 43 | $ | 479 | $ | 112 |
Gross Amounts of Derivatives | Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets | Net Amounts of Derivatives Presented in the Condensed Consolidated Balance Sheets | |||||||||
Derivative liabilities | $ | 479 | — | $ | 479 |
• | Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets. |
• | Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The forward exchange contracts are classified as Level 2 because they are valued using quoted market prices and other observable data for similar instruments in an active market. |
• | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
As of March 27, 2020 | |||||||||||||||
Accrued and other current liabilities | |||||||||||||||
Derivative liabilities | $ | — | $ | 479 | $ | — | $ | 479 | |||||||
Total liabilities measured and recorded at fair value | $ | — | $ | 479 | $ | — | $ | 479 | |||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
As of December 31, 2019 | |||||||||||||||
Prepaid and other current assets | |||||||||||||||
Derivative assets | $ | — | $ | 43 | $ | — | $ | 43 | |||||||
Total assets measured and recorded at fair value | $ | — | $ | 43 | $ | — | $ | 43 | |||||||
Accrued and other current liabilities | |||||||||||||||
Derivative liabilities | $ | — | $ | 112 | $ | — | $ | 112 | |||||||
Total liabilities measured and recorded at fair value | $ | — | $ | 112 | $ | — | $ | 112 |
March 27, 2020 | December 31, 2019 | ||||||
Accounts receivable, net: | |||||||
Accounts receivable | $ | 95,719 | $ | 91,513 | |||
Less: allowances for doubtful accounts and sales returns | (2,661 | ) | (3,013 | ) | |||
Total | $ | 93,058 | $ | 88,500 |
March 27, 2020 | December 31, 2019 | ||||||
Inventories, net: | |||||||
Raw materials | $ | 4,881 | $ | 4,179 | |||
Work-in-process | 2,220 | 1,633 | |||||
Finished goods | 18,841 | 14,080 | |||||
Service-related spares | 8,912 | 9,150 | |||||
Total | $ | 34,854 | $ | 29,042 |
March 27, 2020 | December 31, 2019 | ||||||
Prepaid expenses and other current assets: | |||||||
French R&D tax credits receivable(1) | 7,163 | 7,343 | |||||
Contract assets(2) | 5,806 | 13,969 | |||||
Deferred cost of revenue | $ | 3,892 | $ | 2,631 | |||
Prepaid maintenance, royalty, rent, and property taxes | 3,653 | 1,594 | |||||
Capitalized sales commissions | 1,168 | 1,309 | |||||
Other | 10,319 | 13,916 | |||||
Total | $ | 32,001 | $ | 40,762 |
March 27, 2020 | December 31, 2019 | ||||||
Property and equipment, net: | |||||||
Machinery and equipment | $ | 77,213 | $ | 75,229 | |||
Capitalized software | 34,395 | 34,190 | |||||
Construction in progress* | 19,482 | 5,506 | |||||
Leasehold improvements | 15,072 | 15,170 | |||||
Furniture and fixtures | 6,004 | 6,036 | |||||
Property and equipment, gross | 152,166 | 136,131 | |||||
Less: accumulated depreciation and amortization | (115,075 | ) | (113,203 | ) | |||
Total | $ | 37,091 | $ | 22,928 |
March 27, 2020 | December 31, 2019 | ||||||
Other long-term assets: | |||||||
French R&D tax credits receivable | $ | 16,303 | $ | 15,899 | |||
Deferred tax assets | 10,222 | 10,575 | |||||
Equity investment | 3,593 | 3,593 | |||||
Other | 9,757 | 11,238 | |||||
Total | $ | 39,875 | $ | 41,305 |
March 27, 2020 | December 31, 2019 | ||||||
Accrued and other current liabilities: | |||||||
Accrued employee compensation and related expenses | $ | 16,175 | $ | 19,454 | |||
Operating lease liability (short-term) | 8,583 | 8,881 | |||||
Customer deposits | 3,805 | 3,557 | |||||
Accrued warranty | 3,744 | 4,308 | |||||
Accrued royalty payments | 2,384 | 2,642 | |||||
Accrued Avid litigation settlement, current | 2,000 | 2,000 | |||||
Contingent inventory reserves | 1,700 | 2,208 | |||||
Others | 13,689 | 19,485 | |||||
Total | $ | 52,080 | $ | 62,535 |
March 27, 2020 | December 31, 2019 | ||||||
Other non-current liabilities: | |||||||
Operating lease liability (long-term) | $ | 25,326 | $ | 25,766 | |||
Deferred revenue (long-term) | 7,135 | 6,333 | |||||
Others | 8,927 | 9,155 | |||||
Total | $ | 41,388 | $ | 41,254 |
Video | Cable Access | Total | |||||||||
Balance as of December 31, 2019 | $ | 178,982 | $ | 60,798 | $ | 239,780 | |||||
Foreign currency translation adjustment, net | (1,110 | ) | (56 | ) | (1,166 | ) | |||||
Balance as of March 27, 2020 | $ | 177,872 | $ | 60,742 | $ | 238,614 |
March 27, 2020 | December 31, 2019 | ||||||||||||||||||||||||
Weighted Average Remaining Life (Years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Developed core technology | 0.3 | $ | 31,707 | $ | (31,642 | ) | $ | 65 | $ | 31,707 | $ | (30,757 | ) | $ | 950 | ||||||||||
Customer relationships/contracts | 0.9 | 44,497 | (41,773 | ) | 2,724 | 44,577 | (41,092 | ) | 3,485 | ||||||||||||||||
Trademarks and trade names | n/a | 594 | (594 | ) | — | 609 | (583 | ) | 26 | ||||||||||||||||
Maintenance agreements and related relationships | n/a | 5,500 | (5,500 | ) | — | 5,500 | (5,500 | ) | — | ||||||||||||||||
Order backlog | n/a | 3,054 | (3,054 | ) | — | 3,085 | (3,085 | ) | — | ||||||||||||||||
Total identifiable intangibles, net | $ | 85,352 | $ | (82,563 | ) | $ | 2,789 | $ | 85,478 | $ | (81,017 | ) | $ | 4,461 |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Included in cost of revenue | $ | 885 | $ | 1,295 | |||
Included in operating expenses | 770 | 788 | |||||
Total amortization expense | $ | 1,655 | $ | 2,083 |
Cost of Revenue | Operating Expenses | Total | |||||||||
Year ended December 31, | |||||||||||
2020 (remaining nine months) | $ | 65 | $ | 2,228 | $ | 2,293 | |||||
2021 | — | 496 | 496 | ||||||||
Total future amortization expense | $ | 65 | $ | 2,724 | $ | 2,789 |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Restructuring and related charges in: | |||||||
Cost of revenue | $ | (73 | ) | $ | 301 | ||
Operating expenses - Restructuring and related charges | 676 | 57 | |||||
Total restructuring and related charges | $ | 603 | $ | 358 |
Excess facilities | Severance and benefits | French VDP | Others | Total | ||||||||||||||||
Balance at December 31, 2019 | $ | 720 | $ | 3,294 | $ | 806 | $ | 30 | $ | 4,850 | ||||||||||
Charges for current period | — | 563 | 40 | — | 603 | |||||||||||||||
Cash payments | (463 | ) | (1,252 | ) | (526 | ) | — | (2,241 | ) | |||||||||||
Others | — | (80 | ) | (46 | ) | — | (126 | ) | ||||||||||||
Balance at March 27, 2020 | $ | 257 | $ | 2,525 | $ | 274 | $ | 30 | $ | 3,086 |
March 27, 2020 | December 31, 2019 | ||||||
Liability: | |||||||
Principal amount | $ | 115,500 | $ | 115,500 | |||
Less: Debt discount, net of amortization | (22,594 | ) | (23,652 | ) | |||
Less: Debt issuance costs, net of amortization | (3,074 | ) | (3,219 | ) | |||
Carrying amount | $ | 89,832 | $ | 88,629 | |||
Remaining amortization period (years) | 4.4 | 4.7 | |||||
Effective interest rate on liability component | 7.95 | % | 7.95 | % |
March 27, 2020 | December 31, 2019 | ||||||
Liability: | |||||||
Principal amount | $ | 45,785 | $ | 45,785 | |||
Less: Debt discount, net of amortization | (1,586 | ) | (2,151 | ) | |||
Less: Debt issuance costs, net of amortization | (191 | ) | (259 | ) | |||
Carrying amount | $ | 44,008 | $ | 43,375 | |||
Remaining amortization period (years) | 0.7 | 0.9 | |||||
Effective interest rate on liability component | 9.94 | % | 9.94 | % |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Contractual interest expense | $ | 1,035 | $ | 1,283 | |||
Amortization of debt discount | 1,623 | 1,433 | |||||
Amortization of debt issuance costs | 212 | 172 | |||||
Total interest expense recognized | $ | 2,870 | $ | 2,888 |
March 27, 2020 | December 31, 2019 | ||||||
Financing from French government agencies related to various government incentive programs (1) | $ | 16,160 | $ | 16,566 | |||
Term loans | 174 | 587 | |||||
Obligations under finance leases | 57 | 71 | |||||
Total debt obligations | 16,391 | 17,224 | |||||
Less: current portion | (6,343 | ) | (6,713 | ) | |||
Long-term portion | $ | 10,048 | $ | 10,511 |
Years ending December 31, | Finance lease obligations | Other Debt obligations | |||||
2020 (remaining nine months) | $ | 35 | $ | 6,212 | |||
2021 | 22 | 5,007 | |||||
2022 | — | 4,750 | |||||
2023 | — | 147 | |||||
Thereafter | — | 218 | |||||
Total | $ | 57 | $ | 16,334 |
Stock Options Outstanding | |||||||||||||
Number of Shares | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | ||||||||||
Balance at December 31, 2019 | 1,888 | $ | 5.83 | ||||||||||
Exercised | (127 | ) | 5.78 | ||||||||||
Canceled or expired | (203 | ) | 5.78 | ||||||||||
Balance at March 27, 2020 | 1,558 | 5.84 | 1.9 | $ | 1,319 | ||||||||
Vested and expected to vest | 1,558 | 5.84 | 1.9 | $ | 1,319 | ||||||||
Exercisable | 1,558 | 5.84 | 1.9 | $ | 1,319 |
Restricted Stock Units Outstanding | |||||||
Number of Shares | Weighted Average Grant Date Fair Value Per Share | ||||||
Balance at December 31, 2019 | 3,601 | $ | 5.18 | ||||
Granted | 1,894 | 6.24 | |||||
Vested | (1,790 | ) | 5.48 | ||||
Forfeited | (237 | ) | 3.84 | ||||
Balance at March 27, 2020 | 3,468 | 5.69 |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Service cost | $ | 61 | $ | 57 | |||
Interest cost | 9 | 20 | |||||
Net periodic benefit cost | $ | 70 | $ | 77 |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Stock-based compensation in: | |||||||
Cost of revenue | $ | 770 | $ | 225 | |||
Research and development expense | 1,738 | 616 | |||||
Selling, general and administrative expense | 3,751 | 1,272 | |||||
Total stock-based compensation in operating expense | 5,489 | 1,888 | |||||
Total stock-based compensation | $ | 6,259 | $ | 2,113 |
ESPP Purchase Period Ending | ||||||
July 1, 2020 | July 1, 2019 | |||||
Expected term (years) | 0.5 | 0.5 | ||||
Volatility | 50 | % | 43 | % | ||
Risk-free interest rate | 1.6 | % | 2.5 | % | ||
Expected dividends | 0.0 | % | 0.0 | % | ||
Estimated weighted average fair value per share at purchase date | $2.24 | $1.31 |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Loss before income taxes | $ | (21,225 | ) | $ | (11,625 | ) | |
Provision for income taxes | 729 | (319 | ) | ||||
Effective income tax rate | (3.4 | )% | 2.7 | % |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Numerator: | |||||||
Net loss | $ | (21,954 | ) | $ | (11,306 | ) | |
Denominator: | |||||||
Weighted average number of common shares outstanding | |||||||
Basic and diluted | 95,575 | 88,165 | |||||
Net loss per share: | |||||||
Basic and diluted | $ | (0.23 | ) | $ | (0.13 | ) |
Three months ended | |||||
March 27, 2020 | March 29, 2019 | ||||
Stock options | 1,796 | 2,941 | |||
RSUs | 2,899 | 2,400 | |||
Stock purchase rights under the ESPP | 443 | 489 | |||
Convertible Debt | 1,169 | — | |||
Warrants (1) | — | 1,954 | |||
Total | 6,307 | 7,784 |
• | The conversion spread of 7,962,609 shares will have a dilutive impact on diluted net income per share when the Company’s average market price of its common stock for a given period exceeds the conversion price of $5.75 per share for the 2020 Notes. |
• | The conversion spread of 13,337,182 shares will have a dilutive impact on diluted net income per share when the Company’s average market price of its common stock for a given period exceeds the conversion price of $8.66 per share for the 2024 Notes. |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Video | |||||||
Revenue | $ | 54,372 | $ | 67,176 | |||
Gross profit | 27,907 | 38,602 | |||||
Operating income (loss) | (6,267 | ) | 1,968 | ||||
Cable Access | |||||||
Revenue | $ | 24,045 | $ | 12,930 | |||
Gross profit | 10,414 | 5,068 | |||||
Operating loss | (3,265 | ) | (5,822 | ) | |||
Total | |||||||
Revenue | $ | 78,417 | $ | 80,106 | |||
Gross profit | 38,321 | 43,670 | |||||
Operating loss | $ | (9,532 | ) | $ | (3,854 | ) |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Total segment operating loss | $ | (9,532 | ) | $ | (3,854 | ) | |
Unallocated corporate expenses | (603 | ) | (358 | ) | |||
Stock-based compensation | (6,259 | ) | (2,113 | ) | |||
Amortization of intangibles | (1,655 | ) | (2,083 | ) | |||
Loss from operations | (18,049 | ) | (8,408 | ) | |||
Non-operating expense, net | (3,176 | ) | (3,217 | ) | |||
Loss before income taxes | $ | (21,225 | ) | $ | (11,625 | ) |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Net Revenue (in thousands) (1) | |||||||
United States | $ | 34,403 | $ | 30,115 | |||
Other Countries | 44,014 | 49,991 | |||||
Total | $ | 78,417 | $ | 80,106 |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Market (in thousands) | |||||||
Service Provider | $ | 43,759 | $ | 44,212 | |||
Broadcast and Media | 34,658 | 35,894 | |||||
Total | $ | 78,417 | $ | 80,106 |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Balance at beginning of period | $ | 4,314 | $ | 4,869 | |||
Accrual for current period warranties | 656 | 1,403 | |||||
Warranty costs incurred | (1,226 | ) | (1,685 | ) | |||
Balance at end of period | $ | 3,744 | $ | 4,587 |
• | the impact of the COVID-19 pandemic, and related responses of businesses and governments to the pandemic, on our operations and personnel, on commercial activity in the markets in which we operate and worldwide and regional economies, and on our results of operations; |
• | developing trends and demands in the markets we address, particularly emerging markets; |
• | economic conditions, particularly in certain geographies, and in financial markets; |
• | new and future products and services; |
• | spending of our customers; |
• | our strategic direction, future business plans and growth strategy; |
• | industry and customer consolidation; |
• | expected demand for and benefits of our products and services; |
• | concentration of revenue sources; |
• | expectations regarding our CableOS solutions; |
• | expectations regarding the impact of the software license agreement with Comcast on our business; |
• | potential future acquisitions and dispositions; |
• | anticipated results of potential or actual litigation; |
• | our competitive environment; |
• | the impact of our restructuring plans; |
• | the impact of governmental regulations, including with respect to tariffs and economic sanctions; |
• | anticipated revenue and expenses, including the sources of such revenue and expenses; |
• | expected impacts of changes in accounting rules; |
• | expectations regarding the usability of our inventory and the risk that inventory will exceed forecasted demand; |
• | expectations and estimates related to goodwill and intangible assets and their associated carrying value; and |
• | use of cash, cash needs and ability to raise capital, including repaying our convertible notes. |
Three months ended | |||||||||||||
March 27, 2020 | March 29, 2019 | Q1 FY20 vs Q1 FY19 | |||||||||||
Segment: | |||||||||||||
Video | $ | 54,372 | $ | 67,176 | $ | (12,804 | ) | (19 | )% | ||||
Cable Access | 24,045 | 12,955 | 11,090 | 86 | % | ||||||||
Total segment revenue | 78,417 | 80,131 | (1,714 | ) | (2 | )% | |||||||
Amortization of warrants | — | (25 | ) | 25 | (100 | )% | |||||||
Total net revenue | $ | 78,417 | $ | 80,106 | $ | (1,689 | ) | (2 | )% | ||||
Segment revenue as a % of total segment revenue: | |||||||||||||
Video | 69 | % | 84 | % | |||||||||
Cable Access | 31 | % | 16 | % |
Three months ended | |||||||||||||
March 27, 2020 | March 29, 2019 | Q1 FY20 vs Q1 FY19 | |||||||||||
Geography: | |||||||||||||
Americas | $ | 37,650 | $ | 34,188 | $ | 3,462 | 10 | % | |||||
EMEA | 27,816 | 28,078 | (262 | ) | (1 | )% | |||||||
APAC | 12,951 | 17,840 | (4,889 | ) | (27 | )% | |||||||
Total net revenue | $ | 78,417 | $ | 80,106 | $ | (1,689 | ) | (2 | )% | ||||
Regional revenue as a % of total net revenue: | |||||||||||||
Americas | 48 | % | 43 | % | |||||||||
EMEA | 35 | % | 35 | % | |||||||||
APAC | 17 | % | 22 | % |
Three months ended | |||||||||||||
March 27, 2020 | March 29, 2019 | Q1 FY20 vs Q1 FY19 | |||||||||||
Gross profit | $ | 36,738 | $ | 41,849 | $ | (5,111 | ) | (12 | )% | ||||
As a percentage of net revenue (“gross margin”) | 46.8 | % | 52.2 | % | (5.4 | )% |
Three months ended | |||||||||||||
March 27, 2020 | March 29, 2019 | Q1 FY20 vs Q1 FY19 | |||||||||||
Research and development | $ | 22,123 | $ | 21,401 | $ | 722 | 3 | % | |||||
As a percentage of net revenue | 28.2 | % | 26.7 | % |
Three months ended | |||||||||||||
March 27, 2020 | March 29, 2019 | Q1 FY20 vs Q1 FY19 | |||||||||||
Selling, general and administrative | $ | 31,218 | $ | 28,011 | $ | 3,207 | 11 | % | |||||
As a percentage of net revenue | 39.8 | % | 35.0 | % |
Three months ended | |||||||||||||
March 27, 2020 | March 29, 2019 | Q1 FY20 vs Q1 FY19 | |||||||||||
Video | $ | (6,267 | ) | $ | 1,968 | $ | (8,235 | ) | (418 | )% | |||
Cable Access | (3,265 | ) | (5,797 | ) | 2,532 | (44 | )% | ||||||
Total segment operating loss | $ | (9,532 | ) | $ | (3,829 | ) | $ | (5,703 | ) | 149 | % | ||
Segment operating income (loss) as a % of segment revenue (“operating margin”): | |||||||||||||
Video | (11.5 | )% | 2.9 | % | (14.4 | )% | |||||||
Cable Access | (13.6 | )% | (44.7 | )% | 31.1 | % |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Total segment operating loss | $ | (9,532 | ) | $ | (3,829 | ) | |
Amortization of warrants | — | (25 | ) | ||||
Unallocated corporate expenses | (603 | ) | (358 | ) | |||
Stock-based compensation | (6,259 | ) | (2,113 | ) | |||
Amortization of intangibles | (1,655 | ) | (2,083 | ) | |||
Loss from operations | (18,049 | ) | (8,408 | ) | |||
Non-operating expense, net | (3,176 | ) | (3,217 | ) | |||
Loss before income taxes | $ | (21,225 | ) | $ | (11,625 | ) |
Three months ended | |||||||||||||
March 27, 2020 | March 29, 2019 | Q1 FY20 vs Q1 FY19 | |||||||||||
Amortization of intangibles | $ | 770 | $ | 788 | $ | (18 | ) | (2 | )% | ||||
As a percentage of net revenue | 1.0 | % | 1.0 | % |
Three months ended | |||||||||||||
March 27, 2020 | March 29, 2019 | Q1 FY20 vs Q1 FY19 | |||||||||||
Restructuring and related charges in: | |||||||||||||
Cost of revenue | $ | (73 | ) | $ | 301 | $ | (374 | ) | (124 | )% | |||
Operating expenses-Restructuring and related charges | 676 | 57 | 619 | 1,086 | % | ||||||||
Total restructuring and related charges | $ | 603 | $ | 358 | $ | 245 | 68 | % |
Three months ended | |||||||||||||
March 27, 2020 | March 29, 2019 | Q1 FY20 vs Q1 FY19 | |||||||||||
Provision for (benefit from) income taxes | $ | 729 | $ | (319 | ) | $ | 1,048 | (329 | )% | ||||
Effective income tax rate | (3.4 | )% | 2.7 | % |
Three months ended | |||||||
March 27, 2020 | March 29, 2019 | ||||||
Net cash provided by (used in): | |||||||
Operating activities | $ | (11,041 | ) | $ | 4,216 | ||
Investing activities | (11,224 | ) | (1,674 | ) | |||
Financing activities | 1,730 | 1,418 | |||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (811 | ) | (33 | ) | |||
Net increase in cash, cash equivalents and restricted cash | $ | (21,346 | ) | $ | 3,927 |
Payments due in each fiscal year | |||||||||||||||||||
Total Amounts Committed | 2020 (Remaining nine months) | 2021 and 2022 | 2023 and 2024 | Thereafter | |||||||||||||||
Convertible debt | $ | 161,285 | $ | 45,785 | $ | — | $ | 115,500 | $ | — | |||||||||
Operating leases | 45,966 | 7,209 | 11,997 | 9,160 | 17,600 | ||||||||||||||
Purchase commitments | 55,302 | 42,954 | 12,179 | 169 | — | ||||||||||||||
French debt | 16,334 | 6,212 | 9,757 | 365 | — | ||||||||||||||
Interest on convertible debt | 12,226 | 2,986 | 6,930 | 2,310 | — | ||||||||||||||
Other commitments (1) | 1,742 | 999 | 742 | 1 | — | ||||||||||||||
Avid litigation settlement fees | 2,000 | 2,000 | — | — | — | ||||||||||||||
French VDP Obligations | 274 | 274 | — | — | — | ||||||||||||||
Finance lease | 57 | 35 | 22 | — | — | ||||||||||||||
Total contractual obligations | $ | 295,186 | $ | 108,454 | $ | 41,627 | $ | 127,505 | $ | 17,600 | |||||||||
Other commercial commitments: | |||||||||||||||||||
Standby letters of credit | $ | 2,656 | $ | 2,407 | $ | 249 | $ | — | $ | — | |||||||||
Total commercial commitments | $ | 2,656 | $ | 2,407 | $ | 249 | $ | — | $ | — |
March 27, 2020 | December 31, 2019 | ||||||
Derivatives not designated as hedging instruments: | |||||||
Purchase | $ | 21,783 | $ | 14,806 | |||
Sell | $ | 4,669 | $ | 2,629 |
• | Declines in demand for our offerings or delays in purchasing decisions as a result of COVID-19, including as a result of social distancing requirements and shelter-in-place orders limiting our ability to deploy our products, and general economic uncertainty causing a number of businesses to delay or reduce costs. |
• | Delays in payments or defaults by our customers or if customers terminate their relationships with us or do not renew their agreements on economic or other terms that are favorable to us. |
• | The responsive measures to the COVID-19 pandemic have caused us to modify our business practices by having employees work remotely, canceling all non-essential employee travel, and cancelling, postponing or holding virtually events and meetings. We may in the future be required to, or choose voluntarily to, take additional actions for the health and safety of our workforce, whether in response to government orders or based on our own determinations of what is in the best interests of our employees. To the extent our current or future measures result in decreased productivity, harm our company culture or otherwise negatively affect our business, our financial condition and operating results could be adversely affected. |
Exhibit Number | Exhibit Index |
31.1 | |
31.2 | |
32.1* | |
32.2* | |
101 | The following materials from Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 27, 2020, formatted in Extensible Business Reporting Language (XBRL) include: |
(i) Condensed Consolidated Balance Sheets at March 27, 2020 and December 31, 2019, (ii) Condensed Consolidated Statements of Operations for the three months ended March 27, 2020 and March 29, 2019, (iii) Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 27, 2020 and March 29, 2019, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 27, 2020 and March 29, 2019, (v) Condensed Consolidated Statements of Cash Flows for the three months ended March 27, 2020 and March 29, 2019, and (vi) Notes to Condensed Consolidated Financial Statements. |
HARMONIC INC. | |
By: | /s/ Sanjay Kalra |
Sanjay Kalra | |
Chief Financial Officer | |
Date: May 4, 2020 |
1. | I have reviewed this Quarterly Report on Form 10-Q of Harmonic 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 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(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. |
By: | /s/ Patrick J. Harshman |
Patrick J. Harshman | |
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Harmonic 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 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(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. |
By: | /s/ Sanjay Kalra |
Sanjay Kalra | |
Chief Financial Officer |
/s/ Patrick J. Harshman |
Patrick J. Harshman |
President and Chief Executive Officer |
/s/ Sanjay Kalra |
Sanjay Kalra |
Chief Financial Officer |
Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Warranty Accrual Included in Accrued Liabilities | Activity for the Company’s warranty accrual, which is included in “Accrued and other current liabilities”, is summarized below (in thousands):
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Employee Benefit Plans and Stock-based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Options Outstanding | The following table summarizes the Company’s stock option activities and related information during the three months ended March 27, 2020 (in thousands, except per share amounts and terms):
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Summary of Restricted Stock Units Outstanding | The following table summarizes the Company’s RSUs activities and related information during the three months ended March 27, 2020 (in thousands, except per share amounts):
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Schedule of Defined Benefit Plans Obligations | The table below presents the components of net periodic benefit costs (in thousands):
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Summary of Stock-Based Compensation Expense | Stock-based Compensation The following table summarizes stock-based compensation for all plans (in thousands):
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Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions |
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Balance Sheet Components (Tables) |
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Mar. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Net | The following tables provide details of selected balance sheet components (in thousands):
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Inventories |
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Prepaid, and Other Current Assets |
(1) The Company’s French subsidiary participates in the French Crédit d’Impôt Recherche program (the “R&D tax credits”) which allows companies to monetize eligible research expenses. The R&D tax credits can be used to offset against income tax payable to the French government in each of the four years after being incurred, or if not utilized, are recoverable in cash. The amount of R&D tax credits recoverable are subject to audit by the French government. The R&D tax credits receivable at March 27, 2020 were approximately $23.5 million and are expected to be recoverable from 2020 through 2023. (2) Contract assets reflect the satisfied performance obligations for which the Company does not yet have an unconditional right to consideration. |
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Property, Plant and Equipment |
*During fiscal 2019, the Company entered into a lease for a new facility which will become the Company’s new headquarters in 2020. The new lease commenced in May 2019, as the facility was made available to the Company for constructing leasehold improvements. Construction in progress includes $18.2 million for constructing leasehold improvements in the new headquarters facility. |
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Other Long Term Assets |
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Accrued Liabilities |
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Other Non-current Liabilities |
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Derivative and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure | DERIVATIVES AND HEDGING ACTIVITIES The Company uses forward contracts to manage exposures to foreign currency exchange rates. The Company’s primary objective in holding derivative instruments is to reduce the volatility of earnings and cash flows associated with fluctuations in foreign currency exchange rates and the Company does not use derivative instruments for trading purposes. The use of derivative instruments exposes the Company to credit risk to the extent that the counterparties may be unable to meet their contractual obligations. As such, the potential risk of loss with any one counterparty is closely monitored by the Company. Derivatives Not Designated as Hedging Instruments (Balance Sheet Hedges) The Company’s balance sheet hedges consist of foreign currency forward contracts that generally mature within three months, are carried at fair value, and are used to minimize the short-term impact of foreign currency exchange rate fluctuation on cash and certain trade and inter-company receivables and payables. Changes in the fair value of these foreign currency forward contracts are recognized in “Other expense, net” in the Condensed Consolidated Statement of Operations and are largely offset by the changes in the fair value of the assets or liabilities being hedged. Losses on the non-designated derivative instruments recognized during the periods presented were as follows (in thousands):
The U.S. dollar equivalents of all outstanding notional amounts of foreign currency forward contracts are summarized as follows (in thousands):
The locations and fair value amounts of the Company’s derivative instruments reported in its Condensed Consolidated Balance Sheets are as follows (in thousands):
Offsetting of Derivative Assets and Liabilities The Company recognizes all derivative instruments on a gross basis in the Condensed Consolidated Balance Sheets. However, the arrangements with its counterparties allows for net settlement, which are designed to reduce credit risk by permitting net settlement with the same counterparty. As of March 27, 2020, information related to the offsetting arrangements was as follows (in thousands):
In connection with foreign currency derivatives entered in Israel, the Company’s subsidiaries in Israel are required to maintain a compensating balance with their bank at the end of each month. The compensating balance arrangements do not legally restrict the use of cash. As of March 27, 2020, the total compensating balance maintained was $1.0 million. |
Restructuring and Related Charges |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Charges | RESTRUCTURING AND RELATED CHARGES The Company has implemented several restructuring plans in an effort to better align its resources with its business strategy. The goal of these plans was to bring operational expenses to appropriate levels relative to the Company’s net revenues, while simultaneously implementing extensive company-wide expense control programs. The restructuring plans have primarily been comprised of excess facilities, severance payments and termination benefits related to headcount reductions. The Company accounts for its restructuring plans under the authoritative guidance for exit or disposal activities. The restructuring and related charges are included in “Cost of revenue” and “Operating expenses - Restructuring and related charges” in the Condensed Consolidated Statements of Operations. The following table summarizes the restructuring and related charges (in thousands):
As of March 27, 2020 and December 31, 2019, the Company’s total restructuring liability was $3.1 million and $4.9 million, respectively, of which $1.9 million and $1.5 million, respectively, were reported as a component of “Accrued and other current liabilities”, and the remaining $1.2 million and $3.4 million, respectively, were reported as a component of “Other non-current liabilities” on the Company’s Condensed Consolidated Balance Sheets. The following table summarizes the activities related to the Company’s restructuring plans during the three months ended March 27, 2020 (in thousands):
|
Employee Benefit Plans and Stock-based Compensation - Summary of Projected Benefit Obligation (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
|
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract] | ||
Service cost | $ 61 | $ 57 |
Interest cost | 9 | 20 |
Net periodic benefit cost | $ 70 | $ 77 |
Segment - Geographic Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
|||
Segment Reporting Information [Line Items] | ||||
Net Revenue | [1] | $ 78,417 | $ 80,106 | |
UNITED STATES | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenue | [1] | 34,403 | 30,115 | |
Other countries | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenue | [1] | $ 44,014 | $ 49,991 | |
|
Convertible Notes, Other Debts And Finance Leases - Debt Maturities (Details) - TVN [Member] $ in Thousands |
Mar. 27, 2020
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Finance Leases, 2020 (remaining nine months) | $ 35 |
Finance Leases, 2021 | 22 |
Finance Leases, Total | 57 |
Other debt obligations - 2020 (remaining nine months) | 6,212 |
Other debt obligations - 2021 | 5,007 |
Other debt obligations - 2022 | 4,750 |
Other debt obligations - 2023 | 147 |
Other debt obligations - thereafter | 218 |
Other debt obligations Total | $ 16,334 |
Balance Sheet Components - Accounts Receivable, Net (Details) - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
---|---|---|
Receivables [Abstract] | ||
Accounts receivable | $ 95,719 | $ 91,513 |
Less: allowances for doubtful accounts and sales returns | (2,661) | (3,013) |
Accounts Receivable, after Allowance for Credit Loss, Current | $ 93,058 | $ 88,500 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
|||
Total net revenue | [1] | $ 78,417 | $ 80,106 | |
Total cost of revenue | 41,679 | 38,257 | ||
Total gross profit | 36,738 | 41,849 | ||
Operating expenses: | ||||
Research and development | 22,123 | 21,401 | ||
Selling, general and administrative | 31,218 | 28,011 | ||
Amortization of intangibles | 770 | 788 | ||
Restructuring and related charges | 676 | 57 | ||
Total operating expenses | 54,787 | 50,257 | ||
Loss from operations | (18,049) | (8,408) | ||
Interest expense, net | (2,903) | (2,906) | ||
Other expense, net | (273) | (311) | ||
Loss before income taxes | (21,225) | (11,625) | ||
Provision for (benefit from) income taxes | 729 | (319) | ||
Net loss | $ (21,954) | $ (11,306) | ||
Net loss per share: | ||||
Basic and Diluted | $ (0.23) | $ (0.13) | ||
Shares used in per share calculation: | ||||
Basic and Diluted | 95,575 | 88,165 | ||
Appliance & Integration [Member] | ||||
Total net revenue | $ 47,752 | $ 52,365 | ||
Total cost of revenue | 26,287 | 27,054 | ||
SaaS & Service [Member] | ||||
Total net revenue | 30,665 | 27,741 | ||
Total cost of revenue | $ 15,392 | $ 11,203 | ||
|
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
||
---|---|---|---|---|
Property, Plant and Equipment [Line Items] | ||||
Property and Equipment, Gross | $ 152,166 | $ 136,131 | ||
Less: accumulated depreciation and amortization | (115,075) | (113,203) | ||
Property and Equipment, Net | 37,091 | 22,928 | ||
Machinery and Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and Equipment, Gross | 77,213 | 75,229 | ||
Capitalized Software [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and Equipment, Gross | 34,395 | 34,190 | ||
Construction in Progress [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and Equipment, Gross | [1] | 19,482 | 5,506 | |
Leasehold Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and Equipment, Gross | 15,072 | 15,170 | ||
Furniture and Fixtures [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and Equipment, Gross | 6,004 | $ 6,036 | ||
Harmonic Headquarter Lease Commencing May 2019 [Member] | Construction in Progress [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and Equipment, Gross | $ 18,200 | |||
|
Goodwill and Intangible Assets - Narratives (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 27, 2020
USD ($)
| |
Goodwill [Line Items] | |
Goodwill, Impairment Loss | $ 0.0 |
Basis of Presentation and Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 27, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) which Harmonic Inc. (“Harmonic,” or the “Company”) considers necessary to present fairly the results of operations for the interim periods covered and the consolidated financial condition of the Company at the date of the balance sheets. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (“SEC”) on March 2, 2020 (the “2019 Form 10-K”). The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2020, or any other future period. The Company’s fiscal quarters are based on 13-week periods, except for the fourth quarter, which ends on December 31. The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheet as of December 31, 2019 was derived from audited financial statements, and the unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the SEC for interim reporting. As permitted under those requirements, certain footnotes or other financial information that are normally required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company’s reported financial positions or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. If estimates or assumptions differ from actual results, subsequent periods are adjusted to reflect more current information. Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of May 4, 2020, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. Reclassifications Certain prior period balances have been reclassified to conform to the current period’s presentation. These reclassifications did not have a material impact on previously reported financial statements. Significant Accounting Policies The Company’s significant accounting policies are described in Note 2 to its audited Consolidated Financial Statements included in the 2019 Form 10-K. There have been no significant changes to these policies during the three months ended March 27, 2020 other than those disclosed in Note 2, “Recent Accounting Pronouncements”. |
Goodwill and Identified Intangible Assets - Estimated Future Amortization Expense of Purchased Intangible Assets (Detail) - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
---|---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
2020 (remaining nine months) | $ 2,293 | |
2021 | 496 | |
Total future amortization expense | 2,789 | $ 4,461 |
Cost of Revenue [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
2020 (remaining nine months) | 65 | |
2021 | 0 | |
Total future amortization expense | 65 | |
Operating Expense [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
2020 (remaining nine months) | 2,228 | |
2021 | 496 | |
Total future amortization expense | $ 2,724 |
Convertible Notes, Other Debts And Finance Lease - Narratives (Details) |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 27, 2020
USD ($)
$ / shares
|
Sep. 27, 2019
USD ($)
$ / shares
|
Dec. 31, 2019
USD ($)
day
$ / shares
|
Dec. 31, 2015
USD ($)
$ / shares
|
|||
Debt Instrument [Line Items] | ||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Financing from French government agencies related to various government incentive programs (1) | [1] | $ 16,160,000 | $ 16,566,000 | |||
Letters of Credit Outstanding, Amount | 2,700,000 | 2,700,000 | ||||
Convertible notes | 1,777,000 | 2,410,000 | ||||
TVN [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Income Taxes Receivable | $ 23,500,000 | |||||
Loans Backed By French Research And Development Tax Credit Receivables [Member] | TVN [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 0.60% | |||||
Financing from French government agencies related to various government incentive programs (1) | [1] | $ 14,700,000 | $ 15,100,000 | |||
Debt Instrument, Basis Spread on Variable Rate | 1.30% | |||||
Loans From French Government For R&D Innovation Projects [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Financing from French government agencies related to various government incentive programs (1) | [1] | $ 1,500,000 | ||||
Revolving Credit Facility [Member] | JPMORGAN CHASE BANK N.A. [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.25% | |||||
Line of Credit Facility, Current Borrowing Capacity | 0 | |||||
Letters of Credit Outstanding, Amount | 300,000 | |||||
Revolving Credit Facility [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Letters of Credit Outstanding, Amount | $ 2,200,000 | |||||
Convertible Note due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | 2.00% | ||||
Common stock, par value | $ / shares | $ 0.001 | |||||
Debt Instrument, Face Amount | $ 115,500,000 | $ 115,500,000 | $ 115,500,000 | |||
Debt Instrument, Convertible, Conversion Ratio | 115.5001 | |||||
Debt Conversion, Converted Instrument, Amount | $ 1,000 | |||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 8.66 | |||||
Carrying amount of equity component | $ 24,900,000 | |||||
Convertible Note due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | 4.00% | ||||
Debt Instrument, Face Amount | $ 45,785,000 | $ 45,785,000 | $ 128,250,000 | |||
Debt Instrument, Convertible, Conversion Ratio | 173.9978 | |||||
Debt Conversion, Converted Instrument, Amount | $ 1,000 | |||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 5.75 | |||||
Debt Instrument, Repurchase Amount | 109,600,000 | |||||
Carrying amount of equity component | $ 26,100,000 | |||||
Convertible notes | $ 1,800,000 | |||||
Convertible Note due 2020 | Stock price greater or equal 130 percent of Note Conversion Price [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Convertible, Threshold Trading Days | day | 20 | |||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | day | 30 | |||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 130.00% | |||||
Maximum [Member] | Revolving Credit Facility [Member] | JPMORGAN CHASE BANK N.A. [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Current Borrowing Capacity | $ 25,000,000 | |||||
Convertible Debt | Convertible Note due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Loss on debt extinguishment | 5,700,000 | |||||
Convertible Debt | Long-term Debt [Member] | Convertible Note due 2020 | Privately Negotiated Transactions [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Extinguishment of Debt, Amount | 82,500,000 | |||||
Convertible Debt | Additional Paid-in Capital [Member] | Convertible Note due 2020 | Privately Negotiated Transactions [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Extinguishment of Debt, Amount | $ 27,100,000 | |||||
Euribor Future [Member] | Loans Backed By French Research And Development Tax Credit Receivables [Member] | TVN [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Adjusted EURIBOR Rate, Term | 1 month | |||||
One Month LIBOR [Member] | Revolving Credit Facility [Member] | JPMORGAN CHASE BANK N.A. [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Adjusted EURIBOR Rate, Term | 1 month | |||||
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | JPMORGAN CHASE BANK N.A. [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | |||||
LIBOR for interest period of one, two or three months [Member] | Revolving Credit Facility [Member] | JPMORGAN CHASE BANK N.A. [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | |||||
Two Month LIBOR [Member] | Revolving Credit Facility [Member] | JPMORGAN CHASE BANK N.A. [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Adjusted EURIBOR Rate, Term | 2 months | |||||
Three Month LIBOR [Member] | Revolving Credit Facility [Member] | JPMORGAN CHASE BANK N.A. [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Adjusted EURIBOR Rate, Term | 3 months | |||||
|
Derivatives and Hedging Activities Asset and Liability Offset (Details) $ in Thousands |
Mar. 27, 2020
USD ($)
|
---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities, Gross Amounts of Derivatives | $ 479 |
Derivative Liabilities, Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets | 0 |
Net Amounts of Derivatives Liability Presented in the Condensed Consolidated Balance Sheets | $ 479 |
Derivatives and Hedging Activities - Additional Information (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 27, 2020
USD ($)
| |
Not Designated as Hedging Instrument [Member] | Forward Contracts [Member] | |
Derivative [Line Items] | |
Derivative, Term of Contract | 3 months |
Israel [Member] | |
Derivative [Line Items] | |
Compensating Balance, Amount | $ 1.0 |
Revenue Narratives (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-28 $ in Millions |
3 Months Ended |
---|---|
Mar. 27, 2020
USD ($)
| |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Practical Expedient, Initial Application and Transition, Nondisclosure of Transaction Price Allocation to Remaining Performance Obligation [true false] | true |
Comcast CableOS Software License Agreement [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 98.1 |
Minimum [Member] | Comcast CableOS Software License Agreement [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 years |
Maximum [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Optional Exemption, Remaining Duration | 1 year |
Maximum [Member] | Support and Maintenance Contracts [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Optional Exemption, Remaining Duration | 1 year |
Maximum [Member] | Comcast CableOS Software License Agreement [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 4 years |
Net Loss Per Share |
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Mar. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (Loss) Per Share | NET LOSS PER SHARE The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except per share amounts):
Basic net loss per share was the same as diluted net loss per share for the three months ended March 27, 2020 and March 29, 2019, as the inclusion of potential common shares outstanding would have been anti-dilutive due to the Company’s net losses for the periods presented. The following table sets forth the potential weighted common shares outstanding and the anti-dilutive weighted shares that were excluded from the computation of basic and diluted net loss per share calculations (in thousands):
(1) See Note 15, “Warrants” for additional information. The Company’s intent is to settle the principal amount of the 2020 Notes and the 2024 Notes in cash. The treasury stock method is used to calculate any potential dilutive effect of the conversion spread on diluted net income per share, if applicable.
See Note 11, “Convertible Notes, Other Debts and Finance Leases” for additional information on the 2020 Notes and the 2024 Notes. |
Basis of Presentation and Significant Accounting Policies (Policies) |
3 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 27, 2020 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company’s reported financial positions or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. If estimates or assumptions differ from actual results, subsequent periods are adjusted to reflect more current information. Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of May 4, 2020, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. Reclassifications Certain prior period balances have been reclassified to conform to the current period’s presentation. These reclassificatio |
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Reclassification | Reclassifications Certain prior period balances have been reclassified to conform to the current period’s presentation. These reclassifications did not have a material impact on previously reported financial statements. |
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Significant Accounting Policies | Significant Accounting Policies The Company’s significant accounting policies are described in Note 2 to its audited Consolidated Financial Statements included in the 2019 Form 10-K. There have been no significant changes to these policies during the three months ended March 27, 2020 other than those disclosed in Note 2, “Recent Accounting Pronouncements”. |
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Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets and certain other instruments. For trade receivables and other instruments, the Company will be required to use a new forward-looking “expected loss” model. The Company adopted this new standard in the first quarter of fiscal 2020, and the adoption did not have a material impact on its condensed consolidated financial statements. ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new ASU removes Step 2 of the goodwill impairment test and requires the assessment of fair value of individual assets and liabilities of a reporting unit to measure goodwill impairments. Goodwill impairment will then be the amount by which a reporting unit's carrying value exceeds its fair value. The Company adopted this new standard in the first quarter of fiscal 2020, and the adoption did not have an impact on its condensed consolidated financial statements. ASU 2018-13, Fair Value Measurement (Topic 820) In August 2018, the FASB issued ASU 2018-13, which removes, modifies and adds to the disclosure requirements on fair value measurements in Topic 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted this new standard in the first quarter of fiscal 2020, and the adoption did not have a material impact on its condensed consolidated financial statements. ASU 2019-08, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements—Share-Based Consideration Payable to a Customer In November 2019, the FASB issued ASU 2019-08, Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements - Share-Based Consideration Payable to a Customer, which clarifies guidance on measurement and classification of share-based payments to customers. The Company adopted this new standard in the first quarter of fiscal 2020, and the adoption did not have a material impact on its condensed consolidated financial statements. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General Subtopic 715-20 - Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, which is designed to improve the effectiveness of disclosures by removing and adding disclosures related to defined benefit plans. The new ASU is effective for the Company for fiscal years ending after December 15, 2020, and early adoption is permitted. The Company expects the impact to its disclosure to be relatively limited. In January 2020, the FASB issued ASU No. 2020-01, to clarify certain interactions between the guidance to account for equity securities, the guidance to account for investments under the equity method of accounting, and the guidance to account for derivatives and hedging. The new ASU clarifies the application of measurement alternatives and the accounting for certain forward contracts and purchased options to acquire investments. The new ASU is effective for the Company for fiscal years ending after December 15, 2021, and early adoption is permitted. The Company is currently evaluating the impact of adopting the new ASU on its consolidated financial statements. |
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Revenue | Significant Judgments. The Company has revenue arrangements that include promises to transfer multiple products and services to a customer. The Company may exercise significant judgment when determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together. The Company has revenue arrangements that include multiple performance obligations. The Company allocates the transaction price to all separate performance obligations based on the relative standalone selling prices (“SSP”) of each obligation. The Company’s best evidence for SSP is the price the Company charges for that good or service when the Company sells it separately in similar circumstances to similar customers. If goods or services are not always sold separately, the Company uses the best estimate of SSP in the allocation of the transaction price. The objective of determining the best estimate of SSP is to estimate the price at which the Company would transact a sale if the product or service were sold on a standalone basis. The Company’s process for determining the best estimate of SSP involves management’s judgment, and considers multiple factors including, but not limited to, major product groupings, geographies, gross margin objectives and pricing practices. Pricing practices taken into consideration include contractually stated prices, discounts and applicable price lists. These factors may vary over time, depending upon the unique facts and circumstances related to each deliverable. If the facts and circumstances underlying the factors considered change or should future facts and circumstances lead the Company to consider additional factors, the Company’s best estimate of SSP may also change. If the Company has not yet established a price because the good or service has not previously been sold on a standalone basis, SSP for such good and service in a contract with multiple performance obligations is determined by applying a residual approach whereby all other performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSP, using observable prices, with any residual amount of the transaction price allocated to the good or service for which the price has not yet been established. |
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Derivatives and Hedging Activities | The Company uses forward contracts to manage exposures to foreign currency exchange rates. The Company’s primary objective in holding derivative instruments is to reduce the volatility of earnings and cash flows associated with fluctuations in foreign currency exchange rates and the Company does not use derivative instruments for trading purposes. The use of derivative instruments exposes the Company to credit risk to the extent that the counterparties may be unable to meet their contractual obligations. As such, the potential risk of loss with any one counterparty is closely monitored by the Company. Derivatives Not Designated as Hedging Instruments (Balance Sheet Hedges) The Company’s balance sheet hedges consist of foreign currency forward contracts that generally mature within three months, are carried at fair value, and are used to minimize the short-term impact of foreign currency exchange rate fluctuation on cash and certain trade and inter-company receivables and payables. Changes in the fair value of these foreign currency forward contracts are recognized in “Other expense, net” in the Condensed Consolidated Statement of Operations and are largely offset by the changes in the fair value of the assets or liabilities being hedged. Offsetting of Derivative Assets and Liabilities The Company recognizes all derivative instruments on a gross basis in the Condensed Consolidated Balance Sheets. However, the arrangements with its counterparties allows for net settlement, which are designed to reduce credit risk by permitting net settlement with the same counterparty. |
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Fair Value of Financial Instruments | The authoritative accounting guidance establishes a framework for measuring fair value and requires disclosure about the fair value measurements of assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. This guidance requires the Company to classify and disclose assets and liabilities measured at fair value on a recurring basis, as well as fair value measurements of assets and liabilities measured on a nonrecurring basis in periods subsequent to initial measurement, in a three-tier fair value hierarchy as described below. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The guidance describes three levels of inputs that may be used to measure fair value:
The Company uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The fair value of the Company’s convertible notes is influenced by interest rates, the Company’s stock price and stock market volatility. |
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Goodwill and Intangible Assets, Goodwill | Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. Goodwill is tested for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company determined that there was no impairment identified as of March 27, 2020. |
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Share-based Compensation Expense | The expected term of the stock purchase rights under the ESPP represents the period of time from the beginning of the offering period to the purchase date. The Company uses its historical volatility for a period equivalent to the expected term of the options to estimate the expected volatility. The risk-free interest rate assumption is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term. The Company has not paid and does not plan to pay any cash dividends in the foreseeable future. The Company estimates the fair value of employee stock options and stock purchase rights under the ESPP using a Black-Scholes option valuation model. The value of the stock purchase rights under the ESPP consists of: (1) the 15% discount on the purchase of the stock; (2) 85% of the fair value of the call option; and (3) 15% of the fair value of the put option. The call option and put option were valued using the Black-Scholes option pricing model. |
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Segment Information | Operating segments are defined as components of an enterprise that engage in business activities for which separate financial information is available and evaluated by the Company’s Chief Operating Decision Maker (the “CODM”), which for the Company is its Chief Executive Officer, in deciding how to allocate resources and assess performance. Based on our internal reporting structure, the Company consists of two operating segments: Video and Cable Access. The operating segments were determined based on the nature of the products offered. Unallocated Corporate Expenses Together with amortization of intangibles and stock-based compensation, the Company does not allocate restructuring and related charges to the operating loss for each segment because management does not include this information in the measurement of the performance of the operating segments. A measure of assets by segment is not applicable as segment assets are not included in the discrete financial information provided to the CODM. |
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Warranties and Indemnification | Harmonic is obligated to indemnify its officers and the members of its Board of Directors pursuant to its bylaws and contractual indemnity agreements. Harmonic also indemnifies some of its suppliers and most of its customers for specified intellectual property matters pursuant to certain contractual arrangements, subject to certain limitations. The scope of these indemnities varies, but, in some instances, includes indemnification for damages and expenses (including reasonable attorneys’ fees). The Company accrues for estimated warranty costs at the time of product shipment. Management periodically reviews the estimated fair value of its warranty liability and records adjustments based on the terms of warranties provided to customers, historical and anticipated warranty claims experience, and estimates of the timing and cost of warranty claims. |
Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Assets and Liabilities Measured at Fair Value Based on Three-Tier Fair Value Hierarchy | The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):
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Goodwill and Identified Intangible Assets - Amortization Expense for Identifiable Purchased Intangible Assets (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 27, 2020 |
Mar. 29, 2019 |
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Acquired Finite-Lived Intangible Assets [Line Items] | ||
Included in cost of revenue | $ 885 | $ 1,295 |
Amortization of intangibles | 770 | 788 |
Total amortization expense | $ 1,655 | $ 2,083 |
Restructuring and Related Charges Schedule of Restructuring Cost by Types (Details) $ in Thousands |
3 Months Ended |
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Mar. 27, 2020
USD ($)
| |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | $ 4,850 |
Charges for current period | 603 |
Cash payments | (2,241) |
Others | (126) |
Restructuring Reserve | 3,086 |
Excess facilities | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | 720 |
Cash payments | (463) |
Others | 0 |
Restructuring Reserve | 257 |
Severance and benefits | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | 3,294 |
Charges for current period | 563 |
Cash payments | (1,252) |
Others | (80) |
Restructuring Reserve | 2,525 |
French VDP | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | 806 |
Charges for current period | 40 |
Cash payments | (526) |
Others | (46) |
Restructuring Reserve | 274 |
Others | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | 30 |
Charges for current period | 0 |
Cash payments | 0 |
Restructuring Reserve | $ 30 |
Derivative and Hedging Activities gain losses in Statement of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 27, 2020 |
Mar. 29, 2019 |
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Other Nonoperating Income (Expense) [Member] | Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Losses recognized in income | $ (912) | $ (565) |
Revenue - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 27, 2020 |
Mar. 29, 2019 |
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Revenue from Contract with Customer [Abstract] | ||
Revenue Recognized Included in Beginning Deferred Revenue | $ 18.0 | $ 21.2 |
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value Based on Three-Tier Fair Value Hierarchy (Detail) - Fair Value, Recurring [Member] - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | $ 43 | |
Total liabilities measured and recorded at fair value | $ 479 | 112 |
Foreign exchange forward contracts [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 43 | |
Foreign exchange forward contracts [Member] | Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 479 | 112 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 0 | |
Total liabilities measured and recorded at fair value | 0 | 0 |
Level 1 [Member] | Foreign exchange forward contracts [Member] | Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 0 | |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 43 | |
Total liabilities measured and recorded at fair value | 479 | 112 |
Level 2 [Member] | Foreign exchange forward contracts [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 43 | |
Level 2 [Member] | Foreign exchange forward contracts [Member] | Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 479 | 112 |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 0 | |
Total liabilities measured and recorded at fair value | $ 0 | 0 |
Level 3 [Member] | Foreign exchange forward contracts [Member] | Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | $ 0 |
Derivative and Hedging Activities (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments gain and losses by Statement of Operations locations | Losses on the non-designated derivative instruments recognized during the periods presented were as follows (in thousands):
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Schedule of Notional Amounts of Outstanding Derivative Positions | The U.S. dollar equivalents of all outstanding notional amounts of foreign currency forward contracts are summarized as follows (in thousands):
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Schedule of Derivatives Instruments Balance Sheet Location | The locations and fair value amounts of the Company’s derivative instruments reported in its Condensed Consolidated Balance Sheets are as follows (in thousands):
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Changes in fair values of non-designated foreign currency forward contracts | As of March 27, 2020, information related to the offsetting arrangements was as follows (in thousands):
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES The Company reported the following operating results for the periods presented (in thousands):
The Company operates in multiple jurisdictions and its profits are taxed pursuant to the tax laws of these jurisdictions. The Company’s effective income tax rate may be affected by changes in, or interpretations of tax laws and tax agreements in any given jurisdiction, utilization of net operating loss and tax credit carry forwards, changes in geographical mix of income and expense, and changes in management’s assessment of matters such as the ability to realize deferred tax assets. The Company’s effective tax rate varies from year to year primarily due to the absence of several one-time, discrete items that benefited or decremented the tax rates in the previous years. The Company's effective income tax rate of (3.4)% for the three months ended March 27, 2020 was different from the U.S. federal statutory rate of 21%, primarily due to the full valuation allowance against U.S. federal, California and other states deferred tax assets, foreign withholding taxes and income taxes on earnings from operations in foreign tax jurisdictions. The Company's effective income tax rate of 2.7% for the three months ended March 29, 2019 was different from the U.S. federal statutory rate of 21%, primarily due to geographical mix of income and losses, full valuation allowance against U.S. federal, California and other states deferred tax assets, foreign withholding taxes and income taxes on earnings from operations in foreign tax jurisdictions. In addition, during the three months ended March 29, 2019, the Company recorded a one-time benefit of approximately $0.8 million due to a valuation allowance release for one of its foreign subsidiaries. This release of valuation allowance was due to changes in forecasted taxable income resulting from the Company receiving a favorable tax ruling during the first quarter of 2019. The Company files U.S. federal and state, and foreign income tax returns in jurisdictions with varying statutes of limitations during which such tax returns may be audited and adjusted by the relevant tax authorities. The 2016 through 2019 tax years generally remain subject to examination by U.S. federal and most state tax authorities. In significant foreign jurisdictions, the 2014 through 2019 tax years generally remain subject to examination by their respective tax authorities. If, upon the conclusion of an audit, the ultimate determination of taxes owed in the jurisdictions under audit is for an amount in excess of the tax provision the Company has recorded in the applicable period, the Company’s overall tax expense, effective tax rate, operating results and cash flow could be materially and adversely impacted in the period of adjustment. On July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. v. Commissioner, 145 T.C. No.3 (2015) related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. A final decision was entered by the U.S. Tax Court on December 1, 2015 (the “2015 Decision”). On February 19, 2016, the U.S. Internal Revenue Service filed a notice of appeal in Altera Corp. v. Commissioner, 145 T.C. No. 3 (2015), to the Ninth Circuit Court of Appeals. The Ninth Circuit was to decide whether a regulation that mandates that stock-based compensation costs related to the intangible development activity of a qualified cost sharing arrangement (a “QCSA”) must be included in the joint cost pool of the QCSA (the “all costs rule”) is consistent with the arm’s length standard as set forth in Section 482 of the Internal Revenue Code. On June 7, 2019, the Ninth Circuit overturned the earlier Tax Court decision and ruled to include share-based compensation in the cost sharing pool. On July 22, 2019, Altera Corp. filed a petition for an en banc rehearing before the U.S. Court of Appeals for the Ninth Circuit, which was denied on November 12, 2019. Altera filed a petition for a writ of certiorari on February 10, 2020 asking the Supreme Court to review the Ninth Circuit Court of Appeals' decision, but it has not yet been granted. The Company has not changed its historical position of including share-based compensation in the cost base consistent with the Ninth Circuit’s ruling. As of March 27, 2020, the total amount of gross unrecognized tax benefits, including interest and penalties, was approximately $17.0 million, of which $15.7 million would affect the Company’s effective tax rate if the benefits are eventually recognized, subject to valuation allowance considerations. The Company recognizes interest and penalties related to unrecognized tax positions in income tax expense. The net interest and penalty charges recorded as of March 27, 2020 were not material On March 27, 2020, the “Coronavirus Aid, Relief, and Economic Security Act” was signed into law. The new legislation includes a number of income tax provisions applicable to individuals and businesses. The Company is required to recognize the effect of the tax law changes in the period of enactment for the three months ended March 27, 2020, such as the reclassification of the long term receivable of $0.5 million for the alternative minimum tax credit refund to short term receivable. |
Commitments and Contingencies |
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Mar. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Warranties The Company accrues for estimated warranty costs at the time of product shipment. Management periodically reviews the estimated fair value of its warranty liability and records adjustments based on the terms of warranties provided to customers, historical and anticipated warranty claims experience, and estimates of the timing and cost of warranty claims. Activity for the Company’s warranty accrual, which is included in “Accrued and other current liabilities”, is summarized below (in thousands):
Purchase Obligations The Company relies on a limited number of contract manufacturers and suppliers to provide manufacturing services for a substantial majority of its products. The Company had approximately $55.3 million of non-cancelable commitments to purchase inventories and other commitments as of March 27, 2020. Standby Letters of Credit and Guarantees As of March 27, 2020 and December 31, 2019, the Company has outstanding bank guarantees and standby letters of credit in aggregate of $2.7 million, consisting of building leases and performance bonds issued to customers. As of March 27, 2020 there were $0.3 million of outstanding letters of credit issued under the Credit Agreement. There were no revolving borrowings under the Credit Agreement as of March 27, 2020. During 2017, one of the Company’s subsidiaries entered into a $2.0 million credit facility with a foreign bank for the purpose of issuing performance guarantees. The credit facility is secured by a $2.2 million guarantee issued by the Company. There were no amounts outstanding under this credit facility as of March 27, 2020 and December 31, 2019, respectively. Indemnification Harmonic is obligated to indemnify its officers and the members of its Board of Directors pursuant to its bylaws and contractual indemnity agreements. Harmonic also indemnifies some of its suppliers and most of its customers for specified intellectual property matters pursuant to certain contractual arrangements, subject to certain limitations. The scope of these indemnities varies, but, in some instances, includes indemnification for damages and expenses (including reasonable attorneys’ fees). There have been no amounts accrued in respect of these indemnification provisions through March 27, 2020. Legal proceedings From time to time, the Company is involved in lawsuits as well as subject to various legal proceedings, claims, threats of litigation, and investigations in the ordinary course of business, including claims of alleged infringement of third-party patents and other intellectual property rights, commercial, employment, and other matters. The Company assesses potential liabilities in connection with each lawsuit and threatened lawsuits and accrues an estimated loss for these loss contingencies if both of the following conditions are met: information available prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. While certain matters to which the Company is a party specify the damages claimed, such claims may not represent reasonably probable losses. Given the inherent uncertainties of litigation, the ultimate outcome of these matters cannot be predicted at this time, nor can the amount of possible loss or range of loss, if any, be reasonably estimated. |
Income Taxes (Tables) |
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Mar. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of income before income tax | The Company reported the following operating results for the periods presented (in thousands):
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Goodwill and Identified Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the three months ended March 27, 2020 were as follows (in thousands):
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Summary of Goodwill and Identified Intangible Assets | The following is a summary of intangible assets, net (in thousands):
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Amortization Expense for Identifiable Purchased Intangible Assets | Amortization expense for the identifiable purchased intangible assets for the three months ended March 27, 2020 and March 29, 2019 was allocated as follows (in thousands):
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Estimated Future Amortization Expense of Purchased Intangible Assets | The estimated future amortization expense of purchased intangible assets with definite lives is as follows (in thousands):
|
Revenue Contract Assets and Deferred Revenue (Details) - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
---|---|---|
Prepaid Expenses and Other Current Assets [Member] | ||
Capitalized Contract Cost [Line Items] | ||
Contract assets | $ 5,806 | $ 13,969 |
Other Noncurrent Liabilities [Member] | ||
Capitalized Contract Cost [Line Items] | ||
Deferred revenue | $ 55,854 | $ 43,450 |
Investments in Equity Securities |
3 Months Ended |
---|---|
Mar. 27, 2020 | |
Investments, All Other Investments [Abstract] | |
Investments in Equity Securities | INVESTMENTS IN EQUITY SECURITIES EDC In 2014, the Company acquired an 18.4% interest in Encoding.com, Inc. (“EDC”), a privately held video transcoding service company headquartered in San Francisco, California, for $3.5 million by purchasing EDC’s Series B preferred stock. EDC is considered a VIE but the Company determined that it is not the primary beneficiary of EDC. As a result, EDC is measured at its cost minus impairment, if any. The Company determined that there were no indicators at March 27, 2020 that the EDC investment was impaired. The Company’s maximum exposure to loss from the EDC’s investment at March 27, 2020 was limited to its investment cost of $3.6 million, including $0.1 million of transaction costs. |
Goodwill and Identified Intangible Assets |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Identified Intangible Assets | GOODWILL AND IDENTIFIED INTANGIBLE ASSETS Goodwill Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. Goodwill is tested for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company determined that there was no impairment identified as of March 27, 2020. The changes in the carrying amount of goodwill for the three months ended March 27, 2020 were as follows (in thousands):
Intangible Assets, Net The following is a summary of intangible assets, net (in thousands):
Amortization expense for the identifiable purchased intangible assets for the three months ended March 27, 2020 and March 29, 2019 was allocated as follows (in thousands):
The estimated future amortization expense of purchased intangible assets with definite lives is as follows (in thousands):
|
Employee Benefit Plans and Stock-based compensation - Stock-based Compensation in Opex (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | $ 6,259 | $ 2,113 |
Cost of Revenue [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | 770 | 225 |
Research and Development Expense [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | 1,738 | 616 |
Selling, General and Administrative Expenses [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | 3,751 | 1,272 |
Operating Expense [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | $ 5,489 | $ 1,888 |
Segment Information Segment - Market Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
|||
Revenue from External Customer [Line Items] | ||||
Net Revenue | [1] | $ 78,417 | $ 80,106 | |
Service Provider [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net Revenue | 43,759 | 44,212 | ||
Broadcast and Media [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net Revenue | $ 34,658 | $ 35,894 | ||
|
Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
Dec. 31, 2019 |
Dec. 20, 2019 |
Dec. 17, 2019 |
Sep. 26, 2016 |
|
Class of Warrant or Right [Line Items] | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 4.76 | |||||
Reduction to net revenues - amortization of the Warrant | $ 434 | $ 25 | ||||
Comcast Warrants Exercise in its Entirety [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Right to purchase shares vested | 3,217,547 | |||||
Comcast Warrants Exercise Shares Delivered [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 804,387 | |||||
Comcast Warrants Exercised Shares Remaining to be Issued [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Right to purchase shares vested | 2,413,160 | |||||
Maximum [Member] | Comcast Warrant Expires September 26, 2023 [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 7,816,162 | |||||
Revenue from Contract with Customer Benchmark [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Reduction to net revenues - amortization of the Warrant | $ 400 | $ 25 |
Employee Benefit Plans and Stock-based Compensation - Additional Information (Detail) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
Dec. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Payment Arrangement, Exercise of Option, Tax Benefit | $ 0 | $ 0 | |
Defined Benefit Plan, Benefit Obligation | 5,200,000 | $ 5,300,000 | |
Liability, Defined Benefit Pension Plan, Current | 100,000 | ||
Liability, Defined Benefit Pension Plan, Noncurrent | $ 5,100,000 | ||
Discretionary contributions of plan | 25.00% | ||
Percent of employees' gross pay eligible for matching | 4.00% | ||
Maximum contribution amount per participant | $ 1,000 | ||
Contributions in period | 109,000 | 122,000 | |
Dividend, Share-based Payment Arrangement, Cash | 0 | ||
Total stock-based compensation | $ 6,259,000 | $ 2,113,000 | |
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common Stock, Capital Shares Reserved for Future Issuance | 800,000 | ||
Discount Percentage On Purchase Of Stock | 15.00% | ||
Share-based Payment Arrangement, Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common Stock, Capital Shares Reserved for Future Issuance | 3,700,000 | ||
Grants in Period, Number of Shares | 0 | ||
Performance-Based RSU Awards to Settle Incentive Bonus Payments [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 472,247 | 0 | |
Total stock-based compensation | $ 3,000,000 | ||
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 67,910 | ||
Total stock-based compensation | $ 400,000 | ||
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 800,000 | ||
PerformanceBased RSU Awards 2019 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 40,000 | ||
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 400,000 | ||
Market-based awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 182,830 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Awards, Grants in Period, Fair Value | $ 1,100,000 | ||
Total stock-based compensation | 100,000 | ||
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 1,800,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 0 | ||
Market Based Award 2019 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 700,000 | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 18,700,000 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 2 months 1 day | ||
TVN [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Payment for Pension and Other Postretirement Benefits | $ 0 | ||
Call Option [Member] | Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of fair market value of Common Stock to purchase shares | 85.00% | ||
Put Option [Member] | Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of fair market value of Common Stock to purchase shares | 15.00% |
Balance Sheet Components - Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Operating lease liability (long-term) | $ 25,326 | $ 25,766 |
Deferred revenue (long-term) | 7,135 | 6,333 |
Others | 8,927 | 9,155 |
Other Liabilities, Noncurrent | $ 41,388 | $ 41,254 |
Recent Accounting Pronouncements |
3 Months Ended |
---|---|
Mar. 27, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets and certain other instruments. For trade receivables and other instruments, the Company will be required to use a new forward-looking “expected loss” model. The Company adopted this new standard in the first quarter of fiscal 2020, and the adoption did not have a material impact on its condensed consolidated financial statements. ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new ASU removes Step 2 of the goodwill impairment test and requires the assessment of fair value of individual assets and liabilities of a reporting unit to measure goodwill impairments. Goodwill impairment will then be the amount by which a reporting unit's carrying value exceeds its fair value. The Company adopted this new standard in the first quarter of fiscal 2020, and the adoption did not have an impact on its condensed consolidated financial statements. ASU 2018-13, Fair Value Measurement (Topic 820) In August 2018, the FASB issued ASU 2018-13, which removes, modifies and adds to the disclosure requirements on fair value measurements in Topic 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted this new standard in the first quarter of fiscal 2020, and the adoption did not have a material impact on its condensed consolidated financial statements. ASU 2019-08, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements—Share-Based Consideration Payable to a Customer In November 2019, the FASB issued ASU 2019-08, Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements - Share-Based Consideration Payable to a Customer, which clarifies guidance on measurement and classification of share-based payments to customers. The Company adopted this new standard in the first quarter of fiscal 2020, and the adoption did not have a material impact on its condensed consolidated financial statements. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General Subtopic 715-20 - Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, which is designed to improve the effectiveness of disclosures by removing and adding disclosures related to defined benefit plans. The new ASU is effective for the Company for fiscal years ending after December 15, 2020, and early adoption is permitted. The Company expects the impact to its disclosure to be relatively limited. In January 2020, the FASB issued ASU No. 2020-01, to clarify certain interactions between the guidance to account for equity securities, the guidance to account for investments under the equity method of accounting, and the guidance to account for derivatives and hedging. The new ASU clarifies the application of measurement alternatives and the accounting for certain forward contracts and purchased options to acquire investments. The new ASU is effective for the Company for fiscal years ending after December 15, 2021, and early adoption is permitted. The Company is currently evaluating the impact of adopting the new ASU on its consolidated financial statements. |
Fair Value Measurements - Narratives (Details) - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
Sep. 27, 2019 |
Dec. 31, 2015 |
---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other Long-term Debt | $ 16,391 | $ 17,224 | ||
Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Convertible Debt, Fair Value Disclosures | 114,600 | 131,900 | ||
Other Long-term Debt | 16,400 | 17,200 | ||
Fair Value, Nonrecurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured and recorded at fair value | 0 | |||
Total liabilities measured and recorded at fair value | 0 | |||
TVN [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Postemployment Benefits Liability | $ 300 | 800 | ||
Convertible Note due 2020 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | 4.00% | ||
Convertible Note due 2020 | Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Convertible Debt, Fair Value Disclosures | $ 53,800 | $ 66,800 | ||
Convertible Note due 2024 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | 2.00% |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Apr. 27, 2020 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 27, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | HARMONIC INC | |
Entity Central Index Key | 0000851310 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 96,579,495 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
|
Net loss | $ (21,954) | $ (11,306) |
Other comprehensive income (loss) before tax: | ||
Losses reclassified into earnings | 0 | 157 |
Change in foreign currency translation adjustments | (3,119) | (1,300) |
Other comprehensive loss before tax | (3,119) | (1,143) |
Provision for income taxes | 156 | 106 |
Other comprehensive loss, net of tax | (3,275) | (1,249) |
Total comprehensive loss | $ (25,229) | $ (12,555) |
Balance Sheet Components Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Dec. 31, 2019 |
|
French R&D tax credits receivable, noncurrent | $ 16,303 | $ 15,899 |
TVN [Member] | Research Tax Credit Carryforward [Member] | ||
The number of years R&D tax credits can be used to offset against income tax payable after incurred | 4 years | |
Other Noncurrent Assets [Member] | TVN [Member] | Research Tax Credit Carryforward [Member] | ||
French R&D tax credits receivable, noncurrent | $ 23,500 |
Derivatives and Hedging Activities Assets Liabilities Balance Sheet Location (Details) - Foreign Exchange Contract [Member] - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | $ 0 | $ 43 |
Derivative Liability, Current | 479 | 112 |
Not Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | 0 | 43 |
Not Designated as Hedging Instrument [Member] | Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Current | $ 479 | $ 112 |
Investments in Equity Securities (Details) - Variable Interest Entity, Not Primary Beneficiary [Member] - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Oct. 22, 2014 |
|
EDC [Member] | ||
Schedule of Cost-method Investments [Line Items] (Deprecated 2018-01-31) | ||
Cost Method Investments Original Cost | $ 3.5 | |
Cost-method Investments, Other than Temporary Impairment | $ 0.0 | |
Maximum Exposure to Loss from Investment | 3.6 | |
Variable Interest Entity, Transaction Costs, Amount | $ 0.1 | |
EDC [Member] | ||
Schedule of Cost-method Investments [Line Items] (Deprecated 2018-01-31) | ||
Noncontrolling Interest, Ownership Percentage by Parent | 18.40% |
Goodwill and Identified Intangible Assets - Changes in Carrying Amount of Goodwill (Detail) $ in Thousands |
3 Months Ended |
---|---|
Mar. 27, 2020
USD ($)
| |
Goodwill [Line Items] | |
Balance at beginning of period | $ 239,780 |
Foreign currency translation adjustment, net | (1,166) |
Balance at end of period | 238,614 |
Video [Member] | |
Goodwill [Line Items] | |
Balance at beginning of period | 178,982 |
Foreign currency translation adjustment, net | (1,110) |
Balance at end of period | 177,872 |
Cable Access [Member] | |
Goodwill [Line Items] | |
Balance at beginning of period | 60,798 |
Foreign currency translation adjustment, net | (56) |
Balance at end of period | $ 60,742 |
Restructuring and Related Charges Restructuring and Related Charges, COS & OPEX (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 27, 2020 |
Mar. 29, 2019 |
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Restructuring and Related Activities [Abstract] | ||
Cost of Revenue - restructuring adjustment | $ (73) | |
Cost of revenue - restructuring and related charges | $ 301 | |
Operating expenses - Restructuring and related charges | 676 | 57 |
Restructuring Charges | $ 603 | $ 358 |
Convertible Notes, Other Debts And Finance Leases - 2024 Convertible Notes Roll Forward (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
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Mar. 27, 2020 |
Dec. 31, 2019 |
Sep. 27, 2019 |
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Debt Instrument [Line Items] | |||
Carrying amount | $ 89,832 | $ 88,629 | |
Convertible Note due 2024 | |||
Debt Instrument [Line Items] | |||
Principal amount | 115,500 | 115,500 | $ 115,500 |
Less: Debt discount, net of amortization | (22,594) | (23,652) | |
Less: Debt issuance costs, net of amortization | (3,074) | (3,219) | |
Carrying amount | $ 89,832 | $ 88,629 | |
Remaining amortization period (years) | 4 years 4 months 24 days | 4 years 8 months 12 days | |
Effective interest rate on liability component | 7.95% | 7.95% |
Warrants |
3 Months Ended |
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Mar. 27, 2020 | |
Equity [Abstract] | |
Warrants Disclosure | WARRANTS On September 26, 2016, the Company granted a warrant to purchase shares of common stock (the “Warrant”) to Comcast pursuant to which Comcast may, subject to certain vesting provisions, purchase up to 7,816,162 shares of the Company’s common stock subject to adjustment in accordance with the terms of the Warrant, for a per share exercise price of $4.76. The Warrant shares were fully vested and exercisable as of July 1, 2019. On December 17, 2019, Comcast exercised the Warrant in its entirety, resulting in a net issuance of 3,217,547 shares. The Company delivered 804,387 shares to Comcast on December 20, 2019, with the remaining 2,413,160 shares delivered on January 10, 2020. During the three months ended March 27, 2020 and March 29, 2019, the Company recorded $0.4 million and $25 thousand, respectively, as a reduction to net revenues in connection with amortization of the Warrant. |
Revenue (Tables) |
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Contract assets and Deferred Revenue | Contract assets and deferred revenue consisted of the following (in thousands):
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Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | REVENUE The Company’s principal sources of revenue are from the sale of hardware, software, hardware and software maintenance contracts, and end-to-end solutions, encompassing design, manufacture, test, integration and installation of products. The Company also derives recurring revenue from subscriptions, which are comprised of subscription fees from customers utilizing the Company’s cloud-based video processing solutions. The Company’s revenue is classified into two categories in the Condensed Consolidated Statement of Operations, which are “Appliance and integration” and “SaaS and service.” The “Appliance and integration” revenue category includes hardware, licenses and professional services and is reflective of non-recurring revenue, while the “SaaS and service” category includes usage fees for the Company’s SaaS platform and support revenue stream from the Company’s appliance-based customers and reflects the Company’s recurring revenue stream. Significant Judgments. The Company has revenue arrangements that include promises to transfer multiple products and services to a customer. The Company may exercise significant judgment when determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together. The Company has revenue arrangements that include multiple performance obligations. The Company allocates the transaction price to all separate performance obligations based on the relative standalone selling prices (“SSP”) of each obligation. The Company’s best evidence for SSP is the price the Company charges for that good or service when the Company sells it separately in similar circumstances to similar customers. If goods or services are not always sold separately, the Company uses the best estimate of SSP in the allocation of the transaction price. The objective of determining the best estimate of SSP is to estimate the price at which the Company would transact a sale if the product or service were sold on a standalone basis. The Company’s process for determining the best estimate of SSP involves management’s judgment, and considers multiple factors including, but not limited to, major product groupings, geographies, gross margin objectives and pricing practices. Pricing practices taken into consideration include contractually stated prices, discounts and applicable price lists. These factors may vary over time, depending upon the unique facts and circumstances related to each deliverable. If the facts and circumstances underlying the factors considered change or should future facts and circumstances lead the Company to consider additional factors, the Company’s best estimate of SSP may also change. If the Company has not yet established a price because the good or service has not previously been sold on a standalone basis, SSP for such good and service in a contract with multiple performance obligations is determined by applying a residual approach whereby all other performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSP, using observable prices, with any residual amount of the transaction price allocated to the good or service for which the price has not yet been established. Contract Balances. Deferred revenue represents the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. The Company’s payment terms vary by the type and location of its customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer. Contract assets exist when the Company has satisfied a performance obligation but does not have an unconditional right to consideration (e.g., because the entity first must satisfy another performance obligation in the contract before it is entitled to invoice the customer). Contract assets and deferred revenue consisted of the following (in thousands):
Contract assets and Deferred revenue (long-term) are reported as components of “Prepaid expenses and other current assets” and “Other non-current liabilities”, respectively, on the Condensed Consolidated Balance Sheets. See Note 8, “Balance Sheet Components” for additional information. During the three months ended March 27, 2020 and March 29, 2019, the Company recognized revenue of $18.0 million and $21.2 million, respectively, that was included in the deferred revenue balance at the beginning of each fiscal year. Practical Expedients and Exemptions. The Company elected the practical expedient under Topic 606 to not disclose the transaction price allocated to remaining performance obligations, since the majority of the Company’s arrangements have original expected durations of one year or less, or the invoicing corresponds to the value of the Company’s performance completed to date. These performance obligations primarily relate to the Company’s support and maintenance contracts which have a duration of one year or less and subscriptions services for which invoicing corresponds to the value of the Company’s performance completed to date. In July 2019, Comcast elected enterprise license pricing for the Company’s CableOS software under certain existing commercial agreements between the Company and Comcast (the “CableOS software license agreement”), which also includes maintenance and support services, and material rights. As of March 27, 2020, the aggregate amount of the transaction price under this agreement allocated to the remaining performance obligations is $98.1 million, and the Company will recognize this revenue as the related performance obligations are delivered over the next three years to four years. See Note 16, “Segment Information” for disaggregated revenue information. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS The authoritative accounting guidance establishes a framework for measuring fair value and requires disclosure about the fair value measurements of assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. This guidance requires the Company to classify and disclose assets and liabilities measured at fair value on a recurring basis, as well as fair value measurements of assets and liabilities measured on a nonrecurring basis in periods subsequent to initial measurement, in a three-tier fair value hierarchy as described below. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The guidance describes three levels of inputs that may be used to measure fair value:
The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):
The Company’s liability for the acquired employee voluntary departure plan in France (the “French VDP”) was $0.3 million and $0.8 million as of March 27, 2020 and December 31, 2019, respectively. This amount is not included in the table above because its fair value at inception, based on Level 3 inputs, was determined during the fourth quarter of fiscal 2016. Subsequently there is no recurring fair value remeasurement for this liability based on the applicable accounting guidance. The carrying value of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued and other current liabilities, approximate fair value due to their short maturities. The Company uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The fair value of the Company’s convertible notes is influenced by interest rates, the Company’s stock price and stock market volatility. The fair value of the Company’s 4.00% Convertible Senior Notes due 2020 (the “2020 Notes”) was approximately $53.8 million and $66.8 million as of March 27, 2020 and December 31, 2019, respectively. The fair value of Company’s 2.00% Convertible Senior Notes due 2024 (the “2024 Notes” and, together with the 2020 Notes, the “Notes”) was approximately $114.6 million and $131.9 million as of March 27, 2020 and December 31, 2019, respectively. The Notes are classified as Level 2 valuations. The Company’s other debts assumed from the Thomson Video Networks (“TVN”) acquisition are classified within Level 2 because these borrowings are not actively traded and the majority of them have a variable interest rate structure based upon market rates currently available to the Company for debt with similar terms and maturities, therefore, the carrying value of these debts approximate its fair value. The other debts, excluding finance leases, outstanding as of March 27, 2020 and December 31, 2019 were in the aggregate of $16.4 million and $17.2 million, respectively. (See Note 11, “Convertible Notes, Other debts and Finance Leases” for additional information). During the three months ended March 27, 2020, there were no nonrecurring fair value measurements of assets and liabilities subsequent to initial recognition. |
Convertible Notes, Other Debts And Finance Lease |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Notes, Other Debts And Capital Leases | CONVERTIBLE NOTES, OTHER DEBTS AND FINANCE LEASES 2.00% Convertible Senior Notes due 2024 In September 2019, the Company issued $115.5 million of the 2024 Notes pursuant to an indenture (the “2024 Notes Indenture”), dated September 13, 2019, by and between the Company and U.S. Bank National Association, as trustee. The 2024 Notes bear interest at a rate of 2.00% per year, payable semiannually on March 1 and September 1 of each year. The 2024 Notes will mature on September 1, 2024, unless earlier repurchased by the Company, redeemed by the Company or converted pursuant to their terms. The 2024 Notes are convertible into cash, shares of the Company’s common stock, par value $0.001 (“Common Stock”), or a combination thereof, at the Company’s election, at an initial conversion rate of 115.5001 shares of Common Stock per $1,000 principal amount of 2024 Notes (which is equivalent to an initial conversion price of approximately $8.66 per share). The conversion rate, and thus the effective conversion price, may be adjusted under certain circumstances, including in connection with conversions made following certain fundamental changes or a notice of redemption and under other circumstances, in each case, as set forth in the 2024 Notes Indenture. The 2024 Notes will be convertible at certain times and upon the occurrence of certain events in the future, in each case, specified in the 2024 Notes Indenture. Further, on or after June 1, 2024, until the close of business on the scheduled trading day immediately preceding the maturity date, holders of the 2024 Notes may convert all or a portion of their 2024 Notes regardless of these conditions. In accordance with the accounting guidance on embedded conversion features, the conversion feature associated with the 2024 Notes was valued at $24.9 million and bifurcated from the host debt instrument and recorded in “Additional paid-in capital”. The resulting debt discount on the 2024 Notes is being amortized to interest expense at the effective interest rate over the contractual term of the 2024 Notes. The following table presents the components of the 2024 Notes as of March 27, 2020 and December 31, 2019 (in thousands, except for years and percentages):
4.00% Convertible Senior Notes due 2020 In December 2015, the Company issued $128.25 million in aggregate principal amount of the 2020 Notes pursuant to an indenture (the “2020 Notes Indenture”), dated December 14, 2015, by and between the Company and U.S. Bank National Association, as trustee. The 2020 Notes bear interest at a rate of 4.00% per year, payable in cash on June 1 and December 1 of each year and the 2020 Notes will mature on December 1, 2020 unless earlier repurchased by the Company, redeemed by the Company or converted pursuant to their terms. In September 2019, the Company used approximately $109.6 million of the net proceeds from the issuance of the 2024 Notes to repurchase $82.5 million aggregate principal of the 2020 Notes in privately negotiated transactions. The repurchase of the 2020 Notes was accounted for as a debt extinguishment, and the consideration transferred was allocated between the equity and liability components by determining the fair value of the conversion option immediately prior to the debt extinguishment and allocating that portion of the repurchase price to additional paid-in capital for $27.1 million, with the residual repurchase price allocated to the liability component, respectively. The partial repurchase of the 2020 Notes resulted in the recognition of a $5.7 million loss on debt extinguishment for the year ended December 31, 2019. The 2020 Notes are convertible into cash, shares of the Common Stock, or a combination thereof, at the Company’s election, at an initial conversion rate of 173.9978 shares of Common Stock per $1,000 principal amount of 2020 Notes (which is equivalent to an initial conversion price of approximately $5.75 per share). The conversion rate, and thus the effective conversion price, may be adjusted under certain circumstances, including in connection with conversions made following certain fundamental changes and under other circumstances, in each case, as set forth in the 2020 Notes Indenture. The 2020 Notes will be convertible at certain times and upon the occurrence of certain events in the future, in each case, specified in the 2020 Notes Indenture. Further, on or after September 1, 2020, until the close of business on the scheduled trading day immediately preceding the maturity date, holders of the 2020 Notes may convert all or a portion of their 2020 Notes regardless of these conditions. In accordance with the accounting guidance on embedded conversion features, the conversion feature associated with the 2020 Notes was initially valued at $26.1 million and bifurcated from the host debt instrument and recorded in “Additional paid-in capital”. The resulting debt discount on the 2020 Notes is being amortized to interest expense at the effective interest rate over the contractual terms of the 2020 Notes. The following table presents the components of the 2020 Notes as of March 27, 2020 and December 31, 2019 (in thousands, except for years and percentages):
The 2020 Notes became convertible as of December 31, 2019, as the last reported sale price of the Common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter was greater than or equal to 130% of the conversion price of the 2020 Notes on each applicable trading day. As a result of the 2020 Notes becoming currently convertible for cash up to the principal amount of $45.8 million, the Company reclassified the unamortized debt discount for the 2020 Notes in the amount of $1.8 million from “Additional paid-in-capital” to convertible debt in the mezzanine equity section in the Condensed Consolidated Balance Sheet as of March 27, 2020. The following table presents interest expense recognized for the 2020 Notes and the 2024 Notes (in thousands):
Other Debts and Finance Leases The Company has a variety of debt and credit facilities in France to satisfy the financing requirements of the operations of its French subsidiary. These arrangements are summarized in the table below (in thousands):
(1) As of March 27, 2020 and December 31, 2019, loans backed by French R&D tax credit receivables were $14.7 million and $15.1 million, respectively. As of March 27, 2020, the French Subsidiary had an aggregate of $23.5 million of R&D tax credit receivables from the French government from 2020 through 2023. See Note 8, “Balance Sheet Components” for additional information. These tax loans have a fixed rate of 0.6%, plus EURIBOR 1 month + 1.3% and mature between 2020 through 2022. The remaining loans of $1.5 million at March 27, 2020, primarily relate to financial support from French government agencies for R&D innovation projects at minimal interest rates, and these loans mature between 2020 through 2025. Future minimum repayments The table below presents the future minimum repayments of debts and finance lease obligations in France as of March 27, 2020 (in thousands):
Line of Credit On December 19, 2019, the Company entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as lender. The Credit Agreement provides for a secured revolving loan facility in an aggregate principal amount of up to $25.0 million, based on a borrowing base of eligible accounts receivable and inventory, with a maturity date of October 31, 2020. The Company may use availability under the revolving loan facility for the issuance of letters of credit. The proceeds of the revolving loans may be used for general corporate purposes. The revolving loans bear interest, at the Company’s election, at a floating rate per annum equal to either (1) 1.25% plus the greater of (i) 1 month LIBOR on any day plus 2.50% and (ii) the prime rate as reported in the Wall Street Journal from time to time or (2) 2.25% plus LIBOR for an interest period of one, two or three months. Interest on the revolving loans is payable monthly in arrears, in the case of prime rate loans, and at the end of the applicable interest period, in the case of LIBOR loans. The Credit Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company, among other things, incur debt, grant liens, undergo certain fundamental changes, make investments, make certain restricted payments, dispose of assets, enter into transactions with affiliates, and enter into burdensome agreements, in each case, subject to limitations and exceptions set forth in the Credit Agreement. The Company is also required to maintain compliance with an adjusted quick ratio, a minimum EBITDA covenant (tested quarterly) and a minimum liquidity covenant, in each case, determined in accordance with the terms of the Credit Agreement. As of March 27, 2020, the Company was in compliance with the covenants under the Credit Agreement. As of March 27, 2020, there was $0.3 million of outstanding letters of credit issued under the Credit Agreement. There were no revolving borrowings under the Credit Agreement as of March 27, 2020. As of March 27, 2020, the Company has security for letters of credit which are unsecured in the amount of $2.2 million. |
Segment Information (Tables) |
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Segment Reporting Information, by Segment | The following table provides summary financial information by reportable segment (in thousands):
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Reconciliation of Operating Profit (Loss) from Segments to Consolidated | A reconciliation of the Company’s consolidated segment operating loss to consolidated loss before income taxes is as follows (in thousands):
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Revenue from External Customers by Geographic Areas |
(1) Revenue is attributed to countries based on the location of the customer. |
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Revenue from External Customers by Products and Services | Market Information
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Convertible Notes, Other Debts And Finance Lease (Tables) |
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Convertible Debt Interest | The following table presents interest expense recognized for the 2020 Notes and the 2024 Notes (in thousands):
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Schedule of Other Debt and Capital Leases | The Company has a variety of debt and credit facilities in France to satisfy the financing requirements of the operations of its French subsidiary. These arrangements are summarized in the table below (in thousands):
(1) As of March 27, 2020 and December 31, 2019, loans backed by French R&D tax credit receivables were $14.7 million and $15.1 million, respectively. As of March 27, 2020, the French Subsidiary had an aggregate of $23.5 million of R&D tax credit receivables from the French government from 2020 through 2023. See Note 8, “Balance Sheet Components” for additional information. These tax loans have a fixed rate of 0.6%, plus EURIBOR 1 month + 1.3% and mature between 2020 through 2022. The remaining loans of $1.5 million at March 27, 2020, primarily relate to financial support from French government agencies for R&D innovation projects at minimal interest rates, and these loans mature between 2020 through 2025. |
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Schedule of Maturities of Long-term Debt | The table below presents the future minimum repayments of debts and finance lease obligations in France as of March 27, 2020 (in thousands):
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Convertible Note due 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table presents the components of the 2024 Notes as of March 27, 2020 and December 31, 2019 (in thousands, except for years and percentages):
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Convertible Note due 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table presents the components of the 2020 Notes as of March 27, 2020 and December 31, 2019 (in thousands, except for years and percentages):
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Balance Sheet Components - Inventories, net (Details) - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,881 | $ 4,179 |
Work-in-process | 2,220 | 1,633 |
Finished goods | 18,841 | 14,080 |
Service-related spares | 8,912 | 9,150 |
Inventory, Net | $ 34,854 | $ 29,042 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 27, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 96,566,000 | 91,875,000 |
Common stock, shares outstanding | 96,566,000 | 91,875,000 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
|
Cash flows from operating activities: | ||
Net loss | $ (21,954) | $ (11,306) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Amortization of intangibles | 1,655 | 2,083 |
Depreciation | 2,843 | 2,846 |
Stock-based compensation | 6,259 | 2,113 |
Amortization of discount on convertible debt | 1,835 | 1,605 |
Amortization of non-cash warrant | 434 | 25 |
Restructuring, asset impairment and loss on retirement of fixed assets | 8 | 103 |
Deferred income taxes, net | 653 | (538) |
Foreign currency adjustments | (2,066) | (638) |
Provision for excess and obsolete inventories | 234 | 254 |
Provision for doubtful accounts, returns and discounts | 331 | 417 |
Other non-cash adjustments, net | 113 | 287 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (5,068) | 22,351 |
Inventories | (6,281) | (4,157) |
Prepaid expenses and other assets | 10,579 | 1,417 |
Accounts payable | (242) | (8,177) |
Deferred revenue | 12,477 | 4,750 |
Income taxes payable | (768) | (192) |
Accrued and other liabilities | (12,083) | (9,027) |
Net cash provided by (used in) operating activities | (11,041) | 4,216 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (11,224) | (1,674) |
Net cash used in investing activities | (11,224) | (1,674) |
Cash flows from financing activities: | ||
Payment of convertible debt issuance costs | (35) | 0 |
Proceeds from other debts and finance leases | 0 | 160 |
Repayment of other debts and finance leases | (406) | (97) |
Proceeds from common stock issued to employees | 3,000 | 2,012 |
Payment of tax withholding obligations related to net share settlements of restricted stock units | (829) | (657) |
Net cash provided by financing activities | 1,730 | 1,418 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (811) | (33) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (21,346) | 3,927 |
Cash, cash equivalents and restricted cash at beginning of period | 93,058 | 65,989 |
Cash, cash equivalents and restricted cash at end of period | 71,712 | 69,916 |
Supplemental disclosures of cash flow information: | ||
Income tax payments, net | 408 | 490 |
Interest payments, net | 1,095 | 92 |
Supplemental schedule of non-cash investing and financing activities: | ||
Capital expenditures incurred but not yet paid | $ 7,620 | $ 91 |
Balance Sheet Components - Other Long Term Assets (Details) - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
French R&D tax credits receivable | $ 16,303 | $ 15,899 |
Deferred tax assets | 10,222 | 10,575 |
Equity investment | 3,593 | 3,593 |
Other | 9,757 | 11,238 |
Other Assets, Noncurrent | $ 39,875 | $ 41,305 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions |
Mar. 27, 2020 |
Dec. 31, 2019 |
Dec. 31, 2017 |
---|---|---|---|
Other Commitments [Line Items] | |||
Non-cancelable purchase commitments | $ 55.3 | ||
Maximum amount of potential future payments under the company's financial guarantees | 2.7 | $ 2.7 | |
Indemnification [Member] | |||
Other Commitments [Line Items] | |||
Accrual for indemnification provisions | 0.0 | ||
Domestic Line of Credit [Member] | Performance Guarantee [Member] | Guarantee Obligations [Member] | |||
Other Commitments [Line Items] | |||
Bank Guarantees and Standby Letters of Credit | $ 2.2 | ||
Foreign Line of Credit [Member] | Performance Guarantee [Member] | Guarantee Obligations [Member] | |||
Other Commitments [Line Items] | |||
Line of Credit Facility, Current Borrowing Capacity | $ 2.0 | ||
JPMORGAN CHASE BANK N.A. [Member] | Revolving Credit Facility [Member] | |||
Other Commitments [Line Items] | |||
Maximum amount of potential future payments under the company's financial guarantees | 0.3 | ||
Line of Credit Facility, Current Borrowing Capacity | 0.0 | ||
Foreign Line of Credit [Member] | Performance Guarantee [Member] | |||
Other Commitments [Line Items] | |||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0.0 | $ 0.0 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
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Income Tax Disclosure [Abstract] | ||
Loss before income taxes | $ (21,225) | $ (11,625) |
Provision for income taxes | $ 729 | $ (319) |
Effective income tax rate | (3.40%) | 2.70% |
Employee Benefit Plans and Stock-based Compensation - Summary of Restricted Stock Units Outstanding (Detail) - Restricted Stock Units Outstanding [Member] shares in Thousands |
3 Months Ended |
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Mar. 27, 2020
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Units, Beginning balance | shares | 3,601 |
Weighted Average Grant Date Fair Value, Beginning balance | $ / shares | $ 5.18 |
Granted | shares | 1,894 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 6.24 |
Vested | shares | (1,790) |
Vested in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 5.48 |
Forfeited | shares | (237) |
Weighted Average Grant Date Fair Value, Forfeited or cancelled | $ / shares | $ 3.84 |
Number of Units, Ending balance | shares | 3,468 |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares | $ 5.69 |
Segment Information Segment Income or Loss Reconciliation (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
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Segment Reporting Information [Line Items] | ||
Operating income (loss) | $ (18,049) | $ (8,408) |
Unallocated Corporate Expenses | (54,787) | (50,257) |
Stock-based compensation | (6,259) | (2,113) |
Amortization of intangibles | (1,655) | (2,083) |
Nonoperating Income (Expense) | (3,176) | (3,217) |
Loss before income taxes | (21,225) | (11,625) |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) | (9,532) | (3,854) |
Corporate, Non-Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Unallocated Corporate Expenses | $ (603) | $ (358) |
Net Loss Per Share - Numerators and Denominators of Basic and Diluted Net Income (Loss) Per Share Computations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
|
Numerator: | ||
Net loss | $ (21,954) | $ (11,306) |
Denominator: | ||
Basic and diluted | 95,575 | 88,165 |
Net loss per share: | ||
Basic and diluted | $ (0.23) | $ (0.13) |
Convertible Notes , Other Debts And Finance Leases - Other Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
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---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Financing from French government agencies related to various government incentive programs (1) | [1] | $ 16,160 | $ 16,566 | |
Term loans | 174 | 587 | ||
Obligations under finance leases | 57 | 71 | ||
Other Long-term Debt | 16,391 | 17,224 | ||
Less: current portion | (6,343) | (6,713) | ||
Long-term portion | $ 10,048 | $ 10,511 | ||
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Employee Benefit Plans and Stock-based Compensation |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans and Stock-based compensation | EMPLOYEE BENEFIT PLANS AND STOCK-BASED COMPENSATION Equity Award Plans The Company’s stock benefit plans include the 2002 Employee Stock Purchase Plan (“ESPP”) and current active stock plans adopted in 1995 and 2002. See Note 13, “Employee Benefit Plans and Stock-based Compensation” of Notes to Consolidated Financial Statements in the 2019 Form 10-K for details pertaining to each plan. As of March 27, 2020, there were 0.8 million and 3.7 million shares of common stock reserved for future grants under the Company’s ESPP and active stock plans, respectively. Stock Option Activities The following table summarizes the Company’s stock option activities and related information during the three months ended March 27, 2020 (in thousands, except per share amounts and terms):
The aggregate intrinsic value disclosed above represents the difference between the exercise price of the options and the fair value of the Company’s common stock. There were no employee stock options granted in the three months ended March 27, 2020. There were no realized tax benefits attributable to stock options exercised in jurisdictions where this expense is deductible for tax purposes for the three months ended March 27, 2020 and March 29, 2019, respectively. Restricted Stock Units (“RSUs”) Activities The following table summarizes the Company’s RSUs activities and related information during the three months ended March 27, 2020 (in thousands, except per share amounts):
Performance- and Market-based awards The Company settled a portion of its incentive bonus payments to eligible employees by issuing performance-based RSU awards (“PRSUs”) from the 1995 Stock Plan. The Company granted 472,247 shares of PRSUs to certain employees for the three months ended March 27, 2020, all of which were fully vested at the time of grant for the purpose of settling amounts earned under the Company’s 2019 incentive bonus plans. The stock-based compensation recognized for these PRSUs was $3.0 million for the three months ended March 27, 2020. There were no PRSUs issued for purposes of settling amounts earned under the Company's incentive plans in the three months ended March 29, 2019. In the first quarter of 2020, the Company granted 67,910 performance-based RSUs to certain key executives that are expected to vest by the end of fiscal 2020. The vesting condition for these PRSUs include achievement of certain financial operating goals. The stock-based compensation recognized for all PRSUs which vest according to achievement of certain financial operating goals for the three months ended March 27, 2020 was $0.4 million. The unrecognized stock-based compensation of the PRSUs as of March 27, 2020 was $0.8 million which includes $0.4 million of unrecognized expense from PRSUs granted in 2019. 40,000 shares of PRSUs granted in 2019 had vested as of March 27, 2020. In the first quarter of 2020, the Company granted 182,830 market-based RSUs (“MRSUs”) under the 1995 Stock Plan to a key executive that is expected to vest during a three-year period. The vesting condition for the MRSUs include performance of the Company’s total shareholder return (“TSR”) relative to the TSR of the NASDAQ Telecommunication Index. The aggregate grant-date fair value of these shares was estimated to be $1.1 million using a Monte-Carlo simulation valuation method. The stock-based compensation recognized for all MRSUs for the three months ended March 27, 2020 was $0.1 million. The unrecognized stock-based compensation of the MRSUs as of March 27, 2020 was $1.8 million which includes $0.7 million of unrecognized expense from MRSUs granted in 2019. None of these MRSUs had vested as of March 27, 2020. French Retirement Benefit Plan The Company assumed obligations under a defined benefit pension plan in connection with the acquisition of its French subsidiary in 2016. The plan is unfunded and there are no contributions required by laws or funding regulations, discretionary contributions or non-cash contributions expected to be made. The table below presents the components of net periodic benefit costs (in thousands):
The present value of the Company’s pension obligation as of March 27, 2020 was $5.2 million, of which $0.1 million was reported as a component of “Accrued and other current liabilities” and $5.1 million was reported as a component of “Other non-current liabilities” on the Company’s Condensed Consolidated Balance Sheets. The present value of the Company’s pension obligation as of December 31, 2019 was $5.3 million. 401(k) Plan The Company has a retirement/savings plan for its U.S. employees, which qualifies as a thrift plan under Section 401(k) of the Internal Revenue Code. This plan allows participants to contribute up to the applicable Internal Revenue Code limitations under the plan. The Company has made discretionary contributions to the plan of 25% of the first 4% contributed by eligible participants, up to a maximum contribution per participant of $1,000 per year. The contributions for the three months ended March 27, 2020 and March 29, 2019 were $109,000 and $122,000, respectively. Stock-based Compensation The following table summarizes stock-based compensation for all plans (in thousands):
As of March 27, 2020, total unrecognized stock-based compensation cost related to unvested RSUs was $18.7 million and is expected to be recognized over a weighted-average period of approximately 2.17 years. Valuation Assumptions The Company estimates the fair value of employee stock options and stock purchase rights under the ESPP using a Black-Scholes option valuation model. The value of the stock purchase rights under the ESPP consists of: (1) the 15% discount on the purchase of the stock; (2) 85% of the fair value of the call option; and (3) 15% of the fair value of the put option. The call option and put option were valued using the Black-Scholes option pricing model.
The expected term of the stock purchase rights under the ESPP represents the period of time from the beginning of the offering period to the purchase date. The Company uses its historical volatility for a period equivalent to the expected term of the options to estimate the expected volatility. The risk-free interest rate assumption is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term. The Company has not paid and does not plan to pay any cash dividends in the foreseeable future. |
Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee, Operating Leases | LEASES The components of lease expense are as follows (in thousands):
Supplemental cash flow information related to leases are as follows (in thousands):
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Balance Sheet Components |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components | BALANCE SHEET COMPONENTS The following tables provide details of selected balance sheet components (in thousands):
(1) The Company’s French subsidiary participates in the French Crédit d’Impôt Recherche program (the “R&D tax credits”) which allows companies to monetize eligible research expenses. The R&D tax credits can be used to offset against income tax payable to the French government in each of the four years after being incurred, or if not utilized, are recoverable in cash. The amount of R&D tax credits recoverable are subject to audit by the French government. The R&D tax credits receivable at March 27, 2020 were approximately $23.5 million and are expected to be recoverable from 2020 through 2023. (2) Contract assets reflect the satisfied performance obligations for which the Company does not yet have an unconditional right to consideration.
*During fiscal 2019, the Company entered into a lease for a new facility which will become the Company’s new headquarters in 2020. The new lease commenced in May 2019, as the facility was made available to the Company for constructing leasehold improvements. Construction in progress includes $18.2 million for constructing leasehold improvements in the new headquarters facility.
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Net Loss Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Numerators and Denominators of Basic and Diluted Net Income (Loss) Per Share Computations | The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except per share amounts):
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Anti-dilutive Securities | The following table sets forth the potential weighted common shares outstanding and the anti-dilutive weighted shares that were excluded from the computation of basic and diluted net loss per share calculations (in thousands):
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Restructuring and Related Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of restructuring activities | The following table summarizes the restructuring and related charges (in thousands):
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Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the activities related to the Company’s restructuring plans during the three months ended March 27, 2020 (in thousands):
|
Balance Sheet Components - Prepaid Expenses And Other Current Assets (Details) - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
||
---|---|---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
French R&D tax credits receivable(1) | [1] | $ 7,163 | $ 7,343 | |
Contract assets(2) | 5,806 | 13,969 | ||
Deferred cost of revenue | 3,892 | 2,631 | ||
Prepaid maintenance, royalty, rent, and property taxes | 3,653 | 1,594 | ||
Capitalized sales commissions | 1,168 | 1,309 | ||
Other | 10,319 | 13,916 | ||
Prepaid Expense and Other Assets, Current | $ 32,001 | $ 40,762 | ||
|
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
---|---|---|
Current assets: | ||
Cash and cash equivalents | $ 71,712 | $ 93,058 |
Accounts receivable, net | 93,058 | 88,500 |
Inventories, net | 34,854 | 29,042 |
Prepaid expenses and other current assets | 32,001 | 40,762 |
Total current assets | 231,625 | 251,362 |
Property and equipment, net | 37,091 | 22,928 |
Operating lease right-of-use assets | 26,281 | 27,491 |
Goodwill | 238,614 | 239,780 |
Intangibles, net | 2,789 | 4,461 |
Other long-term assets | 39,875 | 41,305 |
Total assets | 576,275 | 587,327 |
Current liabilities: | ||
Other debts and finance lease obligations, current | 6,343 | 6,713 |
Accounts payable | 45,159 | 40,933 |
Income taxes payable | 419 | 1,226 |
Deferred revenue | 48,719 | 37,117 |
Accrued and other current liabilities | 52,080 | 62,535 |
Convertible notes, short-term | 44,008 | 43,375 |
Total current liabilities | 196,728 | 191,899 |
Convertible notes, long-term | 89,832 | 88,629 |
Other debts and finance lease obligations, long-term | 10,048 | 10,511 |
Income taxes payable, long-term | 180 | 178 |
Other non-current liabilities | 41,388 | 41,254 |
Total liabilities | 338,176 | 332,471 |
Commitments and contingencies (Note 17) | ||
Convertible notes | 1,777 | 2,410 |
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.001 par value, 150,000 shares authorized; 96,566 and 91,875 shares issued and outstanding at March 27, 2020 and December 31, 2019, respectively | 97 | 92 |
Additional paid-in capital | 2,336,459 | 2,327,359 |
Accumulated deficit | (2,093,894) | (2,071,940) |
Accumulated other comprehensive loss | (6,340) | (3,065) |
Total stockholders’ equity | 236,322 | 252,446 |
Total liabilities and stockholders’ equity | $ 576,275 | $ 587,327 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands |
Total |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
AOCI Attributable to Parent [Member] |
Convertible Note due 2020 |
---|---|---|---|---|---|---|
Common Stock, Beginning at Dec. 31, 2018 | 87,057 | |||||
Balance at Dec. 31, 2018 | $ 228,250 | $ 87 | $ 2,296,795 | $ (2,067,416) | $ (1,216) | |
Cumulative effect to retained earnings related to adoption of Topic 718 | Accounting Standards Update 2016-09 [Member] | 1,400 | 1,400 | ||||
Common Stock, Ending at Jan. 01, 2019 | 87,057 | |||||
Balance at Jan. 01, 2019 | 229,650 | $ 87 | 2,296,795 | (2,066,016) | (1,216) | |
Common Stock, Beginning at Dec. 31, 2018 | 87,057 | |||||
Balance at Dec. 31, 2018 | 228,250 | $ 87 | 2,296,795 | (2,067,416) | (1,216) | |
Net loss | (11,306) | (11,306) | ||||
Other comprehensive loss, net of tax | (1,249) | (1,249) | ||||
Issuance of common stock under option, stock award and purchase plans, Shares | 1,727 | |||||
Issuance of common stock under option, stock award and purchase plans, Value | 1,355 | $ 2 | 1,353 | |||
Stock-based compensation | 2,111 | 2,111 | ||||
Common Stock, Ending at Mar. 29, 2019 | 88,784 | |||||
Balance at Mar. 29, 2019 | 220,561 | $ 89 | 2,300,259 | (2,077,322) | (2,465) | |
Common Stock, Beginning at Dec. 31, 2019 | 91,875 | |||||
Balance at Dec. 31, 2019 | 252,446 | $ 92 | 2,327,359 | (2,071,940) | (3,065) | |
Net loss | (21,954) | (21,954) | ||||
Other comprehensive loss, net of tax | (3,275) | (3,275) | ||||
Issuance of common stock under option, stock award and purchase plans, Shares | 2,278 | |||||
Issuance of common stock under option, stock award and purchase plans, Value | 2,171 | $ 3 | 2,168 | |||
Stock-based compensation | 6,301 | 6,301 | ||||
Issuance of warrant, shares | 2,413 | |||||
Issuance of warrant, amount | $ 2 | |||||
Issuance of warrant, Additional Paid-in Capital | 0 | (2) | ||||
Reclassification from mezzanine equity to equity for 4.00% Convertible Senior Notes due in 2020 | 633 | 633 | ||||
Common Stock, Ending at Mar. 27, 2020 | 96,566 | |||||
Balance at Mar. 27, 2020 | $ 236,322 | $ 97 | $ 2,336,459 | $ (2,093,894) | $ (6,340) | |
Debt Instrument, Interest Rate, Stated Percentage | 4.00% |
Balance Sheet Components - Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued employee compensation and related expenses | $ 16,175 | $ 19,454 |
Operating lease liability (short-term) | 8,583 | 8,881 |
Customer deposits | 3,805 | 3,557 |
Accrued warranty | 3,744 | 4,308 |
Accrued royalty payments | 2,384 | 2,642 |
Accrued Avid litigation settlement, current | 2,000 | 2,000 |
Contingent inventory reserves | 1,700 | 2,208 |
Others | 13,689 | 19,485 |
Accrued Liabilities, Current | $ 52,080 | $ 62,535 |
Employee Benefit Plans and Stock-based Compensation - Summary of Stock Options Outstanding (Detail) - Share-based Payment Arrangement, Option [Member] $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended |
---|---|
Mar. 27, 2020
USD ($)
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Beginning balance | shares | 1,888 |
Weighted Average Exercise Price, Beginning balance | $ / shares | $ 5.83 |
Exercised | shares | (127) |
Weighted Average Exercise Price, Options exercised | $ / shares | $ 5.78 |
Canceled or expired | shares | (203) |
Canceled or Expired, Weighted Average Exercise Price | $ / shares | $ 5.78 |
Number of Shares, Ending balance | shares | 1,558 |
Weighted Average Exercise Price, Ending balance | $ / shares | $ 5.84 |
Weighted Average Remaining Contractual Term | 1 year 10 months 24 days |
Aggregate Intrinsic Value | $ | $ 1,319 |
Vested and expected to vest | shares | 1,558 |
Weighted Average Exercise Price, Vested and expected to vest | $ / shares | $ 5.84 |
Weighted Average Remaining Contractual Term (Years), Vested and expected to vest | 1 year 10 months 24 days |
Aggregate Intrinsic Value, Vested and expected to vest | $ | $ 1,319 |
Number of Shares, Exercisable | shares | 1,558 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 5.84 |
Weighted Average Remaining Contractual Term (Years), Exercisable | 1 year 10 months 24 days |
Aggregate Intrinsic Value, Exercisable | $ | $ 1,319 |
Segment Information - Summary Financial Infomation by reportable segments (Details) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 27, 2020
USD ($)
segment
|
Mar. 29, 2019
USD ($)
|
|||
Segment Reporting Information [Line Items] | ||||
Total net revenue | [1] | $ 78,417 | $ 80,106 | |
Gross Profit | 36,738 | 41,849 | ||
Operating income (loss) | $ (18,049) | (8,408) | ||
Number of Reportable Segments | segment | 2 | |||
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 78,417 | 80,106 | ||
Gross Profit | 38,321 | 43,670 | ||
Operating income (loss) | (9,532) | (3,854) | ||
Operating Segments [Member] | Video [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 54,372 | 67,176 | ||
Gross Profit | 27,907 | 38,602 | ||
Operating income (loss) | (6,267) | 1,968 | ||
Operating Segments [Member] | Cable Access [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 24,045 | 12,930 | ||
Gross Profit | 10,414 | 5,068 | ||
Operating income (loss) | $ (3,265) | $ (5,822) | ||
|
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
|
Income Tax Contingency [Line Items] | ||
Effective income tax rate | (3.40%) | 2.70% |
Federal statutory income tax rate | 21.00% | 21.00% |
Unrecognized Tax Benefits | $ 17.0 | |
Unrecognized tax benefits that would impact the provision for income taxes | 15.7 | |
Alternative Minimum Tax Credit Refund | $ 0.5 | |
One foreign subsidiary | ||
Income Tax Contingency [Line Items] | ||
One-time benefit due to valuation allowance release | $ 0.8 |
Convertible Notes, Other Debts And Finance Leases - Interest (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
|
Debt Disclosure [Abstract] | ||
Contractual interest expense | $ 1,035 | $ 1,283 |
Amortization of debt discount | 1,623 | 1,433 |
Amortization of debt issuance costs | 212 | 172 |
Total interest expense recognized | $ 2,870 | $ 2,888 |
Commitments and Contingencies - Summary of Warranty Accrual Included in Accrued Liabilities (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Balance at beginning of period | $ 4,314 | $ 4,869 |
Accrual for current period warranties | 656 | 1,403 |
Warranty costs incurred | (1,226) | (1,685) |
Balance at end of period | $ 3,744 | $ 4,587 |
Employee Benefit Plans and Stock-based Compensation - Summary of Stock Awards Valuation Assumptions (Details) - Employee Stock Purchase Plan - $ / shares |
6 Months Ended | |
---|---|---|
Jul. 01, 2020 |
Jul. 01, 2019 |
|
Purchase Period July 1, 2019 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 6 months | |
Volatility | 43.00% | |
Risk-free interest rate | 2.50% | |
Expected dividends | 0.00% | |
Estimated weighted average fair value per share at purchase date | $ 1.31 | |
Forecast [Member] | Purchase Period July 1 2020 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 6 months | |
Volatility | 50.00% | |
Risk-free interest rate | 1.60% | |
Expected dividends | 0.00% | |
Estimated weighted average fair value per share at purchase date | $ 2.24 |
Derivatives and Hedging Activities Notional Amounts (Details) - Foreign Exchange Forward [Member] - Not Designated as Hedging Instrument [Member] - Fair Value Hedging [Member] - USD ($) $ in Thousands |
Mar. 27, 2020 |
Dec. 31, 2019 |
---|---|---|
Long [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Purchase | $ 21,783 | $ 14,806 |
Short [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Sell | $ 4,669 | $ 2,629 |
Lease - Lease Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 27, 2020 |
Mar. 29, 2019 |
|
Leases [Abstract] | ||
Operating lease cost | $ 2,668 | $ 1,996 |
Variable lease cost | 792 | 779 |
Total lease cost | 3,460 | 2,775 |
Cash paid for amounts included in the measurement of operating lease liabilities | 2,421 | 2,130 |
Right-of-Use assets obtained in exchange for operating lease obligations | $ 1,671 | $ 0 |
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