Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2014 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | UTSTARCOM HOLDINGS CORP. |
Entity Central Index Key | 1030471 |
Document Type | 20-F |
Document Period End Date | 31-Dec-14 |
Amendment Flag | FALSE |
Current Fiscal Year End Date | -19 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Entity Common Stock, Shares Outstanding | 38,148,076 |
Document Fiscal Year Focus | 2014 |
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $77,824 | $107,773 |
Short-term investments | 2,299 | |
Accounts receivable, net of allowances for doubtful accounts of $10,877 and $11,063, respectively | 16,690 | 23,260 |
Inventories | 20,659 | 23,355 |
Deferred costs | 55,257 | 86,723 |
Prepaids and other current assets | 19,337 | 21,552 |
Short-term restricted cash | 13,731 | 9,822 |
Total current assets | 205,797 | 272,485 |
Property, plant and equipment, net | 3,037 | 4,771 |
Long-term investments | 59,799 | 74,588 |
Long-term deferred costs | 4,956 | 8,539 |
Long-term deferred tax assets | 985 | 590 |
Other long-term assets | 4,489 | 5,994 |
Total assets | 279,063 | 366,967 |
Current liabilities: | ||
Accounts payable | 29,769 | 24,953 |
Income taxes payable | 7,463 | 11,827 |
Customer advances | 49,244 | 75,670 |
Deferred revenue | 26,819 | 29,093 |
Deferred tax liabilities | 656 | 577 |
Other current liabilities | 15,463 | 22,430 |
Total current liabilities | 129,414 | 164,550 |
Long-term deferred revenue | 18,304 | 35,251 |
Other long-term liabilities | 16,016 | 16,786 |
Total liabilities | 163,734 | 216,587 |
Commitments and contingencies (Note 8) | ||
Shareholders' equity: | ||
Ordinary shares: $0.00375 par value; 250,000 authorized shares; 38,314 and 45,444 shares issued at December 31, 2014 and December 31, 2013, respectively; 38,148 and 39,778 shares outstanding at December 31, 2014 and December 31, 2013, respectively (Note 1) | 122 | 151 |
Additional paid-in capital | 1,258,182 | 1,280,810 |
Treasury stock, at cost: 166 and 5,666 shares at December 31, 2014 and December 31, 2013, respectively | -443 | -20,421 |
Accumulated deficit | -1,206,286 | -1,176,022 |
Accumulated other comprehensive income | 63,754 | 65,862 |
Total shareholders' equity | 115,329 | 150,380 |
Total liabilities and equity | $279,063 | $366,967 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Allowances for doubtful accounts (in dollars) | $10,877 | $11,063 |
Statement [Line Items] | ||
Ordinary share, par value (in dollars per share) | $0.00 | $0.00 |
Ordinary share, authorized shares | 250,000 | 250,000 |
Ordinary share, shares issued | 38,314 | 45,444 |
Ordinary share, shares outstanding | 38,148 | 39,778 |
Treasury shares | 166 | 5,666 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 12 Months Ended | |||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Net sales | ||||||
Products | $105,988 | $141,138 | $160,688 | |||
Services | 23,432 | 23,301 | 26,040 | |||
Total net sales | 129,420 | 164,439 | 186,728 | |||
Cost of net sales | ||||||
Products | 84,988 | 99,888 | 95,854 | |||
Services | 22,304 | 24,331 | 22,716 | |||
Gross profit | 22,128 | 40,220 | 68,158 | |||
Operating expenses: | ||||||
Selling, general and administrative | 24,515 | 37,626 | 52,457 | |||
Research and development | 11,686 | 14,520 | 28,131 | |||
Amortization of intangible assets | 516 | |||||
Restructuring | 358 | |||||
Net loss on divestitures | 1,307 | 16,239 | ||||
Total operating expenses | 36,201 | 53,453 | 97,701 | |||
Operating loss | -14,073 | -13,233 | -29,543 | |||
Interest income | 589 | 511 | 2,612 | |||
Interest expense | -88 | -151 | -240 | |||
Other income (expense), net | -2,249 | 11,480 | -2,973 | |||
Equity losses of associates | -8,878 | -9,586 | ||||
Investment impairment | -3,947 | -9,400 | -3,043 | |||
Loss before income taxes | -28,646 | -20,379 | -33,187 | |||
Income tax expense | -1,618 | -2,351 | -2,392 | |||
Net loss | -30,264 | -22,730 | -35,579 | |||
Net loss attributable to non-controlling interests | 9 | 1,194 | ||||
Net loss attributable to UTStarcom Holdings Corp. | -30,264 | -22,721 | -34,385 | |||
Net loss per share attributable to UTStarcom Holdings Corp.-Basic | ($0.81) | ($0.58) | ($0.71) | |||
Net loss per share attributable to UTStarcom Holdings Corp.-Diluted | ($0.81) | ($0.58) | ($0.71) | |||
Weighted average shares outstanding-Basic (in shares) | 37,380 | 39,127 | 48,513 | |||
Weighted average shares outstanding-Diluted (in shares) | 37,380 | 39,127 | 48,513 | |||
Net loss | -30,264 | -22,730 | -35,579 | |||
Other comprehensive loss, net of tax | ||||||
Net change in cumulative translation adjustment | -2,781 | -13,759 | -3,272 | |||
Unrealized gain from available-for-sale investments | 673 | |||||
Comprehensive loss | -32,372 | -36,489 | -38,851 | |||
Comprehensive loss attributable to non-controlling interests | [1] | 9 | [1] | 1,194 | [1] | |
Comprehensive loss attributable to UTStarcom Holding Corp. | ($32,372) | ($36,480) | ($37,657) | |||
[1] | Comprehensive loss attributable to non-controlling interests consisted solely of net loss. |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] | Non-controlling interest [Member] |
In Thousands, except Share data, unless otherwise specified | |||||||
Balance at Dec. 31, 2011 | $271,039 | $182 | $1,306,780 | ($6,301) | ($1,118,916) | $82,893 | $6,401 |
Balance (in shares) at Dec. 31, 2011 | 50,605,000 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Repurchase of ordinary shares | -8,842 | -8,842 | |||||
Repurchase of ordinary shares (in shares) | -2,611,000 | ||||||
Repurchase of ordinary share from UiTV shareholder | -5,278 | -5,278 | |||||
Repurchase of ordinary share from UiTV shareholder (in shares) | -1,491,000 | ||||||
Restricted stock issued and restricted stock units released (in shares) | 1,271,000 | ||||||
Stock-based compensation | 2,981 | 2,981 | |||||
Restricted stock cancellation (in shares) | -118,000 | ||||||
Net loss | -35,579 | -34,385 | -1,194 | ||||
Derecognition of non-controlling interests on deconsolidation of a subsidiary | -4,393 | -4,393 | |||||
Other comprehensive income: | |||||||
Foreign currency translation | -3,272 | -3,272 | |||||
Unrealized gain from available-for-sale investments | |||||||
Balance at Dec. 31, 2012 | 216,656 | 182 | 1,309,761 | -20,421 | -1,153,301 | 79,621 | 814 |
Balance (in shares) at Dec. 31, 2012 | 47,656,000 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Repurchase of ordinary shares | -30,680 | -31 | -30,649 | ||||
Repurchase of ordinary shares (in shares) | -8,333,000 | ||||||
Repurchase of ordinary share from UiTV shareholder | |||||||
Restricted stock issued and restricted stock units released (in shares) | 455,000 | ||||||
Stock-based compensation | 1,698 | 1,698 | |||||
Net loss | -22,730 | -22,721 | -9 | ||||
Derecognition of non-controlling interests on deconsolidation of a subsidiary | -805 | -805 | |||||
Other comprehensive income: | |||||||
Foreign currency translation | -6,671 | -6,671 | |||||
CTA recognition on liquidation of the subsidiaries | -7,088 | -7,088 | |||||
Unrealized gain from available-for-sale investments | |||||||
Balance at Dec. 31, 2013 | 150,380 | 151 | 1,280,810 | -20,421 | -1,176,022 | 65,862 | |
Balance (in shares) at Dec. 31, 2013 | 39,778,000 | 39,778,000 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
New issuance of ordinary shares | 5,340 | 8 | 5,332 | ||||
New issuance of ordinary shares (in shares) | 2,000,000 | ||||||
Repurchase of ordinary shares | -10,308 | -10,308 | |||||
Repurchase of ordinary shares (in shares) | -4,050,000 | ||||||
Repurchase of ordinary share from UiTV shareholder | |||||||
Restricted stock issued and restricted stock units released (in shares) | 420,000 | ||||||
Stock-based compensation | 2,289 | 2,289 | |||||
Treasury stock retirement | -37 | -30,249 | 30,286 | ||||
Net loss | -30,264 | -30,264 | |||||
Derecognition of non-controlling interests on deconsolidation of a subsidiary | |||||||
Other comprehensive income: | |||||||
Foreign currency translation | -2,902 | -2,902 | |||||
CTA recognition on liquidation of the subsidiaries | 121 | 121 | |||||
Unrealized gain from available-for-sale investments | 673 | 673 | |||||
Balance at Dec. 31, 2014 | $115,329 | $122 | $1,258,182 | ($443) | ($1,206,286) | $63,754 | |
Balance (in shares) at Dec. 31, 2014 | 38,148,000 | 38,148,000 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net loss | ($30,264) | ($22,730) | ($35,579) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization | 2,654 | 3,464 | 3,951 | |||
Net loss on divestitures | 1,307 | 16,239 | ||||
Net loss on disposal of assets | 219 | 3,553 | 879 | |||
Loss (gain) on CTA recognition from liquidation of subsidiaries | 121 | [1] | -7,088 | [1] | [1] | |
Change due to reversal of tax payable | -992 | -1,240 | ||||
Equity pick up of losses of an associate | 8,878 | 9,586 | ||||
Investment impairment | 3,947 | 9,400 | 3,043 | |||
Stock-based compensation expense | 2,289 | 1,698 | 2,981 | |||
Provision for (recovery of) doubtful accounts | 49 | -75 | -1,154 | |||
ESA Loan impairment | 2,788 | |||||
Deferred income taxes | -424 | -380 | -2,211 | |||
Changes in operating assets and liabilities, net of effect of UiTV deconsolidation and IPTV divestiture | ||||||
Accounts receivable | 6,332 | -14,058 | 664 | |||
Inventories and deferred costs | 36,859 | 45,875 | -4,231 | |||
Other assets | -772 | 6,058 | 17,455 | |||
Accounts payable | 6,415 | 7,110 | 9,506 | |||
Income taxes payable | -3,390 | 110 | 6,393 | |||
Customer advances | -25,759 | -12,005 | 9,749 | |||
Deferred revenue | -18,788 | -29,524 | -37,760 | |||
Other liabilities | -5,774 | -2,976 | -15,543 | |||
Net cash used in operating activities | -15,612 | -1,915 | -25,618 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Additions to property, plant and equipment | -1,298 | -3,766 | -5,445 | |||
Purchase of intangible assets | -54 | |||||
Payment on divestitures | -804 | -2,369 | ||||
Net proceeds from divestitures | 2,000 | 220 | ||||
Payment for the non-controlling interest on the liquidation of a subsidiary | -898 | |||||
Proceeds from settlement of an investment interest, net | 569 | |||||
Change in restricted cash | -3,526 | 2,209 | -1,129 | |||
Purchase of investment interests | -1,080 | -26,592 | -15,602 | |||
Proceeds from refund of investment interests | 932 | |||||
Purchase of short-term investments | -81 | -2,267 | ||||
Proceeds from sale of short-term investments | 379 | 4,300 | ||||
Cash decrease due to deconsolidation of a subsidiary | -6,841 | |||||
Payment on divestiture of IPTV business and investment in IPTV convertible bond | -503 | -56,010 | ||||
Other | 162 | 80 | ||||
Net cash used in investing activities | -5,776 | -28,890 | -82,748 | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Issuance of ordinary shares | 5,340 | |||||
Repurchase of ordinary shares | -10,308 | -30,680 | -8,842 | |||
Net cash used in financing activities | -4,968 | -30,680 | -8,842 | |||
Effect of exchange rate changes on cash and cash equivalents | -3,593 | -10,326 | -4,834 | |||
Net decrease in cash and cash equivalents | -29,949 | -71,811 | -122,042 | |||
Cash and cash equivalents at beginning of year | 107,773 | 179,584 | 301,626 | |||
Cash and cash equivalents at end of year | 77,824 | 107,773 | 179,584 | |||
Cash paid: | ||||||
Interest | 88 | 151 | 240 | |||
Income taxes | 5,100 | 1,600 | 3,000 | |||
Non-cash operating activities | ||||||
Purchase UiTV convertible bond through converting of outstanding receivables | 7,114 | |||||
Non-cash investing activities | ||||||
Repurchase of ordinary shares from UiTV shareholder | -5,278 | |||||
Accrual related to purchase of property, plant and equipment | 13 | 530 | 1,911 | |||
Purchase UiTV convertible bond through converting of outstanding receivables | -7,114 | |||||
Disposal of short-term investments through exchanging of equity investment | 1,826 | |||||
Acquisition of short-term investments through exchanging of equity investment | ($1,826) | |||||
[1] | During 2013, the Company recognized $7.1 million gain in the Consolidated Statements of Operations and Comprehensive Income (Loss) on the reversal of the cumulative translation adjustment previously recorded in accumulated other comprehensive income upon the liquidation of two previously inactive Chinese entities. The prior cumulative translation adjustment primarily resulted from the difference between local functional currency and the Company's reporting currency. |
BASIS_OF_PRESENTATION_AND_LIQU
BASIS OF PRESENTATION AND LIQUIDITY | 12 Months Ended |
Dec. 31, 2014 | |
BASIS OF PRESENTATION AND LIQUIDITY [Abstract] | |
BASIS OF PRESENTATION AND LIQUIDITY | NOTE 1—BASIS OF PRESENTATION AND LIQUIDITY |
UTStarcom Holdings Corp., or the Company, a Cayman Islands corporation incorporated in 2011, is a global telecom infrastructure provider dedicated to developing technology that will serve the rapidly growing demand for bandwidth from mobile, streaming and other applications. The Company works with carriers globally, from Asia to the Americas, to meet this demand through a range of innovative broadband packet optical transport and wireless/fixed-line access products and solutions. | |
UTStarcom Inc. was founded in 1991 and started trading on NASDAQ in 2000. On June 24, 2011, the stockholders of UTStarcom Inc. approved the proposed merger, or the Merger, to reorganize UTStarcom, Inc. as a Cayman Islands company. Pursuant to the approval of the shareholders, UTSI Mergeco Inc., a Delaware corporation and a wholly-owned subsidiary of UTStarcom Holdings Corp., merged with and into the existing public company, UTStarcom, Inc., which is incorporated under the laws of the State of Delaware. As a result of the reorganization, UTStarcom Holdings Corp. became the parent company of UTStarcom, Inc. and its subsidiaries. | |
Also pursuant to the Merger, the Company issued an equal number of ordinary shares in exchange for the common stock of UTStarcom Inc. The Company's business is conducted in substantially the same manner as was conducted by UTStarcom, Inc. The transaction was accounted for as a legal re-organization of entities under common control. The accompanying consolidated financial statements include the accounts of the Company and its wholly- and majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated in the preparation of the consolidated financial statements. The non-controlling interests in consolidated subsidiaries are shown separately in the consolidated financial statements. | |
The accompanying Consolidated Balance Sheets as of December 31, 2014 and 2013, and the Consolidated Statements of Operations and Comprehensive Loss for each of the three years ended December 31, 2014, 2013 and 2012 have been prepared by the Company pursuant to the rules and regulations of the SEC and in conformity with generally accepted accounting principles in the U.S. (“US GAAP”). | |
The accompanying consolidated financial statements are presented on the basis that the Company is a going concern. The going concern assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. | |
The Company incurred net losses of $30.3 million, $22.7 million and $34.4 million during the years ended December 31, 2014, 2013, and 2012, respectively. As of December 31, 2014 and 2013, the Company had an accumulated deficit of $1,206.3 million and $1,176.0 million, respectively. The Company incurred net cash outflows from operations of $15.6 million, $1.9 million and $25.6 million during the years ended December 31, 2014, 2013 and 2012 respectively. | |
As of December 31, 2014 and 2013 , the Company had cash and cash equivalents of $77.8 million and $107.8 million, of which $14.5 million and $11.5 million, respectively, were held by subsidiaries in China. China imposes currency exchange controls on certain transfers of funds to and from China. The Company's China subsidiaries are subject to pre-approval from the State Administration of Foreign Exchange (“SAFE”) for non-domestic financing. Additionally, the amount of cash available for transfer from the China subsidiaries for use by the Company's non-China subsidiaries is also limited both by the liquidity needs of the subsidiaries in China and the restriction on currency exchange by Chinese-government mandated limitations including currency exchange controls on certain transfers of funds outside of China. The Company's China subsidiaries have no accumulated profit as of December 31, 2014 determined in accordance with Chinese accounting standards that can be paid as dividends. In the years 2014, 2013 and 2012, the Company's China subsidiaries did not pay dividends to our parent company. | |
Management believes that the continuing efforts to stream-line its operations will enable its fixed cost base to be better aligned with operations, market demand and projected sales level. Management believes both the Company's China and non-China operations will have sufficient liquidity to finance working capital and capital expenditure needs in excess of 12 months. Furthermore, the Company has concentrated its business in Asia, particularly Taiwan, Japan and India. Any unforeseen prolonged economic and /or political risks in these markets could impact the Company's customers in making their respective investment decisions and could have a material impact on the foregoing assessment. There can be no assurance that additional financing, if required, will be available on terms satisfactory to the Company or at all, and if funds are raised in the future through issuance of preferred stock or debt, these securities could have rights, privileges or preference senior to those of the Company's ordinary share and newly issued debt could contain debt covenants that impose restrictions on the Company's operations. Further, any sale of newly issued debt or equity securities could result in additional dilution to the Company's current shareholders. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Use of Estimates: | |||||||||||||
The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant judgment and estimates are used for revenue recognition, allowances for doubtful accounts and sales returns, tax valuation allowances, inventory write-down, deferred costs, accrued product warranty costs, provisions for contract losses, investment impairments, stock-based compensation expense, loss contingencies and restructuring expenses among others. Actual results could differ materially from those estimates. | |||||||||||||
Cash and Cash Equivalents: | |||||||||||||
Cash and cash equivalents consist of highly liquid instruments with original maturities of three months or less. Approximately 29%, or $22.5 million of cash and cash equivalents were held by the Company's subsidiaries in the U.S. as of December 31, 2014. The remainder was held by the other UTStarcom entities throughout the world. As of December 31, 2014, approximately 19%, or $14.5 million, of the Company's cash and cash equivalents were held by its subsidiaries in China and China imposes currency exchange controls on transfers of funds outside of China. Cash and cash equivalents are invested in short-term bank deposits and similar short duration instruments that are highly liquid and readily convertible with fixed maturities from overnight to three months. | |||||||||||||
Restricted Cash: | |||||||||||||
As of December 31, 2014, the Company had short-term restricted cash of $13.7 million, and had long-term restricted cash of $3.4 million included in other long-term assets. As of December 31, 2013, the Company had short-term restricted cash of $9.8 million, and had long-term restricted cash of $4.9 million included in other long-term assets. These amounts primarily collateralize the Company's issuances of performance bonds, warranty bonds, standby and commercial letters of credit. | |||||||||||||
Investments: | |||||||||||||
The Company's investments consist principally of bank notes debt and equity securities classified as available for sale and cost and equity method investments in privately held companies. The investments in equity securities of privately held companies in which the Company holds less than 20% voting interest and on which the Company does not have the ability to exercise significant influence are accounted for under ASC 325, “Investments—Other” using the cost method. Under the cost method, these investments are carried at the lower of cost or fair market value. The investments in equity securities of privately held companies in which the Company holds at least 20% but less than 50% voting interest and on which the Company has the ability to exercise significant influence are accounted for under ASC 323, “Investments—Equity Method and Joint Ventures” using the equity method. Investments in debt securities that are classified as available for sale are measured at fair value in the statement of financial position under ASC 320, “Investments—Debt and Equity Securities”. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) will be excluded from earnings and reported in other comprehensive income until realized except as indicated in the following paragraph. | |||||||||||||
The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. In making this determination, the Company reviews several factors to determine whether the losses are other-than-temporary, including but not limited to: (i) the length of time the investment was in an unrealized loss position, (ii) the extent to which fair value was less than cost, (iii) the financial condition and near term prospects of the issuer, and (iv) the Company's intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. | |||||||||||||
Revenue Recognition: | |||||||||||||
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is reasonably assured. The Company assesses collectability based on a number of factors, including payment history and the credit worthiness of the customer. If the Company determines that collection is not reasonably assured, the Company defers revenue recognition until collection becomes reasonably assured, which is generally upon receipt of cash. If the payment due from the customer is not fixed or determinable due to extended payment terms, revenue is recognized as payments become due and payable by the customer, assuming all other criteria for revenue recognition are met. Any payments received prior to revenue recognition are recorded as customer advances. Any expected losses on contracts are recognized when identified on an individual basis in accordance with the prevailing accounting guidance for the respective contract. | |||||||||||||
When a sales arrangement contains multiple deliverable elements or multiple element arrangements, the Company allocates revenue to each element based on the relative selling price of each element. Under this approach, the selling price of a deliverable is determined by using a selling price hierarchy that requires the use of vendor-specific objective evidence, or VSOE of fair value, if available, third-party evidence, or TPE of selling price if VSOE is not available or management's best estimate of selling prices, or BESP if neither VSOE nor TPE is available. | |||||||||||||
VSOE is the selling price using the price charged by the Company for a deliverable when sold separately. When there is no VSOE, the Company uses management's BESP in the allocation of arrangement consideration. Therefore, the Company typically is not able to determine TPE for its products or services. TPE of selling price is determined by evaluating similar competitor deliverables when sold separately to similarly situated customers. Generally, the Company's products differ from that of its peers, in that its product offerings are directed towards the integration of telecom, broadband and cable television networks and as such, usually entail a significant level of differentiation or customization for its customers such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine what similar competitor products' selling prices are on a stand-alone basis. | |||||||||||||
Multiple element arrangements primarily involve the sale of hardware systems, installation and training. In addition, while not separately sold, the arrangement may include extended warranties that cover product repairs, maintenance services, and software updates for the software components that are essential to the functionality of the hardware systems or equipment. Revenue consideration allocated to each element under the relative selling price method is recognized as each element is earned, namely upon installation and acceptance of equipment or delivery of terminals, the delivered element(s) has stand-alone value, there is no right of return on delivered element(s), and the Company is in control of the undelivered element(s). For arrangements that include service elements, including technical support and installation and also training, revenue is deferred until such services are deemed complete. Revenue from extended warranties is recognized ratably over the contract period of the extended warranty services. | |||||||||||||
Final acceptance is required for revenue recognition when installation services are not considered perfunctory. Final acceptance indicates that the customer has fully accepted delivery and installation, if any, of equipment and the Company is entitled to full payment. The Company does not recognize revenue before final acceptance is granted by the customer if acceptance is considered substantive to the transaction. | |||||||||||||
In connection with the restructuring of the telecommunication industry in China, the Ministry of Industry and Information Technology ("MIIT") announced that PAS services in China would be phased out by January 1, 2012. The Company still had $13.2 million of deferred revenue associated with unfulfilled contractual obligations for its historical PAS infrastructure contracts as of December 31, 2011. Such amounts were deferred at its VSOE of fair value according to the terms of the contracts. Upon the phasing out of the PAS services as required by the MIIT announcement, the Company took appropriate actions, such as communicating with its customers regarding the termination of such services, to legally release those obligations. Accordingly, approximately $8.1 million of the deferred revenue was released in 2012 upon the completion of the appropriate legal actions. The remaining balance of $5.1 million was included as the part of the liabilities transferred to the buyer on the IPTV divestiture in August 2012. However, as customers were unwilling to have customer contracts assigned to the buyer, the Company is still the primary obligor for most of the. Therefore, the deferred revenue is still included in the Company's Consolidated Balance Sheet. See “Note 3—Divestitures”. | |||||||||||||
Revenue from fixed price contracts that include a requirement for significant software modification or customization is recognized using the completed contract method of accounting whereby no revenue is recognized prior to the completion of the project, because for contracts involving unique requirements the Company is unable to make reasonably dependable estimates of progress towards meeting contractual requirements. In the event estimated total project costs exceed estimated total project revenues, the entire estimated loss is charged to operations in the period in which the loss becomes probable and can be reasonably estimated. The complexity of the estimation process and judgments about internal and external factors including labor utilization, changes to specifications and testing requirements, time required for performance and resulting incurrence of contract penalties, and the performance of subcontractors affect the estimation process. | |||||||||||||
The Company will recognize gross revenue based on the amount billed to customers, when all revenue recognition criteria have been met for transactions where the Company is a reseller. For these transactions the Company is responsible to fulfill the contracts' obligations, and assumes both the general inventory risk as well as the credit risk. | |||||||||||||
The assessment of collectability is also a factor in determining whether revenue should be recognized. The Company assesses collectability based on a number of factors, including payment history and the credit-worthiness of the customer. The Company does not request collateral from its customers. In international sales, the Company may require letters of credit from its customers that can be drawn on demand if the customer defaults on its payment. If the Company determines that collection of a payment is not reasonably assured, the Company defers revenue recognition until collection becomes reasonably assured, which is generally upon receipt of cash. | |||||||||||||
On August 31, 2012, the Company completed the divestiture of its IPTV business. As a result, the Company divested the IPTV business, transferring all assets, liabilities and managerial duties to the buyer. As some customers were not willing to assign their contracts to the buyer, the Company is still the primary obligor for those contracts that were not legally assigned to the buyer. Even though the Company signed back-to-back contracts to transfer all obligations and associated economic risks and benefits to the buyer, from the customer point of view, the Company is the sole obligor to their contracts. If the buyer fails to fulfil its obligations under the back to back contracts with respect to these un-assigned contracts with the Company, the company is still obligated to fulfil the obligations under the un-assigned contracts with the customers. Therefore, the Company was not able to derecognize the related liabilities of those un-assigned contracts. The Company continued to recognize revenue for those unassigned contracts when they met the revenue recognition criteria as mentioned above. At the same time, the Company would recognize an equal amount of the deferred costs associated with those contracts. Therefore, there would be no gross profit impact from the future revenue recognition of these unassigned contracts. The Company would continue to derecognize both the liabilities and deferred costs when the related contracts were legally assigned subsequently. During the years ended December 31, 2014 and 2013, the Company recorded $4.3 million and $1.4 million respectively, and during the post divestiture period of 2012, the Company recorded $2.2 million, in the Consolidated Statements of Operations and Comprehensive Loss due to meeting the revenue recognition criteria. As of December 31, 2014, the Company still had both liabilities and deferred costs of $21.5 million related to those un-assigned contracts. See “Note 3—Divestitures”. | |||||||||||||
Because of the nature of doing business in China and other emerging markets, the Company's billings and/or customer payments may not correlate with the contractual payment terms. The Company generally does not enforce contractual payment terms prior to final acceptance. Accordingly, accounts receivable are not recorded until the Company recognizes the related customer revenue. Advances from customers are recognized when the Company has collected cash from the customer, prior to recognizing revenue. Deferred revenue is recorded if there are undelivered elements after final acceptance has been obtained. The Company had current deferred revenue of $26.8 million and $29.1 million, and long-term deferred revenue of $18.3 million and $35.3 million at December 31, 2014 and 2013, respectively. Costs related to deferred revenue are also deferred until revenue is recognized. See “Deferred Costs” below. | |||||||||||||
Product Warranty: | |||||||||||||
The Company provides a warranty on its equipment and terminal sales for periods generally ranging from one to two years from the time of final acceptance. At times, the Company has entered into arrangements to provide limited warranty services for periods longer than two years. The Company provides for the expected cost of product warranties at the time that revenue is recognized based on an assessment of past warranty experience and when specific circumstances dictate. The Company assesses the adequacy of its recorded warranty liability every quarter and makes adjustments to the liabilities if necessary. Specific warranty accruals are reversed upon the expiration of the warranty period and are recorded as reduction of cost of sales. Warranty accrual reversals were $0.1 million, $0.1 million and $0.3 million in 2014, 2013 and 2012, respectively. From time to time, the Company may be subject to additional costs related to non-standard warranty claims from its customers. If and when this occurs, the Company estimates additional accruals based on historical experience, communication with its customers and various assumptions that the Company believes to be reasonable under the circumstances. Such additional warranty accruals are recorded in the period in which the additional costs are identified. | |||||||||||||
Receivables: | |||||||||||||
Although the Company evaluates customer credit worthiness prior to a sale, the Company provides an allowance for doubtful accounts for the estimated loss on trade and notes receivable when collection may no longer be reasonably assured. The Company assesses collectability of receivables based on a number of factors including analysis of creditworthiness, the Company's historical collection history and current economic conditions, its ability to collect payment and on the length of time an individual receivable balance is outstanding. The Company's policy for determining the allowance for doubtful accounts includes both specific allowances for balances known to be uncollectible and a formula-based portfolio approach, based on aging of the accounts receivable, as a part of management's review of the overall allowance for doubtful accounts. This formula-based approach involves aging of the Company's accounts receivable and applying a percentage based on the Company's historical experience. The Company evaluates the percentages applied to each category of aged accounts receivable periodically based on actual history of write-offs and collections and refines this formula-based approach accordingly for use in future periods. Receivable balances are written off when the Company has sufficient evidence to prove that they are uncollectible. | |||||||||||||
Inventories: | |||||||||||||
Inventories consist of product held at the Company's manufacturing facility and warehouses, as well as finished goods at customer sites for which the customer has taken possession, but based on specific contractual terms, title has not yet passed to the customer. The Company may ship inventory to existing customers that require additional equipment to expand their existing networks prior to the signing of an expansion contract. Inventories are stated at the lower of cost or market value, based on the FIFO method of accounting. Write-downs are based on the assumptions about future market conditions and customer demand, including projected changes in average selling prices resulting from competitive pricing pressures. The Company continually monitors inventory valuation for potential losses and obsolete inventory at its manufacturing facilities as well as at customer sites. If actual market conditions are less favorable than those projected by management, additional write-downs may be required. If actual market conditions are more favorable than anticipated, the previously written down inventory may be sold to customers and result in lower cost of sales and higher income from operations than expected in that period. | |||||||||||||
Deferred costs: | |||||||||||||
Deferred costs consist of product shipped to the customer for which the rights and obligations of ownership have passed to the customer but revenue has not yet been recognized due to prolonged acceptance periods for tests and the existence of undelivered elements, such as post-contract support including software update rights for which the Company does not have a vendor specific objective evidence of fair value. All deferred costs are stated at cost. Management periodically assesses the recoverability of deferred costs and provides reserves against deferred cost balances when recovery of deferred costs is not probable. Recoverability is evaluated based on various factors including the length of time the product has been held at the customer site, the viability of payment, including assessment of product demand if a revenue sharing arrangement exists and/or the evaluation if a related transaction will result in a gross margin loss. In a loss situation for a transaction, the deferred cost balance is adjusted for impairment equal to the value of the excess of cost over the amount of revenue that will be eventually recognized for the transaction. Revenue and cost of sales are recorded when final acceptance is received from the customer. With greater concentration of product at customer sites under contract with specific or individual customers, the financial conditions of such specific or individual customers may result in increased concentration risk exposure for the Company's inventory. For any post contract support services contracts signed before the Company's adoption of ASU 09-13/14, where the related revenue is deferred, due to lack of VSOE for post contract support, the entire related deferred direct costs are classified as a noncurrent asset. | |||||||||||||
Property, Plant and Equipment: | |||||||||||||
Property, plant and equipment are recorded at cost and are stated net of accumulated depreciation. Depreciation is provided for on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives or the term of the lease. When assets are disposed, the cost and related accumulated depreciation are removed from the accounts and the resulting gains or losses are included in results of operations. The Company generally depreciates its property, plant and equipment over the following periods: | |||||||||||||
Years | |||||||||||||
Furniture, test or manufacturing equipment | 5 | ||||||||||||
Computers and software | 2 – 3 | ||||||||||||
Automobiles | 5 | ||||||||||||
Leasehold improvements | Lesser of the term of the lease or the | ||||||||||||
estimated useful lives of the assets | |||||||||||||
Depreciation expense was $2.9 million, $5.4 million, and $4.4 million, for the years ended December 31, 2014, 2013 and 2012, respectively, which included accelerated amortization of leasehold improvements amounting to $ 0.2 million for early termination of a portion of Hangzhou office lease, $2.0 million for the Beijing and a portion of Hangzhou offices lease and $0.9 million for the Beijing office lease due to the early termination of leases for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
Other than Temporary Impairment on Investment: | |||||||||||||
The Company reviews its investments for an other-than-temporary impairment whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. Investments identified as having an indication of impairment are subject to further analysis to determine if the impairment is other-than-temporary and this analysis requires estimation the fair value of the investment. In making this determination, the Company reviews several factors to determine whether the losses are other-than-temporary, including but not limited to: (i) the length of time the investment was in an unrealized loss position, (ii) the extent to which fair value was less than cost, (iii) the financial condition and near term prospects of the issuer, and (iv) the Company's intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. The determination of fair value of the investment involves considering factors such as current economic and market conditions, the operating performance of the companies including current earnings trends and forecasted cash flows, and other company and industry specific information. Investment impairments recorded as an other-than-temporary were $3.9 million, $9.4 million, and $3.0 million, for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
Impairment of Long-Lived Assets: | |||||||||||||
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If undiscounted expected future cash flows are less than the carrying value of the assets, an impairment loss is recognized based on the excess of the carrying amount over the fair value of the assets. Long-lived assets that are to be disposed of by sale are measured at the lower of book value or fair value less cost to sell. | |||||||||||||
Advertising Costs: | |||||||||||||
The Company expenses all advertising costs as incurred. Payment to customers for marketing development costs are accounted for as a reduction of the revenue associated with customers as incurred. For the years ended December 31, 2014, 2013 and 2012, advertising costs totaled $0.1 million, $0.1 million, and $0.2 million, respectively. | |||||||||||||
Restructuring Liabilities, Litigation and Other Contingencies: | |||||||||||||
The Company accounts for its restructuring plans using the guidance provided in ASC 420 “Exit or Disposal Cost Obligations” and ASC 712 “Compensation—Nonretirement Postemployment Benefits”. The Company accounts for litigation and contingencies in accordance with ASC 450, “Contingencies”, which requires that the Company record an estimated loss from a loss contingency when information available prior to issuance of the Company's financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. | |||||||||||||
Stock-Based Compensation: | |||||||||||||
Stock-based compensation expense for all share-based payment awards granted to employees is determined based on the grant-date fair value. Stock-based compensation expense for restricted stock awards is measured based on the closing fair market value of the Company's ordinary shares on the date of grant. Stock-based compensation expense for stock options is estimated at the grant date based on each option's fair value as calculated by Black-Scholes model. Stock-based compensation is expensed ratably on a straight-line basis over the requisite service period, which is generally the vesting term of the share-based payment awards. The performance-based restricted stock units are subject to the attainment of goals determined by the Compensation Committee of the Company's Board of Directors. The Company records the relevant stock-based compensation for the performance-based restricted stock units based on the probability of meeting the performance conditions. | |||||||||||||
Accumulated Other Comprehensive Income (AOCI): | |||||||||||||
Accumulated Other Comprehensive Income mainly consisted of foreign currency translation and the unrealized gain or loss from available-for-sale investments. The changes in AOCI, including the amounts reclassified to income, were as follows: | |||||||||||||
Foreign currency | |||||||||||||
translation and unrealized gain, net of tax | |||||||||||||
(in thousands) | |||||||||||||
Balance at December 31, 2012 | $ | 79,621 | |||||||||||
Loss recorded in other comprehensive loss | (6,671 | ) | |||||||||||
Less: Gain reclassified from AOCI to income | (7,088 | ) | |||||||||||
Balance at December 31, 2013 | 65,862 | ||||||||||||
Loss recorded in other comprehensive loss | (2,902 | ) | |||||||||||
Unrealized gain from available-for-sale investments | 673 | ||||||||||||
Less: Loss reclassified from AOCI to income | 121 | ||||||||||||
Balance at December 31, 2014 | $ | 63,754 | |||||||||||
As of December 31, 2014 and 2013, no accumulated other comprehensive income or loss is attributable to non-controlling interests | |||||||||||||
The Company reclassifies foreign currency translation adjustments from AOCI to income upon sale or upon complete or substantially complete liquidation of investments in foreign entities, with the amounts attributable to the entities and accumulated in the translation adjustment component of equity is both: (a) removed from the separate component of equity; and (b) reported as part of the gain or loss on sale or liquidation of the investment for the period during which the sale or liquidation occurs. During fiscal 2014, the Company recognized and reclassified $0.1 million to net loss from the cumulative translation adjustment previously recorded in accumulated other comprehensive income upon the liquidation of three Chinese entities. The prior cumulative translation adjustment primarily resulted from the difference between local functional currency and the Company's reporting currency. | |||||||||||||
On October 4, 2014, one of the Company's cost method investees Cortina was acquired by Inphi Corporation, or Inphi, a public company listed on the New York Stock Exchange. Upon the Merger agreement between Inphi and Cortina, considering the total consideration amount of this acquisition and the Company's interest holding as of September 30, 2014, the Company recorded a $1.5 million realized investment disposal loss in the third quarter of 2014. In exchange for the 1% interest in Cortina, the Company received 124,395 shares of Inphi on November 14, 2014. Management assessed the shares and classified them as available-for-sale securities and subject to fair value accounting. As of December 31, 2014, the fair value of the shares was $2.3 million, which resulted in an unrealized gain of $0.5 million and is recorded in Other Comprehensive Loss in the year ended December 31, 2014. | |||||||||||||
As of December 31, 2013, the Company held a $20.0 million Convertible Bond of UTStarcom Hong Kong Holdings Ltd. issued to the Company. The Convertible Bond was classified as available-for-sale debt securities subject to fair value accounting. As of December 31, 2014, the fair value of the Convertible Bond approximates $20.2 million, using the Cox, Ross and Rubinstein Binomial Model (“Binomial-Model”), which is based on the fair value of invested capital evaluated by an income approach. Therefore, the Company recognized $0.2 million unrealized gain in Other Comprehensive Income. | |||||||||||||
Income Taxes: | |||||||||||||
The Company is subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company's tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognizes the tax benefit (expense) from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company recognizes interest expense and penalties related to income tax matters as part of the provision for income taxes. | |||||||||||||
The Company recognizes deferred income taxes as the difference between the tax bases of assets and liabilities and their financial statement amounts based on enacted tax rates. Management judgment is required in the assessment of the recoverability of the Company's deferred tax assets based on its assessment of projected taxable income. Numerous factors could affect the Company's results of operations in the future. If there was a significant decline in the Company's future operating results, its assessment of the recoverability of its deferred tax assets would need to be revised, and any such adjustment to its deferred tax assets would be charged to income in that period. If necessary, the Company records a valuation allowance to reduce deferred tax assets to an amount management believes is more likely than not to be realized. Changes in estimates of taxable income in the future could result in reversal of the valuation allowances which would be credited to income in the year of reversal. | |||||||||||||
The Company provides U.S. taxes on foreign undistributed earnings that are not considered to be permanently reinvested outside the United States. | |||||||||||||
Financial Instruments: | |||||||||||||
Financial instruments consist of cash and cash equivalents, short and long-term investments, notes receivable, accounts receivable and payable and accrued liabilities. The carrying amounts of cash and cash equivalents, bank notes, accounts receivable and payable, notes receivable, and accrued liabilities approximate their fair values because of the short-term nature of those instruments. The fair value of long term investments in debt and equity securities is determined based on quoted market prices or available information about investees. | |||||||||||||
Foreign Currency Translation: | |||||||||||||
The Company's operations are conducted through international subsidiaries where the local currency is the functional currency and the financial statements of those subsidiaries are translated from their respective functional currencies into U.S. Dollars. All foreign currency assets and liabilities are translated at the period-end exchange rate and all revenues and expenses are translated at the average exchange rate for the period. The effects of translating the financial statements of foreign subsidiaries into U.S. Dollars are reported as a cumulative translation adjustment, a separate component of accumulated other comprehensive income in stockholders' equity. During fiscal 2014, the Company recognized $0.1 million to net loss from the cumulative translation adjustment previously recorded in accumulated other comprehensive income upon the liquidation of three Chinese entities. During fiscal 2013, the Company recognized $7.1 million to net income from the cumulative translation adjustment previously recorded in accumulated other comprehensive income upon the liquidation of two previously inactive Chinese entities. The prior cumulative translation adjustment primarily resulted from the difference between local functional currency and the Company's reporting currency. | |||||||||||||
The foreign currency translation gain(loss) related to the remeasurement of transactions denominated in other than the functional currency is included in other income(expenses), net on the Company's Consolidated Statements of Operations and Comprehensive Loss. In connection with this remeasurement process, the Company recorded losses of 0.6 million, gains of $3.9 million and losses of $4.7 million in the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
Earnings per Share: | |||||||||||||
Basic earnings per share, or EPS, is computed by dividing net income (loss) available to holders of ordinary shares or common stockholders, by the weighted average number of the Company's ordinary shares outstanding, as applicable, during the period, which excludes unvested restricted stock. Diluted EPS presents the amount of net income (loss) available to each ordinary share, outstanding during the period plus each ordinary share that would have been outstanding assuming the Company had issued ordinary shares, for all dilutive potential ordinary shares outstanding during the period. The Company's potentially dilutive ordinary shares include outstanding stock options, unvested restricted stock and restricted stock units. The following table summarizes the total potential ordinary shares that were excluded from the diluted per share calculation, because to include them would have been anti-dilutive for the period. | |||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Anti-dilutive stock options and awards/units outstanding | 1,784 | 1,734 | 2,002 | ||||||||||
Total(1) | 1,784 | 1,734 | 2,002 | ||||||||||
-1 | Calculated using the treasury stock method, which assumes proceeds are used to reduce the dilutive effect of outstanding stock awards. Assumed proceeds include the unrecognized deferred compensation of share awards, and assumed tax proceeds from excess stock-based compensation deductions. | ||||||||||||
For the years ended December 31, 2014, 2013 and 2012, no potential ordinary shares were dilutive because of the net loss incurred in those years, therefore basic and dilutive EPS were the same. | |||||||||||||
Recent Accounting Pronouncements: | |||||||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. | |||||||||||||
To achieve that core principle, an entity should apply the following steps: | |||||||||||||
Step 1: Identify the contract(s) with a customer. | |||||||||||||
Step 2: Identify the performance obligations in the contract. | |||||||||||||
Step 3: Determine the transaction price. | |||||||||||||
Step 4: Allocate the transaction price to the performance obligations in the contract. | |||||||||||||
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | |||||||||||||
As compared to existing guidance on revenue recognition, this Update will significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. Because the guidance in this Update is principles-based, it can be applied to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. | |||||||||||||
The guidance in this Update also improves U.S. GAAP by reducing the number of requirements to which an entity must consider in recognizing revenue. For example, before this Update an entity would have potentially considered industry- specific revenue guidance for some transactions, in addition to general revenue guidance and potentially other relevant guidance that commonly affects revenue transactions. Rather than referring to several locations for guidance, this Update provides a comprehensive framework within Topic 606. As a result of issuing this Update, the FASB concluded that over time the guidance for recognizing revenue in U.S. GAAP should be less complex than current guidance. | |||||||||||||
Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The comprehensive disclosure package will improve the understandability of revenue, which is a critical part of the analysis of an entity's performance and prospects. Furthermore, this Update provides guidance for transactions that are not addressed comprehensively (for example, service revenue, contract modifications, and licenses of intellectual property). Finally, the guidance will apply to all entities, including nonpublic entities that previously did not have extensive guidance. | |||||||||||||
Disclosures | |||||||||||||
An entity should disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative information is required about: | |||||||||||||
1 | Contracts with customers—including revenue and impairments recognized, disaggregation of revenue, and information about contract balances and performance obligations (including the transaction price allocated to the remaining performance obligations) | ||||||||||||
2 | Significant judgments and changes in judgments—determining the timing of satisfaction of performance obligations (over time or at a point in time), and determining the transaction price and amounts allocated to performance obligations | ||||||||||||
3 | Assets recognized from the costs to obtain or fulfill a contract. | ||||||||||||
For a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company believes the adoption of this ASU will have a material and comprehensive effect on the Company's financial position, results of operations Currently, management is in the process of assessing the impact resulting from the adoption of this ASU. | |||||||||||||
In June 2014, the FASB issued ASU 2014-12, “Compensation—Stock Compensation (Topic 718).” The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. As indicated in the definition of vest, the stated vesting period (which includes the period in which the performance target could be achieved) may differ from the requisite service period. | |||||||||||||
For all entities, the amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities. The Company will not early adopt this Update, and believes the adoption of this ASU will not have a material effect on the Company's financial position, results of operations or cash flows. | |||||||||||||
In August 2014, the FASB issued ASU 2014-12, “Presentation of Financial Statements—Going Concern (Subtopic 205-40).” Previously, there was no guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued) | |||||||||||||
The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will not early adopt this Update, and believes the adoption of this ASU will not have a material effect on the Company's financial position, results of operations or cash flows. | |||||||||||||
In January 2015, the FASB issued ASU 2015-01, “Income Statement Extraordinary and Unusual Items”. This standard eliminates the concept of extraordinary and unusual items from U.S. GAAP. The new standard is effective for annual and interim periods after December 15, 2015. Early adoption is permitted. The Company will not early adopt this Update, and believes the adoption of this ASU will not have a material effect on the Company's financial position, results of operations or cash flows. | |||||||||||||
In February 2015, the FASB issued the ASU 2015-02, “Consolidation (Topic 810) — Amendments to the Consolidation Analysis”, which amends the criteria for determining which entities are considered VIEs, amends the criteria for determining if a service provider possesses a variable interest in a VIE and ends the deferral granted to investment companies for application of the VIE consolidation model. The ASU is effective for interim and annual periods beginning after December 15, 2015. Early application is permitted. The Company will not early adopt this Update, and believes the adoption of this ASU will not have a material effect on the Company's financial position, results of operations or cash flows. |
DIVESTITURES
DIVESTITURES | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
DIVESTITURES [Abstract] | ||||||
DIVESTITURES | NOTE 3—DIVESTITURES | |||||
During the year ended December 31, 2010, the Company completed its divestitures of China Packet Data Services Node (“PDSN”) Assets, EMEA operations, and IP Messaging and US PDSN Assets. During the year ended December 31, 2012, the Company completed its divestiture of the IPTV equipment business. During the year ended December 31, 2013, the Company completed its divestitures of the Next Generation Network (“NGN”) equipment business and DOCSIS-EOC product line. | ||||||
China PDSN Assets | ||||||
In the third quarter of 2010, the Company completed a sale of its China PDSN assets. The divested assets were part of the Multimedia Communications segment. After the close of the transactions, the Company remained the primary obligor for certain sales contracts that were in place prior to the close of the transaction. The Company allocated proceeds to each component of the sales agreement based on relative fair values and recorded a gain of $1.6 million upon closing of the transaction in September 2010. The Company determined that the sale of this product line did not meet the criteria for presentation as a discontinued operation because of the Company's continuing involvement. In the third quarter of 2011, the Company entered into a three-party assignment agreement to transfer and release substantially all of the remaining obligations in connection with the sale of China PDSN assets. The Company recognized a gain on divestiture of approximately $4.3 million in year 2011. The Company reassessed and concluded that the three-party assignment agreement was executed beyond the one year reassessment period after its completion of disposal, and there was no triggering event requiring an extension of the reassessment period beyond one year. Therefore, presentation of discontinued operations was not appropriate. In 2012, the Company recognized a gain of $0.8 million as it successfully assigned all the remaining obligations associated with the China PDSN assets and released the related deferred gain. As of December 31, 2012, the Company had no remaining China PDSN deferred gain. | ||||||
EMEA Operations | ||||||
In September 2010, the Company entered into an agreement to sell its EMEA, or Europe, Middle East and Africa, operations for no consideration. In 2010, the Company recognized expenses of approximately $0.9 million as a divestiture loss for its obligations primarily arising out of local statutory requirements such as severance fund for transferred employees and other miscellaneous operational costs. The Company had paid approximately $0.7 million to the buyer in 2010 and $1.0 million remains in the accrual balance. | ||||||
On May 20, 2011, the Company received a Summary Summons from the High Court of Ireland filed by the buyer, which alleged that the Company owed the buyer certain amounts under the original transfer agreement. On September 17, 2012, the High Court of Ireland accepted the Notice of Discontinuance submitted by the buyer and with the payment of approximately $0.6 million paid by the Company to the buyer, which was recorded as offset to the remaining $1.0 million accrued balance and resulted in an additional gain on the divestiture in 2012, the matter was officially closed. The Company determined that the sale of its EMEA operations did not meet the criteria for presentation as a discontinued operation because EMEA did not meet the definition of a component of an entity and the Company has continued involvement with its EMEA operations. | ||||||
IP Messaging and US PDSN Assets | ||||||
In June 2010, the Company completed a sale of its IP Messaging and US PDSN Assets as part of its strategy to focus on core IP-based product offerings. The divested assets were located in North America, Caribbean, and Latin America regions and were part of the Multimedia Communications segment. Consideration for the approximately $1.7 million of net liabilities transferred included approximately $0.4 million cash proceeds plus potential additional contingent consideration of up to $1.6 million based on future cash collection of transferred receivables. A gain of $2.1 million, net of taxes, was recognized in June 2010 as a reduction to operating expenses. In the third and fourth quarter of 2010, the Company received $0.9 million of contingent consideration and recognized an additional gain on the divestiture. In the first and fourth quarters of 2011, the Company received $0.2 million of contingent consideration which it recognized as additional gain on the divestiture, In the second quarter of 2012, the Company received $0.1 million of contingent consideration which it recognized as additional gain on the divestiture. In the first quarter of 2013, the Company received $0.1 million of contingent consideration which was recognized as an additional gain on the divestiture. The Company determined that the sale of these product lines did not meet the criteria for presentation as a discontinued operation as these product lines did not meet the definition of a component of an entity. | ||||||
IPTV operations | ||||||
On August 31, 2012, the Company completed a sale of its IPTV business to an entity founded by our former CEO, and paid a total consideration of approximately $30.0 million related to the net liabilities transferred. In connection with the transaction, the Company transferred approximately $41.4 million in current assets, $1.2 million in property, plant and equipment and other long term assets and $74.1 million in liabilities, and as a result, the Company recorded a net loss of $17.5 million during 2012 related to the transaction, which primarily consisted of the $1.5 million gain on the net release of liabilities, offset by $13.4 million of severance-related amounts either paid to the buyer or accrued for payments to terminated IPTV employees, write-off of $3.8 million of prepaid VAT no longer recoverable due to the disposition, and $1.7 million of transaction costs. As of December 31, 2012, the remaining unpaid balance related to the divestiture was approximately $0.6 million. In the second quarter of 2013, The Company paid $0.5 million which was recorded as offset to the remaining accrual balance and recognized $0.1 million divestiture gain. | ||||||
As some customers were not willing to assign their contracts to the buyer, the Company is still the primary obligor for those contracts that were not legally assigned to the buyer. Even though the Company signed back-to-back contracts to transfer all obligations and associated economic risks and benefits to the buyer, from the customer point of view, the Company is the sole and only obligor to their contracts. If the buyer fails to fulfil its obligations under the back to back contracts with respect to these un-assigned contracts with the Company, the company is still obligated to fulfil the obligations under the un-assigned contracts with the customers.Therefore, the Company was not able to derecognize the related liabilities of those un-assigned contracts. According to the back-to-back contracts with the buyer, all of the obligations and associated economic risks and benefits of the un-assigned contracts had been transferred to the buyer of the IPTV business. Therefore, the Company recorded the portion of the payment ($22.7 million) made to the buyer at the time of the divestiture as the prepaid service cost to fulfil the remaining liabilities related to those un-assigned contracts. As of August 31, 2012, the Company had both liabilities and assets of $47.3 million related to those un-assigned contracts. | ||||||
Million | ||||||
Deferred revenues | $ | 10 | ||||
Customer advances | 37.3 | |||||
Total liabilities associated with the unassigned IPTV contracts | 47.3 | |||||
Deferred contract costs | 24.6 | |||||
Prepaid contract service costs to buyer | 22.7 | |||||
Total assets associated with the un-assigned IPTV contracts | $ | 47.3 | ||||
The Company continues to recognize revenue for those unassigned contracts when the revenue recognition criteria as mentioned above are met. At the same time, the Company recognizes an equal amount of the deferred costs associated with those contracts. Therefore, there is no gross margin impact from the future revenue recognition of these unassigned contracts. The Company continues to derecognize both the liabilities and deferred costs when the related contracts are legally assigned subsequently. During the post divestiture period in 2012, the Company recorded $2.2 million in revenues and related costs in the Consolidated Statements of Operations and Comprehensive Loss relating to these unassigned contracts. During the years ended December 31, 2014 and 2013, the Company recorded $4.3 million and $1.4 million in revenues and related costs in the Consolidated Statements of Operations due to meeting the revenue recognition criteria. As of December 31, 2014, the Company had both liabilities and deferred costs of $21.5 million, respectively, related to those un-assigned contracts. | ||||||
Moreover, on August 31, 2012, UTStarcom Hong Kong Holdings Ltd., a subsidiary prior to its disposal to the buyer as part of the sale of the IPTV business, issued a convertible bond (the “Convertible Bond”) to UTStarcom Hong Kong Ltd., a subsidiary of the Company, in the principal amount of $20.0 million, which said principal amount was paid by the Company in cash. According to the terms of the Convertible Bond, the Convertible Bond bears interest at 6.5% per annum and will be mature on August 31, 2017 (the Maturity Date). On or prior to the Maturity Date, upon UTStarcom Hong Kong Holdings Ltd achieving breakeven on its statement of operations(the “P&L run-rate breakeven”), $5.0 million of principal of the Convertible Bond was to be converted into 8% of the outstanding shares of UTStarcom Hong Kong Holding Ltd. At the Maturity Date, the Company has the option to convert the outstanding principal amount of the Convertible Bond and all accrued and unpaid interest into fully paid and nonassessable ordinary shares of UTStarcom Hong Kong Holding Ltd. equal to 25% (if 8% of shares specified above have been issued) or 33% of the outstanding shares of UTStarcom Hong Kong Holding Ltd or to receive repayment in cash. During the years ended December 31, 2014, 2013 and 2012, the IPTV business accounted for $4.3 million, $1.4 million, and $29.5 million, respectively of the Company's revenues. The Company determined that the divestiture of IPTV business did not meet the criteria for presentation as a discontinued operation due to the significant continuing involvement of the Company in the IPTV operations. The Convertible Bond has been classified as available-for-sale securities subject to fair value accounting. See Note 6—Cash, Cash Equivalents and Investments. On April 7, 2015, the Company entered an agreement with UTStarcom Hong Kong Holdings Ltd., which is an unaffiliated entity of the Company for the early repayment and conversion of the $20 million Convertible Bond. The agreement was effective on April 7, 2015. Pursuant to the agreement, UTStarcom Hong Kong Holdings Ltd. paid $10.0 million in cash to the Company as partial payment of the principal of the Convertible Bond. The remaining principal and the interest of the Convertible Bond were converted to 14% equity interest of UTStarcom Hong Kong Holdings Ltd. | ||||||
NGN operations | ||||||
On March 22, 2013, the Company entered into an agreement to divest all of its NGN related assets and liabilities to a third party. Pursuant to the agreement, the Company recorded $3.2 million in divestiture losses consisting of $2.7 million as compensation to the buyer for taking over a loss making business and $0.5 million of severance for the transferred employees, signing bonus and retention bonus to incentivize certain key employees to sign employment contracts with the buyer. The remaining accrual balance as of December 31, 2013 was $0.8 million, which was fully paid in the second quarter of 2014, and the divestiture was legally completed. The Company determined that the sale of this product line did not meet the criteria for presentation as a discontinued operation because of the Company's continuing involvement. | ||||||
Sale of DOCSIS-EOC product line | ||||||
On March 22, 2013, the Company entered into the agreement to dispose its DOCSIS-EOC product line to a third party with a cash consideration of $1.8 million paid by the buyer. This product was a cable broadband access product adopting or in connection with the C-DOCSIS technology and serving as cable modem termination server. At the date of the transfer, this product was still under the development phase with no customer orders. The Company completed the transaction in 2013, receiving the full amount of $1.8 million, and recorded that amount as a divestiture gain. The transaction was completed in the third quarter of 2013. The product line was not a reportable segment under ASC 280, nor an operating segment or reporting unit. As the product line does not have separable cash flow, as it shared services and costs with other product lines in the broadband unit, the Company determined that the sale of this product line did not meet the criteria for presentation as a discontinued operation. | ||||||
COMPREHENSIVE_LOSS
COMPREHENSIVE LOSS | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
COMPREHENSIVE LOSS | |||||||||||||
COMPREHENSIVE INCOME/LOSS | NOTE 4—COMPREHENSIVE LOSS | ||||||||||||
Total comprehensive loss for the years ended December 31, 2014, 2013 and 2012 consisted of the following: | |||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Net loss | $ | (30,264 | ) | $ | (22,730 | ) | $ | (35,579 | ) | ||||
Other comprehensive loss | |||||||||||||
Unrealized gain from available-for-sale investments | 673 | - | - | ||||||||||
Net change in cumulative translation adjustment | (2,781 | ) | (13,759 | ) | (3,272 | ) | |||||||
Total comprehensive loss | (32,372 | ) | (36,489 | ) | (38,851 | ) | |||||||
Comprehensive loss attributable to non-controlling interests(1) | - | 9 | 1,194 | ||||||||||
Comprehensive loss attributable to UTStarcom Holdings Corp | $ | (32,372 | ) | $ | (36,480 | ) | $ | (37,657 | ) | ||||
-1 | Comprehensive loss attributable to non-controlling interests consisted solely of net loss. | ||||||||||||
The changes in non-controlling interests during the years ended December 31, 2014, 2013 and 2012 were as follows: | |||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Balance at beginning of period | $ | — | $ | 814 | $ | 6,401 | |||||||
Comprehensive loss attributable to non-controlling interests | — | (9 | ) | (1,194 | ) | ||||||||
Non-controlling interests reduction from deconsolidation | — | (805 | ) | (4,393 | ) | ||||||||
Balance at end of period | $ | — | $ | — | $ | 814 |
BALANCE_SHEET_DETAILS
BALANCE SHEET DETAILS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
BALANCE SHEET DETAILS [Abstract] | |||||||||
BALANCE SHEET DETAILS | NOTE 5—BALANCE SHEET DETAILS | ||||||||
The following tables provide details of selected balance sheet items: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Inventories: | |||||||||
Raw materials | $ | 4,127 | $ | 3,225 | |||||
Work in process | 3,952 | 1,344 | |||||||
Finished goods(1) | 12,580 | 18,786 | |||||||
Total Inventory | $ | 20,659 | $ | 23,355 | |||||
-1 | Includes finished goods at customer sites of approximately $11.6 million and $14.7 million at December 31, 2014 and 2013, respectively, for which the customer has taken possession, but based on specific contractual terms, title has not yet passed to the customer and for which revenue has not yet been recognized. | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Prepaids and other current assets | |||||||||
Prepaid tax | $ | 4,323 | $ | 4,894 | |||||
Advance to suppliers | 1,944 | 223 | |||||||
Deferred taxes—current | 3,668 | 3,534 | |||||||
Other receivable(1) | 4,413 | 8,579 | |||||||
Prepaid others | 4,989 | 4,322 | |||||||
Total Prepaids and other current assets | $ | 19,337 | $ | 21,552 | |||||
-1 | The other receivable balance includes loans of approximately $2.0 million and $5.6 million as of December 31, 2014 and December 31, 2013, respectively, made to ESA Cultural Investment (Hong Kong) limited (“borrower” or ESA), a movie investment company with its operations located in Beijing. The Company signed the loan agreement for a total amount of $5.6 million in the fourth quarter of 2012, and $4.0 million was drawdown in the fourth quarter of 2012 with the remaining in the first quarter of 2013. The loan bears interest at 20% per annum and originally matured on December 31, 2013, with a subsequently extended maturity date on 50% of the loan, or $2.8 million, to June 30, 2014, and the other half extended to December 31, 2014. In the fourth quarter of 2014, the Company received $0.8 million against the principal of the outstanding entrusted loan amount. The Company has performed an assessment on the need for a valuation reserve due to collectability risk and $2.8 million was reserved as of December 31, 2014 as the collection term was due. The management expects to collect the remaining $2.0 million balance in the second quarter of 2015. | ||||||||
The other receivable balance includes the amount of $1.08 million paid to UiTV in July and August of 2014. UiTV used this amount to purchase Set Top Boxes for the Internet television service in Thailand. Pursuant to the contract, UiTV will repay in installments, starting from January of 2015 to July of 2018. | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Property, plant and equipment, net: | |||||||||
Leasehold improvements | 5,290 | $ | 6,009 | ||||||
Automobiles | 2,077 | 2,129 | |||||||
Software | 6,505 | 7,191 | |||||||
Computer, Equipment and Furniture | 45,981 | 53,085 | |||||||
Others | 19 | 93 | |||||||
Total | 59,872 | 68,507 | |||||||
Less: accumulated depreciation | (56,835 | ) | (63,736 | ) | |||||
Total Property, plant and equipment, net | $ | 3,037 | $ | 4,771 | |||||
During the years ended December 31, 2014, 2013 and 2012, the Company wrote off $7.3 million with accumulated depreciation of $7.3 million, $41.7 million with accumulated depreciation of $41.7 million, and $45.3 million with accumulated depreciation of $45.3 million of fully depreciated property, plant and equipment, respectively. In 2014, there was $0.2 million of accelerated depreciation of leasehold improvements related to the early termination of a lease of the Hangzhou facility. During 2013, there was $1.7 million of accelerated depreciation related to the early termination of a lease on the Hangzhou facility and $0.3 million accelerated depreciation as a result of combining back office functions in Beijing to the Company's facilities in Hangzhou as part of a cost reduction initiative in 2013. During 2012, there was $0.9 million in accelerated amortization of Beijing Office leasehold improvements due to early termination of that lease. During 2012, in connection with the IPTV divestiture (See Note 3—Divestitures), the Company derecognized property, plant and equipment of $9.1 million with accumulated depreciation of $8.2 million, and in connection with the deconsolidation of UiTV (See Note 6—Cash, Cash equivalents and Investments), the Company derecognized property, plant and equipment of $2.0 million with accumulated depreciation of $0.6 million. | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Other current liabilities: | |||||||||
Accrued contract costs | $ | 3,638 | $ | 3,175 | |||||
Accrued payroll and compensation | 4,705 | 8,136 | |||||||
Warranty costs | 217 | 617 | |||||||
Accrued professional fees | 816 | 1,946 | |||||||
Accrued other taxes | 2,495 | 2,722 | |||||||
Other | 3,592 | 5,834 | |||||||
Total other current liabilities | $ | 15,463 | $ | 22,430 | |||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Other long-term liabilities | |||||||||
Non current income tax payable | $ | 14,048 | $ | 13,606 | |||||
Non current deferred tax liability | 46 | 37 | |||||||
Non current deferred rent | 169 | 475 | |||||||
Others | 1,753 | 2,668 | |||||||
Total other long-term liabilities | $ | 16,016 | $ | 16,786 |
CASH_CASH_EQUIVALENTS_AND_SHOR
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Abstract] | |||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | NOTE 6—CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | ||||||||||||||||
Cash and cash equivalents, consisting primarily of bank deposits and money market funds, are recorded at cost which approximates fair value because of the short-term nature of these instruments. There was no available-for-sale securities included in cash and cash equivalents at December 31, 2014 or December 31, 2013. | |||||||||||||||||
Short-term investments consist of available-for-sale securities and bank notes. There were $2.3 million available-for-sale securities and nil bank notes at December 31, 2014, and nil available-for-sale securities and bank notes at December 31, 2013. The Company accepts bank notes receivable with maturity dates of between three and six months from its customers in China in the normal course of business. The Company may discount these bank notes with banking institutions in China. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. In making this determination, the Company reviews several factors to determine whether the losses are other-than-temporary, including but not limited to: (i) the length of time the investment was in an unrealized loss position, (ii) the extent to which fair value was less than cost, (iii) the financial condition and near term prospects of the issuer, and (iv) the Company's intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. | |||||||||||||||||
As at December 31, 2014 and 2013, the Company had investments in convertible bonds and redeemable convertible preferred stock which were classified as available-for-sale securities and are subject to fair value accounting. Investments in debt securities classified as available for sale will be measured subsequently at fair value in the statement of financial position. An impairment charge will be recognized by the Company when a decline in the fair value below the cost basis is judged to be other-than-temporary. | |||||||||||||||||
The following table shows the break-down of the Company's total long- term investments as of December 31, 2014 and December 31, 2013: | |||||||||||||||||
Accounting Method | December 31, | December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Cortina | Cost Method | $ | — | $ | 3,348 | ||||||||||||
GCT Semiconductor, Inc. | Cost Method | 811 | 811 | ||||||||||||||
Xalted Networks | Cost Method | — | 22 | ||||||||||||||
SBI | Cost Method | 1,560 | 1,900 | ||||||||||||||
Investment using Cost Method Total | 2,371 | 6,081 | |||||||||||||||
ACELAND | Equity Method | 2,109 | 2,109 | ||||||||||||||
UiTV | Equity Method | — | 5,308 | ||||||||||||||
Shareholder Loan to ACELAND | Equity Method | 7,119 | 7,119 | ||||||||||||||
Investment using Equity Method Total | 9,228 | 14,536 | |||||||||||||||
UiTV | Available for sale | 20,000 | 25,971 | ||||||||||||||
AioTV | Available for sale | 8,000 | 8,000 | ||||||||||||||
UTStarcom Hong Kong Holdings Ltd | Available for sale | 20,200 | 20,000 | ||||||||||||||
Investments Classified as available-for-sale Total | 48,200 | 53,971 | |||||||||||||||
Total Investment | $ | 59,799 | $ | 74,588 | |||||||||||||
Cortina | |||||||||||||||||
In September 2004, the Company invested $2.0 million in Series A preferred stock of ImmenStar, Inc., or ImmenStar. ImmenStar was a development stage company that designed a chip that was used in the Company's product. This investment was accounted for under the cost method. In February 2007, ImmenStar was acquired by Cortina Systems, Inc., or Cortina. In exchange for the Company's investment in ImmenStar, the Company received 3.6 million shares of Series D Preferred Convertible Stock of Cortina at $0.837 per share, $1.8 million cash in March 2007 and received an additional 0.4 million shares of Series D Preferred Convertible Stock at $0.837 per share and $0.2 million cash from escrow during 2008. The Company owned an approximately 1% interest of Cortina at December 31, 2013. | |||||||||||||||||
On October 30, 2014, Cortina was acquired by Inphi Corporation, or Inphi, a public company listed on the New York Stock Exchange. Upon the Merger agreement between Inphi and Cortina, considering the total consideration amount of this acquisition and the Company's interest holding as of September 30, 2014, the Company recorded $1.5 million realized investment disposal loss in the third quarter of 2014. In exchange for the 1% interest in Cortina, the Company received 124,395 shares of Inphi on November 14, 2014. Management assessed the shares and classified them as available-for-sale securities and subject to fair value accounting. As of December 31, 2014, the fair value of the shares is $2.3 million, which results in an unrealized gain of $0.5 million in Other Comprehensive Income. As of December 31, 2014, this investment is included in “Short-term investment”. In February of 2015, the Company sold the 124,395 shares of Inphi stock with a total cash consideration of $2.4 million. | |||||||||||||||||
GCT Semiconductor | |||||||||||||||||
In October 2004, the Company invested $3.0 million in Series D preferred convertible stock of GCT Semiconductor, Inc., or GCT, which designs, develops and markets integrated circuit products for the wireless communications industry. This investment represents approximately 0.8% interest in GCT as of December 31, 2014, and is accounted for under the cost method. In the fourth quarter of 2012, the Company reassessed the fair value of its investment in GCT (level 2 within the fair value hierarchy) based on reviewing GCT's operational performance, cash position, financing needs and the stock price of latest private equity financing obtained by GCT, and as a result recorded a $2.2 million impairment charge in impairment of long-lived assets and long term investments, net due to an other-than-temporary decline in the fair value of GCT. During the year of 2014, the Company assessed the fair value of GCT, and concluded that there was no impairment relating to this investment. | |||||||||||||||||
Xalted Networks, or Xalted | |||||||||||||||||
In May 2005 and August 2005, the Company invested $2.0 million and $1.0 million, respectively, in Xalted. In March 2006, the Company invested an additional $0.3 million in Xalted. Xalted is a development stage company providing telecommunication operator customers with a comprehensive set of network systems, software solutions and service offerings. The Company had less than 10% ownership interest at December 31, 2014 and 2013, on a fully diluted basis, in Xalted and accounts for the investment using the cost method. During the third quarter of 2009, management re-evaluated the carrying value of this investment, and as a result, the Company determined that the decline in Xalted's fair value was other-than-temporary and recorded a $1.7 million impairment charge in the third quarter of 2009. In the second quarter of 2011, Xalted completed a share exchange agreement with Kranem Corporation, or Kranem, a public company listed in Over the Counter Bulletin Board. This transaction was recorded as a reverse recapitalization. As a result of this transaction, Xalted became a holding company which did not have any operations other than owning 35% of the issued and outstanding shares of Kranem. In the fourth quarter of 2011 and the third quarter of 2012, the Company reassessed the fair value of its investment in Xalted (level 2 within the fair value hierarchy) based on the share price of Kranem, and as a result recorded a $0.5 million impairment charge in other income (expense) in 2011 and a $0.8 million impairment charge in impairment of long-lived assets and long term investments in 2012,, due to an other-than-temporary decline in the fair value of Xalted. During 2013, the Company recorded $0.3 million in investment impairment charges based on the fair value assessment for Xalted (level 2 within the fair value hierarchy) based on the share price of Kranem. During 2014, Kranem filed for Chapter 11 protection with the U.S. Bankruptcy Court. Because of this, the Company recorded $0.02 million in investment impairment charges. As of December 31, 2014, the investment in Xalted has been fully impaired. | |||||||||||||||||
SBI NEO Technology A Investment LPS, or SBI | |||||||||||||||||
In 2008, the Company invested $0.5 million into SBI in exchange for approximately 2% of the Partnership interest. The Partnership's investment objective is to invest in unlisted or listed companies in Japan and overseas that are engaged in high growth businesses, including businesses focused on information technology and the environment. In the fourth quarter of 2012, the first quarters of 2011 and 2010, the Company contributed an additional $0.6 million, $0.7 million and $0.7 million into SBI, respectively, and maintained a partnership interest of approximately 2% as of December 31, 2014 and 2013. The Company has concluded that it does not have a controlling interest in SBI as it does not have the power to direct the activities of SBI that most significantly impact the entity's economic performance nor does it have significant influence over SBI. Affiliates of a related party have a controlling interest in SBI. See “Note 16—Related Party Transactions.” The Company accounts for the investment in SBI using the cost method. During the year of 2014, the Company assessed the fair value of SBI, and concluded that there was no impairment relating to this investment. In the fourth quarter of 2014, the Company received $0.1 million from SBI which was recorded as a reduction to offset the SBI investment as of December 31, 2014. | |||||||||||||||||
ACELAND Investment Limited | |||||||||||||||||
In December 2010, the Company invested $2.1 million into ACELAND. ACELAND is a joint venture entity with ZTE H.K. Limited. The entity's investment objective is to participate in the investment in Wireless City Planning operated by Softbank to develop XGP business. Pursuant to the investment agreement, in the second quarter of 2011, the Company extended a shareholder loan to ACELAND in the amount of $7.1 million which could be used by ACELAND to subscribe for Class B Wireless City Planning shares. The shareholder loan was made by all shareholders of ACELAND in proportion to their equity interests in ACELAND. Based on the terms of the loan which make repayment contingent on certain events, the Company accounted for it as an equity investment. | |||||||||||||||||
The Company owned an approximately 35% interest in ACELAND as at December 31, 2014 and accounts for the investment in ACELAND using the equity method. ACELAND is a holding company and its sole investment is the 5.82% interest of Wireless City Planning, which is a company in early stage whose fair value fluctuated immaterially from 2013 to 2014. ACELAND did not incur any significant income or losses in 2014 and 2013. | |||||||||||||||||
AioTV Inc . | |||||||||||||||||
In November 2012, the Company invested $8 million in Series B Preferred Stocks of AioTV Inc, or AioTV, at $0.320937 per share. AioTV stands for “all-in-one TV” and is an international cloud-based video aggregation and distribution platform. The investment objective is to give the Company access to technology that will support its rollout of subscription-based, value- added media services. The Company owned a 44% equity interest in AioTV as of December 31, 2014. The preferred stock has been classified as available- for-sale securities as it is not considered to be in-substance common stock due to their redemption feature and is thus subject to fair value accounting. AioTV currently cooperates with consumer electronics makers, cable and telecommunications service providers in North America, South America and Europe. During the year of 2014, the Company assessed the fair value of the investment, and concluded that there was no significant change in fair value relating to this investment. To estimate its fair value, the Company used the option-pricing method and Ross and Rubinstein Binomial Model (“Binomial-Model”), which is based on the fair value of invested capital evaluated by an income approach. The significant inputs for the valuation model included the following: | |||||||||||||||||
Years Ended | |||||||||||||||||
31-Dec | |||||||||||||||||
2014 | |||||||||||||||||
Total fair value of invested capital as at valuation date (in thousands) | 11,954 | ||||||||||||||||
Risk free rate of interest | 1.7 | % | |||||||||||||||
Dividend yield | 0 | % | |||||||||||||||
Expiration date | 11/14/17 | ||||||||||||||||
Volatility | 55.5 | % | |||||||||||||||
The fair value of the invested capital has been determined using income approach including a discounted cash flow model and unobservable inputs including assumptions of projected revenue, expenses, capital spending, other costs and a discount rate of 32% by using the weighted average cost of capital method. | |||||||||||||||||
Risk free rate of interest adopted for the valuation were estimated based on the US Sovereign Strips Curve plus default risk spread between US and China. | |||||||||||||||||
Dividend yield was assumed to be 0% considering that AioTV plans to retain profit for corporate expansion and hence have no plan to distribute dividends in the near future. | |||||||||||||||||
Expiration date is the expected date of illiquidity event estimated by management. | |||||||||||||||||
The expected equity volatility was estimated based on the annualized standard deviation of the daily stock price return of comparable companies for the period before the valuation date and with a similar time span as to expiration. | |||||||||||||||||
UTStarcom Hong Kong Holdings Ltd., | |||||||||||||||||
UTStarcom Hong Kong Holdings Ltd., previously a subsidiary prior to its disposal to the buyer as part of the sale of the IPTV business, is an entity owned by the former CEO of the Company, and is not a subsidiary of the Company. On August 31, 2012, the Company completed a sale of its IPTV business to UTStarcom Hong Kong Holdings Ltd. and paid approximately $30.0 million. In connection with this transaction, the Company recorded a net loss of $17.5 million during 2012 as a result of this sale transaction. On the same day, UTStarcom Hong Kong Holdings Ltd., issued a convertible bond (the “Convertible Bond”) to UTStarcom Hong Kong Ltd., a subsidiary of the Company, in the principal amount of $20.0 million. According to the terms of the Convertible Bond, the Convertible Bond bears interest at 6.5% per annum and will mature on August 30, 2017 (the Maturity Date). On or prior to the Maturity Date, if UTStarcom Hong Kong Holdings Ltd. achieves operating income break-even, $5.0 million of principal of the Convertible Bond will be converted automatically into 8% of the outstanding shares of UTStarcom Hong Kong Holdings Ltd. At the Maturity Date, the Company may convert the outstanding principal amount of the Convertible Bond and all accrued and unpaid interest into fully paid and nonassessable ordinary shares of UTStarcom Hong Kong Holdings Ltd. equal to 25% (if 8% of shares specified above are issued) or 33% of the outstanding shares of UTStarcom Hong Kong Holdings Ltd. or may elect repayment in cash. The Convertible Bond was classified as available-for-sale securities subject to fair value accounting. As of December 31, 2014, the fair value of the Convertible Bond approximates $20.2 million. To estimate its fair value, the Company used the Cox, Ross and Rubinstein Binomial Model (“Binomial-Model”), which is based on the fair value of invested capital evaluated by an income approach. The significant inputs for the valuation model included the following: | |||||||||||||||||
Years Ended | |||||||||||||||||
31-Dec | |||||||||||||||||
2014 | |||||||||||||||||
Total fair value of invested capital as at valuation date (in thousands) | 37,000 | ||||||||||||||||
Risk free rate of interest | 1.69 | % | |||||||||||||||
Dividend yield | 4 | % | |||||||||||||||
Maturity date | 8/30/17 | ||||||||||||||||
Volatility | 49 | % | |||||||||||||||
The fair value of the invested capital has been determined using income approach including discounted cash flow model and unobservable inputs including assumptions of projected revenue, expenses, capital spending, other costs and a discount rate of 40% by using the weighted average cost of capital method. | |||||||||||||||||
Risk free rate of interest adopted for the valuation were estimated based on the the US Sovereign Strips Curve plus a default risk spread between US and China.. | |||||||||||||||||
Dividend yield was calculated to be 4% considering a debt to equity ratio of 50:50 throughout the Convertible Bond's holding period per Management's estimation. The coupon rate carried by the debt portion is 6.5% per annum whilst the expected dividend yield for equity portion is assumed to be zero by the Management given the fact that the underlying IPTV business is still in an early stage. | |||||||||||||||||
Maturity date is the time to maturity of the Convertible Bond according to the investment agreement. | |||||||||||||||||
The expected equity volatility were estimated based on the annualized standard deviation of the daily return embedded in the historical stock price of comparable companies with a time horizon close to the expected term determined based on the maturity date. | |||||||||||||||||
On April 7, 2015, the Company entered an agreement with UTStarcom Hong Kong Holdings Ltd. for the conversion of the $20 million Convertible Bond. The agreement was effective on April 7, 2015. Pursuant to the agreement, UTStarcom Hong Kong Holdings Ltd. paid $10.0 million in cash to the Company as partial payment of the principal of the Convertible Bond. The remaining part of the principal and the interest of the Convertible Bond were converted to 14% equity interest of UTStarcom Hong Kong Holdings Ltd. | |||||||||||||||||
UiTV Media Inc. or UiTV | |||||||||||||||||
On October 16, 2010, the Company invested in UiTV Media Inc. or UiTV (previously known as “iTV Media Inc. or iTV, which changed its name in the fourth quarter of 2014), by entering an Ordinary Shares Purchase Agreement with UiTV and Smart Frontier, the sole shareholder of UiTV, to purchase 5,100,000 ordinary shares at a total price of $10.0 million, which consisted of 51% of UiTV's total shares which were held by Smart Frontier. The purchase price was paid by the Company's ordinary shares, which would be repurchased back in future by the Company according to the Ordinary Shares Purchase Agreement. Concurrent with entering into the Ordinary Shares Purchase Agreement, the Company also entered into a Series A Preference Shares Purchase Agreement to purchase from UiTV 9,600,000 Series A Preference Shares for an aggregate cash consideration of $20.0 million. The Purchase Shares and the Series A Preference Shares together constitute 75% of the total shares of UiTV which gave the Company control over UiTV. The Company recorded this transaction as an acquisition of a business. | |||||||||||||||||
The transactions closed on November 8, 2010. The Company issued 4,473,272 (or 1,491,091 after reverse share split) ordinary shares to Smart Frontier with a fair value of $9.8 million based on the market price of the Company's ordinary share as at November 8, 2010 for the purchase price of $10.0 million for the UiTV ordinary shares and made cash payments of $20.0 million to UiTV for the purchase of Series A Preference Shares. | |||||||||||||||||
On April 15, 2012, the Share Exchange Agreement was entered into by the Company and the UiTV shareholders to exercise the repurchase right. The transaction was effective on June 4, 2012 and the transfer was completed on June 21, 2012. Upon the execution of the Share Exchange Agreement, 1,491,091 UTStarcom ordinary shares previously held by Smart Frontier were transferred back to the Company as treasury shares and the 5,100,000 ordinary shares of Stage Smart Limited previously held by UTStarcom were transferred back to Smart Frontier Holdings Limited. After the repurchase, the Company decreased its ownership in UiTV from 75% to approximately 49% and reduced its representation on the UiTV board of directors from three to two out of a total of five board seats, which triggered deconsolidation of UiTV from its consolidated financial statements starting from June 21, 2012. Since the remaining Series A Preference Shares of UiTV invested by the Company did not qualify as the in-substance common stock due to their substantive liquidation preference, the Company uses the cost method to account for the investment the UiTV Series A preference shares after the deconsolidation. | |||||||||||||||||
On December 3, 2012, UiTV issued a convertible bond to the Company for cash in the principal amount of $3.0 million which shall be convertible into the preference shares issued in a qualified financing, as defined in the convertible bond agreement, or additional Series A Preferred Stock, if a qualified financing is completed. The conversion price per share equals to the lesser of 85% of the per share price paid by the other purchaser of preference shares sold in the qualified financing and the price per share of the Series A Preferred Stock paid by the Company. According to the terms of the convertible bond, the convertible bond bears interest at 6.5% per annum and matured on December 31, 2013 and subsequently the maturity date was extended to December 31, 2015. The convertible bond is classified as available-for-sale securities subject to fair value accounting. | |||||||||||||||||
On January 2, 2013, UiTV issued another convertible bond to the Company for cash in the principal amount of $5.0 million with a maturity date of December 31, 2013, and also subsequently extended the maturity date to December 31, 2015. The issuance of these additional convertible bonds triggered a reassessment of the Company's accounting for its investment in the preference shares. Due to the additional convertible bond investment and the decreasing fair value of the ordinary shares of UiTV in relation to the total fair value of that company, it was determined the preference shares of UiTV Media owned by the Company now substantively participated in the risks and rewards of UiTV Media, irrespective of the liquidation preferences, and were considered as in-substance common stock. Therefore, the Company concluded the equity method criteria had been met and the equity accounting commenced in the first quarter of 2013.After the Company's preferred stock investment in UiTV has been reduced to zero as a result of the Company's share of 49% UiTV losses, the remaining UiTV losses will be fully applied against the Company's convertible bond investment balance until the carrying value of the convertible bond investment balance is reduced to zero. As a result, the Company recorded a total of $5.3 million and $9.6 million in losses for the preferred stock investment in 2014 and 2013, respectively, to reflect the Company's share of 49% UiTV losses and recorded a total of $3.6 million in losses for the convertible bond investment in 2014 to reflect the 100% picking up of UiTV remaining losses. As of December 31, 2014, the remaining balance in the preferred stock is reduced to zero. | |||||||||||||||||
In the second quarter of 2013, the Company further invested in an additional $15.0 million convertible bond issued by UiTV Media with a maturity date of May 31, 2014. In the fourth quarter of 2013, the Company further invested in an additional $12.1 million convertible bond issued by UiTV Media of which $5.0 million was invested through cash with a maturity date of August 31, 2014 and $7.1 million through the conversion of outstanding receivables with a maturity date of December 31, 2015. No significant gain or loss was generated from the conversion of receivables to convertible bonds because it was converted at the book value of the receivables. Through December 31, 2014, the Company has invested $20.0 million preference shares and $35.1 million convertible bonds in UiTV Media. If converted, these investments represent approximately 73% of the equity of UiTV Media. Nevertheless, the Company does not have control over UiTV Media because the founder and CEO of UiTV Media retains the right to elect three of the five board members of UiTV Media unless the voting interests controlled by him falls below 10% of the total voting interests of UiTV Media. As the UiTV Media board of directors has the power to elect or dismiss officers, approve the budget, make strategic decisions and evaluate possible merger and acquisition opportunities of that company, the founder and CEO of UiTV Media controls that company. UiTV Media is considered as a Variable Interest Entity because it is thinly capitalized. Management has concluded the founder and CEO of UiTV Media was the primary beneficiary of UiTV Media for the year ended December 31, 2014, because he has meets the power criterion and loss/benefits criterion in accordance to ASC 81010-25. For the above reasons, the Company did not consolidate UiTV Media as for the year ended December 31, 2014. Once the Company's preferred stock investment in UiTV has been reduced to zero as a result of the Company's share of 49% of UiTV losses, the remaining UiTV losses will be fully applied against the Company's convertible bond investment balance until the carrying value of the convertible bond investment balance is reduced to zero. After taking $2.4 million and $9.1 million impairment charge in 2014 and 2013, respectively, and $ 3.6 million as a result of the 100% UiTV remaining loss picking up in 2014, the convertible bond investments balance at December 31, 2014 was reduced to $20.0 million. | |||||||||||||||||
As of December 31, 2014, the Company evaluated the fair value of invested capital by an income approach and used the market approach as a cross check. Because the convertible bonds were already mature and the estimated business value of UiTV was lower than the redemption amount of the convertible bonds, all of the value of UiTV should first be distributed to the holder of the convertible bonds and no residual value would be left to the preferred and common shareholders. Therefore the fair value of convertible bonds was equal to the business enterprise value of UiTV and the fair value of the Series A Preferred Shares was nil. The significant inputs for the valuation model included the following: | |||||||||||||||||
Years Ended | |||||||||||||||||
31-Dec | |||||||||||||||||
2014 | |||||||||||||||||
Total fair value of invested capital as at valuation date (in thousands) | 20,000 | ||||||||||||||||
The fair value of the invested capital has been determined using income approach including discounted cash flow model and unobservable inputs including assumptions of projected revenue, expenses, capital spending, other costs and a discount rate of 40% by using the weighted average cost of capital method. | |||||||||||||||||
Based on the above the assessment of the convertible bond, the Company concluded the fair value is less than the book value of the convertible bonds as of December 31, 2014, which will not recover in foreseeable future, thus in the year ended December 31, 2014, the Company recorded $2.4 million in impairment charges in investment impairments for the convertible bond. If the current controlling shareholder of UiTV is willing to amend certain provisions of the articles of incorporation that will allow the Company, based on its current shareholdings, to obtain control of UiTV, the Company, as its major investor, would provide an additional investment at fair market price to support the continuing operations of UiTV so as to enable it to meet its liabilities as they fall due and carry on its business. | |||||||||||||||||
The Company presents the below summarized condensed financial information of our equity method investees as our investments in those entities have exceeded the 10% thresholds laid out in Regulations SX 4-08(g) and 1-02(w). | |||||||||||||||||
Condensed | Condensed | Condensed | |||||||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(In thousands) | (In thousands) | (In thousands) | |||||||||||||||
Operating data: | |||||||||||||||||
Revenue | $ | 7,460 | $ | 1,984 | $ | 165 | |||||||||||
Gross profit | $ | (116 | ) | $ | (3,164 | ) | $ | (1,835 | ) | ||||||||
Loss from operations | $ | (12,087 | ) | $ | (16,354 | ) | $ | (13,210 | ) | ||||||||
Net loss | $ | (15,469 | ) | $ | (18,170 | ) | $ | (13,460 | ) | ||||||||
Net loss attributable to UTStarcom Holdings Corp. | $ | (13,744 | ) | $ | (15,942 | ) | $ | (12,797 | ) | ||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(In thousands) | (In thousands) | (In thousands) | |||||||||||||||
Balance sheet data: | |||||||||||||||||
Current assets | $ | 6,582 | $ | 8,712 | $ | 4,849 | |||||||||||
Long-term assets | $ | 10,062 | $ | 37,538 | $ | 30,151 | |||||||||||
Current liabilities | $ | (48,759 | ) | $ | (1,384 | ) | $ | (5,325 | ) | ||||||||
Long-term liabilities | $ | (1,240 | ) | $ | (56,047 | ) | $ | (23,371 | ) | ||||||||
Non-controlling interests | $ | 4,570 | $ | 2,822 | $ | 584 | |||||||||||
Fair Value Measurements | |||||||||||||||||
Pursuant to the accounting guidance for fair value measurements and its subsequent updates, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The accounting guidance also establishes a three-tier fair value hierarchy which requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The fair value hierarchy prioritizes the inputs into three levels that may be used in measuring fair value as follows: | |||||||||||||||||
Level 1—observable inputs such as quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||
Level 2—inputs other than the quoted prices in active markets for identical assets or liabilities that are observable either directly or indirectly. | |||||||||||||||||
Level 3—unobservable inputs based on the Company's assumptions. | |||||||||||||||||
The Company's financial instruments consist principally of cash and cash equivalents, short-term investments, restricted cash, accounts receivable, long-term investments, accounts payable and certain accrued expenses. Short-term investments consist of bank notes and available-for-sale securities with original maturities longer than three months and less than one year. As of December 31, 2014 and 2013, the respective carrying values of financial instruments except for long-term investments approximated their fair values based on their short-term maturities. As of December 31, 2014, the combined fair value of the entity's long term investments in available-for-sale Level 3 convertible bond and redeemable securities was $48.2 million. | |||||||||||||||||
The following is a summary of available-for-sale investments as of December 31, 2014: | |||||||||||||||||
Cost | Impairment | Unrealized | Estimated | ||||||||||||||
charges and | gain | fair value | |||||||||||||||
equity losses | |||||||||||||||||
(in thousands) | |||||||||||||||||
Securities of a public company | $ | 1,826 | $ | — | $ | 473 | $ | 2,299 | |||||||||
Convertible bonds of privately-held company | 45,971 | 5,971 | 200 | 40,200 | |||||||||||||
Preferred convertible shares of privately-held company | 8,000 | — | — | 8,000 | |||||||||||||
Total available-for-sale investments | $ | 55,797 | $ | 5,971 | $ | 673 | $ | 50,499 | |||||||||
The following is a summary of available-for-sale investments as of December 31, 2013: | |||||||||||||||||
Cost | Impairment | Estimated | |||||||||||||||
charges and | fair value | ||||||||||||||||
equity losses | |||||||||||||||||
(in thousands) | |||||||||||||||||
Convertible bonds of privately-held company | $ | 55,113 | $ | 9,142 | $ | 45,971 | |||||||||||
Preferred convertible shares of privately-held company | 8,000 | — | 8,000 | ||||||||||||||
Total available-for-sale investments | $ | 63,113 | $ | 9,142 | $ | 53,971 | |||||||||||
Financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
(in thousands) | |||||||||||||||||
As of December 31, 2014 | |||||||||||||||||
Short-term investments | $ | 2,299 | $ | — | $ | — | $ | 2,299 | |||||||||
Long-term investments | $ | — | $ | — | $ | 48,200 | $ | 48,200 | |||||||||
As of December 31, 2013 | |||||||||||||||||
Short-term investments | $ | — | $ | — | $ | — | $ | — | |||||||||
Long-term investments | $ | — | $ | — | $ | 53,971 | $ | 53,971 | |||||||||
The following is the changes in financial assets using unobservable inputs (Level 3) for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||
Amount | |||||||||||||||||
In thousands | |||||||||||||||||
As of December 31, 2012 | $ | 31,000 | |||||||||||||||
Invested in Convertible bonds | 32,113 | ||||||||||||||||
Less: Impairment Charges | (9,142 | ) | |||||||||||||||
As of December 31, 2013 | 53,971 | ||||||||||||||||
Invested in Convertible bonds | — | ||||||||||||||||
Less: Share of loss from Associates | (3,570 | ) | |||||||||||||||
Less: Impairment Charges | (2,401 | ) | |||||||||||||||
Add: Unrealized gain | 200 | ||||||||||||||||
As of December 31, 2014 | $ | 48,200 | |||||||||||||||
As of December 31, 2014 and 2013, the Company's financial assets measured on a non-recurring basis included $11.6 million and $20.6 million of equity investments in privately-held companies, respectively. |
WARRANTY_OBLIGATIONS_AND_OTHER
WARRANTY OBLIGATIONS AND OTHER GUARANTEES | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
WARRANTY OBLIGATIONS AND OTHER GUARANTEES [Abstract] | |||||
WARRANTY OBLIGATIONS AND OTHER GUARANTEES | NOTE 7—WARRANTY OBLIGATIONS AND OTHER GUARANTEES | ||||
The Company provides a standard warranty on its equipment and terminal sales for a period generally ranging from one to two years from the time of final acceptance. At times, the Company has entered into arrangements to provide limited warranty services for periods longer than two years. The Company provides for the expected cost of product warranties at the time that revenue is recognized based on an assessment of past warranty experience and when specific circumstances dictate. The Company assesses the adequacy of its recorded warranty liability every quarter and makes adjustments to the liabilities if necessary. Specific warranty accruals are reversed upon the expiration of the warranty period and are recorded as a reduction of cost of net sales. From time to time, the Company may be subject to additional costs related to non- standard warranty claims from its customers. If and when this occurs, the Company estimates additional accruals based on historical experience, communication with its customers and various assumptions that the Company believes to be reasonable under the circumstances. Such additional warranty accruals are recorded in the period in which the additional costs are identified. | |||||
(In thousands) | |||||
Balance at December 31, 2011 | $ | 4,660 | |||
Accruals for warranties issued during the period (benefit from expirations), net | 2,039 | ||||
Warranty reserve derecognized upon IPTV divestiture | (2,507 | ) | |||
Settlements made during the period | (2,863 | ) | |||
Balance at December 31, 2012 | 1,329 | ||||
Accruals for warranties issued during the period (benefit from expirations), net | (473 | ) | |||
Settlements made during the period | (239 | ) | |||
Balance at December 31, 2013 | 617 | ||||
Accruals for warranties issued during the period (benefit from expirations), net | (250 | ) | |||
Settlements made during the period | (150 | ) | |||
Balance at December 31, 2014 | $ | 217 | |||
Certain of the Company's sales contracts include provisions under which customers would be indemnified by the Company in the event of, among other things, a third-party claim against the customer for intellectual property rights infringement related to the Company's products. There are no limitations on the maximum potential future payments under these guarantees. Historically, the Company has not incurred material costs as a result of obligations under these agreements. It is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
COMMITMENTS AND CONTINGENCIES. [Abstract] | |||||
COMMITMENTS AND CONTINGENCIES | NOTE 8—COMMITMENTS AND CONTINGENCIES | ||||
Leases | |||||
The Company has entered into non-cancelable operating, office space, manufacturing facilities leases. Future minimum lease payments under all non-cancelable operating leases with an initial term in excess of one year as of December 31, 2014 are as follows: | |||||
Amount | |||||
(in thousands) | |||||
2015 | $ | 2,455 | |||
2016 | 1,304 | ||||
2017 | — | ||||
2018 | — | ||||
2019 | — | ||||
Thereafter | — | ||||
Total | $ | 3,759 | |||
Rent expense for the years ended December 31, 2014, 2013 and 2012 was $1.8 million, $2.4 million, and $6.3 million, respectively. | |||||
India Department of Telecommunication Security and Supply Chain Standards | |||||
India's Department of Telecommunications (“DOT”) had required equipment manufacturers to satisfy certain security and supply chain standards to the satisfaction of Indian authorities. The Company entered into agreements with several customers in India which establish detailed security and supply chain standards covering products supplied to these telecommunication customers as required by the Indian authorities. These agreements contain significant penalty clauses in the event a security breach is detected related to product supplied by the Company. In May 2011, India's DOT provided a revised template for these agreements, but the Company has not executed the revised agreement with our customers. Management is unable to estimate the likelihood or the financial impact of any such potential security breach on the Company's financial position, results of operations, or cash flows. As of December 31, 2014, the Company has not been charged with to any penalty liability related to these agreements. In 2014, 2013 and 2012, there was no revenue recognized in relation to contracts signed after the effective date of the agreements, and management currently does not believe it has met the criteria to recognize revenue because the Company has not satisfied the security requirements as designated in the agreements. As of December 31, 2014, deferred revenue and deferred costs related to contracts covered by these security agreements were $11.7 million and $5.7 million, respectively. As of December 31, 2013, deferred revenue and deferred costs related to contracts covered by these security agreements were $10.2 million and $5.3 million, respectively. As of December 31, 2012, deferred revenue and deferred costs related to contracts covered by these security agreements were $9.8 million and $6.1 million, respectively. The Company continues to assess the potential impact these agreements may have on the timing of revenue recognition. | |||||
Contractual obligations and commercial commitments | |||||
Letters of credit: | |||||
The Company issues bid bond, commercial letters of credit or standby letters of credit primarily to support international sales activities outside of China and in support of purchase commitments. When the Company submits a bid for a sale, often the potential customer will require that the Company issue a bid bond or a standby letter of credit to demonstrate its commitment through the bid process. In addition, the Company may be required to issue standby letters of credit as guarantees for advance customer payments upon contract signing or performance guarantees. The standby letters of credit usually expire without being drawn by the beneficiary thereof. Finally, the Company may issue commercial letters of credit in support of purchase commitments. As of December 31, 2014, the Company's outstanding letters of credit approximated $17.1 million. These balances are included in the balance of Short-term and Long-term restricted cash. | |||||
Purchase commitments | |||||
The Company is obligated to purchase raw materials and work-in-process inventory under various orders from various suppliers, all of which should be fulfilled without adverse consequences material to the Company's operations or financial condition. At December 31, 2014, the Company had outstanding purchase commitments, including agreements that are non-cancelable and cancelable without penalty, approximating $29.2 million. | |||||
Intellectual property: | |||||
Certain sales contracts include provisions under which customers would be indemnified by the Company in the event of, among other things, a third party claim against the customer for intellectual property rights infringement related to the Company's products. There are no limitations on the maximum potential future payments under these guarantees. The Company has not accrued any amounts in relation to these provisions as no such claims have been made and the Company believes it has valid enforceable rights to the intellectual property embedded in its products. | |||||
Uncertain Tax Positions | |||||
As of December 31, 2014, the Company had $45.4 million of gross unrecognized tax benefits, of which $10.2 million related to tax benefits that, if recognized, would impact the annual effective tax rate. The remaining $35.2 million gross unrecognized tax benefits, if recognized, would impact certain deferred tax assets. | |||||
Litigation | |||||
Governmental Investigations | |||||
In December 2005, the U.S. Embassy in Mongolia informed the Company that it had forwarded to the DOJ, allegations that an agent of the Company's Mongolia joint venture had offered payments to a Mongolian government official in possible violation of the FCPA. The Company, through its Audit Committee, authorized an independent investigation into possible violations of the FCPA, and it has been in contact with the DOJ and the SEC regarding the investigation. The investigation identified possible FCPA violations in Mongolia, Southeast Asia, India, and China, as well as possible violations of U.S. immigration laws. The DOJ requested that the Company voluntarily produce documents related to the investigation, the SEC subpoenaed the Company for documents, and the Company received a Grand Jury Subpoena requiring the production of documents related to one aspect of the DOJ investigation, that is, travel the Company had sponsored. The Company has resolved the investigations with the DOJ and the SEC. On December 31, 2009, as part of the resolution of these investigations, the Company executed a consent pursuant to which, without admitting or denying the SEC's allegations, it agreed to a judgment in favor of the SEC of $1.5 million, and agreed to certain reporting obligations for up to four years. The SEC approved that resolution. On April 14, 2010, the United States District Court for the Northern District of California entered a judgment incorporating the terms of that consent. On December 31, 2009, the Company entered into a non-prosecution agreement with the DOJ, pursuant to which the Company has paid an additional $1.5 million and agreed to undertake a three-year reporting obligation and to review and, where appropriate, strengthen the Company's compliance, bookkeeping and internal controls standards and procedures. Under the non-prosecution agreement, subject to compliance with its terms, the DOJ has agreed not to criminally prosecute the Company for crimes (other than criminal tax violations) relating to certain travel arrangements it provided to customers in China. We submitted our first reports to the DOJ and SEC on May 1, 2010, our second reports to the DOJ and SEC on April 29, 2011 and our third reports to the DOJ and SEC on April 26, 2012. Our last reports submitted to the DOJ and the SEC were on May 1, 2013 and April 30, 2013, respectively. | |||||
Other Litigation | |||||
The Company is a party to other litigation matters and claims that are normal in the course of operations, and while the results of such litigation matters and claims cannot be predicted with certainty, management of the Company believes that the final outcome of such matters will not have a material adverse impact on the Company's financial position, results of operations or cash flows. |
COMMON_STOCK_REPURCHASE_AND_IS
COMMON STOCK REPURCHASE AND ISSUANCE | 12 Months Ended |
Dec. 31, 2014 | |
COMMON STOCK PURCHASE AND OPTION TO PURCHASE ADDITIONAL SHARES [Abstract] | |
COMMON STOCK PURCHASE AND OPTION TO PURCHASE ADDITIONAL SHARES | NOTE 9—COMMON STOCK REPURCHASE AND ISSUANCE |
On August 12, 2011, the Company's Board of Directors approved a repurchase program of up to $20 million of its ordinary shares outstanding over the 12 months through August 15, 2012. In the third quarter of 2012, the Company's Board of Directors had approved the extension of the repurchase program to August 2013. The Company repurchased 4,174,875 at the cost of $15.1 million under this program. On November 30, 2012, the Company announced a commencement of a tender offer (the Tender Offer) to purchase up to 8,333,333 of its ordinary shares at a price of $3.6 per share. The Tender Offer expired on January 3, 2013. The Company purchased 8,333,333 of the Company's ordinary shares at a cost of approximately $30 million under the Tender Offer. All the repurchased shares through the tender offer have been cancelled. | |
On January 17, 2014, The Company entered into the Share Purchase Agreement with Softbank and Shah Capital. The transaction was consummated on the same date. Pursuant to the Share Purchase Agreement, Softbank sold its entire stake in the Company, consisting of 4,883,875 ordinary shares with a par value of US $0.00375 par share (“Ordinary Shares”). The Company and Shah Capital repurchased 3,883,875 and 1,000,000 ordinary shares, respectively, for a price of $2.54 per Ordinary Share for total consideration paid by the Company of $9.9 million. | |
On March 11, 2014, the Company entered into a Subscription Agreement with Shah Capital. Pursuant to the Subscription Agreement, Shah Capital subscribed for and purchased 2,000,000 shares of common stock, with par value US$0.00375 per share, from the Company for a price of $2.67 per share. This price represents 1.3% premium to the 30 day weighted average of the Company's common stock price as of March 10, 2014. The transaction was consummated on the same date. | |
On November 12, 2014, the Company's Board of Directors approved a share repurchase program of up to $40.0 million of its ordinary shares outstanding over the 24 months through 2016. For the year ended December 31, 2014, the Company repurchased 166,421 shares at the cost of $0.4 million, and all of the repurchased shares under the repurchase program are classified as treasury shares of the Company until they are retired. |
COMMON_STOCK_AND_STOCK_INCENTI
COMMON STOCK AND STOCK INCENTIVE PLANS | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
COMMON STOCK AND STOCK INCENTIVE PLANS [Abstract] | |||||||||||||||||||||||||||
COMMON STOCK AND STOCK INCENTIVE PLANS | NOTE 10—COMMON STOCK AND STOCK INCENTIVE PLANS | ||||||||||||||||||||||||||
Stock Incentive Plans | |||||||||||||||||||||||||||
As of December 31, 2014, the Company has the stock incentive plans described below. Substantially all outstanding awards are subject to potential accelerated vesting in the event of a change in control of the Company. The Company repurchases and cancels its ordinary shares forfeited with respect to the tax liability associated with certain vesting of restricted stock and restricted stock unit grants under these plans. | |||||||||||||||||||||||||||
2006 Equity Incentive Plan: | |||||||||||||||||||||||||||
The 2006 Equity Incentive Plan, or 2006 Plan, was implemented on July 21, 2006 after being adopted by the Board of Directors on June 6, 2006 and approved by the Company's stockholders on July 21, 2006. The 2006 Plan replaces the 1997 Plan, the 2001 Plan, and the 2003 Plan, or collectively, the Prior Plans, and no further awards will be granted pursuant to the Prior Plans. The 2006 Plan provides for the grant of the following types of incentive awards: (i) stock options, (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units, (v) performance shares and performance units, and (vi) other stock or cash awards (“Award,” collectively, “Awards”). Those who are eligible for Awards under the 2006 Plan include employees, directors and consultants who provide services to the Company and its affiliates. | |||||||||||||||||||||||||||
The maximum aggregate number of shares that may be awarded and sold under the 2006 Plan is 1,500,000 shares plus (i) any shares that have been reserved but remain unissued under the Prior Plans as of July 21, 2006, and (ii) any shares subject to stock options or similar awards granted under the Prior Plans that expire or become exercisable without having been exercised in full and shares issued pursuant to awards granted under the Prior Plans that are forfeited to or repurchased by the Company. As of December 31, 2014, the number of shares transferred from the Prior Plans to the 2006 plan totaled 8,474,347. As of December 31, 2014, 1,783,638 options and restricted stock awards and units were outstanding under the 2006 Plan. | |||||||||||||||||||||||||||
The Board of Directors or the Compensation Committee of the Board, or Compensation Committee, or Administrator, administers the 2006 Plan. Subject to the terms of the 2006 Plan, the Administrator has the sole discretion to select the employees, consultants, and directors who will receive Awards, determine the terms and conditions of Awards, and to interpret the provisions of the 2006 Plan and outstanding Awards. Options granted under the 2006 Plan generally vest and become exercisable over four years. | |||||||||||||||||||||||||||
Awards granted under the 2006 Plan are generally not transferable, and all rights with respect to an Award granted to a participant generally may be exercised during a participant's lifetime only by the participant; provided, however, that with the Administrator's approval, a participant may (i) transfer an Award to a participant's spouse or former spouse pursuant to a court-approved domestic relations order which relates to the provision of child support, alimony payments or marital property rights, or (ii) transfer an Award by gift to or for the benefit of the participant's immediate family. | |||||||||||||||||||||||||||
The exercise price of all stock options and stock appreciation rights granted under the 2006 Plan must be at least equal to 100% of the fair market value of the ordinary share on the date of grant (or at least 110% of such fair market value for an incentive stock option, or ISO, granted to a shareholder with greater than 10% voting power of the Company's stock). The maximum term of a stock option granted to any participant must not exceed seven years from the date of grant (or five years for an ISO granted to a shareholder with greater than 10% of the voting power of the ordinary share). The Administrator will determine the terms and conditions of all other Awards granted under the Plan. | |||||||||||||||||||||||||||
Stock Award and Stock Option Activity | |||||||||||||||||||||||||||
During fiscal 2014, the Company granted equity awards primarily consisting of restricted stock, restricted stock units and stock options. Such awards generally vest over a period of one to four years from the vesting start date. Restricted stock has the voting rights of ordinary shares and the shares underlying restricted stock are issued and outstanding. As of December 31, 2014, 2013 and 2012, the number of ordinary shares available for issuance pursuant to future grants under the 2006 plan, including remaining unissued shares under Prior Plans that have been transferred into the 2006 plan were 879,021, 1,355,278 and 1,706,901, respectively. The following table summarizes the Company's stock options activities: | |||||||||||||||||||||||||||
Number of | Weighted | ||||||||||||||||||||||||||
shares | average | ||||||||||||||||||||||||||
outstanding | exercise | ||||||||||||||||||||||||||
price | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Options Outstanding, January 1, 2012 | 1,127 | $ | 23.52 | ||||||||||||||||||||||||
Options Granted | 246 | 3.24 | |||||||||||||||||||||||||
Options Exercised | — | — | |||||||||||||||||||||||||
Options Forfeited or Expired | (443 | ) | 19.56 | ||||||||||||||||||||||||
Options Outstanding, December 31, 2012 | 930 | $ | 20.04 | ||||||||||||||||||||||||
Options Granted | — | — | |||||||||||||||||||||||||
Options Exercised | — | — | |||||||||||||||||||||||||
Options Forfeited or Expired | (354 | ) | 18.05 | ||||||||||||||||||||||||
Options Outstanding, December 31, 2013 | 576 | $ | 21.25 | ||||||||||||||||||||||||
Options Granted | 127 | 2.83 | |||||||||||||||||||||||||
Options Exercised | — | — | |||||||||||||||||||||||||
Options Forfeited or Expired | (145 | ) | 62.79 | ||||||||||||||||||||||||
Options Outstanding, December 31, 2014 | 558 | $ | 6.33 | ||||||||||||||||||||||||
Under the Plans, the Company granted restricted stock awards. Restricted stock awards are unvested stock awards that may include grants of restricted stock or grants of restricted stock units. Such awards generally vest over a period of one to four years from the date of grant. Restricted stock has the voting rights of ordinary share and the shares underlying restricted stock are considered to be currently issued and outstanding. Restricted stock units do not have the voting rights of ordinary shares, and the shares underlying the restricted stock units are not considered issued and outstanding. The expense for such awards is based on the fair market value of the shares at the date of grant and is recognized on a straight- line basis over the requisite service period. The weighted average fair value of restricted stock awards granted under our equity incentive plans during the years ended December 31, 2014, 2013 and 2012 was $2.70, $2.76 and $3.29, respectively. The grant of restricted stock awards is deducted from the shares available on a one to one basis for grant under the Company's stock plan. Unvested restricted awards as of December 31, 2014 and changes during the year ended December 31, 2014, 2013 and 2012 are summarized below: | |||||||||||||||||||||||||||
Shares | Weighted | ||||||||||||||||||||||||||
average | |||||||||||||||||||||||||||
grant date | |||||||||||||||||||||||||||
fair value | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Restricted stock awards activity | |||||||||||||||||||||||||||
Total nonvested at January 1, 2012 | 902 | $ | 5.87 | ||||||||||||||||||||||||
Granted | 1,891 | $ | 3.29 | ||||||||||||||||||||||||
Vested | (701 | ) | $ | 5.6 | |||||||||||||||||||||||
Forfeited | (390 | ) | $ | 4.49 | |||||||||||||||||||||||
Total nonvested at December 31, 2012 | 1,702 | $ | 3.43 | ||||||||||||||||||||||||
Reverse split adjustment | 25 | $ | — | ||||||||||||||||||||||||
Granted | 679 | $ | 2.76 | ||||||||||||||||||||||||
Vested | (520 | ) | $ | 3.72 | |||||||||||||||||||||||
Forfeited | (173 | ) | $ | 3.82 | |||||||||||||||||||||||
Total nonvested at December 31, 2013 | 1,713 | $ | 3.08 | ||||||||||||||||||||||||
Granted | 808 | $ | 2.76 | ||||||||||||||||||||||||
Vested | (603 | ) | $ | 3.15 | |||||||||||||||||||||||
Forfeited | (437 | ) | $ | 3.02 | |||||||||||||||||||||||
Total nonvested at December 31, 2014 | 1,481 | $ | 2.9 | ||||||||||||||||||||||||
During the year ended December 31, 2012, 0.7 million shares of restricted stock awards vested. The total fair value of restricted stock awards vested, as measured on the date of vesting, during the year ended December 31, 2012 was $3.9 million. The Company also granted 1.9 million restricted stock awards. | |||||||||||||||||||||||||||
During the year ended December 31, 2013, 0.5 million shares of restricted stock awards vested. The total fair value of restricted stock awards vested, as measured on the date of vesting, during the year ended December 31, 2013 was $1.9 million. The Company also granted 0.7 million restricted stock awards. | |||||||||||||||||||||||||||
During the year ended December 31, 2014, 0.6 million shares of restricted stock awards vested. The total fair value of restricted stock awards vested, as measured on the date of vesting, during the year ended December 31, 2014 was $1.9 million. The Company also granted 0.8 million restricted stock awards. | |||||||||||||||||||||||||||
The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2014: | |||||||||||||||||||||||||||
Range of | Numbers | Weighted | Weighted | Numbers | Weighted | ||||||||||||||||||||||
Exercise Price | Outstanding | Average | Average | Exercisable | Average | ||||||||||||||||||||||
as of | Remaining | Exercise | as of | Exercise | |||||||||||||||||||||||
Dec. 31, 2014 | Contractual | Price | Dec. 31, 2014 | Price | |||||||||||||||||||||||
Term | |||||||||||||||||||||||||||
$ | 2.7 | $ | 2.7 | 26,666 | 9.91 | $ | 2.7 | 0 | $ | — | |||||||||||||||||
$ | 2.87 | $ | 2.87 | 100,000 | 9.64 | $ | 2.87 | 0 | $ | — | |||||||||||||||||
$ | 2.97 | $ | 2.97 | 26,666 | 4.83 | $ | 2.97 | 13,332 | $ | 2.97 | |||||||||||||||||
$ | 3.21 | $ | 3.21 | 191,054 | 4.49 | $ | 3.21 | 104,386 | $ | 3.21 | |||||||||||||||||
$ | 4.17 | $ | 6.51 | 88,236 | 2.22 | $ | 5.28 | 83,792 | $ | 5.34 | |||||||||||||||||
$ | 8.46 | $ | 9.72 | 40,325 | 0.54 | $ | 9.53 | 40,325 | $ | 9.53 | |||||||||||||||||
$ | 18.75 | $ | 18.75 | 78,636 | 1.13 | $ | 18.75 | 78,636 | $ | 18.75 | |||||||||||||||||
$ | 19.83 | $ | 24.57 | 4,786 | 0.69 | $ | 20.6 | 4,786 | $ | 20.6 | |||||||||||||||||
$ | 26.61 | $ | 26.61 | 116 | 0.92 | $ | 26.61 | 116 | $ | 26.61 | |||||||||||||||||
$ | 33.21 | $ | 33.21 | 1,730 | 0.25 | $ | 33.21 | 1,730 | $ | 33.21 | |||||||||||||||||
Total | 558,215 | 4.53 | $ | 6.33 | 327,103 | $ | 8.68 | ||||||||||||||||||||
Number of shares | Weighted average exercise price | ||||||||||||||||||||||||||
Options exercisable at December 31, 2014 | 327,103 | $ | 8.68 | ||||||||||||||||||||||||
Options vested and expected to vest at December 31, 2014 | 500,275 | $ | 6.71 | ||||||||||||||||||||||||
The intrinsic value represents the total pre-tax intrinsic value and is calculated as the difference between the market value as reported by NASDAQ on December 31, 2014 of $2.83 and the exercise price of the in-the-money shares. During the years ended December 31, 2014, 2013 and 2012, the total pre-tax intrinsic value of options exercised was negligible. The weighted average remaining contractual life of options exercisable was 2.58 years, and the weighted average remaining contractual life of options expected to vest was 4.53 years as of December 31, 2014. | |||||||||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||||||||
Stock-based compensation expense for stock options is estimated at the grant date based on each option's fair value as calculated by the Black-Scholes model. The Black-Scholes model was developed for use in estimating the fair value of short-lived exchange traded options that have no vesting restrictions and are fully transferable. In addition, option pricing models require the input of highly subjective assumptions, including the expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. | |||||||||||||||||||||||||||
The Company uses historical volatility as management believes it is more representative of future stock price trends than implied volatility due to the relatively small number of actively traded options on the Company's ordinary shares available to determine implied volatility. The Company estimates an expected term of options granted based upon the Company's historical exercise and cancellation data for vested options. In addition, separate groups of employees that have similar exercise behavior are considered separately. The expected term of employee stock purchase plan shares is the average of the remaining purchase periods under each offering period. The Company bases the risk free interest rate used in the option valuation model on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. The Company is required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record stock—based compensation expense only for those awards that are expected to vest. | |||||||||||||||||||||||||||
At December 31, 2014, there was approximately $3.1 million of total unrecognized compensation cost, as measured, related to unvested stock options and restricted stock and restricted stock units, which is expected to be recognized over a weighted-average period of 2.48 years. | |||||||||||||||||||||||||||
The following table summarizes the stock-based compensation expense recognized in the Company's Consolidated Statement of Operations: | |||||||||||||||||||||||||||
Years ended December 31, | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Cost of net sales | $ | 60 | $ | 7 | $ | 107 | |||||||||||||||||||||
Selling, general and administrative | 2,185 | 1,597 | 2,398 | ||||||||||||||||||||||||
Research and development | 44 | 94 | 476 | ||||||||||||||||||||||||
Total | $ | 2,289 | $ | 1,698 | $ | 2,981 |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
INCOME TAXES [Abstract] | |||||||||||||
INCOME TAXES | NOTE 11—INCOME TAXES | ||||||||||||
Cayman Islands | |||||||||||||
Under the current tax laws of Cayman Islands, the Company and its subsidiaries are not subject to tax on their income or capital gains. In addition, upon of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. | |||||||||||||
United States and foreign income (loss) before income taxes and minority interest were as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
United States | $ | (14,809 | ) | $ | (156,696 | ) | $ | 11,826 | |||||
Foreign | (13,837 | ) | 136,317 | (45,013 | ) | ||||||||
$ | (28,646 | ) | $ | (20,379 | ) | $ | (33,187 | ) | |||||
The components of the provision (benefit) for income taxes are as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Current | |||||||||||||
United States | $ | — | $ | 1 | $ | (40 | ) | ||||||
Foreign | 2,042 | 2,730 | 4,643 | ||||||||||
Total Current | 2,042 | 2,731 | 4,603 | ||||||||||
Deferred | |||||||||||||
United States | — | — | — | ||||||||||
Foreign | (424 | ) | (380 | ) | (2,211 | ) | |||||||
Total Deferred | (424 | ) | (380 | ) | (2,211 | ) | |||||||
Total | $ | 1,618 | $ | 2,351 | $ | 2,392 | |||||||
As of December 31, 2014, the Company had gross unrecognized tax benefits of approximately $45.4 million and had certain deferred tax assets and the federal tax benefit of state income tax items totaling $35.2 million. Of the total $45.4 million gross unrecognized tax benefits, $10.2 million related to tax benefits that, if recognized, would impact the annual effective tax rate. | |||||||||||||
The Company's policy is to recognize interest expense and penalties related to the above unrecognized tax benefits as a component of income tax expense. During 2014, the total amount of interest and penalties recognized in the Consolidated Statement of Operations was $0.3 million. The Company had accrued interest and penalties of approximately $3.9 million as of December 31, 2014 and approximately $3.6 million as of December 31, 2013. | |||||||||||||
The Company is subject to taxation in the U.S. federal jurisdiction and various U.S. state and foreign jurisdictions. The Company is also under audit by the taxing authorities in China on a recurring basis. The material jurisdictions that the Company is subject to examination are in the United States and China. The Company's tax years for 2004 through 2014 are still open for examination in China. The Company's tax years for 2006 through 2014 are still open for examination in the United States. | |||||||||||||
FASB ASC 740-10 establishes criteria for recognizing or continuing to recognize only more-likely-than-not tax positions, which may result in income tax expense volatility in future periods. While the Company believes that it has adequately provided for all tax positions, amounts asserted by taxing authorities could be greater than the Company's accrued position. Accordingly, additional provisions on income tax related matters could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved. | |||||||||||||
A summary of the Company's unrecognized tax benefits is as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Beginning balance-gross unrecognized tax benefits (UTB's) | $ | 45,430 | $ | 54,012 | $ | 55,650 | |||||||
Additions based on tax positions related to the current year | 142 | 151 | 80 | ||||||||||
Reductions for tax positions related to prior years | (190 | ) | (1,627 | ) | (1,288 | ) | |||||||
Lapse of statute of limitations | — | (7,106 | ) | (430 | ) | ||||||||
Ending balance—gross unrecognized tax benefits (UTB's) | 45,382 | 45,430 | 54,012 | ||||||||||
UTB's as a credit in deferred taxes | (33,021 | ) | (33,187 | ) | (39,402 | ) | |||||||
Federal benefit of state taxes | (2,176 | ) | (2,244 | ) | (2,312 | ) | |||||||
UTB's that would impact the effective tax rate | $ | 10,185 | $ | 10,019 | $ | 12,298 | |||||||
In establishing its deferred income tax assets and liabilities, the Company makes judgments and interpretations based on the enacted tax laws and published tax guidance applicable to its operations. The Company records deferred tax assets and liabilities and evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts. The likelihood of a material change in the Company's expected realization of these assets is dependent on future taxable income and its ability to use foreign tax credit carryforwards and carrybacks. | |||||||||||||
A summary of the components of net deferred tax assets is as follows: | |||||||||||||
December 31, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
(in thousands) | |||||||||||||
Deferred Tax Assets | |||||||||||||
Allowances and reserves | $ | 4,920 | $ | 11,125 | |||||||||
Deferred revenue and customer advances, net | — | — | |||||||||||
Net operating loss carryforward | 230,597 | 254,153 | |||||||||||
Tax credit carryforwards | 87,703 | 95,692 | |||||||||||
Capital loss carryforwards | 3,997 | 18,671 | |||||||||||
Writedowns/amortization of intangible assets and goodwill | 12,997 | 15,651 | |||||||||||
Fixed assets | 6,008 | 7,263 | |||||||||||
Demo equipment income | 7,070 | 7,104 | |||||||||||
Accrued warranties | — | — | |||||||||||
Other | 22,683 | 18,459 | |||||||||||
Total Deferred Tax Assets | 375,975 | 428,118 | |||||||||||
Deferred Tax Liabilities | |||||||||||||
Prepaid expense | (576 | ) | (472 | ) | |||||||||
Deferred revenue and customer advances, net | (2,494 | ) | (1,183 | ) | |||||||||
Accrued warranties | (281 | ) | (165 | ) | |||||||||
Total Deferred Tax Liabilities | (3,351 | ) | (1,820 | ) | |||||||||
Total Deferred Tax Assets (Liabilities) | $ | 372,624 | $ | 426,298 | |||||||||
Less: Valuation Allowance | (368,672 | ) | (422,789 | ) | |||||||||
Total Deferred Tax Assets (Liabilities) | $ | 3,952 | $ | 3,509 | |||||||||
The Company provides for deferred income taxes on the unremitted earnings of foreign subsidiaries unless such earnings are deemed to be permanently reinvested outside the United States. In 2014, the Company had no gross U.S. deferred income tax liability on foreign earnings. | |||||||||||||
As of December 31, 2014, the Company had undistributed earnings of approximately $97.4 million from investments in foreign subsidiaries that are considered permanently reinvested. The determination of the amount of deferred taxes on these earnings is not practicable since the computation would depend on a number of factors that cannot be known until a decision to repatriate the earnings is made. | |||||||||||||
As of December 31, 2014, the Company's U.S. federal net operating loss carryforwards were $552.7 million and expire in varying amounts between 2025 and 2034. As of December 31, 2014, state net operating loss carryforwards were $221.4 million and expire in varying amounts between 2015 and 2032. The Company has concluded that these federal and state net operating losses did not meet the more likely than not standard contained in FASB ASC 740-10 and has therefore placed a $204.7 million valuation allowance against the related deferred tax assets. In the event the tax benefits related to the valuation allowance are realized, an immaterial amount would be credited to paid-in capital. As of December 31, 2014, approximately $237.2 million net operating loss carryforwards in China has expired and as such, as of that date $35.6 million of DTAs and the related full valuation allowance have been removed from the above table. The Company still had net operating loss carryforwards of approximately $78.5 million in China and will expire in varying amounts between 2015 and 2019. The Company has also concluded that these China net operating losses did not meet the more likely than not standard and has therefore placed a $11.8 million valuation allowance against the related deferred tax assets. As of December 31, 2014, the Company had net operating loss carryforwards in countries other than the U.S. and China. These net operating loss carryforwards are approximately $94.9 million. The majority of the net operating loss carryforwards does not expire and can be carried forward indefinitely. However, the Company concluded these losses did not meet the more likely than not standard and has therefore placed a valuation allowance of $14.1 million against the related deferred tax assets. | |||||||||||||
As of December 31, 2014, the Company had U.S. alternative minimum tax credit carryforwards of $1.0 million which have an indefinite life. The Company also had U.S. research and development credit carryforwards of $12.1 million, $3.8 million of the credits have an indefinite life and $8.3 million of the credits expire in varying amounts between 2015 and 2030. The Company has U.S. foreign tax credits of $74.5 million which expire in varying amounts between 2015 and 2025. The Company has concluded that these U.S. tax credit carryforwards did not meet the more likely than not standard contained in FASB ASC 740-10 and has therefore placed a $87.7 million valuation allowance against the related deferred tax assets. | |||||||||||||
The difference between the Company's effective income tax rate and the federal statutory rate is reconciled below: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
U.S. Federal tax (benefit) at statutory rate | $ | (10,026 | ) | $ | (7,133 | ) | $ | (11,183 | ) | ||||
U.S. State tax (benefit)/expense, net of federal income tax benefit | 628 | (360 | ) | 187 | |||||||||
Stock compensation expense | 745 | 574 | 996 | ||||||||||
Effect of differences in foreign tax rates | 8,390 | (30,994 | ) | 422 | |||||||||
Effect of tax rate changes on deferred taxes | — | 2,407 | 7 | ||||||||||
Change in deferred tax valuation allowance | 1,824 | 38,234 | 11,511 | ||||||||||
Tax credits | (535 | ) | (552 | ) | (358 | ) | |||||||
Other | 592 | 175 | 810 | ||||||||||
Total Tax Expense | $ | 1,618 | $ | 2,351 | $ | 2,392 | |||||||
On June 24, 2011, the Company effected the Merger to reorganize the corporate structure of UTStarcom, Inc., a Delaware corporation incorporated in 1991, and its subsidiaries. The Merger resulted in shares of the common stock of UTStarcom, Inc. being converted into the right to receive an equal number of ordinary shares in our capital, which were issued by us in connection with the Merger. Following the Merger, UTStarcom, Inc. became our wholly-owned subsidiary and the Company became the parent company of UTStarcom, Inc. and its subsidiaries. The Company, together with its subsidiaries, continues to conduct its business in substantially the same manner as was conducted by UTStarcom, Inc. and its subsidiaries. The transaction was accounted for as a legal re-organization of entities under common control. The Company remains subject to U.S. taxes at a statutory rate of 35%. | |||||||||||||
The China Corporate Income Tax Law (“CIT Law”) became effective on January 1, 2008. Under the CIT Law, China's dual tax system for domestic enterprises and foreign investment enterprises (“FIEs”) was effectively replaced by a unified system. The new law establishes a tax rate of 25% for most enterprises and a reduced tax rate of 15% for certain qualified high technology enterprises. | |||||||||||||
The CIT Law provides the reduced 15% enterprise income tax rate for qualified high and new technology enterprises. One of the Company's China subsidiaries, HUTS, through which the majority of the Company's business in China is conducted obtained the High and New Technology Enterprise Certificate, or High-tech Certificate, from the relevant approval authorities on September 19, 2008, and thereafter was approved to pay CIT at the reduced tax rate of 15%. The approval for the reduced 15% tax rate is valid for three years and applies retroactively from January 1, 2008, subject to possible re-assessment by the approval authorities. During the re-assessment, the tax authority may suspend the implementation of the reduced 15% rate. On September 29, 2014, HUTS's High tech Certificate re-application was approved, HUT's approval extends the reduced 15% tax rate terms for three years. However, since HUTS is currently in significant loss position, the change in tax rate will not have a material adverse impact on the business or liquidity until HUTS begin to generate profit and deplete all the net operating loss carry forwards. | |||||||||||||
As of September 30, 2005, the Company did not believe it was more likely than not that it would generate a sufficient level and proper mix of taxable income within the appropriate period to utilize all the deferred tax assets in China and the United States. As a result of the review undertaken at September 30, 2005, the Company has concluded that it was appropriate to establish a full valuation allowance for the net deferred tax assets in China and the United States wherein the cumulative losses weigh heavily in the overall assessment. The Company has continued to provide full valuation allowances since 2005 as it did not believe it was more likely than not that it would generate sufficient taxable income within the appropriate period to utilize those deferred tax assets. | |||||||||||||
In 2014, the change in deferred tax valuation allowance of $1.8 million is primarily attributable to the tax expense related to continuing to provide full valuation allowance on the Company's deferred tax assets at December 31, 2014 in the United States and China. In 2013, the change in deferred tax valuation allowance of $38.2 million is primarily attributable to the tax expense related to continuing to provide full valuation allowance on the Company's deferred tax assets at December 31, 2013 in the United States and China. In 2012, the change in deferred tax valuation allowance of $11.5 million is primarily attributable to the tax expense related to continuing to provide a full valuation allowance on the Company's deferred tax assets at December 31, 2012 in the United States and China. | |||||||||||||
In 2014, the income tax benefit of $0.5 million related to tax credits is primarily attributable to an increase in the amount of foreign tax credits generated in the United States due to foreign taxes paid. In 2013, the income tax benefit of $0.6 million related to tax credits is primarily attributable to an increase in the amount of foreign tax credits generated in the United States due to foreign taxes paid. In 2012, the income tax benefit of $0.4 million related to tax credits is primarily attributable to an increase in the amount of foreign tax credits generated in the United States due to foreign taxes paid. |
OTHER_INCOME_EXPENSES_NET
OTHER INCOME (EXPENSES), NET | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
OTHER INCOME (EXPENSES), NET [Abstract] | |||||||||||||
OTHER INCOME (EXPENSES), NET | NOTE 12—OTHER INCOME (EXPENSES), NET | ||||||||||||
Other income (expenses), net consists of the following: | |||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Foreign exchange (losses) gains | $ | (586 | ) | $ | 3,856 | $ | (4,675 | ) | |||||
Gain(loss) from the currency translation adjustment(1) | (121 | ) | 7,088 | — | |||||||||
Tax reversal for expiration of the statute of limitations(2) | 992 | 1,240 | 1,499 | ||||||||||
ESA loan impairment (3). | (2,788 | ) | — | — | |||||||||
Other | 254 | (704 | ) | 203 | |||||||||
Total | $ | (2,249 | ) | $ | 11,480 | $ | (2,973 | ) | |||||
-1 | During 2013, the Company recognized $7.1 million gain in the Consolidated Statements of Operations and Comprehensive Income (Loss) on the reversal of the cumulative translation adjustment previously recorded in accumulated other comprehensive income upon the liquidation of two previously inactive Chinese entities. The prior cumulative translation adjustment primarily resulted from the difference between local functional currency and the Company's reporting currency. | ||||||||||||
-2 | Previously, when the Company divested its Korean subsidiary, the Company provided a tax reserve as it offered indemnification to the buyer for the uncertain tax position arising in the periods before the divestiture. In April 2012, approximately $1.5 million of such tax reserve was released due to the expiration of the statute of limitations, which is five years after the filing of the tax return. In 2013, approximately $1.2 million of such tax reserve was released due to expiration of statute of limitations. In 2014, remaining amount of approximately $1.0 million of such tax reserve was released due to expiration of statute of limitations. | ||||||||||||
-3 | The Company signed the loan agreement to for a total amount of $5.6 million in the fourth quarter of 2012, $4.0 million was drawdown in the fourth quarter of 2012 and the remaining in the first quarter of 2013. The loan bears interest at 20% per annum and originally matured on December 31, 2013, with subsequently extended the maturity date on 50% of the loan, or $2.8 million, to June 30, 2014, and the other half extended to December 31, 2014. In the fourth quarter of 2014, the Company received $0.8 million. The Company has performed an assessment on the need for a valuation reserve and $2.8 million was charged as impairment in other expenses in 2014 as the collection term was due. The management expects to collect the remaining $2.0 million balance in the second quarter of 2015. |
NET_LOSS_PER_SHARE
NET LOSS PER SHARE | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
NET LOSS PER SHARE [Abstract] | |||||||||||||
NET LOSS PER SHARE | NOTE 13—NET LOSS PER SHARE | ||||||||||||
The following table sets forth the computation of basic and diluted net loss per share for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Numerator: | |||||||||||||
Net loss attributable to UTStarcom Holdings Corp. | $ | (30,264 | ) | $ | (22,721 | ) | $ | (34,385 | ) | ||||
Denominator: | |||||||||||||
Weighted average shares outstanding—Basic | 37,380 | 39,127 | 48,513 | ||||||||||
Potentially dilutive common stock equivalents—stock options and restricted stock | — | — | — | ||||||||||
Weighted average shares outstanding—Diluted | 37,380 | 39,127 | 48,513 | ||||||||||
Net loss per share attributable to UTStarcom Holdings Corp.—Basic | $ | (0.81 | ) | $ | (0.58 | ) | $ | (0.71 | ) | ||||
Net loss per share attributable to UTStarcom Holdings Corp.—Diluted | $ | (0.81 | ) | $ | (0.58 | ) | $ | (0.71 | ) | ||||
The dilutive effect of share-based awards is reflected in diluted net loss per share by application of the treasury stock method, which includes consideration of unamortized share-based compensation expense and the dilutive effect of in-the-money options and unvested restricted stock units. Under the treasury stock method, the amount the employee must pay for exercising stock options and unamortized share-based compensation expense are assumed proceeds to be used to repurchase hypothetical shares. An increase in the fair market value of the Company's ordinary share can result in a greater dilutive effect from potentially dilutive awards. | |||||||||||||
For the years ended December 31, 2014, 2013 and 2012, outstanding options to purchase ordinary shares and unvested or unreleased restricted stocks to purchase ordinary shares were excluded from the calculation of diluted earnings per share as their effect was anti-dilutive. Please refer to Note 2. |
SEGMENT_REPORTING
SEGMENT REPORTING | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
SEGMENT REPORTING [Abstract] | |||||||||||||||||||||||||
SEGMENT REPORTING | NOTE 14—SEGMENT REPORTING | ||||||||||||||||||||||||
The Company's reporting segments are as follows: | |||||||||||||||||||||||||
• | Equipment—Focusing on the Company's equipment sales including network infrastructure and application products. Network infrastructure products mainly include broadband products. Network application products mainly include Wireless infrastructure technologies. | ||||||||||||||||||||||||
• | Services—Providing services and support of the Company's equipment products and also the new operational support segment. The equipment Based Services are services and support the Company provides to customers after their purchases of equipment, and operational Support Services provide new services consisting of integrated multi-screen viewing from a single managed platform, time and location shifting, and reliable HD streaming These revenues will be generated through advertising, subscription and software license fees. | ||||||||||||||||||||||||
The Company's Chief Operating Decision Makers make financial decisions based on information they receive from its internal management system and currently evaluates the operating performance and allocates resources to the reporting segments based on segment revenue and gross profit. Cost of sales and direct expenses in relation to production are assigned to the reporting segments. The accounting policies used in measuring segment assets and operating performance are the same as those used at the consolidated level. | |||||||||||||||||||||||||
Summarized below are the Company's segment net sales, gross profit and segment margin for the years ended December 31, 2014, 2013 and 2012 based on the current reporting segment structure. | |||||||||||||||||||||||||
Years ended December 31, | |||||||||||||||||||||||||
Net Sales by Segment | 2014 | % of net | 2013 | % of net | 2012 | % of net | |||||||||||||||||||
sales | sales | sales | |||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||
Equipment | $ | 105,988 | 82 | % | $ | 141,138 | 86 | % | $ | 160,688 | 86 | % | |||||||||||||
Services—Equipment Based Services | 23,432 | 18 | % | 23,301 | 14 | % | 25,784 | 14 | % | ||||||||||||||||
—Operational Support Services | — | 0 | % | — | 0 | % | 256 | 0 | % | ||||||||||||||||
Total Sales | $ | 129,420 | 100 | % | $ | 164,439 | 100 | % | $ | 186,728 | 100 | % | |||||||||||||
Years ended December 31, | |||||||||||||||||||||||||
Gross profit/(loss) by Segment | 2014 | Gross | 2013 | Gross | 2012 | Gross | |||||||||||||||||||
profit | profit | profit | |||||||||||||||||||||||
% | % | % | |||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||
Equipment | $ | 21,000 | 20 | % | $ | 41,250 | 29 | % | $ | 64,835 | 40 | % | |||||||||||||
Services—Equipment Based Services | 1,128 | 5 | % | (1,030 | ) | -4 | % | 3,546 | 14 | % | |||||||||||||||
—Operational Support Services | — | 0 | % | — | 0 | % | (223 | ) | -87 | % | |||||||||||||||
Total Gross profit | $ | 22,128 | 17 | % | $ | 40,220 | 24 | % | $ | 68,158 | 37 | % | |||||||||||||
Years ended December 31, | |||||||||||||||||||||||||
Segment Margin and Operating Loss | 2014 | 2013 | 2012 | ||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Equipment | $ | 6,583 | $ | 24,047 | $ | 34,661 | |||||||||||||||||||
Services—Equipment Based Services | 1,105 | (1,037 | ) | 3,524 | |||||||||||||||||||||
—Operational Support Services | (22 | ) | (2,112 | ) | (7,420 | ) | |||||||||||||||||||
Total segment margin | 7,666 | 20,898 | 30,765 | ||||||||||||||||||||||
General and Corporate | (21,739 | ) | (34,131 | ) | (60,308 | ) | |||||||||||||||||||
Operating Income (Loss) | $ | (14,073 | ) | $ | (13,233 | ) | $ | (29,543 | ) | ||||||||||||||||
General and corporate expenses include all un-allocated expenses such as sales and marketing, general and administration, common R&D expenses, and restructuring expenses. | |||||||||||||||||||||||||
Sales are attributed to a geographical area based upon the location of the customer. Sales data by geographical area are as follows: | |||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
2014 | % of net | 2013 | % of net | 2012 | % of net | ||||||||||||||||||||
sales | sales | sales | |||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||
Net Sales by Region | |||||||||||||||||||||||||
China | $ | 15,465 | 12 | % | $ | 6,945 | 4 | % | $ | 38,544 | 21 | % | |||||||||||||
Japan | 58,999 | 46 | % | 93,203 | 57 | % | 99,367 | 53 | % | ||||||||||||||||
India | 37,424 | 29 | % | 26,595 | 16 | % | 23,992 | 13 | % | ||||||||||||||||
Taiwan | 6,706 | 5 | % | 13,332 | 8 | % | 9,824 | 5 | % | ||||||||||||||||
Other | 10,826 | 8 | % | 24,364 | 15 | % | 15,001 | 8 | % | ||||||||||||||||
Total | $ | 129,420 | 100 | % | $ | 164,439 | 100 | % | $ | 186,728 | 100 | % | |||||||||||||
Long-lived assets, consisting of property, plant and equipment, by geographical area are as follows: | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
China | $ | 1,988 | $ | 3,795 | |||||||||||||||||||||
Other | 1,049 | 976 | |||||||||||||||||||||||
Total long-lived assets | $ | 3,037 | $ | 4,771 |
CREDIT_RISK_AND_CONCENTRATION
CREDIT RISK AND CONCENTRATION | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
CREDIT RISK AND CONCENTRATION [Abstract] | |||||||||||||
CREDIT RISK AND CONCENTRATION | NOTE 15—CREDIT RISK AND CONCENTRATION | ||||||||||||
Financial Risks: | |||||||||||||
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash, cash equivalents, short-term investments and accounts and notes receivable. The Company places its temporary cash and short-term investments with several financial institutions. Approximately $55.3 million and $56.5 million of the Company's cash and cash equivalents and short-term investments were on deposit in accounts outside the U.S. at December 31, 2014 and 2013, respectively, of which approximately $14.5 million and $11.5 million were held by subsidiaries in China.. | |||||||||||||
The Company's exposure to market risk for changes in interest rates relates primarily to its investment portfolio. The fair value of its investment portfolio would not be significantly affected by either a 10% increase or decrease in interest rates due mainly to the short term nature of most of its investment portfolio with the exception of the available-for-sale securities. The investment classified as available-for-sales securities is reported at fair value. It will be measured subsequently at fair value in the statement of financial position with unrealized gains and losses will be recorded in accumulated other comprehensive income (loss) in shareholders' equity. Any negative events or deterioration in financial well-being with respect to the counterparties of the long-term investments and the underlying collateral may cause material losses to the Company and have a material effect on the Company's financial condition and results of operations. In addition, the Company's interest income can be sensitive to changes in the general level of U.S. and China interest rates since the majority of its funds are invested in instruments with maturities of less than one year. In a declining interest rate environment, as short term investments mature, reinvestment occurs at less favorable market rates. Given the short term nature of certain investments, declining interest rates will not negatively impact the Company's investment income. | |||||||||||||
The Company maintains an investment portfolio of various holdings, types and maturities. The Company does not use derivative financial instruments. The Company places its cash investments in instruments that meet high credit quality standards, as specified in its investment policy guidelines. The Company's policy is to limit the risk of principal loss and to ensure the safety of invested funds by generally attempting to limit market risk. | |||||||||||||
The Company's available-for-sale securities are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income (loss) in shareholders' equity. Any negative events or deterioration in financial well-being with respect to the counterparties of these investments may cause material losses to the Company and have a material effect on the Company's financial condition and results of operations. | |||||||||||||
Concentration of Credit Risk and Major Customers: | |||||||||||||
At December 31, 2014, the Company's accounts receivable balance included amounts due from affiliates of Softbank, representing approximately 65% of the Company's total accounts receivables, net of allowances for doubtful accounts. At December 31, 2013, the Company's accounts receivable balance included amounts due from affiliates of Softbank representing approximately 82% of the Company's total accounts receivables, net of allowances for doubtful accounts. The following customers accounted for 10% or more of the Company's net revenues: | |||||||||||||
For the years ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Affiliates of Softbank | 44 | % | 55 | % | 49 | % | |||||||
Approximately 0%, 1%, and 18% of the Company's net sales during 2014, 2013, and 2012, respectively, were to entities affiliated with the government of China. Accounts receivable balances from these China government affiliated entities or state owned enterprises were $6.0 million and $6.3 million, respectively, as of December 31, 2014 and 2013. The Company extends credit to its customers in China generally without requiring collateral. In global sales outside of China, the Company may require letters of credit from its customers. The Company monitors its exposure for credit losses and maintains allowances for doubtful accounts. | |||||||||||||
Country Risks: | |||||||||||||
Approximately 12%, 4% and 21% of the Company's sales for the year ended December 31, 2014, 2013, and 2012, respectively, were made in China. Accordingly, the political, economic and legal environment, as well as the general state of China's economy may influence the Company's business, financial condition and results of operations. The Company's operations in China are subject to special considerations and significant risks not typically associated with companies in the United States. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company's results may be adversely affected by, among other things, changes in the political, economic and social conditions in China, and by changes in governmental policies with respect to laws and regulations, changes in China's telecommunications industry and regulatory rules and policies, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation. | |||||||||||||
In addition, the major customers of the Company are Japan-based customers. Therefore, our results of operations may be adversely affected by the political and business relationship between China and Japan as well as other events affecting Japan in general. From time to time there have been tensions and conflicts between China and Japan. Adverse changes in political and economic policies, geopolitical uncertainties, and international conflicts between China and Japan may lead to reduce in our sales. Any future conflicts between China and Japan may have an adverse impact on the political and business relationship of the two countries. Furthermore, events affecting Japan in general, such as natural disasters, Japanese Yen devaluation may also have a negative impact on our business, financial condition and results of operations. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
RELATED PARTY TRANSACTIONS [Abstract] | |||||||||
RELATED PARTY TRANSACTIONS | NOTE 16—RELATED PARTY TRANSACTIONS | ||||||||
Softbank and affiliates | |||||||||
The Company recognizes revenue with respect to sales of telecommunications equipment to affiliates of Softbank, a significant former shareholder of the Company, who sold its 12.3% interest in the Company on January 17, 2014. Thereafter, Softbank is no longer the Company's related party after the consummation of the transaction, and the transactions with Softbank in the year of 2014 have been excluded from the related party transaction disclosures. | |||||||||
Softbank offers Broadband-Access service throughout Japan, which is marketed under the name of “YAHOO! BB.” The Company supports Softbank's ADSL service through the sales of its MSAN product. The Company also supports the building of Softbank's optical transmission network in Japan through the sales of its PTN product. | |||||||||
During 2013 and 2012, the Company recognized revenue and cost of net sales for sales of telecommunications equipment and services to affiliates of Softbank as follows: | |||||||||
Years Ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Net sales | $ | 90,302 | $ | 92,011 | |||||
Cost of net sales | 59,052 | 51,448 | |||||||
Gross profit | $ | 31,250 | $ | 40,563 | |||||
Included in accounts receivable at December 31, 2013 was $19.0 million, related to these transactions. Amounts due to Softbank included in accounts payable was Nil at December 31, 2013. | |||||||||
Sales to Softbank include a three-year service period and a penalty clause if product failure rates exceed a certain level over a seven year period. As of December 31, 2013, the Company's customer advance balance related to Softbank agreements was $3.1 million. The current deferred revenue and noncurrent deferred revenue balances related to Softbank was $2.0 million and $3.8 million as of December 31, 2013, respectively. The Company's noncurrent deferred revenue balance related to Softbank was $3.8 million as of December 31, 2013 compared to $4.6 million as of December 31, 2012. | |||||||||
As discussed in Note 6, the Company has a $1.6 million investment in SBI and affiliates of Softbank have a controlling interest in SBI. | |||||||||
Yellowstone | |||||||||
Subsequent to the completion of BEIID investment on September 7, 2010, one of the Company's new directors also served as a director for Yellowstone Investment Advisory Ltd, or Yellowstone. During the years of 2014, 2013 and 2012, the Company paid approximately Nil, Nil and $1.8 million respectively, for consulting services provided by Yellowstone. | |||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17—SUBSEQUENT EVENTS |
$40 million shares repurchase | |
The Company purchased 691,691 shares at the cost of $1.9 million in 2015 under the share repurchase program approved by the Company's Board of Directors on November 12, 2015. | |
Conversion for $20 million IPTV Convertible Bond | |
On April 7, 2015, the Company entered an agreement with UTStarcom Hong Kong Holdings Ltd. for the conversion of the $20 million Convertible Bond. The agreement was effective on April 7, 2015. Pursuant to the agreement, UTStarcom Hong Kong Holdings Ltd. paid $10.0 million in cash to the Company as partial payment of the principal of the Convertible Bond. The remaining part of the principal and the interest of the Convertible Bond were converted to 14% equity interest of UTStarcom Hong Kong Holdings Ltd. | |
Sold Inphi Stock | |
In February of 2015, the Company sold all of the 124,395 shares of Inphi stock with a total cash consideration of $2.4 million. |
SCHEDULE_I_CONDENSED_FINANCIAL
SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT [Abstract] | |||||||||||||
SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT | UTSTARCOM HOLDINGS CORP. (UNCONSOLIDATED—PARENT COMPANY BASIS) | ||||||||||||
REGISTRANT BALANCE SHEETS | |||||||||||||
(In thousands, except par value) | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(in thousands) | |||||||||||||
ASSETS | |||||||||||||
Investment in affiliated companies | $ | 121,863 | $ | 177,710 | |||||||||
Total assets | 121,863 | 177,710 | |||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
Current liabilities: | |||||||||||||
Accounts payable—intercompany | 6,534 | 27,330 | |||||||||||
Total current liabilities | 6,534 | 27,330 | |||||||||||
Total liabilities | 6,534 | 27,330 | |||||||||||
Stockholders' equity: | |||||||||||||
Ordinary share: $0.00375 par value; 250,000 authorized shares; 38,314 and 45,444 shares issued at December 31, 2014 and December 31, 2013, respectively; 38,148 and 39,778 shares outstanding at December 31, 2014 and December 31, 2013, respectively (Note 1) | 122 | 151 | |||||||||||
Additional paid-in capital | 1,258,182 | 1,280,810 | |||||||||||
Treasury stock, at cost:166 and 5,666 shares at December 31, 2014 and December 31, 2013, respectively | (443 | ) | (20,421 | ) | |||||||||
Accumulated deficit | (1,206,286 | ) | (1,176,022 | ) | |||||||||
Accumulated other comprehensive income | 63,754 | 65,862 | |||||||||||
Total stockholders' equity | 115,329 | 150,380 | |||||||||||
Total liabilities and stockholders' equity | $ | 121,863 | $ | 177,710 | |||||||||
UTSTARCOM HOLDINGS CORP. (UNCONSOLIDATED—PARENT COMPANY BASIS) | |||||||||||||
CONDENSED INFORMATION AS TO THE RESULTS OF OPERATIONS OF THE REGISTRANT | |||||||||||||
(In thousands) | |||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Net sales | |||||||||||||
Unrelated parties | $ | — | $ | — | $ | — | |||||||
Related parties | — | — | — | ||||||||||
Intercompany | — | — | — | ||||||||||
Cost of sales | |||||||||||||
Unrelated parties | — | — | — | ||||||||||
Related parties | — | — | — | ||||||||||
Intercompany | — | — | — | ||||||||||
Gross profit | — | — | — | ||||||||||
Operating expenses: | |||||||||||||
Selling, general and administrative | 1,398 | 2,377 | 2,315 | ||||||||||
Research and development | — | — | — | ||||||||||
Amortization of intangible assets | — | — | — | ||||||||||
Restructuring charges | — | — | — | ||||||||||
Impairment of long-lived assets | — | — | — | ||||||||||
Total operating expenses | 1,398 | 2,377 | 2,315 | ||||||||||
Operating loss | (1,398 | ) | (2,377 | ) | (2,315 | ) | |||||||
Interest income | — | — | — | ||||||||||
Interest expense | — | — | — | ||||||||||
Other income, net | — | — | — | ||||||||||
Loss before income taxes and equity in loss of affiliated companies | (1,398 | ) | (2,377 | ) | (2,315 | ) | |||||||
Equity in net loss of affiliated companies | (28,866 | ) | (20,344 | ) | (32,070 | ) | |||||||
Income tax benefit (expense) | — | — | — | ||||||||||
Net loss | $ | (30,264 | ) | $ | (22,721 | ) | $ | (34,385 | ) | ||||
NOTE 1—BASIS OF PRESENTATION | |||||||||||||
UTStarcom Holdings Corp., or the Company, a Cayman Island corporation, is the parent company of all UTStarcom Holdings Corp. subsidiaries. The condensed financial statements of the Company have been prepared pursuant to the rules and regulations of the SEC and in conformity with U.S. GAAP. | |||||||||||||
On June 24, 2011, the Company effected a merger, or the Merger, to reorganize the corporate structure of UTStarcom, Inc., a Delaware corporation incorporated in 1991, and its subsidiaries. As a result of the reorganization, UTStarcom Holdings Corp. became the parent company of UTStarcom, Inc. and its subsidiaries. Pursuant to the Merger, the Company issued an equal number of ordinary shares in exchange for the common stock of UTStarcom, Inc. Given the reorganization of the corporate structure on June 24, 2011, the prior period numbers have been adjusted as if the new corporate structure had been in place since the beginning of the earliest period presented in the above condensed financial statements. | |||||||||||||
The Company is generally a holding company of certain subsidiaries, or collectively subsidiaries. The condensed financial statements of the Company have been prepared with the assumption that the current corporate structure has been in existence throughout all relevant periods. | |||||||||||||
The Company records its investment in subsidiaries under the equity method of accounting as prescribed in ASC 323-10, “The Equity Method of Accounting for Investments in Common Stock.” Such investment is presented on the balance sheet as “Investment in affiliated companies” and the subsidiaries' profit or loss are recognized based on the effective shareholding percentage as “Equity in net income (loss) of affiliated companies” on the results of operations. | |||||||||||||
Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. | |||||||||||||
The Company is a shell company and does not have any activities. Operating expenses for the Company for the years ended December 31, 2014, 2013 and 2012 consisted mainly of the retaining fee for the Board of Directors, its director and officer insurance expenses and the expenses associated with investor relations. As the Company does not have any cash activity, the recorded expenses were paid on behalf of the Company by UTStarcom, Inc., its subsidiary, and statements of cash flows have been omitted. | |||||||||||||
SCHEDULE_II_VALUATION_AND_QUAL
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES [Abstract] | |||||||||||||||||||||||||
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | SCHEDULE II | ||||||||||||||||||||||||
UTSTARCOM HOLDINGS CORP. | |||||||||||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | |||||||||||||||||||||||||
For the Years Ended December 31, 2014, 2013, and 2012 | |||||||||||||||||||||||||
Description | Balance at | Charged | Credited to | (Deductions) | (Deductions) | Balance at | |||||||||||||||||||
beginning of | (credited) to | other accounts | Adjustments | Adjustments(1) | end of | ||||||||||||||||||||
the period | costs and | IPTV | the period | ||||||||||||||||||||||
expenses | divestiture | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||||||||||
Allowance for doubtful accounts | $ | 11,063 | $ | 49 | $ | — | $ | — | $ | (235 | ) | $ | 10,877 | ||||||||||||
Tax valuation allowance | $ | 422,789 | $ | 1,824 | $ | (55,941 | )(2) | $ | — | $ | — | $ | 368,672 | ||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||||||
Allowance for doubtful accounts | $ | 10,796 | $ | (75 | ) | $ | — | $ | — | $ | 342 | $ | 11,063 | ||||||||||||
Tax valuation allowance | $ | 418,285 | $ | 36,324 | $ | (31,820 | ) | $ | — | $ | — | $ | 422,789 | ||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||
Allowance for doubtful accounts | $ | 30,145 | $ | (1,148 | ) | $ | — | $ | (17,625 | ) | $ | (576 | ) | $ | 10,796 | ||||||||||
Tax valuation allowance | $ | 469,224 | $ | (30,745 | ) | $ | (20,194 | ) | $ | — | $ | — | $ | 418,285 | |||||||||||
-1 | Represents write-offs of allowance for doubtful accounts and foreign exchange adjustments. | ||||||||||||||||||||||||
-2 | Includes $35.6 million removal of tax valuation allowance for expiration of net operating loss carryforwards in China. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||
Use of Estimates: | Use of Estimates: | ||||||||||||
The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant judgment and estimates are used for revenue recognition, allowances for doubtful accounts and sales returns, tax valuation allowances, inventory write-down, deferred costs, accrued product warranty costs, provisions for contract losses, investment impairments, stock-based compensation expense, loss contingencies and restructuring expenses among others. Actual results could differ materially from those estimates. | |||||||||||||
Cash and Cash Equivalents: | Cash and Cash Equivalents: | ||||||||||||
Cash and cash equivalents consist of highly liquid instruments with original maturities of three months or less. Approximately 29%, or $22.5 million of cash and cash equivalents were held by the Company's subsidiaries in the U.S. as of December 31, 2014. The remainder was held by the other UTStarcom entities throughout the world. As of December 31, 2014, approximately 19%, or $14.5 million, of the Company's cash and cash equivalents were held by its subsidiaries in China and China imposes currency exchange controls on transfers of funds outside of China. Cash and cash equivalents are invested in short-term bank deposits and similar short duration instruments that are highly liquid and readily convertible with fixed maturities from overnight to three months. | |||||||||||||
Restricted Cash: | Restricted Cash: | ||||||||||||
As of December 31, 2014, the Company had short-term restricted cash of $13.7 million, and had long-term restricted cash of $3.4 million included in other long-term assets. As of December 31, 2013, the Company had short-term restricted cash of $9.8 million, and had long-term restricted cash of $4.9 million included in other long-term assets. These amounts primarily collateralize the Company's issuances of performance bonds, warranty bonds, standby and commercial letters of credit. | |||||||||||||
Investments: | Investments: | ||||||||||||
The Company's investments consist principally of bank notes debt and equity securities classified as available for sale and cost and equity method investments in privately held companies. The investments in equity securities of privately held companies in which the Company holds less than 20% voting interest and on which the Company does not have the ability to exercise significant influence are accounted for under ASC 325, “Investments—Other” using the cost method. Under the cost method, these investments are carried at the lower of cost or fair market value. The investments in equity securities of privately held companies in which the Company holds at least 20% but less than 50% voting interest and on which the Company has the ability to exercise significant influence are accounted for under ASC 323, “Investments—Equity Method and Joint Ventures” using the equity method. Investments in debt securities that are classified as available for sale are measured at fair value in the statement of financial position under ASC 320, “Investments—Debt and Equity Securities”. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) will be excluded from earnings and reported in other comprehensive income until realized except as indicated in the following paragraph. | |||||||||||||
The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. In making this determination, the Company reviews several factors to determine whether the losses are other-than-temporary, including but not limited to: (i) the length of time the investment was in an unrealized loss position, (ii) the extent to which fair value was less than cost, (iii) the financial condition and near term prospects of the issuer, and (iv) the Company's intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. | |||||||||||||
Revenue Recognition: | Revenue Recognition: | ||||||||||||
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is reasonably assured. The Company assesses collectability based on a number of factors, including payment history and the credit worthiness of the customer. If the Company determines that collection is not reasonably assured, the Company defers revenue recognition until collection becomes reasonably assured, which is generally upon receipt of cash. If the payment due from the customer is not fixed or determinable due to extended payment terms, revenue is recognized as payments become due and payable by the customer, assuming all other criteria for revenue recognition are met. Any payments received prior to revenue recognition are recorded as customer advances. Any expected losses on contracts are recognized when identified on an individual basis in accordance with the prevailing accounting guidance for the respective contract. | |||||||||||||
When a sales arrangement contains multiple deliverable elements or multiple element arrangements, the Company allocates revenue to each element based on the relative selling price of each element. Under this approach, the selling price of a deliverable is determined by using a selling price hierarchy that requires the use of vendor-specific objective evidence, or VSOE of fair value, if available, third-party evidence, or TPE of selling price if VSOE is not available or management's best estimate of selling prices, or BESP if neither VSOE nor TPE is available. | |||||||||||||
VSOE is the selling price using the price charged by the Company for a deliverable when sold separately. When there is no VSOE, the Company uses management's BESP in the allocation of arrangement consideration. Therefore, the Company typically is not able to determine TPE for its products or services. TPE of selling price is determined by evaluating similar competitor deliverables when sold separately to similarly situated customers. Generally, the Company's products differ from that of its peers, in that its product offerings are directed towards the integration of telecom, broadband and cable television networks and as such, usually entail a significant level of differentiation or customization for its customers such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine what similar competitor products' selling prices are on a stand-alone basis. | |||||||||||||
Multiple element arrangements primarily involve the sale of hardware systems, installation and training. In addition, while not separately sold, the arrangement may include extended warranties that cover product repairs, maintenance services, and software updates for the software components that are essential to the functionality of the hardware systems or equipment. Revenue consideration allocated to each element under the relative selling price method is recognized as each element is earned, namely upon installation and acceptance of equipment or delivery of terminals, the delivered element(s) has stand-alone value, there is no right of return on delivered element(s), and the Company is in control of the undelivered element(s). For arrangements that include service elements, including technical support and installation and also training, revenue is deferred until such services are deemed complete. Revenue from extended warranties is recognized ratably over the contract period of the extended warranty services. | |||||||||||||
Final acceptance is required for revenue recognition when installation services are not considered perfunctory. Final acceptance indicates that the customer has fully accepted delivery and installation, if any, of equipment and the Company is entitled to full payment. The Company does not recognize revenue before final acceptance is granted by the customer if acceptance is considered substantive to the transaction. | |||||||||||||
In connection with the restructuring of the telecommunication industry in China, the Ministry of Industry and Information Technology ("MIIT") announced that PAS services in China would be phased out by January 1, 2012. The Company still had $13.2 million of deferred revenue associated with unfulfilled contractual obligations for its historical PAS infrastructure contracts as of December 31, 2011. Such amounts were deferred at its VSOE of fair value according to the terms of the contracts. Upon the phasing out of the PAS services as required by the MIIT announcement, the Company took appropriate actions, such as communicating with its customers regarding the termination of such services, to legally release those obligations. Accordingly, approximately $8.1 million of the deferred revenue was released in 2012 upon the completion of the appropriate legal actions. The remaining balance of $5.1 million was included as the part of the liabilities transferred to the buyer on the IPTV divestiture in August 2012. However, as customers were unwilling to have customer contracts assigned to the buyer, the Company is still the primary obligor for most of the. Therefore, the deferred revenue is still included in the Company's Consolidated Balance Sheet. See “Note 3—Divestitures”. | |||||||||||||
Revenue from fixed price contracts that include a requirement for significant software modification or customization is recognized using the completed contract method of accounting whereby no revenue is recognized prior to the completion of the project, because for contracts involving unique requirements the Company is unable to make reasonably dependable estimates of progress towards meeting contractual requirements. In the event estimated total project costs exceed estimated total project revenues, the entire estimated loss is charged to operations in the period in which the loss becomes probable and can be reasonably estimated. The complexity of the estimation process and judgments about internal and external factors including labor utilization, changes to specifications and testing requirements, time required for performance and resulting incurrence of contract penalties, and the performance of subcontractors affect the estimation process. | |||||||||||||
The Company will recognize gross revenue based on the amount billed to customers, when all revenue recognition criteria have been met for transactions where the Company is a reseller. For these transactions the Company is responsible to fulfill the contracts' obligations, and assumes both the general inventory risk as well as the credit risk. | |||||||||||||
The assessment of collectability is also a factor in determining whether revenue should be recognized. The Company assesses collectability based on a number of factors, including payment history and the credit-worthiness of the customer. The Company does not request collateral from its customers. In international sales, the Company may require letters of credit from its customers that can be drawn on demand if the customer defaults on its payment. If the Company determines that collection of a payment is not reasonably assured, the Company defers revenue recognition until collection becomes reasonably assured, which is generally upon receipt of cash. | |||||||||||||
On August 31, 2012, the Company completed the divestiture of its IPTV business. As a result, the Company divested the IPTV business, transferring all assets, liabilities and managerial duties to the buyer. As some customers were not willing to assign their contracts to the buyer, the Company is still the primary obligor for those contracts that were not legally assigned to the buyer. Even though the Company signed back-to-back contracts to transfer all obligations and associated economic risks and benefits to the buyer, from the customer point of view, the Company is the sole obligor to their contracts. If the buyer fails to fulfil its obligations under the back to back contracts with respect to these un-assigned contracts with the Company, the company is still obligated to fulfil the obligations under the un-assigned contracts with the customers. Therefore, the Company was not able to derecognize the related liabilities of those un-assigned contracts. The Company continued to recognize revenue for those unassigned contracts when they met the revenue recognition criteria as mentioned above. At the same time, the Company would recognize an equal amount of the deferred costs associated with those contracts. Therefore, there would be no gross profit impact from the future revenue recognition of these unassigned contracts. The Company would continue to derecognize both the liabilities and deferred costs when the related contracts were legally assigned subsequently. During the years ended December 31, 2014 and 2013, the Company recorded $4.3 million and $1.4 million respectively, and during the post divestiture period of 2012, the Company recorded $2.2 million, in the Consolidated Statements of Operations and Comprehensive Loss due to meeting the revenue recognition criteria. As of December 31, 2014, the Company still had both liabilities and deferred costs of $21.5 million related to those un-assigned contracts. See “Note 3—Divestitures”. | |||||||||||||
Because of the nature of doing business in China and other emerging markets, the Company's billings and/or customer payments may not correlate with the contractual payment terms. The Company generally does not enforce contractual payment terms prior to final acceptance. Accordingly, accounts receivable are not recorded until the Company recognizes the related customer revenue. Advances from customers are recognized when the Company has collected cash from the customer, prior to recognizing revenue. Deferred revenue is recorded if there are undelivered elements after final acceptance has been obtained. The Company had current deferred revenue of $26.8 million and $29.1 million, and long-term deferred revenue of $18.3 million and $35.3 million at December 31, 2014 and 2013, respectively. Costs related to deferred revenue are also deferred until revenue is recognized. See “Deferred Costs” below. | |||||||||||||
Product Warranty: | Product Warranty: | ||||||||||||
The Company provides a warranty on its equipment and terminal sales for periods generally ranging from one to two years from the time of final acceptance. At times, the Company has entered into arrangements to provide limited warranty services for periods longer than two years. The Company provides for the expected cost of product warranties at the time that revenue is recognized based on an assessment of past warranty experience and when specific circumstances dictate. The Company assesses the adequacy of its recorded warranty liability every quarter and makes adjustments to the liabilities if necessary. Specific warranty accruals are reversed upon the expiration of the warranty period and are recorded as reduction of cost of sales. Warranty accrual reversals were $0.1 million, $0.1 million and $0.3 million in 2014, 2013 and 2012, respectively. From time to time, the Company may be subject to additional costs related to non-standard warranty claims from its customers. If and when this occurs, the Company estimates additional accruals based on historical experience, communication with its customers and various assumptions that the Company believes to be reasonable under the circumstances. Such additional warranty accruals are recorded in the period in which the additional costs are identified. | |||||||||||||
Receivables: | Receivables: | ||||||||||||
Although the Company evaluates customer credit worthiness prior to a sale, the Company provides an allowance for doubtful accounts for the estimated loss on trade and notes receivable when collection may no longer be reasonably assured. The Company assesses collectability of receivables based on a number of factors including analysis of creditworthiness, the Company's historical collection history and current economic conditions, its ability to collect payment and on the length of time an individual receivable balance is outstanding. The Company's policy for determining the allowance for doubtful accounts includes both specific allowances for balances known to be uncollectible and a formula-based portfolio approach, based on aging of the accounts receivable, as a part of management's review of the overall allowance for doubtful accounts. This formula-based approach involves aging of the Company's accounts receivable and applying a percentage based on the Company's historical experience. The Company evaluates the percentages applied to each category of aged accounts receivable periodically based on actual history of write-offs and collections and refines this formula-based approach accordingly for use in future periods. Receivable balances are written off when the Company has sufficient evidence to prove that they are uncollectible. | |||||||||||||
Inventories: | Inventories: | ||||||||||||
Inventories consist of product held at the Company's manufacturing facility and warehouses, as well as finished goods at customer sites for which the customer has taken possession, but based on specific contractual terms, title has not yet passed to the customer. The Company may ship inventory to existing customers that require additional equipment to expand their existing networks prior to the signing of an expansion contract. Inventories are stated at the lower of cost or market value, based on the FIFO method of accounting. Write-downs are based on the assumptions about future market conditions and customer demand, including projected changes in average selling prices resulting from competitive pricing pressures. The Company continually monitors inventory valuation for potential losses and obsolete inventory at its manufacturing facilities as well as at customer sites. If actual market conditions are less favorable than those projected by management, additional write-downs may be required. If actual market conditions are more favorable than anticipated, the previously written down inventory may be sold to customers and result in lower cost of sales and higher income from operations than expected in that period. | |||||||||||||
Deferred Costs: | Deferred costs: | ||||||||||||
Deferred costs consist of product shipped to the customer for which the rights and obligations of ownership have passed to the customer but revenue has not yet been recognized due to prolonged acceptance periods for tests and the existence of undelivered elements, such as post-contract support including software update rights for which the Company does not have a vendor specific objective evidence of fair value. All deferred costs are stated at cost. Management periodically assesses the recoverability of deferred costs and provides reserves against deferred cost balances when recovery of deferred costs is not probable. Recoverability is evaluated based on various factors including the length of time the product has been held at the customer site, the viability of payment, including assessment of product demand if a revenue sharing arrangement exists and/or the evaluation if a related transaction will result in a gross margin loss. In a loss situation for a transaction, the deferred cost balance is adjusted for impairment equal to the value of the excess of cost over the amount of revenue that will be eventually recognized for the transaction. Revenue and cost of sales are recorded when final acceptance is received from the customer. With greater concentration of product at customer sites under contract with specific or individual customers, the financial conditions of such specific or individual customers may result in increased concentration risk exposure for the Company's inventory. For any post contract support services contracts signed before the Company's adoption of ASU 09-13/14, where the related revenue is deferred, due to lack of VSOE for post contract support, the entire related deferred direct costs are classified as a noncurrent asset. | |||||||||||||
Property, Plant and Equipment: | Property, Plant and Equipment: | ||||||||||||
Property, plant and equipment are recorded at cost and are stated net of accumulated depreciation. Depreciation is provided for on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives or the term of the lease. When assets are disposed, the cost and related accumulated depreciation are removed from the accounts and the resulting gains or losses are included in results of operations. The Company generally depreciates its property, plant and equipment over the following periods: | |||||||||||||
Years | |||||||||||||
Furniture, test or manufacturing equipment | 5 | ||||||||||||
Computers and software | 2 – 3 | ||||||||||||
Automobiles | 5 | ||||||||||||
Leasehold improvements | Lesser of the term of the lease or the | ||||||||||||
estimated useful lives of the assets | |||||||||||||
Depreciation expense was $2.9 million, $5.4 million, and $4.4 million, for the years ended December 31, 2014, 2013 and 2012, respectively, which included accelerated amortization of leasehold improvements amounting to $ 0.2 million for early termination of a portion of Hangzhou office lease, $2.0 million for the Beijing and a portion of Hangzhou offices lease and $0.9 million for the Beijing office lease due to the early termination of leases for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
Other than Temporary Impairment on Investment: | Other than Temporary Impairment on Investment: | ||||||||||||
The Company reviews its investments for an other-than-temporary impairment whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. Investments identified as having an indication of impairment are subject to further analysis to determine if the impairment is other-than-temporary and this analysis requires estimation the fair value of the investment. In making this determination, the Company reviews several factors to determine whether the losses are other-than-temporary, including but not limited to: (i) the length of time the investment was in an unrealized loss position, (ii) the extent to which fair value was less than cost, (iii) the financial condition and near term prospects of the issuer, and (iv) the Company's intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. The determination of fair value of the investment involves considering factors such as current economic and market conditions, the operating performance of the companies including current earnings trends and forecasted cash flows, and other company and industry specific information. Investment impairments recorded as an other-than-temporary were $3.9 million, $9.4 million, and $3.0 million, for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
Impairment of Long-Lived Assets: | Impairment of Long-Lived Assets: | ||||||||||||
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If undiscounted expected future cash flows are less than the carrying value of the assets, an impairment loss is recognized based on the excess of the carrying amount over the fair value of the assets. Long-lived assets that are to be disposed of by sale are measured at the lower of book value or fair value less cost to sell. | |||||||||||||
Advertising Costs: | Advertising Costs: | ||||||||||||
The Company expenses all advertising costs as incurred. Payment to customers for marketing development costs are accounted for as a reduction of the revenue associated with customers as incurred. For the years ended December 31, 2014, 2013 and 2012, advertising costs totaled $0.1 million, $0.1 million, and $0.2 million, respectively. | |||||||||||||
Restructuring Liabilities, Litigation and Other Contingencies: | Restructuring Liabilities, Litigation and Other Contingencies: | ||||||||||||
The Company accounts for its restructuring plans using the guidance provided in ASC 420 “Exit or Disposal Cost Obligations” and ASC 712 “Compensation—Nonretirement Postemployment Benefits”. The Company accounts for litigation and contingencies in accordance with ASC 450, “Contingencies”, which requires that the Company record an estimated loss from a loss contingency when information available prior to issuance of the Company's financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. | |||||||||||||
Stock-Based Compensation: | Stock-Based Compensation: | ||||||||||||
Stock-based compensation expense for all share-based payment awards granted to employees is determined based on the grant-date fair value. Stock-based compensation expense for restricted stock awards is measured based on the closing fair market value of the Company's ordinary shares on the date of grant. Stock-based compensation expense for stock options is estimated at the grant date based on each option's fair value as calculated by Black-Scholes model. Stock-based compensation is expensed ratably on a straight-line basis over the requisite service period, which is generally the vesting term of the share-based payment awards. The performance-based restricted stock units are subject to the attainment of goals determined by the Compensation Committee of the Company's Board of Directors. The Company records the relevant stock-based compensation for the performance-based restricted stock units based on the probability of meeting the performance conditions. | |||||||||||||
Accumulated Other Comprehensive Income (AOCI): | Accumulated Other Comprehensive Income (AOCI): | ||||||||||||
Accumulated Other Comprehensive Income mainly consisted of foreign currency translation and the unrealized gain or loss from available-for-sale investments. The changes in AOCI, including the amounts reclassified to income, were as follows: | |||||||||||||
Foreign currency | |||||||||||||
translation and unrealized gain, net of tax | |||||||||||||
(in thousands) | |||||||||||||
Balance at December 31, 2012 | $ | 79,621 | |||||||||||
Loss recorded in other comprehensive loss | (6,671 | ) | |||||||||||
Less: Gain reclassified from AOCI to income | (7,088 | ) | |||||||||||
Balance at December 31, 2013 | 65,862 | ||||||||||||
Loss recorded in other comprehensive loss | (2,902 | ) | |||||||||||
Unrealized gain from available-for-sale investments | 673 | ||||||||||||
Less: Loss reclassified from AOCI to income | 121 | ||||||||||||
Balance at December 31, 2014 | $ | 63,754 | |||||||||||
As of December 31, 2014 and 2013, no accumulated other comprehensive income or loss is attributable to non-controlling interests | |||||||||||||
The Company reclassifies foreign currency translation adjustments from AOCI to income upon sale or upon complete or substantially complete liquidation of investments in foreign entities, with the amounts attributable to the entities and accumulated in the translation adjustment component of equity is both: (a) removed from the separate component of equity; and (b) reported as part of the gain or loss on sale or liquidation of the investment for the period during which the sale or liquidation occurs. During fiscal 2014, the Company recognized and reclassified $0.1 million to net loss from the cumulative translation adjustment previously recorded in accumulated other comprehensive income upon the liquidation of three Chinese entities. The prior cumulative translation adjustment primarily resulted from the difference between local functional currency and the Company's reporting currency. | |||||||||||||
On October 4, 2014, one of the Company's cost method investees Cortina was acquired by Inphi Corporation, or Inphi, a public company listed on the New York Stock Exchange. Upon the Merger agreement between Inphi and Cortina, considering the total consideration amount of this acquisition and the Company's interest holding as of September 30, 2014, the Company recorded a $1.5 million realized investment disposal loss in the third quarter of 2014. In exchange for the 1% interest in Cortina, the Company received 124,395 shares of Inphi on November 14, 2014. Management assessed the shares and classified them as available-for-sale securities and subject to fair value accounting. As of December 31, 2014, the fair value of the shares was $2.3 million, which resulted in an unrealized gain of $0.5 million and is recorded in Other Comprehensive Loss in the year ended December 31, 2014. | |||||||||||||
As of December 31, 2013, the Company held a $20.0 million Convertible Bond of UTStarcom Hong Kong Holdings Ltd. issued to the Company. The Convertible Bond was classified as available-for-sale debt securities subject to fair value accounting. As of December 31, 2014, the fair value of the Convertible Bond approximates $20.2 million, using the Cox, Ross and Rubinstein Binomial Model (“Binomial-Model”), which is based on the fair value of invested capital evaluated by an income approach. Therefore, the Company recognized $0.2 million unrealized gain in Other Comprehensive Income. | |||||||||||||
Income Taxes: | Income Taxes: | ||||||||||||
The Company is subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company's tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognizes the tax benefit (expense) from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company recognizes interest expense and penalties related to income tax matters as part of the provision for income taxes. | |||||||||||||
The Company recognizes deferred income taxes as the difference between the tax bases of assets and liabilities and their financial statement amounts based on enacted tax rates. Management judgment is required in the assessment of the recoverability of the Company's deferred tax assets based on its assessment of projected taxable income. Numerous factors could affect the Company's results of operations in the future. If there was a significant decline in the Company's future operating results, its assessment of the recoverability of its deferred tax assets would need to be revised, and any such adjustment to its deferred tax assets would be charged to income in that period. If necessary, the Company records a valuation allowance to reduce deferred tax assets to an amount management believes is more likely than not to be realized. Changes in estimates of taxable income in the future could result in reversal of the valuation allowances which would be credited to income in the year of reversal. | |||||||||||||
The Company provides U.S. taxes on foreign undistributed earnings that are not considered to be permanently reinvested outside the United States. | |||||||||||||
Financial Instruments: | Financial Instruments: | ||||||||||||
Financial instruments consist of cash and cash equivalents, short and long-term investments, notes receivable, accounts receivable and payable and accrued liabilities. The carrying amounts of cash and cash equivalents, bank notes, accounts receivable and payable, notes receivable, and accrued liabilities approximate their fair values because of the short-term nature of those instruments. The fair value of long term investments in debt and equity securities is determined based on quoted market prices or available information about investees. | |||||||||||||
Foreign Currency Translation: | Foreign Currency Translation: | ||||||||||||
The Company's operations are conducted through international subsidiaries where the local currency is the functional currency and the financial statements of those subsidiaries are translated from their respective functional currencies into U.S. Dollars. All foreign currency assets and liabilities are translated at the period-end exchange rate and all revenues and expenses are translated at the average exchange rate for the period. The effects of translating the financial statements of foreign subsidiaries into U.S. Dollars are reported as a cumulative translation adjustment, a separate component of accumulated other comprehensive income in stockholders' equity. During fiscal 2014, the Company recognized $0.1 million to net loss from the cumulative translation adjustment previously recorded in accumulated other comprehensive income upon the liquidation of three Chinese entities. During fiscal 2013, the Company recognized $7.1 million to net income from the cumulative translation adjustment previously recorded in accumulated other comprehensive income upon the liquidation of two previously inactive Chinese entities. The prior cumulative translation adjustment primarily resulted from the difference between local functional currency and the Company's reporting currency. | |||||||||||||
The foreign currency translation gain(loss) related to the remeasurement of transactions denominated in other than the functional currency is included in other income(expenses), net on the Company's Consolidated Statements of Operations and Comprehensive Loss. In connection with this remeasurement process, the Company recorded losses of 0.6 million, gains of $3.9 million and losses of $4.7 million in the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
Earnings per Share: | Earnings per Share: | ||||||||||||
Basic earnings per share, or EPS, is computed by dividing net income (loss) available to holders of ordinary shares or common stockholders, by the weighted average number of the Company's ordinary shares outstanding, as applicable, during the period, which excludes unvested restricted stock. Diluted EPS presents the amount of net income (loss) available to each ordinary share, outstanding during the period plus each ordinary share that would have been outstanding assuming the Company had issued ordinary shares, for all dilutive potential ordinary shares outstanding during the period. The Company's potentially dilutive ordinary shares include outstanding stock options, unvested restricted stock and restricted stock units. The following table summarizes the total potential ordinary shares that were excluded from the diluted per share calculation, because to include them would have been anti-dilutive for the period. | |||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Anti-dilutive stock options and awards/units outstanding | 1,784 | 1,734 | 2,002 | ||||||||||
Total(1) | 1,784 | 1,734 | 2,002 | ||||||||||
-1 | Calculated using the treasury stock method, which assumes proceeds are used to reduce the dilutive effect of outstanding stock awards. Assumed proceeds include the unrecognized deferred compensation of share awards, and assumed tax proceeds from excess stock-based compensation deductions. | ||||||||||||
For the years ended December 31, 2014, 2013 and 2012, no potential ordinary shares were dilutive because of the net loss incurred in those years, therefore basic and dilutive EPS were the same. | |||||||||||||
Recent Accounting Pronouncements: | Recent Accounting Pronouncements: | ||||||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. | |||||||||||||
To achieve that core principle, an entity should apply the following steps: | |||||||||||||
Step 1: Identify the contract(s) with a customer. | |||||||||||||
Step 2: Identify the performance obligations in the contract. | |||||||||||||
Step 3: Determine the transaction price. | |||||||||||||
Step 4: Allocate the transaction price to the performance obligations in the contract. | |||||||||||||
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | |||||||||||||
As compared to existing guidance on revenue recognition, this Update will significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. Because the guidance in this Update is principles-based, it can be applied to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. | |||||||||||||
The guidance in this Update also improves U.S. GAAP by reducing the number of requirements to which an entity must consider in recognizing revenue. For example, before this Update an entity would have potentially considered industry- specific revenue guidance for some transactions, in addition to general revenue guidance and potentially other relevant guidance that commonly affects revenue transactions. Rather than referring to several locations for guidance, this Update provides a comprehensive framework within Topic 606. As a result of issuing this Update, the FASB concluded that over time the guidance for recognizing revenue in U.S. GAAP should be less complex than current guidance. | |||||||||||||
Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The comprehensive disclosure package will improve the understandability of revenue, which is a critical part of the analysis of an entity's performance and prospects. Furthermore, this Update provides guidance for transactions that are not addressed comprehensively (for example, service revenue, contract modifications, and licenses of intellectual property). Finally, the guidance will apply to all entities, including nonpublic entities that previously did not have extensive guidance. | |||||||||||||
Disclosures | |||||||||||||
An entity should disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative information is required about: | |||||||||||||
1 | Contracts with customers—including revenue and impairments recognized, disaggregation of revenue, and information about contract balances and performance obligations (including the transaction price allocated to the remaining performance obligations) | ||||||||||||
2 | Significant judgments and changes in judgments—determining the timing of satisfaction of performance obligations (over time or at a point in time), and determining the transaction price and amounts allocated to performance obligations | ||||||||||||
3 | Assets recognized from the costs to obtain or fulfill a contract. | ||||||||||||
For a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company believes the adoption of this ASU will have a material and comprehensive effect on the Company's financial position, results of operations Currently, management is in the process of assessing the impact resulting from the adoption of this ASU. | |||||||||||||
In June 2014, the FASB issued ASU 2014-12, “Compensation—Stock Compensation (Topic 718).” The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. As indicated in the definition of vest, the stated vesting period (which includes the period in which the performance target could be achieved) may differ from the requisite service period. | |||||||||||||
For all entities, the amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities. The Company will not early adopt this Update, and believes the adoption of this ASU will not have a material effect on the Company's financial position, results of operations or cash flows. | |||||||||||||
In August 2014, the FASB issued ASU 2014-12, “Presentation of Financial Statements—Going Concern (Subtopic 205-40).” Previously, there was no guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued) | |||||||||||||
The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will not early adopt this Update, and believes the adoption of this ASU will not have a material effect on the Company's financial position, results of operations or cash flows. | |||||||||||||
In January 2015, the FASB issued ASU 2015-01, “Income Statement Extraordinary and Unusual Items”. This standard eliminates the concept of extraordinary and unusual items from U.S. GAAP. The new standard is effective for annual and interim periods after December 15, 2015. Early adoption is permitted. The Company will not early adopt this Update, and believes the adoption of this ASU will not have a material effect on the Company's financial position, results of operations or cash flows. | |||||||||||||
In February 2015, the FASB issued the ASU 2015-02, “Consolidation (Topic 810) — Amendments to the Consolidation Analysis”, which amends the criteria for determining which entities are considered VIEs, amends the criteria for determining if a service provider possesses a variable interest in a VIE and ends the deferral granted to investment companies for application of the VIE consolidation model. The ASU is effective for interim and annual periods beginning after December 15, 2015. Early application is permitted. The Company will not early adopt this Update, and believes the adoption of this ASU will not have a material effect on the Company's financial position, results of operations or cash flows. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||
Schedule of useful lives of property, plant and equipment | Years | ||||||||||||
Furniture, test or manufacturing equipment | 5 | ||||||||||||
Computers and software | 2 – 3 | ||||||||||||
Automobiles | 5 | ||||||||||||
Leasehold improvements | Lesser of the term of the lease or the | ||||||||||||
estimated useful lives of the assets | |||||||||||||
Schedule of changes in AOCI, including the amounts reclassified to income | Foreign currency | ||||||||||||
translation and unrealized gain, net of tax | |||||||||||||
(in thousands) | |||||||||||||
Balance at December 31, 2012 | $ | 79,621 | |||||||||||
Loss recorded in other comprehensive loss | (6,671 | ) | |||||||||||
Less: Gain reclassified from AOCI to income | (7,088 | ) | |||||||||||
Balance at December 31, 2013 | 65,862 | ||||||||||||
Loss recorded in other comprehensive loss | (2,902 | ) | |||||||||||
Unrealized gain from available-for-sale investments | 673 | ||||||||||||
Less: Loss reclassified from AOCI to income | 121 | ||||||||||||
Balance at December 31, 2014 | $ | 63,754 | |||||||||||
Summary of the total potential ordinary shares that were excluded from the diluted per share calculation | |||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Anti-dilutive stock options and awards/units outstanding | 1,784 | 1,734 | 2,002 | ||||||||||
Total(1) | 1,784 | 1,734 | 2,002 | ||||||||||
-1 | Calculated using the treasury stock method, which assumes proceeds are used to reduce the dilutive effect of outstanding stock awards. Assumed proceeds include the unrecognized deferred compensation of share awards, and assumed tax proceeds from excess stock-based compensation deductions. |
DIVESTITURES_Tables
DIVESTITURES (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
DIVESTITURES [Abstract] | ||||||
Schedule of liabilities and assets related to un-assigned contracts | Million | |||||
Deferred revenues | $ | 10 | ||||
Customer advances | 37.3 | |||||
Total liabilities associated with the unassigned IPTV contracts | 47.3 | |||||
Deferred contract costs | 24.6 | |||||
Prepaid contract service costs to buyer | 22.7 | |||||
Total assets associated with the un-assigned IPTV contracts | $ | 47.3 |
COMPREHENSIVE_LOSS_Tables
COMPREHENSIVE LOSS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
COMPREHENSIVE LOSS | |||||||||||||
Schedule of total comprehensive loss | Years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Net loss | $ | (30,264 | ) | $ | (22,730 | ) | $ | (35,579 | ) | ||||
Other comprehensive loss | |||||||||||||
Unrealized gain from available-for-sale investments | 673 | - | - | ||||||||||
Net change in cumulative translation adjustment | (2,781 | ) | (13,759 | ) | (3,272 | ) | |||||||
Total comprehensive loss | (32,372 | ) | (36,489 | ) | (38,851 | ) | |||||||
Comprehensive loss attributable to non-controlling interests(1) | - | 9 | 1,194 | ||||||||||
Comprehensive loss attributable to UTStarcom Holdings Corp | $ | (32,372 | ) | $ | (36,480 | ) | $ | (37,657 | ) | ||||
Schedule of changes in noncontrolling interests | Years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Balance at beginning of period | $ | — | $ | 814 | $ | 6,401 | |||||||
Comprehensive loss attributable to non-controlling interests | — | (9 | ) | (1,194 | ) | ||||||||
Non-controlling interests reduction from deconsolidation | — | (805 | ) | (4,393 | ) | ||||||||
Balance at end of period | $ | — | $ | — | $ | 814 |
BALANCE_SHEET_DETAILS_Tables
BALANCE SHEET DETAILS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
BALANCE SHEET DETAILS [Abstract] | |||||||||
Schedule of inventories | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Inventories: | |||||||||
Raw materials | $ | 4,127 | $ | 3,225 | |||||
Work in process | 3,952 | 1,344 | |||||||
Finished goods(1) | 12,580 | 18,786 | |||||||
Total Inventory | $ | 20,659 | $ | 23,355 | |||||
-1 | Includes finished goods at customer sites of approximately $11.6 million and $14.7 million at December 31, 2014 and 2013, respectively, for which the customer has taken possession, but based on specific contractual terms, title has not yet passed to the customer and for which revenue has not yet been recognized. | ||||||||
Schedule of Prepaid and other current assets | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Prepaids and other current assets | |||||||||
Prepaid tax | $ | 4,323 | $ | 4,894 | |||||
Advance to suppliers | 1,944 | 223 | |||||||
Deferred taxes—current | 3,668 | 3,534 | |||||||
Other receivable(1) | 4,413 | 8,579 | |||||||
Prepaid others | 4,989 | 4,322 | |||||||
Total Prepaids and other current assets | $ | 19,337 | $ | 21,552 | |||||
-1 | The other receivable balance includes loans of approximately $2.0 million and $5.6 million as of December 31, 2014 and December 31, 2013, respectively, made to ESA Cultural Investment (Hong Kong) limited (“borrower” or ESA), a movie investment company with its operations located in Beijing. The Company signed the loan agreement for a total amount of $5.6 million in the fourth quarter of 2012, and $4.0 million was drawdown in the fourth quarter of 2012 with the remaining in the first quarter of 2013. The loan bears interest at 20% per annum and originally matured on December 31, 2013, with a subsequently extended maturity date on 50% of the loan, or $2.8 million, to June 30, 2014, and the other half extended to December 31, 2014. In the fourth quarter of 2014, the Company received $0.8 million against the principal of the outstanding entrusted loan amount. The Company has performed an assessment on the need for a valuation reserve due to collectability risk and $2.8 million was reserved as of December 31, 2014 as the collection term was due. The management expects to collect the remaining $2.0 million balance in the second quarter of 2015. | ||||||||
The other receivable balance includes the amount of $1.08 million paid to UiTV in July and August of 2014. UiTV used this amount to purchase Set Top Boxes for the Internet television service in Thailand. Pursuant to the contract, UiTV will repay in installments, starting from January of 2015 to July of 2018. | |||||||||
Schedule of property, plant and equipment, net | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Property, plant and equipment, net: | |||||||||
Leasehold improvements | 5,290 | $ | 6,009 | ||||||
Automobiles | 2,077 | 2,129 | |||||||
Software | 6,505 | 7,191 | |||||||
Computer, Equipment and Furniture | 45,981 | 53,085 | |||||||
Others | 19 | 93 | |||||||
Total | 59,872 | 68,507 | |||||||
Less: accumulated depreciation | (56,835 | ) | (63,736 | ) | |||||
Total Property, plant and equipment, net | $ | 3,037 | $ | 4,771 | |||||
During the years ended December 31, 2014, 2013 and 2012, the Company wrote off $7.3 million with accumulated depreciation of $7.3 million, $41.7 million with accumulated depreciation of $41.7 million, and $45.3 million with accumulated depreciation of $45.3 million of fully depreciated property, plant and equipment, respectively. In 2014, there was $0.2 million of accelerated depreciation of leasehold improvements related to the early termination of a lease of the Hangzhou facility. During 2013, there was $1.7 million of accelerated depreciation related to the early termination of a lease on the Hangzhou facility and $0.3 million accelerated depreciation as a result of combining back office functions in Beijing to the Company's facilities in Hangzhou as part of a cost reduction initiative in 2013. During 2012, there was $0.9 million in accelerated amortization of Beijing Office leasehold improvements due to early termination of that lease. During 2012, in connection with the IPTV divestiture (See Note 3—Divestitures), the Company derecognized property, plant and equipment of $9.1 million with accumulated depreciation of $8.2 million, and in connection with the deconsolidation of UiTV (See Note 6—Cash, Cash equivalents and Investments), the Company derecognized property, plant and equipment of $2.0 million with accumulated depreciation of $0.6 million. | |||||||||
Schedule of other current liabilities | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Other current liabilities: | |||||||||
Accrued contract costs | $ | 3,638 | $ | 3,175 | |||||
Accrued payroll and compensation | 4,705 | 8,136 | |||||||
Warranty costs | 217 | 617 | |||||||
Accrued professional fees | 816 | 1,946 | |||||||
Accrued other taxes | 2,495 | 2,722 | |||||||
Other | 3,592 | 5,834 | |||||||
Total other current liabilities | $ | 15,463 | $ | 22,430 | |||||
Schedule of other long-term liabilities | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Other long-term liabilities | |||||||||
Non current income tax payable | $ | 14,048 | $ | 13,606 | |||||
Non current deferred tax liability | 46 | 37 | |||||||
Non current deferred rent | 169 | 475 | |||||||
Others | 1,753 | 2,668 | |||||||
Total other long-term liabilities | $ | 16,016 | $ | 16,786 |
CASH_CASH_EQUIVALENTS_AND_SHOR1
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Abstract] | |||||||||||||||||
Schedule showing break-down of the Company's total long-term investments | Accounting Method | December 31, | December 31, | ||||||||||||||
2014 | 2013 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Cortina | Cost Method | $ | — | $ | 3,348 | ||||||||||||
GCT Semiconductor, Inc. | Cost Method | 811 | 811 | ||||||||||||||
Xalted Networks | Cost Method | — | 22 | ||||||||||||||
SBI | Cost Method | 1,560 | 1,900 | ||||||||||||||
Investment using Cost Method Total | 2,371 | 6,081 | |||||||||||||||
ACELAND | Equity Method | 2,109 | 2,109 | ||||||||||||||
UiTV | Equity Method | — | 5,308 | ||||||||||||||
Shareholder Loan to ACELAND | Equity Method | 7,119 | 7,119 | ||||||||||||||
Investment using Equity Method Total | 9,228 | 14,536 | |||||||||||||||
UiTV | Available for sale | 20,000 | 25,971 | ||||||||||||||
AioTV | Available for sale | 8,000 | 8,000 | ||||||||||||||
UTStarcom Hong Kong Holdings Ltd | Available for sale | 20,200 | 20,000 | ||||||||||||||
Investments Classified as available-for-sale Total | 48,200 | 53,971 | |||||||||||||||
Total Investment | $ | 59,799 | $ | 74,588 | |||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||||||||||||
Summary of condensed financial information of iTV Media | Condensed | Condensed | Condensed | ||||||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(In thousands) | (In thousands) | (In thousands) | |||||||||||||||
Operating data: | |||||||||||||||||
Revenue | $ | 7,460 | $ | 1,984 | $ | 165 | |||||||||||
Gross profit | $ | (116 | ) | $ | (3,164 | ) | $ | (1,835 | ) | ||||||||
Loss from operations | $ | (12,087 | ) | $ | (16,354 | ) | $ | (13,210 | ) | ||||||||
Net loss | $ | (15,469 | ) | $ | (18,170 | ) | $ | (13,460 | ) | ||||||||
Net loss attributable to UTStarcom Holdings Corp. | $ | (13,744 | ) | $ | (15,942 | ) | $ | (12,797 | ) | ||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(In thousands) | (In thousands) | (In thousands) | |||||||||||||||
Balance sheet data: | |||||||||||||||||
Current assets | $ | 6,582 | $ | 8,712 | $ | 4,849 | |||||||||||
Long-term assets | $ | 10,062 | $ | 37,538 | $ | 30,151 | |||||||||||
Current liabilities | $ | (48,759 | ) | $ | (1,384 | ) | $ | (5,325 | ) | ||||||||
Long-term liabilities | $ | (1,240 | ) | $ | (56,047 | ) | $ | (23,371 | ) | ||||||||
Non-controlling interests | $ | 4,570 | $ | 2,822 | $ | 584 | |||||||||||
Summary of available-for-sale investments: | Cost | Impairment | Estimated | ||||||||||||||
charges and | fair value | ||||||||||||||||
equity losses | |||||||||||||||||
(in thousands) | |||||||||||||||||
Convertible bonds of privately-held company | $ | 55,113 | $ | 9,142 | $ | 45,971 | |||||||||||
Preferred convertible shares of privately-held company | 8,000 | — | 8,000 | ||||||||||||||
Total available-for-sale investments | $ | 63,113 | $ | 9,142 | $ | 53,971 | |||||||||||
Cost | Impairment | Unrealized | Estimated | ||||||||||||||
charges and | gain | fair value | |||||||||||||||
equity losses | |||||||||||||||||
(in thousands) | |||||||||||||||||
Securities of a public company | $ | 1,826 | $ | — | $ | 473 | $ | 2,299 | |||||||||
Convertible bonds of privately-held company | 45,971 | 5,971 | 200 | 40,200 | |||||||||||||
Preferred convertible shares of privately-held company | 8,000 | — | — | 8,000 | |||||||||||||
Total available-for-sale investments | $ | 55,797 | $ | 5,971 | $ | 673 | $ | 50,499 | |||||||||
Schedule of financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(in thousands) | |||||||||||||||||
As of December 31, 2014 | |||||||||||||||||
Short-term investments | $ | 2,299 | $ | — | $ | — | $ | 2,299 | |||||||||
Long-term investments | $ | — | $ | — | $ | 48,200 | $ | 48,200 | |||||||||
As of December 31, 2013 | |||||||||||||||||
Short-term investments | $ | — | $ | — | $ | — | $ | — | |||||||||
Long-term investments | $ | — | $ | — | $ | 53,971 | $ | 53,971 | |||||||||
Schedule of changes in financial assets using unobservable inputs (Level 3) | Amount | ||||||||||||||||
In thousands | |||||||||||||||||
As of December 31, 2012 | $ | 31,000 | |||||||||||||||
Invested in Convertible bonds | 32,113 | ||||||||||||||||
Less: Impairment Charges | (9,142 | ) | |||||||||||||||
As of December 31, 2013 | 53,971 | ||||||||||||||||
Invested in Convertible bonds | — | ||||||||||||||||
Less: Share of loss from Associates | (3,570 | ) | |||||||||||||||
Less: Impairment Charges | (2,401 | ) | |||||||||||||||
Add: Unrealized gain | 200 | ||||||||||||||||
As of December 31, 2014 | $ | 48,200 | |||||||||||||||
AioTV [Member] | |||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||||||||||||
Schedule of significant inputs for the valuation model used to estimate fair value of investments | Years Ended | ||||||||||||||||
31-Dec | |||||||||||||||||
2014 | |||||||||||||||||
Total fair value of invested capital as at valuation date (in thousands) | 11,954 | ||||||||||||||||
Risk free rate of interest | 1.7 | % | |||||||||||||||
Dividend yield | 0 | % | |||||||||||||||
Expiration date | 11/14/17 | ||||||||||||||||
Volatility | 55.5 | % | |||||||||||||||
UTStarcom Hong Kong Holdings Ltd. [Member] | |||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||||||||||||
Schedule of significant inputs for the valuation model used to estimate fair value of investments | Years Ended | ||||||||||||||||
31-Dec | |||||||||||||||||
2014 | |||||||||||||||||
Total fair value of invested capital as at valuation date (in thousands) | 37,000 | ||||||||||||||||
Risk free rate of interest | 1.69 | % | |||||||||||||||
Dividend yield | 4 | % | |||||||||||||||
Maturity date | 8/30/17 | ||||||||||||||||
Volatility | 49 | % | |||||||||||||||
UiTV Media Inc [Member] | |||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||||||||||||
Schedule of significant inputs for the valuation model used to estimate fair value of investments | Years Ended | ||||||||||||||||
31-Dec | |||||||||||||||||
2014 | |||||||||||||||||
Total fair value of invested capital as at valuation date (in thousands) | 20,000 |
WARRANTY_OBLIGATIONS_AND_OTHER1
WARRANTY OBLIGATIONS AND OTHER GUARANTEES (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
WARRANTY OBLIGATIONS AND OTHER GUARANTEES [Abstract] | |||||
Summary of the activity related to warranty obligations | (In thousands) | ||||
Balance at December 31, 2011 | $ | 4,660 | |||
Accruals for warranties issued during the period (benefit from expirations), net | 2,039 | ||||
Warranty reserve derecognized upon IPTV divestiture | (2,507 | ) | |||
Settlements made during the period | (2,863 | ) | |||
Balance at December 31, 2012 | 1,329 | ||||
Accruals for warranties issued during the period (benefit from expirations), net | (473 | ) | |||
Settlements made during the period | (239 | ) | |||
Balance at December 31, 2013 | 617 | ||||
Accruals for warranties issued during the period (benefit from expirations), net | (250 | ) | |||
Settlements made during the period | (150 | ) | |||
Balance at December 31, 2014 | $ | 217 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
COMMITMENTS AND CONTINGENCIES. [Abstract] | |||||
Schedule of future minimum lease payments under all non-cancelable operating leases with an initial term in excess of one year | Amount | ||||
(in thousands) | |||||
2015 | $ | 2,455 | |||
2016 | 1,304 | ||||
2017 | — | ||||
2018 | — | ||||
2019 | — | ||||
Thereafter | — | ||||
Total | $ | 3,759 |
COMMON_STOCK_AND_STOCK_INCENTI1
COMMON STOCK AND STOCK INCENTIVE PLANS (Tables) | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
COMMON STOCK AND STOCK INCENTIVE PLANS [Abstract] | |||||||||||||||||||||||||||
Summary of stock options activity | Number of | Weighted | |||||||||||||||||||||||||
shares | average | ||||||||||||||||||||||||||
outstanding | exercise | ||||||||||||||||||||||||||
price | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Options Outstanding, January 1, 2012 | 1,127 | $ | 23.52 | ||||||||||||||||||||||||
Options Granted | 246 | 3.24 | |||||||||||||||||||||||||
Options Exercised | — | — | |||||||||||||||||||||||||
Options Forfeited or Expired | (443 | ) | 19.56 | ||||||||||||||||||||||||
Options Outstanding, December 31, 2012 | 930 | $ | 20.04 | ||||||||||||||||||||||||
Options Granted | — | — | |||||||||||||||||||||||||
Options Exercised | — | — | |||||||||||||||||||||||||
Options Forfeited or Expired | (354 | ) | 18.05 | ||||||||||||||||||||||||
Options Outstanding, December 31, 2013 | 576 | $ | 21.25 | ||||||||||||||||||||||||
Options Granted | 127 | 2.83 | |||||||||||||||||||||||||
Options Exercised | — | — | |||||||||||||||||||||||||
Options Forfeited or Expired | (145 | ) | 62.79 | ||||||||||||||||||||||||
Options Outstanding, December 31, 2014 | 558 | $ | 6.33 | ||||||||||||||||||||||||
Summary of unvested restricted awards | Shares | Weighted | |||||||||||||||||||||||||
average | |||||||||||||||||||||||||||
grant date | |||||||||||||||||||||||||||
fair value | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Restricted stock awards activity | |||||||||||||||||||||||||||
Total nonvested at January 1, 2012 | 902 | $ | 5.87 | ||||||||||||||||||||||||
Granted | 1,891 | $ | 3.29 | ||||||||||||||||||||||||
Vested | (701 | ) | $ | 5.6 | |||||||||||||||||||||||
Forfeited | (390 | ) | $ | 4.49 | |||||||||||||||||||||||
Total nonvested at December 31, 2012 | 1,702 | $ | 3.43 | ||||||||||||||||||||||||
Reverse split adjustment | 25 | $ | — | ||||||||||||||||||||||||
Granted | 679 | $ | 2.76 | ||||||||||||||||||||||||
Vested | (520 | ) | $ | 3.72 | |||||||||||||||||||||||
Forfeited | (173 | ) | $ | 3.82 | |||||||||||||||||||||||
Total nonvested at December 31, 2013 | 1,713 | $ | 3.08 | ||||||||||||||||||||||||
Granted | 808 | $ | 2.76 | ||||||||||||||||||||||||
Vested | (603 | ) | $ | 3.15 | |||||||||||||||||||||||
Forfeited | (437 | ) | $ | 3.02 | |||||||||||||||||||||||
Total nonvested at December 31, 2014 | 1,481 | $ | 2.9 | ||||||||||||||||||||||||
Summary of significant ranges of outstanding and exercisable stock options | Range of | Numbers | Weighted | Weighted | Numbers | Weighted | |||||||||||||||||||||
Exercise Price | Outstanding | Average | Average | Exercisable | Average | ||||||||||||||||||||||
as of | Remaining | Exercise | as of | Exercise | |||||||||||||||||||||||
Dec. 31, 2014 | Contractual | Price | Dec. 31, 2014 | Price | |||||||||||||||||||||||
Term | |||||||||||||||||||||||||||
$ | 2.7 | $ | 2.7 | 26,666 | 9.91 | $ | 2.7 | 0 | $ | — | |||||||||||||||||
$ | 2.87 | $ | 2.87 | 100,000 | 9.64 | $ | 2.87 | 0 | $ | — | |||||||||||||||||
$ | 2.97 | $ | 2.97 | 26,666 | 4.83 | $ | 2.97 | 13,332 | $ | 2.97 | |||||||||||||||||
$ | 3.21 | $ | 3.21 | 191,054 | 4.49 | $ | 3.21 | 104,386 | $ | 3.21 | |||||||||||||||||
$ | 4.17 | $ | 6.51 | 88,236 | 2.22 | $ | 5.28 | 83,792 | $ | 5.34 | |||||||||||||||||
$ | 8.46 | $ | 9.72 | 40,325 | 0.54 | $ | 9.53 | 40,325 | $ | 9.53 | |||||||||||||||||
$ | 18.75 | $ | 18.75 | 78,636 | 1.13 | $ | 18.75 | 78,636 | $ | 18.75 | |||||||||||||||||
$ | 19.83 | $ | 24.57 | 4,786 | 0.69 | $ | 20.6 | 4,786 | $ | 20.6 | |||||||||||||||||
$ | 26.61 | $ | 26.61 | 116 | 0.92 | $ | 26.61 | 116 | $ | 26.61 | |||||||||||||||||
$ | 33.21 | $ | 33.21 | 1,730 | 0.25 | $ | 33.21 | 1,730 | $ | 33.21 | |||||||||||||||||
Total | 558,215 | 4.53 | $ | 6.33 | 327,103 | $ | 8.68 | ||||||||||||||||||||
Number of shares | Weighted average exercise price | ||||||||||||||||||||||||||
Options exercisable at December 31, 2014 | 327,103 | $ | 8.68 | ||||||||||||||||||||||||
Options vested and expected to vest at December 31, 2014 | 500,275 | $ | 6.71 | ||||||||||||||||||||||||
Summary of the stock-based compensation expense recognized in the Company's Consolidated Statement of Operations | Years ended December 31, | ||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Cost of net sales | $ | 60 | $ | 7 | $ | 107 | |||||||||||||||||||||
Selling, general and administrative | 2,185 | 1,597 | 2,398 | ||||||||||||||||||||||||
Research and development | 44 | 94 | 476 | ||||||||||||||||||||||||
Total | $ | 2,289 | $ | 1,698 | $ | 2,981 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
INCOME TAXES [Abstract] | |||||||||||||
Schedule of United States and Foreign Income (Loss) Before Income Taxes and Minority Interest | Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
United States | $ | (14,809 | ) | $ | (156,696 | ) | $ | 11,826 | |||||
Foreign | (13,837 | ) | 136,317 | (45,013 | ) | ||||||||
$ | (28,646 | ) | $ | (20,379 | ) | $ | (33,187 | ) | |||||
Schedule of Components of the Provision (Benefit) for Income Taxes | Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Current | |||||||||||||
United States | $ | — | $ | 1 | $ | (40 | ) | ||||||
Foreign | 2,042 | 2,730 | 4,643 | ||||||||||
Total Current | 2,042 | 2,731 | 4,603 | ||||||||||
Deferred | |||||||||||||
United States | — | — | — | ||||||||||
Foreign | (424 | ) | (380 | ) | (2,211 | ) | |||||||
Total Deferred | (424 | ) | (380 | ) | (2,211 | ) | |||||||
Total | $ | 1,618 | $ | 2,351 | $ | 2,392 | |||||||
Summary of Unrecognized Tax Benefits | Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Beginning balance-gross unrecognized tax benefits (UTB's) | $ | 45,430 | $ | 54,012 | $ | 55,650 | |||||||
Additions based on tax positions related to the current year | 142 | 151 | 80 | ||||||||||
Reductions for tax positions related to prior years | (190 | ) | (1,627 | ) | (1,288 | ) | |||||||
Lapse of statute of limitations | — | (7,106 | ) | (430 | ) | ||||||||
Ending balance—gross unrecognized tax benefits (UTB's) | 45,382 | 45,430 | 54,012 | ||||||||||
UTB's as a credit in deferred taxes | (33,021 | ) | (33,187 | ) | (39,402 | ) | |||||||
Federal benefit of state taxes | (2,176 | ) | (2,244 | ) | (2,312 | ) | |||||||
UTB's that would impact the effective tax rate | $ | 10,185 | $ | 10,019 | $ | 12,298 | |||||||
Summary of the Components of Net Deferred Tax Assets | December 31, | December 31, | |||||||||||
2014 | 2013 | ||||||||||||
(in thousands) | |||||||||||||
Deferred Tax Assets | |||||||||||||
Allowances and reserves | $ | 4,920 | $ | 11,125 | |||||||||
Deferred revenue and customer advances, net | — | — | |||||||||||
Net operating loss carryforward | 230,597 | 254,153 | |||||||||||
Tax credit carryforwards | 87,703 | 95,692 | |||||||||||
Capital loss carryforwards | 3,997 | 18,671 | |||||||||||
Writedowns/amortization of intangible assets and goodwill | 12,997 | 15,651 | |||||||||||
Fixed assets | 6,008 | 7,263 | |||||||||||
Demo equipment income | 7,070 | 7,104 | |||||||||||
Accrued warranties | — | — | |||||||||||
Other | 22,683 | 18,459 | |||||||||||
Total Deferred Tax Assets | 375,975 | 428,118 | |||||||||||
Deferred Tax Liabilities | |||||||||||||
Prepaid expense | (576 | ) | (472 | ) | |||||||||
Deferred revenue and customer advances, net | (2,494 | ) | (1,183 | ) | |||||||||
Accrued warranties | (281 | ) | (165 | ) | |||||||||
Total Deferred Tax Liabilities | (3,351 | ) | (1,820 | ) | |||||||||
Total Deferred Tax Assets (Liabilities) | $ | 372,624 | $ | 426,298 | |||||||||
Less: Valuation Allowance | (368,672 | ) | (422,789 | ) | |||||||||
Total Deferred Tax Assets (Liabilities) | $ | 3,952 | $ | 3,509 | |||||||||
Schedule of Reconciliation of Effective Income Tax Rate and the Federal Statutory Rate | Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
U.S. Federal tax (benefit) at statutory rate | $ | (10,026 | ) | $ | (7,133 | ) | $ | (11,183 | ) | ||||
U.S. State tax (benefit)/expense, net of federal income tax benefit | 628 | (360 | ) | 187 | |||||||||
Stock compensation expense | 745 | 574 | 996 | ||||||||||
Effect of differences in foreign tax rates | 8,390 | (30,994 | ) | 422 | |||||||||
Effect of tax rate changes on deferred taxes | — | 2,407 | 7 | ||||||||||
Change in deferred tax valuation allowance | 1,824 | 38,234 | 11,511 | ||||||||||
Tax credits | (535 | ) | (552 | ) | (358 | ) | |||||||
Other | 592 | 175 | 810 | ||||||||||
Total Tax Expense | $ | 1,618 | $ | 2,351 | $ | 2,392 |
OTHER_INCOME_EXPENSES_NET_Tabl
OTHER INCOME (EXPENSES), NET (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
OTHER INCOME (EXPENSES), NET [Abstract] | |||||||||||||
Schedule of components of other income, net | Years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Foreign exchange (losses) gains | $ | (586 | ) | $ | 3,856 | $ | (4,675 | ) | |||||
Gain(loss) from the currency translation adjustment(1) | (121 | ) | 7,088 | — | |||||||||
Tax reversal for expiration of the statute of limitations(2) | 992 | 1,240 | 1,499 | ||||||||||
ESA loan impairment (3). | (2,788 | ) | — | — | |||||||||
Other | 254 | (704 | ) | 203 | |||||||||
Total | $ | (2,249 | ) | $ | 11,480 | $ | (2,973 | ) | |||||
-1 | During 2013, the Company recognized $7.1 million gain in the Consolidated Statements of Operations and Comprehensive Income (Loss) on the reversal of the cumulative translation adjustment previously recorded in accumulated other comprehensive income upon the liquidation of two previously inactive Chinese entities. The prior cumulative translation adjustment primarily resulted from the difference between local functional currency and the Company's reporting currency. | ||||||||||||
-2 | Previously, when the Company divested its Korean subsidiary, the Company provided a tax reserve as it offered indemnification to the buyer for the uncertain tax position arising in the periods before the divestiture. In April 2012, approximately $1.5 million of such tax reserve was released due to the expiration of the statute of limitations, which is five years after the filing of the tax return. In 2013, approximately $1.2 million of such tax reserve was released due to expiration of statute of limitations. In 2014, remaining amount of approximately $1.0 million of such tax reserve was released due to expiration of statute of limitations. | ||||||||||||
-3 | The Company signed the loan agreement to for a total amount of $5.6 million in the fourth quarter of 2012, $4.0 million was drawdown in the fourth quarter of 2012 and the remaining in the first quarter of 2013. The loan bears interest at 20% per annum and originally matured on December 31, 2013, with subsequently extended the maturity date on 50% of the loan, or $2.8 million, to June 30, 2014, and the other half extended to December 31, 2014. In the fourth quarter of 2014, the Company received $0.8 million. The Company has performed an assessment on the need for a valuation reserve and $2.8 million was charged as impairment in other expenses in 2014 as the collection term was due. The management expects to collect the remaining $2.0 million balance in the second quarter of 2015. |
NET_LOSS_PER_SHARE_Tables
NET LOSS PER SHARE (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
NET LOSS PER SHARE [Abstract] | |||||||||||||
Schedule of computation of basic and diluted net loss per share | Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Numerator: | |||||||||||||
Net loss attributable to UTStarcom Holdings Corp. | $ | (30,264 | ) | $ | (22,721 | ) | $ | (34,385 | ) | ||||
Denominator: | |||||||||||||
Weighted average shares outstanding—Basic | 37,380 | 39,127 | 48,513 | ||||||||||
Potentially dilutive common stock equivalents—stock options and restricted stock | — | — | — | ||||||||||
Weighted average shares outstanding—Diluted | 37,380 | 39,127 | 48,513 | ||||||||||
Net loss per share attributable to UTStarcom Holdings Corp.—Basic | $ | (0.81 | ) | $ | (0.58 | ) | $ | (0.71 | ) | ||||
Net loss per share attributable to UTStarcom Holdings Corp.—Diluted | $ | (0.81 | ) | $ | (0.58 | ) | $ | (0.71 | ) | ||||
SEGMENT_REPORTING_Tables
SEGMENT REPORTING (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
SEGMENT REPORTING [Abstract] | |||||||||||||||||||||||||
Summary of the Company's segment net sales, gross profit and segment margin | Years ended December 31, | ||||||||||||||||||||||||
Net Sales by Segment | 2014 | % of net | 2013 | % of net | 2012 | % of net | |||||||||||||||||||
sales | sales | sales | |||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||
Equipment | $ | 105,988 | 82 | % | $ | 141,138 | 86 | % | $ | 160,688 | 86 | % | |||||||||||||
Services—Equipment Based Services | 23,432 | 18 | % | 23,301 | 14 | % | 25,784 | 14 | % | ||||||||||||||||
—Operational Support Services | — | 0 | % | — | 0 | % | 256 | 0 | % | ||||||||||||||||
Total Sales | $ | 129,420 | 100 | % | $ | 164,439 | 100 | % | $ | 186,728 | 100 | % | |||||||||||||
Years ended December 31, | |||||||||||||||||||||||||
Gross profit/(loss) by Segment | 2014 | Gross | 2013 | Gross | 2012 | Gross | |||||||||||||||||||
profit | profit | profit | |||||||||||||||||||||||
% | % | % | |||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||
Equipment | $ | 21,000 | 20 | % | $ | 41,250 | 29 | % | $ | 64,835 | 40 | % | |||||||||||||
Services—Equipment Based Services | 1,128 | 5 | % | (1,030 | ) | -4 | % | 3,546 | 14 | % | |||||||||||||||
—Operational Support Services | — | 0 | % | — | 0 | % | (223 | ) | -87 | % | |||||||||||||||
Total Gross profit | $ | 22,128 | 17 | % | $ | 40,220 | 24 | % | $ | 68,158 | 37 | % | |||||||||||||
Years ended December 31, | |||||||||||||||||||||||||
Segment Margin and Operating Loss | 2014 | 2013 | 2012 | ||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Equipment | $ | 6,583 | $ | 24,047 | $ | 34,661 | |||||||||||||||||||
Services—Equipment Based Services | 1,105 | (1,037 | ) | 3,524 | |||||||||||||||||||||
—Operational Support Services | (22 | ) | (2,112 | ) | (7,420 | ) | |||||||||||||||||||
Total segment margin | 7,666 | 20,898 | 30,765 | ||||||||||||||||||||||
General and Corporate | (21,739 | ) | (34,131 | ) | (60,308 | ) | |||||||||||||||||||
Operating Income (Loss) | $ | (14,073 | ) | $ | (13,233 | ) | $ | (29,543 | ) | ||||||||||||||||
Schedule of sales data by geographical area | Years Ended December 31, | ||||||||||||||||||||||||
2014 | % of net | 2013 | % of net | 2012 | % of net | ||||||||||||||||||||
sales | sales | sales | |||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||
Net Sales by Region | |||||||||||||||||||||||||
China | $ | 15,465 | 12 | % | $ | 6,945 | 4 | % | $ | 38,544 | 21 | % | |||||||||||||
Japan | 58,999 | 46 | % | 93,203 | 57 | % | 99,367 | 53 | % | ||||||||||||||||
India | 37,424 | 29 | % | 26,595 | 16 | % | 23,992 | 13 | % | ||||||||||||||||
Taiwan | 6,706 | 5 | % | 13,332 | 8 | % | 9,824 | 5 | % | ||||||||||||||||
Other | 10,826 | 8 | % | 24,364 | 15 | % | 15,001 | 8 | % | ||||||||||||||||
Total | $ | 129,420 | 100 | % | $ | 164,439 | 100 | % | $ | 186,728 | 100 | % | |||||||||||||
Schedule of long-lived assets, consisting of property, plant and equipment, by geographical area | December 31, | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
China | $ | 1,988 | $ | 3,795 | |||||||||||||||||||||
Other | 1,049 | 976 | |||||||||||||||||||||||
Total long-lived assets | $ | 3,037 | $ | 4,771 |
CREDIT_RISK_AND_CONCENTRATION_
CREDIT RISK AND CONCENTRATION (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
CREDIT RISK AND CONCENTRATION [Abstract] | |||||||||||||
Schedule of Customers Who Accounted for 10% or more of the Company's Net Revenues | For the years ended | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Affiliates of Softbank | 44 | % | 55 | % | 49 | % |
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
RELATED PARTY TRANSACTIONS [Abstract] | |||||||||
Schedule of Recognized Revenue and Cost of Net Sales for Sales of Telecommunications Equipment and Services to Affiliates of Softbank | Years Ended December 31, | ||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Net sales | $ | 90,302 | $ | 92,011 | |||||
Cost of net sales | 59,052 | 51,448 | |||||||
Gross profit | $ | 31,250 | $ | 40,563 |
BASIS_OF_PRESENTATION_AND_LIQU1
BASIS OF PRESENTATION AND LIQUIDITY (Narrative) (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
BASIS OF PRESENTATION AND LIQUIDITY [Abstract] | ||||
Net losses | ($30,264) | ($22,721) | ($34,385) | |
Net cash outflows from operations | 15,612 | 1,915 | 25,618 | |
Cash and cash equivalents [Line Items] | ||||
Cash and cash equivalents | 77,824 | 107,773 | 179,584 | 301,626 |
Accumulated deficit | 1,206,286 | 1,176,022 | ||
Subsidiaries [Member] | China [Member] | ||||
Cash and cash equivalents [Line Items] | ||||
Cash and cash equivalents | 14,500 | 11,500 | ||
Accumulated deficit | $0 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cash and Cash Equivalents and Restricted Cash - Narrative) (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $77,824,000 | $107,773,000 | $179,584,000 | $301,626,000 |
Restricted Cash: | ||||
Short-term restricted cash | 13,731,000 | 9,822,000 | ||
Long-term restricted cash | 3,400,000 | 4,900,000 | ||
Subsidiaries [Member] | U.S. [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents (as a percent) | 29.00% | |||
Cash and cash equivalents | 22,500,000 | |||
Subsidiaries [Member] | China [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents (as a percent) | 19.00% | |||
Cash and cash equivalents | $14,500,000 | $11,500,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Revenue Recognition - Narrative) (Details) (USD $) | 12 Months Ended | 4 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Aug. 31, 2012 | Dec. 31, 2011 | |
Revenue Recognition [Line Items] | ||||||
Deferred revenue | $11,700,000 | $10,200,000 | $9,800,000 | $9,800,000 | ||
Deferred service costs related to unassigned contracts | 5,700,000 | 5,300,000 | 6,100,000 | 6,100,000 | ||
Revenues relating to unassigned contracts | 129,420,000 | 164,439,000 | 186,728,000 | |||
Current deferred revenue | 26,819,000 | 29,093,000 | ||||
Long-term deferred revenue | 18,304,000 | 35,251,000 | ||||
IPTV operations [Member] | ||||||
Revenue Recognition [Line Items] | ||||||
Deferred revenue | 5,100,000 | 5,100,000 | 10,000,000 | |||
Deferred service costs related to unassigned contracts | 22,700,000 | |||||
Liabilities and deferred costs related to un-assigned contracts | 21,500,000 | 47,300,000 | ||||
Revenues relating to unassigned contracts | 4,300,000 | 1,400,000 | 29,500,000 | 2,200,000 | ||
PAS infrastructure contracts [Member] | ||||||
Revenue Recognition [Line Items] | ||||||
Deferred revenue | 13,200,000 | |||||
Deferred revenue released | $8,100,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Product Warranty - Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Product Warranty: | |||
Warranty accrual reversals | $0.10 | $0.10 | $0.30 |
Minimum [Member] | |||
Product Warranty: | |||
Warranty period | 1 year | ||
Period after sales to provide limited warranty services | 2 years | ||
Maximum [Member] | |||
Product Warranty: | |||
Warranty period | 2 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Useful Lives of Property, Plant and Equipment) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $2.90 | $5.40 | $4.40 |
Hangzhou office [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Accelerated amortization due to early termination | 0.2 | ||
Furniture, test or manufacturing equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives | 5 years | ||
Computers and software [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives | 2 years | ||
Computers and software [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives | 3 years | ||
Automobiles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives | 5 years | ||
Leasehold improvements [Member] | Beijing and Hangzhou offices [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Accelerated amortization due to early termination | 2 | ||
Leasehold improvements [Member] | Beijing office [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Accelerated amortization due to early termination | $0.90 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Goodwill and Intangible Assets, Other than Temporary Impairment on Investment, Advertising Costs, Third Party Commissions and Foreign Currency Translation - Narrative) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | item | ||
Goodwill and Intangible Assets | |||
Amortization of intangible assets | $516,000 | ||
Other than Temporary Impairment on Investment | |||
Investment impairment | 3,947,000 | 9,400,000 | 3,043,000 |
Advertising Costs | |||
Advertising costs | 100,000 | 100,000 | 200,000 |
Foreign Currency Translation | |||
Less: Gain (loss) reclassified from AOCI to income | 121,000 | -7,088,000 | |
Number of chinese entities | 3 | 2 | |
Gain (loss) on foreign currency translation | ($586,000) | $3,856,000 | ($4,675,000) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Changes in AOCI, including the Amounts Reclassified to Income) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 14, 2014 | Sep. 30, 2014 | |
item | item | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Beginning balance | $65,862,000 | $79,621,000 | |||
Loss recorded in other comprehensive loss | -2,902,000 | -6,671,000 | -3,272,000 | ||
Unrealized gain from available-for-sale investments | 673,000 | ||||
Less: Gain (loss) reclassified from AOCI to income | 121,000 | -7,088,000 | |||
Ending balance | 63,754,000 | 65,862,000 | 79,621,000 | ||
Number of chinese entities | 3 | 2 | |||
Fair value of investment | 50,499,000 | 53,971,000 | |||
Investment | 59,799,000 | 74,588,000 | |||
Convertible Bond [Member] | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Fair value of investment | 40,200,000 | 45,971,000 | |||
UTStarcom Hong Kong Holdings Ltd. [Member] | Convertible Bond [Member] | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Fair value of investment | 20,200,000 | ||||
Cost method investment [Member] | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Investment | 2,371,000 | 6,081,000 | |||
Cost method investment [Member] | Cortina [Member] | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Realized loss on disposal | 1,500,000 | ||||
Investment, ownership interest (as a percent) | 1.00% | ||||
Investment | 3,348,000 | ||||
Available-for-sale securities [Member] | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Investment | 48,200,000 | 53,971,000 | |||
Available-for-sale securities [Member] | Inphi Corporation [Member] | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Unrealized gain from available-for-sale investments | 500,000 | ||||
Number of shares received in exchange for investment | 124,395 | ||||
Fair value of investment | 2,300,000 | ||||
Available-for-sale securities [Member] | UTStarcom Hong Kong Holdings Ltd. [Member] | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Investment | 20,200,000 | 20,000,000 | |||
Available-for-sale securities [Member] | UTStarcom Hong Kong Holdings Ltd. [Member] | Convertible Bond [Member] | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Unrealized gain from available-for-sale investments | 200,000 | ||||
Fair value of investment | 20,200,000 | ||||
Investment | $20,000,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Summary of the Total Potential Ordinary Shares that were Excluded from the Diluted Per Share Calculation) (Details) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Antidilutive securities excluded from computation of earnings per share [Line Items] | ||||||
Antidilutive securities (in shares) | 1,784 | [1] | 1,734 | [1] | 2,002 | [1] |
Anti-dilutive stock options and awards/units outstanding [Member] | ||||||
Antidilutive securities excluded from computation of earnings per share [Line Items] | ||||||
Antidilutive securities (in shares) | 1,784 | 1,734 | 2,002 | |||
[1] | Calculated using the treasury stock method, which assumes proceeds are used to reduce the dilutive effect of outstanding stock awards. Assumed proceeds include the unrecognized deferred compensation of share awards, and assumed tax proceeds from excess stock-based compensation deductions. |
DIVESTITURES_Narrative_Details
DIVESTITURES (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 4 Months Ended | 162 Months Ended | 0 Months Ended | 3 Months Ended | |||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2012 | Sep. 30, 2010 | Dec. 31, 2011 | Sep. 17, 2012 | Dec. 31, 2010 | Jun. 30, 2010 | Dec. 31, 2013 | Mar. 31, 2013 | Jun. 30, 2012 | Dec. 31, 2011 | Mar. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2010 | Dec. 31, 2012 | Jun. 30, 2013 | Apr. 07, 2015 | Mar. 22, 2013 | Sep. 30, 2013 | |
Divestitures [Line Items] | |||||||||||||||||||||
Gain (loss) recorded on divestiture | ($1,307,000) | ($16,239,000) | |||||||||||||||||||
Amount of obligations paid | 503,000 | 56,010,000 | |||||||||||||||||||
Payment of unpaid balance related to divestiture | 804,000 | 2,369,000 | |||||||||||||||||||
Deferred service costs related to unassigned contracts | 5,700,000 | 5,300,000 | 6,100,000 | 5,300,000 | 6,100,000 | ||||||||||||||||
Revenues recognized | 129,420,000 | 164,439,000 | 186,728,000 | ||||||||||||||||||
Par value of shares (in Hong Kong dollars per share) | $0.00 | $0.00 | $0.00 | ||||||||||||||||||
UTStarcom Hong Kong Holdings Ltd. [Member] | UTStarcom Hong Kong Ltd. [Member] | Convertible Bond [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Interest rate of debt securities (as a percent) | 6.50% | 6.50% | |||||||||||||||||||
Principal amount of debt securities to be converted if P&L run-rate break-even is achieved on or prior to the Maturity Date | 5,000,000 | ||||||||||||||||||||
Percentage of outstanding shares to be issued on conversion if P&L run-rate break-even is achieved on or prior to the Maturity Date | 8.00% | ||||||||||||||||||||
UTStarcom Hong Kong Holdings Ltd. [Member] | UTStarcom Hong Kong Ltd. [Member] | Convertible Bond [Member] | Minimum [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Percentage of outstanding shares to be issued on conversion at the Maturity Date | 25.00% | ||||||||||||||||||||
UTStarcom Hong Kong Holdings Ltd. [Member] | UTStarcom Hong Kong Ltd. [Member] | Convertible Bond [Member] | Maximum [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Percentage of outstanding shares to be issued on conversion at the Maturity Date | 33.00% | ||||||||||||||||||||
China PDSN Assets [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Gain (loss) recorded on divestiture | 800,000 | 1,600,000 | 4,300,000 | ||||||||||||||||||
China PDSN Assets [Member] | Minimum [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Reassessment period | 1 year | ||||||||||||||||||||
EMEA Operations [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Gain (loss) recorded on divestiture | -900,000 | ||||||||||||||||||||
Amount of obligations paid | 600,000 | 700,000 | |||||||||||||||||||
Amount of obligations remaining in accrual balance | 1,000,000 | 1,000,000 | |||||||||||||||||||
IP Messaging and US PDSN Assets [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Net liabilities transferred in connection with divestiture | 1,700,000 | ||||||||||||||||||||
Cash proceeds | 400,000 | ||||||||||||||||||||
Gain (loss) recorded on divestiture, after tax | 2,100,000 | ||||||||||||||||||||
IP Messaging and US PDSN Assets [Member] | Maximum [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Potential additional contingent consideration | 1,600,000 | ||||||||||||||||||||
IP Messaging and US PDSN Assets [Member] | Contingent consideration [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Gain (loss) recorded on divestiture | 900,000 | 100,000 | 200,000 | 200,000 | 900,000 | ||||||||||||||||
Cash proceeds | 100,000 | 100,000 | 200,000 | 200,000 | 900,000 | 900,000 | |||||||||||||||
IPTV operations [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Gain (loss) recorded on divestiture | -17,500,000 | 100,000 | |||||||||||||||||||
Amount of obligations remaining in accrual balance | 600,000 | 600,000 | |||||||||||||||||||
Amount of consideration paid by the Company upon divestiture | 30,000,000 | ||||||||||||||||||||
Liabilities transferred in connection with divestiture | 74,100,000 | ||||||||||||||||||||
Loss related to severance liabilities for termination of employees or transfer of employees to the buyer | 13,400,000 | ||||||||||||||||||||
Loss related to write-off of assets not transferred to the buyer | 3,800,000 | ||||||||||||||||||||
Transaction costs | 1,700,000 | ||||||||||||||||||||
Payment of unpaid balance related to divestiture | 500,000 | ||||||||||||||||||||
Gain from the net liability release | 1,500,000 | ||||||||||||||||||||
Deferred service costs related to unassigned contracts | 22,700,000 | ||||||||||||||||||||
Revenues recognized | 4,300,000 | 1,400,000 | 29,500,000 | 2,200,000 | |||||||||||||||||
Liabilities and deferred costs related to un-assigned contracts | 21,500,000 | 47,300,000 | |||||||||||||||||||
IPTV operations [Member] | UTStarcom Hong Kong Holdings Ltd. [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Gain (loss) recorded on divestiture | 17,500,000 | ||||||||||||||||||||
IPTV operations [Member] | UTStarcom Hong Kong Holdings Ltd. [Member] | Subsequent Events [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Ownership interest upon conversion of preference shares and convertible bonds | 14.00% | ||||||||||||||||||||
IPTV operations [Member] | UTStarcom Hong Kong Holdings Ltd. [Member] | Subsequent Events [Member] | Common Stock [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Convertible Bond converted to ordinary shares | 14 | ||||||||||||||||||||
IPTV operations [Member] | UTStarcom Hong Kong Holdings Ltd. [Member] | Convertible Bond [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Amount invested | 20,000,000 | ||||||||||||||||||||
IPTV operations [Member] | UTStarcom Hong Kong Holdings Ltd. [Member] | Convertible Bond [Member] | Subsequent Events [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Face amount of convertible debt | 20,000,000 | ||||||||||||||||||||
Cash proceeds from partial payment of the principal of the Convertible Bond | 10,000,000 | ||||||||||||||||||||
Ownership interest upon conversion of preference shares and convertible bonds | 14.00% | ||||||||||||||||||||
IPTV operations [Member] | Current assets [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Assets transferred in connection with divestiture | 41,400,000 | ||||||||||||||||||||
IPTV operations [Member] | Property, plant and equipment and other long term assets [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Assets transferred in connection with divestiture | 1,200,000 | ||||||||||||||||||||
NGN operations [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Gain (loss) recorded on divestiture | 3,200,000 | ||||||||||||||||||||
Divestiture loss related to on-going performance cost for the assigned contracts | 2,700,000 | ||||||||||||||||||||
Divestiture loss related to severance cost | 500,000 | ||||||||||||||||||||
DOCSIS-EOC product line [Member] | |||||||||||||||||||||
Divestitures [Line Items] | |||||||||||||||||||||
Cash proceeds | $1,800,000 | $1,800,000 | $1,800,000 |
DIVESTITURES_Schedule_of_liabi
DIVESTITURES (Schedule of liabilities and assets related to un-assigned contracts) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2012 |
In Millions, unless otherwise specified | ||||
Divestitures [Line Items] | ||||
Deferred revenue | $11.70 | $10.20 | $9.80 | |
Prepaid contract service costs to buyer | 5.7 | 5.3 | 6.1 | |
IPTV operations [Member] | ||||
Divestitures [Line Items] | ||||
Deferred revenue | 5.1 | 10 | ||
Customer advances | 37.3 | |||
Total liabilities associated with the unassigned IPTV contracts | 21.5 | 47.3 | ||
Deferred contract costs | 24.6 | |||
Prepaid contract service costs to buyer | 22.7 | |||
Total assets associated with the un-assigned IPTV contracts | $47.30 |
COMPREHENSIVE_LOSS_Schedule_of
COMPREHENSIVE LOSS (Schedule of Total Comprehensive Income (Loss)) (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
COMPREHENSIVE LOSS | ||||||
Net loss | ($30,264) | ($22,730) | ($35,579) | |||
Other comprehensive loss | ||||||
Unrealized gain from available-for-sale investments | 673 | |||||
Net change in cumulative translation adjustment | -2,781 | -13,759 | -3,272 | |||
Comprehensive loss | -32,372 | -36,489 | -38,851 | |||
Comprehensive loss attributable to non-controlling interests | [1] | 9 | [1] | 1,194 | [1] | |
Comprehensive loss attributable to UTStarcom Holding Corp. | ($32,372) | ($36,480) | ($37,657) | |||
[1] | Comprehensive loss attributable to non-controlling interests consisted solely of net loss. |
COMPREHENSIVE_LOSS_Schedule_of1
COMPREHENSIVE LOSS (Schedule of Changes in Noncontrolling Interests) (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Changes in noncontrolling interests | ||||||
Balance at beginning of period | $814 | $6,401 | ||||
Comprehensive loss attributable to non-controlling interests | [1] | -9 | [1] | -1,194 | [1] | |
Non-controlling interests reduction from deconsolidation | -805 | -4,393 | ||||
Balance at end of period | $814 | |||||
[1] | Comprehensive loss attributable to non-controlling interests consisted solely of net loss. |
BALANCE_SHEET_DETAILS_Schedule
BALANCE SHEET DETAILS (Schedule of Inventories) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Inventories: | ||||
Raw materials | $4,127,000 | $3,225,000 | ||
Work in process | 3,952,000 | 1,344,000 | ||
Finished goods | 12,580,000 | [1] | 18,786,000 | [1] |
Total Inventory | 20,659,000 | 23,355,000 | ||
Finished goods at customer sites | $11,600,000 | $14,700,000 | ||
[1] | Includes finished goods at customer sites of approximately $11.6 million and $14.7 million at December 31, 2014 and 2013, respectively, for which the customer has taken possession, but based on specific contractual terms, title has not yet passed to the customer and for which revenue has not yet been recognized. |
BALANCE_SHEET_DETAILS_Schedule1
BALANCE SHEET DETAILS (Schedule of Prepaid and Other Current Assets) (Details) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | Aug. 31, 2014 | Jul. 31, 2014 | ||||
Prepaids and other current assets | |||||||||
Prepaid tax | $4,323,000 | $4,323,000 | $4,894,000 | ||||||
Advance to suppliers | 1,944,000 | 1,944,000 | 223,000 | ||||||
Deferred taxes-current | 3,668,000 | 3,668,000 | 3,534,000 | ||||||
Other receivable | 4,413,000 | [1] | 4,413,000 | [1] | 8,579,000 | [1] | |||
Prepaid others | 4,989,000 | 4,989,000 | 4,322,000 | ||||||
Total Prepaids and other current assets | 19,337,000 | 19,337,000 | 21,552,000 | ||||||
Other receivables [Line Items] | |||||||||
Amount of other receivable expects to be collected | 2,000,000 | ||||||||
ESA Cultural Investment (Hong Kong) limited [Member] | |||||||||
Other receivables [Line Items] | |||||||||
Proceeds from loan payments | 2,000,000 | 800,000 | 5,600,000 | ||||||
Loan amount reseved due to collectability risk | 2,800,000 | 2,800,000 | |||||||
Loan receivable | 5,600,000 | ||||||||
Amount drawn | 800,000 | 4,000,000 | |||||||
Percentage of loan receivable on extended maturity date | 50.00% | ||||||||
Loan receivable on extended maturity date | 2,800,000 | 2,800,000 | |||||||
Interest rate of debt securities (as a percent) | 20.00% | ||||||||
UiTV Media Inc [Member] | |||||||||
Other receivables [Line Items] | |||||||||
Amount paid to equity method investee | $1,800,000 | $1,080,000 | |||||||
[1] | The other receivable balance includes loans of approximately $2.0 million and $5.6 million as of December 31, 2014 and December 31, 2013, respectively, made to ESA Cultural Investment (Hong Kong) limited (bborrowerb or ESA), a movie investment company with its operations located in Beijing. The Company signed the loan agreement for a total amount of $5.6 million in the fourth quarter of 2012, and $4.0 million was drawdown in the fourth quarter of 2012 with the remaining in the first quarter of 2013. The loan bears interest at 20% per annum and originally matured on December 31, 2013, with a subsequently extended maturity date on 50% of the loan, or $2.8 million, to June 30, 2014, and the other half extended to December 31, 2014. In the fourth quarter of 2014, the Company received $0.8 million against the principal of the outstanding entrusted loan amount. The Company has performed an assessment on the need for a valuation reserve due to collectability risk and $2.8 million was reserved as of December 31, 2014 as the collection term was due. The management expects to collect the remaining $2.0 million balance in the second quarter of 2015. |
BALANCE_SHEET_DETAILS_Schedule2
BALANCE SHEET DETAILS (Schedule of Property, Plant and Equipment, Net) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, plant and equipment, net: [Line Items] | |||
Total | $59,872,000 | $68,507,000 | |
Less: accumulated depreciation | -56,835,000 | -63,736,000 | |
Total Property, plant and equipment, net | 3,037,000 | 4,771,000 | |
Write off of fully depreciated property, plant and equipment | 7,300,000 | 41,700,000 | 45,300,000 |
Accumulated depreciation related to write off of fully depreciated property, plant and equipment | 7,300,000 | 41,700,000 | 45,300,000 |
Hangzhou facility [Member] | |||
Property, plant and equipment, net: [Line Items] | |||
Accelerated depreciation | 1,700,000 | ||
IPTV divestiture [Member] | |||
Property, plant and equipment, net: [Line Items] | |||
Derecognized amount of property, plant and equipment | 9,100,000 | ||
Accumulated depreciation related to derecognized amount of property, plant and equipment | 8,200,000 | ||
UiTV deconsolidation [Member] | |||
Property, plant and equipment, net: [Line Items] | |||
Derecognized amount of property, plant and equipment | 2,000,000 | ||
Accumulated depreciation related to derecognized amount of property, plant and equipment | 600,000 | ||
Leasehold improvements [Member] | |||
Property, plant and equipment, net: [Line Items] | |||
Total | 5,290,000 | 6,009,000 | |
Leasehold improvements [Member] | Hangzhou facility [Member] | |||
Property, plant and equipment, net: [Line Items] | |||
Accelerated depreciation | 200,000 | 300,000 | |
Accelerated amortization due to early termination | 900,000 | ||
Automobiles [Member] | |||
Property, plant and equipment, net: [Line Items] | |||
Total | 2,077,000 | 2,129,000 | |
Software [Member] | |||
Property, plant and equipment, net: [Line Items] | |||
Total | 6,505,000 | 7,191,000 | |
Computer, Equipment and Furniture [Member] | |||
Property, plant and equipment, net: [Line Items] | |||
Total | 45,981,000 | 53,085,000 | |
Others [Member] | |||
Property, plant and equipment, net: [Line Items] | |||
Total | $19,000 | $93,000 |
BALANCE_SHEET_DETAILS_Schedule3
BALANCE SHEET DETAILS (Schedule of Other Current Liabilities) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other current liabilities: | ||
Accrued contract costs | $3,638 | $3,175 |
Accrued payroll and compensation | 4,705 | 8,136 |
Warranty costs | 217 | 617 |
Accrued professional fees | 816 | 1,946 |
Accrued other taxes | 2,495 | 2,722 |
Other | 3,592 | 5,834 |
Total other current liabilities | $15,463 | $22,430 |
BALANCE_SHEET_DETAILS_Schedule4
BALANCE SHEET DETAILS (Schedule of Other Long-term Liabilities) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other long-term liabilities | ||
Non current income tax payable | $14,048 | $13,606 |
Non current deferred tax liability | 46 | 37 |
Non current deferred rent | 169 | 475 |
Others | 1,753 | 2,668 |
Total other long-term liabilities | $16,016 | $16,786 |
CASH_CASH_EQUIVALENTS_AND_SHOR2
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Short-term Investments - Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Available-for-sale securities | 2,300,000 | |
Notes Payable to Bank, Current | ||
Bank notes | 2,299,000 | |
China [Member] | Minimum [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Maturity period of bank notes receivable | 3 months | |
China [Member] | Maximum [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Maturity period of bank notes receivable | 6 months |
CASH_CASH_EQUIVALENTS_AND_SHOR3
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Schedule of Total Long-term Investments) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | $59,799 | $74,588 |
Cost Method [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | 2,371 | 6,081 |
Cost Method [Member] | Cortina [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | 3,348 | |
Cost Method [Member] | GCT Semiconductor, Inc. [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | 811 | 811 |
Cost Method [Member] | Xalted Networks [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | 22 | |
Cost Method [Member] | SBI [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | 1,560 | 1,900 |
Equity Method [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | 9,228 | 14,536 |
Equity Method [Member] | UiTV Media Inc [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | 5,308 | |
Equity Method [Member] | ACELAND [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | 2,109 | 2,109 |
Equity Method [Member] | Shareholder Loan to ACELAND [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | 7,119 | 7,119 |
Available for sale [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | 48,200 | 53,971 |
Available for sale [Member] | UiTV Media Inc [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | 20,000 | 25,971 |
Available for sale [Member] | AioTV [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | 8,000 | 8,000 |
Available for sale [Member] | UTStarcom Hong Kong Holdings Ltd. [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||
Long-term investments | $20,200 | $20,000 |
CASH_CASH_EQUIVALENTS_AND_SHOR4
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Long-term Investments - Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Nov. 14, 2014 | Sep. 30, 2014 | Mar. 31, 2007 | Dec. 31, 2008 | Oct. 31, 2004 | Dec. 31, 2012 | Mar. 31, 2006 | Aug. 31, 2005 | 31-May-05 | Sep. 30, 2012 | Dec. 31, 2011 | Sep. 30, 2009 | Dec. 31, 2014 | Mar. 31, 2011 | Mar. 31, 2010 | Sep. 30, 2004 | Feb. 28, 2015 | Jun. 30, 2011 | |
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||||||||||||||
Per share price of investment | $2.83 | $2.83 | ||||||||||||||||||
Fair value of investment | $50,499,000 | 53,971,000 | $50,499,000 | |||||||||||||||||
Unrealized gain from available-for-sale investments | 673,000 | |||||||||||||||||||
Xalted Networks [Member] | Maximum [Member] | ||||||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||||||||||||||
Investment, ownership interest (as a percent) | 10.00% | 10.00% | ||||||||||||||||||
Cortina [Member] | Cost method investment [Member] | ||||||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||||||||||||||
Investment, ownership interest (as a percent) | 1.00% | |||||||||||||||||||
Realized loss on disposal | 1,500,000 | |||||||||||||||||||
Cortina [Member] | Cost method investment [Member] | Series D preferred convertible stock [Member] | ||||||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||||||||||||||
Shares received in exchange for investment | 3,600,000 | 400,000 | ||||||||||||||||||
Per share price of investment | $0.84 | $0.84 | ||||||||||||||||||
Investment, ownership interest (as a percent) | 1.00% | |||||||||||||||||||
GCT SemiConductor, Inc. [Member] | Cost method investment [Member] | Series D preferred convertible stock [Member] | ||||||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||||||||||||||
Payments to acquire investments | 3,000,000 | |||||||||||||||||||
Other-than-temporary impairment charge | 2,200,000 | |||||||||||||||||||
Xalted Networks [Member] | Cost method investment [Member] | ||||||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||||||||||||||
Payments to acquire investments | 300,000 | 1,000,000 | 2,000,000 | |||||||||||||||||
Other-than-temporary impairment charge | 300,000 | 800,000 | 500,000 | 1,700,000 | ||||||||||||||||
SBI [Member] | Cost method investment [Member] | ||||||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||||||||||||||
Payments to acquire investments | 500,000 | 600,000 | 700,000 | 700,000 | ||||||||||||||||
Investment, ownership interest (as a percent) | 2.00% | 2.00% | 2.00% | |||||||||||||||||
Cash received from investment which was recorded as a reduction to offset the investment | 100,000 | |||||||||||||||||||
ImmenStar, Inc. [Member] | Cost method investment [Member] | Series A preferred stock [Member] | ||||||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||||||||||||||
Payments to acquire investments | 2,000,000 | |||||||||||||||||||
Cash received in exchange for investment | 1,800,000 | 200,000 | ||||||||||||||||||
Kranem Corporation [Member] | Xalted Networks [Member] | ||||||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||||||||||||||
Issued and outstanding stock ownership percentage | 35.00% | |||||||||||||||||||
Kranem Corporation [Member] | Cost method investment [Member] | ||||||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||||||||||||||
Other-than-temporary impairment charge | 20,000 | |||||||||||||||||||
Inphi Corporation [Member] | Available for sale [Member] | ||||||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||||||||||||||
Shares received in exchange for investment | 124,395 | |||||||||||||||||||
Fair value of investment | 2,300,000 | 2,300,000 | ||||||||||||||||||
Unrealized gain from available-for-sale investments | 500,000 | |||||||||||||||||||
Inphi Corporation [Member] | Available for sale [Member] | Subsequent event [Member] | ||||||||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||||||||||||||
Cash received in exchange for investment | $2,400,000 | |||||||||||||||||||
Shares of investment classified as available-for-sale securities sold | 124,395 |
CASH_CASH_EQUIVALENTS_AND_SHOR5
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Schedule of Significant Inputs for the Valuation Model used to Estimate Fair Value of Investments - AioTV Inc.) (Details) (AioTV [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
AioTV [Member] | |
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |
Total fair value of invested capital as at valuation date | $11,954 |
Risk free rate of interest (as a percent) | 1.70% |
Dividend yield (as a percent) | 0.00% |
Volatility (as a percent) | 55.50% |
Discount rate (as a percent) | 32.00% |
CASH_CASH_EQUIVALENTS_AND_SHOR6
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Equity Method Investments - Narrative) (Details) (USD $) | 12 Months Ended | 1 Months Ended | 3 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Jun. 30, 2011 | ||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||
Gain (loss) recognized on initial investment | ($2,788,000) | [1] | [1] | [1] | ||||
ACELAND [Member] | ||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||
Payments to acquire interest in joint venture | 2,100,000 | |||||||
Contribution of equity investment through a shareholder loan | $7,100,000 | |||||||
Equity method investment, ownership interest (as a percent) | 35.00% | |||||||
ACELAND [Member] | Wireless City Planning [Member] | ||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | ||||||||
Equity method investment, ownership interest (as a percent) | 5.82% | |||||||
[1] | The Company signed the loan agreement to for a total amount of $5.6 million in the fourth quarter of 2012, $4.0 million was drawdown in the fourth quarter of 2012 and the remaining in the first quarter of 2013. The loan bears interest at 20% per annum and originally matured on December 31, 2013, with subsequently extended the maturity date on 50% of the loan, or $2.8 million, to June 30, 2014, and the other half extended to December 31, 2014. In the fourth quarter of 2014, the Company received $0.8 million. The Company has performed an assessment on the need for a valuation reserve and $2.8 million was charged as impairment in other expenses in 2014 as the collection term was due. The management expects to collect the remaining $2.0 million balance in the second quarter of 2015. |
CASH_CASH_EQUIVALENTS_AND_SHOR7
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Available-for-sale Securities - Narrative) (Details) (USD $) | 12 Months Ended | 162 Months Ended | 0 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | Nov. 30, 2012 | Apr. 07, 2015 | Aug. 31, 2012 | |
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Per share price of investment | $2.83 | ||||||
Impairment charge | $3,947,000 | $9,400,000 | $3,043,000 | ||||
Loss recorded on divestiture | 1,307,000 | 16,239,000 | |||||
Fair value of securities | 50,499,000 | 53,971,000 | |||||
Par value of shares (in Hong Kong dollars per share) | $0.00 | $0.00 | |||||
Convertible Bond [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Fair value of securities | 40,200,000 | 45,971,000 | |||||
IPTV operations [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Amount of consideration paid by the Company upon divestiture | 30,000,000 | ||||||
Loss recorded on divestiture | 17,500,000 | -100,000 | |||||
AioTV [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Equity method investment, ownership interest (as a percent) | 44.00% | ||||||
AioTV [Member] | Series B preferred stock [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Payments to acquire available-for-sale equity securities | 8,000,000 | ||||||
Per share price of investment | $0.32 | ||||||
UTStarcom Hong Kong Holdings Ltd. [Member] | Convertible Bond [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Fair value of securities | 20,200,000 | ||||||
UTStarcom Hong Kong Holdings Ltd. [Member] | IPTV operations [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Loss recorded on divestiture | -17,500,000 | ||||||
UTStarcom Hong Kong Holdings Ltd. [Member] | IPTV operations [Member] | Subsequent Events [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Ownership interest upon conversion of preference shares and convertible bonds | 14.00% | ||||||
UTStarcom Hong Kong Holdings Ltd. [Member] | IPTV operations [Member] | Convertible Bond [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Principal amount of consideration received | 20,000,000 | ||||||
UTStarcom Hong Kong Holdings Ltd. [Member] | IPTV operations [Member] | Convertible Bond [Member] | Subsequent Events [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Face amount of convertible debt | 20,000,000 | ||||||
Cash proceeds from partial payment of the principal of the Convertible Bond | 10,000,000 | ||||||
Ownership interest upon conversion of preference shares and convertible bonds | 14.00% | ||||||
UTStarcom Hong Kong Holdings Ltd. [Member] | Ordinary Shares [Member] | IPTV operations [Member] | Subsequent Events [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Convertible Bond converted to ordinary shares | 14 | ||||||
UTStarcom Hong Kong Holdings Ltd. [Member] | UTStarcom Hong Kong Ltd. [Member] | Convertible Bond [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Interest rate of debt securities (as a percent) | 6.50% | 6.50% | |||||
Principal amount of debt securities to be converted if P&L run-rate break-even is achieved on or prior to the Maturity Date | $5,000,000 | ||||||
Percentage of outstanding shares to be issued on conversion if operating income break-even is achieved on or prior to the Maturity Date | 8.00% | ||||||
Minimum [Member] | UTStarcom Hong Kong Holdings Ltd. [Member] | UTStarcom Hong Kong Ltd. [Member] | Convertible Bond [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Percentage of outstanding shares to be issued on conversion at the Maturity Date | 25.00% | ||||||
Maximum [Member] | UTStarcom Hong Kong Holdings Ltd. [Member] | UTStarcom Hong Kong Ltd. [Member] | Convertible Bond [Member] | |||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |||||||
Percentage of outstanding shares to be issued on conversion at the Maturity Date | 33.00% |
CASH_CASH_EQUIVALENTS_AND_SHOR8
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Schedule of Significant Inputs for the Valuation Model used to Estimate Fair Value of Investments - UTStarcom Hong Kong Ltd.) (Details) (UTStarcom Hong Kong Holdings Ltd. [Member], UTStarcom Hong Kong Ltd. [Member], Convertible Bond [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Binomial-Model [Member] | |
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |
Total fair value of invested capital as at valuation date | $37,000 |
Risk-free interest rate (as a percent) | 1.69% |
Dividend yield (as a percent) | 4.00% |
Volatility rate (as a percent) | 49.00% |
Discounted cash flow model [Member] | |
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS [Line Items] | |
Dividend yield (as a percent) | 4.00% |
Discount rate (as a percent) | 40.00% |
Estimated debt to equity ratio | 1 |
CASH_CASH_EQUIVALENTS_AND_SHOR9
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Acquisition - Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | 162 Months Ended | 0 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 21, 2012 | Dec. 03, 2012 | Dec. 31, 2013 | Jun. 30, 2013 | Nov. 08, 2010 | Apr. 15, 2012 | |
item | |||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |||||||||
Loss from equity method investment | $8,878,000 | $9,586,000 | |||||||
Additions to investment through conversion of outstanding receivables | 7,114,000 | ||||||||
Investment impairment | 3,947,000 | 9,400,000 | 3,043,000 | ||||||
Investment | 59,799,000 | 74,588,000 | 74,588,000 | ||||||
Equity Method [Member] | |||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |||||||||
Investment | 9,228,000 | 14,536,000 | 14,536,000 | ||||||
Series A Preferred Stock [Member] | UiTV Media Inc. or UiTV [Member] | |||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |||||||||
Book value after reduction due to percentage of equity loss pick up | 0 | ||||||||
UiTV Media Inc. or UiTV [Member] | |||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |||||||||
Percentage of shares acquired | 49.00% | 75.00% | |||||||
Number of Board seats held before the repurchase | 3 | ||||||||
Number of Board seats held | 2 | ||||||||
Number of total Board seats | 5 | ||||||||
Equity method investment, ownership interest (as a percent) | 49.00% | ||||||||
Ownership interest upon conversion of preference shares and convertible bonds | 73.00% | 73.00% | |||||||
Number of board members out of 5 members that may be appointed by founder and CEO of investee unless voting interest fall below 10% | 3 | ||||||||
Equity loss pick up (as a percent) | 49.00% | ||||||||
Percentage of losses of VIE that will be recognized by company until convertible bond investment balance has been depleted | 100.00% | ||||||||
UiTV Media Inc. or UiTV [Member] | Equity Method [Member] | |||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |||||||||
Loss from equity method investment | 5,300,000 | 9,600,000 | |||||||
Investment impairment | 2,400,000 | 9,100,000 | |||||||
UiTV Media Inc. or UiTV [Member] | Series A Preferred Stock [Member] | |||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |||||||||
Amount invested | 20,000,000 | 20,000,000 | |||||||
UiTV Media Inc. or UiTV [Member] | Convertible Bond [Member] | |||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |||||||||
Interest rate of debt securities (as a percent) | 6.50% | ||||||||
Principal amount of consideration received | 3,000,000 | ||||||||
Loss from equity method investment | 3,600,000 | ||||||||
Amount invested | 35,100,000 | 35,100,000 | |||||||
UiTV Media Inc. or UiTV [Member] | Convertible Bond [Member] | Equity Method [Member] | |||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |||||||||
Principal amount of consideration received | 12,100,000 | 15,000,000 | |||||||
Cash paid to acquire investment | 5,000,000 | ||||||||
Additions to investment through conversion of outstanding receivables | 7,100,000 | ||||||||
Amount invested | 20,000,000 | ||||||||
Investment impairment | 3,600,000 | ||||||||
UiTV Media Inc. or UiTV [Member] | Convertible Bond [Member] | Maximum [Member] | |||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |||||||||
Price per share of qualified financing as a percentage of per share price used to determine conversion of debt securities | 85.00% | ||||||||
UiTV Media Inc. or UiTV [Member] | Series A Preference Shares [Member] | |||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |||||||||
Number of shares purchased | 9,600,000 | ||||||||
Aggregate cash consideration | 20,000,000 | ||||||||
Repurchase of ordinary shares from iTV shareholder (in shares) | 1,491,091 | ||||||||
UiTV Media Inc. or UiTV [Member] | Smart Frontier [Member] | Ordinary Shares [Member] | |||||||||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |||||||||
Number of shares purchased | 5,100,000 | ||||||||
Aggregate purchase price | 10,000,000 | ||||||||
Percentage of shares acquired | 51.00% | ||||||||
Fair value of shares issued | $9,800,000 | ||||||||
Number of shares of acquiree transferred back | 5,100,000 | ||||||||
Repurchase of ordinary shares from iTV shareholder (in shares) | 1,491,091 |
Recovered_Sheet1
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Schedule of Significant Inputs for the Valuation Model used to Estimate Fair Value of Investments - UiTV Media Inc. or UiTV) (Details) (UiTV Media Inc. or UiTV [Member], Convertible Bond [Member], Equity Method [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
UiTV Media Inc. or UiTV [Member] | Convertible Bond [Member] | Equity Method [Member] | |
Significant inputs for the valuation model used to estimate fair value of investments | |
Total fair value of invested capital as at valuation date | $20,000 |
Discount rate (as a percent) | 40.00% |
Recovered_Sheet2
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Summary of Condensed Financial Information) (Details) (UiTV Media Inc. or UiTV [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
UiTV Media Inc. or UiTV [Member] | |||
Operating data: | |||
Revenue | $7,460 | $1,984 | $165 |
Gross profit | -116 | -3,164 | -1,835 |
Loss from operations | -12,087 | -16,354 | -13,210 |
Net loss | -15,469 | -18,170 | -13,460 |
Net loss attributable to UTStarcom Holdings Corp. | -13,744 | -15,942 | -12,797 |
Balance sheet data: | |||
Current assets | 6,582 | 8,712 | 4,849 |
Long-term assets | 10,062 | 37,538 | 30,151 |
Current liabilities | -48,759 | -1,384 | -5,325 |
Long-term liabilities | -1,240 | -56,047 | -23,371 |
Non-controlling interests | $4,570 | $2,822 | $584 |
Recovered_Sheet3
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Summary of Available-for-sale Investments) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Available-for-sale investments [Line Items] | ||
Cost | $55,797 | $63,113 |
Impairment charges and equity losses | 5,971 | 9,142 |
Unrealized gain | 673 | |
Estimated fair value | 50,499 | 53,971 |
Securities of Public Company [Member] | ||
Available-for-sale investments [Line Items] | ||
Cost | 1,826 | |
Impairment charges and equity losses | ||
Unrealized gain | 473 | |
Estimated fair value | 2,299 | |
Convertible bonds of privately-held company [Member] | ||
Available-for-sale investments [Line Items] | ||
Cost | 45,971 | 55,113 |
Impairment charges and equity losses | 5,971 | 9,142 |
Unrealized gain | 200 | |
Estimated fair value | 40,200 | 45,971 |
Preferred convertible shares of privately-held company [Member] | ||
Available-for-sale investments [Line Items] | ||
Cost | 8,000 | 8,000 |
Impairment charges and equity losses | ||
Unrealized gain | ||
Estimated fair value | $8,000 | $8,000 |
Recovered_Sheet4
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Schedule of Financial Assets Measured and Recognized at Fair Value on a Recurring Basis and Classified under the Appropriate Level of the Fair Value Hierarchy) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | ||
Long-term investments | $59,799 | $74,588 |
Recurring [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | ||
Short-term investments | 2,299 | |
Long-term investments | 48,200 | 53,971 |
Level 1 [Member] | Recurring [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | ||
Short-term investments | 2,299 | |
Long-term investments | ||
Level 2 [Member] | Recurring [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | ||
Short-term investments | ||
Long-term investments | ||
Level 3 [Member] | Recurring [Member] | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | ||
Short-term investments | ||
Long-term investments | $48,200 | $53,971 |
Recovered_Sheet5
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Schedule of Changes in Financial Assets using Unobservable Inputs (Level 3)) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in financial assets using unobservable inputs (Level 3) | |||
Less: Impairment Charges | ($3,947) | ($9,400) | ($3,043) |
Level 3 [Member] | |||
Changes in financial assets using unobservable inputs (Level 3) | |||
Investments in financial assets | 53,971 | 31,000 | |
Less: Share of loss from Associates | -3,570 | ||
Less: Impairment Charges | -2,401 | -9,142 | |
Add: Unrealized gain | 200 | ||
Investments in financial assets | 48,200 | 53,971 | |
Level 3 [Member] | Convertible Bond [Member] | |||
Changes in financial assets using unobservable inputs (Level 3) | |||
Investments in financial assets | 32,113 | ||
Nonrecurring [Member] | Equity securities [Member] | Privately-held companies [Member] | |||
Changes in financial assets using unobservable inputs (Level 3) | |||
Investments in financial assets | $11,600 | $20,600 |
WARRANTY_OBLIGATIONS_AND_OTHER2
WARRANTY OBLIGATIONS AND OTHER GUARANTEES (Summary of the Activity Related to Warranty Obligations) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
WARRANTY OBLIGATIONS AND OTHER GUARANTEES [Abstract] | |||
Standard product warranty term, minimum | 1 year | ||
Standard product warranty term, maximum | 2 years | ||
Limited warranty services term, minimum | 2 years | ||
Activity related to warranty obligations | |||
Balance at the beginning of the period | $617 | $1,329 | $4,660 |
Accruals for warranties issued during the period (benefit from expirations), net | -250 | -473 | 2,039 |
Warranty reserve derecognized upon IPTV divestiture | -2,507 | ||
Settlements made during the period | -150 | -239 | -2,863 |
Balance at the end of the period | $217 | $617 | $1,329 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Schedule of Future Minimum Lease Payments Under All Non-cancelable Operating Leases With Initial Term In Excess of One Year) (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Leases | ||||
2015 | $2,455,000 | |||
2016 | 1,304,000 | |||
2017 | ||||
2018 | ||||
2019 | ||||
Thereafter | ||||
Future minimum lease payments | 3,759,000 | |||
Rent expense | ||||
Rent expense | 1,800,000 | 2,400,000 | 6,300,000 | |
Revenue recognized related to security agreements | 0 | 0 | 0 | |
Deferred revenue related to contracts covered by security agreements | 11,700,000 | 10,200,000 | 9,800,000 | |
Deferred costs related to contracts covered by security agreements | 5,700,000 | 5,300,000 | 6,100,000 | |
Letter of credit: | ||||
Outstanding letters of credit | 17,100,000 | |||
Outstanding purchase commitments, including agreements that are non-cancelable and cancelable without penalty | 29,200,000 | |||
Intellectual Property | ||||
Claims made for valid enforceable IP | 0 | |||
Uncertain Tax Positions | ||||
Gross unrecognized tax benefits | 45,382,000 | 45,430,000 | 54,012,000 | 55,650,000 |
Unrecognized tax benefits that would impact the annual effective tax rate if recognized | 10,185,000 | 10,019,000 | 12,298,000 | |
Unrecognized tax benefits related to deferred tax assets and federal tax benefit of state income tax items | $35,200,000 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) (Governmental Investigations [Member], USD $) | 0 Months Ended | 1 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2009 | Dec. 31, 2005 |
item | ||
Commitments and contingencies [Line Items] | ||
Number of aspects of the DOJ investigation requiring the production of documents | 1 | |
Consent executed to judgment in favor of SEC as a part of the resolution of investigations | $1.50 | |
Additional amount paid under the non-prosecution agreement entered into with the DOJ | $1.50 | |
Period for which the company agreed to undertake reporting obligation under the non-prosecution agreement entered into with the DOJ | 3 years | |
Maximum [Member] | ||
Commitments and contingencies [Line Items] | ||
Maximum reporting obligation period | 4 years |
COMMON_STOCK_REPURCHASE_AND_IS1
COMMON STOCK REPURCHASE AND ISSUANCE (Details) (USD $) | 12 Months Ended | 0 Months Ended | 17 Months Ended | 0 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 17, 2014 | Mar. 11, 2014 | Aug. 12, 2011 | Dec. 31, 2012 | Nov. 30, 2012 | Nov. 12, 2014 | |
Repurchase program disclosures [Line Items] | |||||||||
Value of shares repurchased | $10,308,000 | $30,680,000 | $8,842,000 | ||||||
Per share price of investment | $2.83 | ||||||||
Par value of shares (in dollars per share) | $0.00 | $0.00 | |||||||
Share Purchase Agreement [Member] | Reporting Entities [Member] | |||||||||
Repurchase program disclosures [Line Items] | |||||||||
Value of shares repurchased | 9,900,000 | ||||||||
Per share price of investment | $2.54 | ||||||||
Number of shares of common stock repurchased | 3,883,875 | ||||||||
Share Purchase Agreement [Member] | Shah Capital [Member] | |||||||||
Repurchase program disclosures [Line Items] | |||||||||
Per share price of investment | $2.54 | ||||||||
Number of shares of common stock repurchased | 1,000,000 | ||||||||
Share Purchase Agreement [Member] | Softbank [Member] | |||||||||
Repurchase program disclosures [Line Items] | |||||||||
Number of shares in reporting entity sold by investee | 4,883,875 | ||||||||
Per share price of investment | $0.00 | ||||||||
Subscription Agreement [Member] | Shah Capital [Member] | |||||||||
Repurchase program disclosures [Line Items] | |||||||||
Share price (in dollars per share) | $2.67 | ||||||||
Number of shares of common stock issued | 2,000,000 | ||||||||
Par value of shares (in dollars per share) | $0.00 | ||||||||
Premium percentage | 1.30% | ||||||||
Repurchase program, August 2011 [Member] | |||||||||
Repurchase program disclosures [Line Items] | |||||||||
Maximum ordinary shares outstanding under the repurchase program | 20,000,000 | ||||||||
Period over which shares can be repurchased | 12 months | ||||||||
Shares repurchased under program | 4,174,875 | 4,174,875 | |||||||
Value of shares repurchased | 15,100,000 | ||||||||
Tender offer repurchase program [Member] | |||||||||
Repurchase program disclosures [Line Items] | |||||||||
Value of shares repurchased | 30,000,000 | ||||||||
Ordinary shares authorized to be repurchased under a tender offer | 8,333,333 | ||||||||
Share price (in dollars per share) | $3.60 | ||||||||
Ordinary shares repurchased | 8,333,333 | ||||||||
Repurchase program, November 2014 [Member] | |||||||||
Repurchase program disclosures [Line Items] | |||||||||
Maximum ordinary shares outstanding under the repurchase program | 40,000,000 | ||||||||
Period over which shares can be repurchased | 24 months | ||||||||
Shares repurchased under program | 166,421 | ||||||||
Value of shares repurchased | $400,000 |
COMMON_STOCK_AND_STOCK_INCENTI2
COMMON STOCK AND STOCK INCENTIVE PLANS (Stock Incentive Plans - Narrative) (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Minimum [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Vesting period | 1 year |
Maximum [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Vesting period | 4 years |
2006 Equity Incentive Plan [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Number of shares authorized | 1,500,000 |
Number of shares transferred from the prior plan | 8,474,347 |
2006 Equity Incentive Plan [Member] | Options and restricted stock units [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Number of awards outstanding (in shares) | 1,783,638 |
2006 Equity Incentive Plan [Member] | Stock options [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Vesting period | 4 years |
2006 Equity Incentive Plan [Member] | Stock options [Member] | Maximum [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Expiration term | 7 years |
2006 Equity Incentive Plan [Member] | Stock options and stock appreciation rights [Member] | Minimum [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Exercise price as a percentage of the fair market value of an ordinary share on the date of grant | 100.00% |
2006 Equity Incentive Plan [Member] | ISO [Member] | Minimum [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Exercise price as a percentage of the fair market value of an ordinary share on the date of grant | 110.00% |
Percentage of voting power required of the company's stock for specified exercise price | 10.00% |
2006 Equity Incentive Plan [Member] | ISO [Member] | Maximum [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Expiration term | 5 years |
Percentage of voting power required of the company's stock for specified vesting period | 10.00% |
COMMON_STOCK_AND_STOCK_INCENTI3
COMMON STOCK AND STOCK INCENTIVE PLANS (Stock Award and Stock Option Activity - Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restricted stock awards [Member] | |||
Stock-based awards | |||
Ratio for grant of stock awards that is deducted from the shares available for grant | 1 | ||
Fair value of restricted stock awards vested | $1.90 | $1.90 | $3.90 |
2006 Equity Incentive Plan [Member] | |||
Stock-based awards | |||
Number of ordinary shares available for issuance pursuant to future grants | 879,021 | 1,355,278 | 1,706,901 |
COMMON_STOCK_AND_STOCK_INCENTI4
COMMON STOCK AND STOCK INCENTIVE PLANS (Summary of Stock Options Activity) (Details) (Stock options [Member], USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock options [Member] | |||
Number of shares outstanding | |||
Options Outstanding at the beginning of the period (in shares) | 576 | 930 | 1,127 |
Options Granted (in shares) | 127 | 246 | |
Options Exercised (in shares) | |||
Options Forfeited or Expired (in shares) | -145 | -354 | -443 |
Options Outstanding at the end of the period (in shares) | 558 | 576 | 930 |
Weighted average exercise price | |||
Options Outstanding at the beginning of the period (in dollars per share) | $21.25 | $20.04 | $23.52 |
Options Granted (in dollars per share) | $2.83 | $3.24 | |
Options Exercised (in dollars per share) | |||
Options Forfeited or Expired (in dollars per share) | $62.79 | $18.05 | $19.56 |
Options Outstanding at the end of the period (in dollars per share) | $6.33 | $21.25 | $20.04 |
COMMON_STOCK_AND_STOCK_INCENTI5
COMMON STOCK AND STOCK INCENTIVE PLANS (Summary of Unvested Restricted Awards) (Details) (Restricted stock awards [Member], USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restricted stock awards [Member] | |||
Shares | |||
Total nonvested at the beginning of the period (in shares) | 1,713 | 1,702 | 902 |
Reverse split adjustment | 25 | ||
Granted (in shares) | 808 | 679 | 1,891 |
Vested (in shares) | -603 | -520 | -701 |
Forfeited (in shares) | -437 | -173 | -390 |
Total nonvested at the end of the period (in shares) | 1,481 | 1,713 | 1,702 |
Weighted average grant date fair value | |||
Total nonvested at the beginning of the period (in dollars per share) | $3.08 | $3.43 | $5.87 |
Granted (in dollars per share) | $2.76 | $2.76 | $3.29 |
Vested (in dollars per share) | $3.15 | $3.72 | $5.60 |
Forfeited (in dollars per share) | $3.02 | $3.82 | $4.49 |
Total nonvested at the end of the period (in dollars per share) | $2.90 | $3.08 | $3.43 |
COMMON_STOCK_AND_STOCK_INCENTI6
COMMON STOCK AND STOCK INCENTIVE PLANS (Summary of Significant Ranges of Outstanding and Exercisable Stock Options) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Stock Options Outstanding | |
Number outstanding (in shares) | 558,215 |
Weighted-average remaining contractual life | 4 years 6 months 11 days |
Weighted-average exercise price per share (in dollars per share) | $6.33 |
Stock Options Exercisable | |
Number Exercisable (in shares) | 327,103 |
Weighted-average exercise price per share (in dollars per share) | $8.68 |
Options exercisable and expected to vest at the end of the period | |
Number of options exercisable (in shares) | 327,103 |
Weighted-average exercise price per share of options exercisable (in dollars per share) | $8.68 |
Number of options expected to vest (in shares) | 500,275 |
Weighted-average exercise price per share of options expected to vest (in dollars per share) | $6.71 |
$ 2.70 - $ 2.70 [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Exercise price, low end of range (in dollars per share) | $2.70 |
Exercise price, high end of range (in dollars per share) | $2.70 |
Stock Options Outstanding | |
Number outstanding (in shares) | 26,666 |
Weighted-average remaining contractual life | 9 years 10 months 28 days |
Weighted-average exercise price per share (in dollars per share) | $2.70 |
Stock Options Exercisable | |
Number Exercisable (in shares) | 0 |
Weighted-average exercise price per share (in dollars per share) | |
$ 2.87 - $ 2.87 [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Exercise price, low end of range (in dollars per share) | $2.87 |
Exercise price, high end of range (in dollars per share) | $2.87 |
Stock Options Outstanding | |
Number outstanding (in shares) | 100,000 |
Weighted-average remaining contractual life | 9 years 7 months 20 days |
Weighted-average exercise price per share (in dollars per share) | $2.87 |
Stock Options Exercisable | |
Number Exercisable (in shares) | 0 |
Weighted-average exercise price per share (in dollars per share) | |
$ 2.97 - $ 2.97 [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Exercise price, low end of range (in dollars per share) | $2.97 |
Exercise price, high end of range (in dollars per share) | $2.97 |
Stock Options Outstanding | |
Number outstanding (in shares) | 26,666 |
Weighted-average remaining contractual life | 4 years 9 months 29 days |
Weighted-average exercise price per share (in dollars per share) | $2.97 |
Stock Options Exercisable | |
Number Exercisable (in shares) | 13,332 |
Weighted-average exercise price per share (in dollars per share) | $2.97 |
$ 3.21 - $ 3.21 [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Exercise price, low end of range (in dollars per share) | $3.21 |
Exercise price, high end of range (in dollars per share) | $3.21 |
Stock Options Outstanding | |
Number outstanding (in shares) | 191,054 |
Weighted-average remaining contractual life | 4 years 5 months 26 days |
Weighted-average exercise price per share (in dollars per share) | $3.21 |
Stock Options Exercisable | |
Number Exercisable (in shares) | 104,386 |
Weighted-average exercise price per share (in dollars per share) | $3.21 |
$ 4.17 - $ 6.51 [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Exercise price, low end of range (in dollars per share) | $4.17 |
Exercise price, high end of range (in dollars per share) | $6.51 |
Stock Options Outstanding | |
Number outstanding (in shares) | 88,236 |
Weighted-average remaining contractual life | 2 years 2 months 19 days |
Weighted-average exercise price per share (in dollars per share) | $5.28 |
Stock Options Exercisable | |
Number Exercisable (in shares) | 83,792 |
Weighted-average exercise price per share (in dollars per share) | $5.34 |
$ 8.46 - $ 9.72 [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Exercise price, low end of range (in dollars per share) | $8.46 |
Exercise price, high end of range (in dollars per share) | $9.72 |
Stock Options Outstanding | |
Number outstanding (in shares) | 40,325 |
Weighted-average remaining contractual life | 6 months 14 days |
Weighted-average exercise price per share (in dollars per share) | $9.53 |
Stock Options Exercisable | |
Number Exercisable (in shares) | 40,325 |
Weighted-average exercise price per share (in dollars per share) | $9.53 |
$18.75 - $18.75 [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Exercise price, low end of range (in dollars per share) | $18.75 |
Exercise price, high end of range (in dollars per share) | $18.75 |
Stock Options Outstanding | |
Number outstanding (in shares) | 78,636 |
Weighted-average remaining contractual life | 1 year 1 month 17 days |
Weighted-average exercise price per share (in dollars per share) | $18.75 |
Stock Options Exercisable | |
Number Exercisable (in shares) | 78,636 |
Weighted-average exercise price per share (in dollars per share) | $18.75 |
$ 19.83 - $ 24.57 [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Exercise price, low end of range (in dollars per share) | $19.83 |
Exercise price, high end of range (in dollars per share) | $24.57 |
Stock Options Outstanding | |
Number outstanding (in shares) | 4,786 |
Weighted-average remaining contractual life | 8 months 8 days |
Weighted-average exercise price per share (in dollars per share) | $20.60 |
Stock Options Exercisable | |
Number Exercisable (in shares) | 4,786 |
Weighted-average exercise price per share (in dollars per share) | $20.60 |
$ 26.61 - $ 26.61 [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Exercise price, low end of range (in dollars per share) | $26.61 |
Exercise price, high end of range (in dollars per share) | $26.61 |
Stock Options Outstanding | |
Number outstanding (in shares) | 116 |
Weighted-average remaining contractual life | 11 months 1 day |
Weighted-average exercise price per share (in dollars per share) | $26.61 |
Stock Options Exercisable | |
Number Exercisable (in shares) | 116 |
Weighted-average exercise price per share (in dollars per share) | $26.61 |
$ 33.21 - $ 33.21 [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Exercise price, low end of range (in dollars per share) | $33.21 |
Exercise price, high end of range (in dollars per share) | $33.21 |
Stock Options Outstanding | |
Number outstanding (in shares) | 1,730 |
Weighted-average remaining contractual life | 3 months |
Weighted-average exercise price per share (in dollars per share) | $33.21 |
Stock Options Exercisable | |
Number Exercisable (in shares) | 1,730 |
Weighted-average exercise price per share (in dollars per share) | $33.21 |
COMMON_STOCK_AND_STOCK_INCENTI7
COMMON STOCK AND STOCK INCENTIVE PLANS (Stock-Based Compensation - Narrative) (Details) (USD $) | 12 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Market value of shares as reported by NASDAQ ((in dollars per share) | $2.83 |
Unrecognized compensation cost related to unvested stock options and restricted stock and restricted stock units | |
Unrecognized compensation cost | $3.10 |
Expected weighted-average period of unrecognized cost | 2 years 5 months 23 days |
Stock options [Member] | |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |
Weighted average remaining contractual life of options exercisable | 2 years 6 months 29 days |
Weighted average remaining contractual life of options expected to vest | 4 years 6 months 11 days |
COMMON_STOCK_AND_STOCK_INCENTI8
COMMON STOCK AND STOCK INCENTIVE PLANS (Summary of Stock-Based Compensation Expense Recognized In Company'S Consolidated Statement of Operations) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |||
Stock-based compensation expense recognized | $2,289 | $1,698 | $2,981 |
Cost of net sales [Member] | |||
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |||
Stock-based compensation expense recognized | 60 | 7 | 107 |
Selling, general and administrative [Member] | |||
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |||
Stock-based compensation expense recognized | 2,185 | 1,597 | 2,398 |
Research and development [Member] | |||
COMMON STOCK AND STOCK INCENTIVE PLANS [Line Items] | |||
Stock-based compensation expense recognized | $44 | $94 | $476 |
INCOME_TAXES_Schedule_of_Unite
INCOME TAXES (Schedule of United States and foreign Income (Loss) Before Income Taxes and Non-Controlling Interest) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
United States and foreign income (loss) before income taxes and non-controlling interest | |||
Income (loss) before income taxes | ($28,646) | ($20,379) | ($33,187) |
United States [Member] | |||
United States and foreign income (loss) before income taxes and non-controlling interest | |||
Income (loss) before income taxes | -14,809 | -156,696 | 11,826 |
Foreign [Member] | |||
United States and foreign income (loss) before income taxes and non-controlling interest | |||
Income (loss) before income taxes | ($13,837) | $136,317 | ($45,013) |
INCOME_TAXES_Schedule_of_Compo
INCOME TAXES (Schedule of Components of Provision (Benefit) for Income Taxes) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current | |||
United States | $1 | ($40) | |
Foreign | 2,042 | 2,730 | 4,643 |
Total Current | 2,042 | 2,731 | 4,603 |
Deferred | |||
United States | |||
Foreign | -424 | -380 | -2,211 |
Total Deferred | -424 | -380 | -2,211 |
Total | $1,618 | $2,351 | $2,392 |
INCOME_TAXES_Narrative_Details
INCOME TAXES (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Unrecognized tax benefits | ||
Unrecognized tax benefits related to deferred tax assets and federal tax benefit of state income tax items | $35,200,000 | |
Interest and penalties recognized in the statement of income | 300,000 | |
Accrued interest and penalties | 3,900,000 | 3,600,000 |
Undistributed earnings of foreign subsidiaries permanently reinvested outside the United States | 97,400,000 | |
Operating loss carryforwards [Line Items] | ||
Net operating loss carryforwards expired amount | 230,597,000 | 254,153,000 |
Deferred tax assets and related valuation allowance which have been removed | 35,600,000 | |
United States [Member] | U.S. [Member] | ||
Operating loss carryforwards [Line Items] | ||
Valuation allowance against the related deferred tax assets | 204,700,000 | |
Federal [Member] | U.S. [Member] | ||
Operating loss carryforwards [Line Items] | ||
Net operating loss carryforwards | 552,700,000 | |
State [Member] | U.S. [Member] | ||
Operating loss carryforwards [Line Items] | ||
Net operating loss carryforwards | 221,400,000 | |
Foreign [Member] | China [Member] | ||
Operating loss carryforwards [Line Items] | ||
Net operating loss carryforwards | 78,500,000 | |
Net operating loss carryforwards expired amount | 237,200,000 | |
Deferred tax assets and related valuation allowance which have been removed | 35,600,000 | |
Valuation allowance against the related deferred tax assets | 11,800,000 | |
Foreign [Member] | Countries other than U.S. and China [Member] | ||
Operating loss carryforwards [Line Items] | ||
Net operating loss carryforwards | 94,900,000 | |
Valuation allowance against the related deferred tax assets | $14,100,000 |
INCOME_TAXES_Tax_Credit_Narrat
INCOME TAXES (Tax Credit - Narrative) (Details) (U.S. [Member], USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Tax credit carryforwards [Line Items] | |
Valuation allowance against the related deferred tax assets | $87.70 |
Foreign [Member] | Tax credit subject To expiration [Member] | |
Tax credit carryforwards [Line Items] | |
Tax credit carryforwards | 74.5 |
Alternative minimum tax credit [Member] | Tax credit not subject to expiration [Member] | |
Tax credit carryforwards [Line Items] | |
Tax credit carryforwards | 1 |
R&D credit [Member] | |
Tax credit carryforwards [Line Items] | |
Tax credit carryforwards | 12.1 |
R&D credit [Member] | Tax credit subject To expiration [Member] | |
Tax credit carryforwards [Line Items] | |
Tax credit carryforwards | 8.3 |
R&D credit [Member] | Tax credit not subject to expiration [Member] | |
Tax credit carryforwards [Line Items] | |
Tax credit carryforwards | $3.80 |
INCOME_TAXES_Other_Narrative_D
INCOME TAXES (Other - Narrative) (Details) | 12 Months Ended | 36 Months Ended | 48 Months Ended |
Dec. 31, 2014 | Dec. 31, 2010 | Dec. 31, 2014 | |
U.S. [Member] | |||
INCOME TAXES [Line Items] | |||
Statutory tax rate (as a percent) | 35.00% | ||
China [Member] | |||
INCOME TAXES [Line Items] | |||
Statutory tax rate (as a percent) | 25.00% | ||
Reduced tax rate for qualified high technology enterprises (as a percent) | 15.00% | ||
Number of subsidiaries approved for the reduced tax rate | 1 | ||
China [Member] | HUTS [Member] | |||
INCOME TAXES [Line Items] | |||
Reduced tax rate for qualified high technology enterprises (as a percent) | 15.00% | 15.00% | |
Valid period for reduced income tax rate applicable to qualified high technology enterprise | 3 years | 3 years |
INCOME_TAXES_Summary_of_Unreco
INCOME TAXES (Summary of Unrecognized Tax Benefits) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Unrecognized tax benefits | |||
Beginning balance-gross unrecognized tax benefits (UTB's) | $45,430 | $54,012 | $55,650 |
Additions based on tax positions related to the current year | 142 | 151 | 80 |
Reductions for tax positions related to prior years | -190 | -1,627 | -1,288 |
Lapse of statute of limitations | -7,106 | -430 | |
Ending balance-gross unrecognized tax benefits (UTB's) | 45,382 | 45,430 | 54,012 |
UTB's as a credit in deferred taxes | -33,021 | -33,187 | -39,402 |
Federal benefit of state taxes | -2,176 | -2,244 | -2,312 |
UTB's that would impact the effective tax rate | $10,185 | $10,019 | $12,298 |
INCOME_TAXES_Summary_of_Compon
INCOME TAXES (Summary of Components of Net Deferred Tax Assets) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Tax Assets | ||
Allowances and reserves | $4,920 | $11,125 |
Deferred revenue and customer advances, net | ||
Net operating loss carryforward | 230,597 | 254,153 |
Tax credit carryforwards | 87,703 | 95,692 |
Capital loss carryforwards | 3,997 | 18,671 |
Writedown/amortization of intangible assets and goodwill | 12,997 | 15,651 |
Fixed assets | 6,008 | 7,263 |
Demo equipment income | 7,070 | 7,104 |
Accrued warranties | ||
Other | 22,683 | 18,459 |
Total Deferred Tax Assets | 375,975 | 428,118 |
Deferred Tax Liabilities | ||
Prepaid expense | -576 | -472 |
Deferred revenue and customer advances, net | -2,494 | -1,183 |
Accrued warranties | -281 | -165 |
Total Deferred Tax Liabilities | -3,351 | -1,820 |
Total Deferred Tax Assets (Liabilities) | 372,624 | 426,298 |
Less: Valuation Allowance | -368,672 | -422,789 |
Total Deferred Tax Assets (Liabilities) | $3,952 | $3,509 |
INCOME_TAXES_Schedule_of_Recon
INCOME TAXES (Schedule of Reconciliation of Effective Income Tax Rate and Federal Statutory Rate) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of effective income tax rate and the federal statutory rate | |||
U.S. Federal tax (benefit) at statutory rate | ($10,026) | ($7,133) | ($11,183) |
U.S. State tax (benefit)/expense, net of federal income tax benefit | 628 | -360 | 187 |
Stock compensation expense | 745 | 574 | 996 |
Effect of differences in foreign tax rates | 8,390 | -30,994 | 422 |
Effect of tax rate changes on deferred taxes | 2,407 | 7 | |
Change in deferred tax valuation allowance | 1,824 | 38,234 | 11,511 |
Tax credits | -535 | -552 | -358 |
Other | 592 | 175 | 810 |
Total | $1,618 | $2,351 | $2,392 |
OTHER_INCOME_EXPENSES_NET_Sche
OTHER INCOME (EXPENSES), NET (Schedule of Components of Other Income, Net) (Details) (USD $) | 12 Months Ended | 3 Months Ended | |||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2012 | Jun. 30, 2015 | ||||
item | item | ||||||||
OTHER INCOME (EXPENSES), NET [Abstract] | |||||||||
Foreign exchange (losses) gains | ($586,000) | $3,856,000 | ($4,675,000) | ||||||
Gain (loss) from the currency translation adjustment | -121,000 | [1] | 7,088,000 | [1] | [1] | ||||
Tax reversal for expiration of the statute of limitations | 992,000 | [2] | 1,240,000 | [2] | 1,499,000 | [2] | |||
ESA loan impairment | -2,788,000 | [3] | [3] | [3] | |||||
Other | 254,000 | -704,000 | 203,000 | ||||||
Total | -2,249,000 | 11,480,000 | -2,973,000 | ||||||
Number of inactive Chinese entities | 3 | 2 | 3 | ||||||
Period after the filing of the tax return when tax reserve was released | 5 years | ||||||||
ESA Cultural Investment (Hong Kong) limited [Member] | |||||||||
Other receivables [Line Items] | |||||||||
Loan receivable | 5,600,000 | 5,600,000 | |||||||
Amount drawn | 800,000 | 4,000,000 | |||||||
Interest rate of debt securities (as a percent) | 20.00% | ||||||||
Percentage of loan receivable on extended maturity date | 50.00% | ||||||||
Loan receivable on extended maturity date | 2,800,000 | 2,800,000 | |||||||
Proceeds from loan payments | 2,000,000 | 5,600,000 | 800,000 | ||||||
ESA Cultural Investment (Hong Kong) limited [Member] | Subsequent Events [Member] | |||||||||
Other receivables [Line Items] | |||||||||
Amount drawn | $2,000,000 | ||||||||
[1] | During 2013, the Company recognized $7.1 million gain in the Consolidated Statements of Operations and Comprehensive Income (Loss) on the reversal of the cumulative translation adjustment previously recorded in accumulated other comprehensive income upon the liquidation of two previously inactive Chinese entities. The prior cumulative translation adjustment primarily resulted from the difference between local functional currency and the Company's reporting currency. | ||||||||
[2] | Previously, when the Company divested its Korean subsidiary, the Company provided a tax reserve as it offered indemnification to the buyer for the uncertain tax position arising in the periods before the divestiture. In April 2012, approximately $1.5 million of such tax reserve was released due to the expiration of the statute of limitations, which is five years after the filing of the tax return. In 2013, approximately $1.2 million of such tax reserve was released due to expiration of statute of limitations. In 2014, remaining amount of approximately $1.0 million of such tax reserve was released due to expiration of statute of limitations. | ||||||||
[3] | The Company signed the loan agreement to for a total amount of $5.6 million in the fourth quarter of 2012, $4.0 million was drawdown in the fourth quarter of 2012 and the remaining in the first quarter of 2013. The loan bears interest at 20% per annum and originally matured on December 31, 2013, with subsequently extended the maturity date on 50% of the loan, or $2.8 million, to June 30, 2014, and the other half extended to December 31, 2014. In the fourth quarter of 2014, the Company received $0.8 million. The Company has performed an assessment on the need for a valuation reserve and $2.8 million was charged as impairment in other expenses in 2014 as the collection term was due. The management expects to collect the remaining $2.0 million balance in the second quarter of 2015. |
NET_LOSS_PER_SHARE_Schedule_of
NET LOSS PER SHARE (Schedule of Computation of Basic and Diluted Net Income Per Share) (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator: | |||
Net loss attributable to UTStarcom Holdings Corp. | ($30,264) | ($22,721) | ($34,385) |
Denominator: | |||
Weighted average shares outstanding-Basic | 37,380 | 39,127 | 48,513 |
Potentially dilutive common stock equivalents-stock options and restricted stock (in shares) | |||
Weighted average shares outstanding-Diluted | 37,380 | 39,127 | 48,513 |
Net loss per share attributable to UTStarcom Holdings Corp.-Basic(1) (in dollars per share) | ($0.81) | ($0.58) | ($0.71) |
Net loss per share attributable to UTStarcom Holdings Corp.-Diluted(1) (in dollars per share) | ($0.81) | ($0.58) | ($0.71) |
Parent [Member] | |||
Numerator: | |||
Net loss attributable to UTStarcom Holdings Corp. | ($30,264) | ($22,721) | ($34,385) |
SEGMENT_REPORTING_Summary_of_t
SEGMENT REPORTING (Summary of the Company's Segment Net Sales, Gross Profit and Segment Margin) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment reporting [Line Items] | |||
Net Sales by Segment | $129,420 | $164,439 | $186,728 |
Net Sales by Segment (as a percent) | 100.00% | 100.00% | 100.00% |
Gross profit/(loss) by Segment | 22,128 | 40,220 | 68,158 |
Gross profit/(loss) by Segment (as a percent) | 17.00% | 24.00% | 37.00% |
Segment Margin | 7,666 | 20,898 | 30,765 |
General and Corporate | -21,739 | -34,131 | -60,308 |
Operating loss | -14,073 | -13,233 | -29,543 |
Equipment [Member] | |||
Segment reporting [Line Items] | |||
Net Sales by Segment | 105,988 | 141,138 | 160,688 |
Net Sales by Segment (as a percent) | 82.00% | 86.00% | 86.00% |
Gross profit/(loss) by Segment | 21,000 | 41,250 | 64,835 |
Gross profit/(loss) by Segment (as a percent) | 20.00% | 29.00% | 40.00% |
Segment Margin | 6,583 | 24,047 | 34,661 |
Equipment Based Services [Member] | |||
Segment reporting [Line Items] | |||
Net Sales by Segment | 23,432 | 23,301 | 25,784 |
Net Sales by Segment (as a percent) | 18.00% | 14.00% | 14.00% |
Gross profit/(loss) by Segment | 1,128 | -1,030 | 3,546 |
Gross profit/(loss) by Segment (as a percent) | 5.00% | -4.00% | 14.00% |
Segment Margin | 1,105 | -1,037 | 3,524 |
Operational Support Services [Member] | |||
Segment reporting [Line Items] | |||
Net Sales by Segment | 256 | ||
Net Sales by Segment (as a percent) | 0.00% | 0.00% | 0.00% |
Gross profit/(loss) by Segment | -223 | ||
Gross profit/(loss) by Segment (as a percent) | 0.00% | 0.00% | -87.00% |
Segment Margin | ($22) | ($2,112) | ($7,420) |
SEGMENT_REPORTING_Schedule_of_
SEGMENT REPORTING (Schedule of Sales Data by Geographical Area) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment reporting [Line Items] | |||
Net Sales by Segment | $129,420 | $164,439 | $186,728 |
Net Sales by Segment (as a percent) | 100.00% | 100.00% | 100.00% |
China [Member] | |||
Segment reporting [Line Items] | |||
Net Sales by Segment | 15,465 | 6,945 | 38,544 |
Net Sales by Segment (as a percent) | 12.00% | 4.00% | 21.00% |
Japan [Member] | |||
Segment reporting [Line Items] | |||
Net Sales by Segment | 58,999 | 93,203 | 99,367 |
Net Sales by Segment (as a percent) | 46.00% | 57.00% | 53.00% |
India [Member] | |||
Segment reporting [Line Items] | |||
Net Sales by Segment | 37,424 | 26,595 | 23,992 |
Net Sales by Segment (as a percent) | 29.00% | 16.00% | 13.00% |
Taiwan [Member] | |||
Segment reporting [Line Items] | |||
Net Sales by Segment | 6,706 | 13,332 | 9,824 |
Net Sales by Segment (as a percent) | 5.00% | 8.00% | 5.00% |
Other [Member] | |||
Segment reporting [Line Items] | |||
Net Sales by Segment | $10,826 | $24,364 | $15,001 |
Net Sales by Segment (as a percent) | 8.00% | 15.00% | 8.00% |
SEGMENT_REPORTING_Schedule_of_1
SEGMENT REPORTING (Schedule of Long-lived Assets, consisting of Property, Plant and Equipment, by Geographical Area) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Segment reporting [Line Items] | ||
Long-lived assets | $3,037 | $4,771 |
China [Member] | ||
Segment reporting [Line Items] | ||
Long-lived assets | 1,988 | 3,795 |
Other [Member] | ||
Segment reporting [Line Items] | ||
Long-lived assets | $1,049 | $976 |
CREDIT_RISK_AND_CONCENTRATION_1
CREDIT RISK AND CONCENTRATION (Narrative) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CREDIT RISK AND CONCENTRATION [Abstract] | |||
Increase or decrease in interest rates of short-term investments that will not significantly affect the fair value of investment portfolio (as a percent) | 10.00% | ||
Credit risk and concentration [Line Items] | |||
Accounts receivable balances | 16,690,000 | 23,260,000 | |
Credit risk concentration [Member] | Cash, Cash Equivalents and Short Term Investments [Member] | Countries outside US [Member] | |||
Credit risk and concentration [Line Items] | |||
Cash and cash equivalents and short-term investments | 55,300,000 | 56,500,000 | |
Credit risk concentration [Member] | Cash, Cash Equivalents and Short Term Investments [Member] | China [Member] | Subsidiary [Member] | |||
Credit risk and concentration [Line Items] | |||
Cash and cash equivalents and short-term investments | 14,500,000 | 11,500,000 | |
Customer concentration [Member] | Accounts receivable [Member] | Affiliates of Softbank [Member] | |||
Credit risk and concentration [Line Items] | |||
Concentration of risk (as a percent) | 65.00% | 82.00% | |
Customer concentration [Member] | Accounts receivable [Member] | China government affiliated entities [Member] | |||
Credit risk and concentration [Line Items] | |||
Accounts receivable balances | 6,000,000 | 6,300,000 | |
Customer concentration [Member] | Net revenues [Member] | Affiliates of Softbank [Member] | |||
Credit risk and concentration [Line Items] | |||
Concentration of risk (as a percent) | 44.00% | 55.00% | 49.00% |
Customer concentration [Member] | Net revenues [Member] | China government affiliated entities [Member] | |||
Credit risk and concentration [Line Items] | |||
Concentration of risk (as a percent) | 0.00% | 1.00% | 18.00% |
Country risks [Member] | Net revenues [Member] | China [Member] | |||
Credit risk and concentration [Line Items] | |||
Concentration of risk (as a percent) | 12.00% | 4.00% | 21.00% |
RELATED_PARTY_TRANSACTIONS_Sch
RELATED PARTY TRANSACTIONS (Schedule of Recognized Revenue and Cost of Net Sales for Sales of Telecommunications Equipment and Services to Affiliates of Softbank) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Related party transactions [Line Items] | |||
Net sales | $129,420 | $164,439 | $186,728 |
Gross profit | 22,128 | 40,220 | 68,158 |
Softbank and affiliates [Member] | |||
Related party transactions [Line Items] | |||
Net sales | 90,302 | 92,011 | |
Cost of net sales | 59,052 | 51,448 | |
Gross profit | $31,250 | $40,563 |
RELATED_PARTY_TRANSACTIONS_Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Jan. 17, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Softbank and affiliates [Member] | ||||
Related party transactions [Line Items] | ||||
Accounts receivable | $1.60 | $19 | ||
Accounts payable | ||||
Service period of sales to related party | 3 years | |||
Period over which product failure rates exceed a certain level under the penalty clause | 7 years | |||
Customer advances | 3.1 | |||
Deferred revenue current | 2 | |||
Deferred revenue noncurrent | 3.8 | 4.6 | ||
Softbank and affiliates [Member] | Share Purchase Agreement [Member] | ||||
Related party transactions [Line Items] | ||||
Ownership interest held by related party (as a percent) | 12.30% | |||
Yellowstone [Member] | ||||
Related party transactions [Line Items] | ||||
Number of directors of the entity who served as a director in related party | 1 | |||
Consulting services | $1.80 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 12 Months Ended | 1 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 28, 2015 | Apr. 07, 2015 | Nov. 12, 2015 | |
Subsequent events [Line Items] | ||||||
Value of shares repurchased | $10,308,000 | $30,680,000 | $8,842,000 | |||
Subsequent Events [Member] | Inphi Corporation [Member] | Available-for-sale securities [Member] | ||||||
Subsequent events [Line Items] | ||||||
Shares of investment classified as available-for-sale securities sold | 124,395 | |||||
Cash received in exchange for investment | 2,400,000 | |||||
Subsequent Events [Member] | IPTV operations [Member] | UTStarcom Hong Kong Holdings Ltd. [Member] | ||||||
Subsequent events [Line Items] | ||||||
Ownership interest upon conversion of preference shares and convertible bonds | 14.00% | |||||
Subsequent Events [Member] | IPTV operations [Member] | Convertible Bond [Member] | UTStarcom Hong Kong Holdings Ltd. [Member] | ||||||
Subsequent events [Line Items] | ||||||
Face amount of convertible debt | 20,000,000 | |||||
Cash proceeds from partial payment of the principal of the Convertible Bond | 10,000,000 | |||||
Ownership interest upon conversion of preference shares and convertible bonds | 14.00% | |||||
Subsequent Events [Member] | Repurchase program, November 2015 [Member] | Scenario forecast [Member] | ||||||
Subsequent events [Line Items] | ||||||
Shares repurchased under program | 691,691 | |||||
Value of shares repurchased | $1,900,000 |
SCHEDULE_I_CONDENSED_FINANCIAL1
SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT (REGISTRANT BALANCE SHEETS) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
ASSETS | ||
Total assets | $279,063 | $366,967 |
Current liabilities: | ||
Accounts payable-intercompany | 29,769 | 24,953 |
Total current liabilities | 129,414 | 164,550 |
Total liabilities | 163,734 | 216,587 |
Stockholders' equity: | ||
Ordinary shares: $0.00375 par value; 250,000 authorized shares; 38,314 and 45,444 shares issued at December 31, 2014 and December 31, 2013, respectively; 38,148 and 39,778 shares outstanding at December 31, 2014 and December 31, 2013, respectively (Note 1) | 122 | 151 |
Additional paid-in capital | 1,258,182 | 1,280,810 |
Treasury stock, at cost:166 and 5,666 shares at December 31, 2014 and December 31, 2013, respectively | -443 | -20,421 |
Accumulated deficit | -1,206,286 | -1,176,022 |
Accumulated other comprehensive income | 63,754 | 65,862 |
Total shareholders' equity | 115,329 | 150,380 |
Total liabilities and equity | 279,063 | 366,967 |
UTSTARCOM HOLDINGS CORP [Member] | ||
ASSETS | ||
Investment in affiliated companies | 121,863 | 177,710 |
Total assets | 121,863 | 177,710 |
Current liabilities: | ||
Accounts payable-intercompany | 6,534 | 27,330 |
Total current liabilities | 6,534 | 27,330 |
Total liabilities | 6,534 | 27,330 |
Stockholders' equity: | ||
Ordinary shares: $0.00375 par value; 250,000 authorized shares; 38,314 and 45,444 shares issued at December 31, 2014 and December 31, 2013, respectively; 38,148 and 39,778 shares outstanding at December 31, 2014 and December 31, 2013, respectively (Note 1) | 122 | 151 |
Additional paid-in capital | 1,258,182 | 1,280,810 |
Treasury stock, at cost:166 and 5,666 shares at December 31, 2014 and December 31, 2013, respectively | -443 | -20,421 |
Accumulated deficit | -1,206,286 | -1,176,022 |
Accumulated other comprehensive income | 63,754 | 65,862 |
Total shareholders' equity | 115,329 | 150,380 |
Total liabilities and equity | $121,863 | $177,710 |
SCHEDULE_I_CONDENSED_FINANCIAL2
SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT (REGISTRANT BALANCE SHEETS) (Parenthetical) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
REGISTRANT BALANCE SHEETS [Line Items] | ||
Ordinary share, par value (in dollars per share) | $0.00 | $0.00 |
Ordinary share, authorized shares | 250,000 | 250,000 |
Ordinary share, shares issued | 38,314 | 45,444 |
Ordinary share, shares outstanding | 38,148 | 39,778 |
Treasury shares | 166 | 5,666 |
UTSTARCOM HOLDINGS CORP [Member] | ||
REGISTRANT BALANCE SHEETS [Line Items] | ||
Ordinary share, par value (in dollars per share) | $0.00 | $0.00 |
Ordinary share, authorized shares | 250,000 | 250,000 |
Ordinary share, shares issued | 38,314 | 45,444 |
Ordinary share, shares outstanding | 38,148 | 39,778 |
Treasury shares | 166 | 5,666 |
SCHEDULE_I_CONDENSED_FINANCIAL3
SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT (RESULTS OF OPERATIONS ) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cost of sales | |||
Gross profit | $22,128 | $40,220 | $68,158 |
Operating expenses: | |||
Selling, general and administrative | 24,515 | 37,626 | 52,457 |
Research and development | 11,686 | 14,520 | 28,131 |
Amortization of intangible assets | 516 | ||
Restructuring charges | 358 | ||
Total operating expenses | 36,201 | 53,453 | 97,701 |
Operating loss | -14,073 | -13,233 | -29,543 |
Interest income | 589 | 511 | 2,612 |
Interest expense | -88 | -151 | -240 |
Other income, net | -2,249 | 11,480 | -2,973 |
Income (loss) before income taxes | -28,646 | -20,379 | -33,187 |
Equity in net loss of affiliated companies | -8,878 | -9,586 | |
Income tax benefit (expense) | 1,618 | 2,351 | 2,392 |
Net loss attributable to UTStarcom Holdings Corp. | -30,264 | -22,721 | -34,385 |
UTSTARCOM HOLDINGS CORP [Member] | |||
Net sales | |||
Unrelated parties | |||
Related parties | |||
Intercompany | |||
Cost of sales | |||
Unrelated parties | |||
Related parties | |||
Intercompany | |||
Gross profit | |||
Operating expenses: | |||
Selling, general and administrative | 1,398 | 2,377 | 2,315 |
Research and development | |||
Amortization of intangible assets | |||
Restructuring charges | |||
Impairment of long-lived assets | |||
Total operating expenses | 1,398 | 2,377 | 2,315 |
Operating loss | -1,398 | -2,377 | -2,315 |
Interest income | |||
Interest expense | |||
Other income, net | |||
Income (loss) before income taxes | -1,398 | -2,377 | -2,315 |
Equity in net loss of affiliated companies | -28,866 | -20,344 | -32,070 |
Income tax benefit (expense) | |||
Net loss attributable to UTStarcom Holdings Corp. | ($30,264) | ($22,721) | ($34,385) |
SCHEDULE_II_VALUATION_AND_QUAL1
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Changes in valuation and qualifying accounts | ||||||
Removal of tax valuation allowance for expiration of net operating loss carryforwards | $35,600,000 | |||||
Allowance for Doubtful Accounts [Member] | ||||||
Changes in valuation and qualifying accounts | ||||||
Balance at beginning of period | 11,063,000 | 10,796,000 | 30,145,000 | |||
Charged (credited) to costs and expenses | 49,000 | -75,000 | -1,148,000 | |||
Charged (credited) to other accounts | ||||||
(Deductions) Adjustments | -235,000 | [1] | 342,000 | [1] | -576,000 | [1] |
Balance at end of period | 10,877,000 | 11,063,000 | 10,796,000 | |||
Allowance for Doubtful Accounts [Member] | IPTV divestiture [Member] | ||||||
Changes in valuation and qualifying accounts | ||||||
(Deductions) Adjustments | -17,625,000 | |||||
Tax valuation allowance [Member] | ||||||
Changes in valuation and qualifying accounts | ||||||
Balance at beginning of period | 422,789,000 | 418,285,000 | 469,224,000 | |||
Charged (credited) to costs and expenses | 1,824,000 | 36,324,000 | -30,745,000 | |||
Charged (credited) to other accounts | -55,941,000 | [2] | -31,820,000 | -20,194,000 | ||
(Deductions) Adjustments | [1] | [1] | [1] | |||
Balance at end of period | 368,672,000 | 422,789,000 | 418,285,000 | |||
Tax valuation allowance [Member] | IPTV divestiture [Member] | ||||||
Changes in valuation and qualifying accounts | ||||||
(Deductions) Adjustments | ||||||
[1] | Represents write-offs of allowance for doubtful accounts and foreign exchange adjustments. | |||||
[2] | Includes $35.6 million removal of tax valuation allowance for expiration of net operating loss carryforwards in China. |