Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jan. 03, 2015 | Mar. 12, 2015 | Jun. 27, 2014 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | IRIDEX CORP | ||
Entity Central Index Key | 1006045 | ||
Document Type | 10-K | ||
Document Period End Date | 3-Jan-15 | ||
Amendment Flag | FALSE | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | -2 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $49,005,071 | ||
Entity Common Stock, Shares Outstanding | 9,858,612 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $13,303 | $13,444 |
Accounts receivable, net of allowance for doubtful accounts of $223 in 2014 and $207 in 2013 | 8,337 | 7,345 |
Inventories | 9,119 | 10,605 |
Prepaid expenses and other current assets | 510 | 576 |
Deferred income taxes - current | 1,625 | |
Total current assets | 32,894 | 31,970 |
Property and equipment, net | 735 | 543 |
Other intangible assets, net | 284 | 328 |
Goodwill | 533 | 533 |
Deferred income taxes - long term | 7,151 | |
Other long-term assets | 221 | 303 |
Total assets | 41,818 | 33,677 |
Current liabilities: | ||
Accounts payable | 1,758 | 2,278 |
Accrued compensation | 1,863 | 1,891 |
Accrued expenses | 1,770 | 1,592 |
Accrued warranty | 469 | 468 |
Deferred revenue | 1,179 | 1,133 |
Total current liabilities | 7,039 | 7,362 |
Long-term liabilities: | ||
Other long-term liabilities | 1,043 | 461 |
Total liabilities | 8,082 | 7,823 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Convertible preferred stock, $0.01 par value; 2,000,000 shares authorized; none issued | ||
Common stock, $0.01 par value: Authorized: 30,000,000 shares; Issued and outstanding: 9,786,695 shares in 2014 and 9,899,483 shares in 2013 | 108 | 104 |
Additional paid-in capital | 38,511 | 40,671 |
Accumulated deficit | -4,883 | -14,921 |
Total stockholders’ equity | 33,736 | 25,854 |
Total liabilities and stockholders’ equity | $41,818 | $33,677 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $223 | $207 |
Convertible preferred stock, par value | $0.01 | $0.01 |
Convertible preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Convertible preferred stock, shares issued | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 9,786,695 | 9,899,483 |
Common stock, shares outstanding | 9,786,695 | 9,899,483 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Income Statement [Abstract] | |||
Total revenues | $42,814 | $38,273 | $33,859 |
Cost of revenues | 21,409 | 19,686 | 17,513 |
Gross profit | 21,405 | 18,587 | 16,346 |
Operating expenses: | |||
Research and development | 4,629 | 3,684 | 4,385 |
Sales and marketing | 8,155 | 7,720 | 7,895 |
General and administrative | 6,034 | 5,023 | 4,926 |
Proceeds from demutualization of insurance carrier | -473 | ||
Total operating expenses | 18,818 | 15,954 | 17,206 |
Income (loss) from continuing operations | 2,587 | 2,633 | -860 |
Legal settlement | 800 | ||
Interest and other expense, net | -1,255 | -371 | -210 |
Income (loss) from continuing operations before (benefit from) provision for income taxes | 1,332 | 2,262 | -270 |
(Benefit from) provision for income taxes | -8,706 | 31 | -100 |
Income (loss) from continuing operations, net of tax | 10,038 | 2,231 | -170 |
Income (loss) from discontinued operations, net of tax | -264 | ||
Gain on sale of discontinued operations, net of tax | 1,872 | ||
Income from discontinued operations, net of tax | 1,608 | ||
Net income | $10,038 | $2,231 | $1,438 |
Basic - | |||
Continuing operations | $1.01 | $0.24 | ($0.02) |
Discontinued operations | $0 | $0 | $0.18 |
Net income | $1.01 | $0.24 | $0.16 |
Diluted - | |||
Continuing operations | $0.97 | $0.22 | ($0.02) |
Discontinued operations | $0 | $0 | $0.18 |
Net income | $0.97 | $0.22 | $0.16 |
Weighted average shares used in computing net income per common share - basic | 9,892 | 9,245 | 8,935 |
Weighted average shares used in computing net income per common share - diluted | 10,357 | 10,104 | 8,935 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income | $10,038 | $2,231 | $1,438 |
Other comprehensive income, net of tax: | |||
Recognition of accumulated foreign currency translation loss | 35 | ||
Other comprehensive income, net of tax | 35 | ||
Comprehensive income | $10,038 | $2,231 | $1,473 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
In Thousands, except Share data | |||||||
Beginning Balance, value at Dec. 31, 2011 | $22,426 | $5 | $92 | $42,032 | ($1,078) | ($35) | ($18,590) |
Beginning Balance, shares at Dec. 31, 2011 | 500,000 | 8,917,824 | |||||
Issuance of common stock under stock option plan | 445 | 2 | 443 | ||||
Issuance of common stock under stock option plan, shares | 174,631 | 174,631 | |||||
Employee stock-based compensation expense | 396 | 396 | |||||
Release of restricted stock and escrow shares | 36,815 | ||||||
Stock repurchase | -734 | -734 | |||||
Stock repurchase, shares | -188,799 | ||||||
Stock repurchased from tender offer, value | -2,101 | -2,101 | |||||
Stock repurchased from tender offer, share | -487,500 | ||||||
Retirement of treasury stock | -1,812 | 1,812 | |||||
Foreign currency translation adjustments | 35 | 35 | |||||
Net income | 1,438 | 1,438 | |||||
Ending Balance, value at Dec. 29, 2012 | 21,905 | 5 | 94 | 38,958 | -17,152 | ||
Ending Balance, shares at Dec. 29, 2012 | 500,000 | 8,452,971 | |||||
Issuance of common stock under stock option plan | 1,495 | 5 | 1,490 | ||||
Issuance of common stock under stock option plan, shares | 493,622 | 493,622 | |||||
Employee stock-based compensation expense | 689 | 689 | |||||
Release of restricted stock and escrow shares | 27,915 | ||||||
Stock repurchase | -426 | -426 | |||||
Stock repurchase, shares | -75,025 | ||||||
Stock repurchased from tender offer, value | -40 | -40 | |||||
Preferred stock conversion to common stock | -5 | 5 | |||||
Preferred stock conversion to common stock, share | -500,000 | 1,000,000 | |||||
Net income | 2,231 | 2,231 | |||||
Ending Balance, value at Dec. 28, 2013 | 25,854 | 104 | 40,671 | -14,921 | |||
Ending Balance, shares at Dec. 28, 2013 | 9,899,483 | ||||||
Issuance of common stock under stock option plan | 1,501 | 4 | 1,497 | ||||
Issuance of common stock under stock option plan, shares | 399,390 | 399,390 | |||||
Employee stock-based compensation expense | 972 | 972 | |||||
Excess tax benefits from stock-based awards | 36 | 36 | |||||
Release of restricted stock and escrow shares | 50,262 | ||||||
Stock repurchase | -4,665 | -4,665 | |||||
Stock repurchase, shares | -562,440 | ||||||
Net income | 10,038 | 10,038 | |||||
Ending Balance, value at Jan. 03, 2015 | $33,736 | $108 | $38,511 | ($4,883) | |||
Ending Balance, shares at Jan. 03, 2015 | 9,786,695 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Operating activities: | |||
Net income | $10,038 | $2,231 | $1,438 |
Less income from discontinued operations | 1,608 | ||
Income (loss) from continuing operations | 10,038 | 2,231 | -170 |
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 420 | 490 | 427 |
Change in fair value of earn-out liability | 1,258 | 355 | 215 |
Stock-based compensation cost recognized | 972 | 689 | 388 |
Deferred income taxes | -8,776 | ||
Excess tax benefits from stock-based awards | -36 | ||
Provision for doubtful accounts | 86 | 61 | 33 |
Changes in operating assets and liabilities, net of assets and liabilities acquired: | |||
Accounts receivable | -1,078 | -1,926 | 38 |
Inventories | 1,486 | -2,514 | -1,376 |
Prepaid expenses and other current assets | 66 | 553 | -665 |
Other long-term assets | 82 | -16 | -88 |
Accounts payable | -520 | 173 | 525 |
Accrued compensation | -28 | 328 | 383 |
Accrued expenses | 17 | 171 | -756 |
Accrued warranty | 1 | 15 | -103 |
Deferred revenue | 46 | 129 | -10 |
Other long-term liabilities | -20 | 28 | 21 |
Net cash provided (used in) by operating activities | 4,014 | 767 | -1,138 |
Investing activities: | |||
Acquisition of property and equipment | -568 | -380 | -394 |
Payment on earn-out liability | -459 | -383 | -328 |
Net cash used in investing activities | -1,027 | -763 | -722 |
Cash flows from financing activities: | |||
Proceeds from stock option exercises | 1,501 | 1,495 | 445 |
Excess tax benefits from stock-based awards | 36 | ||
Repurchase of common stock | -4,665 | -426 | -2,835 |
Payment of legal costs in connection with tender offer | -40 | ||
Net cash (used in) provided by financing activities | -3,128 | 1,029 | -2,390 |
Net cash provided by operating activities from discontinued operations | 695 | ||
Net cash provided by investing activities from discontinued operations | 510 | 4,632 | |
Effect of foreign exchange rate changes from discontinued operations | 35 | ||
Net cash provided by discontinued operations | 510 | 5,362 | |
Net (decrease) increase in cash and cash equivalents | -141 | 1,543 | 1,112 |
Cash and cash equivalents, beginning of year | 13,444 | 11,901 | 10,789 |
Cash and cash equivalents, end of year | 13,303 | 13,444 | 11,901 |
Cash paid (received) during the year for: | |||
Income taxes | 35 | -536 | -145 |
Supplemental disclosure of non-cash activities: | |||
Conversion of preferred stock to common stock | $5 |
Organization
Organization | 12 Months Ended |
Jan. 03, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | 1. Organization |
Description of Business. | |
IRIDEX Corporation (“IRIDEX”, the “Company”, “we”, “us”, or “our”) is a leading worldwide provider of therapeutic based laser systems, delivery devices and consumable instrumentation used to treat sight-threatening eye diseases in ophthalmology. Our ophthalmology products are sold in the United States (“U.S.”) predominantly through a direct sales force, and an independent sales force, and internationally through approximately 70 independent distributors in over 100 countries. In February 2012, we completed the sale of our aesthetics business to Cutera, Inc. and reclassified the aesthetics business segment as discontinued operations. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||
Jan. 03, 2015 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||||||||||
Financial Statement Presentation. | |||||||||||||
The consolidated financial statements include the accounts of IRIDEX and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||
Our fiscal year always ends on the Saturday closest to December 31. Fiscal 2014 ended on January 3, 2015 (“FY 2014”), fiscal 2013 ended on December 28, 2013 (“FY 2013”), and fiscal 2012 ended on December 29, 2012 (“FY 2012”). Consequently, fiscal year 2014 included 53 weeks of operations while fiscal years 2013 and 2012 included only 52 weeks. | |||||||||||||
Reclassifications. | |||||||||||||
In February 2012, we completed the sale of our aesthetics business to Cutera, Inc. In accordance with accounting principles generally accepted in the U.S. (“GAAP”), we have recast our financial information to show the results from our ophthalmology business as continuing operations and the results from our aesthetics business as discontinued operations. | |||||||||||||
Use of Estimates. | |||||||||||||
The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an adverse effect on our operating results. | |||||||||||||
Discontinued Operations. | |||||||||||||
Discontinued operations are accounted for and presented in accordance with Accounting Standards Codification (“ASC”) 360, Impairment or Disposal of Long-Lived Assets, (“ASC 360”). When a qualifying component of the Company is disposed of or has been classified as held for sale, the operating results of that component are removed from continuing operations for all periods presented and displayed as discontinued operations if: (a) elimination of the component’s operations and cash flows from the Company’s ongoing operations has occurred (or will occur) and (b) significant continuing involvement by the Company in the component’s operations does not exist after the disposal transaction. | |||||||||||||
On December 30, 2011, we entered into an agreement to sell our aesthetics business to Cutera, Inc. The operating results of our aesthetics business were therefore classified as discontinued operations, and the associated assets and liabilities were classified as discontinued operations for all periods presented under the requirements of ASC 360. The sale of the aesthetics business was completed on February 2, 2012. | |||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
(in thousands) | 3-Jan-15 | 28-Dec-13 | 29-Dec-12 | ||||||||||
Total revenues | $ | — | $ | — | $ | 1,630 | |||||||
Income (loss) from discontinued operations | $ | — | $ | — | $ | (325 | ) | ||||||
Gain on sales of aesthetics business | $ | — | $ | — | $ | 1,149 | |||||||
Income from discontinued operations, before | $ | — | $ | — | $ | 824 | |||||||
income taxes | |||||||||||||
Income tax (benefit) expense | $ | — | $ | — | $ | (784 | ) | ||||||
Income from discontinued operations, net of tax | $ | — | $ | — | $ | 1,608 | |||||||
Current assets of discontinued operations as of December 29, 2012 comprised of restricted cash in the amount of $510 thousand. In accordance with the terms of the sale of the aesthetics segment to Cutera, Inc., 10% of the total purchase price was deposited and held in an escrow account for a period of twelve months from the date of closing and was available to resolve certain claims by Cutera, Inc., if any, against which the Company had indemnified Cutera, Inc. There had been no claims made by Cutera, Inc. and in May 2013, the cash held in the escrow account was released to the Company. | |||||||||||||
Cash and Cash Equivalents. | |||||||||||||
We consider all highly liquid debt instruments with insignificant interest rate risk and an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist primarily of cash deposits in money market funds that are available for withdrawal without restriction. | |||||||||||||
Sales Returns Allowance and Allowance for Doubtful Accounts. | |||||||||||||
The Company estimates future product returns related to current period product revenue. We analyze historical returns, and changes in customer demand and acceptance of our products when evaluating the adequacy of the sales returns allowance. Significant management judgment and estimates must be made and used in connection with establishing the sales returns allowance in any accounting period. Material differences may result in the amount and timing of our revenue for any period if management made different judgments or utilized different estimates. Our provision for sales returns is recorded net of the associated costs. The balance for the provision of sales returns was $47 thousand and $33 thousand as of January 3, 2015 and December 28, 2013, respectively, and is recorded within the deferred revenue accounts in the consolidated balance sheets. | |||||||||||||
Similarly management must make estimates regarding the uncollectibility of accounts receivable. We are exposed to credit risk in the event of non-payment by customers to the extent of amounts recorded on the consolidated balance sheets. As sales levels change, the level of accounts receivable would likely also change. In addition, in the event that customers were to delay their payments to us, the levels of accounts receivable would likely increase. We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance for doubtful accounts is based on past payment history with the customer, analysis of the customer’s current financial condition, the aging of the accounts receivable balance, customer concentration and other known factors. | |||||||||||||
Inventories. | |||||||||||||
Inventories are stated at the lower of cost or market and include on-hand inventory physically held at the Company’s facility, sales demo inventory and service loaner inventory. Cost is determined on a standard cost basis which approximates actual cost on a first-in, first-out (“FIFO”) method. Lower of cost or market is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence or impaired inventory and are charged to cost of revenues. Once the cost of the inventory is reduced, a new lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Factors influencing these adjustments include changes in demand, product life cycle and development plans, component cost trends, product pricing, physical deterioration and quality issues. Revisions to these adjustments would be required if these factors differ from our estimates. | |||||||||||||
As part of our normal business, we generally utilize various finished goods inventory as either sales demos to facilitate the sale of our products to prospective customers, or as loaners that we allow our existing customers to use while we repair their products. The Company is amortizing these demos and loaners over an estimated useful life of four years. The amortization of the demos is charged to sales expense while the amortization on the loaners is charged to cost of revenues. The gross value of demos and loaners was $1.4 million and $1.6 million and the accumulated amortization was $524 thousand and $601 thousand as of January 3, 2015 and December 28, 2013, respectively. The net book value of demos and loaners is charged to cost of revenues when such demos or loaners are sold. | |||||||||||||
Property and Equipment. | |||||||||||||
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight–line basis over the estimated useful lives of the assets, which is generally three years. Leasehold improvements are amortized over the lesser of their estimated useful lives or the lease term. Repairs and maintenance costs are expensed as incurred. | |||||||||||||
Valuation of Goodwill and Intangible Assets. | |||||||||||||
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The Company reviews goodwill for impairment on an annual basis or whenever events or changes in circumstances indicate the carrying value may not be recoverable. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step quantitative goodwill impairment test. If, after assessing the totality of circumstances, an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then it is required to perform the two-step impairment test. It does not require an entity to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying value. However, an entity also has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. The Company has determined that it has a single reporting unit for purposes of performing its goodwill impairment test. As the Company uses the market approach to assess impairment, its common stock price is an important component of the fair value calculation. If the Company’s stock price continues to experience significant price and volume fluctuations, this will impact the fair value of the reporting unit and can lead to potential impairment in future periods. The Company performed its annual impairment test during the second quarter of 2014 and determined that its goodwill was not impaired. As of January 3, 2015, the Company had not identified any factors that indicated there was an impairment of its goodwill and determined that no additional impairment analysis was then required. | |||||||||||||
Intangible assets with definite lives are amortized over the useful life of the asset. We review our amortizing intangible assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future non-discounted net cash flow the asset is expected to generate. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. In such circumstances, the Company conducts an impairment analysis in accordance with ASC 350, Intangibles – Goodwill and Other (“ASC 350”). | |||||||||||||
Revenue Recognition. | |||||||||||||
Our revenues arise from the sale of laser consoles, delivery devices, consumables and service and support activities. Revenue from product sales is recognized upon receipt of a purchase order and product shipment provided that no significant obligations remain and collection of the receivables is reasonably assured. Shipments are generally made with Free-On-Board (“FOB”) shipping point terms, whereby title passes upon shipment from our dock. Any shipments with FOB receiving point terms are recorded as revenue when the shipment arrives at the receiving point. Cost is recognized as product sales revenue is recognized. The Company’s sales may include post-sales obligations for training or other deliverables. For revenue arrangements such as these, we recognize revenue in accordance with ASC 605, Revenue Recognition, Multiple-Element Arrangements. The Company allocates revenue among deliverables in multiple-element arrangements using the relative selling price method. Revenue allocated to each element is recognized when the basic revenue recognition criteria is met for each element. The Company is required to apply a hierarchy to determine the selling price to be used for allocating revenue to deliverables: (i) vendor-specific objective evidence of selling price (“VSOE”), (ii) third-party evidence of selling price (“TPE”) and (iii) best estimate of the selling price (“ESP”). In general, the Company is unable to establish VSOE or TPE for all of the elements in the arrangement; therefore, revenue is allocated to these elements based on the Company’s ESP, which the Company determines after considering multiple factors such as management approved pricing guidelines, geographic differences, market conditions, competitor pricing strategies, internal costs and gross margin objectives. These factors may vary over time depending upon the unique facts and circumstances related to each deliverable. As a result, the Company’s ESP for products and services could change. Revenues for post-sales obligations are recognized as the obligations are fulfilled. | |||||||||||||
In international regions, we utilize distributors to market and sell our products. We recognize revenue upon shipment for sales to these independent, third-party distributors as we have no continuing obligations subsequent to shipment. Generally our distributors are responsible for all marketing, sales, installation, training and warranty labor coverage for our products. Our standard terms and conditions do not provide price protection or stock return rights to any of our distributors. | |||||||||||||
Royalty revenues are typically based on licensees’ net sales of products that utilize our technology and are recognized as earned in accordance with the contract terms when royalties from licensees can be reliably measured and collectibility is reasonably assured, such as upon the earlier of the receipt of a royalty statement from the licensee or upon payment by the licensee. | |||||||||||||
Taxes Collected from Customers and Remitted to Governmental Authorities. | |||||||||||||
Taxes collected from customers and remitted to governmental authorities are recognized on a net basis in the accompanying consolidated statements of operations as well as accrued expenses to the degree which is appropriate. | |||||||||||||
Deferred Revenue. | |||||||||||||
Revenue related to service contracts is deferred and recognized on a straight line basis over the period of the applicable service period. Costs associated with these service arrangements are recognized as incurred. A reconciliation of the changes in the Company’s deferred revenue balances for the years ended January 3, 2015 and December 28, 2013 are as follows (in thousands): | |||||||||||||
FY 2012: Balance as of December 29, 2012 | $ | 1,004 | |||||||||||
Additions to deferral | 1,383 | ||||||||||||
Revenue recognized | (1,254 | ) | |||||||||||
FY 2013: Balance as of December 28, 2013 | 1,133 | ||||||||||||
Additions to deferral | 1,514 | ||||||||||||
Revenue recognized | (1,468 | ) | |||||||||||
FY 2014: Balance as of January 3, 2015 | $ | 1,179 | |||||||||||
Warranty. | |||||||||||||
We provide reserves for the estimated cost of product warranties at the time revenue is recognized based on historical experience of known product failure rates and expected material and labor costs to provide warranty services. We generally provide a two-year warranty on our products. Additionally, from time to time, specific warranty accruals may be made if unforeseen technical problems arise. Alternatively, if estimates are determined to be greater than the actual amounts necessary, we may reverse a portion of such provisions in future periods. Warranty costs are reflected in the consolidated statements of operations as costs of revenues. A reconciliation of the changes in the Company’s warranty liability for the years ended January 3, 2015 and December 28, 2013 are as follows (in thousands): | |||||||||||||
FY 2012: Balance as of December 29, 2012 | $ | 453 | |||||||||||
Accruals for product warranties | 213 | ||||||||||||
Cost of warranty claims | (198 | ) | |||||||||||
FY 2013: Balance as of December 28, 2013 | 468 | ||||||||||||
Accruals for product warranties | 313 | ||||||||||||
Cost of warranty claims | (312 | ) | |||||||||||
FY 2014: Balance as of January 3, 2015 | $ | 469 | |||||||||||
Shipping and Handling Costs. | |||||||||||||
Our shipping and handling costs billed to customers are included in revenues and the associated expense is recorded in cost of revenues for all periods presented. Shipping and handling costs amounted to $0.3 million for each of the fiscal years 2014, 2013 and 2012. | |||||||||||||
Research and Development. | |||||||||||||
Research and development expenditures are charged to operations as incurred. | |||||||||||||
Advertising. | |||||||||||||
Advertising and promotion costs are expensed as they are incurred; such costs were approximately $0.2 million in 2014, $0.1 million in 2013, and $0.2 million in 2012 and are included in sales and marketing expenses in the accompanying consolidated statements of operations. | |||||||||||||
Income Taxes. | |||||||||||||
We account for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. Under ASC 740, the liability method is used in accounting for income taxes. Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We evaluate annually the realizability of our deferred tax assets by assessing our valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization include our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. In 2013, we recorded a full valuation allowance for our deferred tax assets based on our historical loss and the uncertainty regarding our ability to project future taxable income. In 2014, the Company released $9.2 million of valuation allowance against most of its deferred tax assets except for the California Research and Development Credit. | |||||||||||||
Accounting for Uncertainty in Income Taxes. | |||||||||||||
The Company accounts for uncertain tax positions in accordance with ASC 740. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax provision that an entity takes or expects to take in a tax return. Additionally, ASC 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. Under ASC 740, an entity may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. In accordance with our accounting policy, we recognize accrued interests and penalties related to unrecognized tax benefits as a component of income tax expense. There were no accrued interest and penalties during the year ended January 3, 2015. | |||||||||||||
Accounting for Stock-Based Compensation. | |||||||||||||
The Company accounts for stock-based compensation granted to employees and directors, including employees stock option awards, restricted stock and restricted stock units in accordance with ASC 718, Compensation – Stock Compensation (“ASC 718”). Accordingly, stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as expense over the employee’s service period. The Company recognizes compensation expense on a straight-line basis over the requisite service period of the award. | |||||||||||||
The Company values options using the Black-Scholes option pricing model. Restricted stock and time-based restricted stock units are valued at the grant date fair value of the underlying common shares. Performance-based restricted stock units are valued using the Monte Carlo simulation model. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions which determine the fair value of share-based awards, including the option’s expected term and the price volatility of the underlying stock. The Monte Carlo simulation model incorporates assumptions for the holding period, risk-free interest rate, stock price volatility and dividend yield. | |||||||||||||
Concentration of Credit Risk and Other Risks and Uncertainties. | |||||||||||||
The Company’s cash and cash equivalents are deposited in demand and money market accounts. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally these deposits may be redeemed upon demand and therefore, bear minimal risk. | |||||||||||||
The Company markets its products to distributors and end-users throughout the world. Sales to international distributors are generally made on open credit terms and letters of credit. Management performs ongoing credit evaluations of our customers and maintains an allowance for potential credit losses. Historically, the Company has not experienced any significant losses related to individual customers or a group of customers in any particular geographic area. For the years ended January 3, 2015, December 28, 2013, and December 29, 2012, no single customer accounted for greater than 10% of total revenues. As of January 3, 2015, one customer accounted for approximately 13% of our net accounts receivable balance. No customer accounted for more than 10% of our accounts receivable balance as of December 28, 2013. | |||||||||||||
The Company’s products require approvals from the Food and Drug Administration and international regulatory agencies prior to commercialized sales. The Company’s future products may not receive required approvals. If the Company were denied such approvals, or if such approvals were delayed, it would have a materially adverse impact on the Company’s business, results of operations and financial condition. | |||||||||||||
Reliance on Certain Suppliers. | |||||||||||||
Certain components and services used by the Company to manufacture and develop its products are presently available from only one or a limited number of suppliers or vendors. The loss of any of these suppliers or vendors would potentially require a significant level of hardware and/or software development efforts to incorporate the products or services into the Company’s products. | |||||||||||||
Net Income per Share. | |||||||||||||
Net income per share is computed in accordance with ASC 260, Earnings per Share. Basic net income per share is based upon the weighted average number of common shares outstanding during the period. Diluted net income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalents outstanding during the period. Common stock equivalents consist of incremental common shares issuable upon the exercise of stock options, release (vesting) of restricted stock units and awards, and the conversion of Series A Preferred Stock into common stock and are calculated under the treasury stock method. Common stock equivalent shares from unexercised stock options, unvested restricted stock units and awards and the conversion of Series A Preferred Stock are excluded from the computation for periods in which the Company incurs a loss from continuing operations or if the exercise price of such options is greater than the average market price of the stock for the period as their effect is anti-dilutive. See Note 14 - Computation of Basic and Diluted Net Income (Loss) Per Common Share. | |||||||||||||
Recently Issued and Adopted Accounting Standards. | |||||||||||||
In May 2014, as part of its ongoing efforts to assist in the convergence of U.S. GAAP and International Financial Reporting Standards (“IFRS”), the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers.” The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The ASU provides alternative methods of initial adoption and is effective for annual and interim periods beginning after December 15, 2016. We are currently evaluating the impact that this standard will have on our consolidated financial statements. | |||||||||||||
In June 2014, the FASB issued ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force)”. The ASU clarifies that entities should treat performance targets that can be met after the requisite service period of a share-based payment award as performance conditions that affect vesting. Therefore, an entity would not record compensation expense (measured as of the grant date without taking into account the effect of the performance target) related to an award for which transfer to the employee is contingent on the entity’s satisfaction of a performance target until it becomes probable that the performance target will be met. The ASU does not contain any new disclosure requirements. For all entities, the ASU is effective for reporting periods beginning after December 15, 2015. Early adoption is permitted. We expect to adopt this standard in fiscal 2016 and do not expect the adoption of this standard to have a material impact on our consolidated financial statements. |
Fair_Value_Measurement
Fair Value Measurement | 12 Months Ended | ||||||||||||||||||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||
Fair Value Measurement | 3. Fair Value Measurement | ||||||||||||||||||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: | |||||||||||||||||||||||||||||||||
— | Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. | ||||||||||||||||||||||||||||||||
— | Level 2: Directly or indirectly observable inputs as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument. | ||||||||||||||||||||||||||||||||
— | Level 3: Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. | ||||||||||||||||||||||||||||||||
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. | |||||||||||||||||||||||||||||||||
The carrying amounts of the Company’s financial assets and liabilities, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses as of January 3, 2015 and December 28, 2013, approximate fair value because of the short maturity of these instruments. | |||||||||||||||||||||||||||||||||
As of January 3, 2015 and December 28, 2013, financial assets and liabilities measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above was as follows (in thousands): | |||||||||||||||||||||||||||||||||
As of January 3, 2015 | As of December 28, 2013 | ||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Money market funds | $ | 11,846 | $ | 11,846 | $ | 12,742 | $ | 12,742 | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Earn-out liability | $ | 1,423 | $ | 1,423 | $ | 624 | $ | 624 | |||||||||||||||||||||||||
The Company’s Level 1 financial assets are money market funds whose fair values are based on quoted market prices. The Company does not have any Level 2 financial assets or liabilities. The fair value of the earn-out liability arising from the acquisitions of RetinaLabs and Ocunetics is classified within Level 3 of the fair value hierarchy since it is based on significant unobservable inputs. The significant unobservable inputs include projected royalties and discount rates to present value the payments. A significant increase (decrease) in the projected royalty payments in isolation could result in a significantly higher (lower) fair value measurement and a significant increase (decrease) in the discount rate in isolation could result in a significantly lower (higher) fair value measurement. The fair value of the earn-out liability is calculated on a quarterly basis by the Company based on a collaborative effort of the Company’s operations, finance and accounting groups based on additional information as it becomes available. We continue to generate revenues from our RetinaLabs acquisition and anticipate generating revenues from our Ocunetics transaction. Both of these deals were structured with an earn-out component. Our expectations of the future revenues to be generated from these deals have increased; we now anticipate increasing our payment under the earn-out conditions. The earn-out liability is included in accrued expenses and other long-term liabilities in the consolidated balance sheets. Any change in the fair value adjustment is recorded in the consolidated statements of operations. | |||||||||||||||||||||||||||||||||
Charges related to fair value adjustments were $1,258 thousand, $355 thousand and $215 thousand for the fiscal years 2014, 2013 and 2012, respectively | |||||||||||||||||||||||||||||||||
The following table presents quantitative information about the inputs and valuation methodologies used for our fair value measurements classified in Level 3 of the fair value hierarchy as of January 3, 2015 and December 28, 2013. | |||||||||||||||||||||||||||||||||
As of January 3, 2015 | Fair Value | Valuation | Significant | Weighted | |||||||||||||||||||||||||||||
(in | Technique | Unobservable | Average | ||||||||||||||||||||||||||||||
thousands) | Input | (range) | |||||||||||||||||||||||||||||||
Earn-out liability | $ | 1,423 | Discounted cash | Projected royalties | $3,048 | ||||||||||||||||||||||||||||
flow | (in thousands) | ($669 – $3,613) | |||||||||||||||||||||||||||||||
Discount rate | 13.54% | ||||||||||||||||||||||||||||||||
(10.34% - 27.00%) | |||||||||||||||||||||||||||||||||
As of December 28, 2013 | Fair Value | Valuation | Significant | Weighted | |||||||||||||||||||||||||||||
(in | Technique | Unobservable | Average | ||||||||||||||||||||||||||||||
thousands) | Input | (range) | |||||||||||||||||||||||||||||||
Earn-out liability | $ | 624 | Discounted cash | Projected royalties | $1,463 | ||||||||||||||||||||||||||||
flow | (in thousands) | ($414 – $1,675) | |||||||||||||||||||||||||||||||
Discount rate | 21.61% | ||||||||||||||||||||||||||||||||
(20.52% - 27.00%) | |||||||||||||||||||||||||||||||||
The following table provides a reconciliation of the beginning and ending balances of the contingent consideration – cash (Level 3 liabilities) (in thousands): | |||||||||||||||||||||||||||||||||
Balance as of December 29, 2012 | $ | 652 | |||||||||||||||||||||||||||||||
Payments against earn-out | (383 | ) | |||||||||||||||||||||||||||||||
Change in fair value of earn-out liability | 355 | ||||||||||||||||||||||||||||||||
Balance as of December 28, 2013 | 624 | ||||||||||||||||||||||||||||||||
Payments against earn-out | (459 | ) | |||||||||||||||||||||||||||||||
Change in fair value of earn-out liability | 1,258 | ||||||||||||||||||||||||||||||||
Balance as of January 3, 2015 | $ | 1,423 | |||||||||||||||||||||||||||||||
Inventories
Inventories | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | 4. Inventories | ||||||||
The components of the Company’s inventories are as follows (in thousands): | |||||||||
FY 2014 | FY 2013 | ||||||||
January 3, | December 28, | ||||||||
2015 | 2013 | ||||||||
Raw materials | $ | 3,966 | $ | 5,922 | |||||
Work in process | 1,609 | 976 | |||||||
Finished goods | 3,544 | 3,707 | |||||||
Total inventories | $ | 9,119 | $ | 10,605 | |||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Property Plant And Equipment [Abstract] | |||||||||
Property and Equipment | 5. Property and Equipment | ||||||||
The components of the Company’s property and equipment are as follows (in thousands): | |||||||||
FY 2014 | FY 2013 | ||||||||
January 3, | December 28, | ||||||||
2015 | 2013 | ||||||||
Equipment | $ | 7,623 | $ | 7,065 | |||||
Leasehold improvements | 2,309 | 2,299 | |||||||
Less: accumulated depreciation and amortization | (9,197 | ) | (8,821 | ) | |||||
Property and equipment, net | $ | 735 | $ | 543 | |||||
Depreciation expense related to property and equipment was $376 thousand, $264 thousand and $236 thousand for the fiscal years 2014, 2013 and 2012, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Jan. 03, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | 6. Goodwill |
The carrying value of goodwill was $0.5 million as of January 3, 2015 and December 28, 2013. | |
Goodwill is tested for impairment at least annually or whenever there is a change in circumstances that indicates the carrying value of these assets may be impaired. The determination of whether any potential impairment of goodwill exists is based upon a two-step impairment test performed in accordance with ASC 350. There was no impairment of goodwill recognized during fiscal years 2014, 2013 or 2012. |
Intangible_Assets
Intangible Assets | 12 Months Ended | ||||||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||
Intangible Assets | 7. Intangible Assets | ||||||||||||||||||||
The components of the Company’s purchased intangible assets as of January 3, 2015 are as follows (in thousands): | |||||||||||||||||||||
Useful | FY 2014 | Gross | Accumulated | Net | Useful Lives | ||||||||||||||||
Lives | Annual | Carrying | Amortization | Carrying | Remaining | ||||||||||||||||
Amortization | Value | Value | |||||||||||||||||||
Customer relations | 15 Years | $ | 16 | $ | 240 | $ | 76 | $ | 164 | 10.25 Years | |||||||||||
Patents | Varies | 28 | 720 | 600 | 120 | Varies | |||||||||||||||
$ | 44 | $ | 960 | $ | 676 | $ | 284 | ||||||||||||||
The components of the Company’s purchased intangible assets as of December 28, 2013 are as follows (in thousands): | |||||||||||||||||||||
Useful | FY 2013 | Gross | Accumulated | Net | Useful Lives | ||||||||||||||||
Lives | Annual | Carrying | Amortization | Carrying | Remaining | ||||||||||||||||
Amortization | Value | Value | |||||||||||||||||||
Customer relations | 15 Years | $ | 16 | $ | 240 | $ | 60 | $ | 180 | 11.25 Years | |||||||||||
Patents | Varies | 210 | 720 | 572 | 148 | Varies | |||||||||||||||
$ | 226 | $ | 960 | $ | 632 | $ | 328 | ||||||||||||||
Aggregate amortization expense for the fiscal years 2014, 2013 and 2012 were $44 thousand, $226 thousand and $191 thousand, respectively. The amortization of customer relations was charged to sales and marketing expense and the amortization of Patents was charged to cost of revenues. | |||||||||||||||||||||
Estimated future amortization expense for purchased intangible assets is as follows (in thousands): | |||||||||||||||||||||
Fiscal Year: | |||||||||||||||||||||
2015 | $ | 53 | |||||||||||||||||||
2016 | 99 | ||||||||||||||||||||
2017 | 16 | ||||||||||||||||||||
2018 | 16 | ||||||||||||||||||||
2019 | 16 | ||||||||||||||||||||
Thereafter | 84 | ||||||||||||||||||||
Total | $ | 284 | |||||||||||||||||||
Accrued_Expenses
Accrued Expenses | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Payables And Accruals [Abstract] | |||||||||
Accrued Expenses | 8. Accrued Expenses | ||||||||
The components of the Company’s accrued expenses are as follows (in thousands): | |||||||||
FY 2014 | FY 2013 | ||||||||
January 3, | December 28, | ||||||||
2015 | 2013 | ||||||||
Customer deposits | $ | 500 | $ | 200 | |||||
Earn-out – short term | 382 | 184 | |||||||
Distributor commission | 300 | 524 | |||||||
Sales and use tax payable | 107 | 111 | |||||||
Royalties payable | 36 | 32 | |||||||
Other accrued expenses | 445 | 541 | |||||||
Total accrued expenses | $ | 1,770 | $ | 1,592 | |||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Jan. 03, 2015 | |||||
Commitments And Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies | 9. Commitments and Contingencies | ||||
Lease Agreements. | |||||
The Company leases its operating facilities under a non-cancelable operating lease. In December 2009, the lease for the Mountain View, California facility was amended and renewed to lease for an additional six year period beginning March 1, 2010 until February 28, 2015. In August 2014, the Company executed an amendment to extend the term of the lease through February 28, 2017. There are no remaining options to extend or renew the terms of this lease. Rent expense totaled $0.6 million for each of the fiscal years 2014, 2013 and 2012. | |||||
Future minimum lease payments under current operating leases at January 3, 2015 are summarized as follows (in thousands): | |||||
Fiscal Year | Operating Lease Payments | ||||
2015 | $ | 858 | |||
2016 | 993 | ||||
2017 | 164 | ||||
Total future minimum lease payments | $ | 2,015 | |||
Manufacture and Supply Agreement. | |||||
In January 2014, the Company and Peregrine Surgical Ltd. amended the manufacture, supply and distributor agreement that was originally entered into in April 2013. The amendment modified the term and termination period from April 1, 2013 through April 1, 2017 to January 1, 2014 through January 1, 2018. All other terms under the original agreement remained in force. | |||||
Under the agreement, the Company has a minimum commitment to purchase annually $750 thousand of certain components and ophthalmic instrumentation. In 2014, the Company was not able to meet the minimum commitment, having purchased only $678 thousand. The deficient amount of $72 thousand was mutually agreed upon by both parties to be added to the 2015 minimum commitment. | |||||
Future minimum payments for manufacture and supply commitments as of January 3, 2015 are summarized as follows (in thousands): | |||||
Fiscal Year | Contract Manufacturing and Supply Commitments | ||||
2015 | $ | 6,171 | |||
2016 | 2,013 | ||||
2017 | 750 | ||||
Total contract manufacturing and supply commitments | $ | 8,934 | |||
License Agreements. | |||||
The Company is obligated to pay royalties equivalent to 5% of sales on certain products under certain license agreements with termination dates as early as the end of 2018 and as late as the end of 2021. Royalty expense, charged to cost of revenues, was approximately $0.2 million, $0.1 million, and $0.1 million for the fiscal years 2014, 2013 and 2012, respectively. | |||||
Indemnification Arrangements. | |||||
The Company enters into standard indemnification arrangements in our ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, generally our business partners or customers, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to our products. The term of these indemnification agreements is generally perpetual anytime after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal. | |||||
The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of a culpable nature; to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified; and to make good faith determination whether or not it is practicable for the Company to obtain directors and officers insurance. The Company currently has directors and officers liability insurance. | |||||
In general, management believes that claims which are pending or known to be threatened, will not have a material adverse effect on the Company’s financial position or results of operations and are adequately covered by the Company’s liability insurance. However, it is possible that cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one of more of these contingencies or because of the diversion of management’s attention and the incurrence of significant expenses. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||
Stockholders' Equity | 10. Stockholders’ Equity | ||||||||||||||||||||
Convertible Preferred Stock | |||||||||||||||||||||
The Company is authorized to issue up to 2,000,000 shares of undesignated preferred stock from time to time in one or more series. During August 2007, the Company filed a Certificate of Designation authorizing the Company to issue up to 500,000 of the 2,000,000 shares of authorized undesignated preferred stock as shares of Series A Preferred Stock, par value $0.01 per share and the Company issued 500,000 shares of Series A Preferred Stock, convertible into 1 million shares of common stock, and warrants to purchase an aggregate of 600,000 shares of common stock at an exercise price of $0.01 per share. The warrants were to expire December 31, 2007 but were exercised prior to that date. The purchase price for a unit of 1 share of Series A Preferred Stock and a warrant to purchase 1.2 shares of common stock was $10.00, resulting in net proceeds to the Company of approximately $4.9 million. Of the total $4.9 million proceeds received, approximately $2.3 million was allocated to the common stock warrants based on their estimated fair value at the time of issuance. On June 11, 2013, all outstanding shares of the Company’s Series A Preferred Stock automatically converted into 1,000,000 shares of common stock. | |||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||
1998 Stock Plan. | |||||||||||||||||||||
The 1998 Stock Plan (“the 1998 Plan”), as amended, provides for the granting to employees (including officers and non-employee directors) of incentive stock options and for the granting to employees (including officers and non-employee directors) and consultants of nonstatutory stock options, stock purchase rights (“SPRs”), restricted stock, restricted stock units (“RSUs”), performance shares, performance units and stock appreciation rights. The exercise price of incentive stock options and stock appreciation rights granted under the 1998 Plan must be at least equal to the fair market value of the shares at the time of grant. With respect to any recipient who owns stock possessing more than 10% of the voting power of our outstanding capital stock, the exercise price of any option or SPR granted must be at least equal to 110% of the fair market value at the time of grant. Options granted under the 1998 Plan are exercisable at such times and under such conditions as determined by the administrator; generally over a four year period. The maximum term of incentive stock options granted to any recipient must not exceed ten years; provided, however, that the maximum term of an incentive stock option granted to any recipient possessing more than 10% of the voting power of the Company’s outstanding capital stock must not exceed five years. In the case of SPRs, unless the administrator determines otherwise, the Company has a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser’s employment with the Company for any reason (including death or disability). Such repurchase option lapses at a rate determined by the administrator. The purchase price for shares repurchased by the Company is the original price paid by the purchaser. As of January 3, 2015 and December 28, 2013, no shares were subject to repurchase. The form of consideration for exercising an option or stock purchase right, including the method of payment, is determined by the administrator. The 1998 Plan expired in February 2008. | |||||||||||||||||||||
2008 Equity Incentive Plan. | |||||||||||||||||||||
On June 11, 2008, the shareholders approved the adoption of the 2008 Equity Incentive Plan, (“the Incentive Plan”). There are no material changes in the Incentive Plan from the 1998 Plan. In 2014, the stockholders approved an amendment to the Incentive Plan for purposes of complying with Section 162(m) of the Internal Revenue Code of 1986, as amended, to increase the share reserve under the Incentive Plan, and to make certain other amendments to the terms of the Incentive Plan. The maximum aggregate number of shares that may be awarded and sold under the Incentive Plan is 300,000 shares plus any shares subject to stock options or similar awards granted under the 1998 Plan that expire or otherwise terminate without having been exercised in full and shares issued pursuant to awards granted under the 1998 Plan that are forfeited to the Company on or after the date the 1998 Plan expires. | |||||||||||||||||||||
The following table summarizes information regarding activity in our stock option plans during the fiscal years ended 2014, 2013 and 2012 (in thousands except share and per share data): | |||||||||||||||||||||
Outstanding Options | |||||||||||||||||||||
Shares | Number | Aggregate | Weighted | ||||||||||||||||||
Available | of Shares | Price | Average | ||||||||||||||||||
for Grant | Exercise | ||||||||||||||||||||
Price | |||||||||||||||||||||
Balances as of December 31, 2011 | 505,221 | 1,766,401 | $ | 6,380 | $ | 3.61 | |||||||||||||||
Additional shares reserved | 391,166 | — | — | — | |||||||||||||||||
Options granted | (335,050 | ) | 335,050 | 1,313 | 3.92 | ||||||||||||||||
Restricted stock granted | (66,665 | ) | |||||||||||||||||||
Options exercised | — | (174,631 | ) | (445 | ) | 2.55 | |||||||||||||||
Options cancelled | 356,277 | (356,277 | ) | (1,550 | ) | 4.35 | |||||||||||||||
Options expired | -108,971 | — | — | — | |||||||||||||||||
Balances as of December 29, 2012 | 741,978 | 1,570,543 | 5,698 | 3.63 | |||||||||||||||||
Additional shares reserved | 52,128 | — | — | — | |||||||||||||||||
Options granted | (149,600 | ) | 149,600 | 851 | 5.69 | ||||||||||||||||
Restricted stock granted | (234,012 | ) | — | — | — | ||||||||||||||||
Options exercised | — | (493,622 | ) | (1,495 | ) | 3.03 | |||||||||||||||
Options cancelled | 123,679 | (123,679 | ) | (698 | ) | 5.64 | |||||||||||||||
Options expired | -57,628 | — | — | — | |||||||||||||||||
Balances as of December 28, 2013 | 476,545 | 1,102,842 | 4,356 | 3.97 | |||||||||||||||||
Additional shares reserved | 503,306 | — | — | — | |||||||||||||||||
Options granted | (158,300 | ) | 158,300 | 1,362 | 8.61 | ||||||||||||||||
Restricted stock granted | (62,225 | ) | — | — | — | ||||||||||||||||
Options exercised | — | (399,390 | ) | (1,501 | ) | 3.76 | |||||||||||||||
Options cancelled | 27,957 | (27,957 | ) | (171 | ) | 6.13 | |||||||||||||||
Awards cancelled | 79,890 | — | — | — | |||||||||||||||||
Options expired | (13,056 | ) | — | — | — | ||||||||||||||||
Balances as of January 3, 2015 | 854,117 | 833,795 | $ | 4,046 | $ | 4.88 | |||||||||||||||
There were 1,687,912 shares reserved for future issuance under the stock option plans as of January 3, 2015. | |||||||||||||||||||||
The following table summarizes information with respect to stock options outstanding and exercisable as of January 3, 2015: | |||||||||||||||||||||
Options Outstanding | Options Vested and Exercisable | ||||||||||||||||||||
Range of Exercise Prices | Number of | Weighted | Weighted | Number of | Weighted | ||||||||||||||||
Shares | Average | Average | Shares | Average | |||||||||||||||||
Outstanding as of | Remaining | Exercise | Exercisable as of | Exercise | |||||||||||||||||
January 3, | Contractual | Price | January 3, | Price | |||||||||||||||||
2015 | Life (years) | 2015 | |||||||||||||||||||
$0.90 - $3.07 | 96,025 | 1.12 | $ | 1.7 | 96,025 | $ | 1.7 | ||||||||||||||
$3.08 - $3.60 | 91,707 | 3.17 | $ | 3.51 | 72,064 | $ | 3.49 | ||||||||||||||
$3.72 - $3.75 | 33,250 | 3.83 | $ | 3.72 | 22,000 | $ | 3.73 | ||||||||||||||
$3.86 - $3.86 | 147,896 | 4.91 | $ | 3.86 | 59,646 | $ | 3.86 | ||||||||||||||
$3.89 - $4.31 | 140,325 | 3.12 | $ | 4.12 | 112,521 | $ | 4.15 | ||||||||||||||
$4.70 - $5.92 | 137,463 | 4.54 | $ | 5.5 | 64,546 | $ | 5.45 | ||||||||||||||
$6.00 - $8.58 | 122,129 | 5.92 | $ | 7.91 | 25,131 | $ | 7.45 | ||||||||||||||
$8.60 - $8.98 | 42,000 | 6.55 | $ | 8.84 | — | $ | — | ||||||||||||||
$9.34 - $9.34 | 20,000 | 6.18 | $ | 9.34 | — | $ | — | ||||||||||||||
$10.19 - $10.19 | 3,000 | 5.92 | $ | 10.19 | 813 | $ | 10.19 | ||||||||||||||
$0.90 - $10.19 | 833,795 | 4.14 | $ | 4.88 | 452,746 | $ | 3.85 | ||||||||||||||
The determination of the fair value of options granted by the Company is computed using the Black-Scholes option pricing model with the following weighted average assumptions: | |||||||||||||||||||||
Employee Stock Option Plan | |||||||||||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||||||||||
Average risk free interest rate | 1.49% | 1.12% | 0.68% | ||||||||||||||||||
Expected life (in years) | 4.50 years | 4.50 years | 4.55 years | ||||||||||||||||||
Dividend yield | — | — | — | ||||||||||||||||||
Average volatility | 56.20% | 71.50% | 89.20% | ||||||||||||||||||
The weighted average grant date fair value of options granted as calculated using Black-Scholes option pricing was $4.02, $3.16, and $2.60 per share for the fiscal years 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
Option pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility is based on analysis of the Company’s stock price history over a period commensurate with the expected term of the options, trading volume of the Company’s stock, look-back volatilities and Company specific events that affected volatility in a prior period. The Company had elected to use the simplified method for estimating the expected term prior to July 3, 2011. Effective July 3, 2011, the expected term of employee stock options represents the weighted average period the stock options are expected to remain outstanding and is based on the history of exercises and cancellations on all past option grants made by the Company, the contractual term, the vesting period and the expected remaining term of the outstanding options. The risk-free interest rate is based on the U.S. Treasury interest rates whose term is consistent with the expected life of the stock options. No dividend yield is included as the Company has not issued any dividends and does not anticipate issuing any dividends in the future. | |||||||||||||||||||||
The following table shows stock-based compensation expense by functional line item in the consolidated statements of operations for 2014, 2013 and 2012 (in thousands): | |||||||||||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||||||||
3-Jan-15 | 28-Dec-13 | 29-Dec-12 | |||||||||||||||||||
Cost of revenues | $ | 149 | $ | 108 | $ | 63 | |||||||||||||||
Research and development | 105 | 71 | 77 | ||||||||||||||||||
Sales and marketing | 118 | 113 | 105 | ||||||||||||||||||
General and administrative | 600 | 397 | 143 | ||||||||||||||||||
Total stock-based compensation expense – continuing operations | 972 | 689 | 388 | ||||||||||||||||||
Total stock-based compensation expense – discontinued operations | — | — | 8 | ||||||||||||||||||
Total stock-based compensation expense | $ | 972 | $ | 689 | $ | 396 | |||||||||||||||
Stock-based compensation expense capitalized to inventory was immaterial for 2014, 2013, and 2012. | |||||||||||||||||||||
Information regarding stock options outstanding, exercisable and expected to vest as of January 3, 2015 is summarized below: | |||||||||||||||||||||
Number of | Weighted Average | Weighted Average | Aggregate Intrinsic Value | ||||||||||||||||||
Remaining Contractual | |||||||||||||||||||||
Shares | Exercise Price | Life (years) | (thousands) | ||||||||||||||||||
Options outstanding | 833,795 | $ | 4.88 | 4.14 | $ | 3,139 | |||||||||||||||
Options vested and expected to vest | 781,361 | $ | 4.77 | 4.04 | $ | 3,026 | |||||||||||||||
Options exercisable | 452,746 | $ | 3.85 | 3.01 | $ | 2,158 | |||||||||||||||
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of fiscal 2014 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on January 3, 2015. This amount changes based on the fair market value of the Company’s common stock. The total intrinsic value of options exercised for fiscal years 2014, 2013 and 2012 was approximately $1.9 million, $1.5 million, and $261 thousand, respectively. | |||||||||||||||||||||
As of January 3, 2015, there was $1.2 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements under both of the plans. The cost is expected to be recognized over a weighted average period of 2.44 years. | |||||||||||||||||||||
Cash flows resulting from excess tax benefits are classified as a part of cash flows from financing activities. Excess tax benefits are realized tax benefits from tax deductions for exercised stock options and vested restricted stock units and awards in excess of the deferred tax asset attributable to stock-based compensation expense for such stock-based awards. Excess tax benefits are considered realized when the tax deductions reduce taxes that otherwise would be payable. Excess tax benefits classified as a financing cash inflow for fiscal 2014were $36 thousand. | |||||||||||||||||||||
Restricted Stock Awards/Restricted Stock Units | |||||||||||||||||||||
Effective for the 2011 fiscal year, each non-employee member of the Board received an annual equity award of either restricted stock or RSU, at the election of such Board member, in each case equal to $20 thousand worth of our common stock (determined at the fair market value of the shares at the time such award is granted) under the Company’s 2008 Equity Incentive Plan. Each equity award or RSU vests in full on the one-year anniversary of the date of grant provided that the non-employee member continues to serve on the Board through such date. | |||||||||||||||||||||
Summary of Restricted Stock Units and Awards | |||||||||||||||||||||
The Company recognizes the estimated compensation expense of restricted stock units and awards, net of estimated forfeitures, over the vesting term. The estimated compensation expense is based on the fair value of the Company’s common stock on the date of grant. | |||||||||||||||||||||
Information regarding the restricted stock units outstanding, vested and expected to vest as of January 3, 2015 is summarized below: | |||||||||||||||||||||
Number of | Weighted Average | Aggregate Intrinsic | |||||||||||||||||||
Shares | Remaining Contractual | Value (thousands) | |||||||||||||||||||
Life (years) | |||||||||||||||||||||
Restricted stock units outstanding | 277,390 | 0.59 | $ | 2,388 | |||||||||||||||||
Restricted stock units vested and expected to vest | 196,858 | 0.23 | $ | 1,695 | |||||||||||||||||
The intrinsic value of the restricted stock units is calculated based on the closing price of IRIDEX shares as quoted on the NASDAQ Global Market on the last trading day of the year, January 2, 2015 of $8.61. | |||||||||||||||||||||
In March 2013, the Company granted a restricted stock unit award for up to 220,000 shares of the Company’s common stock (the “Market Performance Award #1”) under the terms of the Company’s 2008 Equity Incentive Plan, as amended, to the Company’s President and Chief Executive Officer. The number of shares issuable pursuant to the Market Performance Award #1 will be based upon the Company’s average stock price performance during the two months prior to and two months following the date the service condition is met. Based on the Company’s average stock price performance, the Market Performance Award #1 is expected to vest on December 31, 2014. See Note 15 – Subsequent Events. | |||||||||||||||||||||
In January 2014, the Company granted a restricted stock unit award for up to 50,000 shares of the Company’s common stock (the “Market Performance Award #2”) under the terms of the Company’s 2008 Equity Incentive Plan, as amended, to the Company’s President and Chief Executive Officer. The number of shares issuable pursuant to the Market Performance Award #2 will be based upon the Company’s calculated stock price (average stock price performance during the two months prior to and two months following the date the service condition is met. Under the Market Performance Award #2, none of the restricted stock units will vest if the calculated stock price is less than $11.00 per share. Based on the Company’s average stock price performance, the Market Performance Award #2 is not expected to vest on December 31, 2014. See Note 15 – Subsequent Events. | |||||||||||||||||||||
With respect to the Market Performance Award #1 and Market Performance Award #2 (the “Performance Awards”), to the extent that the market condition is not met, the Performance Awards will not vest and will be cancelled. Since the market conditions will affect the vesting of the Performance Awards, the Company could not use the Black-Scholes option pricing model to value the award; instead, a binomial model was used. The Company utilized the Monte Carlo simulation technique, which incorporated assumptions for the expected holding period, risk-free interest rate, stock price volatility and dividend yield. The total value of the Market Performance Award #1 was $258 thousand the total value of the Market Performance Award #2 was $234 thousand. Compensation expense was recognized ratably over the expected vesting term. | |||||||||||||||||||||
Information regarding the restricted stock units activity during the year ended January 3, 2015, December 28, 2013 and December 29, 2012 is summarized below: | |||||||||||||||||||||
Number of | Weighted Average | ||||||||||||||||||||
Shares | Grant Date Fair | ||||||||||||||||||||
Value | |||||||||||||||||||||
Outstanding as of December 31, 2011 | 90,189 | $ | 3.49 | ||||||||||||||||||
Restricted stock units granted | 55,999 | $ | 3.85 | ||||||||||||||||||
Restricted stock units released | (15,189 | ) | $ | 3.95 | |||||||||||||||||
Restricted stock units forfeited | (75,000 | ) | $ | 3.4 | |||||||||||||||||
Outstanding as of December 29, 2012 | 55,999 | $ | 3.85 | ||||||||||||||||||
Restricted stock units granted | 230,509 | $ | 4.51 | ||||||||||||||||||
Restricted stock units released | (17,249 | ) | $ | 3.77 | |||||||||||||||||
Outstanding as of December 28, 2013 | 269,259 | $ | 4.42 | ||||||||||||||||||
Restricted stock units granted | 59,780 | $ | 9.76 | ||||||||||||||||||
Restricted stock units released | (46,759 | ) | $ | 9.29 | |||||||||||||||||
Restricted stock units forfeited | (4,890 | ) | $ | 8.18 | |||||||||||||||||
Outstanding as of January 3, 2015 | 277,390 | $ | 4.68 | ||||||||||||||||||
Information regarding the restricted stock awards activity during the year ended January 3, 2015, December 28, 2013 and December 29, 2012 is summarized below: | |||||||||||||||||||||
Number of | Weighted Average | ||||||||||||||||||||
Shares | Grant Date Fair | ||||||||||||||||||||
Value | |||||||||||||||||||||
Outstanding as of December 31, 2011 | 10,126 | $ | 3.95 | ||||||||||||||||||
Restricted stock awards granted | 10,666 | 3.75 | |||||||||||||||||||
Restricted stock awards released | (10,126 | ) | $ | 3.95 | |||||||||||||||||
Outstanding as of December 29, 2012 | 10,666 | $ | 3.75 | ||||||||||||||||||
Restricted stock awards granted | 3,503 | $ | 5.71 | ||||||||||||||||||
Restricted stock awards released | (10,666 | ) | $ | 3.75 | |||||||||||||||||
Outstanding as of December 28, 2013 | 3,503 | $ | 5.71 | ||||||||||||||||||
Restricted stock awards granted | 2,445 | $ | 8.18 | ||||||||||||||||||
Restricted stock awards released | (3,503 | ) | $ | 5.71 | |||||||||||||||||
Outstanding as of January 3, 2015 | 2,445 | $ | 8.18 | ||||||||||||||||||
Employee_Benefit_Plan
Employee Benefit Plan | 12 Months Ended |
Jan. 03, 2015 | |
Employee Benefits And Share Based Compensation [Abstract] | |
Employee Benefit Plan | 11. Employee Benefit Plan |
The Company has a plan known as the IRIS Medical Instruments 401(k) Trust to provide retirement benefits through the deferred salary deductions for substantially all U.S. employees. Employees may contribute up to 15% of their annual compensation to the plan, limited to a maximum amount set by the Internal Revenue Service. The plan also provides for Company contributions at the discretion of the Board of Directors. Prior to the start of fiscal 2009, the Company suspended the matching contributions. Subsequent to December 29, 2012, the Company reinstated a Company match in the amount of 50% of employee contributions up to a maximum of $3 thousand. In 2014, total matching contributions made by the Company were $186 thousand. In 2013, total matching contributions made by the Company were $170 thousand. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Jan. 03, 2015 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | 12. Income Taxes | ||||||||||||
Pre-tax book income (loss) from continuing operations was comprised of the following: | |||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
January 3, | December 28, | December 29, | |||||||||||
2015 | 2013 | 2012 | |||||||||||
United States | $ | 1,332 | $ | 2,262 | $ | (270 | ) | ||||||
Foreign | — | — | — | ||||||||||
Total | $ | 1,332 | $ | 2,262 | $ | (270 | ) | ||||||
The (benefit from) provision for income taxes from continuing operations includes: | |||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
January 3, | December 28, | December 29, | |||||||||||
2015 | 2013 | 2012 | |||||||||||
Current: | |||||||||||||
Federal | $ | 54 | $ | 11 | $ | (114 | ) | ||||||
State | 16 | 20 | 14 | ||||||||||
70 | 31 | (100 | ) | ||||||||||
Deferred: | |||||||||||||
Federal | (7,862 | ) | — | — | |||||||||
State | (914 | ) | — | — | |||||||||
(8,776 | ) | — | — | ||||||||||
(Benefit from) provision for income taxes | $ | (8,706 | ) | $ | 31 | $ | (100 | ) | |||||
The Company’s effective tax rate differs from the statutory federal income tax rate as shown in the following schedule: | |||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
January 3, | December 28, | December 29, | |||||||||||
2015 | 2013 | 2012 | |||||||||||
Income tax provision at statutory rate | 34 | % | 34 | % | 34 | % | |||||||
State income taxes, net of federal benefit | (68.0 | %) | (13.3 | %) | (88.1 | %) | |||||||
Permanent differences | (1.1 | %) | (17.0 | %) | (89.1 | %) | |||||||
Research and development credits | (2.6 | %) | 0 | % | 0 | % | |||||||
Change in valuation allowance | (613.5 | %) | (2.3 | %) | 180.3 | % | |||||||
Other | (2.4 | %) | 0 | % | 0 | % | |||||||
Effective tax rate | (653.6 | %) | 1.4 | % | 37.1 | % | |||||||
The tax effect of temporary differences and carryforwards that give rise to significant portions of the net deferred tax assets are presented below (in thousands): | |||||||||||||
FY 2014 | FY 2013 | ||||||||||||
January 3, | December 28, | ||||||||||||
2015 | 2013 | ||||||||||||
Accruals and reserves | $ | 1,681 | $ | 1,792 | |||||||||
Deferred revenue | 113 | 91 | |||||||||||
Fixed assets | 439 | 423 | |||||||||||
Intangibles | 825 | 441 | |||||||||||
Stock compensation | 676 | 696 | |||||||||||
Net operating loss | 4,278 | 5,224 | |||||||||||
Research and development credits | 1,575 | 1,260 | |||||||||||
Other tax credits | 94 | 47 | |||||||||||
Net deferred tax asset | $ | 9,681 | $ | 9,974 | |||||||||
Valuation allowance | (905 | ) | (9,974 | ) | |||||||||
Net deferred tax assets | $ | 8,776 | $ | — | |||||||||
The Company's accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of the Company's deferred tax assets. Assessing the realizability of deferred tax assets is dependent upon several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during the periods in which those temporary differences become deductible. The Company's management forecasts taxable income by considering all available positive and negative evidence including its history of operating income or losses and its financial plans and estimates which are used to manage the business. These assumptions require significant judgment about future taxable income. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are reduced. | |||||||||||||
In the fourth quarter of fiscal year 2014, the Company's management determined, based on the Company's recent history of earnings coupled with its forecasted profitability that it is more likely than not that all of its federal and the majority of its state deferred tax assets will be realized in the foreseeable future. Accordingly, in the fourth quarter of fiscal year 2014, the Company released $9.2 million of valuation allowance. As of January 3, 2015, the Company had federal and state net operating loss (“NOL”) carryforwards of $12.5 million and $14.5 million, respectively. Of the total NOL carryover, $2 million for federal and $2.1 million for states, relate to windfall stock option deductions which, when realized, will be credited to equity. The federal NOL will begin to expire in 2032 and the state NOL will begin to expire in 2020, in each case if not used. | |||||||||||||
The Tax Increase Prevention Act of 2014, enacted on December 19, 2014, provided for one-year extension of the research and development credit through 2014. As of January 3, 2015, the Company had federal and state research credit carryforwards of approximately $1.3 million and $1.9 million, respectively, available to offset future tax liabilities. The federal credits will begin expiring in 2026 if not used. The state research credits do not expire. The above NOL and research and development credits are subject to IRC sections 382 and 383. In the event of a change in ownership as defined by these code sections, the usage of the above mentioned NOL’s and credits may be limited. | |||||||||||||
The Company accounts for uncertain tax positions in accordance with ASC 740. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax provision that an entity takes or expects to take in a tax return. Additionally, ASC 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. Under ASC 740, an entity may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. In accordance with our accounting policy, we recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. There were no accrued interest and penalties during the year ended January 3, 2015. | |||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): | |||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
January 3, | December 28, | December 29, | |||||||||||
2015 | 2013 | 2012 | |||||||||||
Balance at the beginning of the year | $ | 1,027 | $ | 954 | $ | 1,191 | |||||||
Additions based upon tax positions related to the current year | 53 | 48 | 36 | ||||||||||
Additions based upon tax positions related to the prior year | 51 | 25 | — | ||||||||||
Reductions based upon tax positions related to the prior year | (270 | ) | — | (273 | ) | ||||||||
Balance at the end of the year | $ | 861 | $ | 1,027 | $ | 954 | |||||||
Recognition of the unrecognized tax benefits of $861 thousand as of January 3, 2015 would affect the Company’s effective tax rate. The Company does not anticipate any material change in its unrecognized tax benefits of $861 thousand over the next twelve months. The unrecognized tax benefits may change during the next year for items that arise in the ordinary course of business. | |||||||||||||
The Company files U.S. federal and state returns. The tax years 2009 to 2014 remain open in several jurisdictions, none of which have individual significance. |
Business_Segments_and_Customer
Business Segments and Customers | 12 Months Ended | ||||||||||||
Jan. 03, 2015 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Business Segments and Customers | 13. Business Segments and Geographical Information | ||||||||||||
The Company operates in one segment, ophthalmology. The Company develops, manufactures and markets medical devices. Our revenues arise from the sale of consoles, delivery devices, consumables, service and support activities. | |||||||||||||
Revenue information shown by geographic region is as follows (in thousands): | |||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
January 3, | December 28, | December 29, | |||||||||||
2015 | 2013 | 2012 | |||||||||||
United States | $ | 22,590 | $ | 21,043 | $ | 18,496 | |||||||
Europe | 9,096 | 7,345 | 7,468 | ||||||||||
Rest of Americas | 3,199 | 3,309 | 2,335 | ||||||||||
Asia/Pacific Rim | 7,929 | 6,576 | 5,560 | ||||||||||
$ | 42,814 | $ | 38,273 | $ | 33,859 | ||||||||
Revenues are attributed to countries based on location of end customers. For fiscal years 2014, 2013 and 2012 no individual country accounted for more than 10% of the Company’s sales, except for the United States, which accounted for 52.8%, 55.0%, and 54.6% of revenues in 2014, 2013, and 2012 respectively. | |||||||||||||
As of January 3, 2015 and December 28, 2013, the Company had no long-lived assets in any country other than in the United States. | |||||||||||||
Computation_of_Basic_and_Dilut
Computation of Basic and Diluted Net Income (Loss) Per Common Share | 12 Months Ended | ||||||||||||
Jan. 03, 2015 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Computation of Basic and Diluted Net Income (Loss) Per Common Share | 14. Computation of Basic and Diluted Net Income (Loss) Per Common Share | ||||||||||||
A reconciliation of the numerator and denominator of basic and diluted net income (loss) per common share is provided as follows (in thousands, except per share amounts): | |||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
January 3, | December 28, | December 29, | |||||||||||
2015 | 2013 | 2012 | |||||||||||
Numerator: | |||||||||||||
Income (loss) from continuing operations | $ | 10,038 | $ | 2,231 | $ | (170 | ) | ||||||
Income from discontinued operations | — | — | 1,608 | ||||||||||
Net income | $ | 10,038 | $ | 2,231 | $ | 1,438 | |||||||
Denominator: | |||||||||||||
Weighted average shares of common stock (basic) | 9,892 | 9,245 | 8,935 | ||||||||||
Effect of dilutive preferred shares | — | 448 | — | ||||||||||
Effect of dilutive stock options | 291 | 291 | — | ||||||||||
Effect of dilutive contingent shares | 174 | 120 | — | ||||||||||
Weighted average shares of common stock (diluted) | 10,357 | 10,104 | 8,935 | ||||||||||
Per share data: | |||||||||||||
Basic net income (loss) per share: | |||||||||||||
Net income (loss) before discontinued operations | $ | 1.01 | $ | 0.24 | $ | (0.02 | ) | ||||||
Discontinued operations | 0 | 0 | 0.18 | ||||||||||
Net income | $ | 1.01 | $ | 0.24 | $ | 0.16 | |||||||
Diluted net income (loss) per share: | |||||||||||||
Net income (loss) before discontinued operations | $ | 0.97 | $ | 0.22 | $ | (0.02 | ) | ||||||
Discontinued operations | 0 | 0 | 0.18 | ||||||||||
Net income | $ | 0.97 | $ | 0.22 | $ | 0.16 | |||||||
For periods in which the Company generates income from continuing operations, the conversion of Series A Preferred Stock to common stock and common stock equivalent shares from unexercised stock options (if the exercise price of such options is lower than the average market price of the stock for the period) and vesting of restricted stock units and awards are included in the computation as their effect is dilutive. The Company excludes stock options and other common stock equivalents from the computation if the exercise price of the options is greater than the average market price of the stock for the period because the inclusion of these options would be anti-dilutive. Accordingly, as of January 3, 2015 and December 28, 2013, stock options to purchase 116,320 and 156,564 shares, respectively, were excluded from the computation of diluted weighted average shares outstanding. | |||||||||||||
For periods in which the Company incurs a loss from continuing operations, the conversion of Series A Preferred Stock to common stock and common stock equivalent shares from unexercised stock options are excluded from the computation as their effect is anti-dilutive. Accordingly, as of December 29, 2012, 1,000,000 shares of common stock equivalents (from the conversion of Series A Preferred Stock), stock options to purchase 1,570,543 shares of common stock and restricted stock units and awards for 66,665 shares of common stock have been excluded. | |||||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Jan. 03, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events |
In March 2015, in connection with the Performance Awards granted to the Company’s President and Chief Executive Officer, where the total number of shares issuable was determined based upon the Company’s calculated price (average stock price performance during the two months prior to and two months following the date the service condition is met), under the Market Performance Award #1, the Company released 190 thousand shares of restricted stock units to the Company’s President and Chief Executive Officer and cancelled the remaining 30 thousand shares that could have been earned under this award. In addition, since no shares of the total number of shares that could have been earned under the Market Performance Award #2 vested, 50 thousand shares were also cancelled. | |
The Company has evaluated subsequent events and has concluded that no additional subsequent events that require disclosure in the consolidated financial statements have occurred since the year ended January 3, 2015. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||
Jan. 03, 2015 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Financial Statement Presentation | Financial Statement Presentation. | ||||||||||||
The consolidated financial statements include the accounts of IRIDEX and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||
Our fiscal year always ends on the Saturday closest to December 31. Fiscal 2014 ended on January 3, 2015 (“FY 2014”), fiscal 2013 ended on December 28, 2013 (“FY 2013”), and fiscal 2012 ended on December 29, 2012 (“FY 2012”). Consequently, fiscal year 2014 included 53 weeks of operations while fiscal years 2013 and 2012 included only 52 weeks. | |||||||||||||
Reclassifications | Reclassifications. | ||||||||||||
In February 2012, we completed the sale of our aesthetics business to Cutera, Inc. In accordance with accounting principles generally accepted in the U.S. (“GAAP”), we have recast our financial information to show the results from our ophthalmology business as continuing operations and the results from our aesthetics business as discontinued operations. | |||||||||||||
Use of Estimates | Use of Estimates. | ||||||||||||
The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an adverse effect on our operating results. | |||||||||||||
Discontinued Operations | Discontinued Operations. | ||||||||||||
Discontinued operations are accounted for and presented in accordance with Accounting Standards Codification (“ASC”) 360, Impairment or Disposal of Long-Lived Assets, (“ASC 360”). When a qualifying component of the Company is disposed of or has been classified as held for sale, the operating results of that component are removed from continuing operations for all periods presented and displayed as discontinued operations if: (a) elimination of the component’s operations and cash flows from the Company’s ongoing operations has occurred (or will occur) and (b) significant continuing involvement by the Company in the component’s operations does not exist after the disposal transaction. | |||||||||||||
On December 30, 2011, we entered into an agreement to sell our aesthetics business to Cutera, Inc. The operating results of our aesthetics business were therefore classified as discontinued operations, and the associated assets and liabilities were classified as discontinued operations for all periods presented under the requirements of ASC 360. The sale of the aesthetics business was completed on February 2, 2012. | |||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
(in thousands) | 3-Jan-15 | 28-Dec-13 | 29-Dec-12 | ||||||||||
Total revenues | $ | — | $ | — | $ | 1,630 | |||||||
Income (loss) from discontinued operations | $ | — | $ | — | $ | (325 | ) | ||||||
Gain on sales of aesthetics business | $ | — | $ | — | $ | 1,149 | |||||||
Income from discontinued operations, before | $ | — | $ | — | $ | 824 | |||||||
income taxes | |||||||||||||
Income tax (benefit) expense | $ | — | $ | — | $ | (784 | ) | ||||||
Income from discontinued operations, net of tax | $ | — | $ | — | $ | 1,608 | |||||||
Current assets of discontinued operations as of December 29, 2012 comprised of restricted cash in the amount of $510 thousand. In accordance with the terms of the sale of the aesthetics segment to Cutera, Inc., 10% of the total purchase price was deposited and held in an escrow account for a period of twelve months from the date of closing and was available to resolve certain claims by Cutera, Inc., if any, against which the Company had indemnified Cutera, Inc. There had been no claims made by Cutera, Inc. and in May 2013, the cash held in the escrow account was released to the Company. | |||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents. | ||||||||||||
We consider all highly liquid debt instruments with insignificant interest rate risk and an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist primarily of cash deposits in money market funds that are available for withdrawal without restriction. | |||||||||||||
Sales Returns Allowance and Allowance for Doubtful Accounts | Sales Returns Allowance and Allowance for Doubtful Accounts. | ||||||||||||
The Company estimates future product returns related to current period product revenue. We analyze historical returns, and changes in customer demand and acceptance of our products when evaluating the adequacy of the sales returns allowance. Significant management judgment and estimates must be made and used in connection with establishing the sales returns allowance in any accounting period. Material differences may result in the amount and timing of our revenue for any period if management made different judgments or utilized different estimates. Our provision for sales returns is recorded net of the associated costs. The balance for the provision of sales returns was $47 thousand and $33 thousand as of January 3, 2015 and December 28, 2013, respectively, and is recorded within the deferred revenue accounts in the consolidated balance sheets. | |||||||||||||
Similarly management must make estimates regarding the uncollectibility of accounts receivable. We are exposed to credit risk in the event of non-payment by customers to the extent of amounts recorded on the consolidated balance sheets. As sales levels change, the level of accounts receivable would likely also change. In addition, in the event that customers were to delay their payments to us, the levels of accounts receivable would likely increase. We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance for doubtful accounts is based on past payment history with the customer, analysis of the customer’s current financial condition, the aging of the accounts receivable balance, customer concentration and other known factors. | |||||||||||||
Inventories | Inventories. | ||||||||||||
Inventories are stated at the lower of cost or market and include on-hand inventory physically held at the Company’s facility, sales demo inventory and service loaner inventory. Cost is determined on a standard cost basis which approximates actual cost on a first-in, first-out (“FIFO”) method. Lower of cost or market is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence or impaired inventory and are charged to cost of revenues. Once the cost of the inventory is reduced, a new lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Factors influencing these adjustments include changes in demand, product life cycle and development plans, component cost trends, product pricing, physical deterioration and quality issues. Revisions to these adjustments would be required if these factors differ from our estimates. | |||||||||||||
As part of our normal business, we generally utilize various finished goods inventory as either sales demos to facilitate the sale of our products to prospective customers, or as loaners that we allow our existing customers to use while we repair their products. The Company is amortizing these demos and loaners over an estimated useful life of four years. The amortization of the demos is charged to sales expense while the amortization on the loaners is charged to cost of revenues. The gross value of demos and loaners was $1.4 million and $1.6 million and the accumulated amortization was $524 thousand and $601 thousand as of January 3, 2015 and December 28, 2013, respectively. The net book value of demos and loaners is charged to cost of revenues when such demos or loaners are sold. | |||||||||||||
Property and Equipment | Property and Equipment. | ||||||||||||
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight–line basis over the estimated useful lives of the assets, which is generally three years. Leasehold improvements are amortized over the lesser of their estimated useful lives or the lease term. Repairs and maintenance costs are expensed as incurred. | |||||||||||||
Valuation of Goodwill and Intangible Assets | Valuation of Goodwill and Intangible Assets. | ||||||||||||
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The Company reviews goodwill for impairment on an annual basis or whenever events or changes in circumstances indicate the carrying value may not be recoverable. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step quantitative goodwill impairment test. If, after assessing the totality of circumstances, an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then it is required to perform the two-step impairment test. It does not require an entity to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying value. However, an entity also has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. The Company has determined that it has a single reporting unit for purposes of performing its goodwill impairment test. As the Company uses the market approach to assess impairment, its common stock price is an important component of the fair value calculation. If the Company’s stock price continues to experience significant price and volume fluctuations, this will impact the fair value of the reporting unit and can lead to potential impairment in future periods. The Company performed its annual impairment test during the second quarter of 2014 and determined that its goodwill was not impaired. As of January 3, 2015, the Company had not identified any factors that indicated there was an impairment of its goodwill and determined that no additional impairment analysis was then required. | |||||||||||||
Intangible assets with definite lives are amortized over the useful life of the asset. We review our amortizing intangible assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future non-discounted net cash flow the asset is expected to generate. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. In such circumstances, the Company conducts an impairment analysis in accordance with ASC 350, Intangibles – Goodwill and Other (“ASC 350”). | |||||||||||||
Revenue Recognition | Revenue Recognition. | ||||||||||||
Our revenues arise from the sale of laser consoles, delivery devices, consumables and service and support activities. Revenue from product sales is recognized upon receipt of a purchase order and product shipment provided that no significant obligations remain and collection of the receivables is reasonably assured. Shipments are generally made with Free-On-Board (“FOB”) shipping point terms, whereby title passes upon shipment from our dock. Any shipments with FOB receiving point terms are recorded as revenue when the shipment arrives at the receiving point. Cost is recognized as product sales revenue is recognized. The Company’s sales may include post-sales obligations for training or other deliverables. For revenue arrangements such as these, we recognize revenue in accordance with ASC 605, Revenue Recognition, Multiple-Element Arrangements. The Company allocates revenue among deliverables in multiple-element arrangements using the relative selling price method. Revenue allocated to each element is recognized when the basic revenue recognition criteria is met for each element. The Company is required to apply a hierarchy to determine the selling price to be used for allocating revenue to deliverables: (i) vendor-specific objective evidence of selling price (“VSOE”), (ii) third-party evidence of selling price (“TPE”) and (iii) best estimate of the selling price (“ESP”). In general, the Company is unable to establish VSOE or TPE for all of the elements in the arrangement; therefore, revenue is allocated to these elements based on the Company’s ESP, which the Company determines after considering multiple factors such as management approved pricing guidelines, geographic differences, market conditions, competitor pricing strategies, internal costs and gross margin objectives. These factors may vary over time depending upon the unique facts and circumstances related to each deliverable. As a result, the Company’s ESP for products and services could change. Revenues for post-sales obligations are recognized as the obligations are fulfilled. | |||||||||||||
In international regions, we utilize distributors to market and sell our products. We recognize revenue upon shipment for sales to these independent, third-party distributors as we have no continuing obligations subsequent to shipment. Generally our distributors are responsible for all marketing, sales, installation, training and warranty labor coverage for our products. Our standard terms and conditions do not provide price protection or stock return rights to any of our distributors. | |||||||||||||
Royalty revenues are typically based on licensees’ net sales of products that utilize our technology and are recognized as earned in accordance with the contract terms when royalties from licensees can be reliably measured and collectibility is reasonably assured, such as upon the earlier of the receipt of a royalty statement from the licensee or upon payment by the licensee. | |||||||||||||
Taxes Collected from Customers and Remitted to Governmental Authorities | Taxes Collected from Customers and Remitted to Governmental Authorities. | ||||||||||||
Taxes collected from customers and remitted to governmental authorities are recognized on a net basis in the accompanying consolidated statements of operations as well as accrued expenses to the degree which is appropriate. | |||||||||||||
Deferred Revenue | Deferred Revenue. | ||||||||||||
Revenue related to service contracts is deferred and recognized on a straight line basis over the period of the applicable service period. Costs associated with these service arrangements are recognized as incurred. A reconciliation of the changes in the Company’s deferred revenue balances for the years ended January 3, 2015 and December 28, 2013 are as follows (in thousands): | |||||||||||||
FY 2012: Balance as of December 29, 2012 | $ | 1,004 | |||||||||||
Additions to deferral | 1,383 | ||||||||||||
Revenue recognized | (1,254 | ) | |||||||||||
FY 2013: Balance as of December 28, 2013 | 1,133 | ||||||||||||
Additions to deferral | 1,514 | ||||||||||||
Revenue recognized | (1,468 | ) | |||||||||||
FY 2014: Balance as of January 3, 2015 | $ | 1,179 | |||||||||||
Warranty | Warranty. | ||||||||||||
We provide reserves for the estimated cost of product warranties at the time revenue is recognized based on historical experience of known product failure rates and expected material and labor costs to provide warranty services. We generally provide a two-year warranty on our products. Additionally, from time to time, specific warranty accruals may be made if unforeseen technical problems arise. Alternatively, if estimates are determined to be greater than the actual amounts necessary, we may reverse a portion of such provisions in future periods. Warranty costs are reflected in the consolidated statements of operations as costs of revenues. A reconciliation of the changes in the Company’s warranty liability for the years ended January 3, 2015 and December 28, 2013 are as follows (in thousands): | |||||||||||||
FY 2012: Balance as of December 29, 2012 | $ | 453 | |||||||||||
Accruals for product warranties | 213 | ||||||||||||
Cost of warranty claims | (198 | ) | |||||||||||
FY 2013: Balance as of December 28, 2013 | 468 | ||||||||||||
Accruals for product warranties | 313 | ||||||||||||
Cost of warranty claims | (312 | ) | |||||||||||
FY 2014: Balance as of January 3, 2015 | $ | 469 | |||||||||||
Shipping and Handling Costs | Shipping and Handling Costs. | ||||||||||||
Our shipping and handling costs billed to customers are included in revenues and the associated expense is recorded in cost of revenues for all periods presented. Shipping and handling costs amounted to $0.3 million for each of the fiscal years 2014, 2013 and 2012. | |||||||||||||
Research and Development | Research and Development. | ||||||||||||
Research and development expenditures are charged to operations as incurred. | |||||||||||||
Advertising | Advertising. | ||||||||||||
Advertising and promotion costs are expensed as they are incurred; such costs were approximately $0.2 million in 2014, $0.1 million in 2013, and $0.2 million in 2012 and are included in sales and marketing expenses in the accompanying consolidated statements of operations. | |||||||||||||
Income Taxes | Income Taxes. | ||||||||||||
We account for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. Under ASC 740, the liability method is used in accounting for income taxes. Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We evaluate annually the realizability of our deferred tax assets by assessing our valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization include our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. In 2013, we recorded a full valuation allowance for our deferred tax assets based on our historical loss and the uncertainty regarding our ability to project future taxable income. In 2014, the Company released $9.2 million of valuation allowance against most of its deferred tax assets except for the California Research and Development Credit. | |||||||||||||
Accounting for Uncertainty in Income Taxes | Accounting for Uncertainty in Income Taxes. | ||||||||||||
The Company accounts for uncertain tax positions in accordance with ASC 740. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax provision that an entity takes or expects to take in a tax return. Additionally, ASC 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. Under ASC 740, an entity may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. In accordance with our accounting policy, we recognize accrued interests and penalties related to unrecognized tax benefits as a component of income tax expense. There were no accrued interest and penalties during the year ended January 3, 2015. | |||||||||||||
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation. | ||||||||||||
The Company accounts for stock-based compensation granted to employees and directors, including employees stock option awards, restricted stock and restricted stock units in accordance with ASC 718, Compensation – Stock Compensation (“ASC 718”). Accordingly, stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as expense over the employee’s service period. The Company recognizes compensation expense on a straight-line basis over the requisite service period of the award. | |||||||||||||
The Company values options using the Black-Scholes option pricing model. Restricted stock and time-based restricted stock units are valued at the grant date fair value of the underlying common shares. Performance-based restricted stock units are valued using the Monte Carlo simulation model. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions which determine the fair value of share-based awards, including the option’s expected term and the price volatility of the underlying stock. The Monte Carlo simulation model incorporates assumptions for the holding period, risk-free interest rate, stock price volatility and dividend yield. | |||||||||||||
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties. | ||||||||||||
The Company’s cash and cash equivalents are deposited in demand and money market accounts. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally these deposits may be redeemed upon demand and therefore, bear minimal risk. | |||||||||||||
The Company markets its products to distributors and end-users throughout the world. Sales to international distributors are generally made on open credit terms and letters of credit. Management performs ongoing credit evaluations of our customers and maintains an allowance for potential credit losses. Historically, the Company has not experienced any significant losses related to individual customers or a group of customers in any particular geographic area. For the years ended January 3, 2015, December 28, 2013, and December 29, 2012, no single customer accounted for greater than 10% of total revenues. As of January 3, 2015, one customer accounted for approximately 13% of our net accounts receivable balance. No customer accounted for more than 10% of our accounts receivable balance as of December 28, 2013. | |||||||||||||
The Company’s products require approvals from the Food and Drug Administration and international regulatory agencies prior to commercialized sales. The Company’s future products may not receive required approvals. If the Company were denied such approvals, or if such approvals were delayed, it would have a materially adverse impact on the Company’s business, results of operations and financial condition. | |||||||||||||
Reliance on Certain Suppliers | Reliance on Certain Suppliers. | ||||||||||||
Certain components and services used by the Company to manufacture and develop its products are presently available from only one or a limited number of suppliers or vendors. The loss of any of these suppliers or vendors would potentially require a significant level of hardware and/or software development efforts to incorporate the products or services into the Company’s products. | |||||||||||||
Net Income per Share | Net Income per Share. | ||||||||||||
Net income per share is computed in accordance with ASC 260, Earnings per Share. Basic net income per share is based upon the weighted average number of common shares outstanding during the period. Diluted net income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalents outstanding during the period. Common stock equivalents consist of incremental common shares issuable upon the exercise of stock options, release (vesting) of restricted stock units and awards, and the conversion of Series A Preferred Stock into common stock and are calculated under the treasury stock method. Common stock equivalent shares from unexercised stock options, unvested restricted stock units and awards and the conversion of Series A Preferred Stock are excluded from the computation for periods in which the Company incurs a loss from continuing operations or if the exercise price of such options is greater than the average market price of the stock for the period as their effect is anti-dilutive. See Note 14 - Computation of Basic and Diluted Net Income (Loss) Per Common Share. | |||||||||||||
Recently Issued and Adopted Accounting Standards | Recently Issued and Adopted Accounting Standards. | ||||||||||||
In May 2014, as part of its ongoing efforts to assist in the convergence of U.S. GAAP and International Financial Reporting Standards (“IFRS”), the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers.” The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The ASU provides alternative methods of initial adoption and is effective for annual and interim periods beginning after December 15, 2016. We are currently evaluating the impact that this standard will have on our consolidated financial statements. | |||||||||||||
In June 2014, the FASB issued ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force)”. The ASU clarifies that entities should treat performance targets that can be met after the requisite service period of a share-based payment award as performance conditions that affect vesting. Therefore, an entity would not record compensation expense (measured as of the grant date without taking into account the effect of the performance target) related to an award for which transfer to the employee is contingent on the entity’s satisfaction of a performance target until it becomes probable that the performance target will be met. The ASU does not contain any new disclosure requirements. For all entities, the ASU is effective for reporting periods beginning after December 15, 2015. Early adoption is permitted. We expect to adopt this standard in fiscal 2016 and do not expect the adoption of this standard to have a material impact on our consolidated financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Jan. 03, 2015 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Summary of Activities for Discontinued Operations | The sale of the aesthetics business was completed on February 2, 2012. | ||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
(in thousands) | 3-Jan-15 | 28-Dec-13 | 29-Dec-12 | ||||||||||
Total revenues | $ | — | $ | — | $ | 1,630 | |||||||
Income (loss) from discontinued operations | $ | — | $ | — | $ | (325 | ) | ||||||
Gain on sales of aesthetics business | $ | — | $ | — | $ | 1,149 | |||||||
Income from discontinued operations, before | $ | — | $ | — | $ | 824 | |||||||
income taxes | |||||||||||||
Income tax (benefit) expense | $ | — | $ | — | $ | (784 | ) | ||||||
Income from discontinued operations, net of tax | $ | — | $ | — | $ | 1,608 | |||||||
Reconciliation of Changes in Deferred Revenue | A reconciliation of the changes in the Company’s deferred revenue balances for the years ended January 3, 2015 and December 28, 2013 are as follows (in thousands): | ||||||||||||
FY 2012: Balance as of December 29, 2012 | $ | 1,004 | |||||||||||
Additions to deferral | 1,383 | ||||||||||||
Revenue recognized | (1,254 | ) | |||||||||||
FY 2013: Balance as of December 28, 2013 | 1,133 | ||||||||||||
Additions to deferral | 1,514 | ||||||||||||
Revenue recognized | (1,468 | ) | |||||||||||
FY 2014: Balance as of January 3, 2015 | $ | 1,179 | |||||||||||
Reconciliation of Changes in Warranty Liability | A reconciliation of the changes in the Company’s warranty liability for the years ended January 3, 2015 and December 28, 2013 are as follows (in thousands): | ||||||||||||
FY 2012: Balance as of December 29, 2012 | $ | 453 | |||||||||||
Accruals for product warranties | 213 | ||||||||||||
Cost of warranty claims | (198 | ) | |||||||||||
FY 2013: Balance as of December 28, 2013 | 468 | ||||||||||||
Accruals for product warranties | 313 | ||||||||||||
Cost of warranty claims | (312 | ) | |||||||||||
FY 2014: Balance as of January 3, 2015 | $ | 469 | |||||||||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||
Financial Assets and Liabilities Measured and Recognized at Fair Value on a Recurring Basis | As of January 3, 2015 and December 28, 2013, financial assets and liabilities measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above was as follows (in thousands): | ||||||||||||||||||||||||||||||||
As of January 3, 2015 | As of December 28, 2013 | ||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Money market funds | $ | 11,846 | $ | 11,846 | $ | 12,742 | $ | 12,742 | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Earn-out liability | $ | 1,423 | $ | 1,423 | $ | 624 | $ | 624 | |||||||||||||||||||||||||
Quantitative Information about the Inputs and Valuation Methodologies Used for Fair Value Measurements | Charges related to fair value adjustments were $1,258 thousand, $355 thousand and $215 thousand for the fiscal years 2014, 2013 and 2012, respectively | ||||||||||||||||||||||||||||||||
The following table presents quantitative information about the inputs and valuation methodologies used for our fair value measurements classified in Level 3 of the fair value hierarchy as of January 3, 2015 and December 28, 2013. | |||||||||||||||||||||||||||||||||
As of January 3, 2015 | Fair Value | Valuation | Significant | Weighted | |||||||||||||||||||||||||||||
(in | Technique | Unobservable | Average | ||||||||||||||||||||||||||||||
thousands) | Input | (range) | |||||||||||||||||||||||||||||||
Earn-out liability | $ | 1,423 | Discounted cash | Projected royalties | $3,048 | ||||||||||||||||||||||||||||
flow | (in thousands) | ($669 – $3,613) | |||||||||||||||||||||||||||||||
Discount rate | 13.54% | ||||||||||||||||||||||||||||||||
(10.34% - 27.00%) | |||||||||||||||||||||||||||||||||
As of December 28, 2013 | Fair Value | Valuation | Significant | Weighted | |||||||||||||||||||||||||||||
(in | Technique | Unobservable | Average | ||||||||||||||||||||||||||||||
thousands) | Input | (range) | |||||||||||||||||||||||||||||||
Earn-out liability | $ | 624 | Discounted cash | Projected royalties | $1,463 | ||||||||||||||||||||||||||||
flow | (in thousands) | ($414 – $1,675) | |||||||||||||||||||||||||||||||
Discount rate | 21.61% | ||||||||||||||||||||||||||||||||
(20.52% - 27.00%) | |||||||||||||||||||||||||||||||||
Reconciliation of the Changes in the Company's Earn-Out - Cash (Level 3 Liabilities) Balance | The following table provides a reconciliation of the beginning and ending balances of the contingent consideration – cash (Level 3 liabilities) (in thousands): | ||||||||||||||||||||||||||||||||
Balance as of December 29, 2012 | $ | 652 | |||||||||||||||||||||||||||||||
Payments against earn-out | (383 | ) | |||||||||||||||||||||||||||||||
Change in fair value of earn-out liability | 355 | ||||||||||||||||||||||||||||||||
Balance as of December 28, 2013 | 624 | ||||||||||||||||||||||||||||||||
Payments against earn-out | (459 | ) | |||||||||||||||||||||||||||||||
Change in fair value of earn-out liability | 1,258 | ||||||||||||||||||||||||||||||||
Balance as of January 3, 2015 | $ | 1,423 | |||||||||||||||||||||||||||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Components of Inventories | The components of the Company’s inventories are as follows (in thousands): | ||||||||
FY 2014 | FY 2013 | ||||||||
January 3, | December 28, | ||||||||
2015 | 2013 | ||||||||
Raw materials | $ | 3,966 | $ | 5,922 | |||||
Work in process | 1,609 | 976 | |||||||
Finished goods | 3,544 | 3,707 | |||||||
Total inventories | $ | 9,119 | $ | 10,605 | |||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Property Plant And Equipment [Abstract] | |||||||||
Component of Property and Equipment | The components of the Company’s property and equipment are as follows (in thousands): | ||||||||
FY 2014 | FY 2013 | ||||||||
January 3, | December 28, | ||||||||
2015 | 2013 | ||||||||
Equipment | $ | 7,623 | $ | 7,065 | |||||
Leasehold improvements | 2,309 | 2,299 | |||||||
Less: accumulated depreciation and amortization | (9,197 | ) | (8,821 | ) | |||||
Property and equipment, net | $ | 735 | $ | 543 | |||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||
Components of Purchased Intangible Assets | The components of the Company’s purchased intangible assets as of January 3, 2015 are as follows (in thousands): | ||||||||||||||||||||
Useful | FY 2014 | Gross | Accumulated | Net | Useful Lives | ||||||||||||||||
Lives | Annual | Carrying | Amortization | Carrying | Remaining | ||||||||||||||||
Amortization | Value | Value | |||||||||||||||||||
Customer relations | 15 Years | $ | 16 | $ | 240 | $ | 76 | $ | 164 | 10.25 Years | |||||||||||
Patents | Varies | 28 | 720 | 600 | 120 | Varies | |||||||||||||||
$ | 44 | $ | 960 | $ | 676 | $ | 284 | ||||||||||||||
The components of the Company’s purchased intangible assets as of December 28, 2013 are as follows (in thousands): | |||||||||||||||||||||
Useful | FY 2013 | Gross | Accumulated | Net | Useful Lives | ||||||||||||||||
Lives | Annual | Carrying | Amortization | Carrying | Remaining | ||||||||||||||||
Amortization | Value | Value | |||||||||||||||||||
Customer relations | 15 Years | $ | 16 | $ | 240 | $ | 60 | $ | 180 | 11.25 Years | |||||||||||
Patents | Varies | 210 | 720 | 572 | 148 | Varies | |||||||||||||||
$ | 226 | $ | 960 | $ | 632 | $ | 328 | ||||||||||||||
Estimated Future Amortization Expense for Purchased Intangible Assets | Estimated future amortization expense for purchased intangible assets is as follows (in thousands): | ||||||||||||||||||||
Fiscal Year: | |||||||||||||||||||||
2015 | $ | 53 | |||||||||||||||||||
2016 | 99 | ||||||||||||||||||||
2017 | 16 | ||||||||||||||||||||
2018 | 16 | ||||||||||||||||||||
2019 | 16 | ||||||||||||||||||||
Thereafter | 84 | ||||||||||||||||||||
Total | $ | 284 | |||||||||||||||||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Payables And Accruals [Abstract] | |||||||||
Components of Accrued Expenses | The components of the Company’s accrued expenses are as follows (in thousands): | ||||||||
FY 2014 | FY 2013 | ||||||||
January 3, | December 28, | ||||||||
2015 | 2013 | ||||||||
Customer deposits | $ | 500 | $ | 200 | |||||
Earn-out – short term | 382 | 184 | |||||||
Distributor commission | 300 | 524 | |||||||
Sales and use tax payable | 107 | 111 | |||||||
Royalties payable | 36 | 32 | |||||||
Other accrued expenses | 445 | 541 | |||||||
Total accrued expenses | $ | 1,770 | $ | 1,592 | |||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Jan. 03, 2015 | |||||
Commitments And Contingencies Disclosure [Abstract] | |||||
Future Minimum Lease Payments under Current Operating Leases | Future minimum lease payments under current operating leases at January 3, 2015 are summarized as follows (in thousands): | ||||
Fiscal Year | Operating Lease Payments | ||||
2015 | $ | 858 | |||
2016 | 993 | ||||
2017 | 164 | ||||
Total future minimum lease payments | $ | 2,015 | |||
Future Minimum Payments for Manufacture and Supply Commitments | Future minimum payments for manufacture and supply commitments as of January 3, 2015 are summarized as follows (in thousands): | ||||
Fiscal Year | Contract Manufacturing and Supply Commitments | ||||
2015 | $ | 6,171 | |||
2016 | 2,013 | ||||
2017 | 750 | ||||
Total contract manufacturing and supply commitments | $ | 8,934 | |||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||
Summary of Activity in Stock Option Plan | The following table summarizes information regarding activity in our stock option plans during the fiscal years ended 2014, 2013 and 2012 (in thousands except share and per share data): | ||||||||||||||||||||
Outstanding Options | |||||||||||||||||||||
Shares | Number | Aggregate | Weighted | ||||||||||||||||||
Available | of Shares | Price | Average | ||||||||||||||||||
for Grant | Exercise | ||||||||||||||||||||
Price | |||||||||||||||||||||
Balances as of December 31, 2011 | 505,221 | 1,766,401 | $ | 6,380 | $ | 3.61 | |||||||||||||||
Additional shares reserved | 391,166 | — | — | — | |||||||||||||||||
Options granted | (335,050 | ) | 335,050 | 1,313 | 3.92 | ||||||||||||||||
Restricted stock granted | (66,665 | ) | |||||||||||||||||||
Options exercised | — | (174,631 | ) | (445 | ) | 2.55 | |||||||||||||||
Options cancelled | 356,277 | (356,277 | ) | (1,550 | ) | 4.35 | |||||||||||||||
Options expired | -108,971 | — | — | — | |||||||||||||||||
Balances as of December 29, 2012 | 741,978 | 1,570,543 | 5,698 | 3.63 | |||||||||||||||||
Additional shares reserved | 52,128 | — | — | — | |||||||||||||||||
Options granted | (149,600 | ) | 149,600 | 851 | 5.69 | ||||||||||||||||
Restricted stock granted | (234,012 | ) | — | — | — | ||||||||||||||||
Options exercised | — | (493,622 | ) | (1,495 | ) | 3.03 | |||||||||||||||
Options cancelled | 123,679 | (123,679 | ) | (698 | ) | 5.64 | |||||||||||||||
Options expired | -57,628 | — | — | — | |||||||||||||||||
Balances as of December 28, 2013 | 476,545 | 1,102,842 | 4,356 | 3.97 | |||||||||||||||||
Additional shares reserved | 503,306 | — | — | — | |||||||||||||||||
Options granted | (158,300 | ) | 158,300 | 1,362 | 8.61 | ||||||||||||||||
Restricted stock granted | (62,225 | ) | — | — | — | ||||||||||||||||
Options exercised | — | (399,390 | ) | (1,501 | ) | 3.76 | |||||||||||||||
Options cancelled | 27,957 | (27,957 | ) | (171 | ) | 6.13 | |||||||||||||||
Awards cancelled | 79,890 | — | — | — | |||||||||||||||||
Options expired | (13,056 | ) | — | — | — | ||||||||||||||||
Balances as of January 3, 2015 | 854,117 | 833,795 | $ | 4,046 | $ | 4.88 | |||||||||||||||
Stock Options Outstanding and Exercisable | The following table summarizes information with respect to stock options outstanding and exercisable as of January 3, 2015: | ||||||||||||||||||||
Options Outstanding | Options Vested and Exercisable | ||||||||||||||||||||
Range of Exercise Prices | Number of | Weighted | Weighted | Number of | Weighted | ||||||||||||||||
Shares | Average | Average | Shares | Average | |||||||||||||||||
Outstanding as of | Remaining | Exercise | Exercisable as of | Exercise | |||||||||||||||||
January 3, | Contractual | Price | January 3, | Price | |||||||||||||||||
2015 | Life (years) | 2015 | |||||||||||||||||||
$0.90 - $3.07 | 96,025 | 1.12 | $ | 1.7 | 96,025 | $ | 1.7 | ||||||||||||||
$3.08 - $3.60 | 91,707 | 3.17 | $ | 3.51 | 72,064 | $ | 3.49 | ||||||||||||||
$3.72 - $3.75 | 33,250 | 3.83 | $ | 3.72 | 22,000 | $ | 3.73 | ||||||||||||||
$3.86 - $3.86 | 147,896 | 4.91 | $ | 3.86 | 59,646 | $ | 3.86 | ||||||||||||||
$3.89 - $4.31 | 140,325 | 3.12 | $ | 4.12 | 112,521 | $ | 4.15 | ||||||||||||||
$4.70 - $5.92 | 137,463 | 4.54 | $ | 5.5 | 64,546 | $ | 5.45 | ||||||||||||||
$6.00 - $8.58 | 122,129 | 5.92 | $ | 7.91 | 25,131 | $ | 7.45 | ||||||||||||||
$8.60 - $8.98 | 42,000 | 6.55 | $ | 8.84 | — | $ | — | ||||||||||||||
$9.34 - $9.34 | 20,000 | 6.18 | $ | 9.34 | — | $ | — | ||||||||||||||
$10.19 - $10.19 | 3,000 | 5.92 | $ | 10.19 | 813 | $ | 10.19 | ||||||||||||||
$0.90 - $10.19 | 833,795 | 4.14 | $ | 4.88 | 452,746 | $ | 3.85 | ||||||||||||||
Weighted Average Assumptions for Fair Value of Options Granted | |||||||||||||||||||||
The determination of the fair value of options granted by the Company is computed using the Black-Scholes option pricing model with the following weighted average assumptions: | |||||||||||||||||||||
Employee Stock Option Plan | |||||||||||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||||||||||
Average risk free interest rate | 1.49% | 1.12% | 0.68% | ||||||||||||||||||
Expected life (in years) | 4.50 years | 4.50 years | 4.55 years | ||||||||||||||||||
Dividend yield | — | — | — | ||||||||||||||||||
Average volatility | 56.20% | 71.50% | 89.20% | ||||||||||||||||||
Stock-Based Compensation Expense | The following table shows stock-based compensation expense by functional line item in the consolidated statements of operations for 2014, 2013 and 2012 (in thousands): | ||||||||||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||||||||
3-Jan-15 | 28-Dec-13 | 29-Dec-12 | |||||||||||||||||||
Cost of revenues | $ | 149 | $ | 108 | $ | 63 | |||||||||||||||
Research and development | 105 | 71 | 77 | ||||||||||||||||||
Sales and marketing | 118 | 113 | 105 | ||||||||||||||||||
General and administrative | 600 | 397 | 143 | ||||||||||||||||||
Total stock-based compensation expense – continuing operations | 972 | 689 | 388 | ||||||||||||||||||
Total stock-based compensation expense – discontinued operations | — | — | 8 | ||||||||||||||||||
Total stock-based compensation expense | $ | 972 | $ | 689 | $ | 396 | |||||||||||||||
Stock Options Outstanding, Exercisable and Expected to Vest | Information regarding stock options outstanding, exercisable and expected to vest as of January 3, 2015 is summarized below: | ||||||||||||||||||||
Number of | Weighted Average | Weighted Average | Aggregate Intrinsic Value | ||||||||||||||||||
Remaining Contractual | |||||||||||||||||||||
Shares | Exercise Price | Life (years) | (thousands) | ||||||||||||||||||
Options outstanding | 833,795 | $ | 4.88 | 4.14 | $ | 3,139 | |||||||||||||||
Options vested and expected to vest | 781,361 | $ | 4.77 | 4.04 | $ | 3,026 | |||||||||||||||
Options exercisable | 452,746 | $ | 3.85 | 3.01 | $ | 2,158 | |||||||||||||||
Restricted Stock Units Outstanding, Vested and Expected to Vest | Information regarding the restricted stock units outstanding, vested and expected to vest as of January 3, 2015 is summarized below: | ||||||||||||||||||||
Number of | Weighted Average | Aggregate Intrinsic | |||||||||||||||||||
Shares | Remaining Contractual | Value (thousands) | |||||||||||||||||||
Life (years) | |||||||||||||||||||||
Restricted stock units outstanding | 277,390 | 0.59 | $ | 2,388 | |||||||||||||||||
Restricted stock units vested and expected to vest | 196,858 | 0.23 | $ | 1,695 | |||||||||||||||||
Restricted Stock Units and Awards | Information regarding the restricted stock units activity during the year ended January 3, 2015, December 28, 2013 and December 29, 2012 is summarized below: | ||||||||||||||||||||
Number of | Weighted Average | ||||||||||||||||||||
Shares | Grant Date Fair | ||||||||||||||||||||
Value | |||||||||||||||||||||
Outstanding as of December 31, 2011 | 90,189 | $ | 3.49 | ||||||||||||||||||
Restricted stock units granted | 55,999 | $ | 3.85 | ||||||||||||||||||
Restricted stock units released | (15,189 | ) | $ | 3.95 | |||||||||||||||||
Restricted stock units forfeited | (75,000 | ) | $ | 3.4 | |||||||||||||||||
Outstanding as of December 29, 2012 | 55,999 | $ | 3.85 | ||||||||||||||||||
Restricted stock units granted | 230,509 | $ | 4.51 | ||||||||||||||||||
Restricted stock units released | (17,249 | ) | $ | 3.77 | |||||||||||||||||
Outstanding as of December 28, 2013 | 269,259 | $ | 4.42 | ||||||||||||||||||
Restricted stock units granted | 59,780 | $ | 9.76 | ||||||||||||||||||
Restricted stock units released | (46,759 | ) | $ | 9.29 | |||||||||||||||||
Restricted stock units forfeited | (4,890 | ) | $ | 8.18 | |||||||||||||||||
Outstanding as of January 3, 2015 | 277,390 | $ | 4.68 | ||||||||||||||||||
Information regarding the restricted stock awards activity during the year ended January 3, 2015, December 28, 2013 and December 29, 2012 is summarized below: | |||||||||||||||||||||
Number of | Weighted Average | ||||||||||||||||||||
Shares | Grant Date Fair | ||||||||||||||||||||
Value | |||||||||||||||||||||
Outstanding as of December 31, 2011 | 10,126 | $ | 3.95 | ||||||||||||||||||
Restricted stock awards granted | 10,666 | 3.75 | |||||||||||||||||||
Restricted stock awards released | (10,126 | ) | $ | 3.95 | |||||||||||||||||
Outstanding as of December 29, 2012 | 10,666 | $ | 3.75 | ||||||||||||||||||
Restricted stock awards granted | 3,503 | $ | 5.71 | ||||||||||||||||||
Restricted stock awards released | (10,666 | ) | $ | 3.75 | |||||||||||||||||
Outstanding as of December 28, 2013 | 3,503 | $ | 5.71 | ||||||||||||||||||
Restricted stock awards granted | 2,445 | $ | 8.18 | ||||||||||||||||||
Restricted stock awards released | (3,503 | ) | $ | 5.71 | |||||||||||||||||
Outstanding as of January 3, 2015 | 2,445 | $ | 8.18 | ||||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Jan. 03, 2015 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Pre-Tax Book Income (Loss) from Continuing Operations | Pre-tax book income (loss) from continuing operations was comprised of the following: | ||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
January 3, | December 28, | December 29, | |||||||||||
2015 | 2013 | 2012 | |||||||||||
United States | $ | 1,332 | $ | 2,262 | $ | (270 | ) | ||||||
Foreign | — | — | — | ||||||||||
Total | $ | 1,332 | $ | 2,262 | $ | (270 | ) | ||||||
(Benefit from) Provision for Income Taxes from Continuing Operations | The (benefit from) provision for income taxes from continuing operations includes: | ||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
January 3, | December 28, | December 29, | |||||||||||
2015 | 2013 | 2012 | |||||||||||
Current: | |||||||||||||
Federal | $ | 54 | $ | 11 | $ | (114 | ) | ||||||
State | 16 | 20 | 14 | ||||||||||
70 | 31 | (100 | ) | ||||||||||
Deferred: | |||||||||||||
Federal | (7,862 | ) | — | — | |||||||||
State | (914 | ) | — | — | |||||||||
(8,776 | ) | — | — | ||||||||||
(Benefit from) provision for income taxes | $ | (8,706 | ) | $ | 31 | $ | (100 | ) | |||||
Company's Effective Tax Rate Differs from the Statutory Federal Income Tax Rate | The Company’s effective tax rate differs from the statutory federal income tax rate as shown in the following schedule: | ||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
January 3, | December 28, | December 29, | |||||||||||
2015 | 2013 | 2012 | |||||||||||
Income tax provision at statutory rate | 34 | % | 34 | % | 34 | % | |||||||
State income taxes, net of federal benefit | (68.0 | %) | (13.3 | %) | (88.1 | %) | |||||||
Permanent differences | (1.1 | %) | (17.0 | %) | (89.1 | %) | |||||||
Research and development credits | (2.6 | %) | 0 | % | 0 | % | |||||||
Change in valuation allowance | (613.5 | %) | (2.3 | %) | 180.3 | % | |||||||
Other | (2.4 | %) | 0 | % | 0 | % | |||||||
Effective tax rate | (653.6 | %) | 1.4 | % | 37.1 | % | |||||||
Tax Effect of Temporary Differences and Carryforwards that Give Rise to Significant Portions of the Net Deferred Tax Assets | The tax effect of temporary differences and carryforwards that give rise to significant portions of the net deferred tax assets are presented below (in thousands): | ||||||||||||
FY 2014 | FY 2013 | ||||||||||||
January 3, | December 28, | ||||||||||||
2015 | 2013 | ||||||||||||
Accruals and reserves | $ | 1,681 | $ | 1,792 | |||||||||
Deferred revenue | 113 | 91 | |||||||||||
Fixed assets | 439 | 423 | |||||||||||
Intangibles | 825 | 441 | |||||||||||
Stock compensation | 676 | 696 | |||||||||||
Net operating loss | 4,278 | 5,224 | |||||||||||
Research and development credits | 1,575 | 1,260 | |||||||||||
Other tax credits | 94 | 47 | |||||||||||
Net deferred tax asset | $ | 9,681 | $ | 9,974 | |||||||||
Valuation allowance | (905 | ) | (9,974 | ) | |||||||||
Net deferred tax assets | $ | 8,776 | $ | — | |||||||||
A Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): | ||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
January 3, | December 28, | December 29, | |||||||||||
2015 | 2013 | 2012 | |||||||||||
Balance at the beginning of the year | $ | 1,027 | $ | 954 | $ | 1,191 | |||||||
Additions based upon tax positions related to the current year | 53 | 48 | 36 | ||||||||||
Additions based upon tax positions related to the prior year | 51 | 25 | — | ||||||||||
Reductions based upon tax positions related to the prior year | (270 | ) | — | (273 | ) | ||||||||
Balance at the end of the year | $ | 861 | $ | 1,027 | $ | 954 | |||||||
Business_Segments_and_Customer1
Business Segments and Customers (Tables) | 12 Months Ended | ||||||||||||
Jan. 03, 2015 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Revenue Information by Geographic Region | Revenue information shown by geographic region is as follows (in thousands): | ||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
January 3, | December 28, | December 29, | |||||||||||
2015 | 2013 | 2012 | |||||||||||
United States | $ | 22,590 | $ | 21,043 | $ | 18,496 | |||||||
Europe | 9,096 | 7,345 | 7,468 | ||||||||||
Rest of Americas | 3,199 | 3,309 | 2,335 | ||||||||||
Asia/Pacific Rim | 7,929 | 6,576 | 5,560 | ||||||||||
$ | 42,814 | $ | 38,273 | $ | 33,859 | ||||||||
Computation_of_Basic_and_Dilut1
Computation of Basic and Diluted Net Income (Loss) Per Common Share (Tables) | 12 Months Ended | ||||||||||||
Jan. 03, 2015 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Reconciliation of Numerator and Denominator of Basic and Diluted Net Income (Loss) Per Common Share | A reconciliation of the numerator and denominator of basic and diluted net income (loss) per common share is provided as follows (in thousands, except per share amounts): | ||||||||||||
FY 2014 | FY 2013 | FY 2012 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||
January 3, | December 28, | December 29, | |||||||||||
2015 | 2013 | 2012 | |||||||||||
Numerator: | |||||||||||||
Income (loss) from continuing operations | $ | 10,038 | $ | 2,231 | $ | (170 | ) | ||||||
Income from discontinued operations | — | — | 1,608 | ||||||||||
Net income | $ | 10,038 | $ | 2,231 | $ | 1,438 | |||||||
Denominator: | |||||||||||||
Weighted average shares of common stock (basic) | 9,892 | 9,245 | 8,935 | ||||||||||
Effect of dilutive preferred shares | — | 448 | — | ||||||||||
Effect of dilutive stock options | 291 | 291 | — | ||||||||||
Effect of dilutive contingent shares | 174 | 120 | — | ||||||||||
Weighted average shares of common stock (diluted) | 10,357 | 10,104 | 8,935 | ||||||||||
Per share data: | |||||||||||||
Basic net income (loss) per share: | |||||||||||||
Net income (loss) before discontinued operations | $ | 1.01 | $ | 0.24 | $ | (0.02 | ) | ||||||
Discontinued operations | 0 | 0 | 0.18 | ||||||||||
Net income | $ | 1.01 | $ | 0.24 | $ | 0.16 | |||||||
Diluted net income (loss) per share: | |||||||||||||
Net income (loss) before discontinued operations | $ | 0.97 | $ | 0.22 | $ | (0.02 | ) | ||||||
Discontinued operations | 0 | 0 | 0.18 | ||||||||||
Net income | $ | 0.97 | $ | 0.22 | $ | 0.16 | |||||||
Organization_Details_Textual
Organization (Details Textual) | Jan. 03, 2015 |
Country | |
Distributor | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Number of distributors | 70 |
Number of countries | 100 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Summary of Activities for Discontinued Operations (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 29, 2012 |
Summary of activities for discontinued operations | |
Total revenues | $1,630 |
Income (loss) from discontinued operations | -325 |
Gain on sales of aesthetics business | 1,149 |
Income from discontinued operations, before income taxes | 824 |
Income tax (benefit) expense | -784 |
Income from discontinued operations, net of tax | $1,608 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Additional Information (Details) (USD $) | 12 Months Ended | ||
Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | |
Disclosure Summary Of Significant Accounting Policies [Line Items] | |||
Restricted cash | $510,000 | ||
Percentage of purchase price to be deposited in escrow account | 10.00% | ||
Provision of sales returns | 47,000 | 33,000 | |
Gross value of demos and loaners | 1,400,000 | 1,600,000 | |
Accumulated amortization on inventory demos and loaners | 524,000 | 601,000 | |
Estimated useful life of demos and loaners | 4 years | ||
Estimated useful lives of the assets | 3 years | ||
Products warranty period | 2 years | ||
Shipping and handling costs | 300,000 | 300,000 | 300,000 |
Advertising and promotion costs | 200,000 | 100,000 | 200,000 |
Release of deferred tax assets valuation allowance | -9,200,000 | ||
Accrued interest and penalty incurred | $0 | ||
Customer accounted percentage of net accounts receivable balance | 13.00% | 10.00% | |
Revenue, Total | Customer Concentration Risk | |||
Disclosure Summary Of Significant Accounting Policies [Line Items] | |||
Number of customer accounted for total revenues and net accounts receivable | 0 | 0 | 0 |
Customer accounted percentage of total revenues | 10.00% | 10.00% | 10.00% |
Accounts Receivable | Credit Concentration Risk | |||
Disclosure Summary Of Significant Accounting Policies [Line Items] | |||
Number of customer accounted for total revenues and net accounts receivable | 1 | 0 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Reconciliation of Changes in Deferred Revenue (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 |
Reconciliation of the changes in the Company's deferred revenue balance | ||
Balance, beginning of period | $1,133 | $1,004 |
Additions to deferral | 1,514 | 1,383 |
Revenue recognized | -1,468 | -1,254 |
Balance, end of period | $1,179 | $1,133 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies - Reconciliation of Changes in Warranty Liability (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 |
Reconciliation of the changes in the Company's warranty liability | ||
Balance, beginning of period | $468 | $453 |
Accruals for product warranties | 313 | 213 |
Cost of warranty claims | -312 | -198 |
Balance, end of period | $469 | $468 |
Fair_Value_Measurement_Financi
Fair Value Measurement - Financial Assets and Liabilities Measured and Recognized at Fair Value on a Recurring Basis (Details) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
In Thousands, unless otherwise specified | ||
Money Market Funds | ||
Assets: | ||
Assets, Fair Value Measurements | $11,846 | $12,742 |
Level 1 | Money Market Funds | ||
Assets: | ||
Assets, Fair Value Measurements | 11,846 | 12,742 |
Earn Out Liability | ||
Liabilities: | ||
Liabilities, Fair Value Measurements | 1,423 | 624 |
Earn Out Liability | Level 3 | ||
Liabilities: | ||
Liabilities, Fair Value Measurements | $1,423 | $624 |
Fair_Value_Measurement_Additio
Fair Value Measurement - Additional Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Fair Value Disclosures [Abstract] | |||
Charges related to fair value adjustments | $1,258 | $355 | $215 |
Fair_Value_Measurement_Quantit
Fair Value Measurement - Quantitative Information about the Inputs and Valuation Methodologies Used for Fair Value Measurements (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 |
Earn Out Liability | ||
Quantitative information about the inputs and valuation methodologies used for fair value measurements | ||
Liabilities, Fair Value Measurements | 1,423 | 624 |
Level 3 | Earn Out Liability | ||
Quantitative information about the inputs and valuation methodologies used for fair value measurements | ||
Liabilities, Fair Value Measurements | 1,423 | 624 |
Level 3 | Discounted Cash Flow | ||
Quantitative information about the inputs and valuation methodologies used for fair value measurements | ||
Valuation Technique, Earn-out liability | Discounted cash flow | Discounted cash flow |
Level 3 | Discounted Cash Flow | Weighted Average | ||
Quantitative information about the inputs and valuation methodologies used for fair value measurements | ||
Weighted Average, Projected royalties | 3,048 | 1,463 |
Weighted Average, Discount rate | 13.54% | 21.61% |
Level 3 | Discounted Cash Flow | Minimum | ||
Quantitative information about the inputs and valuation methodologies used for fair value measurements | ||
Weighted Average, Projected royalties | 669 | 414 |
Weighted Average, Discount rate | 10.34% | 20.52% |
Level 3 | Discounted Cash Flow | Maximum | ||
Quantitative information about the inputs and valuation methodologies used for fair value measurements | ||
Weighted Average, Projected royalties | 3,613 | 1,675 |
Weighted Average, Discount rate | 27.00% | 27.00% |
Level 3 | Discounted Cash Flow | Earn Out Liability | ||
Quantitative information about the inputs and valuation methodologies used for fair value measurements | ||
Liabilities, Fair Value Measurements | 1,423 | 624 |
Fair_Value_Measurement_Reconci
Fair Value Measurement - Reconciliation of the Changes in the Company's Earn-Out - Cash (Level 3 Liabilities) Balance (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Reconciliation of the changes in the Company's earn-out - cash (Level 3 liabilities) balance | |||
Balance at the beginning of the period | $624 | $652 | |
Payments against earn-out | -459 | -383 | |
Change in fair value of earn-out liability | 1,258 | 355 | 215 |
Balance at the end of the period | $1,423 | $624 | $652 |
Inventories_Details
Inventories (Details) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw materials | $3,966 | $5,922 |
Work in process | 1,609 | 976 |
Finished goods | 3,544 | 3,707 |
Total inventories | $9,119 | $10,605 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
In Thousands, unless otherwise specified | ||
Component of property and equipment | ||
Less: accumulated depreciation and amortization | ($9,197) | ($8,821) |
Property and equipment, net | 735 | 543 |
Equipment | ||
Component of property and equipment | ||
Property and equipment, gross | 7,623 | 7,065 |
Leasehold Improvements | ||
Component of property and equipment | ||
Property and equipment, gross | $2,309 | $2,299 |
Property_and_Equipment_Details1
Property and Equipment (Details Textual) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $376 | $264 | $236 |
Goodwill_Details_Textual
Goodwill (Details Textual) (USD $) | 12 Months Ended | ||
Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Carrying value of goodwill | $533,000 | $533,000 | |
Impairment of goodwill | $0 | $0 | $0 |
Intangible_Assets_Components_o
Intangible Assets - Components of Purchased Intangible Assets (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Components of purchased intangible assets | |||
Annual Amortization | $44 | $226 | $191 |
Gross Carrying Value | 960 | 960 | |
Accumulated Amortization | 676 | 632 | |
Net Carrying Value | 284 | 328 | |
Customer Relations | |||
Components of purchased intangible assets | |||
Useful Lives | 15 years | 15 years | |
Useful Lives Remaining | 10 years 3 months | 11 years 3 months | |
Annual Amortization | 16 | 16 | |
Gross Carrying Value | 240 | 240 | |
Accumulated Amortization | 76 | 60 | |
Net Carrying Value | 164 | 180 | |
Patents | |||
Components of purchased intangible assets | |||
Annual Amortization | 28 | 210 | |
Gross Carrying Value | 720 | 720 | |
Accumulated Amortization | 600 | 572 | |
Net Carrying Value | $120 | $148 | |
Useful Lives Remaining | Varies | Varies |
Intangible_Assets_Intangible_A
Intangible Assets - Intangible Assets (Details Textual) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $44 | $226 | $191 |
Intangible_Assets_Estimated_Fu
Intangible Assets - Estimated Future Amortization Expense for Purchased Intangible Assets (Details) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
In Thousands, unless otherwise specified | ||
Estimated future amortization expense for purchased intangible assets | ||
2015 | $53 | |
2016 | 99 | |
2017 | 16 | |
2018 | 16 | |
2019 | 16 | |
Thereafter | 84 | |
Net Carrying Value | $284 | $328 |
Accrued_Expenses_Components_of
Accrued Expenses - Components of Accrued Expenses (Details) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
In Thousands, unless otherwise specified | ||
Components of accrued expenses | ||
Customer deposits | $500 | $200 |
Earn-out – short term | 382 | 184 |
Distributor commission | 300 | 524 |
Sales and use tax payable | 107 | 111 |
Royalties payable | 36 | 32 |
Other accrued expenses | 445 | 541 |
Total accrued expenses | $1,770 | $1,592 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details Textual) (USD $) | 12 Months Ended | ||
Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Lease renewal period | 6 years | ||
Rent expense | $600,000 | $600,000 | $600,000 |
Lease expiration date | 28-Feb-17 | ||
Annual minimum purchase commitment | 750,000 | ||
Purchases made under agreement | 678,000 | ||
Deficient amount under purchase agreement | 72,000 | ||
Royalties pay equivalent to Percentage of sales | 5.00% | ||
Royalty expense | $200,000 | $100,000 | $100,000 |
Early termination date of certain license agreement | 2018 | ||
Late termination date of certain license agreement | 2021 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details) (USD $) | Jan. 03, 2015 |
In Thousands, unless otherwise specified | |
Future minimum lease payments under current operating leases | |
2015 | $858 |
2016 | 993 |
2017 | 164 |
Total future minimum lease payments | $2,015 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 1) (USD $) | Jan. 03, 2015 |
In Thousands, unless otherwise specified | |
Future minimum payments for manufacturing and supply commitments | |
2015 | $6,171 |
2016 | 2,013 |
2017 | 750 |
Total contract manufacturing and supply commitments | $8,934 |
Stockholders_Equity_Details_Te
Stockholders' Equity (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||
Jun. 11, 2013 | Aug. 31, 2007 | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | Dec. 31, 2011 | Mar. 25, 2013 | Jan. 31, 2014 | Jan. 02, 2015 | |
Undesignated Preferred stock authorized | 2,000,000 | 2,000,000 | |||||||
Preferred stock Par value | $0.01 | $0.01 | |||||||
Convertible preferred stock, shares issued | 0 | 0 | |||||||
Warrants to purchase common stock | 600,000 | ||||||||
Exercise price of warrants | $0.01 | ||||||||
Warrants expiration date | 31-Dec-07 | ||||||||
Warrants to purchase number of common stock | 1.2 | ||||||||
Purchase price of preferred stock and warrants | $10 | ||||||||
Proceeds allocated to common stock warrants | $2,300,000 | ||||||||
Common stock converted from Series A Preferred Stock, shares | 1,000,000 | ||||||||
Exercisable period | 3 years 4 days | ||||||||
Shares reserved | 1,687,912 | ||||||||
Weighted-average grant date fair value of the options granted | $4.02 | $3.16 | $2.60 | ||||||
Total intrinsic value of options exercised | 1,900,000 | 1,500,000 | 261,000 | ||||||
Total unrecognized compensation cost related to non-vested share-based compensation arrangements | 1,200,000 | ||||||||
Cost is expected to be recognized over a weighted average period | 2 years 5 months 9 days | ||||||||
Excess tax benefits from stock-based awards | 36,000 | ||||||||
Restricted stock units granted | 62,225 | 234,012 | 66,665 | ||||||
Options vested and expected to vest, Weighted Average Exercise Price | $4.77 | ||||||||
Restricted Stock Units (RSUs) | |||||||||
Grant of non-qualified stock option | 20,000 | ||||||||
The intrinsic value of the restricted stock units | $8.61 | ||||||||
Restricted stock units granted | 59,780 | 230,509 | 55,999 | ||||||
1998 Stock Plan | |||||||||
Voting rights on outstanding capital stock | 10.00% | ||||||||
Exercise price of option | 110.00% | ||||||||
Term of incentive stock options for major stock holders | 5 years | ||||||||
Exercisable period | 4 years | ||||||||
Maximum term of incentive stock options granted | 10 years | ||||||||
Repurchase of shares | 0 | 0 | |||||||
Expiration date of option Plan | 2008-02 | ||||||||
2008 Equity Incentive Plan | |||||||||
Grant of non-qualified stock option | 300,000 | ||||||||
Award One | Restricted Stock Units (RSUs) | |||||||||
Period consider for calculation of average stock price performance prior awards vesting | 2 months | ||||||||
Period consider for calculation of average stock price performance after awards vesting | 2 months | ||||||||
Restricted stock units granted | 220,000 | ||||||||
Total value of Market Performance Award | 258,000 | ||||||||
Award Two | Restricted Stock Units (RSUs) | |||||||||
Period consider for calculation of average stock price performance prior awards vesting | 2 months | ||||||||
Period consider for calculation of average stock price performance after awards vesting | 2 months | ||||||||
Restricted stock units granted | 50,000 | ||||||||
Options vested and expected to vest, Weighted Average Exercise Price | $11 | ||||||||
Total value of Market Performance Award | 234,000 | ||||||||
Common Stock | |||||||||
Preferred stock conversion to common stock, share | 1,000,000 | 1,000,000 | |||||||
Series A Preferred Stock | |||||||||
Undesignated Preferred stock authorized | 500,000 | ||||||||
Preferred stock Par value | $0.01 | ||||||||
Convertible preferred stock, shares issued | 500,000 | ||||||||
Unit preferred stock | 1 | ||||||||
Proceeds from common stock | $4,900,000 |
Stockholders_Equity_Summary_of
Stockholders' Equity - Summary of Activity in Stock Option Plan (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Shares Available for Grant, Beginning Balance | 476,545 | 741,978 | 505,221 |
Shares Available for Grant, Additional shares reserved | 503,306 | 52,128 | 391,166 |
Shares Available for Grant, Options granted | -158,300 | -149,600 | -335,050 |
Shares Available for Grant, Restricted stock granted | -62,225 | -234,012 | -66,665 |
Shares Available for Grant, Options cancelled | 27,957 | 123,679 | 356,277 |
Shares Available for Grant, Awards cancelled | 79,890 | ||
Shares Available for Grant, Options expired | -13,056 | -57,628 | -108,971 |
Shares Available for Grant, Ending Balance | 854,117 | 476,545 | 741,978 |
Outstanding, Number of Shares, Beginning Balance | 1,102,842 | 1,570,543 | 1,766,401 |
Number of Shares, Options granted | 158,300 | 149,600 | 335,050 |
Number of Shares, Options exercised | -399,390 | -493,622 | -174,631 |
Number of Shares, Options cancelled | -27,957 | -123,679 | -356,277 |
Number of Shares, Ending Balance | 833,795 | 1,102,842 | 1,570,543 |
Aggregate Price, Beginning Balance | $4,356 | $5,698 | $6,380 |
Aggregate Price, Options granted | 1,362 | 851 | 1,313 |
Aggregate Price, Options exercised | -1,501 | -1,495 | -445 |
Aggregate Price, Options cancelled | -171 | -698 | -1,550 |
Aggregate Price, Ending Balance | $4,046 | $4,356 | $5,698 |
Weighted Average Exercise Price, Beginning Balance | $3.97 | $3.63 | $3.61 |
Weighted Average Exercise Price, Options granted | $8.61 | $5.69 | $3.92 |
Weighted Average Exercise Price, Options exercised | $3.76 | $3.03 | $2.55 |
Weighted Average Exercise Price, Options cancelled | $6.13 | $5.64 | $4.35 |
Weighted Average Exercise Price, Ending Balance | $4.88 | $3.97 | $3.63 |
Stockholders_Equity_Details_1
Stockholders' Equity (Details 1) (USD $) | 12 Months Ended |
Jan. 03, 2015 | |
Range One | |
Stock options outstanding and exercisable | |
Range of Exercise Prices, Lower Range Limit | $0.90 |
Range of Exercise Prices, Upper Range Limit | $3.07 |
Options Outstanding, Number of Shares | 96,025 |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 1 year 1 month 13 days |
Options Outstanding, Weighted Average Exercise Price | $1.70 |
Options Vested and Exercisable, Number of Shares Exercisable | 96,025 |
Options Vested and Exercisable, Weighted Average Exercise Price | $1.70 |
Range Two | |
Stock options outstanding and exercisable | |
Range of Exercise Prices, Lower Range Limit | $3.08 |
Range of Exercise Prices, Upper Range Limit | $3.60 |
Options Outstanding, Number of Shares | 91,707 |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 3 years 2 months 1 day |
Options Outstanding, Weighted Average Exercise Price | $3.51 |
Options Vested and Exercisable, Number of Shares Exercisable | 72,064 |
Options Vested and Exercisable, Weighted Average Exercise Price | $3.49 |
Range Three | |
Stock options outstanding and exercisable | |
Range of Exercise Prices, Lower Range Limit | $3.72 |
Range of Exercise Prices, Upper Range Limit | $3.75 |
Options Outstanding, Number of Shares | 33,250 |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 3 years 9 months 29 days |
Options Outstanding, Weighted Average Exercise Price | $3.72 |
Options Vested and Exercisable, Number of Shares Exercisable | 22,000 |
Options Vested and Exercisable, Weighted Average Exercise Price | $3.73 |
Range Four | |
Stock options outstanding and exercisable | |
Range of Exercise Prices, Lower Range Limit | $3.86 |
Range of Exercise Prices, Upper Range Limit | $3.86 |
Options Outstanding, Number of Shares | 147,896 |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 4 years 10 months 28 days |
Options Outstanding, Weighted Average Exercise Price | $3.86 |
Options Vested and Exercisable, Number of Shares Exercisable | 59,646 |
Options Vested and Exercisable, Weighted Average Exercise Price | $3.86 |
Range Five | |
Stock options outstanding and exercisable | |
Range of Exercise Prices, Lower Range Limit | $3.89 |
Range of Exercise Prices, Upper Range Limit | $4.31 |
Options Outstanding, Number of Shares | 140,325 |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 3 years 1 month 13 days |
Options Outstanding, Weighted Average Exercise Price | $4.12 |
Options Vested and Exercisable, Number of Shares Exercisable | 112,521 |
Options Vested and Exercisable, Weighted Average Exercise Price | $4.15 |
Range Six | |
Stock options outstanding and exercisable | |
Range of Exercise Prices, Lower Range Limit | $4.70 |
Range of Exercise Prices, Upper Range Limit | $5.92 |
Options Outstanding, Number of Shares | 137,463 |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 4 years 6 months 15 days |
Options Outstanding, Weighted Average Exercise Price | $5.50 |
Options Vested and Exercisable, Number of Shares Exercisable | 64,546 |
Options Vested and Exercisable, Weighted Average Exercise Price | $5.45 |
Range Seven | |
Stock options outstanding and exercisable | |
Range of Exercise Prices, Lower Range Limit | $6 |
Range of Exercise Prices, Upper Range Limit | $8.58 |
Options Outstanding, Number of Shares | 122,129 |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 5 years 11 months 1 day |
Options Outstanding, Weighted Average Exercise Price | $7.91 |
Options Vested and Exercisable, Number of Shares Exercisable | 25,131 |
Options Vested and Exercisable, Weighted Average Exercise Price | $7.45 |
Range Eight | |
Stock options outstanding and exercisable | |
Range of Exercise Prices, Lower Range Limit | $8.60 |
Range of Exercise Prices, Upper Range Limit | $8.98 |
Options Outstanding, Number of Shares | 42,000 |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 6 years 6 months 18 days |
Options Outstanding, Weighted Average Exercise Price | $8.84 |
Range Nine | |
Stock options outstanding and exercisable | |
Range of Exercise Prices, Lower Range Limit | $9.34 |
Range of Exercise Prices, Upper Range Limit | $9.34 |
Options Outstanding, Number of Shares | 20,000 |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 6 years 2 months 5 days |
Options Outstanding, Weighted Average Exercise Price | $9.34 |
Range Ten | |
Stock options outstanding and exercisable | |
Range of Exercise Prices, Lower Range Limit | $10.19 |
Range of Exercise Prices, Upper Range Limit | $10.19 |
Options Outstanding, Number of Shares | 3,000 |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 5 years 11 months 1 day |
Options Outstanding, Weighted Average Exercise Price | $10.19 |
Options Vested and Exercisable, Number of Shares Exercisable | 813 |
Options Vested and Exercisable, Weighted Average Exercise Price | $10.19 |
Range Eleven | |
Stock options outstanding and exercisable | |
Range of Exercise Prices, Lower Range Limit | $0.90 |
Range of Exercise Prices, Upper Range Limit | $10.19 |
Options Outstanding, Number of Shares | 833,795 |
Options Outstanding, Weighted Average Remaining Contractual Life (years) | 4 years 1 month 21 days |
Options Outstanding, Weighted Average Exercise Price | $4.88 |
Options Vested and Exercisable, Number of Shares Exercisable | 452,746 |
Options Vested and Exercisable, Weighted Average Exercise Price | $3.85 |
Stockholders_Equity_Weighted_A
Stockholders' Equity - Weighted Average Assumptions for Fair Value of Options Granted (Details) | 12 Months Ended | ||
Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | |
Weighted average assumptions for fair value of options granted | |||
Average risk free interest rate | 1.49% | 1.12% | 0.68% |
Expected life (in years) | 4 years 6 months | 4 years 6 months | 4 years 6 months 18 days |
Average volatility | 56.20% | 71.50% | 89.20% |
Stockholders_Equity_StockBased
Stockholders' Equity - Stock-Based Compensation Expense (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $972 | $689 | $396 |
Continuing Operations | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 972 | 689 | 388 |
Discontinued Operations | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 8 | ||
Cost of revenues | Continuing Operations | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 149 | 108 | 63 |
Research and development | Continuing Operations | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 105 | 71 | 77 |
Sales and marketing | Continuing Operations | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 118 | 113 | 105 |
General and administrative | Continuing Operations | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $600 | $397 | $143 |
Stockholders_Equity_Stock_Opti
Stockholders' Equity - Stock Options Outstanding, Exercisable and Expected to Vest (Details) (USD $) | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | Dec. 31, 2011 |
Stock options outstanding, exercisable and expected to vest | ||||
Options outstanding, Number of Shares | 833,795 | 1,102,842 | 1,570,543 | 1,766,401 |
Options outstanding, Weighted Average Exercise Price | $4.88 | $3.97 | $3.63 | $3.61 |
Options outstanding, Weighted Average Remaining Contractual Life (years) | 4 years 1 month 21 days | |||
Options exercisable, Aggregate Intrinsic Value | $3,139 | |||
Options vested and expected to vest, Number of Shares | 781,361 | |||
Options vested and expected to vest, Weighted Average Exercise Price | $4.77 | |||
Options vested and expected to vest, Weighted Average Remaining Contractual Life (years) | 4 years 15 days | |||
Options exercisable, Aggregate Intrinsic Value | 3,026 | |||
Options exercisable, Number of Shares | 452,746 | |||
Options vested and expected to vest, Weighted Average Exercise Price | $3.85 | |||
Exercisable period | 3 years 4 days | |||
Options exercisable, Aggregate Intrinsic Value | $2,158 |
Stockholders_Equity_Details_5
Stockholders' Equity (Details 5) (Restricted Stock Units (RSUs), USD $) | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | Dec. 31, 2011 |
Restricted Stock Units (RSUs) | ||||
Restricted stock units outstanding, vested and expected to vest | ||||
Restricted stock units outstanding, Number of Shares | 277,390 | 269,259 | 55,999 | 90,189 |
Restricted stock units outstanding, Weighted Average Remaining Contractual Life (years) | 7 months 2 days | |||
Restricted stock units outstanding, Aggregate Intrinsic Value | $2,388 | |||
Restricted stock units vested and expected to vest, Number of Shares | 196,858 | |||
Restricted stock units vested and expected to vest, Weighted Average Remaining Contractual Life (years) | 6 months 29 days | |||
Restricted stock units vested and expected to vest, Aggregate Intrinsic Value | $1,695 |
Stockholders_Equity_Restricted
Stockholders' Equity - Restricted Stock Units and Awards (Details) (USD $) | 12 Months Ended | ||
Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | |
Restricted stock units and awards | |||
Number of Shares, Restricted stock granted | 62,225 | 234,012 | 66,665 |
Restricted Stock Units (RSUs) | |||
Restricted stock units and awards | |||
Number of Shares, Beginning Balance | 269,259 | 55,999 | 90,189 |
Number of Shares, Restricted stock granted | 59,780 | 230,509 | 55,999 |
Number of Shares, Restricted stock released | -46,759 | -17,249 | -15,189 |
Number of Shares, Restricted stock forfeited | -4,890 | -75,000 | |
Number of Shares, Ending Balance | 277,390 | 269,259 | 55,999 |
Outstanding, Weighted Average Grant Date Fair Value, Beginning Balance | 4.42 | 3.85 | 3.49 |
Weighted Average Grant Date Fair Value, Restricted stock granted | 9.76 | 4.51 | 3.85 |
Weighted Average Grant Date Fair Value, Restricted stock released | 9.29 | 3.77 | 3.95 |
Weighted Average Grant Date Fair Value, Restricted stock forfeited | 8.18 | 3.4 | |
Outstanding, Weighted Average Grant Date Fair Value, Ending Balance | 4.68 | 4.42 | 3.85 |
Restricted Stock Awards | |||
Restricted stock units and awards | |||
Number of Shares, Beginning Balance | 3,503 | 10,666 | 10,126 |
Number of Shares, Restricted stock granted | 2,445 | 3,503 | 10,666 |
Number of Shares, Restricted stock released | -3,503 | -10,666 | -10,126 |
Number of Shares, Ending Balance | 2,445 | 3,503 | 10,666 |
Outstanding, Weighted Average Grant Date Fair Value, Beginning Balance | 5.71 | 3.75 | 3.95 |
Weighted Average Grant Date Fair Value, Restricted stock granted | 8.18 | 5.71 | 3.75 |
Weighted Average Grant Date Fair Value, Restricted stock released | 5.71 | 3.75 | 3.95 |
Outstanding, Weighted Average Grant Date Fair Value, Ending Balance | 8.18 | 5.71 | 3.75 |
Employee_Benefit_Plan_Details
Employee Benefit Plan (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Contribution Plan Employee Contribution Percentage | 15.00% | ||
Employee contributions to plan in percentage | 50.00% | ||
Total matching contributions made by the company | $186 | $170 | |
Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employee contributions to plan | 3 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Pre-tax book (loss) income from continuing operations | |||
United States | $1,332 | $2,262 | ($270) |
Income (loss) from continuing operations before (benefit from) provision for income taxes | $1,332 | $2,262 | ($270) |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Current: | |||
Federal | $54 | $11 | ($114) |
State | 16 | 20 | 14 |
Total | 70 | 31 | -100 |
Deferred: | |||
Federal | -7,862 | ||
State | -914 | ||
Total | -8,776 | ||
(Benefit from) provision for income taxes | ($8,706) | $31 | ($100) |
Income_Taxes_Details_2
Income Taxes (Details 2) | 12 Months Ended | ||
Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | |
Company's effective tax rate differs from the statutory federal income tax rate | |||
Income tax provision at statutory rate | 34.00% | 34.00% | 34.00% |
State income taxes, net of federal benefit | -68.00% | -13.30% | -88.10% |
Permanent differences | -1.10% | -17.00% | -89.10% |
Research and development credits | -2.60% | 0.00% | 0.00% |
Change in valuation allowance | -613.50% | -2.30% | 180.30% |
Other | -2.40% | 0.00% | 0.00% |
Effective tax rate | -653.60% | 1.40% | 37.10% |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
In Thousands, unless otherwise specified | ||
Tax effect of temporary differences and carryforwards that give rise to significant portions of the net deferred tax assets | ||
Accruals and reserves | $1,681 | $1,792 |
Deferred revenue | 113 | 91 |
Fixed assets | 439 | 423 |
Intangibles | 825 | 441 |
Stock compensation | 676 | 696 |
Net operating loss | 4,278 | 5,224 |
Research and development credits | 1,575 | 1,260 |
Other tax credits | 94 | 47 |
Net deferred tax asset | 9,681 | 9,974 |
Valuation allowance | -905 | -9,974 |
Net deferred tax assets | $8,776 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | 3 Months Ended | |||
Jan. 03, 2015 | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | Dec. 31, 2011 | |
Income Taxes [Line Items] | |||||
Release of deferred tax assets valuation allowance | ($9,200,000) | ||||
Accrued interest and penalties | 0 | 0 | |||
Ending balance of unrecognized tax benefits | 861,000 | 861,000 | 1,027,000 | 954,000 | 1,191,000 |
Unrecognized tax benefits recognition impact on income tax rate | 861,000 | 861,000 | |||
Earliest Tax Year | |||||
Income Taxes [Line Items] | |||||
Open Tax Year | 2009 | ||||
Latest Tax Year | |||||
Income Taxes [Line Items] | |||||
Open Tax Year | 2014 | ||||
Federal | |||||
Income Taxes [Line Items] | |||||
Release of deferred tax assets valuation allowance | -9,200,000 | ||||
Net operating loss | 12,500,000 | 12,500,000 | |||
Stock option deduction | 2,000,000 | 2,000,000 | |||
Net operating loss expiration year | 2032 | ||||
Research credit | 1,300,000 | 1,300,000 | |||
Tax credit carryforward expiration year | 2026 | ||||
State | |||||
Income Taxes [Line Items] | |||||
Net operating loss | 14,500,000 | 14,500,000 | |||
Stock option deduction | 2,100,000 | 2,100,000 | |||
Net operating loss expiration year | 2020 | ||||
Research credit | $1,900,000 | $1,900,000 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
A reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Balance at the beginning of the year | $1,027 | $954 | $1,191 |
Additions based upon tax positions related to the current year | 53 | 48 | 36 |
Additions based upon tax positions related to the prior year | 51 | 25 | |
Reductions based upon tax positions related to the prior year | -270 | -273 | |
Balance at the end of the year | $861 | $1,027 | $954 |
Business_Segments_and_Customer2
Business Segments and Customers (Details Textual) (USD $) | 12 Months Ended | ||
Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | 1 | ||
Long-lived assets | 0 | 0 | |
Customer Concentration Risk | Revenue, Total | |||
Segment Reporting Information [Line Items] | |||
Percentage of revenues accounted | 10.00% | 10.00% | 10.00% |
United States | Customer Concentration Risk | Revenue, Total | |||
Segment Reporting Information [Line Items] | |||
Percentage of revenues accounted | 52.80% | 55.00% | 54.60% |
Business_Segments_and_Customer3
Business Segments and Customers - Revenue Information by Geographic Region (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Total revenues | $42,814 | $38,273 | $33,859 |
United States | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Total revenues | 22,590 | 21,043 | 18,496 |
Europe | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Total revenues | 9,096 | 7,345 | 7,468 |
Rest of Americas | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Total revenues | 3,199 | 3,309 | 2,335 |
Asia/Pacific Rim | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Total revenues | $7,929 | $6,576 | $5,560 |
Computation_of_Basic_and_Dilut2
Computation of Basic and Diluted Net Income (Loss) Per Common Share - Reconciliation of Numerator and Denominator of Basic and Diluted Net Income (Loss) Per Common Share (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Numerator: | |||
Income (loss) from continuing operations | $10,038 | $2,231 | ($170) |
Income from discontinued operations, net of tax | 1,608 | ||
Net income | $10,038 | $2,231 | $1,438 |
Denominator: | |||
Weighted average shares of common stock (basic) | 9,892 | 9,245 | 8,935 |
Effect of dilutive preferred shares | 448 | ||
Effect of dilutive stock options | 291 | 291 | |
Effect of dilutive contingent shares | 174 | 120 | |
Weighted average shares of common stock (diluted) | 10,357 | 10,104 | 8,935 |
Basic net income (loss) per share: | |||
Net income (loss) before discontinued operations | $1.01 | $0.24 | ($0.02) |
Discontinued operations | $0 | $0 | $0.18 |
Net income | $1.01 | $0.24 | $0.16 |
Diluted net income (loss) per share: | |||
Net income (loss) before discontinued operations | $0.97 | $0.22 | ($0.02) |
Discontinued operations | $0 | $0 | $0.18 |
Net income | $0.97 | $0.22 | $0.16 |
Computation_of_Basic_and_Dilut3
Computation of Basic and Diluted Net Income (Loss) Per Common Share (Details Textual) | 12 Months Ended | ||
Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | |
Stock option | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Shares that were excluded from the computation of diluted weighted average shares outstanding | 116,320 | 156,564 | 1,570,543 |
Convertible Debt Securities [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Shares that were excluded from the computation of diluted weighted average shares outstanding | 1,000,000 | ||
Restricted Stock Units (RSUs) | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Shares that were excluded from the computation of diluted weighted average shares outstanding | 66,665 |
Subsequent_Events_Details_Text
Subsequent Events (Details Textual) | 12 Months Ended | 1 Months Ended | |||
Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | Jan. 31, 2014 | Mar. 31, 2015 | |
Restricted Stock Units (RSUs) | |||||
Subsequent Event [Line Items] | |||||
Number of Shares, Restricted stock awards released | 46,759 | 17,249 | 15,189 | ||
Number of Shares, Restricted stock units cancelled | 4,890 | 75,000 | |||
Restricted Stock Units (RSUs) | Market Performance Award #1 | |||||
Subsequent Event [Line Items] | |||||
Period consider for calculation of average stock price performance prior awards vesting | 2 months | ||||
Period consider for calculation of average stock price performance after awards vesting | 2 months | ||||
Restricted Stock Units (RSUs) | Market Performance Award #2 | |||||
Subsequent Event [Line Items] | |||||
Period consider for calculation of average stock price performance prior awards vesting | 2 months | ||||
Period consider for calculation of average stock price performance after awards vesting | 2 months | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Period consider for calculation of average stock price performance prior awards vesting | 2 months | ||||
Period consider for calculation of average stock price performance after awards vesting | 2 months | ||||
Subsequent Event | Restricted Stock Units (RSUs) | Market Performance Award #1 | |||||
Subsequent Event [Line Items] | |||||
Number of Shares, Restricted stock awards released | 190,000 | ||||
Number of Shares, Restricted stock units cancelled | 30,000 | ||||
Subsequent Event | Restricted Stock Units (RSUs) | Market Performance Award #2 | |||||
Subsequent Event [Line Items] | |||||
Number of Shares, Restricted stock awards released | 0 | ||||
Number of Shares, Restricted stock units cancelled | 50,000 |