Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 03, 2020 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Registrant Name | OneSpan Inc. | |
Entity File Number | 000-24389 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-4169320 | |
Entity Address, Address Line One | 121 West Wacker Drive, Suite 2050 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60601 | |
City Area Code | 312 | |
Local Phone Number | 766-4001 | |
Title of 12(b) Security | Common Shares | |
Trading Symbol | OSPN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 40,345,291 | |
Entity Central Index Key | 0001044777 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and equivalents | $ 83,984 | $ 84,282 |
Short term investments | 26,796 | 25,511 |
Accounts receivable, net of allowances of $3,723 in 2020 and $2,524 in 2019 | 54,347 | 62,405 |
Inventories, net | 16,443 | 19,819 |
Prepaid expenses | 6,004 | 6,198 |
Contract assets | 6,848 | 5,240 |
Other current assets | 7,261 | 6,346 |
Total current assets | 201,683 | 209,801 |
Property and equipment, net | 12,159 | 11,454 |
Operating lease right-of-use assets | 10,789 | 10,580 |
Goodwill | 91,646 | 94,612 |
Intangible assets, net of accumulated amortization | 30,652 | 36,209 |
Deferred income taxes | 8,039 | 7,863 |
Contract assets - non-current | 3,774 | 3,355 |
Other assets | 9,719 | 8,668 |
Total assets | 368,461 | 382,542 |
Current liabilities | ||
Accounts payable | 5,778 | 10,835 |
Deferred revenue | 37,728 | 30,338 |
Accrued wages and payroll taxes | 13,766 | 15,415 |
Short-term income taxes payable | 2,571 | 7,410 |
Other accrued expenses | 9,608 | 8,786 |
Deferred compensation | 1,041 | 1,028 |
Total current liabilities | 70,492 | 73,812 |
Long-term deferred revenue | 10,723 | 15,259 |
Long-term lease liability | 11,749 | 11,299 |
Other long-term liabilities | 8,021 | 8,297 |
Long-term income taxes payable | 5,905 | 6,958 |
Deferred income taxes | 4,364 | 4,623 |
Total liabilities | 111,254 | 120,248 |
Stockholders' equity | ||
Preferred stock: 500 shares authorized, none issued and outstanding at December 31, 2020 and 2019 | ||
Common stock: $.001 par value per share, 75,000 shares authorized; 40,329 and 40,207 issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 40 | 40 |
Additional paid-in capital | 97,140 | 96,109 |
Accumulated income | 177,166 | 179,440 |
Accumulated other comprehensive loss | (17,139) | (13,295) |
Total stockholders' equity | 257,207 | 262,294 |
Total liabilities and stockholders' equity | $ 368,461 | $ 382,542 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts | $ 3,723 | $ 2,524 |
Preferred stock, shares authorized | 500 | 500 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000 | 75,000 |
Common stock, shares issued | 40,329 | 40,207 |
Common stock, shares outstanding | 40,329 | 40,207 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue | ||||
Total revenue | $ 54,954 | $ 56,167 | $ 111,324 | $ 103,262 |
Cost of goods sold | ||||
Total cost of goods sold | 18,225 | 17,880 | 34,295 | 33,919 |
Gross profit | 36,729 | 38,287 | 77,029 | 69,343 |
Operating costs | ||||
Sales and marketing | 14,694 | 16,040 | 29,553 | 30,423 |
Research and development | 10,541 | 11,977 | 20,535 | 22,472 |
General and administrative | 10,846 | 10,180 | 23,114 | 20,050 |
Amortization of intangible assets | 2,335 | 2,368 | 4,689 | 4,716 |
Total operating costs | 38,416 | 40,565 | 77,891 | 77,661 |
Operating loss | (1,687) | (2,278) | (862) | (8,318) |
Interest income, net | 126 | 69 | 333 | 204 |
Other income (expense), net | 509 | 451 | 171 | (100) |
Loss before income taxes | (1,052) | (1,758) | (358) | (8,214) |
Provision (benefit) for income taxes | 973 | 753 | 1,663 | 353 |
Net loss | $ (2,025) | $ (2,511) | $ (2,021) | $ (8,567) |
Net loss per share | ||||
Basic (in dollars per share) | $ (0.05) | $ (0.06) | $ (0.05) | $ (0.21) |
Diluted (in dollars per share) | $ (0.05) | $ (0.06) | $ (0.05) | $ (0.21) |
Weighted average common shares outstanding | ||||
Basic (in shares) | 40,028 | 40,038 | 40,059 | 40,037 |
Diluted (in shares) | 40,028 | 40,038 | 40,059 | 40,037 |
Product and license | ||||
Revenue | ||||
Total revenue | $ 35,384 | $ 40,117 | $ 73,644 | $ 71,460 |
Cost of goods sold | ||||
Total cost of goods sold | 12,576 | 13,451 | 23,314 | 24,767 |
Services and other | ||||
Revenue | ||||
Total revenue | 19,570 | 16,050 | 37,680 | 31,802 |
Cost of goods sold | ||||
Total cost of goods sold | $ 5,649 | $ 4,429 | $ 10,981 | $ 9,152 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net loss | $ (2,025) | $ (2,511) | $ (2,021) | $ (8,567) |
Other comprehensive loss | ||||
Cumulative translation adjustment, net of tax | 446 | (1,298) | (3,832) | (428) |
Pension adjustment, net of tax | (6) | (12) | (12) | (28) |
Comprehensive loss | $ (1,585) | $ (3,821) | $ (5,865) | $ (9,023) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Income | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Dec. 31, 2018 | $ 40 | $ 93,310 | $ 171,576 | $ (13,287) | $ 251,639 |
Balance (in shares) at Dec. 31, 2018 | 40,225 | ||||
Change in Stockholders' Equity | |||||
Net income (loss) | (6,056) | (6,056) | |||
Foreign currency translation adjustment, net of tax | 870 | 870 | |||
Restricted stock awards | 552 | 552 | |||
Restricted stock awards, Shares | (10) | ||||
Tax payments for stock issuances | (218) | (218) | |||
Pension adjustment, net of tax | (16) | (16) | |||
Balance at Mar. 31, 2019 | $ 40 | 93,644 | 165,520 | (12,433) | 246,771 |
Balance (in shares) at Mar. 31, 2019 | 40,215 | ||||
Balance at Dec. 31, 2018 | $ 40 | 93,310 | 171,576 | (13,287) | 251,639 |
Balance (in shares) at Dec. 31, 2018 | 40,225 | ||||
Change in Stockholders' Equity | |||||
Net income (loss) | (8,567) | ||||
Balance at Jun. 30, 2019 | $ 40 | 94,272 | 163,009 | (13,743) | 243,578 |
Balance (in shares) at Jun. 30, 2019 | 40,328 | ||||
Balance at Mar. 31, 2019 | $ 40 | 93,644 | 165,520 | (12,433) | 246,771 |
Balance (in shares) at Mar. 31, 2019 | 40,215 | ||||
Change in Stockholders' Equity | |||||
Net income (loss) | (2,511) | (2,511) | |||
Foreign currency translation adjustment, net of tax | (1,298) | (1,298) | |||
Restricted stock awards | 677 | 677 | |||
Restricted stock awards, Shares | 117 | ||||
Tax payments for stock issuances | (49) | (49) | |||
Tax payments for stock issuances, Shares | (4) | ||||
Pension adjustment, net of tax | (12) | (12) | |||
Balance at Jun. 30, 2019 | $ 40 | 94,272 | 163,009 | (13,743) | 243,578 |
Balance (in shares) at Jun. 30, 2019 | 40,328 | ||||
Balance at Dec. 31, 2019 | $ 40 | 96,109 | 179,440 | (13,295) | 262,294 |
Balance (in shares) at Dec. 31, 2019 | 40,207 | ||||
Change in Stockholders' Equity | |||||
Cumulative impact of change in accounting principles, net of tax | (253) | (253) | |||
Net income (loss) | 4 | 4 | |||
Foreign currency translation adjustment, net of tax | (4,278) | (4,278) | |||
Restricted stock awards | 1,350 | 1,350 | |||
Restricted stock awards, Shares | 168 | ||||
Tax payments for stock issuances | (293) | (293) | |||
Tax payments for stock issuances, Shares | (61) | ||||
Pension adjustment, net of tax | (6) | (6) | |||
Balance at Mar. 31, 2020 | $ 40 | 97,166 | 179,191 | (17,579) | 258,818 |
Balance (in shares) at Mar. 31, 2020 | 40,314 | ||||
Balance at Dec. 31, 2019 | $ 40 | 96,109 | 179,440 | (13,295) | 262,294 |
Balance (in shares) at Dec. 31, 2019 | 40,207 | ||||
Change in Stockholders' Equity | |||||
Net income (loss) | (2,021) | ||||
Balance at Jun. 30, 2020 | $ 40 | 97,140 | 177,166 | (17,139) | 257,207 |
Balance (in shares) at Jun. 30, 2020 | 40,329 | ||||
Balance at Mar. 31, 2020 | $ 40 | 97,166 | 179,191 | (17,579) | 258,818 |
Balance (in shares) at Mar. 31, 2020 | 40,314 | ||||
Change in Stockholders' Equity | |||||
Net income (loss) | (2,025) | (2,025) | |||
Foreign currency translation adjustment, net of tax | 446 | 446 | |||
Restricted stock awards | 860 | 860 | |||
Restricted stock awards, Shares | 19 | ||||
Tax payments for stock issuances | (886) | (886) | |||
Tax payments for stock issuances, Shares | (4) | ||||
Pension adjustment, net of tax | (6) | (6) | |||
Balance at Jun. 30, 2020 | $ 40 | $ 97,140 | $ 177,166 | $ (17,139) | $ 257,207 |
Balance (in shares) at Jun. 30, 2020 | 40,329 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | ||
Cash flows from operating activities: | |||
Net loss | $ (2,021) | $ (8,567) | |
Adjustments to reconcile net loss from operations to net cash provided by (used in) operations: | |||
Depreciation and amortization of intangible assets | 6,097 | 5,734 | |
Loss on disposal of assets | 53 | ||
Deferred tax benefit | (319) | (349) | |
Stock-based compensation | 2,210 | 1,229 | |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 7,528 | (8,788) | |
Inventories, net | 3,376 | (5,792) | |
Contract assets | (2,026) | 4,703 | |
Accounts payable | (5,025) | 4,448 | |
Income taxes payable | (5,870) | (6,139) | |
Accrued expenses | (791) | (4,269) | |
Deferred compensation | 13 | (332) | |
Deferred revenue | 2,990 | (1,758) | |
Other assets and liabilities | (1,834) | (2,913) | |
Net cash provided by (used in) operating activities | 4,381 | (22,793) | |
Cash flows from investing activities: | |||
Purchase of short term investments | (14,645) | (12,829) | |
Maturities of short term investments | 13,340 | 9,500 | |
Additions to property and equipment | (2,167) | (989) | |
Other | (48) | ||
Net cash used in investing activities | (3,520) | (4,318) | |
Cash flows from financing activities: | |||
Tax payments for restricted stock issuances | (1,179) | (266) | |
Net cash used in financing activities | (1,179) | (266) | |
Effect of exchange rate changes on cash | 20 | (205) | |
Net decrease in cash | (298) | (27,582) | |
Cash, cash equivalents, and restricted cash, beginning of period | 85,129 | 77,555 | |
Cash, cash equivalents, and restricted cash, end of period | [1] | $ 84,831 | $ 49,973 |
[1] | The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to amounts reported within the unaudited condensed consolidated balance sheet as of June 30, 2020 and December 31, 2019 and amounts previously reported within the unaudited condensed consolidated balance sheet in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 (in thousands): |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||||
Cash and cash equivalents | $ 83,984 | $ 84,282 | $ 49,126 | |||
Restricted cash included in other non-current assets | 847 | 847 | 847 | |||
Cash, cash equivalents and restricted cash | $ 84,831 | [1] | $ 85,129 | $ 49,973 | [1] | $ 77,555 |
[1] | The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to amounts reported within the unaudited condensed consolidated balance sheet as of June 30, 2020 and December 31, 2019 and amounts previously reported within the unaudited condensed consolidated balance sheet in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 (in thousands): |
Description of the Company and
Description of the Company and Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Description of the Company and Basis of Presentation | |
Description of the Company and Basis of Presentation | Note 1 – Description of the Company and Basis of Presentation Description of the Company OneSpan Inc. and its wholly owned subsidiaries design, develop, market and support hardware and software security systems that manage and secure access to information assets. OneSpan has operations in Austria, Australia, Belgium, Brazil, Canada, China, France, Japan, The Netherlands, Singapore, Switzerland, the United Arab Emirates, the United Kingdom (U.K), and the United States (U.S.). In accordance with ASC 280, Segment Reporting, our operations are reported as a single operating segment. The chief operating decision maker is the Chief Executive Officer who reviews the statement of operations of the Company on a consolidated basis, makes decisions and manages the operations of the Company as a single operating segment. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of OneSpan and its subsidiaries and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the results of the interim periods presented. All significant intercompany accounts and transactions have been eliminated. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ended December 31, 2020, particularly in light of the novel coronavirus (COVID-19) pandemic and its effects on domestic and global economies. To limit the spread of COVID-19, governments have imposed, and may continue to impose, among other things, travel and business operation restrictions and stay-at-home orders and social distancing guidelines, causing some businesses to adjust, reduce or suspend operating activities. These disruptions and restrictions could adversely affect our operating results due to, among other things, reduced demand for our services and solutions as a result of our customers having to adjust, reduce or suspend operating activities. During the summer of 2020, we began to experience softened demand for our products and services due to, we believe, global economic uncertainty connected with the continued seriousness of the COVID-19 pandemic. For additional information, see Part II, Item 1A – Risk Factors of this Form 10-Q for additional information regarding the potential impact of COVID-19 on the Company. Revision of Previously Issued Financial Statements We have revised amounts reported in previously issued financial statements for the periods presented in this Quarterly Report on Form 10-Q related to immaterial errors. The errors relate to certain contracts with customers involving term-based software licenses and related maintenance and support services. The net contract assets that originated from a portion of these contracts in prior periods were not properly accounted for in subsequent periods, which caused overstatements of revenue in prior periods. We evaluated the aggregate effects of the errors to our previously issued financial statements in accordance with SEC Staff Accounting Bulletins No. 99 and No. 108 and, based upon quantitative and qualitative factors, determined that the errors were not material to the previously issued financial statements and disclosures included in our Annual Reports on Form 10-K for the years ended December 31, 2019 and 2018, or for any quarterly periods included therein or through our most recent Quarterly Report on Form 10-Q. The following tables present the effects of the aforementioned revisions on our condensed consolidated balance sheet as of December 31, 2019, our unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2019, our unaudited condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2019, our unaudited condensed consolidated statement of stockholders’ equity for the three and six months ended June 30, 2019, our unaudited condensed consolidated statement of stockholders’ equity for the three months ended March 31, 2020, and our unaudited condensed consolidated statement of cash flows for the six months ended June 30, 2019 (in thousands). Condensed Consolidated Balance Sheet December 31, 2019 in thousands As Previously Reported Adjustments As Revised Contract assets $ 7,058 $ (1,818) $ 5,240 Total current assets 211,619 (1,818) 209,801 Contract assets - non-current 3,565 (210) 3,355 Total assets 384,570 (2,028) 382,542 Short-term income taxes payable 7,711 (301) 7,410 Total current liabilities 74,113 (301) 73,812 Long-term deferred revenue 15,259 — 15,259 Long-term income taxes payable 6,958 — 6,958 Total liabilities 120,549 (301) 120,248 Accumulated income 181,167 (1,727) 179,440 Accumulated other comprehensive loss — Total stockholders' equity 264,021 (1,727) 262,294 Total liabilities and stockholders' equity 384,570 (2,028) 382,542 Condensed Consolidated Statements of Operations (Unaudited) Three Months ended June 30, 2019 Six Months ended June 30, 2019 As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised Revenue Product and license $ 40,117 $ — $ 40,117 $ 71,978 $ (518) $ 71,460 Services and other 16,117 (67) 16,050 31,864 (62) 31,802 Total revenue 56,234 (67) 56,167 103,842 (580) 103,262 Gross Profit 38,354 (67) 38,287 69,923 (580) 69,343 Operating loss (2,211) (67) (2,278) (7,738) (580) (8,318) Loss before income taxes (1,691) (67) (1,758) (7,634) (580) (8,214) Provision (benefit) for income taxes 770 (17) 753 499 (146) 353 Net Loss (2,461) (50) (2,511) (8,133) (434) (8,567) Condensed Consolidated Statements of Comprehensive Loss (Unaudited) Three Months ended June 30, 2019 Six Months ended June 30, 2019 As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised Net income (loss) $ (2,461) $ (50) $ (2,511) $ (8,133) $ (434) $ (8,567) Comprehensive income (loss) (3,771) (50) (3,821) (8,589) (434) (9,023) Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) Total Stockholders' Equity in thousands As Previously Reported Adjustments As Revised Balance at December 31, 2018 $ 252,441 $ (802) $ 251,639 Net income (loss) (5,671) (385) (6,056) Balance at March 31, 2019 247,958 (1,187) 246,771 Net income (loss) (2,461) (50) (2,511) Balance at June 30, 2019 244,815 (1,237) 243,578 Balance at December 31, 2019 $ 264,021 $ (1,727) $ 262,294 Net income (loss) 98 (94) 4 Balance at March 31, 2020 260,639 (1,821) 258,818 Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months ended June 30, 2019 in thousands As Previously Reported Adjustments As Revised Cash flows from operating activities: Net loss $ (8,133) $ (434) $ (8,567) Changes in operating assets and liabilities: Contract assets 4,123 580 4,703 Income taxes payable (5,993) (146) (6,139) Deferred revenue — — — Net cash provided by (used in) operating activities (22,793) — (22,793) For the three months ended March 31, 2020, the impacts of the adjustments resulted in a decrease of $0.1 million to income before taxes, and a decrease of $0.1 million to net income, compared to the amounts previously reported. Principles of Consolidation The consolidated financial statements include the accounts of OneSpan Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Foreign Currency Translation and Transactions The financial position and results of the operations of the majority of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Accordingly, assets and liabilities are translated into U.S. Dollars using current exchange rates as of the balance sheet date. Revenue and expenses are translated at average exchange rates prevailing during the year. Translation adjustments arising from differences in exchange rates are charged or credited to other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are included in the condensed consolidated statements of operations in other income (expense), net. Foreign exchange transaction gains aggregated less than $0.1 million for the three months ended June 30, 2020, and foreign exchange transaction gains aggregated $0.2 million for the three months ended June 30, 2019. For the six months ended June 30, 2020, foreign exchange loss aggregated $0.5 million, and foreign exchange transaction losses aggregated $0.7 million for the six months ended June 30, 2019. The financial position and results of our operations in Singapore, Switzerland, and Canada are measured in U.S. Dollars. For these subsidiaries, gains and losses that result from foreign currency transactions are included in the consolidated statements of operations in other income (expense), net. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Except for certain changes which resulted from the adoption of ASU 2016-13, there have been no changes to the significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 16, 2020 that have had a material impact on the Company’s condensed consolidated financial statements and related notes. Cash, Cash Equivalents and Restricted Cash. We are in a lease agreement that required a letter of credit in the amount of $0.8 million to secure the obligation. The restricted cash related to this letter of credit is recorded in other non-current assets on the Condensed Consolidated Balance Sheet at June 30, 2020 and December 31, 2019. Short Term Investments The Company’s short term investments are in debt securities which consist of U.S treasury bills and notes, U.S. government agency notes, corporate notes, and high quality commercial paper with maturities at acquisition of more than three months and less than twelve months The Company classifies its investments in debt securities as available-for-sale. The Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments Accounts Receivable, net of Allowance for Credit Losses The Company adopted ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments accordance with ASU No. 2016-13, the Company evaluates its allowance based on expected losses rather than incurred losses, which is known as the current expected credit loss (“CECL”) model. The allowance is determined using the loss rate approach and is measured on a collective (pool) basis when similar risk characteristics exist. Where financial instruments do not share risk characteristics, they are evaluated on an individual basis. The allowance is based on relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Equity Method Investment We apply the equity method of accounting to our investment in Promon AS (Promon), because we exercise significant influence, but not controlling interest, in the investee. Promon is a technology company headquartered in Norway that specializes in mobile app security, whose solutions focus largely on Runtime Application Self-Protection (RASP). We exercise significant influence over Promon as a result of our 17% ownership interest in Promon, our representation on Promon’s Board of Directors, and the significance to Promon of our business activities with them. We integrate Promon’s RASP technology into our software solution, which are licensed to our customers. Under the equity method of accounting, the Company’s proportionate share of the net earnings (losses) of Promon is reported in other income (expense), net in our condensed consolidated Statements of Operations. The impact of the proportionate share of net earnings (losses) were immaterial for the three and six months ended June 30, 2020 and 2019 as were the relative size of Promon’s assets and operations in relation to the Company’s. The carrying value of our equity method investment is reported in other noncurrent assets in the condensed consolidated Balance Sheets and is reported originally at cost and adjusted each period for the Company’s share of the investee’s earnings (losses) and dividends paid, if any. The Company also assesses the investment for impairment whenever events or changes in circumstances indicate that the carrying value of the investment may not be recoverable. The Company did not record any impairment charges during the six month periods ended June 30, 2020 and 2019. The Company recorded $0.1 million and $0.6 million in costs of sales during the three months ended June 30, 2020 and June 30, 2019, respectively for license fees owed to Promon for use of their software and technology, and recorded $1.4 million and $1.2 million for the six months ended June 30, 2020 and 2019, respectively. The Company owed Promon $2.3 million as of June 30, 2020, which is included in accounts payable and accrued liabilities. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) Accounts receivable In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which amends ASC 820, Fair Value Measurement . ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019, with early adoption permitted for removed or modified disclosures, and delayed adoption of the additional disclosures until their effective date. In August 2018, the FASB issued ASU 2018-15, C ustomer's Accounting for Fees Paid in a Cloud Computing Arrangement In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans In December 2019, the FASB issued ASU 2019-12, Simplification for Accounting for Income Taxes In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topics 321, 323 and 815 In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Statements. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, our management believes that the issued standards that are not yet effective will not have a material impact on our consolidated financial statements upon adoption. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue | |
Revenue | Note 3 – Revenue We recognize revenue in accordance with ASC 606 “Revenue from Contracts with Customers” Disaggregation of Revenues The following tables present our revenues disaggregated by major products and services, geographical region and timing of revenue recognition. Revenue by major products (in thousands) Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Hardware products $ 24,188 $ 29,039 $ 43,926 $ 53,329 Software licenses 11,196 11,078 29,718 18,131 Subscription 6,133 5,347 11,840 10,607 Professional services 1,326 848 2,747 1,657 Maintenance, support and other 12,111 9,855 23,093 19,538 Total Revenue $ 54,954 $ 56,167 $ 111,324 $ 103,262 Revenue by location of customer for the three months ended June 30, 2020 and 2019 (in thousands) EMEA Americas APAC Total Total Revenue: 2020 $ 28,336 $ 13,932 $ 12,686 $ 54,954 2019 $ 33,774 $ 14,426 $ 7,967 $ 56,167 Percent of Total: 2020 52 % 25 % 23 % 100 % 2019 60 % 26 % 14 % 100 % Revenue by location of customer for the six months ended June 30, 2020 and 2019 (in thousands) EMEA Americas APAC Total Total Revenue: 2020 $ 61,940 $ 26,265 $ 23,119 $ 111,324 2019 $ 58,860 $ 27,157 $ 17,245 $ 103,262 Percent of Total: 2020 56 % 24 % 20 % 100 % 2019 57 % 26 % 17 % 100 % Timing of revenue recognition (in thousands) Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Products and Licenses transferred at a point in time $ 35,384 $ 40,117 $ 73,644 $ 71,460 Services transferred over time 19,570 16,050 37,680 31,802 Total Revenue $ 54,954 $ 56,167 $ 111,324 $ 103,262 Contract balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers. June 30, December 31, 2020 2019 Receivables, inclusive of trade and unbilled $ 54,347 $ 62,405 Contract Assets (current and non-current) $ 10,622 $ 8,595 Contract Liabilities (Deferred Revenue current and non-current) $ 48,451 $ 45,597 Contract assets relate primarily to multi-year term license arrangements and the remaining contractual billings. These contract assets are transferred to receivables when the right to billing occurs, which is normally over 3 - 5 years . The contract liabilities primarily relate to the advance consideration received from customers for subscription and maintenance services. Revenue is recognized for these services over time. As a practical expedient, we do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to a customer and when the customer pays for that product or service will be one year Revenue recognized during the six months ended June 30, 2020 included $21.4 million that was included on the December 31, 2019 balance sheet in contract liabilities. Deferred revenue increased in the same period due to timing of annual renewals. Transaction price allocated to the remaining performance obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. in thousands 2020 2021 2022 Beyond 2022 Total Future revenue related to current unsatisfied performance obligations $ 6,577 $ 10,869 $ 8,266 $ 12,196 $ 37,908 The Company applies practical expedients and does not one year Costs of obtaining a contract The Company incurs incremental costs related to commissions, which can be directly tied to obtaining a contract. The Company capitalizes commissions associated with certain new contracts and amortizes the costs over a period of benefit based on the transfer of goods or services that we have determined to be up to seven years . The Amortization is reflected in Sales and Marketing in the Statements of Operations. We determined the period of benefit by taking into consideration our customer contracts, our technology and other factors, including customer attrition. Commissions are earned upon invoicing to the customer. For contracts with multiple year payment terms, as the commissions that are payable after year 1 are payable based on continued employment, they are expensed when incurred . Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period for the assets that the Company otherwise would have recognized is one year or less. These costs are included in Sales and Marketing expense in the condensed consolidated statements of operations. The following tables provide information related to the capitalized costs and amortization recognized in the current and prior periods: in thousands June 30, 2020 December 31, 2019 Capitalized costs to obtain contracts, current $ 960 $ 676 Capitalized costs to obtain contracts, non-current $ 4,296 $ 3,222 Three months ended June 30, Six months ended June 30, in thousands 2020 2019 2020 2019 Amortization of capitalized costs to obtain contracts $ 264 $ 113 $ 433 $ 222 Impairments of capitalized costs to obtain contracts $ - $ - $ - $ - |
Inventories, net
Inventories, net | 6 Months Ended |
Jun. 30, 2020 | |
Inventories, net | |
Inventories, net | Note 4 – Inventories, net Inventories, net, consisting principally of hardware and component parts, are stated at the lower of cost or net realizable value. Cost is determined using the FIFO method. Inventories, net are comprised of the following: June 30, December 31, 2020 2019 (in thousands) Component parts $ 6,295 $ 7,429 Work-in-process and finished goods 10,148 12,390 Total $ 16,443 $ 19,819 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill | |
Goodwill | Note 5 – Goodwill Goodwill activity for the three months ended June 30, 2020 consisted of the following: in thousands Net balance at December 31, 2019 $ 94,612 Net foreign currency translation (2,966) Net balance at June 30, 2020 $ 91,646 No impairment of goodwill was recorded during the six months ended June 30, 2020 or June 30, 2019. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2020 | |
Intangible Assets | |
Intangible Assets | Note 6 – Intangible Assets Intangible asset activity for the six months ended June 30, 2020 is detailed in the following table. in thousands Acquired Technology Customer Relationships Other Total Intangible Assets Net balance at December 31, 2019 $ 5,454 $ 26,884 $ 3,871 $ 36,209 Additions — — 48 48 Disposals (5) (5) Net foreign currency translation (207) (697) (7) (911) Amortization expense (1,714) (1,799) (1,176) (4,689) Net balance at June 30, 2020 $ 3,533 $ 24,388 $ 2,731 $ 30,652 June 30, 2020 balance at cost $ 42,171 $ 38,691 $ 13,700 $ 94,562 Accumulated amortization (38,638) (14,303) (10,969) (63,910) Net balance at June 30, 2020 $ 3,533 $ 24,388 $ 2,731 $ 30,652 Certain intangible assets are denominated in functional currencies besides the U.S. dollar and are subject to currency fluctuations. No impairment of intangible assets was recorded during the six months ended June 30, 2020 or June 30, 2019. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2020 | |
Property and Equipment | |
Property and Equipment | Note 7 – Property and Equipment The major classes of property and equipment are as follows: in thousands June 30, 2020 December 31, 2019 Office equipment and software $ 14,342 $ 14,595 Leasehold improvements 10,423 9,417 Furniture and fixtures 3,880 3,717 Total 28,645 27,729 Accumulated depreciation (16,486) (16,275) Property and equipment, net $ 12,159 $ 11,454 Depreciation expense was $0.7 and $1.4 million for the three and six months ended June 30, 2020, respectively, compared to $0.5 million and $1.0 million for the three and six months ended June 30, 2019, respectively. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | Note 8 – Fair Value Measurements The fair values of cash equivalents, receivables, net, and accounts payable approximate their carrying amounts due to their short duration. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing base upon its own market assumptions. The Company classifies its investments in debt securities as available-for-sale. As described in Note 2- Summary of Significant Accounting Policies, the January 1, 2020 adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments, amended our accounting for available-for-sale debt securities. We review available-for-sale det securities for impairments related to losses and other factors each quarter. The unrealized gains and losses on the available-for-sale debt securities were not material as of June 30, 2020 and December 31, 2019. The estimated fair value of our financial instruments has been determined by using available market information and appropriate valuation methodologies, as defined in ASC 820, Fair Value Measurements ● Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities. ● Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived primarily from or corroborated by observable market data. ● Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The following tables summarize assets that are measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019: Fair Value Measurement at Reporting Date Using in thousands June 30, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: U.S. Treasury Notes $ 6,994 - $ 6,994 - Corporate Notes / Bonds $ 10,689 - $ 10,689 - Commercial Paper $ 1,499 - $ 1,499 - U.S. Treasury Bills $ 5,365 - $ 5,365 - U.S. Government Agencies $ 2,249 - $ 2,249 - Fair Value Measurement at Reporting Date Using in thousands December 31, 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: U.S. Treasury Notes $ 9,225 - $ 9,225 - Corporate Notes / Bonds $ 8,169 - $ 8,169 - Commercial Paper $ 3,482 - $ 3,482 - U.S. Treasury Bills $ 2,385 - $ 2,385 - U.S. Government Agencies $ 2,249 - $ 2,249 - |
Allowance for credit losses
Allowance for credit losses | 6 Months Ended |
Jun. 30, 2020 | |
Allowance for credit losses | |
Allowance for credit losses | Note 9 – Allowance for credit losses As described in Note 2 - Summary of Significant Accounting Policies, the January 1, 2020 adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments, The changes in the allowance for credit losses during the six months ended June 30, 2020 were as follows: in thousands Balance at December 31, 2019 $ 2,524 Impact of ASU 2016-13 adoption 288 Balance at January 1, 2020 2,812 Provision 912 Net foreign currency translation (1) Balance at June 30, 2020 $ 3,723 A higher allowance for credit losses was recorded during the six months ended June 30, 2020 due to the adverse impact the COVID-19 pandemic has had on factors that affect our estimate of future credit losses. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | Note 10 – Leases Operating lease cost details for the three and six months ended June 30, 2020 and 2019 are as follows: Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 (in thousands) (in thousands) Building rent $ 765 $ 857 $ 1,456 $ 1,721 Automobile rentals 359 233 711 510 Total net operating lease costs $ 1,124 $ 1,090 $ 2,167 $ 2,231 At June 30, 2020, the weighted average remaining lease term for our operating leases is 7.0 years. The weighted average discount rate for our operating leases is 5%. During the six months ended June 30, 2020, there were $2.0 million of operating cash payments for lease liabilities, and $1.9 million of right-of use assets obtained in exchange for new lease liabilities. Maturities of our operating leases are as follows: As of June 30, 2020 (in $ thousands) 2020 (remaining 6 months) $ 1,554 2021 3,052 2022 2,667 2023 2,153 2024 1,401 Later years 6,555 Less imputed interest (3,110) Total lease liabilities $ 14,272 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Taxes | |
Income Taxes | Note 11 – Income Taxes We estimate that our tax expense for 2020 will be approximately $3.3 million. Our global effective tax rate is higher than the U.S. statutory tax rate of 21% primarily due to losses in jurisdictions for which a valuation allowance is required. Our ultimate tax expense will depend on the mix of earnings in various jurisdictions. Income taxes of $2.2 million and $7.9 million were paid during the three and six months ended June 30, 2020, respectively. At December 31, 2019, we had deferred tax assets of $24.9 million resulting from foreign and state NOL carryforwards of $16.6 million and other foreign deductible carryforwards of $8.3 million. At December 31, 2019, we had a valuation allowance of $17.3 million against deferred tax assets related to certain carryforwards. Certain non-U.S. operations have incurred net operating losses (NOLs), which are currently subject to a valuation allowance. These NOLs may become deductible to the extent these operations become profitable. For each of our operations, we evaluate whether it is more likely than not that the tax benefits related to NOLs will be realized. As part of this evaluation, we consider evidence such as tax planning strategies, historical operating results, forecasted taxable income, and recent financial performance. In the year that certain non-U.S. operations record a loss, we do not recognize a corresponding tax benefit, thus increasing our effective tax rate. Upon determining that it is more likely than not that the NOLs will be realized, we will reduce the tax valuation allowances related to these NOLs, which will result in a reduction of our income tax expense and our effective tax rate in the period. On March 27, 2020 President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Among other provision, the law provides relief to U.S. federal corporate taxpayers through temporary adjustments to net operating loss rules, changes to limitations on interest expense deductibility, the acceleration of available refunds for minimum tax credit carryforwards, and depreciation method changes. We do not expect the provisions of the legislation to have a significant impact on our effective tax rate nor the income tax payable and deferred income tax positions of the Company. |
Long-Term Compensation Plan and
Long-Term Compensation Plan and Stock Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Long-Term Compensation Plan and Stock Based Compensation | |
Long-Term Compensation Plan and Stock Based Compensation | Note 12 – Long-Term Compensation Plan and Stock Based Compensation (share counts in thousands) Under the OneSpan Inc. 2019 Omnibus Incentive Plan, we awarded 296 restricted stock units during the six months ended June 30, 2020, subject to time-based vesting. During the same period we awarded restricted stock units some of which are subject to the achievement of future performance criteria and others that are subject to the achievement of market conditions. For the restricted stock units for which performance criteria have been established, the Company currently believes it is probable that 198 unissued shares will be earned. The restricted stock units subject to market conditions allow for up to 88 shares to be earned if the market conditions are fully achieved. The fair value of the unissued 296 time-based restricted stock units was $5.2 million at the date of grant, and is being amortized over the vesting period of one to four years . The fair value of the 198 unissued shares was $4.1 million at the date of grant, and is being amortized over the vesting period of three years . The fair value of the 88 shares subject to market conditions was $1.6 million at the date of grant, and is being amortized over the vesting period of three years . The following table details long-term compensation plan and stock-based compensation expense for the three and six months ended June 30, 2020 and 2019: Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 in thousands (in thousands) (in thousands) Restricted stock $ 860 $ 677 $ 2,210 $ 1,229 Long-term compensation plan 305 755 670 1,258 Total compensation $ 1,165 $ 1,432 $ 2,880 $ 2,487 |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings per Share | |
Earnings per Share | Note 13 – Earnings per Share (share counts in thousands) Basic earnings per share is based on the weighted average number of shares outstanding and excludes the dilutive effect of common stock equivalents. Diluted earnings per share is based on the weighted average number of shares outstanding and includes the dilutive effect of common stock equivalents to the extent they are not anti-dilutive. Because the Company is in a net loss position for the three and six months ended June 30, 2020, and the three and six months ended June 30, 2019, diluted net loss per share for this period excludes the effects of all common stock equivalents, which are anti-dilutive. The details of the earnings per share calculations for the three and six months ended June 30, 2020 and 2019 are as follows: June 30, June 30, in thousands, except per share data 2020 2019 2020 2019 Net loss $ (2,025) $ (2,511) $ (2,021) $ (8,567) Weighted average common shares outstanding: Basic 40,028 40,038 40,059 40,037 Incremental shares with dilutive effect: Restricted stock awards — — — — Diluted 40,028 40,038 40,059 40,037 Net income (loss) per share: Basic $ (0.05) $ (0.06) $ (0.05) $ (0.21) Diluted $ (0.05) $ (0.06) $ (0.05) $ (0.21) |
Legal Proceedings and Contingen
Legal Proceedings and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Legal Proceedings and Contingencies | |
Legal Proceedings and Contingencies | Note 14 – Legal Proceedings and Contingencies We are a party to or have intellectual property subject to litigation and other proceedings that arise in the ordinary course of our business. These types of matters could result in fines, penalties, compensatory or treble damages or non-monetary sanctions or relief. We believe the probability is remote that the outcome of each of these matters, including the legal proceedings described below, will have a material adverse effect on the corporation as a whole, notwithstanding that the unfavorable resolution of any matter may have a material effect on our financial results in any particular interim reporting period. Among the factors that we consider in this assessment are the nature of existing legal proceedings and claims, the asserted or possible damages or loss contingency (if estimable), the progress of the case, existing law and precedent, the opinions or views of legal counsel and other advisers, our experience in similar cases and the experience of other companies, the facts available to us at the time of assessment and how we intend to respond to the proceeding or claim. Our assessment of these factors may change over time as individual proceedings or claims progress. Although we cannot predict the outcome of legal or other proceedings with certainty, where there is at least a reasonable possibility that a loss may have been incurred, U.S. GAAP requires us to disclose an estimate of the reasonably possible loss or range of loss or make a statement that such an estimate cannot be made. We follow a process in which we seek to estimate the reasonably possible loss or range of loss, and only if we are unable to make such an estimate do we conclude and disclose that an estimate cannot be made. Accordingly, unless otherwise indicated below in our discussion of legal proceedings, a reasonably possible loss or range of loss associated with any individual legal proceeding cannot be estimated. We include various types of indemnification clauses in our agreements. These indemnifications may include, but are not limited to, infringement claims related to our intellectual property, direct damages and consequential damages. The type and amount of such indemnifications vary substantially based on our assessment of risk and reward associated with each agreement. We believe the estimated fair value of these indemnification clauses is minimal, and we cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions. We have no liabilities recorded for these clauses as of June 30, 2020. We are involved in an ongoing dispute with a German company, Onespin solutions GmbH, regarding the co-existence of, or alleged infringement with, its trademark in certain jurisdictions for “ONESPIN” and our trademark in certain jurisdictions for “ONESPAN”. Onespin sells integrated circuit integrity verification solutions for use in the system on chip software development process flow. We believe that its products and services are sufficiently different from ours. Therefore, among other reasons, we are vigorously defending our intellectual property rights where necessary. In addition, we are the plaintiff in litigation against Onespin in Europe currently. While the outcome of any particular aspect of this current dispute cannot be predicted with certainty, including timing, we plan to continue to assert our rights and prosecute litigation wherever advisable. From time to time, we have been involved in litigation and claims incidental to the conduct of our business, such as compensation claims from current or former employees in Europe. We expect that to continue. Excluding matters specifically disclosed above, we are not a party to any lawsuit or proceeding that, in management’s opinion, is likely to have a material adverse effect on its business, financial condition or results of operations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Description of the Company | Description of the Company OneSpan Inc. and its wholly owned subsidiaries design, develop, market and support hardware and software security systems that manage and secure access to information assets. OneSpan has operations in Austria, Australia, Belgium, Brazil, Canada, China, France, Japan, The Netherlands, Singapore, Switzerland, the United Arab Emirates, the United Kingdom (U.K), and the United States (U.S.). In accordance with ASC 280, Segment Reporting, our operations are reported as a single operating segment. The chief operating decision maker is the Chief Executive Officer who reviews the statement of operations of the Company on a consolidated basis, makes decisions and manages the operations of the Company as a single operating segment. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of OneSpan and its subsidiaries and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the results of the interim periods presented. All significant intercompany accounts and transactions have been eliminated. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ended December 31, 2020, particularly in light of the novel coronavirus (COVID-19) pandemic and its effects on domestic and global economies. To limit the spread of COVID-19, governments have imposed, and may continue to impose, among other things, travel and business operation restrictions and stay-at-home orders and social distancing guidelines, causing some businesses to adjust, reduce or suspend operating activities. These disruptions and restrictions could adversely affect our operating results due to, among other things, reduced demand for our services and solutions as a result of our customers having to adjust, reduce or suspend operating activities. During the summer of 2020, we began to experience softened demand for our products and services due to, we believe, global economic uncertainty connected with the continued seriousness of the COVID-19 pandemic. For additional information, see Part II, Item 1A – Risk Factors of this Form 10-Q for additional information regarding the potential impact of COVID-19 on the Company. |
Revision of Previously Issued Financial Statements | Revision of Previously Issued Financial Statements We have revised amounts reported in previously issued financial statements for the periods presented in this Quarterly Report on Form 10-Q related to immaterial errors. The errors relate to certain contracts with customers involving term-based software licenses and related maintenance and support services. The net contract assets that originated from a portion of these contracts in prior periods were not properly accounted for in subsequent periods, which caused overstatements of revenue in prior periods. We evaluated the aggregate effects of the errors to our previously issued financial statements in accordance with SEC Staff Accounting Bulletins No. 99 and No. 108 and, based upon quantitative and qualitative factors, determined that the errors were not material to the previously issued financial statements and disclosures included in our Annual Reports on Form 10-K for the years ended December 31, 2019 and 2018, or for any quarterly periods included therein or through our most recent Quarterly Report on Form 10-Q. The following tables present the effects of the aforementioned revisions on our condensed consolidated balance sheet as of December 31, 2019, our unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2019, our unaudited condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2019, our unaudited condensed consolidated statement of stockholders’ equity for the three and six months ended June 30, 2019, our unaudited condensed consolidated statement of stockholders’ equity for the three months ended March 31, 2020, and our unaudited condensed consolidated statement of cash flows for the six months ended June 30, 2019 (in thousands). Condensed Consolidated Balance Sheet December 31, 2019 in thousands As Previously Reported Adjustments As Revised Contract assets $ 7,058 $ (1,818) $ 5,240 Total current assets 211,619 (1,818) 209,801 Contract assets - non-current 3,565 (210) 3,355 Total assets 384,570 (2,028) 382,542 Short-term income taxes payable 7,711 (301) 7,410 Total current liabilities 74,113 (301) 73,812 Long-term deferred revenue 15,259 — 15,259 Long-term income taxes payable 6,958 — 6,958 Total liabilities 120,549 (301) 120,248 Accumulated income 181,167 (1,727) 179,440 Accumulated other comprehensive loss — Total stockholders' equity 264,021 (1,727) 262,294 Total liabilities and stockholders' equity 384,570 (2,028) 382,542 Condensed Consolidated Statements of Operations (Unaudited) Three Months ended June 30, 2019 Six Months ended June 30, 2019 As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised Revenue Product and license $ 40,117 $ — $ 40,117 $ 71,978 $ (518) $ 71,460 Services and other 16,117 (67) 16,050 31,864 (62) 31,802 Total revenue 56,234 (67) 56,167 103,842 (580) 103,262 Gross Profit 38,354 (67) 38,287 69,923 (580) 69,343 Operating loss (2,211) (67) (2,278) (7,738) (580) (8,318) Loss before income taxes (1,691) (67) (1,758) (7,634) (580) (8,214) Provision (benefit) for income taxes 770 (17) 753 499 (146) 353 Net Loss (2,461) (50) (2,511) (8,133) (434) (8,567) Condensed Consolidated Statements of Comprehensive Loss (Unaudited) Three Months ended June 30, 2019 Six Months ended June 30, 2019 As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised Net income (loss) $ (2,461) $ (50) $ (2,511) $ (8,133) $ (434) $ (8,567) Comprehensive income (loss) (3,771) (50) (3,821) (8,589) (434) (9,023) Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) Total Stockholders' Equity in thousands As Previously Reported Adjustments As Revised Balance at December 31, 2018 $ 252,441 $ (802) $ 251,639 Net income (loss) (5,671) (385) (6,056) Balance at March 31, 2019 247,958 (1,187) 246,771 Net income (loss) (2,461) (50) (2,511) Balance at June 30, 2019 244,815 (1,237) 243,578 Balance at December 31, 2019 $ 264,021 $ (1,727) $ 262,294 Net income (loss) 98 (94) 4 Balance at March 31, 2020 260,639 (1,821) 258,818 Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months ended June 30, 2019 in thousands As Previously Reported Adjustments As Revised Cash flows from operating activities: Net loss $ (8,133) $ (434) $ (8,567) Changes in operating assets and liabilities: Contract assets 4,123 580 4,703 Income taxes payable (5,993) (146) (6,139) Deferred revenue — — — Net cash provided by (used in) operating activities (22,793) — (22,793) For the three months ended March 31, 2020, the impacts of the adjustments resulted in a decrease of $0.1 million to income before taxes, and a decrease of $0.1 million to net income, compared to the amounts previously reported. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of OneSpan Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. |
Estimates and Assumptions | Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The financial position and results of the operations of the majority of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Accordingly, assets and liabilities are translated into U.S. Dollars using current exchange rates as of the balance sheet date. Revenue and expenses are translated at average exchange rates prevailing during the year. Translation adjustments arising from differences in exchange rates are charged or credited to other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are included in the condensed consolidated statements of operations in other income (expense), net. Foreign exchange transaction gains aggregated less than $0.1 million for the three months ended June 30, 2020, and foreign exchange transaction gains aggregated $0.2 million for the three months ended June 30, 2019. For the six months ended June 30, 2020, foreign exchange loss aggregated $0.5 million, and foreign exchange transaction losses aggregated $0.7 million for the six months ended June 30, 2019. The financial position and results of our operations in Singapore, Switzerland, and Canada are measured in U.S. Dollars. For these subsidiaries, gains and losses that result from foreign currency transactions are included in the consolidated statements of operations in other income (expense), net. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash. We are in a lease agreement that required a letter of credit in the amount of $0.8 million to secure the obligation. The restricted cash related to this letter of credit is recorded in other non-current assets on the Condensed Consolidated Balance Sheet at June 30, 2020 and December 31, 2019. |
Short Term Investments | Short Term Investments The Company’s short term investments are in debt securities which consist of U.S treasury bills and notes, U.S. government agency notes, corporate notes, and high quality commercial paper with maturities at acquisition of more than three months and less than twelve months The Company classifies its investments in debt securities as available-for-sale. The Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments |
Accounts Receivable, net of Allowance for Credit Losses | Accounts Receivable, net of Allowance for Credit Losses The Company adopted ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments accordance with ASU No. 2016-13, the Company evaluates its allowance based on expected losses rather than incurred losses, which is known as the current expected credit loss (“CECL”) model. The allowance is determined using the loss rate approach and is measured on a collective (pool) basis when similar risk characteristics exist. Where financial instruments do not share risk characteristics, they are evaluated on an individual basis. The allowance is based on relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. |
Equity Method Investment | Equity Method Investment We apply the equity method of accounting to our investment in Promon AS (Promon), because we exercise significant influence, but not controlling interest, in the investee. Promon is a technology company headquartered in Norway that specializes in mobile app security, whose solutions focus largely on Runtime Application Self-Protection (RASP). We exercise significant influence over Promon as a result of our 17% ownership interest in Promon, our representation on Promon’s Board of Directors, and the significance to Promon of our business activities with them. We integrate Promon’s RASP technology into our software solution, which are licensed to our customers. Under the equity method of accounting, the Company’s proportionate share of the net earnings (losses) of Promon is reported in other income (expense), net in our condensed consolidated Statements of Operations. The impact of the proportionate share of net earnings (losses) were immaterial for the three and six months ended June 30, 2020 and 2019 as were the relative size of Promon’s assets and operations in relation to the Company’s. The carrying value of our equity method investment is reported in other noncurrent assets in the condensed consolidated Balance Sheets and is reported originally at cost and adjusted each period for the Company’s share of the investee’s earnings (losses) and dividends paid, if any. The Company also assesses the investment for impairment whenever events or changes in circumstances indicate that the carrying value of the investment may not be recoverable. The Company did not record any impairment charges during the six month periods ended June 30, 2020 and 2019. The Company recorded $0.1 million and $0.6 million in costs of sales during the three months ended June 30, 2020 and June 30, 2019, respectively for license fees owed to Promon for use of their software and technology, and recorded $1.4 million and $1.2 million for the six months ended June 30, 2020 and 2019, respectively. The Company owed Promon $2.3 million as of June 30, 2020, which is included in accounts payable and accrued liabilities. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) Accounts receivable In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which amends ASC 820, Fair Value Measurement . ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019, with early adoption permitted for removed or modified disclosures, and delayed adoption of the additional disclosures until their effective date. In August 2018, the FASB issued ASU 2018-15, C ustomer's Accounting for Fees Paid in a Cloud Computing Arrangement In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans In December 2019, the FASB issued ASU 2019-12, Simplification for Accounting for Income Taxes In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topics 321, 323 and 815 In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Statements. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, our management believes that the issued standards that are not yet effective will not have a material impact on our consolidated financial statements upon adoption. |
Description of the Company an_2
Description of the Company and Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Description of the Company and Basis of Presentation | |
Revised Consolidated Statements | Condensed Consolidated Balance Sheet December 31, 2019 in thousands As Previously Reported Adjustments As Revised Contract assets $ 7,058 $ (1,818) $ 5,240 Total current assets 211,619 (1,818) 209,801 Contract assets - non-current 3,565 (210) 3,355 Total assets 384,570 (2,028) 382,542 Short-term income taxes payable 7,711 (301) 7,410 Total current liabilities 74,113 (301) 73,812 Long-term deferred revenue 15,259 — 15,259 Long-term income taxes payable 6,958 — 6,958 Total liabilities 120,549 (301) 120,248 Accumulated income 181,167 (1,727) 179,440 Accumulated other comprehensive loss — Total stockholders' equity 264,021 (1,727) 262,294 Total liabilities and stockholders' equity 384,570 (2,028) 382,542 Condensed Consolidated Statements of Operations (Unaudited) Three Months ended June 30, 2019 Six Months ended June 30, 2019 As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised Revenue Product and license $ 40,117 $ — $ 40,117 $ 71,978 $ (518) $ 71,460 Services and other 16,117 (67) 16,050 31,864 (62) 31,802 Total revenue 56,234 (67) 56,167 103,842 (580) 103,262 Gross Profit 38,354 (67) 38,287 69,923 (580) 69,343 Operating loss (2,211) (67) (2,278) (7,738) (580) (8,318) Loss before income taxes (1,691) (67) (1,758) (7,634) (580) (8,214) Provision (benefit) for income taxes 770 (17) 753 499 (146) 353 Net Loss (2,461) (50) (2,511) (8,133) (434) (8,567) Condensed Consolidated Statements of Comprehensive Loss (Unaudited) Three Months ended June 30, 2019 Six Months ended June 30, 2019 As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised Net income (loss) $ (2,461) $ (50) $ (2,511) $ (8,133) $ (434) $ (8,567) Comprehensive income (loss) (3,771) (50) (3,821) (8,589) (434) (9,023) Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) Total Stockholders' Equity in thousands As Previously Reported Adjustments As Revised Balance at December 31, 2018 $ 252,441 $ (802) $ 251,639 Net income (loss) (5,671) (385) (6,056) Balance at March 31, 2019 247,958 (1,187) 246,771 Net income (loss) (2,461) (50) (2,511) Balance at June 30, 2019 244,815 (1,237) 243,578 Balance at December 31, 2019 $ 264,021 $ (1,727) $ 262,294 Net income (loss) 98 (94) 4 Balance at March 31, 2020 260,639 (1,821) 258,818 Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months ended June 30, 2019 in thousands As Previously Reported Adjustments As Revised Cash flows from operating activities: Net loss $ (8,133) $ (434) $ (8,567) Changes in operating assets and liabilities: Contract assets 4,123 580 4,703 Income taxes payable (5,993) (146) (6,139) Deferred revenue — — — Net cash provided by (used in) operating activities (22,793) — (22,793) |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue | |
Revenues disaggregated by geography, major product line and timing of revenue recognition | Revenue by major products (in thousands) Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Hardware products $ 24,188 $ 29,039 $ 43,926 $ 53,329 Software licenses 11,196 11,078 29,718 18,131 Subscription 6,133 5,347 11,840 10,607 Professional services 1,326 848 2,747 1,657 Maintenance, support and other 12,111 9,855 23,093 19,538 Total Revenue $ 54,954 $ 56,167 $ 111,324 $ 103,262 Revenue by location of customer for the three months ended June 30, 2020 and 2019 (in thousands) EMEA Americas APAC Total Total Revenue: 2020 $ 28,336 $ 13,932 $ 12,686 $ 54,954 2019 $ 33,774 $ 14,426 $ 7,967 $ 56,167 Percent of Total: 2020 52 % 25 % 23 % 100 % 2019 60 % 26 % 14 % 100 % Revenue by location of customer for the six months ended June 30, 2020 and 2019 (in thousands) EMEA Americas APAC Total Total Revenue: 2020 $ 61,940 $ 26,265 $ 23,119 $ 111,324 2019 $ 58,860 $ 27,157 $ 17,245 $ 103,262 Percent of Total: 2020 56 % 24 % 20 % 100 % 2019 57 % 26 % 17 % 100 % Timing of revenue recognition (in thousands) Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Products and Licenses transferred at a point in time $ 35,384 $ 40,117 $ 73,644 $ 71,460 Services transferred over time 19,570 16,050 37,680 31,802 Total Revenue $ 54,954 $ 56,167 $ 111,324 $ 103,262 |
Schedule of changes in contract assets and contract liabilities | June 30, December 31, 2020 2019 Receivables, inclusive of trade and unbilled $ 54,347 $ 62,405 Contract Assets (current and non-current) $ 10,622 $ 8,595 Contract Liabilities (Deferred Revenue current and non-current) $ 48,451 $ 45,597 |
Schedule of estimated revenue expected to be recognized in the future | in thousands 2020 2021 2022 Beyond 2022 Total Future revenue related to current unsatisfied performance obligations $ 6,577 $ 10,869 $ 8,266 $ 12,196 $ 37,908 |
Schedule related to the capitalized costs and amortization | in thousands June 30, 2020 December 31, 2019 Capitalized costs to obtain contracts, current $ 960 $ 676 Capitalized costs to obtain contracts, non-current $ 4,296 $ 3,222 Three months ended June 30, Six months ended June 30, in thousands 2020 2019 2020 2019 Amortization of capitalized costs to obtain contracts $ 264 $ 113 $ 433 $ 222 Impairments of capitalized costs to obtain contracts $ - $ - $ - $ - |
Inventories, net (Tables)
Inventories, net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventories, net | |
Summary of Inventories, net | June 30, December 31, 2020 2019 (in thousands) Component parts $ 6,295 $ 7,429 Work-in-process and finished goods 10,148 12,390 Total $ 16,443 $ 19,819 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill | |
Schedule of Goodwill Activity | in thousands Net balance at December 31, 2019 $ 94,612 Net foreign currency translation (2,966) Net balance at June 30, 2020 $ 91,646 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Intangible Assets | |
Schedule of intangible asset activity | in thousands Acquired Technology Customer Relationships Other Total Intangible Assets Net balance at December 31, 2019 $ 5,454 $ 26,884 $ 3,871 $ 36,209 Additions — — 48 48 Disposals (5) (5) Net foreign currency translation (207) (697) (7) (911) Amortization expense (1,714) (1,799) (1,176) (4,689) Net balance at June 30, 2020 $ 3,533 $ 24,388 $ 2,731 $ 30,652 June 30, 2020 balance at cost $ 42,171 $ 38,691 $ 13,700 $ 94,562 Accumulated amortization (38,638) (14,303) (10,969) (63,910) Net balance at June 30, 2020 $ 3,533 $ 24,388 $ 2,731 $ 30,652 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property and Equipment | |
Schedule of major classes of property and equipment | in thousands June 30, 2020 December 31, 2019 Office equipment and software $ 14,342 $ 14,595 Leasehold improvements 10,423 9,417 Furniture and fixtures 3,880 3,717 Total 28,645 27,729 Accumulated depreciation (16,486) (16,275) Property and equipment, net $ 12,159 $ 11,454 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements | |
Schedule of assets that are measured at fair value on a recurring basis | Fair Value Measurement at Reporting Date Using in thousands June 30, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: U.S. Treasury Notes $ 6,994 - $ 6,994 - Corporate Notes / Bonds $ 10,689 - $ 10,689 - Commercial Paper $ 1,499 - $ 1,499 - U.S. Treasury Bills $ 5,365 - $ 5,365 - U.S. Government Agencies $ 2,249 - $ 2,249 - Fair Value Measurement at Reporting Date Using in thousands December 31, 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: U.S. Treasury Notes $ 9,225 - $ 9,225 - Corporate Notes / Bonds $ 8,169 - $ 8,169 - Commercial Paper $ 3,482 - $ 3,482 - U.S. Treasury Bills $ 2,385 - $ 2,385 - U.S. Government Agencies $ 2,249 - $ 2,249 - |
Allowance for credit losses (Ta
Allowance for credit losses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Allowance for credit losses | |
Schedule of changes in the allowance for doubtful accounts | in thousands Balance at December 31, 2019 $ 2,524 Impact of ASU 2016-13 adoption 288 Balance at January 1, 2020 2,812 Provision 912 Net foreign currency translation (1) Balance at June 30, 2020 $ 3,723 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of operating lease costs | Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 (in thousands) (in thousands) Building rent $ 765 $ 857 $ 1,456 $ 1,721 Automobile rentals 359 233 711 510 Total net operating lease costs $ 1,124 $ 1,090 $ 2,167 $ 2,231 |
Schedule of maturities of operating leases | As of June 30, 2020 (in $ thousands) 2020 (remaining 6 months) $ 1,554 2021 3,052 2022 2,667 2023 2,153 2024 1,401 Later years 6,555 Less imputed interest (3,110) Total lease liabilities $ 14,272 |
Long-Term Compensation Plan a_2
Long-Term Compensation Plan and Stock Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Long-Term Compensation Plan and Stock Based Compensation | |
Summary of compensation expense | Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 in thousands (in thousands) (in thousands) Restricted stock $ 860 $ 677 $ 2,210 $ 1,229 Long-term compensation plan 305 755 670 1,258 Total compensation $ 1,165 $ 1,432 $ 2,880 $ 2,487 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings per Share | |
Details of Earnings Per Share Calculations | June 30, June 30, in thousands, except per share data 2020 2019 2020 2019 Net loss $ (2,025) $ (2,511) $ (2,021) $ (8,567) Weighted average common shares outstanding: Basic 40,028 40,038 40,059 40,037 Incremental shares with dilutive effect: Restricted stock awards — — — — Diluted 40,028 40,038 40,059 40,037 Net income (loss) per share: Basic $ (0.05) $ (0.06) $ (0.05) $ (0.21) Diluted $ (0.05) $ (0.06) $ (0.05) $ (0.21) |
Description of the Company an_3
Description of the Company and Basis of Presentation (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 10, 2020 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Income (loss) before taxes | $ (1,052) | $ (1,758) | $ (358) | $ (8,214) | |||
Net income (loss) | (2,025) | $ 4 | (2,511) | $ (6,056) | (2,021) | (8,567) | |
Gain (loss) from foreign currency transactions | $ 100 | 200 | $ 500 | 700 | |||
Number of shares authorized under share repurchase program | 50 | ||||||
Adjustment | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Income (loss) before taxes | (100) | (67) | (580) | ||||
Net income (loss) | $ (94) | $ (50) | $ (385) | $ (434) |
Description of the Company an_4
Description of the Company and Basis of Presentation - Revised Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Pro forma Balance Sheet: | ||
Contract assets | $ 6,848 | $ 5,240 |
Total current assets | 201,683 | 209,801 |
Contract assets - non-current | 3,774 | 3,355 |
Total assets | 368,461 | 382,542 |
Short-term income taxes payable | 2,571 | 7,410 |
Total current liabilities | 70,492 | 73,812 |
Long-term deferred revenue | 10,723 | 15,259 |
Long-term income taxes payable | 5,905 | 6,958 |
Total liabilities | 111,254 | 120,248 |
Accumulated income | 177,166 | 179,440 |
Accumulated other comprehensive income (loss) | (17,139) | (13,295) |
Total stockholders' equity | 257,207 | 262,294 |
Total liabilities and stockholders' equity | $ 368,461 | 382,542 |
As Previously Reported | ||
Pro forma Balance Sheet: | ||
Contract assets | 7,058 | |
Total current assets | 211,619 | |
Contract assets - non-current | 3,565 | |
Total assets | 384,570 | |
Short-term income taxes payable | 7,711 | |
Total current liabilities | 74,113 | |
Long-term deferred revenue | 15,259 | |
Long-term income taxes payable | 6,958 | |
Total liabilities | 120,549 | |
Accumulated income | 181,167 | |
Total stockholders' equity | 264,021 | |
Total liabilities and stockholders' equity | 384,570 | |
Adjustment | ||
Pro forma Balance Sheet: | ||
Contract assets | (1,818) | |
Total current assets | (1,818) | |
Contract assets - non-current | (210) | |
Total assets | (2,028) | |
Short-term income taxes payable | (301) | |
Total current liabilities | (301) | |
Total liabilities | (301) | |
Accumulated income | (1,727) | |
Total stockholders' equity | (1,727) | |
Total liabilities and stockholders' equity | $ (2,028) |
Description of the Company an_5
Description of the Company and Basis of Presentation - Revised Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total revenue | $ 54,954 | $ 56,167 | $ 111,324 | $ 103,262 | ||
Gross profit | 36,729 | 38,287 | 77,029 | 69,343 | ||
Operating loss | (1,687) | (2,278) | (862) | (8,318) | ||
Loss before income taxes | (1,052) | (1,758) | (358) | (8,214) | ||
Provision (benefit) for income taxes | 973 | 753 | 1,663 | 353 | ||
Net loss | (2,025) | $ 4 | (2,511) | $ (6,056) | (2,021) | (8,567) |
Product and license | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total revenue | 35,384 | 40,117 | 73,644 | 71,460 | ||
Services and other | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total revenue | $ 19,570 | 16,050 | $ 37,680 | 31,802 | ||
As Previously Reported | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total revenue | 56,234 | 103,842 | ||||
Gross profit | 38,354 | 69,923 | ||||
Operating loss | (2,211) | (7,738) | ||||
Loss before income taxes | (1,691) | (7,634) | ||||
Provision (benefit) for income taxes | 770 | 499 | ||||
Net loss | 98 | (2,461) | (5,671) | (8,133) | ||
As Previously Reported | Product and license | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total revenue | 40,117 | 71,978 | ||||
As Previously Reported | Services and other | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total revenue | 16,117 | 31,864 | ||||
Adjustment | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total revenue | (67) | (580) | ||||
Gross profit | (67) | (580) | ||||
Operating loss | (67) | (580) | ||||
Loss before income taxes | (100) | (67) | (580) | |||
Provision (benefit) for income taxes | (17) | (146) | ||||
Net loss | $ (94) | (50) | $ (385) | (434) | ||
Adjustment | Product and license | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total revenue | (518) | |||||
Adjustment | Services and other | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total revenue | $ (67) | $ (62) |
Description of the Company an_6
Description of the Company and Basis of Presentation - Revised Consolidated Statements of Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revision of Previously Issued Financial Statements | ||||||
Net income (loss) | $ (2,025) | $ 4 | $ (2,511) | $ (6,056) | $ (2,021) | $ (8,567) |
Other comprehensive loss | ||||||
Comprehensive loss | $ (1,585) | (3,821) | $ (5,865) | (9,023) | ||
As Previously Reported | ||||||
Revision of Previously Issued Financial Statements | ||||||
Net income (loss) | 98 | (2,461) | (5,671) | (8,133) | ||
Other comprehensive loss | ||||||
Comprehensive loss | (3,771) | (8,589) | ||||
Adjustment | ||||||
Revision of Previously Issued Financial Statements | ||||||
Net income (loss) | $ (94) | (50) | $ (385) | (434) | ||
Other comprehensive loss | ||||||
Comprehensive loss | $ (50) | $ (434) |
Description of the Company an_7
Description of the Company and Basis of Presentation - Revised Total Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Change in Stockholders' Equity | ||||||
Balance | $ 258,818 | $ 262,294 | $ 246,771 | $ 251,639 | $ 262,294 | $ 251,639 |
Net income (loss) | (2,025) | 4 | (2,511) | (6,056) | (2,021) | (8,567) |
Balance | 257,207 | 258,818 | 243,578 | 246,771 | 257,207 | 243,578 |
As Previously Reported | ||||||
Change in Stockholders' Equity | ||||||
Balance | 260,639 | 264,021 | 247,958 | 252,441 | 264,021 | 252,441 |
Net income (loss) | 98 | (2,461) | (5,671) | (8,133) | ||
Balance | 260,639 | 244,815 | 247,958 | 244,815 | ||
Adjustment | ||||||
Change in Stockholders' Equity | ||||||
Balance | $ (1,821) | (1,727) | (1,187) | (802) | $ (1,727) | (802) |
Net income (loss) | (94) | (50) | (385) | (434) | ||
Balance | $ (1,821) | $ (1,237) | $ (1,187) | $ (1,237) |
Description of the Company an_8
Description of the Company and Basis of Presentation - Revised Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||||||
Net loss | $ (2,025) | $ 4 | $ (2,511) | $ (6,056) | $ (2,021) | $ (8,567) |
Changes in operating assets and liabilities: | ||||||
Contract assets | (2,026) | 4,703 | ||||
Income taxes payable | (5,870) | (6,139) | ||||
Deferred revenue | 2,990 | (1,758) | ||||
Net cash provided by (used in) operating activities | $ 4,381 | (22,793) | ||||
As Previously Reported | ||||||
Cash flows from operating activities: | ||||||
Net loss | 98 | (2,461) | (5,671) | (8,133) | ||
Changes in operating assets and liabilities: | ||||||
Contract assets | 4,123 | |||||
Income taxes payable | (5,993) | |||||
Net cash provided by (used in) operating activities | (22,793) | |||||
Adjustment | ||||||
Cash flows from operating activities: | ||||||
Net loss | $ (94) | $ (50) | $ (385) | (434) | ||
Changes in operating assets and liabilities: | ||||||
Contract assets | 580 | |||||
Income taxes payable | $ (146) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Cash and Cash Equivalents | |||||
Restricted cash | $ 847 | $ 847 | $ 847 | $ 847 | $ 847 |
Equity Method Investment | |||||
Impairment charges | 0 | 0 | |||
Cost of Goods and Services Sold | $ 18,225 | $ 17,880 | $ 34,295 | 33,919 | |
Cost, Product and Service [Extensible List] | us-gaap:LicenseAndServiceMember | us-gaap:LicenseAndServiceMember | |||
Promon | |||||
Equity Method Investment | |||||
Ownership percentage | 17.00% | 17.00% | |||
Cost of Goods and Services Sold | $ 100 | $ 600 | $ 1,400 | $ 1,200 | |
Amount owed included in accounts payable and accrued liabilities | $ 2,300 | $ 2,300 | |||
Letter of Credit | |||||
Cash and Cash Equivalents | |||||
Restricted Cash, Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent | Other Assets, Noncurrent | ||
Restricted cash | $ 800 | $ 800 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Adoption of new accounting pronouncements | ||||
Accounts receivable, net of allowance | $ 54,347 | $ 54,347 | $ 62,405 | |
Accumulated other comprehensive loss | $ (17,139) | $ (13,295) | ||
ASU 2016-01 | Adjustment | ||||
Adoption of new accounting pronouncements | ||||
Accounts receivable, net of allowance | $ (300) | |||
Accumulated other comprehensive loss | $ (300) |
Revenue - Disaggregation of rev
Revenue - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue | ||||
Revenue | $ 54,954 | $ 56,167 | $ 111,324 | $ 103,262 |
Percent of Total | 100.00% | 100.00% | 100.00% | 100.00% |
Products and Licenses transferred at a point in time | ||||
Revenue | ||||
Revenue | $ 35,384 | $ 40,117 | $ 73,644 | $ 71,460 |
Services transferred over time | ||||
Revenue | ||||
Revenue | 19,570 | 16,050 | 37,680 | 31,802 |
EMEA | ||||
Revenue | ||||
Revenue | $ 28,336 | $ 33,774 | $ 61,940 | $ 58,860 |
Percent of Total | 52.00% | 60.00% | 56.00% | 57.00% |
Americas | ||||
Revenue | ||||
Revenue | $ 13,932 | $ 14,426 | $ 26,265 | $ 27,157 |
Percent of Total | 25.00% | 26.00% | 24.00% | 26.00% |
APAC | ||||
Revenue | ||||
Revenue | $ 12,686 | $ 7,967 | $ 23,119 | $ 17,245 |
Percent of Total | 23.00% | 14.00% | 20.00% | 17.00% |
Hardware products | ||||
Revenue | ||||
Revenue | $ 24,188 | $ 29,039 | $ 43,926 | $ 53,329 |
Software licenses | ||||
Revenue | ||||
Revenue | 11,196 | 11,078 | 29,718 | 18,131 |
Subscription | ||||
Revenue | ||||
Revenue | 6,133 | 5,347 | 11,840 | 10,607 |
Professional services | ||||
Revenue | ||||
Revenue | 1,326 | 848 | 2,747 | 1,657 |
Maintenance, support and other | ||||
Revenue | ||||
Revenue | $ 12,111 | $ 9,855 | $ 23,093 | $ 19,538 |
Revenue - Contract balances (De
Revenue - Contract balances (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Contract balances | |||
Revenue recognized that was included in the balance sheet | $ 21,400 | ||
Contract Assets (current and non-current) | $ 10,622 | $ 8,595 | |
Contract Liabilities (Deferred Revenue current and non-current) | $ 48,451 | $ 45,597 | |
Revenue, Practical Expedient, Financing Component [true/false] | true | ||
Minimum | |||
Contract balances | |||
The amount of time contract assets are transferred to receivables | 3 years | ||
Maximum | |||
Contract balances | |||
The amount of time contract assets are transferred to receivables | 5 years |
Revenue - Performance Obligatio
Revenue - Performance Obligations (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Revenue | |
Future revenue related to current unsatisfied performance obligations | $ 37,908 |
Remaining performance obligations | true |
Original expected durations | true |
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true/false] | true |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Future revenue related to current unsatisfied performance obligations | $ 6,577 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Future revenue related to current unsatisfied performance obligations | $ 10,869 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Future revenue related to current unsatisfied performance obligations | $ 8,266 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 9 months |
Future revenue related to current unsatisfied performance obligations | $ 12,196 |
Revenue - Capitalized Costs and
Revenue - Capitalized Costs and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Revenue | |||||
Amortization period | 7 years | 7 years | |||
Capitalized costs to obtain contracts, current | $ 960 | $ 960 | $ 676 | ||
Capitalized costs to obtain contracts, non-current | 4,296 | 4,296 | $ 3,222 | ||
Amortization of capitalized costs to obtain contracts | $ 264 | $ 113 | $ 433 | $ 222 |
Inventories, net - Summary of I
Inventories, net - Summary of Inventories, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Inventories, net | ||
Component parts | $ 6,295 | $ 7,429 |
Work-in-process and finished goods | 10,148 | 12,390 |
Total | $ 16,443 | $ 19,819 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill Activity (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill | ||
Net balance at beginning of period | $ 94,612 | |
Net foreign currency translation | (2,966) | |
Net balance at end of period | 91,646 | |
Goodwill impairment | $ 0 | $ 0 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | |
Intangible asset activity | |||||
Net balance | $ 36,209 | ||||
Additions | 48 | ||||
Disposals-Other | (5) | ||||
Net foreign currency translation | (911) | ||||
Amortization expense | $ (2,335) | $ (2,368) | (4,689) | $ (4,716) | |
Net balance | 30,652 | 30,652 | |||
Intangible assets, net | |||||
Balance at cost | $ 94,562 | ||||
Accumulated amortization | (63,910) | ||||
Ending Balance | 30,652 | 36,209 | 30,652 | ||
Impairment charges | 0 | $ 0 | |||
Acquired Technology | |||||
Intangible asset activity | |||||
Net balance | 5,454 | ||||
Net foreign currency translation | (207) | ||||
Amortization expense | (1,714) | ||||
Net balance | 3,533 | 3,533 | |||
Intangible assets, net | |||||
Balance at cost | 42,171 | ||||
Accumulated amortization | (38,638) | ||||
Ending Balance | 3,533 | 3,533 | 3,533 | ||
Customer relationships | |||||
Intangible asset activity | |||||
Net balance | 26,884 | ||||
Net foreign currency translation | (697) | ||||
Amortization expense | (1,799) | ||||
Net balance | 24,388 | 24,388 | |||
Intangible assets, net | |||||
Balance at cost | 38,691 | ||||
Accumulated amortization | (14,303) | ||||
Ending Balance | 24,388 | 24,388 | 24,388 | ||
Other | |||||
Intangible asset activity | |||||
Net balance | 3,871 | ||||
Additions | 48 | ||||
Disposals-Other | (5) | ||||
Net foreign currency translation | (7) | ||||
Amortization expense | (1,176) | ||||
Net balance | 2,731 | 2,731 | |||
Intangible assets, net | |||||
Balance at cost | 13,700 | ||||
Accumulated amortization | (10,969) | ||||
Ending Balance | $ 2,731 | $ 2,731 | $ 2,731 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Total | $ 28,645 | $ 28,645 | $ 27,729 | ||
Accumulated depreciation | (16,486) | (16,486) | (16,275) | ||
Property and equipment, net | 12,159 | 12,159 | 11,454 | ||
Depreciation expense | 700 | $ 500 | 1,400 | $ 1,000 | |
Office equipment and software | |||||
Property, Plant and Equipment [Line Items] | |||||
Total | 14,342 | 14,342 | 14,595 | ||
Leasehold Improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Total | 10,423 | 10,423 | 9,417 | ||
Furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Total | $ 3,880 | $ 3,880 | $ 3,717 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
U.S. Treasury Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 6,994 | $ 9,225 |
U.S. Treasury Notes | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 6,994 | 9,225 |
Corporate Notes / Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 10,689 | 8,169 |
Corporate Notes / Bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 10,689 | 8,169 |
Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,499 | 3,482 |
Commercial Paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,499 | 3,482 |
U.S. Treasury Bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 5,365 | 2,385 |
U.S. Treasury Bills | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 5,365 | 2,385 |
U.S. Government Agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,249 | 2,249 |
U.S. Government Agencies | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 2,249 | $ 2,249 |
Allowance for credit losses (De
Allowance for credit losses (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Jun. 30, 2020 |
Changes in the allowance for credit losses | ||
Ending Balance | $ 2,524 | |
Impact of ASU 2016-13 adoption | ||
Changes in the allowance for credit losses | ||
Provision | 288 | $ 912 |
Net foreign currency translation | (1) | |
Ending Balance | $ 2,812 | $ 3,723 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating lease cost | $ 1,124 | $ 1,090 | $ 2,167 | $ 2,231 |
Other information related to operating leases | ||||
Cash payments to settle a lease liability reported in cash flows | 2,000 | |||
Right-of-use assets obtained in exchange for new lease liabilities | $ 1,900 | |||
Weighted-average discount rate | 5.00% | 5.00% | ||
Weighted average remaining lease term | 7 years | 7 years | ||
Building | ||||
Operating lease cost | $ 765 | 857 | $ 1,456 | 1,721 |
Automobile | ||||
Operating lease cost | $ 359 | $ 233 | $ 711 | $ 510 |
Leases - Maturities of our oper
Leases - Maturities of our operating leases (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Maturities of operating leases | |
2020 (remaining 6 months) | $ 1,554 |
2021 | 3,052 |
2022 | 2,667 |
2023 | 2,153 |
2024 | 1,401 |
Later years | 6,555 |
Less imputed interest | (3,110) |
Total lease liabilities | $ 14,272 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred tax assets, operating loss, and other carryforwards | ||||||
Provision (benefit) for income taxes | $ 973 | $ 753 | $ 1,663 | $ 353 | ||
Statutory tax rate | 21.00% | |||||
Income taxes paid | $ 2,200 | $ 7,900 | ||||
Deferred tax assets, foreign and state NOL carryforwards | $ 24,900 | |||||
Foreign and state, net operating loss (NOL) carryforwards | 16,600 | |||||
Other foreign deductible carryforwards | 8,300 | |||||
Deferred tax assets, valuation allowance | $ 17,300 | |||||
Forecast | ||||||
Deferred tax assets, operating loss, and other carryforwards | ||||||
Provision (benefit) for income taxes | $ 3,300 |
Long-Term Compensation Plan a_3
Long-Term Compensation Plan and Stock Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | |
Plan information | |||||
Restricted stock awards | $ 860 | $ 1,350 | $ 677 | $ 552 | |
2019 Omnibus Incentive Plan | Restricted Stock, subject to time-based criteria | |||||
Plan information | |||||
Stock based compensation awards issued shares | 296 | ||||
Restricted stock awards | $ 5,200 | ||||
2019 Omnibus Incentive Plan | Restricted Stock, subject to time-based criteria | Minimum | |||||
Plan information | |||||
Vesting period (in years) | 1 year | ||||
2019 Omnibus Incentive Plan | Restricted Stock, subject to time-based criteria | Maximum | |||||
Plan information | |||||
Vesting period (in years) | 4 years | ||||
2019 Omnibus Incentive Plan | Restricted Stock, subject to future performance criteria | |||||
Plan information | |||||
Stock based compensation awards issued shares | 198 | ||||
Restricted stock awards | $ 4,100 | ||||
Vesting period (in years) | 3 years | ||||
2019 Omnibus Incentive Plan | Restricted Stock, subject to market conditions | |||||
Plan information | |||||
Stock based compensation awards issued shares | 88 | ||||
Restricted stock awards | $ 1,600 | ||||
Vesting period (in years) | 3 years |
Long-Term Compensation Plan a_4
Long-Term Compensation Plan and Stock Based Compensation - Allocation of Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Compensation expense | ||||
Restricted stock | $ 860 | $ 677 | $ 2,210 | $ 1,229 |
Long-term compensation plan | 305 | 755 | 670 | 1,258 |
Total Compensation | $ 1,165 | $ 1,432 | $ 2,880 | $ 2,487 |
Earnings per Share - Details of
Earnings per Share - Details of Earnings Per Share Calculations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings per Share | ||||||
Net loss | $ (2,025) | $ 4 | $ (2,511) | $ (6,056) | $ (2,021) | $ (8,567) |
Weighted average common shares outstanding: | ||||||
Basic (in shares) | 40,028 | 40,038 | 40,059 | 40,037 | ||
Incremental shares with dilutive effect: | ||||||
Diluted (in shares) | 40,028 | 40,038 | 40,059 | 40,037 | ||
Basic (in dollars per share) | $ (0.05) | $ (0.06) | $ (0.05) | $ (0.21) | ||
Diluted (in dollars per share) | $ (0.05) | $ (0.06) | $ (0.05) | $ (0.21) |