Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 27, 2015 | Jun. 30, 2013 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | DOT HILL SYSTEMS CORP | ||
Entity Central Index Key | 1042783 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Common Stock, Shares Outstanding | 60,813,245 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $277,450,499 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
ASSETS | ||
Cash and cash equivalents | $42,492 | $40,406 |
Accounts receivable, net | 43,328 | 42,907 |
Inventories | 11,342 | 6,539 |
Prepaid expenses and other assets | 11,126 | 7,265 |
Total current assets | 108,288 | 97,117 |
Property and equipment, net | 8,764 | 7,565 |
Intangible Assets | 2,680 | 0 |
Other assets | 500 | 702 |
Total assets | 120,232 | 105,384 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Accounts payable | 37,421 | 33,255 |
Accrued compensation | 4,015 | 4,922 |
Accrued expenses | 8,039 | 8,935 |
Deferred revenue | 5,319 | 4,211 |
Credit facility borrowings | 0 | 2,000 |
Total current liabilities | 54,794 | 53,323 |
Other long-term liabilities | 2,908 | 4,414 |
Total liabilities | 57,702 | 57,737 |
Commitments and Contingencies (Note 12) | ||
Stockholders’ Equity: | ||
Preferred stock, $.001 par value, 10,000 shares authorized, zero shares issued and outstanding at December 31, 2013 and 2014 | 0 | 0 |
Common stock, $.001 par value, 100,000 shares authorized, 59,138 and 60,777 shares issued and outstanding at December 31, 2013 and 2014, respectively | 61 | 59 |
Additional paid-in capital | 336,827 | 330,103 |
Accumulated other comprehensive loss | -3,152 | -3,254 |
Accumulated deficit | -271,206 | -279,261 |
Total stockholders’ equity | 62,530 | 47,647 |
Total liabilities and stockholders’ equity | $120,232 | $105,384 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 60,777,000 | 59,138,000 |
Common stock, shares outstanding | 60,777,000 | 59,138,000 |
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 REVENUE | $217,665 | $206,565 | $194,548 |
COST OF GOODS SOLD | 145,090 | 140,495 | 146,177 |
GROSS PROFIT | 72,575 | 66,070 | 48,371 |
OPERATING EXPENSES: | |||
Research and development | 37,645 | 35,332 | 34,199 |
Sales and marketing | 14,505 | 13,450 | 14,133 |
General and administrative | 12,122 | 11,658 | 9,695 |
Total operating expenses | 64,272 | 60,440 | 58,027 |
OPERATING INCOME (LOSS) | 8,303 | 5,630 | -9,656 |
OTHER INCOME: | |||
Interest income (expense), net | -36 | -16 | -8 |
Other income (expense), net | 15 | -23 | 11 |
Total other income (expense), net | -21 | -39 | 3 |
INCOME (LOSS) BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS | 8,282 | 5,591 | -9,653 |
INCOME TAX EXPENSE | 227 | 51 | 749 |
INCOME (LOSS) FROM CONTINUING OPERATIONS | 8,055 | 5,540 | -10,402 |
LOSS FROM DISCONTINUED OPERATIONS | 0 | -476 | -4,548 |
NET INCOME (LOSS) | 8,055 | 5,064 | -14,950 |
NET INCOME (LOSS) PER SHARE | |||
Income (Loss) from continuing operations - basic and diluted | $0.13 | $0.09 | ($0.18) |
Loss from discontinued operations - basic and diluted | $0 | ($0.01) | ($0.08) |
Net Income (Loss) per share - basic and diluted | $0.13 | $0.09 | ($0.26) |
WEIGHTED AVERAGE SHARES USED TO CALCULATE NET LOSS PER SHARE: | |||
Basic weighted-average common shares outstanding | 60,171 | 58,521 | 56,954 |
Diluted weighted-average common shares outstanding | 63,898 | 59,247 | 56,954 |
COMPREHENSIVE INCOME (LOSS): | |||
NET INCOME (LOSS) | 8,055 | 5,064 | -14,950 |
Foreign currency translation adjustment | 102 | 279 | 129 |
Comprehensive income (loss) | $8,157 | $5,343 | ($14,821) |
Consolidated_Statements_Of_Sto
Consolidated Statements Of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
In Thousands, unless otherwise specified | |||||
Beginning balance at at Dec. 31, 2011 | $48,702 | $58 | $321,681 | ($3,662) | ($269,375) |
Beginning balance, shares at at Dec. 31, 2011 | 57,699 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued (canceled) under stock plans, shares | -253 | ||||
Common stock issued (canceled) under stock plans | 166 | 0 | 166 | ||
Common stock issued under bonus plans, shares | 819 | ||||
Common stock issued under bonus plans | 1,005 | 0 | 1,005 | ||
Share-based compensation expense | 3,723 | 3,723 | |||
Foreign currency translation adjustment | 129 | 129 | |||
Net income (loss) | -14,950 | -14,950 | |||
Ending balance at at Dec. 31, 2012 | 38,775 | 58 | 326,575 | -3,533 | -284,325 |
Ending balance, shares at at Dec. 31, 2012 | 58,265 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued (canceled) under stock plans, shares | 873 | ||||
Common stock issued (canceled) under stock plans | 839 | 1 | 838 | ||
Share-based compensation expense | 2,690 | 2,690 | |||
Foreign currency translation adjustment | 279 | 279 | |||
Net income (loss) | 5,064 | 5,064 | |||
Ending balance at at Dec. 31, 2013 | 47,647 | 59 | 330,103 | -3,254 | -279,261 |
Ending balance, shares at at Dec. 31, 2013 | 59,138 | 59,138 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued (canceled) under stock plans, shares | 1,639 | ||||
Common stock issued (canceled) under stock plans | 3,581 | 2 | 3,579 | ||
Share-based compensation expense | 3,145 | 3,145 | |||
Foreign currency translation adjustment | 102 | 102 | |||
Net income (loss) | 8,055 | 8,055 | |||
Ending balance at at Dec. 31, 2014 | $62,530 | $61 | $336,827 | ($3,152) | ($271,206) |
Ending balance, shares at at Dec. 31, 2014 | 60,777 | 60,777 |
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 |
Statement of Cash Flows [Abstract] | |||
Net income (loss) | $8,055 | $5,064 | ($14,950) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 3,972 | 3,125 | 3,527 |
Provision for bad debt expense | 64 | 2 | 25 |
Share-based compensation expense | 3,145 | 2,690 | 3,723 |
Long-lived assets impairment charge | 0 | 0 | 1,647 |
Write-off of property and equipment | 63 | 23 | 244 |
Changes in operating assets and liabilities: | |||
Accounts receivable | -859 | -17,931 | 6,621 |
Inventories | -4,845 | -1,503 | 213 |
Prepaid expenses and other assets | -3,682 | -1,618 | 1,740 |
Accounts payable | 2,962 | 11,100 | -7,474 |
Accrued compensation and other expenses | -1,783 | 614 | -2,505 |
Deferred revenue | 1,122 | 1,340 | 2,017 |
Other long-term liabilities | -1,490 | 1,182 | 2,726 |
Net cash provided by (used in) operating activities | 6,724 | 4,088 | -2,446 |
Cash Flows From Investing Activities: | |||
Purchases of property and equipment | -4,156 | -3,644 | -6,152 |
Purchases of intangible assets | -1,990 | 0 | 0 |
Proceeds from sale of property and equipment | 0 | 0 | 74 |
Net cash used in investing activities | -6,146 | -3,644 | -6,078 |
Cash Flows From Financing Activities: | |||
Principal payment of note payable | 0 | 0 | -71 |
Payments on bank borrowings | -2,000 | -7,700 | -1,800 |
Proceeds from bank borrowings | 0 | 6,900 | 4,600 |
Shares withheld for tax purposes | -95 | -223 | -590 |
Proceeds from sale of stock to employees | 3,676 | 1,062 | 756 |
Net cash provided by financing activities | 1,581 | 39 | 2,895 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | -73 | -392 | -224 |
Net Increase (Decrease) in Cash and Cash Equivalents | 2,086 | 91 | -5,853 |
Cash and Cash Equivalents, beginning of period | 40,406 | 40,315 | 46,168 |
Cash and Cash Equivalents, end of period | 42,492 | 40,406 | 40,315 |
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | |||
Capital expenditures incurred but not yet paid | 2,125 | 398 | 477 |
Property and equipment transferred from inventory | 42 | 0 | 0 |
Stock payment for employee bonus plan | 0 | 0 | 1,005 |
Supplemental Cash Flow Data: | |||
Cash paid for income taxes | $254 | $72 | $116 |
Summary_Of_Significant_Account
Summary Of Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Summary Of Significant Accounting Policies | Summary of Significant Accounting Policies | ||||||||
Description of Business | |||||||||
Dot Hill Systems Corp (referred to herein as Dot Hill, we, our or us) is a provider of storage systems for the entry and mid-range storage markets for organizations requiring high reliability, high performance networked storage and data management solutions in an open systems architecture. Our storage solutions consist of integrated hardware, firmware and software products employing a modular system that allows end-users to add various capacity or data protection schemes as needed. Our broad range of products, from medium capacity standalone storage units to complete multi-terabyte storage area networks, or SANs, provide end-users with a cost-effective means of addressing increasing storage demands without sacrificing performance. | |||||||||
Basis of Presentation | |||||||||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. | |||||||||
Principles of Consolidation | |||||||||
The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. | |||||||||
Foreign Currency | |||||||||
For our foreign subsidiaries whose functional currency is the local currency, assets and liabilities are translated into United States Dollars at period-end exchange rates. Revenues and expenses, and gains and losses, are translated at rates of exchange that approximate the rates in effect on the transaction date. Resulting translation gains and losses are recognized as a component of other comprehensive loss. | |||||||||
For our foreign subsidiaries that maintain their books of record in a currency other than the functional currency, the subsidiaries remeasure monetary assets and liabilities using current rates of exchange at the balance sheet date and remeasure non-monetary assets and liabilities using historical rates of exchange. Gains and losses from re-measurement for such subsidiaries are recognized currently in income as a component of general and administrative expenses. We incurred foreign currency transaction losses of $0.5 million and $0.1 million for the years ended December 31, 2013 and 2014. We realized foreign currency transaction gains of $0.5 million for the year ended December 31, 2012. | |||||||||
Foreign currency translation adjustments comprise the entire amount of our accumulated other comprehensive loss at December 31, 2012, 2013 and 2014. | |||||||||
Use of Accounting Estimates | |||||||||
The preparation of our audited consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of net revenue and expenses in the reporting periods. The accounting estimates that require management’s most significant and subjective judgments include revenue recognition, inventory valuation (refer to Note 4, Inventories) and recurring and specific issue warranty obligations (refer to Note 6, Product Warranties). In addition, we have other accounting policies that involve estimates such as the determination of useful lives of long-lived assets, the valuation of long-lived assets, accruals for restructuring, capitalization of software development costs, contingent liabilities and income taxes, including the valuation allowance for deferred tax assets, and the valuation and recognition of share-based compensation expense. Actual results may differ from these estimates and such differences could be material. | |||||||||
Revenue Recognition | |||||||||
We derive our revenue from sales of our hardware products, software and services. | |||||||||
Hardware | |||||||||
Hardware product revenue consists of revenue from sales of our AssuredSAN storage systems that are integrated with our original equipment manufacturers, or OEM, customers' industry standard hardware and which become essential to the integrated system product. We recognize hardware product revenue when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the price is fixed or determinable; and (iv) collectability is reasonably assured. Revenue is recognized for hardware product sales upon transfer of title and risk of loss to the customer and, in addition, upon installation for certain of our AssuredUVS appliance products. We record reductions to revenue for estimated product returns and pricing adjustments in the same period that the related revenue is recorded. These estimates are based on contractual return rights, historical sales returns, analysis of credit memo data and other factors known at the time. If actual future returns and pricing adjustments differ from past experience and our estimates, additional revenue reserves may be required. | |||||||||
We exclude from revenues taxes collected from customers on behalf of governmental authorities. | |||||||||
Software | |||||||||
In accordance with the specific guidance for recognizing software revenue, where applicable, we recognize revenue from perpetual software licenses at the inception of the license term assuming all revenue recognition criteria have been met. We use the relative fair value method to allocate revenue to software licenses at the inception of the license term when vendor-specific objective evidence, or VSOE, of fair value for all elements related to our products is available. We have established VSOE for the fair value of our software licenses and support services as measured by the prices paid by our customers when the licenses and services are sold separately on a standalone basis. | |||||||||
Specific long-term software contracts may contain multiple deliverables including software licenses, services, training and post-contract support, or PCS, for which we have not established VSOE of fair value of any of the elements. Under specific guidance for recognizing software revenue, we defer all revenue related to each deliverable until the only undelivered element is PCS. We then begin recognizing revenue ratably over the PCS period. | |||||||||
We defer all the direct and incremental costs related to the deliverables in these contracts until delivery of all the elements except PCS. The deferred costs are then recognized ratably over the contractual PCS support periods as a component of Cost of Goods Sold. | |||||||||
During the preparation of the Company's consolidated financial statements for the year ended December 31, 2012 and the accounting analysis for the renewal of a long-term software contract, the Company determined that it had applied an inappropriate revenue recognition methodology to the contract. The Company recorded revenue as royalty payments were received on this contract and should have deferred all the revenue and direct and incremental costs until all the deliverables, except PCS, were delivered in 2012. | |||||||||
This was corrected in the fourth quarter of 2012, and the net out-of-period impact of these adjustments was $1.1 million, consisting of a reduction of revenue and research and development costs of $4.2 million and $3.1 million, respectively. Once all elements except PCS were delivered, the related deferred direct and incremental costs began to be recognized ratably over the contractual PCS support period, as a component of Cost of Goods Sold. | |||||||||
Service | |||||||||
Our service revenue primarily includes out-of-warranty repairs and product maintenance contracts. Out-of warranty repairs primarily consist of product repair services performed by our contract manufacturers for those customers that allowed their original product warranty to expire without purchasing one of our higher level support service plans. Revenue from these out-of-warranty repairs, and the associated cost of sales, is recognized in the period these services are provided. Service revenue also consists of product maintenance contracts purchased by our customers as an extension of our standard warranty. Revenue from our product maintenance contracts is deferred and recognized ratably over the contract term, generally 12 to 36 months. Net revenue derived from services was less than 10% of total revenue for all periods presented. | |||||||||
Revenue Recognition for Arrangements with Multiple Deliverables | |||||||||
For multi-element arrangements that include hardware products containing software essential to the hardware product’s functionality and undelivered non-software services (all non-software related elements), we allocate the transaction price to all deliverables based on their relative selling prices. In such circumstances, we use a hierarchy to determine the selling price to be used for allocating the transaction price to deliverables: (i) VSOE of fair value, (ii) third-party evidence of selling price, or TPE, and (iii) best estimate of the selling price, or ESP. VSOE of fair value generally exists only when we sell the deliverable separately and represents the actual price charged by us for that deliverable. ESPs reflect our best estimates of what the selling prices of the deliverables would be if they were sold regularly on a standalone basis. | |||||||||
Revenue Recognition for Sales to Channel Partners | |||||||||
On sales to channel partners, we evaluate whether fees are considered fixed or determinable by considering a number of factors, including our ability to estimate returns, payment terms and our relationship and past history with the particular channel partner. If fees are not considered fixed or determinable at the time of sale to a channel partner, revenue recognition is deferred until there is persuasive evidence indicating the product has sold through to an end-user. Persuasive evidence of sell-through may include reports from channel partners documenting sell-through activity or data indicating an order has shipped to an end-user. | |||||||||
Deferred Revenue | |||||||||
We defer revenue on upfront nonrefundable payments received from our customers and recognize it ratably over the term of the agreement, unless the payment is in exchange for products delivered that represent the culmination of a separate earnings process. When we provide consideration to a customer, we recognize the value of that consideration as a reduction in net revenue. We may be required to maintain inventory with certain of our largest OEM customers, which we refer to as "hubbing" arrangements. Pursuant to these arrangements we deliver products to a customer or a designated third-party warehouse based upon the customer’s projected needs, but do not recognize product revenue unless and until the customer has taken legal title of our product from the warehouse to incorporate into its end products. | |||||||||
Advertising Costs | |||||||||
We expense advertising costs in the period incurred. Advertising expense is included as a component of sales and marketing expense. Advertising expense was $1.2 million, $1.6 million and $1.8 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||
Shipping and Handling | |||||||||
Cost related to the shipping and handling of our products is included in cost of goods sold for all periods presented. | |||||||||
Research and Development and Capitalized Software Development Costs | |||||||||
Research and development costs are expensed as incurred. In conjunction with the development of our products, we incur certain software development costs. For the majority of our software development projects, no costs have been capitalized because the period between achieving technological feasibility and completion of such software is relatively short and software development costs qualifying for capitalization have been insignificant. On a specific software project under development, it was determined that the period between achieving technological feasibility and completion of the software is not relatively short and software development costs qualifying for capitalization will be significant. For this project, since technological feasibility has been established, all software development costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached after all high-risk development issues have been resolved through coding and testing. The amortization of these costs will be included in cost of goods sold over the estimated life of the products. Refer to Note 5, Intangible Assets. | |||||||||
Share-Based Compensation | |||||||||
Share-based compensation expense for all share-based payment awards granted is determined based on the grant-date fair value. We recognize these compensation costs net of an estimated forfeiture rate, and recognize compensation cost only for those shares expected to vest on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the share-based payment awards. We estimate forfeiture rates based on our historical experience. | |||||||||
Income Taxes | |||||||||
We recognize deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. We record a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. | |||||||||
Contingent Liabilities | |||||||||
We are involved in certain claims from time to time arising in the ordinary course of business involving our products, suppliers, and/or customers. We may incur settlements, fines, penalties or judgments in connection with some of these matters. While we may be unable to estimate the ultimate dollar amount of exposure or loss in connection with these matters, we make accruals as warranted. The amounts we accrue could vary substantially from amounts we pay due to several factors including the following: possible third-party contributions, the inherent uncertainties of the estimation process, and the uncertainties involved in litigation. We believe that we have adequately provided in our consolidated financial statements for the impact of these contingencies. We also believe that the outcomes will not materially affect our results of operations, our financial position or our cash flows, except as disclosed. Refer to Note 12, Commitments and Contingencies. | |||||||||
Cash and Cash Equivalents | |||||||||
We classify investments as cash equivalents if they are readily convertible to cash and have original maturities of three months or less at the time of acquisition. Cash and cash equivalents consist primarily of money market mutual funds issued or managed in the United States. At December 31, 2013 and 2014, the carrying value of cash and cash equivalents approximates fair value due to the short period of time to maturity. | |||||||||
As of December 31, 2014, $3.0 million of the $42.5 million of cash, cash equivalents, and marketable securities was held by our foreign subsidiaries, as compared to $3.6 million of the $40.4 million of cash, cash equivalents and marketable securities held by our foreign subsidiaries as of December 31, 2013. We currently intend to repatriate approximately $2.0 million of our cash and cash equivalents when we close down our Netherlands subsidiary during 2015. We obtained a favorable ruling from the Netherlands and will not be charged foreign taxes on the repatriation and we expect that our net operating loss carryforwards and foreign tax credits will be available to offset any United States tax liability, should one arise. We anticipate that future foreign earnings will be deemed to be permanently reinvested, although we could elect to repatriate funds held in one or more foreign jurisdictions. If applicable, withholding taxes could reduce the net amount repatriated, and we could be required to accrue and remit applicable United States income taxes to the extent a tax liability results after utilization of net operating loss carryforwards and available tax credits. Refer to Note 12, Commitments and Contingencies, for a discussion of the associated cumulative translation loss. | |||||||||
Property and Equipment | |||||||||
Property and equipment are recorded at cost less accumulated depreciation. Property and equipment are depreciated for financial reporting purposes using the straight-line method over the following estimated useful lives: machinery and equipment, furniture, fixtures and computer software, 3-5 years; leasehold improvements are amortized using the straight-line method over the shorter of the useful lives of the assets or the terms of the leases. Significant improvements to our property and equipment are capitalized while expenditures for maintenance and repairs are charged to expense in the period incurred. | |||||||||
The components of property and equipment consist of the following, (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Machinery and equipment | $ | 16,628 | $ | 19,263 | |||||
Furniture, fixtures, and computer software | 1,669 | 2,072 | |||||||
Leasehold improvements | 2,578 | 2,620 | |||||||
Construction in progress | 831 | 228 | |||||||
Total property and equipment, at cost | 21,706 | 24,183 | |||||||
Less accumulated depreciation | (14,141 | ) | (15,419 | ) | |||||
Property and equipment, net | $ | 7,565 | $ | 8,764 | |||||
Depreciation expense was $2.5 million, $3.1 million and $4.0 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||
Concentration of Customers and Suppliers | |||||||||
A majority of our net revenue is derived from a limited number of customers. For the years ended December 31, 2012 and 2013, we had two customers, Customer A and C, that accounted for 10% or more of our total net revenue. For the year ended December 31, 2014, we had two customers, Customer A and B, that account for 10% or more of our total net revenue. Our agreements with our customers do not contain any minimum purchase commitments, do not obligate them to purchase their storage solutions exclusively from us and may be terminated at any time upon notice. | |||||||||
Net revenue consists of all product and service revenues. Net revenue by major customer is as follows (as a percentage of total net revenue): | |||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | 2014 | |||||||
Customer A | 68 | % | 59 | % | 47 | % | |||
Customer B | — | % | 0 | % | 11 | % | |||
Customer C | 10 | % | 13 | % | 8 | % | |||
Other customers less than 10% | 22 | % | 28 | % | 34 | % | |||
Total | 100 | % | 100 | % | 100 | % | |||
If our relationship with Customers A, B and/or C were disrupted or declined significantly, we would lose a substantial portion of our anticipated net revenue and our business could be materially harmed. We cannot guarantee that our relationship with Customers A, B and/or C or our other customers will expand or not otherwise be disrupted. | |||||||||
At December 31, 2013, we had one customer, Customer A, comprising 63% of our total accounts receivable. At December 31, 2014, we had two customers, Customer A and B, comprising 40% and 31%, respectively, of our total accounts receivable. The decrease in accounts receivable from Customer A is due to decreased revenue in the fourth quarter of 2014 as compared to the fourth quarter of 2013, and the increase in accounts receivable from Customer B is due to increased revenue in the fourth quarter of 2014 as compared to the fourth quarter of 2013. No other customer balance exceeded 10% of our total accounts receivable balance at December 31, 2013 or 2014. | |||||||||
We currently rely on one contract manufacturing partner, Foxconn Technology Group, or Foxconn, to produce substantially all of our products. As a result, should Foxconn or parts suppliers not produce and deliver inventory for us to sell on a timely basis, operating results may be adversely impacted. In November 2011, we amended our agreement with Foxconn to extend the manufacturing agreement for a period of three years. In November 2014, we extended the agreement to March 11, 2015, and in March 2015, we extended the agreement to September 1, 2015. We are currently in negotiations to further extend our contract. If the agreement is not further extended, pursuant to terms in the existing agreement, we can continue to operate with Foxconn for a period of six months following the expiration of the agreement, as the Company may issue purchase orders and Foxconn may accept purchase orders under the terms and conditions of the existing agreement. | |||||||||
Long-lived asset impairment | |||||||||
We periodically review the recoverability of the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. An impairment in the carrying value of an asset group is recognized whenever anticipated future undiscounted cash flows from an asset group are estimated to be less than its carrying value. The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk. There were no impairment charges in continuing operations for the years ended December 31, 2012, 2013 or 2014. | |||||||||
Valuation of Goodwill | |||||||||
The changes in the carrying amount of goodwill are as follows during the years ended December 31, 2013 and 2014 (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Balance, beginning of the year | |||||||||
Goodwill | $ | 44,840 | $ | 44,840 | |||||
Accumulated impairment losses | (44,840 | ) | (44,840 | ) | |||||
— | — | ||||||||
Balance, end of the year | |||||||||
Goodwill | 44,840 | 44,840 | |||||||
Accumulated impairment losses | (44,840 | ) | (44,840 | ) | |||||
$ | — | $ | — | ||||||
Goodwill is not allocated to reporting segments as the balance is fully impaired. | |||||||||
Allowance for Doubtful Accounts | |||||||||
We establish an allowance for doubtful accounts for accounts receivable amounts that may not be collectible. We determine the allowance for doubtful accounts based on the aging of our accounts receivable balances and an analysis of our historical experience of bad debt write-offs. Bad debt expense was $0.0 million, $0.0 million and $0.1 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||
The changes in the allowance for doubtful accounts are as follows during the years ended December 31, 2013 and 2014 (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Balance, beginning of the year | $ | 240 | $ | 23 | |||||
Write offs | (219 | ) | — | ||||||
Additions to allowance | 2 | 64 | |||||||
Balance, end of the year | $ | 23 | $ | 87 | |||||
Recent Accounting Pronouncements | |||||||||
From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that, other than the matter described below, the impact of recently issued standards that are not yet effective will not have a material impact on our results of operations and financial position. | |||||||||
In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09. This update creates modifications to various revenue accounting standards for specialized transactions and industries. ASU 2014-09 is intended to conform revenue accounting principles with a concurrently issued International Financial Reporting Standards with previously differing treatment between United States practice and those of much of the rest of the world, as well as, to enhance disclosures related to disaggregated revenue information. The updated guidance may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The updated guidance is effective for public entities for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods. Early adoption is not permitted and entities have the choice to apply ASU 2014-09 either retrospectively to each reporting period presented or by recognizing the cumulative effect of applying ASU 2014-09 at the date of initial application and not adjusting comparative information. The Company is currently evaluating the requirements of ASU 2014-09 and has not yet determined its impact on the Company's consolidated financial statements. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||
Net Income (Loss) Per Share | Earnings Per Share | ||||||||||||||||||||
Basic earnings per share, including continuing and discontinued operations, is calculated by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share, including continuing and discontinued operations, is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock outstanding during the period and including the dilutive effect of common stock that would be issued assuming conversion or exercise of outstanding warrants, stock options, share based compensation awards and other dilutive securities. No such items were included in the computation of diluted loss per share for the year ended December 31, 2012 because we incurred a net loss in the period and the effect of inclusion would have been anti-dilutive. | |||||||||||||||||||||
The following is a reconciliation of weighted-average shares outstanding used in the calculation of basic and diluted earnings from continuing operations per share (in thousands, except per share data): | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||
Income (loss) from continuing operations | $ | (10,402 | ) | $ | 5,540 | $ | 8,055 | ||||||||||||||
Basic weighted-average common shares outstanding | 56,954 | 58,521 | 60,171 | ||||||||||||||||||
Assumed exercise of dilutive stock options, warrants and restricted stock | — | 726 | 3,727 | ||||||||||||||||||
Diluted weighted-average common shares outstanding | 56,954 | 59,247 | 63,898 | ||||||||||||||||||
Income (loss) from continuing operations: | |||||||||||||||||||||
Basic income (loss) per share | $ | (0.18 | ) | $ | 0.09 | $ | 0.13 | ||||||||||||||
Diluted income (loss) per share | $ | (0.18 | ) | $ | 0.09 | $ | 0.13 | ||||||||||||||
Outstanding equity awards not included in the calculation of diluted net earnings (loss) per share because their effect was anti-dilutive were as follows: | |||||||||||||||||||||
December 31, 2012 | December 31, 2013 | December 31, 2014 | |||||||||||||||||||
Number of | Range of | Number of | Range of | Number of | Range of | ||||||||||||||||
Potential | Exercise Prices | Potential | Exercise Prices | Potential | Exercise Prices | ||||||||||||||||
Shares | Shares | Shares | |||||||||||||||||||
Stock options | 8,952,129 | $0.47 - $16.36 | 5,879,842 | $1.55 - $15.15 | 2,518,000 | $3.46 - $7.84 | |||||||||||||||
Unvested stock awards | 655,402 | $ | — | 92,811 | $ | — | 55,900 | $ | — | ||||||||||||
Warrants | 1,602,489 | $ | 2.4 | 1,602,489 | $ | 2.4 | — | $ | — | ||||||||||||
Discontinued_Operations
Discontinued Operations | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||
Discontinued Operations | Discontinued Operations | |||||||||||
During 2011, our primary AssuredUVS customer informed us that the AssuredUVS software would no longer be a component of its business strategy, which would result in a significant decline in revenues for the Company. | ||||||||||||
In February 2012, our Board of Directors approved a plan to exit our AssuredUVS business and close down our Israel Technology Development Center. During the second quarter of 2012, we explored the potential sale of the AssuredUVS business, but were unsuccessful in locating a buyer and ended efforts to sell the business or its component assets as of June 30, 2012. Accordingly, we recognized an impairment of $0.2 million of property, plant and equipment and $1.6 million for the remaining value of acquired software as a component of cost of goods sold as of June 30, 2012. The AssuredUVS business is now recorded in discontinued operations, since we have ceased all ongoing operational activities as of September 30, 2012. | ||||||||||||
The following is a summary of the components of loss from discontinued operations, (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2012 | 2013 | 2014 | ||||||||||
Net revenue | $ | 360 | $ | 50 | $ | — | ||||||
Cost of goods sold | 2,501 | 142 | — | |||||||||
Gross profit | (2,141 | ) | (92 | ) | — | |||||||
Operating expenses: | ||||||||||||
Research and development | 741 | — | — | |||||||||
Sales and marketing | 56 | — | — | |||||||||
General and administrative | 765 | 393 | — | |||||||||
Restructuring charge (recovery) | 844 | (10 | ) | — | ||||||||
Total operating expenses | 2,406 | 383 | — | |||||||||
Operating loss | (4,547 | ) | (475 | ) | — | |||||||
Other income (expense), net | (1 | ) | (1 | ) | — | |||||||
Loss from discontinued operations | $ | (4,548 | ) | $ | (476 | ) | $ | — | ||||
The activity in 2013 was limited to the continued support of certain maintenance contracts entered into prior to shutting down the Israel Technology Development Center, as well as expenses related to the resolution of a dispute with the former primary AssuredUVS customer. |
Inventories
Inventories | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Inventories | Inventories | |||||||
The components of inventories consist of the following (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
Purchased parts and materials | $ | 2,911 | $ | 2,273 | ||||
Finished goods | 3,628 | 9,069 | ||||||
Total inventory | $ | 6,539 | $ | 11,342 | ||||
Inventories are comprised of finished goods and purchased parts and assemblies, which include costs to purchase assembled units and overhead, and are valued at the lower of cost (first-in, first-out method) or market value. The valuation of inventory requires us to estimate excess or obsolete inventory. The determination of excess or obsolete inventory requires us to estimate the future demand for our products. Our customers may require us to purchase and stock material amounts of inventory to ensure availability to meet forecasts, which increases our risk of excess quantities. Because our markets are volatile and are subject to technological risks, price changes and inventory reduction programs by our customers, and because we are required to make last-time buys of certain components on occasion, there is a risk that we will forecast incorrectly and produce excess inventories of particular products or have commitments to purchase excess inventory components from our suppliers. As a result, actual demand will differ from forecasts, and such a difference has in the past and may in the future have a material adverse effect on our gross margin and our results of operations. Any write downs to inventory due to the existence of excess quantities, physical obsolescence, changes in pricing, damage, or other causes result in a new cost basis for the inventory. When we sell or dispose of reserved inventory, the new cost basis is charged to cost of sales. The increase in inventory at December 31, 2014 as compared to December 31, 2013 is due to higher required levels of inventory for a significant customer maintained at a vendor managed inventory location. |
Intangible_Assets
Intangible Assets | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
Intangible Assets | Intangible Assets | |||||||||||||
Identifiable intangible assets are as follows (in thousands): | ||||||||||||||
December 31, 2013 | ||||||||||||||
Estimated Useful | Gross | Accumulated | Net | |||||||||||
Life | Amortization | |||||||||||||
Technology-based intangible assets | N/A | $ | — | $ | — | $ | — | |||||||
Total intangible assets | $ | — | $ | — | $ | — | ||||||||
December 31, 2014 | ||||||||||||||
Estimated Useful | Gross | Accumulated | Net | |||||||||||
Life | Amortization | |||||||||||||
Technology-based intangible assets | Not yet determined | $ | 2,680 | $ | — | $ | 2,680 | |||||||
Total intangible assets | $ | 2,680 | $ | — | $ | 2,680 | ||||||||
Technology-based intangible assets include software to be sold, leased or otherwise marketed. The estimated useful life and projected date that the intangible assets will be generally available for release to customers is not readily determinable as of December 31, 2014. Intangible assets have not been allocated to reporting segments as they are used across the operating segments. | ||||||||||||||
Amortization expense related to intangible assets totaled $0.8 million, $0.0 million and $0.0 million for the years ended December 31, 2012, 2013 and 2014, respectively. Amortization expense for the year ended December 31, 2012 is included in the corporate segment. |
Product_Warranties
Product Warranties | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Product Warranties Disclosures [Abstract] | ||||||||||||
Product Warranties | Product Warranties | |||||||||||
Our standard warranty provides that if our systems do not function to published specifications, we will repair or replace the defective component, system or firmware without charge generally for a period of approximately three years. We generally extend to our customers the warranties provided to us by our suppliers, and accordingly, the majority of our warranty obligations to customers are typically intended to be covered by corresponding supplier warranties. For warranty costs not covered by our suppliers, we provide for estimated warranty costs in the period the revenue is recognized. There can be no assurance that our suppliers will continue to provide such warranties to us in the future or that our warranty obligations to our customers will be covered by corresponding warranties from our suppliers, the absence of which could have a material effect on our financial statements. Estimated liabilities for product warranties are included in accrued expenses. | ||||||||||||
In October 2009, we discovered a quality issue associated with certain power supply devices provided by a long-term component supplier, which resulted in a higher than expected level of power supply failures to us and our customers. In the second and third quarters of 2011, a material customer provided us with a framework estimating the potential claims precipitated by the power supply failures. A final settlement with this material customer was reached during the second quarter of 2012. The terms of the agreement required an immediate payment of $2.0 million, and future price concessions and rebates based on sales volumes. As of December 31, 2014, less than $0.1 million in liability related to this settlement remains outstanding. | ||||||||||||
During the second quarter of 2011, based on the advice of legal counsel, we established that our component supplier is contractually obligated to reimburse us for fair and reasonable costs we incur with our customers associated with these power supply failures. We continued to negotiate this settlement with our supplier and during the second quarter of 2012, the supplier signed a final settlement agreement providing for additional reimbursements above what was recognized as of September 30, 2011. Pursuant to the settlement, the supplier agreed to cash consideration of $1.2 million, which was fully received as of December 31, 2013. Additionally, our supplier committed to product rebates and/or price concessions on product orders for a period of 39 months from the execution of the settlement agreement, in return for our agreement to release our supplier from all obligations relating to the power supply failures known by us to date. | ||||||||||||
In addition, we have commenced discussions with our General Liability and Errors and Omissions Insurance and underwriters and will continue to pursue our rights to cover any damages we incur and that are not reimbursed by our supplier. The insurance company has issued a reservation of rights letter to us and at this time, it is not possible to estimate to what extent the residual amounts, if any, we will be covered by our carrier. As of December 31, 2014 we recorded $0.1 million for reimbursement to be received from our insurance carrier. | ||||||||||||
Our warranty accrual and cost activity is as follows (in thousands): | ||||||||||||
December 31, | ||||||||||||
2012 | 2013 | 2014 | ||||||||||
Balance, beginning of year | $ | 6,871 | $ | 4,455 | $ | 2,965 | ||||||
Charges to operations | 2,116 | 1,350 | 1,770 | |||||||||
Deductions for payments made | (4,532 | ) | (2,840 | ) | (1,372 | ) | ||||||
Balance, end of year | $ | 4,455 | $ | 2,965 | $ | 3,363 | ||||||
During the first quarter of 2013, we were able to negotiate more favorable rates with a third-party service provider. Accordingly, we adjusted our warranty accrual by $0.8 million to reflect this change. In addition, the decrease in deductions for payments made during year ended December 31, 2014 as compared to the year ended December 31, 2013 relates primarily to price concessions and rebates based on sales volumes issued in 2013 to a material customer related to a quality issue associated with certain power supply devices. |
Credit_Facilities
Credit Facilities | 12 Months Ended |
Dec. 31, 2014 | |
Line of Credit Facility [Abstract] | |
Credit Facilities | Credit Facilities |
We maintain a credit facility with Silicon Valley Bank for cash advances and letters of credit of up to an aggregate of $30.0 million based upon an advance rate dependent on certain concentration limits within eligible accounts receivable. These limitations exclude certain eligible customer receivables if an individual customer account balance exceeds 25, 50 or 85 percent of the total eligible accounts receivable, depending on the customer, as defined by our Loan and Security Agreement with Silicon Valley Bank. Borrowings under the credit facility bear interest at the Silicon Valley Bank's prime rate, which was 4.0% at December 31, 2014, and are secured by substantially all of our accounts receivable, deposit and securities accounts. The agreement provides for a negative pledge on our inventory and intellectual property, subject to certain exceptions, and contains usual and customary covenants for an arrangement of its type, including an obligation that we maintain at all times a net worth, as defined in the agreement. As of December 31, 2014, the Company had significant coverage with regard to this covenant. The agreement also includes provisions to increase the financing facility by $20 million subject to our meeting certain requirements, including $40.0 million in borrowing base for the immediately preceding 90 days, and Silicon Valley Bank locating a lender willing to finance the additional facility. In addition, if our cash and cash equivalents net of the total amount outstanding under the credit facility fall below $20.0 million (measured on a rolling three-month basis), the interest rate will increase to the Silicon Valley Bank's prime rate plus 1.0% and additional restrictions will apply. The maturity date of the credit facility is July 21, 2017. | |
As of December 31, 2014 we had no outstanding letters of credit and there was zero outstanding under the Silicon Valley Bank line of credit. There was $30.0 million available for borrowing under the agreement as of December 31, 2014. We are currently in compliance with all financial covenant requirements. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements | |||||||||||||||||||
The short-term nature of our financial instruments expose the Company to limited credit risk and have no stated maturities or have short-term maturities and carry interest rates that approximate market interest rates. There were no transfers between Level I, II or III inputs for any of our assets measured at fair value during the reporting period. | ||||||||||||||||||||
Assets Measured at Fair Value on a Recurring Basis | ||||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Description | December 31, | Quoted Prices for Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total (Losses) | |||||||||||||||
2013 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cash and cash equivalents | $ | 40,406 | $ | 40,406 | $ | — | $ | — | $ | — | ||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Description | December 31, | Quoted Prices for Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total (Losses) | |||||||||||||||
2014 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cash and cash equivalents | $ | 42,492 | $ | 42,492 | $ | — | $ | — | $ | — | ||||||||||
Fair Value of Financial Instruments | ||||||||||||||||||||
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and credit facility borrowings. The carrying values on our balance sheet of our cash and cash equivalents, accounts receivable, and accounts payable approximate their fair values due to the short maturities. The following disclosures relate to financial instruments for which the ending balances at December 31, 2013 and December 31, 2014, are not carried at fair value in their entirety on the Consolidated Balance Sheets. These tables present the carrying value and fair value, by fair value hierarchy, of our financial instruments, excluding cash and cash equivalents, accounts receivable and accounts payable at December 31, 2013 and 2014, respectively (in thousands). | ||||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Description | December 31, 2013 | Quoted Prices for Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total (Losses) | |||||||||||||||
Credit facility borrowings | $ | 2,000 | $ | — | $ | 2,000 | $ | — | $ | — | ||||||||||
The Company had no outstanding borrowings on the credit facility as of December 31, 2014. | ||||||||||||||||||||
The fair value of the Company's debt was estimated using a market approach based on the amount at the measurement date that the Company would receive to enter into an identical liability, since quoted prices for the Company's debt instrument are not available. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | Income Taxes | ||||||||||||
Components of income (loss) from continuing operations before taxes are as follows, (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Income (loss) from continuing operations before taxes: | |||||||||||||
United States | $ | (7,211 | ) | $ | 9,051 | $ | 12,569 | ||||||
Foreign | (2,442 | ) | (3,460 | ) | (4,287 | ) | |||||||
Total income (loss) from continuing operations before taxes | $ | (9,653 | ) | $ | 5,591 | $ | 8,282 | ||||||
Components of the income tax provision (benefit) are as follows, (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Current: | |||||||||||||
Federal | $ | — | $ | (28 | ) | $ | (26 | ) | |||||
State and local | 67 | 99 | 161 | ||||||||||
Foreign | 682 | 85 | 89 | ||||||||||
749 | 156 | 224 | |||||||||||
Deferred: | |||||||||||||
Federal | — | — | — | ||||||||||
State, local and foreign | — | (105 | ) | 3 | |||||||||
— | (105 | ) | 3 | ||||||||||
Total income tax provision | $ | 749 | $ | 51 | $ | 227 | |||||||
The reconciliation of the income tax provision computed using the federal statutory income tax rate to the recognized income tax provision (benefit) is as follows, (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Federal statutory rate | $ | (3,282 | ) | $ | 1,901 | $ | 2,816 | ||||||
State and local income taxes, net of federal benefit | (16 | ) | 65 | 106 | |||||||||
State rate change and other adjustments | 531 | — | (49 | ) | |||||||||
Adjustments to state deferred taxes | — | (590 | ) | 389 | |||||||||
Increase (decrease) in valuation allowance | 597 | (1,672 | ) | (3,332 | ) | ||||||||
Foreign tax rate differential | 915 | 24 | (59 | ) | |||||||||
Research and development credits | 127 | (365 | ) | (267 | ) | ||||||||
Share-based compensation | 518 | 491 | 245 | ||||||||||
Uncertain tax positions | 767 | (43 | ) | 57 | |||||||||
Adjustments to federal deferred taxes | 525 | 110 | 208 | ||||||||||
Other | 67 | 130 | 113 | ||||||||||
Income tax provision | $ | 749 | $ | 51 | $ | 227 | |||||||
The tax effect of temporary differences that give rise to deferred income taxes are as follows, (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss and tax credit carry forwards | $ | 93,128 | $ | 88,656 | |||||||||
Inventory reserve and uniform capitalization | 1,474 | 1,705 | |||||||||||
Stock options and warrants | 2,440 | 2,704 | |||||||||||
Allowance for bad debts and sales returns | 171 | 880 | |||||||||||
Vacation accrual | 261 | 146 | |||||||||||
Deferred rent | 143 | 126 | |||||||||||
Deferred revenue | 380 | 433 | |||||||||||
Warranty accrual | 958 | 1,173 | |||||||||||
Depreciation and amortization | 1,358 | 1,137 | |||||||||||
Other accruals and reserves | 362 | 433 | |||||||||||
Accrued Bonus | 873 | 418 | |||||||||||
Intangible assets | 1,195 | 1,037 | |||||||||||
Total deferred tax assets | 102,743 | 98,848 | |||||||||||
Deferred tax liabilities: | |||||||||||||
State taxes | (3,885 | ) | (3,696 | ) | |||||||||
Other | (548 | ) | (187 | ) | |||||||||
Total deferred income tax liabilities | (4,433 | ) | (3,883 | ) | |||||||||
Valuation allowance | (98,205 | ) | (94,873 | ) | |||||||||
Net deferred tax assets | $ | 105 | $ | 92 | |||||||||
As a result of certain realization requirements, the table of deferred tax assets and liabilities shown above does not include deferred tax assets for net operating losses as of December 31, 2014 that arose directly from tax deductions related to equity compensation in excess of compensation recognized for financial reporting. Equity will be increased by $2.5 million if and when such excess tax benefits are recognized through current taxes payable. The Company uses FASB Accounting Standards Codification, or ASC, 740, Income Taxes, ordering when determining when excess tax benefits or shortfalls have been realized. | |||||||||||||
United States income and withholding taxes have not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. | |||||||||||||
The following table summarizes the activity related to our unrecognized tax benefits (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Balance, January 1 | $ | 5,025 | $ | 5,726 | $ | 5,771 | |||||||
Increase related to prior period positions | 583 | 341 | 122 | ||||||||||
Increase related to current year tax positions | 241 | 380 | 169 | ||||||||||
Reductions for tax positions of prior years | (123 | ) | (676 | ) | (395 | ) | |||||||
Settlements | — | — | — | ||||||||||
Balance, December 31 | $ | 5,726 | $ | 5,771 | $ | 5,667 | |||||||
At December 31, 2012, 2013, and 2014 we had cumulative unrecognized tax benefits of approximately $5.7 million, $5.8 million, and $5.7 million, respectively, of which approximately $0.9 million, $0.8 million, and $0.6 million, respectively, are included in other long term liabilities that, if recognized, would affect the effective tax rate. The remaining $4.8 million, $5.0 million and $5.1 million of unrecognized tax benefits will have no impact on the effective tax rate due to the existence of net operating loss carryforwards and a full valuation allowance. Consistent with previous periods, penalties and tax related interest expense are reported as a component of income tax expense. As of December 31, 2012, and 2013, the total amount of accrued income tax related interest and penalties included in the consolidated balance sheet was less than $0.2 million and approximately $0.4 million, respectively. As of December 31, 2014, the total amount of accrued income tax related interest and penalties included in the consolidated balance sheet was approximately $0.5 million. We anticipate none of our unrecognized tax positions will be settled or reversed within the next 12 months. | |||||||||||||
Due to net operating losses and other tax attributes going forward, we are currently open to audit under the statute of limitations by the Internal Revenue Service for the years ending March 31, 2000 through December 31, 2014. With few exceptions, our state income tax returns are open to audit for the years ended December 31, 2010 through 2014. | |||||||||||||
We periodically evaluate the likelihood of the realization of deferred tax assets, and adjust the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to us for tax reporting purposes, and other relevant factors. | |||||||||||||
At December 31, 2014, based on the weight of available evidence, including cumulative losses in recent years and expectations regarding future taxable income, we determined that it was not more likely than not that our deferred tax assets would be realized and have a $94.9 million valuation allowance associated with our deferred tax assets. | |||||||||||||
As of December 31, 2014, we had federal net operating loss carryforwards of approximately $182.9 million which begin to expire in the tax year ending 2020, and state net operating loss carryforwards of approximately $101.7 million which begin to expire in the tax year ending 2015. We had foreign net operating loss carryforwards of $43.8 million, which have no expiration date. In addition, we had federal tax credit carryforwards of $4.9 million, of which approximately $0.4 million can be carried forward indefinitely to offset future tax liability, and the remaining $4.5 million begin to expire in the tax year ending 2018. We also had state tax credit carryforwards of $3.5 million, of which the entire $3.5 million has no expiration date. | |||||||||||||
As a result of our equity transactions, an ownership change, within the meaning of IRC Section 382, occurred on September 18, 2003. As a result, annual use of our federal net operating loss and credit carry forwards is limited to (i) the aggregate fair market value of Dot Hill immediately before the ownership change multiplied by (ii) the long-term tax-exempt rate (within the meaning of Section 382 (f) of the IRC) in effect at that time. The annual limitation is cumulative and, therefore, if not fully utilized in a year, can be utilized in future years in addition to the IRC Section 382 limitation for those years. | |||||||||||||
As a result of our acquisition of Chaparral Network Storage, Inc., or Chaparral, a second ownership change, within the meaning of IRC Section 382, occurred on February 23, 2004. As a result, annual use of Chaparral’s federal net operating loss and credit carry forwards may be limited. The annual limitation is cumulative and, therefore, if not fully utilized in a year, can be utilized in future years in addition to the Section 382 limitation for those years. | |||||||||||||
As a result of our acquisition of Cloverleaf, a third ownership change, within the meaning of IRC Section 382, occurred on January 26, 2010. As a result, annual use of Cloverleaf’s federal net operating loss and credit carry forwards may be limited. The annual limitation is cumulative and, therefore, if not fully utilized in a year, can be utilized in future years in addition to the Section 382 limitation for those years. |
Stockholders_Equity_Equity_Inc
Stockholders' Equity, Equity Incentive Plans and Warrants | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||
Stockholders’ Equity, Equity Incentive Plans and Warrants | Stockholders’ Equity, Equity Incentive Plans and Warrants | ||||||||||||||||||
Stock Incentive Plans | |||||||||||||||||||
2009 EIP. Our stockholders approved the 2009 Equity Incentive Plan, or the 2009 EIP, at our annual meeting of stockholders held on June 15, 2009. The 2009 EIP authorizes the issuance or grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance awards, performance cash awards and other stock awards to our employees, directors and consultants and is intended as the successor to and continuation of our 2000 EIP. Following the approval of the 2009 EIP by our stockholders, no additional stock awards may be granted under the 2000 Amended and Restated Equity Incentive Plan, or the 2000 EIP. All outstanding stock awards granted under the 2000 EIP will remain subject to the terms of the 2000 EIP provided, however, that any shares subject to outstanding stock awards granted under the 2000 EIP that expire or terminate for any reason prior to exercise or settlement shall become available for issuance pursuant to awards granted under the 2009 EIP. Awards granted under the 2000 EIP expire 10 years from the date of grant. Awards granted under the 2009 EIP expire seven years from the date of grant. As of June 15, 2009, the total number of shares of our common stock reserved for issuance under the 2009 EIP consisted of 4,500,000 shares plus 7,112,217 shares that are subject to outstanding stock awards under the 2000 EIP that may become available for grant under the 2009 EIP if they expire or terminate for any reason prior to exercise or settlement under the 2000 EIP. On May 2, 2011 shareholders approved our Amended 2009 Equity Incentive Plan, primarily to increase the share reserve by 8,000,000 shares. On May 5, 2014, shareholders approved an amendment to the Amended 2009 Equity Incentive Plan, primarily to increase the share reserve by 7,000,000 shares. Unless sooner terminated by our Board of Directors, the 2009 EIP shall automatically terminate on April 26, 2019, the day before the tenth anniversary of the date the 2009 EIP was adopted by the Board. The Board of Directors may also amend the 2009 EIP at any time subject to applicable laws and regulations, including the rules and regulations of The NASDAQ Stock Market LLC. In general, no amendment or termination of the 2009 EIP may adversely affect any rights under awards already granted to a participant unless agreed to by the affected participant. | |||||||||||||||||||
During 2012, 2013 and 2014, we granted restricted stock and options to purchase common stock with various vesting as approved by the Compensation Committee of the Board and/or the Chief Executive Officer and Chief Financial Officer, as appropriate, upon each grant. As of December 31, 2014, 55,900 shares of restricted stock were outstanding under the 2009 EIP, of which none were performance-based restricted stock awards. Additionally, no shares of restricted stock were outstanding under the 2000 EIP. As of December 31, 2014, options to purchase 7,124,198 and 2,178,746 shares of common stock were outstanding under the 2009 EIP and 2000 EIP, respectively. 7,814,281 shares of common stock remained available for grant under the 2009 EIP. | |||||||||||||||||||
2000 NEDSOP. Under our 2000 Non-Employee Directors Stock Option Plan, or 2000 NEDSOP, non-qualified stock options to purchase common stock are automatically granted to our non-employee directors upon appointment to our Board of Directors (initial grants) and upon each of our annual meeting of stockholders (annual grants). Options granted under the 2000 NEDSOP expire 10 years from the date of the grant. Initial grants vest over four years, with 25% of the shares subject to the option vesting one year from the date of grant and the remaining shares subject to the option vesting ratably thereafter on a monthly basis. Annual grants are fully vested on the date of grant. 1,000,000 shares of common stock are reserved for issuance under the 2000 NEDSOP. As of December 31, 2014, options to purchase 650,000 shares of common stock were outstanding under the 2000 NEDSOP and options to purchase 243,124 shares of common stock remained available for grant under the 2000 NEDSOP. | |||||||||||||||||||
ESPP. Our stockholders approved our Amended and Restated Employee Stock Purchase Plan, or 2000 ESPP, at our annual meeting of stockholders held on June 15, 2009, primarily to increase the share reserve under the 2000 ESPP by 4,000,000 shares. The 2000 ESPP qualified under the provisions of Section 423 of the Internal Revenue Code, or IRC, and provided our eligible employees, as defined in the 2000 ESPP, with an opportunity to purchase shares of our common stock at 85% of fair market value. There were 808,761 and 195,857 shares issued under the 2000 ESPP for the years ended December 31, 2013 and 2014, respectively. The 2000 ESPP was terminated after the last purchase on January 31, 2014. On January 21, 2014, the Board of Directors adopted the Dot Hill Systems Corp. 2014 Employee Stock Purchase Plan, or the 2014 ESPP, which was approved by our stockholders on May 5, 2014. There are 4,000,000 shares of common stock reserved for issuance under the 2014 ESPP. The 2014 ESPP qualifies under the provisions of Section 423 of the IRC, and provides our eligible employees, as defined in the 2014 ESPP, with an opportunity to purchase shares of our common stock at 85% of fair market value. There were 196,481 shares issued under the 2014 ESPP for the year ended December 31, 2014. As of December 31, 2014, the 2014 ESPP had a total of 3,803,519 shares available for purchase. | |||||||||||||||||||
As of December 31, 2014, total unrecognized share-based compensation cost related to unvested stock options, restricted stock awards, management stock incentive plan and our 2014 ESPP was $5.2 million, which is expected to be recognized over a weighted-average period of approximately 2.5 years. | |||||||||||||||||||
The following table summarizes share-based compensation expense, (in thousands): | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||
Cost of goods sold | $ | 617 | $ | 334 | $ | 350 | |||||||||||||
Sales and marketing | 419 | 274 | 353 | ||||||||||||||||
Research and development | 1,705 | 1,054 | 1,304 | ||||||||||||||||
General and administrative | 1,024 | 1,028 | 1,138 | ||||||||||||||||
Share-based compensation expense before taxes | 3,765 | 2,690 | 3,145 | ||||||||||||||||
Related deferred income tax benefits | — | — | — | ||||||||||||||||
Share-based compensation expense | $ | 3,765 | $ | 2,690 | $ | 3,145 | |||||||||||||
Share-based compensation expense is derived from: | |||||||||||||||||||
Stock options | $ | 1,508 | $ | 1,924 | $ | 2,642 | |||||||||||||
Restricted stock awards | 1,958 | 489 | 181 | ||||||||||||||||
2014 and 2000 ESPP | 299 | 277 | 322 | ||||||||||||||||
Total | $ | 3,765 | $ | 2,690 | $ | 3,145 | |||||||||||||
We estimate forfeitures at the time of grant and revise, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We have historically and continue to estimate the fair value of share-based awards using the Black-Scholes pricing model. | |||||||||||||||||||
A summary of stock option activity for 2014 is as follows: | |||||||||||||||||||
Number of shares | Weighted average exercise price | Weighted average remaining contractual term (in years) | Aggregate intrinsic value | ||||||||||||||||
Outstanding at January 1, 2014 | 9,850,498 | $ | 2.58 | ||||||||||||||||
Granted | 2,370,500 | 4.04 | |||||||||||||||||
Exercised | (1,184,829 | ) | 2.2 | ||||||||||||||||
Forfeited | (554,079 | ) | 2.53 | ||||||||||||||||
Expired | (529,146 | ) | 8.89 | ||||||||||||||||
Outstanding at December 31, 2014 | 9,952,944 | $ | 2.64 | 4.34 | $ | 18,369,137 | |||||||||||||
Vested and expected to vest at December 31, 2014 | 9,578,949 | $ | 2.61 | 4.27 | $ | 17,994,450 | |||||||||||||
Exercisable at December 31, 2014 | 6,141,839 | $ | 2.48 | 3.52 | $ | 12,604,603 | |||||||||||||
A summary of restricted stock award activity for 2014 is as follows: | |||||||||||||||||||
Number of shares | Weighted average grant date fair value | ||||||||||||||||||
Outstanding at January 1, 2014 | 92,811 | $ | 1.73 | ||||||||||||||||
Granted | 80,000 | 4.32 | |||||||||||||||||
Vested | (116,661 | ) | 2.25 | ||||||||||||||||
Forfeited | (250 | ) | 2.9 | ||||||||||||||||
Outstanding and unvested at December 31, 2014 | 55,900 | $ | 4.33 | ||||||||||||||||
The weighted average grant-date fair values of options granted during the years ended December 31, 2012, 2013 and 2014 were $0.89 per share, $1.05 per share, and $2.35 per share, respectively. The total intrinsic value of options exercised during the years ended December 31, 2012, 2013 and 2014 were $0.0 million, $0.2 million, and $2.6 million, respectively. | |||||||||||||||||||
The weighted average grant-date fair values of restricted stock awards granted during the years ended December 31, 2012, 2013 and 2014 were $1.23, $1.74 and $4.32 per share, respectively. The fair value of restricted stock awards that vested during the years ended December 31, 2012, 2013 and 2014 was $3.3 million, $1.3 million and $0.3 million, respectively. | |||||||||||||||||||
Cash generated from options exercised under all share-based compensation arrangements for the years ended December 31, 2012, 2013 and 2014 were $0.0 million, $0.3 million and $2.6 million, respectively. Cash generated from the purchase of shares through the 2000 ESPP for the years ended December 31, 2012, and 2013 and through the 2000 ESPP and 2014 ESPP for the year ended December 31, 2014, was $0.7 million, $0.7 million, and $1.1 million respectively. We issue new shares from the respective plan share reserves upon exercise of options to purchase common stock and for purchases through the 2000 ESPP and 2014 ESPP. | |||||||||||||||||||
The aggregate intrinsic value in the stock option summary table above is based on our closing stock price of $4.42 per share as of the last business day of the fiscal year ended December 31, 2014, which represents the value that would have been realized by the optionees had all options been exercised on that date. The total fair value of options to purchase common stock that vested during the years ended December 31, 2012, 2013 and 2014 was $2.1 million, $2.2 million, and $2.9 million, respectively. | |||||||||||||||||||
To estimate compensation expense for the years ended December 31, 2012, 2013, and 2014 we used the Black-Scholes pricing model with the following weighted-average assumptions for equity awards granted: | |||||||||||||||||||
EIP and NEDSOP | ESPP | ||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||
2012 | 2013 | 2014 | 2012 | 2013 | 2014 | ||||||||||||||
Risk-free interest rate | 1.19 | % | 1.07 | % | 1.59 | % | 0.12 | % | 0.09 | % | 0.05 | % | |||||||
Expected dividend yield | — | % | — | % | — | % | — | % | — | % | — | % | |||||||
Volatility | 81 | % | 82 | % | 70 | % | 64 | % | 63 | % | 60 | % | |||||||
Expected Term | 5.2 years | 5.3 years | 4.9 years | 0.5 years | 0.5 years | 0.5 years | |||||||||||||
Forfeiture Rate | 0%-10.62% | 0%-9.45% | 0%-10.05% | — | % | — | % | — | % | ||||||||||
The risk-free interest rate is based on the implied yield available on United States Treasury issues with an equivalent remaining term. We have not paid dividends in the past and do not plan to pay any dividends in the future. | |||||||||||||||||||
The expected volatility is based on historical volatility of our stock for the related vesting period. The expected life of the equity award is based on historical experience. | |||||||||||||||||||
The forfeiture rate is estimated when awards are granted and updated if information becomes available indicating that actual forfeitures will differ. | |||||||||||||||||||
Warrants | |||||||||||||||||||
In January 2008, we amended our Product Purchase Agreement, or Agreement, originally entered into with Hewlett-Packard Company, or HP, in September 2007, to allow for sales to additional divisions within HP. In connection with the Agreement, we issued a warrant to HP to purchase 1,602,489 shares of our common stock (approximately 3.5% of our outstanding shares prior to the issuance of the warrant) at an exercise price of $2.40 per share. | |||||||||||||||||||
On October 31, 2011, we amended again the Product Purchase Agreement originally entered into with HP on September 10, 2007. In part, this Amendment extends until October 30, 2016 the expiration date of the warrant previously issued to HP to purchase 1,602,489 shares of our common stock at the original exercise price of $2.40 per share. |
Employee_Retirement_Benefit_Pl
Employee Retirement Benefit Plans | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Retirment Benefit Plans | Employee Retirement Benefit Plans |
Dot Hill Retirement Savings Plan | |
The Dot Hill Retirement Savings Plan, which qualifies under Section 401(k) of the IRC, is open to eligible employees over 21 years of age. Under the plan, participating United States employees may defer up to 100% of their pretax salary, but not more than statutory limits. At our discretion we may make contributions to this plan for plan participants. Our matching contributions vest to employees as a percentage based on years of employment from one to five years, and matching contributions are fully vested to employees after five years of employment. Our matching contributions to the retirement savings plan for the years ended December 31, 2012, 2013 and 2014 were $0.3 million, $0.4 million and $0.3 million, respectively. |
Commitments_And_Contingencies
Commitments And Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments And Contingencies | Commitments and Contingencies | ||||
Operating Leases | |||||
We lease office space, equipment and automobiles under non-cancelable operating leases, which expire at various dates through May 2018. Rent expense for the years ended December 31, 2012, 2013 and 2014 was $1.1 million, $1.2 million and $1.2 million, respectively. We record rent expense on a straight–line basis based on contractual lease payments. | |||||
Future minimum lease payments due under all non-cancelable operating leases as of December 31, 2014 are as follows (in thousands): | |||||
Year Ended December 31, | |||||
2015 | $ | 873 | |||
2016 | 849 | ||||
2017 | 860 | ||||
2018 | 360 | ||||
2019 | — | ||||
Thereafter | — | ||||
Total minimum lease payments | $ | 2,942 | |||
For purposes of the table above, the operating lease obligations exclude common area maintenance, real estate taxes and insurance expenses. | |||||
Unconditional Purchase Obligations | |||||
We have unconditional inventory related purchase obligations to certain suppliers for certain commodities in order to ensure supply of select key components at the most favorable pricing. Additionally, we have non-inventory related purchase obligations that represent purchase commitments made in the ordinary course of business. At December 31, 2014, we had approximately $47.4 million of unconditional purchase obligations, of which $0.9 million for excess purchase commitments was recorded in Accrued Expenses on the balance sheet. | |||||
Cumulative Translation Adjustment | |||||
If we liquidate any of our foreign subsidiaries, our cumulative translation adjustment recorded in Other Comprehensive Income would be required to be reclassified into earnings. As discussed in Note 3 to the Consolidated Financial Statements, the Company currently anticipates liquidation of its Netherlands operating unit during early 2015. The Netherlands operating unit currently has no active operations. Cumulative translation losses of approximately $2.7 million related to the Netherlands operating unit would be reclassified from other comprehensive loss to operating loss. | |||||
Legal Proceedings | |||||
We are not party to any significant legal proceedings, except as described below, but are involved in certain legal actions and claims from time to time arising in the ordinary course of business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters will not have a material adverse effect on its financial position or results of operations. | |||||
Crossroads, Inc. - During the quarter ended September 30, 2014, the Company met with Crossroads Inc., or Crossroads, to establish a framework to resolve the dispute regarding the Amended Settlement and License Agreement dated October 2006. On September 19, 2014, the United States District Court for the Western District of Texas partially granted the Company’s motion for partial summary judgment as to Crossroads’ claims concerning royalty payments on product sales to HP for the period after the Fall of 2011 and at the same time held that the Company is not entitled to the benefit of a license Crossroads granted to HP for the period prior to fall 2011. In addition, a patent claim construction hearing occurred on October 6-7, 2014 but no claim construction order was issued and no trial date has been set. On February 27, 2015, the Company filed motions to join two inter partes reviews of the validity of the patent that are being conducted by the United States Patent Office and filed a motion to stay the district court litigation pending the entry of final written decisions in the inter partes reviews. No trial date has been set. Based on the United States District Court’s response to the Company’s motion for partial summary judgment and ongoing discussions with Crossroads, it is probable that the Company will resolve this dispute for royalty payments from 2009 to the current period for a total amount in the range of $1.0 million to $3.4 million. As of December 31, 2014, $1.0 million was accrued and charged to general and administrative expense. We are in the early stages of the potential settlement of this matter. Accordingly, the actual amount of a settlement could be different than the amount accrued or the currently estimated maximum amount and the difference could be material. |
Segment_Information_Segment_In
Segment Information Segment Information | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Segment Information | Segment Information | |||||||||||
Operating segments, as defined in ASC 280, Segment Reporting, are components of an enterprise for which separate financial information is available and is evaluated regularly by the Chief Operating Decision Maker, or CODM, in deciding how to allocate resources and in assessing performance. ASC 280 also requires disclosures about products and services, geographic areas and significant customers. | ||||||||||||
Prior to the first quarter of 2014, our CODM managed our business as one reportable operating segment that included the design, manufacture, and marketing of a range of storage systems for the entry and mid-range storage markets. Beginning in the first quarter of 2014, due to the growth and significance of our Vertical Markets, our CODM is managing our business in three reportable operating segments: Server OEM, Vertical Markets and Corporate. Hence, we changed our reporting segments accordingly, and segment information for all periods presented has been reclassified to conform to fiscal 2014 presentation. | ||||||||||||
Server OEM | ||||||||||||
The Server OEM segment consists primarily of large Original Equipment Manufacturers who purchase products from us to sell along with their server products. Our products are typically sold in server led sales into their end-user customers' corporate information technology infrastructure. Server OEM customers include Customer A (refer to Note 1, Summary of Significant Accounting Policies - Concentration of Customers and Suppliers). | ||||||||||||
Vertical Markets | ||||||||||||
The Vertical Markets segment consists of strategically selected Vertical Markets that have a propensity for high data growth. Some of our target Vertical Markets include Media and Entertainment, Telecommunications Infrastructure, Oil and Gas, Big Data Analytics and Digital Imaging, among others. These customers typically embed their products into their customer solutions which quite often generate revenue for their end-user customers. We sell to these customers through both Vertical Markets OEM partners or embedded solutions integrators, as well as through channel partners. Vertical Markets customers include Customers B and C (refer to Note 1, Summary of Significant Accounting Policies - Concentration of Customers and Suppliers). | ||||||||||||
Corporate | ||||||||||||
The Corporate segment consists primarily of costs that support both the Server OEM and Vertical Markets segments. | ||||||||||||
Net revenues by segment are as follows (in thousands): | ||||||||||||
Year ended December 31, | ||||||||||||
2012 | 2013 | 2014 | ||||||||||
Net revenue: | ||||||||||||
Server OEM | $ | 143,353 | $ | 134,798 | $ | 115,580 | ||||||
Vertical Markets | 51,195 | 71,767 | 102,085 | |||||||||
Total net revenue | $ | 194,548 | $ | 206,565 | $ | 217,665 | ||||||
Operating income (loss) by segment, and a reconciliation to consolidated income (loss) before income taxes and discontinued operations is as follows (in thousands): | ||||||||||||
Year ended December 31, | ||||||||||||
2012 | 2013 | 2014 | ||||||||||
Operating income (loss): | ||||||||||||
Server OEM | $ | 28,718 | $ | 33,464 | $ | 27,091 | ||||||
Vertical Markets | 7,858 | 21,781 | 33,587 | |||||||||
Corporate | (46,232 | ) | (49,615 | ) | (52,375 | ) | ||||||
Total operating income (loss) | (9,656 | ) | 5,630 | 8,303 | ||||||||
Total other income (expense), net | 3 | (39 | ) | (21 | ) | |||||||
Income (loss) before income taxes and discontinued operations | $ | (9,653 | ) | $ | 5,591 | $ | 8,282 | |||||
The segments use many of the same assets. For internal reporting purposes, we do not allocate assets by segment and therefore, asset, depreciation and amortization, or capital expenditure by segment information is not provided to our CODM. | ||||||||||||
Geographic Information | ||||||||||||
Net revenue is recorded in the geographic area in which the sale is originated. Long-lived assets include property and equipment, net, identifiable intangible assets and other non-current assets. Information concerning principal geographic areas in which we operate is as follows (in thousands): | ||||||||||||
Year ended December 31, | ||||||||||||
2012 | 2013 | 2014 | ||||||||||
Net revenue: | ||||||||||||
United States | $ | 192,801 | $ | 204,764 | $ | 216,306 | ||||||
Europe, Middle East and Africa | 14 | 3 | — | |||||||||
Asia | 1,733 | 1,798 | 1,359 | |||||||||
Total net revenue | $ | 194,548 | $ | 206,565 | $ | 217,665 | ||||||
Long-lived assets: | ||||||||||||
United States | $ | 7,682 | $ | 8,147 | $ | 9,159 | ||||||
Europe, Middle East and Africa | 68 | 15 | 13 | |||||||||
Asia | — | — | — | |||||||||
Total long-lived assets | $ | 7,750 | $ | 8,162 | $ | 9,172 | ||||||
Quarterly_Financial_Informatio
Quarterly Financial Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) | ||||||||||||||||
The information presented below reflects all adjustments, which, in the opinion of management, are of a normal and recurring nature necessary to present fairly the results of operations for the periods presented (in thousands, except per share amounts): | |||||||||||||||||
Year Ended December 31, 2013: | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Net revenue | $ | 44,480 | $ | 50,683 | $ | 52,603 | $ | 58,799 | |||||||||
Gross profit | 14,440 | 17,007 | 16,873 | 17,750 | |||||||||||||
Income (loss) before income taxes and discontinued operations | (526 | ) | 2,138 | 1,875 | 2,104 | ||||||||||||
Net income (loss) from continuing operations | (560 | ) | 2,089 | 1,775 | 2,236 | ||||||||||||
Basic and diluted net income (loss) per share from continuing operations | $ | (0.01 | ) | $ | 0.04 | $ | 0.03 | $ | 0.03 | ||||||||
Year Ended December 31, 2014: | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Net revenue | $ | 48,207 | $ | 48,222 | $ | 52,121 | $ | 69,115 | |||||||||
Gross profit | 15,265 | 16,023 | 16,962 | 24,325 | |||||||||||||
Income (loss) before income taxes and discontinued operations | (411 | ) | (4 | ) | 86 | 8,611 | |||||||||||
Net income (loss) from continuing operations | (412 | ) | (78 | ) | 40 | 8,505 | |||||||||||
Basic and diluted net income (loss) per share from continuing operations | $ | (0.01 | ) | $ | (0.00 | ) | $ | 0 | $ | 0.14 | |||||||
Summary_Of_Significant_Account1
Summary Of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Basis of Presentation | Basis of Presentation | ||||||||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. | |||||||||
Principles of Consolidation | Principles of Consolidation | ||||||||
The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. | |||||||||
Foreign Currency Transaction | Foreign Currency | ||||||||
For our foreign subsidiaries whose functional currency is the local currency, assets and liabilities are translated into United States Dollars at period-end exchange rates. Revenues and expenses, and gains and losses, are translated at rates of exchange that approximate the rates in effect on the transaction date. Resulting translation gains and losses are recognized as a component of other comprehensive loss. | |||||||||
For our foreign subsidiaries that maintain their books of record in a currency other than the functional currency, the subsidiaries remeasure monetary assets and liabilities using current rates of exchange at the balance sheet date and remeasure non-monetary assets and liabilities using historical rates of exchange. Gains and losses from re-measurement for such subsidiaries are recognized currently in income as a component of general and administrative expenses. We incurred foreign currency transaction losses of $0.5 million and $0.1 million for the years ended December 31, 2013 and 2014. We realized foreign currency transaction gains of $0.5 million for the year ended December 31, 2012. | |||||||||
Foreign currency translation adjustments comprise the entire amount of our accumulated other comprehensive loss at December 31, 2012, 2013 and 2014. | |||||||||
Use of Accounting Estimates | Use of Accounting Estimates | ||||||||
The preparation of our audited consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of net revenue and expenses in the reporting periods. The accounting estimates that require management’s most significant and subjective judgments include revenue recognition, inventory valuation (refer to Note 4, Inventories) and recurring and specific issue warranty obligations (refer to Note 6, Product Warranties). In addition, we have other accounting policies that involve estimates such as the determination of useful lives of long-lived assets, the valuation of long-lived assets, accruals for restructuring, capitalization of software development costs, contingent liabilities and income taxes, including the valuation allowance for deferred tax assets, and the valuation and recognition of share-based compensation expense. Actual results may differ from these estimates and such differences could be material. | |||||||||
Revenue Recognition | Revenue Recognition | ||||||||
We derive our revenue from sales of our hardware products, software and services. | |||||||||
Hardware | |||||||||
Hardware product revenue consists of revenue from sales of our AssuredSAN storage systems that are integrated with our original equipment manufacturers, or OEM, customers' industry standard hardware and which become essential to the integrated system product. We recognize hardware product revenue when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the price is fixed or determinable; and (iv) collectability is reasonably assured. Revenue is recognized for hardware product sales upon transfer of title and risk of loss to the customer and, in addition, upon installation for certain of our AssuredUVS appliance products. We record reductions to revenue for estimated product returns and pricing adjustments in the same period that the related revenue is recorded. These estimates are based on contractual return rights, historical sales returns, analysis of credit memo data and other factors known at the time. If actual future returns and pricing adjustments differ from past experience and our estimates, additional revenue reserves may be required. | |||||||||
We exclude from revenues taxes collected from customers on behalf of governmental authorities. | |||||||||
Software | |||||||||
In accordance with the specific guidance for recognizing software revenue, where applicable, we recognize revenue from perpetual software licenses at the inception of the license term assuming all revenue recognition criteria have been met. We use the relative fair value method to allocate revenue to software licenses at the inception of the license term when vendor-specific objective evidence, or VSOE, of fair value for all elements related to our products is available. We have established VSOE for the fair value of our software licenses and support services as measured by the prices paid by our customers when the licenses and services are sold separately on a standalone basis. | |||||||||
Specific long-term software contracts may contain multiple deliverables including software licenses, services, training and post-contract support, or PCS, for which we have not established VSOE of fair value of any of the elements. Under specific guidance for recognizing software revenue, we defer all revenue related to each deliverable until the only undelivered element is PCS. We then begin recognizing revenue ratably over the PCS period. | |||||||||
We defer all the direct and incremental costs related to the deliverables in these contracts until delivery of all the elements except PCS. The deferred costs are then recognized ratably over the contractual PCS support periods as a component of Cost of Goods Sold. | |||||||||
During the preparation of the Company's consolidated financial statements for the year ended December 31, 2012 and the accounting analysis for the renewal of a long-term software contract, the Company determined that it had applied an inappropriate revenue recognition methodology to the contract. The Company recorded revenue as royalty payments were received on this contract and should have deferred all the revenue and direct and incremental costs until all the deliverables, except PCS, were delivered in 2012. | |||||||||
This was corrected in the fourth quarter of 2012, and the net out-of-period impact of these adjustments was $1.1 million, consisting of a reduction of revenue and research and development costs of $4.2 million and $3.1 million, respectively. Once all elements except PCS were delivered, the related deferred direct and incremental costs began to be recognized ratably over the contractual PCS support period, as a component of Cost of Goods Sold. | |||||||||
Service | |||||||||
Our service revenue primarily includes out-of-warranty repairs and product maintenance contracts. Out-of warranty repairs primarily consist of product repair services performed by our contract manufacturers for those customers that allowed their original product warranty to expire without purchasing one of our higher level support service plans. Revenue from these out-of-warranty repairs, and the associated cost of sales, is recognized in the period these services are provided. Service revenue also consists of product maintenance contracts purchased by our customers as an extension of our standard warranty. Revenue from our product maintenance contracts is deferred and recognized ratably over the contract term, generally 12 to 36 months. Net revenue derived from services was less than 10% of total revenue for all periods presented. | |||||||||
Revenue Recognition for Arrangements with Multiple Deliverables | |||||||||
For multi-element arrangements that include hardware products containing software essential to the hardware product’s functionality and undelivered non-software services (all non-software related elements), we allocate the transaction price to all deliverables based on their relative selling prices. In such circumstances, we use a hierarchy to determine the selling price to be used for allocating the transaction price to deliverables: (i) VSOE of fair value, (ii) third-party evidence of selling price, or TPE, and (iii) best estimate of the selling price, or ESP. VSOE of fair value generally exists only when we sell the deliverable separately and represents the actual price charged by us for that deliverable. ESPs reflect our best estimates of what the selling prices of the deliverables would be if they were sold regularly on a standalone basis. | |||||||||
Revenue Recognition for Sales to Channel Partners | |||||||||
On sales to channel partners, we evaluate whether fees are considered fixed or determinable by considering a number of factors, including our ability to estimate returns, payment terms and our relationship and past history with the particular channel partner. If fees are not considered fixed or determinable at the time of sale to a channel partner, revenue recognition is deferred until there is persuasive evidence indicating the product has sold through to an end-user. Persuasive evidence of sell-through may include reports from channel partners documenting sell-through activity or data indicating an order has shipped to an end-user. | |||||||||
Deferred Revenue | |||||||||
We defer revenue on upfront nonrefundable payments received from our customers and recognize it ratably over the term of the agreement, unless the payment is in exchange for products delivered that represent the culmination of a separate earnings process. When we provide consideration to a customer, we recognize the value of that consideration as a reduction in net revenue. We may be required to maintain inventory with certain of our largest OEM customers, which we refer to as "hubbing" arrangements. Pursuant to these arrangements we deliver products to a customer or a designated third-party warehouse based upon the customer’s projected needs, but do not recognize product revenue unless and until the customer has taken legal title of our product from the warehouse to incorporate into its end products. | |||||||||
Advertising Costs | Advertising Costs | ||||||||
We expense advertising costs in the period incurred. Advertising expense is included as a component of sales and marketing expense. Advertising expense was $1.2 million, $1.6 million and $1.8 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||
Shipping and Handling | Shipping and Handling | ||||||||
Cost related to the shipping and handling of our products is included in cost of goods sold for all periods presented. | |||||||||
Research and Development | Research and Development and Capitalized Software Development Costs | ||||||||
Research and development costs are expensed as incurred. In conjunction with the development of our products, we incur certain software development costs. For the majority of our software development projects, no costs have been capitalized because the period between achieving technological feasibility and completion of such software is relatively short and software development costs qualifying for capitalization have been insignificant. On a specific software project under development, it was determined that the period between achieving technological feasibility and completion of the software is not relatively short and software development costs qualifying for capitalization will be significant. For this project, since technological feasibility has been established, all software development costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached after all high-risk development issues have been resolved through coding and testing. The amortization of these costs will be included in cost of goods sold over the estimated life of the products. Refer to Note 5, Intangible Assets. | |||||||||
Share-Based Compensation | Share-Based Compensation | ||||||||
Share-based compensation expense for all share-based payment awards granted is determined based on the grant-date fair value. We recognize these compensation costs net of an estimated forfeiture rate, and recognize compensation cost only for those shares expected to vest on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the share-based payment awards. We estimate forfeiture rates based on our historical experience. | |||||||||
Income Taxes | Income Taxes | ||||||||
We recognize deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. We record a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. | |||||||||
Contingent Liabilities | Contingent Liabilities | ||||||||
We are involved in certain claims from time to time arising in the ordinary course of business involving our products, suppliers, and/or customers. We may incur settlements, fines, penalties or judgments in connection with some of these matters. While we may be unable to estimate the ultimate dollar amount of exposure or loss in connection with these matters, we make accruals as warranted. The amounts we accrue could vary substantially from amounts we pay due to several factors including the following: possible third-party contributions, the inherent uncertainties of the estimation process, and the uncertainties involved in litigation. We believe that we have adequately provided in our consolidated financial statements for the impact of these contingencies. We also believe that the outcomes will not materially affect our results of operations, our financial position or our cash flows, except as disclosed. Refer to Note 12, Commitments and Contingencies. | |||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||
We classify investments as cash equivalents if they are readily convertible to cash and have original maturities of three months or less at the time of acquisition. Cash and cash equivalents consist primarily of money market mutual funds issued or managed in the United States. At December 31, 2013 and 2014, the carrying value of cash and cash equivalents approximates fair value due to the short period of time to maturity. | |||||||||
As of December 31, 2014, $3.0 million of the $42.5 million of cash, cash equivalents, and marketable securities was held by our foreign subsidiaries, as compared to $3.6 million of the $40.4 million of cash, cash equivalents and marketable securities held by our foreign subsidiaries as of December 31, 2013. We currently intend to repatriate approximately $2.0 million of our cash and cash equivalents when we close down our Netherlands subsidiary during 2015. We obtained a favorable ruling from the Netherlands and will not be charged foreign taxes on the repatriation and we expect that our net operating loss carryforwards and foreign tax credits will be available to offset any United States tax liability, should one arise. We anticipate that future foreign earnings will be deemed to be permanently reinvested, although we could elect to repatriate funds held in one or more foreign jurisdictions. If applicable, withholding taxes could reduce the net amount repatriated, and we could be required to accrue and remit applicable United States income taxes to the extent a tax liability results after utilization of net operating loss carryforwards and available tax credits. Refer to Note 12, Commitments and Contingencies, for a discussion of the associated cumulative translation loss. | |||||||||
Property and Equipment | Property and Equipment | ||||||||
Property and equipment are recorded at cost less accumulated depreciation. Property and equipment are depreciated for financial reporting purposes using the straight-line method over the following estimated useful lives: machinery and equipment, furniture, fixtures and computer software, 3-5 years; leasehold improvements are amortized using the straight-line method over the shorter of the useful lives of the assets or the terms of the leases. Significant improvements to our property and equipment are capitalized while expenditures for maintenance and repairs are charged to expense in the period incurred. | |||||||||
The components of property and equipment consist of the following, (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Machinery and equipment | $ | 16,628 | $ | 19,263 | |||||
Furniture, fixtures, and computer software | 1,669 | 2,072 | |||||||
Leasehold improvements | 2,578 | 2,620 | |||||||
Construction in progress | 831 | 228 | |||||||
Total property and equipment, at cost | 21,706 | 24,183 | |||||||
Less accumulated depreciation | (14,141 | ) | (15,419 | ) | |||||
Property and equipment, net | $ | 7,565 | $ | 8,764 | |||||
Depreciation expense was $2.5 million, $3.1 million and $4.0 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||
Concentration of Customers and Suppliers | Concentration of Customers and Suppliers | ||||||||
A majority of our net revenue is derived from a limited number of customers. For the years ended December 31, 2012 and 2013, we had two customers, Customer A and C, that accounted for 10% or more of our total net revenue. For the year ended December 31, 2014, we had two customers, Customer A and B, that account for 10% or more of our total net revenue. Our agreements with our customers do not contain any minimum purchase commitments, do not obligate them to purchase their storage solutions exclusively from us and may be terminated at any time upon notice. | |||||||||
Net revenue consists of all product and service revenues. Net revenue by major customer is as follows (as a percentage of total net revenue): | |||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | 2014 | |||||||
Customer A | 68 | % | 59 | % | 47 | % | |||
Customer B | — | % | 0 | % | 11 | % | |||
Customer C | 10 | % | 13 | % | 8 | % | |||
Other customers less than 10% | 22 | % | 28 | % | 34 | % | |||
Total | 100 | % | 100 | % | 100 | % | |||
If our relationship with Customers A, B and/or C were disrupted or declined significantly, we would lose a substantial portion of our anticipated net revenue and our business could be materially harmed. We cannot guarantee that our relationship with Customers A, B and/or C or our other customers will expand or not otherwise be disrupted. | |||||||||
At December 31, 2013, we had one customer, Customer A, comprising 63% of our total accounts receivable. At December 31, 2014, we had two customers, Customer A and B, comprising 40% and 31%, respectively, of our total accounts receivable. The decrease in accounts receivable from Customer A is due to decreased revenue in the fourth quarter of 2014 as compared to the fourth quarter of 2013, and the increase in accounts receivable from Customer B is due to increased revenue in the fourth quarter of 2014 as compared to the fourth quarter of 2013. No other customer balance exceeded 10% of our total accounts receivable balance at December 31, 2013 or 2014. | |||||||||
We currently rely on one contract manufacturing partner, Foxconn Technology Group, or Foxconn, to produce substantially all of our products. As a result, should Foxconn or parts suppliers not produce and deliver inventory for us to sell on a timely basis, operating results may be adversely impacted. In November 2011, we amended our agreement with Foxconn to extend the manufacturing agreement for a period of three years. In November 2014, we extended the agreement to March 11, 2015, and in March 2015, we extended the agreement to September 1, 2015. We are currently in negotiations to further extend our contract. If the agreement is not further extended, pursuant to terms in the existing agreement, we can continue to operate with Foxconn for a period of six months following the expiration of the agreement, as the Company may issue purchase orders and Foxconn may accept purchase orders under the terms and conditions of the existing agreement. | |||||||||
Long-lived asset impairment | Long-lived asset impairment | ||||||||
We periodically review the recoverability of the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. An impairment in the carrying value of an asset group is recognized whenever anticipated future undiscounted cash flows from an asset group are estimated to be less than its carrying value. The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk. There were no impairment charges in continuing operations for the years ended December 31, 2012, 2013 or 2014. | |||||||||
Valuation of Goodwill | Valuation of Goodwill | ||||||||
The changes in the carrying amount of goodwill are as follows during the years ended December 31, 2013 and 2014 (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Balance, beginning of the year | |||||||||
Goodwill | $ | 44,840 | $ | 44,840 | |||||
Accumulated impairment losses | (44,840 | ) | (44,840 | ) | |||||
— | — | ||||||||
Balance, end of the year | |||||||||
Goodwill | 44,840 | 44,840 | |||||||
Accumulated impairment losses | (44,840 | ) | (44,840 | ) | |||||
$ | — | $ | — | ||||||
Goodwill is not allocated to reporting segments as the balance is fully impaired. | |||||||||
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts | ||||||||
We establish an allowance for doubtful accounts for accounts receivable amounts that may not be collectible. We determine the allowance for doubtful accounts based on the aging of our accounts receivable balances and an analysis of our historical experience of bad debt write-offs. Bad debt expense was $0.0 million, $0.0 million and $0.1 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||
The changes in the allowance for doubtful accounts are as follows during the years ended December 31, 2013 and 2014 (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Balance, beginning of the year | $ | 240 | $ | 23 | |||||
Write offs | (219 | ) | — | ||||||
Additions to allowance | 2 | 64 | |||||||
Balance, end of the year | $ | 23 | $ | 87 | |||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||
From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that, other than the matter described below, the impact of recently issued standards that are not yet effective will not have a material impact on our results of operations and financial position. | |||||||||
In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09. This update creates modifications to various revenue accounting standards for specialized transactions and industries. ASU 2014-09 is intended to conform revenue accounting principles with a concurrently issued International Financial Reporting Standards with previously differing treatment between United States practice and those of much of the rest of the world, as well as, to enhance disclosures related to disaggregated revenue information. The updated guidance may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The updated guidance is effective for public entities for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods. Early adoption is not permitted and entities have the choice to apply ASU 2014-09 either retrospectively to each reporting period presented or by recognizing the cumulative effect of applying ASU 2014-09 at the date of initial application and not adjusting comparative information. The Company is currently evaluating the requirements of ASU 2014-09 and has not yet determined its impact on the Company's consolidated financial statements. |
Summary_Of_Significant_Account2
Summary Of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Property and equipment | The components of property and equipment consist of the following, (in thousands): | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Machinery and equipment | $ | 16,628 | $ | 19,263 | |||||
Furniture, fixtures, and computer software | 1,669 | 2,072 | |||||||
Leasehold improvements | 2,578 | 2,620 | |||||||
Construction in progress | 831 | 228 | |||||||
Total property and equipment, at cost | 21,706 | 24,183 | |||||||
Less accumulated depreciation | (14,141 | ) | (15,419 | ) | |||||
Property and equipment, net | $ | 7,565 | $ | 8,764 | |||||
Net revenue by major customer | Net revenue by major customer is as follows (as a percentage of total net revenue): | ||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | 2014 | |||||||
Customer A | 68 | % | 59 | % | 47 | % | |||
Customer B | — | % | 0 | % | 11 | % | |||
Customer C | 10 | % | 13 | % | 8 | % | |||
Other customers less than 10% | 22 | % | 28 | % | 34 | % | |||
Total | 100 | % | 100 | % | 100 | % | |||
Schedule of Goodwill [Table Text Block] | The changes in the carrying amount of goodwill are as follows during the years ended December 31, 2013 and 2014 (in thousands): | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Balance, beginning of the year | |||||||||
Goodwill | $ | 44,840 | $ | 44,840 | |||||
Accumulated impairment losses | (44,840 | ) | (44,840 | ) | |||||
— | — | ||||||||
Balance, end of the year | |||||||||
Goodwill | 44,840 | 44,840 | |||||||
Accumulated impairment losses | (44,840 | ) | (44,840 | ) | |||||
$ | — | $ | — | ||||||
Allowance for doubtful accounts | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Balance, beginning of the year | $ | 240 | $ | 23 | |||||
Write offs | (219 | ) | — | ||||||
Additions to allowance | 2 | 64 | |||||||
Balance, end of the year | $ | 23 | $ | 87 | |||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||
Schedule of earnings per share, basic and diluted | The following is a reconciliation of weighted-average shares outstanding used in the calculation of basic and diluted earnings from continuing operations per share (in thousands, except per share data): | ||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||
Income (loss) from continuing operations | $ | (10,402 | ) | $ | 5,540 | $ | 8,055 | ||||||||||||||
Basic weighted-average common shares outstanding | 56,954 | 58,521 | 60,171 | ||||||||||||||||||
Assumed exercise of dilutive stock options, warrants and restricted stock | — | 726 | 3,727 | ||||||||||||||||||
Diluted weighted-average common shares outstanding | 56,954 | 59,247 | 63,898 | ||||||||||||||||||
Income (loss) from continuing operations: | |||||||||||||||||||||
Basic income (loss) per share | $ | (0.18 | ) | $ | 0.09 | $ | 0.13 | ||||||||||||||
Diluted income (loss) per share | $ | (0.18 | ) | $ | 0.09 | $ | 0.13 | ||||||||||||||
Outstanding equity awards not included in calculation of diluted net loss per share | Outstanding equity awards not included in the calculation of diluted net earnings (loss) per share because their effect was anti-dilutive were as follows: | ||||||||||||||||||||
December 31, 2012 | December 31, 2013 | December 31, 2014 | |||||||||||||||||||
Number of | Range of | Number of | Range of | Number of | Range of | ||||||||||||||||
Potential | Exercise Prices | Potential | Exercise Prices | Potential | Exercise Prices | ||||||||||||||||
Shares | Shares | Shares | |||||||||||||||||||
Stock options | 8,952,129 | $0.47 - $16.36 | 5,879,842 | $1.55 - $15.15 | 2,518,000 | $3.46 - $7.84 | |||||||||||||||
Unvested stock awards | 655,402 | $ | — | 92,811 | $ | — | 55,900 | $ | — | ||||||||||||
Warrants | 1,602,489 | $ | 2.4 | 1,602,489 | $ | 2.4 | — | $ | — | ||||||||||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||
Summary of the components of loss from discontinued operations | The following is a summary of the components of loss from discontinued operations, (in thousands): | |||||||||||
Year Ended December 31, | ||||||||||||
2012 | 2013 | 2014 | ||||||||||
Net revenue | $ | 360 | $ | 50 | $ | — | ||||||
Cost of goods sold | 2,501 | 142 | — | |||||||||
Gross profit | (2,141 | ) | (92 | ) | — | |||||||
Operating expenses: | ||||||||||||
Research and development | 741 | — | — | |||||||||
Sales and marketing | 56 | — | — | |||||||||
General and administrative | 765 | 393 | — | |||||||||
Restructuring charge (recovery) | 844 | (10 | ) | — | ||||||||
Total operating expenses | 2,406 | 383 | — | |||||||||
Operating loss | (4,547 | ) | (475 | ) | — | |||||||
Other income (expense), net | (1 | ) | (1 | ) | — | |||||||
Loss from discontinued operations | $ | (4,548 | ) | $ | (476 | ) | $ | — | ||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Components of inventory | The components of inventories consist of the following (in thousands): | |||||||
December 31, | ||||||||
2013 | 2014 | |||||||
Purchased parts and materials | $ | 2,911 | $ | 2,273 | ||||
Finished goods | 3,628 | 9,069 | ||||||
Total inventory | $ | 6,539 | $ | 11,342 | ||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
Schedule of identifiable intangible assets | Identifiable intangible assets are as follows (in thousands): | |||||||||||||
December 31, 2013 | ||||||||||||||
Estimated Useful | Gross | Accumulated | Net | |||||||||||
Life | Amortization | |||||||||||||
Technology-based intangible assets | N/A | $ | — | $ | — | $ | — | |||||||
Total intangible assets | $ | — | $ | — | $ | — | ||||||||
December 31, 2014 | ||||||||||||||
Estimated Useful | Gross | Accumulated | Net | |||||||||||
Life | Amortization | |||||||||||||
Technology-based intangible assets | Not yet determined | $ | 2,680 | $ | — | $ | 2,680 | |||||||
Total intangible assets | $ | 2,680 | $ | — | $ | 2,680 | ||||||||
Product_Warranties_Tables
Product Warranties (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Product Warranties Disclosures [Abstract] | ||||||||||||
Warranty Accrual and Cost Activity | Our warranty accrual and cost activity is as follows (in thousands): | |||||||||||
December 31, | ||||||||||||
2012 | 2013 | 2014 | ||||||||||
Balance, beginning of year | $ | 6,871 | $ | 4,455 | $ | 2,965 | ||||||
Charges to operations | 2,116 | 1,350 | 1,770 | |||||||||
Deductions for payments made | (4,532 | ) | (2,840 | ) | (1,372 | ) | ||||||
Balance, end of year | $ | 4,455 | $ | 2,965 | $ | 3,363 | ||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||
Assets Measured at Fair Value on a Recurring Basis | These tables present the carrying value and fair value, by fair value hierarchy, of our financial instruments, excluding cash and cash equivalents, accounts receivable and accounts payable at December 31, 2013 and 2014, respectively (in thousands). | |||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Description | December 31, 2013 | Quoted Prices for Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total (Losses) | |||||||||||||||
Credit facility borrowings | $ | 2,000 | $ | — | $ | 2,000 | $ | — | $ | — | ||||||||||
Assets Measured at Fair Value on a Recurring Basis | ||||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Description | December 31, | Quoted Prices for Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total (Losses) | |||||||||||||||
2013 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cash and cash equivalents | $ | 40,406 | $ | 40,406 | $ | — | $ | — | $ | — | ||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Description | December 31, | Quoted Prices for Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total (Losses) | |||||||||||||||
2014 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cash and cash equivalents | $ | 42,492 | $ | 42,492 | $ | — | $ | — | $ | — | ||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Components of income (loss) before taxes | Components of income (loss) from continuing operations before taxes are as follows, (in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Income (loss) from continuing operations before taxes: | |||||||||||||
United States | $ | (7,211 | ) | $ | 9,051 | $ | 12,569 | ||||||
Foreign | (2,442 | ) | (3,460 | ) | (4,287 | ) | |||||||
Total income (loss) from continuing operations before taxes | $ | (9,653 | ) | $ | 5,591 | $ | 8,282 | ||||||
Components of income tax provision | Components of the income tax provision (benefit) are as follows, (in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Current: | |||||||||||||
Federal | $ | — | $ | (28 | ) | $ | (26 | ) | |||||
State and local | 67 | 99 | 161 | ||||||||||
Foreign | 682 | 85 | 89 | ||||||||||
749 | 156 | 224 | |||||||||||
Deferred: | |||||||||||||
Federal | — | — | — | ||||||||||
State, local and foreign | — | (105 | ) | 3 | |||||||||
— | (105 | ) | 3 | ||||||||||
Total income tax provision | $ | 749 | $ | 51 | $ | 227 | |||||||
Reconciliation of the income tax provision | The reconciliation of the income tax provision computed using the federal statutory income tax rate to the recognized income tax provision (benefit) is as follows, (in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Federal statutory rate | $ | (3,282 | ) | $ | 1,901 | $ | 2,816 | ||||||
State and local income taxes, net of federal benefit | (16 | ) | 65 | 106 | |||||||||
State rate change and other adjustments | 531 | — | (49 | ) | |||||||||
Adjustments to state deferred taxes | — | (590 | ) | 389 | |||||||||
Increase (decrease) in valuation allowance | 597 | (1,672 | ) | (3,332 | ) | ||||||||
Foreign tax rate differential | 915 | 24 | (59 | ) | |||||||||
Research and development credits | 127 | (365 | ) | (267 | ) | ||||||||
Share-based compensation | 518 | 491 | 245 | ||||||||||
Uncertain tax positions | 767 | (43 | ) | 57 | |||||||||
Adjustments to federal deferred taxes | 525 | 110 | 208 | ||||||||||
Other | 67 | 130 | 113 | ||||||||||
Income tax provision | $ | 749 | $ | 51 | $ | 227 | |||||||
The tax effect of temporary differences that give rise to deferred income taxes | The tax effect of temporary differences that give rise to deferred income taxes are as follows, (in thousands): | ||||||||||||
December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss and tax credit carry forwards | $ | 93,128 | $ | 88,656 | |||||||||
Inventory reserve and uniform capitalization | 1,474 | 1,705 | |||||||||||
Stock options and warrants | 2,440 | 2,704 | |||||||||||
Allowance for bad debts and sales returns | 171 | 880 | |||||||||||
Vacation accrual | 261 | 146 | |||||||||||
Deferred rent | 143 | 126 | |||||||||||
Deferred revenue | 380 | 433 | |||||||||||
Warranty accrual | 958 | 1,173 | |||||||||||
Depreciation and amortization | 1,358 | 1,137 | |||||||||||
Other accruals and reserves | 362 | 433 | |||||||||||
Accrued Bonus | 873 | 418 | |||||||||||
Intangible assets | 1,195 | 1,037 | |||||||||||
Total deferred tax assets | 102,743 | 98,848 | |||||||||||
Deferred tax liabilities: | |||||||||||||
State taxes | (3,885 | ) | (3,696 | ) | |||||||||
Other | (548 | ) | (187 | ) | |||||||||
Total deferred income tax liabilities | (4,433 | ) | (3,883 | ) | |||||||||
Valuation allowance | (98,205 | ) | (94,873 | ) | |||||||||
Net deferred tax assets | $ | 105 | $ | 92 | |||||||||
Summary of the activity related to unrecognized tax benefits | The following table summarizes the activity related to our unrecognized tax benefits (in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Balance, January 1 | $ | 5,025 | $ | 5,726 | $ | 5,771 | |||||||
Increase related to prior period positions | 583 | 341 | 122 | ||||||||||
Increase related to current year tax positions | 241 | 380 | 169 | ||||||||||
Reductions for tax positions of prior years | (123 | ) | (676 | ) | (395 | ) | |||||||
Settlements | — | — | — | ||||||||||
Balance, December 31 | $ | 5,726 | $ | 5,771 | $ | 5,667 | |||||||
Stockholders_Equity_Equity_Inc1
Stockholders' Equity, Equity Incentive Plans and Warrants (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||
Share-based compensation expense | The following table summarizes share-based compensation expense, (in thousands): | ||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||
Cost of goods sold | $ | 617 | $ | 334 | $ | 350 | |||||||||||||
Sales and marketing | 419 | 274 | 353 | ||||||||||||||||
Research and development | 1,705 | 1,054 | 1,304 | ||||||||||||||||
General and administrative | 1,024 | 1,028 | 1,138 | ||||||||||||||||
Share-based compensation expense before taxes | 3,765 | 2,690 | 3,145 | ||||||||||||||||
Related deferred income tax benefits | — | — | — | ||||||||||||||||
Share-based compensation expense | $ | 3,765 | $ | 2,690 | $ | 3,145 | |||||||||||||
Share-based compensation expense is derived from: | |||||||||||||||||||
Stock options | $ | 1,508 | $ | 1,924 | $ | 2,642 | |||||||||||||
Restricted stock awards | 1,958 | 489 | 181 | ||||||||||||||||
2014 and 2000 ESPP | 299 | 277 | 322 | ||||||||||||||||
Total | $ | 3,765 | $ | 2,690 | $ | 3,145 | |||||||||||||
Summary of stock option activity | A summary of stock option activity for 2014 is as follows: | ||||||||||||||||||
Number of shares | Weighted average exercise price | Weighted average remaining contractual term (in years) | Aggregate intrinsic value | ||||||||||||||||
Outstanding at January 1, 2014 | 9,850,498 | $ | 2.58 | ||||||||||||||||
Granted | 2,370,500 | 4.04 | |||||||||||||||||
Exercised | (1,184,829 | ) | 2.2 | ||||||||||||||||
Forfeited | (554,079 | ) | 2.53 | ||||||||||||||||
Expired | (529,146 | ) | 8.89 | ||||||||||||||||
Outstanding at December 31, 2014 | 9,952,944 | $ | 2.64 | 4.34 | $ | 18,369,137 | |||||||||||||
Vested and expected to vest at December 31, 2014 | 9,578,949 | $ | 2.61 | 4.27 | $ | 17,994,450 | |||||||||||||
Exercisable at December 31, 2014 | 6,141,839 | $ | 2.48 | 3.52 | $ | 12,604,603 | |||||||||||||
Summary of restricted stock activity | A summary of restricted stock award activity for 2014 is as follows: | ||||||||||||||||||
Number of shares | Weighted average grant date fair value | ||||||||||||||||||
Outstanding at January 1, 2014 | 92,811 | $ | 1.73 | ||||||||||||||||
Granted | 80,000 | 4.32 | |||||||||||||||||
Vested | (116,661 | ) | 2.25 | ||||||||||||||||
Forfeited | (250 | ) | 2.9 | ||||||||||||||||
Outstanding and unvested at December 31, 2014 | 55,900 | $ | 4.33 | ||||||||||||||||
Schedule of valuation assumptions for equity awards | To estimate compensation expense for the years ended December 31, 2012, 2013, and 2014 we used the Black-Scholes pricing model with the following weighted-average assumptions for equity awards granted: | ||||||||||||||||||
EIP and NEDSOP | ESPP | ||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||
2012 | 2013 | 2014 | 2012 | 2013 | 2014 | ||||||||||||||
Risk-free interest rate | 1.19 | % | 1.07 | % | 1.59 | % | 0.12 | % | 0.09 | % | 0.05 | % | |||||||
Expected dividend yield | — | % | — | % | — | % | — | % | — | % | — | % | |||||||
Volatility | 81 | % | 82 | % | 70 | % | 64 | % | 63 | % | 60 | % | |||||||
Expected Term | 5.2 years | 5.3 years | 4.9 years | 0.5 years | 0.5 years | 0.5 years | |||||||||||||
Forfeiture Rate | 0%-10.62% | 0%-9.45% | 0%-10.05% | — | % | — | % | — | % | ||||||||||
Commitments_And_Contingencies_
Commitments And Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Future minimum rental payments for operating leases | Future minimum lease payments due under all non-cancelable operating leases as of December 31, 2014 are as follows (in thousands): | ||||
Year Ended December 31, | |||||
2015 | $ | 873 | |||
2016 | 849 | ||||
2017 | 860 | ||||
2018 | 360 | ||||
2019 | — | ||||
Thereafter | — | ||||
Total minimum lease payments | $ | 2,942 | |||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | Information concerning principal geographic areas in which we operate is as follows (in thousands): | |||||||||||
Year ended December 31, | ||||||||||||
2012 | 2013 | 2014 | ||||||||||
Net revenue: | ||||||||||||
United States | $ | 192,801 | $ | 204,764 | $ | 216,306 | ||||||
Europe, Middle East and Africa | 14 | 3 | — | |||||||||
Asia | 1,733 | 1,798 | 1,359 | |||||||||
Total net revenue | $ | 194,548 | $ | 206,565 | $ | 217,665 | ||||||
Long-lived assets: | ||||||||||||
United States | $ | 7,682 | $ | 8,147 | $ | 9,159 | ||||||
Europe, Middle East and Africa | 68 | 15 | 13 | |||||||||
Asia | — | — | — | |||||||||
Total long-lived assets | $ | 7,750 | $ | 8,162 | $ | 9,172 | ||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Net revenues by segment are as follows (in thousands): | |||||||||||
Year ended December 31, | ||||||||||||
2012 | 2013 | 2014 | ||||||||||
Net revenue: | ||||||||||||
Server OEM | $ | 143,353 | $ | 134,798 | $ | 115,580 | ||||||
Vertical Markets | 51,195 | 71,767 | 102,085 | |||||||||
Total net revenue | $ | 194,548 | $ | 206,565 | $ | 217,665 | ||||||
Operating income (loss) by segment, and a reconciliation to consolidated income (loss) before income taxes and discontinued operations is as follows (in thousands): | ||||||||||||
Year ended December 31, | ||||||||||||
2012 | 2013 | 2014 | ||||||||||
Operating income (loss): | ||||||||||||
Server OEM | $ | 28,718 | $ | 33,464 | $ | 27,091 | ||||||
Vertical Markets | 7,858 | 21,781 | 33,587 | |||||||||
Corporate | (46,232 | ) | (49,615 | ) | (52,375 | ) | ||||||
Total operating income (loss) | (9,656 | ) | 5,630 | 8,303 | ||||||||
Total other income (expense), net | 3 | (39 | ) | (21 | ) | |||||||
Income (loss) before income taxes and discontinued operations | $ | (9,653 | ) | $ | 5,591 | $ | 8,282 | |||||
Quarterly_Financial_Informatio1
Quarterly Financial Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Schedule of Quarterly Financial Information (Unaudited) | The information presented below reflects all adjustments, which, in the opinion of management, are of a normal and recurring nature necessary to present fairly the results of operations for the periods presented (in thousands, except per share amounts): | ||||||||||||||||
Year Ended December 31, 2013: | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Net revenue | $ | 44,480 | $ | 50,683 | $ | 52,603 | $ | 58,799 | |||||||||
Gross profit | 14,440 | 17,007 | 16,873 | 17,750 | |||||||||||||
Income (loss) before income taxes and discontinued operations | (526 | ) | 2,138 | 1,875 | 2,104 | ||||||||||||
Net income (loss) from continuing operations | (560 | ) | 2,089 | 1,775 | 2,236 | ||||||||||||
Basic and diluted net income (loss) per share from continuing operations | $ | (0.01 | ) | $ | 0.04 | $ | 0.03 | $ | 0.03 | ||||||||
Year Ended December 31, 2014: | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Net revenue | $ | 48,207 | $ | 48,222 | $ | 52,121 | $ | 69,115 | |||||||||
Gross profit | 15,265 | 16,023 | 16,962 | 24,325 | |||||||||||||
Income (loss) before income taxes and discontinued operations | (411 | ) | (4 | ) | 86 | 8,611 | |||||||||||
Net income (loss) from continuing operations | (412 | ) | (78 | ) | 40 | 8,505 | |||||||||||
Basic and diluted net income (loss) per share from continuing operations | $ | (0.01 | ) | $ | (0.00 | ) | $ | 0 | $ | 0.14 | |||||||
Summary_Of_Significant_Account3
Summary Of Significant Accounting Policies (Foreign Currency Translation) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | |||
Foreign currency translation gains (losses) | ($0.10) | ($0.50) | $0.50 |
Summary_Of_Significant_Account4
Summary Of Significant Accounting Policies (Advertising Costs) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | |||
Advertising expense | $1.80 | $1.60 | $1.20 |
Summary_Of_Significant_Account5
Summary Of Significant Accounting Policies (Cash and Cash Equivalents) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $42,492,000 | $40,406,000 | $40,315,000 | $46,168,000 |
Foreign earnings expected to be repatriated in next fiscal year | 2,000,000 | |||
Foreign Subsidiaries [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $3,000,000 | $3,600,000 |
Summary_Of_Significant_Account6
Summary Of Significant Accounting Policies (Components of Property and Equipment) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Line Items] | |||
Propertyand equipment, gross | $24,183,000 | $21,706,000 | |
Less accumulated depreciation | -15,419,000 | -14,141,000 | |
Property and equipment, net | 8,764,000 | 7,565,000 | |
Depreciation | 4,000,000 | 3,100,000 | 2,500,000 |
Machinery and equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Propertyand equipment, gross | 19,263,000 | 16,628,000 | |
Furniture, fixtures, and computer software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Propertyand equipment, gross | 2,072,000 | 1,669,000 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Propertyand equipment, gross | 2,620,000 | 2,578,000 | |
Construction in progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Propertyand equipment, gross | $228,000 | $831,000 | |
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years |
Summary_Of_Significant_Account7
Summary Of Significant Accounting Policies (Concentration of Customers and Suppliers) (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Major customers | |||
Number of major customers | 2 | 2 | 2 |
Net Revenue [Member] | Customer Concentration Risk [Member] | |||
Major customers | |||
Concentration risk, percentage | 100.00% | 100.00% | 100.00% |
Net Revenue [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||
Major customers | |||
Concentration risk, percentage | 47.00% | 59.00% | 68.00% |
Net Revenue [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||
Major customers | |||
Concentration risk, percentage | 11.00% | 0.00% | 0.00% |
Net Revenue [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||
Major customers | |||
Concentration risk, percentage | 8.00% | 13.00% | 10.00% |
Net Revenue [Member] | Customer Concentration Risk [Member] | Other customers less than 10% [Member] | |||
Major customers | |||
Concentration risk, percentage | 34.00% | 28.00% | 22.00% |
Accounts Receivable [Member] | Customer A [Member] | |||
Major customers | |||
Concentration risk, percentage | 40.00% | 63.00% | |
Accounts Receivable [Member] | Customer B [Member] | |||
Major customers | |||
Concentration risk, percentage | 31.00% |
Summary_Of_Significant_Account8
Summary Of Significant Accounting Policies (Allowance for Doubtful Accounts) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance, beginning of year | $23 | $240 | |
Allowance for Doubtful Accounts Receivable, Write-offs | 0 | -219 | |
Additions to allowance | 64 | 2 | 0 |
Balance, quarter ended | $87 | $23 | $240 |
Summary_Of_Significant_Account9
Summary Of Significant Accounting Policies (Revenue Recognition) (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Sales Revenue, Services, Net [Member] | |||
Concentration Risk [Line Items] | |||
Service revenue, as a percentage of total revenue | 10.00% | 10.00% | 10.00% |
Minimum [Member] | |||
Concentration Risk [Line Items] | |||
Service contract terms | 12 months | ||
Maximum [Member] | |||
Concentration Risk [Line Items] | |||
Service contract terms | 36 months |
Recovered_Sheet1
Summary Of Significant Accounting Policies (Software) (Details) (Software [Member], USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2012 |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |
Out-of-period impact expense (revenue) adjustment | $1.10 |
Net Revenue [Member] | |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |
Out-of-period impact expense (revenue) adjustment | -4.2 |
Cost of Goods Sold [Member] | |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |
Out-of-period impact expense (revenue) adjustment | $3.10 |
Recovered_Sheet2
Summary Of Significant Accounting Policies (Changes in the Carrying Amount of Goodwill) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Goodwill [Roll Forward] | |||
Goodwill | $44,840 | $44,840 | $44,840 |
Accumulated impairment losses | -44,840 | -44,840 | -44,840 |
Goodwill | 44,840 | 44,840 | 44,840 |
Goodwill, net of accumulated impairment losses | $0 | $0 | $0 |
Earnings_Per_Share_Antidilutiv
Earnings Per Share (Antidilutive Securities) (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 31, 2008 | |
Outstanding equity awards not included in the calculation of diluted net loss per share: | ||||
Warrants, exercise price | 2.4 | |||
Stock Options [Member] | ||||
Outstanding equity awards not included in the calculation of diluted net loss per share: | ||||
Number of equity awards not included in the calculation of diluted net loss per share | 2,518,000 | 5,879,842 | 8,952,129 | |
Range of exercise prices, lower limit | $3.46 | $1.55 | $0.47 | |
Range of exercise prices, upper limit | $7.84 | $15.15 | $16.36 | |
Unvested stock awards [Member] | ||||
Outstanding equity awards not included in the calculation of diluted net loss per share: | ||||
Number of equity awards not included in the calculation of diluted net loss per share | 55,900 | 92,811 | 655,402 | |
Warrants [Member] | ||||
Outstanding equity awards not included in the calculation of diluted net loss per share: | ||||
Number of equity awards not included in the calculation of diluted net loss per share | 0 | 1,602,489 | 1,602,489 | |
Warrants, exercise price | 0 | 2.4 | 2.4 |
Earnings_Per_Share_Calculation
Earnings Per Share (Calculation of Earnings Per Share) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share [Abstract] | |||||||||||
Income (loss) from continuing operations | $8,505 | $40 | ($78) | ($412) | $2,236 | $1,775 | $2,089 | ($560) | $8,055 | $5,540 | ($10,402) |
Basic weighted-average common shares outstanding | 60,171 | 58,521 | 56,954 | ||||||||
Assumed exercise of dilutive stock options, warrants and restricted stock | 3,727 | 726 | 0 | ||||||||
Diluted weighted-average common shares outstanding | 63,898 | 59,247 | 56,954 | ||||||||
Income (loss) from continuing operations: | |||||||||||
Basic income (loss) per share | $0.13 | $0.09 | ($0.18) | ||||||||
Diluted earnings (loss) per share (usd per share) | $0.13 | $0.09 | ($0.18) |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 6 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating expenses: | ||||
Loss from discontinued operations | $0 | ($476) | ($4,548) | |
AssuredUVS [Member] | ||||
Discontinued Operations [Line Items] | ||||
Impairment of intangible assets | 1,600 | |||
Impairment of property, plant and equipment | 200 | |||
Loss from discontinued operations | ||||
Net revenue | 0 | 50 | 360 | |
Cost of goods sold | 0 | 142 | 2,501 | |
Gross profit | 0 | -92 | -2,141 | |
Operating expenses: | ||||
Research and development | 0 | 0 | 741 | |
Sales and marketing | 0 | 0 | 56 | |
General and administrative | 0 | 393 | 765 | |
Restructuring charge (recovery) | 0 | -10 | 844 | |
Total operating expenses | 0 | 383 | 2,406 | |
Operating loss | 0 | -475 | -4,547 | |
Other income (expense), net | 0 | -1 | -1 | |
Loss from discontinued operations | $0 | ($476) | ($4,548) |
Inventories_Details
Inventories (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Purchased parts and materials | $2,273 | $2,911 |
Finished goods | 9,069 | 3,628 |
Total inventory | $11,342 | $6,539 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Finite-Lived Intangible Assets | |||
Gross | $2,680,000 | $0 | |
Accumulated Amortization | 0 | 0 | |
Net | 2,680,000 | 0 | |
Amortization of intangible assets | 0 | 0 | 800,000 |
Software Development [Member] | |||
Finite-Lived Intangible Assets | |||
Gross | 2,680,000 | 0 | |
Accumulated Amortization | 0 | 0 | |
Net | $2,680,000 | $0 |
Product_Warranties_Details
Product Warranties (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | ||
Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | |
Product Liability Contingency [Line Items] | |||||
Maximum product warranty term | 3 years | ||||
Warranty accrual | $3,363,000 | $2,965,000 | $4,455,000 | ||
Estimated product warranty liability | 100,000 | ||||
Reimbursement receivable | 1,200,000 | ||||
Period of product rebates/price concessions under settlement agreement | 39 months | ||||
Movement in Standard Product Warranty Accrual [Roll Forward] | |||||
Balance, beginning of period | 4,455,000 | 2,965,000 | 4,455,000 | 6,871,000 | |
Charges to operations | 1,770,000 | 1,350,000 | 2,116,000 | ||
Deductions for costs incurred | -1,372,000 | -2,840,000 | -4,532,000 | ||
Balance, end of period | 3,363,000 | 2,965,000 | 4,455,000 | ||
Decrease in warrant accrual due to more favorable rates with a third-party service provider | 800,000 | ||||
Estimated Insurance Recoveries | 100,000 | ||||
Material Customer [Member] | |||||
Movement in Standard Product Warranty Accrual [Roll Forward] | |||||
Deductions for costs incurred | ($2,000,000) |
Credit_Facilities_Details
Credit Facilities (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Credit Facility [Line Items] | |||
Proceeds from bank borrowings | $0 | $6,900,000 | $4,600,000 |
Amount outstanding | 0 | 2,000,000 | |
Credit facility | Silicon Valley Bank | |||
Credit Facility [Line Items] | |||
Borrowing capacity | 30,000,000 | ||
Proceeds from bank borrowings | 20,000,000 | ||
Borrowing base requirement | 40,000,000 | ||
Period for borrowing base requirement | 90 days | ||
Cash and cash equivalents, net of amount outstanding under credit agreement | 20,000,000 | ||
Interest rate over prime | 1.00% | ||
Available borrowing capacity | 30,000,000 | ||
Credit facility | Silicon Valley Bank | Prime Rate [Member] | |||
Credit Facility [Line Items] | |||
Interest rate over prime | 4.00% | ||
Letters of credit | Silicon Valley Bank | |||
Credit Facility [Line Items] | |||
Letters of credit outstanding | 0 | ||
Amount outstanding | $0 | ||
Threshold One [Member] | |||
Credit Facility [Line Items] | |||
Customer accounts receivable concentration limit | 25.00% | ||
Threshold Two [Member] | |||
Credit Facility [Line Items] | |||
Customer accounts receivable concentration limit | 50.00% | ||
Threshold Three [Member] | |||
Credit Facility [Line Items] | |||
Customer accounts receivable concentration limit | 85.00% |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Estimate of Fair Value [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Credit facility borrowings | $0 | $0 |
Estimate of Fair Value [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Credit facility borrowings | 0 | 2,000,000 |
Estimate of Fair Value [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Credit facility borrowings | 0 | 0 |
Reported Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Credit facility borrowings | 0 | 2,000,000 |
Recurring [Member] | Estimate of Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value adjustment | 0 | 0 |
Assets, Fair Value Adjustment | 0 | 0 |
Recurring [Member] | Estimate of Fair Value [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 42,492,000 | 40,406,000 |
Recurring [Member] | Estimate of Fair Value [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Recurring [Member] | Estimate of Fair Value [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Recurring [Member] | Reported Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $42,492,000 | $40,406,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Disclosure [Abstract] | ||||
Anticpated increase in equity, if deferred tax benefits are recognized | $2,500,000 | |||
Unrecognized tax benefits | 5,667,000 | 5,771,000 | 5,726,000 | 5,025,000 |
Unrecognized tax benefits that would impact effective tax rate | 600,000 | 800,000 | 900,000 | |
Unrecognized tax benefits that would not impact effective tax rate | 5,100,000 | 5,000,000 | 4,800,000 | |
Income tax penalties and tax related interest accrued | 500,000 | 400,000 | 200,000 | |
Valuation allowance | 94,873,000 | 98,205,000 | ||
Increase in unrecognized tax benefits from settlements with taxing authorities | $0 |
Income_Taxes_Components_of_Inc
Income Taxes (Components of Income (Loss) Before Taxes) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income (loss) from continuing operations before taxes: | |||||||||||
United States | $12,569 | $9,051 | ($7,211) | ||||||||
Foreign | -4,287 | -3,460 | -2,442 | ||||||||
Total income (loss) from continuing operations before taxes | $8,611 | $86 | ($4) | ($411) | $2,104 | $1,875 | $2,138 | ($526) | $8,282 | $5,591 | ($9,653) |
Income_Taxes_Components_of_Inc1
Income Taxes (Components of Income Tax Provision (Benefit)) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | |||
Federal | ($26) | ($28) | $0 |
Current State and Local Tax Expense (Benefit) | 161 | 99 | 67 |
Current Foreign Tax Expense (Benefit) | 89 | 85 | 682 |
Current Income Tax Expense (Benefit) | 224 | 156 | 749 |
Deferred: | |||
Federal | 0 | 0 | 0 |
State, local and foreign | 3 | -105 | 0 |
Deferred Income Tax Expense (Benefit) | 3 | -105 | 0 |
Income tax provision | $227 | $51 | $749 |
Income_Taxes_Reconciliation_of
Income Taxes (Reconciliation of Income Tax) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
State and local income taxes, net of federal benefit | $2,816 | $1,901 | ($3,282) |
State and local income taxes, net of federal benefit | 106 | 65 | -16 |
State rate change and other adjustments | -49 | 0 | 531 |
Effective Income Tax Rate Reconciliation, Change in State Deferred Tax Assets, Amount | 389 | -590 | 0 |
Increase (decrease) in valuation allowance | -3,332 | -1,672 | 597 |
Foreign tax rate differential | -59 | 24 | 915 |
Research and development credits | -267 | -365 | 127 |
Share-based compensation | 245 | 491 | 518 |
Uncertain tax positions | 57 | -43 | 767 |
Adjustments to federal deferred taxes | 208 | 110 | 525 |
Other | 113 | 130 | 67 |
Income tax provision | $227 | $51 | $749 |
Income_Taxes_Deferred_Tax_Asse
Income Taxes (Deferred Tax Assets) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Tax Assets, Gross [Abstract] | ||
Net operating loss and tax credit carry forwards | $88,656 | $93,128 |
Inventory reserve and uniform capitalization | 1,705 | 1,474 |
Stock options and warrants | 2,704 | 2,440 |
Allowance for bad debts and sales returns | 880 | 171 |
Vacation accrual | 146 | 261 |
Deferred rent | 126 | 143 |
Deferred revenue | 433 | 380 |
Warranty accrual | 1,173 | 958 |
Depreciation and amortization | 1,137 | 1,358 |
Other accruals and reserves | 433 | 362 |
Accrued Bonus | 418 | 873 |
Intangible assets | 1,037 | 1,195 |
Total deferred tax assets | 98,848 | 102,743 |
Deferred Tax Liabilities, Gross [Abstract] | ||
State taxes | -3,696 | -3,885 |
Other | -187 | -548 |
Total deferred income tax liabilities | -3,883 | -4,433 |
Valuation allowance | -94,873 | -98,205 |
Net deferred tax assets | $92 | $105 |
Income_Taxes_Unrecognized_Tax_
Income Taxes (Unrecognized Tax Benefit Activity) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning balance | $5,771 | $5,726 | $5,025 |
Increase related to prior period positions | 122 | 341 | 583 |
Increase related to current year tax positions | 169 | 380 | 241 |
Reductions for tax positions of prior years | -395 | -676 | -123 |
Settlements | 0 | 0 | 0 |
Unrecognized tax benefits, ending balance | $5,667 | $5,771 | $5,726 |
Income_Taxes_Operating_Loss_Ca
Income Taxes (Operating Loss Carryforwards) (Details) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Federal [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $182.90 |
State [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | 101.7 |
Foreign Tax Authority [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $43.80 |
Income_Taxes_Tax_Credit_Carryf
Income Taxes (Tax Credit Carryforwards) (Details) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Federal [Member] | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | $4.90 |
Tax credit carryforward with expiration date | 4.5 |
Tax credit carryforward with no expiration date | 0.4 |
State [Member] | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | $3.50 |
Stockholders_Equity_Equity_Inc2
Stockholders' Equity, Equity Incentive Plans and Warrants (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 15, 2009 | 5-May-14 | Jan. 31, 2008 | 2-May-11 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options to purchase common stock, outstanding | 9,952,944 | 9,850,498 | |||||
Total unrecognized share-based compensation cost | $5.20 | ||||||
Unrecognized compensation cost, period for recognition | 2 years 6 months | ||||||
Options granted, weighted average exercise price | $2.35 | $1.05 | $0.89 | ||||
Intrinsic value of options exercised | 2.6 | 0.2 | 0 | ||||
Fair value of options vested in period | 2.9 | 2.2 | 2.1 | ||||
Cash received from exercise of stock options | 2.6 | 0.3 | 0 | ||||
Share price | $4.42 | ||||||
Number of warrants issued as a percentage of outstanding shares | 3.50% | ||||||
Warrants, exercise price | 2.4 | ||||||
2000 EIP [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expected Term | 10 years | ||||||
Common stock reserved for future issuance (in shares) | 7,112,217 | ||||||
Options to purchase common stock, outstanding | 2,178,746 | ||||||
2009 EIP [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expected Term | 7 years | ||||||
Common stock reserved for future issuance (in shares) | 7,814,281 | 4,500,000 | 7,000,000 | 8,000,000 | |||
Options to purchase common stock, outstanding | 7,124,198 | ||||||
2000 NEDSOP [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Term | 10 years | ||||||
2000ESPP [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expected Term | 6 months | 6 months | 6 months | ||||
Stock Issued During Period, Shares, New Issues | 4,000,000 | ||||||
Shares issued in period | 195,857 | 808,761 | |||||
Cash received from exercise of stock options | 1.1 | 0.7 | 0.7 | ||||
2014ESPP [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options to purchase common stock, outstanding | 3,803,519 | ||||||
Stock Issued During Period, Shares, New Issues | 4,000,000 | ||||||
Discount from market price on share purchases | 85.00% | ||||||
Shares issued in period | 196,481 | ||||||
Restricted Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 55,900 | 92,811 | |||||
Options outstanding, weighted average exercise price | $4.32 | $1.74 | $1.23 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $0.30 | $1.30 | $3.30 | ||||
Restricted Stock [Member] | 2000 EIP [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 0 | ||||||
Restricted Stock [Member] | 2009 EIP [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 55,900 | ||||||
Performance Shares [Member] | 2009 EIP [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 0 | ||||||
Director [Member] | 2000 NEDSOP [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options to purchase common stock, outstanding | 650,000 | ||||||
Percentage of awards vesting | 25.00% | ||||||
Award vesting period | 4 years | ||||||
Deferred Compensation Arrangement with Individual, Common Stock Reserved for Future Issuance | 1,000,000 | ||||||
Number of shares available for grant | 243,124 | ||||||
Director [Member] | Vesting after first year [Member] | 2000 NEDSOP [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 1 year | ||||||
Common Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants outstanding | 1,602,489 |
Stockholders_Equity_Equity_Inc3
Stockholders' Equity, Equity Incentive Plans and Warrants (Share-based Compensation Expense) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, gross | $3,145 | $2,690 | $3,765 |
Related deferred income tax benefits | 0 | 0 | 0 |
Share-based compensation expense, net of tax | 3,145 | 2,690 | 3,765 |
Stock Options [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, gross | 2,642 | 1,924 | 1,508 |
Restricted Stock [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, gross | 181 | 489 | 1,958 |
Employee Stock Purchase Pan [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, gross | 322 | 277 | 299 |
Cost of Sales [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, gross | 350 | 334 | 617 |
Selling and marketing [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, gross | 353 | 274 | 419 |
Research and development [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, gross | 1,304 | 1,054 | 1,705 |
General and administrative [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, gross | $1,138 | $1,028 | $1,024 |
Stockholders_Equity_Equity_Inc4
Stockholders' Equity, Equity Incentive Plans and Warrants (Summary of Stock Option Activity) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Number of shares | |
Options outstanding at beginning of period (in shares) | 9,850,498 |
Options granted (in shares) | 2,370,500 |
Options exercised (in shares) | -1,184,829 |
Options forfeited (in shares) | -554,079 |
Options expired (in shares) | -529,146 |
Options outstanding at end of period (in shares) | 9,952,944 |
Options vested and expected to vest (in shares) | 9,578,949 |
Options exercisable (in shares) | 6,141,839 |
Weighted average exercise price | |
Options outstanding at beginning of period, weighted average exercise price | $2.58 |
Options granted, weighted average exercise price | $4.04 |
Options exercised, weighted average exercise price | $2.20 |
Options forfeited, weighted average exercise price | $2.53 |
Options expired, weighted average exercise price | $8.89 |
Options vested and expected to vest, weighted average exercise price | $2.61 |
Options exercisable, weighted average exercise price | $2.48 |
Options outstanding at end of period, weighted average exercise price | $2.64 |
Options outstanding, weighted average remaining contractual term | 4 years 4 months 4 days |
Options outstanding, aggregate intrinsic value | $18,369,137 |
Options vested and expected to vest, weighted average remaining contractual term | 4 years 3 months 7 days |
Options vested and expected to vest, aggregate intrinsic value | 17,994,450 |
Options exercisable, weighted average remaining contractual term | 3 years 6 months 7 days |
Options exercisable, aggregate intrinsic value | $12,604,603 |
Stockholders_Equity_Equity_Inc5
Stockholders' Equity, Equity Incentive Plans and Warrants (Summary of Restricted Stock Awards Activity) (Details) (Restricted Stock [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock [Member] | |||
Restricted stock units, unvested (in shares) | 55,900 | 92,811 | |
Restricted stock units, unvested, weighted average grant date fair value | $4.33 | $1.73 | |
Restricted stock units, granted (in shares) | 80,000 | ||
Restricted stock units, granted, weighted average exercise price | $4.32 | $1.74 | $1.23 |
Restricted stock units, vested (in shares) | -116,661 | ||
Restricted stock units, vested, weighted average exercise price | $2.25 | ||
Restricted stock units, forfeited (in shares) | -250 | ||
Restricted stock units, forfeited, weighted average exercise price | $2.90 |
Stockholders_Equity_Equity_Inc6
Stockholders' Equity, Equity Incentive Plans and Warrants (Schedule of Fair Value Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Forfeiture Rate, Minimum | 0.00% | 0.00% | 0.00% |
Forfeiture Rate, Maximum | 10.05% | 9.45% | 10.62% |
EIP and NEDSOP [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.59% | 1.07% | 1.19% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Volatility | 70.00% | 82.00% | 81.00% |
Expected Term | 4 years 11 months 12 days | 5 years 3 months 18 days | 5 years 2 months 10 days |
2000ESPP [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.05% | 0.09% | 0.12% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Volatility | 60.00% | 63.00% | 64.00% |
Expected Term | 6 months | 6 months | 6 months |
Forfeiture Rate | 0.00% | 0.00% | 0.00% |
Employee_Retirement_Benefit_Pl1
Employee Retirement Benefit Plans (Details) (401K [Member], USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Benefit Plan Disclosure [Line Items] | |||
Maximum employee contribution, as a percentage | 100.00% | ||
Vesting period | 5 years | ||
Contributions to the retirement savings plan | $0.30 | $0.40 | $0.30 |
Minimum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Vesting period | 1 year | ||
Maximum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Vesting period | 5 years |
Commitments_And_Contingencies_1
Commitments And Contingencies (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2015 |
Loss Contingencies [Line Items] | ||||
Rent expense | $1.20 | $1.20 | $1.10 | |
Unconditional purchase obligations | 47.4 | |||
Loss Contingency, Estimate of Possible Loss | 0.9 | |||
Contract Dispute [Member] | ||||
Loss Contingencies [Line Items] | ||||
Loss Contingency, Range of Possible Loss, Minimum | 1 | |||
Loss Contingency, Range of Possible Loss, Maximum | 3.4 | |||
Loss Contingency Accrual | 1 | |||
Scenario, Forecast [Member] | ||||
Loss Contingencies [Line Items] | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Net of Tax | ($2.70) |
Commitments_And_Contingencies_2
Commitments And Contingencies (Future Minimum Lease Payments) (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Operating Leases, Future Minimum Payments Due | |
2015 | $873 |
2016 | 849 |
2017 | 860 |
2018 | 360 |
2019 | 0 |
Thereafter | 0 |
Total minimum lease payments | $2,942 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
segment | segment | segment | |||||||||
Segment Reporting Information [Line Items] | |||||||||||
Number of Reportable Segments | 3 | 1 | 1 | ||||||||
Operating Income (Loss) | $8,303 | $5,630 | ($9,656) | ||||||||
Net revenue | 69,115 | 52,121 | 48,222 | 48,207 | 58,799 | 52,603 | 50,683 | 44,480 | 217,665 | 206,565 | 194,548 |
Total other income (expense), net | -21 | -39 | 3 | ||||||||
Income (loss) before income taxes and discontinued operations | 8,611 | 86 | -4 | -411 | 2,104 | 1,875 | 2,138 | -526 | 8,282 | 5,591 | -9,653 |
Long-Lived Assets | 9,172 | 8,162 | 9,172 | 8,162 | 7,750 | ||||||
UNITED STATES | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 216,306 | 204,764 | 192,801 | ||||||||
Long-Lived Assets | 9,159 | 8,147 | 9,159 | 8,147 | 7,682 | ||||||
EMEA [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 0 | 3 | 14 | ||||||||
Long-Lived Assets | 13 | 15 | 13 | 15 | 68 | ||||||
Asia [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 1,359 | 1,798 | 1,733 | ||||||||
Long-Lived Assets | 0 | 0 | 0 | 0 | 0 | ||||||
Server OEMs [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Income (Loss) | 27,091 | 33,464 | 28,718 | ||||||||
Net revenue | 115,580 | 134,798 | 143,353 | ||||||||
Vertical Markets [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Income (Loss) | 33,587 | 21,781 | 7,858 | ||||||||
Net revenue | 102,085 | 71,767 | 51,195 | ||||||||
Corporate Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Income (Loss) | ($52,375) | ($49,615) | ($46,232) |
Quarterly_Financial_Informatio2
Quarterly Financial Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net revenue | $69,115 | $52,121 | $48,222 | $48,207 | $58,799 | $52,603 | $50,683 | $44,480 | $217,665 | $206,565 | $194,548 |
Gross profit | 24,325 | 16,962 | 16,023 | 15,265 | 17,750 | 16,873 | 17,007 | 14,440 | 72,575 | 66,070 | 48,371 |
Income (loss) before income taxes and discontinued operations | 8,611 | 86 | -4 | -411 | 2,104 | 1,875 | 2,138 | -526 | 8,282 | 5,591 | -9,653 |
Net income (Loss) from continuing operations | $8,505 | $40 | ($78) | ($412) | $2,236 | $1,775 | $2,089 | ($560) | $8,055 | $5,540 | ($10,402) |
Basic and diluted net income (loss) per share from continuing operations | $0.14 | $0 | $0 | ($0.01) | $0.03 | $0.03 | $0.04 | ($0.01) | $0.13 | $0.09 | ($0.18) |