Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 27, 2015 | Jun. 30, 2014 |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | TASER INTERNATIONAL INC | ||
Entity Central Index Key | 1069183 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 53,086,538 | ||
Entity Public Float | $681.70 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $48,367 | $42,271 |
Short-term investments | 32,774 | 9,101 |
Accounts and notes receivable, net of allowance of $251 and 200 as of December 31, 2014 and 2013, respectively | 30,735 | 22,488 |
Inventory, net | 18,323 | 11,109 |
Prepaid expenses and other current assets | 4,443 | 5,397 |
Deferred income tax assets, net | 5,186 | 7,101 |
Total current assets | 139,828 | 97,467 |
Property and equipment, net | 17,523 | 19,043 |
Deferred income tax assets, net | 10,877 | 13,679 |
Intangible assets, net | 3,115 | 3,317 |
Goodwill, net | 2,206 | 2,235 |
Long-term investments | 9,296 | 12,023 |
Other assets | 2,523 | 618 |
Total assets | 185,368 | 148,382 |
Current liabilities: | ||
Accounts payable | 7,682 | 6,221 |
Accrued liabilities | 9,245 | 8,840 |
Current portion of deferred revenue | 14,020 | 6,878 |
Customer deposits | 988 | 1,154 |
Current portion of capital lease payable | 38 | 36 |
Total current liabilities | 31,973 | 23,129 |
Deferred revenue, net of current portion | 21,668 | 13,341 |
Liability for unrecognized tax benefits | 1,471 | 3,122 |
Long-term deferred compensation | 1,121 | 376 |
Long-term portion of capital lease payable | 29 | 67 |
Total liabilities | 56,262 | 40,035 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Common stock, $0.00001 par value; 200,000,000 shares authorized; 53,000,867 and 52,725,247 shares issued and outstanding as of December 31, 2014 and 2013, respectively | 1 | 1 |
Additional paid-in capital | 162,641 | 139,424 |
Treasury stock at cost, 18,139,958 and 16,412,755 shares as of December 31, 2014 and 2013, respectively | -114,645 | -92,203 |
Retained earnings | 81,045 | 61,127 |
Accumulated other comprehensive income (loss) | 64 | -2 |
Total stockholders’ equity | 129,106 | 108,347 |
Total liabilities and stockholders’ equity | $185,368 | $148,382 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Allowance on accounts receivable | $251 | $200 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 53,000,867 | 52,725,247 |
Common stock, shares outstanding | 53,000,867 | 52,725,247 |
Treasury stock, shares | 18,139,958 | 16,412,755 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Net sales | $164,525 | $137,831 | $114,753 |
Cost of products sold and services delivered | 62,977 | 51,988 | 47,038 |
Gross margin | 101,548 | 85,843 | 67,715 |
Operating expenses: | |||
Sales, general and administrative | 54,158 | 46,557 | 39,247 |
Research and development | 14,885 | 9,888 | 8,139 |
Litigation judgments (recoveries) | 0 | 1,450 | -2,200 |
Total operating expenses | 69,043 | 57,895 | 45,186 |
Income from operations | 32,505 | 27,948 | 22,529 |
Interest and other (expense) income, net | -194 | 86 | 83 |
Income before provision for income taxes | 32,311 | 28,034 | 22,612 |
Provision for income taxes | 12,393 | 9,790 | 7,874 |
Net income | 19,918 | 18,244 | 14,738 |
Net income per common and common equivalent shares: | |||
Basic (in dollars per share) | $0.38 | $0.35 | $0.27 |
Diluted (in dollars per share) | $0.37 | $0.34 | $0.27 |
Weighted average number of common and common equivalent shares outstanding: | |||
Weighted average shares outstanding—basic | 52,948 | 51,880 | 53,827 |
Diluted (in shares) | 54,500 | 54,152 | 54,723 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | 19,918 | 18,244 | 14,738 |
Foreign currency translation adjustments | 66 | 55 | 24 |
Comprehensive income | $19,984 | $18,299 | $14,762 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
In Thousands, except Share data, unless otherwise specified | ||||||
Beginning Balance at Dec. 31, 2011 | $82,455 | $1 | $101,597 | ($47,207) | ($81) | $28,145 |
Beginning Balance, Shares at Dec. 31, 2011 | 55,696,608 | 9,556,183 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock options exercised and RSUs vested, net of withholdings | 1,929 | 1,929 | ||||
Stock options exercised and RSUs vested, net of withholdings, Shares | 881,390 | |||||
Stock-based compensation | 3,422 | 3,422 | ||||
Excess tax benefit from stock-based compensation | 4,713 | 4,713 | ||||
Purchase of treasury stock | -19,996 | -19,996 | ||||
Purchase of treasury stock, Shares | -3,807,606 | -3,807,606 | ||||
Net income | 14,738 | 14,738 | ||||
Foreign currency translation adjustments | 24 | 24 | ||||
Ending Balance at Dec. 31, 2012 | 87,285 | 1 | 111,661 | -67,203 | -57 | 42,883 |
Ending Balance, Shares at Dec. 31, 2012 | 52,770,392 | 13,363,789 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock options exercised and RSUs vested, net of withholdings | 15,048 | 15,048 | ||||
Stock options exercised and RSUs vested, net of withholdings, Shares | 2,896,072 | |||||
Stock-based compensation | 4,340 | 4,340 | ||||
Excess tax benefit from stock-based compensation | 6,797 | 6,797 | ||||
Purchase of treasury stock | -25,000 | -25,000 | ||||
Purchase of treasury stock, Shares | -3,048,966 | -3,048,966 | ||||
Shares issued related to business acquisition | 1,578 | 1,578 | ||||
Shares issued related to business acquisition, Shares | 107,749 | |||||
Net income | 18,244 | 18,244 | ||||
Foreign currency translation adjustments | 55 | 55 | ||||
Ending Balance at Dec. 31, 2013 | 108,347 | 1 | 139,424 | -92,203 | -2 | 61,127 |
Ending Balance, Shares at Dec. 31, 2013 | 52,725,247 | 16,412,755 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock options exercised and RSUs vested, net of withholdings | 9,653 | 9,653 | ||||
Stock options exercised and RSUs vested, net of withholdings, Shares | 2,002,823 | |||||
Stock-based compensation | 5,579 | 5,579 | ||||
Excess tax benefit from stock-based compensation | 7,985 | 7,985 | ||||
Purchase of treasury stock | -22,442 | -22,442 | ||||
Purchase of treasury stock, Shares | -1,727,203 | -1,727,203 | ||||
Net income | 19,918 | 19,918 | ||||
Foreign currency translation adjustments | 66 | 66 | ||||
Ending Balance at Dec. 31, 2014 | $129,106 | $1 | $162,641 | ($114,645) | $64 | $81,045 |
Ending Balance, Shares at Dec. 31, 2014 | 53,000,867 | 18,139,958 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income | $19,918 | $18,244 | $14,738 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 4,317 | 5,131 | 6,519 |
Loss (gain) on write-down / disposal of property and equipment, net | 17 | -27 | 161 |
Loss on disposal of intangibles | 215 | 168 | 195 |
Bond premium amortization | 957 | 289 | 29 |
Provision (recovery) for doubtful accounts | 142 | 24 | -242 |
Provision for excess and obsolete inventory | 2,157 | 595 | 554 |
Provision for warranty | 396 | 1,001 | 527 |
Stock-based compensation | 5,579 | 4,340 | 3,422 |
Deferred income taxes | 3,598 | 621 | 1,683 |
Unrecognized tax benefits | 202 | 219 | 920 |
Excess tax benefit from stock-based compensation | -7,985 | -6,797 | -4,713 |
Change in assets and liabilities: | |||
Accounts and notes receivable | -8,389 | -4,411 | -6,080 |
Inventory | -9,371 | -711 | -62 |
Prepaid expenses and other current assets | -1,080 | -569 | 177 |
Accounts payable, accrued and other liabilities | 9,456 | 5,559 | 4,433 |
Deferred revenue | 15,469 | 8,096 | 4,169 |
Customer deposits | -166 | 654 | 87 |
Net cash provided by operating activities | 35,432 | 32,426 | 26,517 |
Cash flows from investing activities: | |||
Purchases of investments | -32,900 | -29,112 | -6,242 |
Proceeds from call / maturity of investments | 10,997 | 9,380 | 9,640 |
Purchases of property and equipment | -2,505 | -1,783 | -1,334 |
Proceeds from disposal of fixed assets | 10 | 34 | 46 |
Purchases of intangible assets | -183 | -323 | -429 |
Business acquisition, net of cash acquired | 0 | -1,258 | |
Net cash (used in) provided by investing activities | -24,581 | -23,062 | 1,681 |
Cash flows from financing activities: | |||
Repurchase of common stock | -22,442 | -25,000 | -19,996 |
Proceeds from options exercised | 11,000 | 15,357 | 1,929 |
Payroll tax payments for net-settled stock awards | -1,347 | -309 | |
Payments on capital lease obligation | -36 | -34 | -9 |
Excess tax benefit from stock-based compensation | 7,985 | 6,797 | 4,713 |
Net cash used in financing activities | -4,840 | -3,189 | -13,363 |
Effect of exchange rate changes on cash and cash equivalents | 85 | -31 | -9 |
Net increase in cash and cash equivalents | 6,096 | 6,144 | 14,826 |
Cash and cash equivalents, beginning of year | 42,271 | 36,127 | 21,301 |
Cash and cash equivalents, end of year | $48,367 | $42,271 | $36,127 |
Organization_and_Summary_of_Si
Organization and Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies | ||||||||||||||||||||
TASER International, Inc. (“TASER” or the “Company”) is a developer and manufacturer of advanced conducted electrical weapons (“CEWs”) designed for use for use by law enforcement, military, corrections, and private security personnel and by private individuals for personal defense. In addition, the Company has developed full technology solutions for the capture, storage and management of video/audio evidence as well as other tactical capabilities for use in law enforcement. The Company sells its products worldwide through its direct sales force, distribution partners, online store and third-party resellers. The Company was incorporated in Arizona in September 1993, and reincorporated in Delaware in January 2001. The Company’s corporate headquarters and manufacturing facilities are located in Scottsdale, Arizona. The Company’s software development unit facility is located in Seattle, Washington. | |||||||||||||||||||||
The accompanying consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries, including TASER International Europe SE (“TASER Europe”). TASER Europe was established in 2009 to facilitate sales and provide customer service to our customers in the European region. All material intercompany accounts, transactions, and profits have been eliminated. | |||||||||||||||||||||
In 2014, the Company established TASER International, B.V. located in Amsterdam, the Netherlands, that will serve as its international headquarters. No transactions were recorded within TASER International, B.V. during the year ended December 31, 2014. | |||||||||||||||||||||
a. Basis of Presentation and Use of Estimates | |||||||||||||||||||||
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. of America (“U.S. GAAP”). The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions in these consolidated financial statements include: | |||||||||||||||||||||
• | product warranty reserves, | ||||||||||||||||||||
• | inventory valuation reserves, | ||||||||||||||||||||
• | revenue recognition allocated in multiple-deliverable contracts or arrangements, | ||||||||||||||||||||
• | valuation of goodwill, intangibles and long-lived assets, | ||||||||||||||||||||
• | recognition, measurement and valuation of current and deferred income taxes, | ||||||||||||||||||||
• | fair value of stock awards issued, the estimated vesting period for performance-based stock awards and forfeiture rates, and | ||||||||||||||||||||
• | recognition and measurement of contingencies and accrued litigation expense. | ||||||||||||||||||||
Actual results could differ materially from those estimates. | |||||||||||||||||||||
b. Cash, Cash Equivalents and Investments | |||||||||||||||||||||
Cash, cash equivalents and investments include cash, money market funds, certificates of deposit, state and municipal obligations and corporate bonds. The Company places its cash and cash equivalents with high quality financial institutions. Balances with these institutions regularly exceed FDIC insured limits; however, to manage the related credit exposure, the Company continually monitors the creditworthiness of the financial institutions where it has deposits. | |||||||||||||||||||||
Cash and cash equivalents include funds on hand and highly liquid investments purchased with initial maturity of three months or less. Short-term investments include securities with an expected maturity date within one year of the balance sheet date that do not meet the definition of a cash equivalent, and long-term investments are securities with an expected maturity date greater than one year. Based on management’s intent and ability, the Company’s investments are classified as held to maturity investments and are recorded at amortized cost. Held-to-maturity investments are reviewed quarterly for impairment to determine if other-than-temporary declines in the carrying value have occurred for any individual investment. Other-than-temporary declines in the value of held-to-maturity investments are recorded as expense in the period the determination is made. | |||||||||||||||||||||
c. Inventory | |||||||||||||||||||||
Inventories are stated at the lower of cost or market. Cost is determined using the weighted average cost of raw materials which approximates the first-in, first-out (“FIFO”) method and includes allocations of manufacturing labor and overhead. Provisions are made to reduce potentially excess, obsolete or slow-moving inventories to their net realizable value. These provisions are based on management’s best estimate after considering historical demand, projected future demand, inventory purchase commitments, industry and market trends and conditions and other factors. Management evaluates inventory costs for abnormal costs due to excess production capacity and treats such costs as period costs. | |||||||||||||||||||||
d. Property and Equipment | |||||||||||||||||||||
Property and equipment are stated at cost, net of accumulated depreciation and amortization. Additions and improvements are capitalized, while ordinary maintenance and repair expenditures are charged to expense as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. | |||||||||||||||||||||
e. Software Development Costs | |||||||||||||||||||||
The Company expenses software development costs, including costs to develop software products or the software component of products to be marketed to external users, before technological feasibility of such products is reached. The Company has determined that technological feasibility is reached shortly before the release of those products and as a result, the development costs incurred after the establishment of technological feasibility and before the release of those products are not material. | |||||||||||||||||||||
Software development costs also include costs to develop software programs to be used solely to meet the Company's internal needs and cloud based applications used to deliver its services. The Company capitalizes development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the intended function. Additionally, the Company capitalizes qualifying costs incurred for upgrades and enhancements to existing software that result in additional functionality. Costs related to preliminary project planning activities, post-implementation activities, maintenance and minor modifications are expensed as incurred. Internal-use software is amortized on a straight line basis over its estimated useful life. There were no software development costs capitalized for the years ending December 31, 2014, 2013 or 2012. The capitalized development costs related to the Company’s software-as-a-service (“SaaS”) product, EVIDENCE.com, were fully amortized as of December 31, 2013. Amortization of capitalized software development costs was $0.6 million and $1.2 million for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. | |||||||||||||||||||||
f. Valuation of Goodwill, Intangibles and Long-lived Assets | |||||||||||||||||||||
In the fourth quarter of 2013, the Company recorded goodwill related to the acquisition of Familiar, Inc. ("Familiar"). The recoverability of goodwill is evaluated and tested for impairment at least annually during the fourth quarter or more often, if and when circumstances indicate that goodwill may not be recoverable. Finite-lived intangible assets and other long-lived assets are amortized over their useful lives. Management evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets and intangible assets may warrant revision or that the remaining balance of these assets, including intangible assets with indefinite lives, may not be recoverable. | |||||||||||||||||||||
Circumstances that might indicate long-lived assets might not be recoverable could include, but are not limited to, a change in the product mix, a change in the way products are created, produced or delivered, or a significant change in the way the Company's products are branded and marketed. When performing a review for recoverability, management estimates the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. The amount of the impairment loss, if impairment exists, is calculated based on the excess of the carrying amounts of the assets over their estimated fair value computed using discounted cash flows. No impairment losses were recorded during the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||||||
g. Customer Deposits | |||||||||||||||||||||
The Company requires deposits in advance of shipment for certain customer sales orders. Customer deposits are recorded as a current liability in the accompanying consolidated balance sheets. | |||||||||||||||||||||
h. Revenue Recognition, Deferred Revenue and Accounts and Notes Receivable | |||||||||||||||||||||
The Company derives revenue from two primary sources: (1) the sale of physical products, including our CEWs, AXON cameras, corresponding extended warranties, and related accessories such as cartridges and batteries, and (2) subscription to the Company's EVIDENCE.com SaaS (including data storage fees and other ancillary services), which includes varying levels of support. To a lesser extent, the Company also recognizes training and other revenue. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, title has transferred, the price is fixed and collectability is reasonably assured. Extended warranty revenue, SaaS revenue and related data storage revenue are recognized ratably over the term of the contract beginning on the commencement date of each contract. | |||||||||||||||||||||
Revenue arrangements with multiple deliverables are divided into separate units and revenue is allocated using the relative selling price method based upon vendor-specific objective evidence of selling price or third-party evidence of the selling prices if vendor-specific objective evidence of selling prices does not exist. If neither vendor-specific objective evidence nor third-party evidence exists, management uses its best estimate of selling price. | |||||||||||||||||||||
The Company offers the right to purchase extended warranties that include additional services and coverage beyond the limited warranty for certain products. Revenue for extended warranty purchases is deferred at the time of sale and recognized over the warranty period commencing on the date of sale. Extended warranties range from one to five years. | |||||||||||||||||||||
EVIDENCE.com and AXON cameras are sometimes sold separately, but in most instances are sold together. In these instances, customers typically purchase and pay for the equipment and one year of EVIDENCE.com in advance. Additional years of service are generally billed annually over a specified service term, which has typically ranged from one to five years. AXON equipment has stand-alone value and represents a deliverable that is provided to the customer at the time of sale, while EVIDENCE.com services are provided over the specified term of the contract. The Company recognizes revenue for the AXON equipment at the time of the sale consistent with the discussion of multiple deliverable arrangements above. Revenue for EVIDENCE.com is deferred at the time of the sale and recognized over the service period. In certain circumstances, not all requirements are met for the recognition of revenue relative to equipment sold in conjunction with EVIDENCE.com at the time the equipment is provided to customers. In such circumstances, based on limitations associated with the allocation of arrangement consideration, part of the revenue may be recognized ratably over the specified term of the contract, or when all conditions for revenue recognition are met, if sooner. | |||||||||||||||||||||
In 2012, the Company introduced a program, the TASER Assurance Program (“TAP”) whereby a customer purchasing a product and joining the program will have the right to trade-in the original product for a new product of the same or like model in the future. Upon joining TAP, customers also receive an extended warranty for the initial products purchased and spare inventory. Under this program the customer generally pays additional annual installments over the contract period, generally three to five years. The Company records consideration received related to the future product purchase as deferred revenue until all revenue recognition criteria are met, which is generally at the end of the contract period. | |||||||||||||||||||||
Sales tax collected on sales is netted against government remittances and thus, recorded on a net basis. Training revenue is recorded as the service is provided. | |||||||||||||||||||||
Deferred revenue consists of payments received in advance related to products and services for which the criteria for revenue recognition have not yet been met. Deferred revenue that will be recognized during the succeeding twelve month period is recorded as current deferred revenue and the remaining portion is recorded as long-term. Deferred revenue does not include future revenue from multi-year contracts for which no invoice has yet been created. Generally, customers are billed in annual installments. See Note 7 for further disclosures about of the Company’s deferred revenue. | |||||||||||||||||||||
Sales are typically made on credit and the Company generally does not require collateral. Management performs ongoing credit evaluations of its customers’ financial condition and maintains an allowance for estimated potential losses. Uncollectible accounts are charged to expense when deemed uncollectible, and accounts and notes receivable are presented net of an allowance for doubtful accounts. This allowance represents management’s best estimate and is based on their judgment after considering a number of factors, including third-party credit reports, actual payment history, cash discounts, customer-specific financial information and broader market and economic trends and conditions. | |||||||||||||||||||||
The Company may, from time to time, enter into agreements with its customers to finance their purchases with a note receivable that may range in terms up to five years. Sales are recorded at the fair value of the note, which is generally sold and assigned to a third-party financing company. The terms of the assignments are such that the Company expects to receive payment within 30 days of the original sale. The assignments are non-recourse and the Company has no obligations or continuing involvement with the notes receivable. Prior to entering into an assignment, the Company evaluates the credit quality and financial condition of the third-party financing company. The Company does not generally record interest income on notes receivable due to minimal holding periods, nor has the Company recognized gains or losses upon the assignment of the notes. As of December 31, 2014 and 2013, there was no balance in accounts and notes receivable related to such arrangements. | |||||||||||||||||||||
i. Cost of Products Sold and Services Provided | |||||||||||||||||||||
Cost of products sold represents manufacturing costs, consisting of materials, labor and overhead related to finished goods and components. Shipping costs incurred related to product delivery are also included in cost of products sold. Cost of services delivered includes third party cloud services, and software maintenance costs, including personnel costs, associated with supporting EVIDENCE.com. | |||||||||||||||||||||
j. Advertising Costs | |||||||||||||||||||||
The Company expenses advertising costs in the period in which they are incurred. The Company incurred advertising costs of $0.3 million, $0.2 million and $0.2 million in the years ended December 31, 2014, 2013 and 2012, respectively. Advertising costs are included in sales, general and administrative expenses in the accompanying statements of operations. | |||||||||||||||||||||
k. Standard Warranties | |||||||||||||||||||||
The Company warranties its CEWs, AXON cameras and E-Docks from manufacturing defects on a limited basis for a period of one year after purchase and, thereafter, will replace any defective unit for a fee. Estimated costs for the standard warranty are charged to cost of products sold and services delivered when revenue is recorded for the related product. Future warranty costs are estimated based on historical data related to returns and warranty costs on a quarterly basis and this rate is applied to current product sales. Historically, reserve amounts have been increased if management becomes aware of a component failure that could result in larger than anticipated returns from customers. The accrued warranty liability expense is reviewed quarterly to verify that it sufficiently reflects the remaining warranty obligations based on the anticipated expenditures over the balance of the warranty obligation period, and adjustments are made when actual warranty claim experience differs from estimates. Costs related to extended warranties are charged to cost of products sold and services delivered when incurred. The reserve for warranty returns is included in accrued liabilities on the accompanying consolidated balance sheets. | |||||||||||||||||||||
Changes in the Company’s estimated product warranty liabilities are as follows (in thousands): | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Balance, January 1 | $ | 955 | $ | 484 | $ | 427 | |||||||||||||||
Utilization of accrual | (676 | ) | (530 | ) | (470 | ) | |||||||||||||||
Warranty expense | 396 | 1,001 | 527 | ||||||||||||||||||
Balance, December 31 | $ | 675 | $ | 955 | $ | 484 | |||||||||||||||
l. Research and Development Expenses | |||||||||||||||||||||
The Company expenses as incurred research and development costs that do not meet the qualifications to be capitalized. The Company incurred research and development expense of $14.9 million, $9.9 million and $8.1 million, in 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
m. Income Taxes | |||||||||||||||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in future years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced through the establishment of a valuation allowance if, based upon available evidence, it is determined that it is more likely than not that the deferred tax assets will not be realized. | |||||||||||||||||||||
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. Management also assesses whether uncertain tax positions, as filed, could result in the recognition of a liability for possible interest and penalties. The Company’s policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. Refer to Note 10 for additional information regarding the change in unrecognized tax benefits. | |||||||||||||||||||||
n. Concentration of Credit Risk and Major Customers / Suppliers | |||||||||||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist of accounts and notes receivable and cash. Sales are typically made on credit and the Company generally does not require collateral. Management performs ongoing credit evaluations of its customers’ financial condition and maintains an allowance for estimated losses. Uncollectible accounts are written off when deemed uncollectible, and accounts receivable are presented net of an allowance for doubtful accounts, which totaled $0.3 million and $0.2 million as of December 31, 2014 and 2013, respectively. Historically, the Company has experienced a low level of write-offs related to doubtful accounts. | |||||||||||||||||||||
The Company maintains the majority of its cash and cash equivalents accounts at three depository institutions. As of December 31, 2014, the aggregate balances in such accounts were $48.4 million. The Company’s cash balances with these institutions regularly exceed FDIC insured limits; however, to manage the related credit exposure, management continually monitors the creditworthiness of the financial institutions where the Company has deposits. | |||||||||||||||||||||
The Company sells its products primarily through a network of unaffiliated distributors. The Company also reserves the right to sell directly to the end user to secure the customer’s account. In 2014, no customer represented more than 10% of total net sales. In 2013 and 2012 one distributor represented 12.2% and 12.8%, respectively, of total net sales with no other customers exceeding 10%. | |||||||||||||||||||||
At December 31, 2014, the Company had a trade receivable from one unaffiliated customer comprising 13.4% of the aggregate accounts receivable balance. At December 31, 2013, the Company had a trade receivable from one unaffiliated customer comprising 17.4% of the aggregate accounts receivable balance. | |||||||||||||||||||||
The Company currently purchases finished circuit boards and injection-molded plastic components from suppliers located in the U.S. Although the Company currently obtains many of these components from single source suppliers, the Company owns the injection molded component tooling used in their production. As a result, management believes it could obtain alternative suppliers in most cases without incurring significant production delays. The Company also purchases small, machined parts from a vendor in Taiwan, custom cartridge assemblies from a proprietary vendor in the U.S., and electronic components from a variety of foreign and domestic distributors. Management believes that there are readily available alternative suppliers in most cases who can consistently meet the Company's needs for these components. The Company acquires most of its components on a purchase order basis and does not have long-term contracts with suppliers. | |||||||||||||||||||||
o. Fair Value of Financial Instruments | |||||||||||||||||||||
The Company uses the fair value framework that prioritizes the inputs to valuation techniques for measuring financial assets and liabilities measured on a recurring basis and for non-financial assets and liabilities when these items are re-measured. Fair value is considered to be the exchange price in an orderly transaction between market participants, to sell an asset or transfer a liability at the measurement date. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: | |||||||||||||||||||||
• | Level 1 – Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. | ||||||||||||||||||||
• | Level 2 – Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. | ||||||||||||||||||||
• | Level 3 – Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Company's own assumptions about inputs that market participants would use in pricing an asset or liability. | ||||||||||||||||||||
The Company has cash equivalents and investments, which at December 31, 2014 and 2013, were comprised of money market funds, state and municipal obligations, corporate bonds, and certificates of deposits. See additional disclosure regarding the fair value of the Company’s cash equivalents and investments in Note 2. Included in the balance of other assets as of December 31, 2014 and 2013 was $1.1 million and $0.4 million, respectively, related to corporate-owned life insurance policies which are used to fund the Company’s deferred compensation plan. The Company determines the fair value of its insurance contracts by obtaining the cash surrender value of the contracts from the issuer, a Level 2 valuation technique. | |||||||||||||||||||||
The Company’s financial instruments also include accounts and notes receivable, accounts payable and accrued liabilities. Due to the short-term nature of these instruments, their fair values approximate their carrying values on the balance sheet. | |||||||||||||||||||||
p. Segment and Geographic Information | |||||||||||||||||||||
The Company is comprised of two reportable segments: the sale of CEWs, accessories and other products and services (the “TASER Weapons” segment); and the video business which includes the TASER Cam, AXON camera products and EVIDENCE.com (the “AXON” segment). Reportable segments are determined based on discrete financial information reviewed by the Company’s Chief Executive Officer who is the Chief Operating Decision Maker (the “CODM”) for the Company. The Company organizes and reviews operations based on products and services, and currently there are no operating segments that are aggregated. The Company performs an annual analysis of its reportable segments. Additional information related to the Company’s business segments is summarized in Note 15. | |||||||||||||||||||||
For the three years ended December 31, 2014, 2013 and 2012, net sales by geographic area were as follows (in thousands): | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
United States | $ | 132,205 | 80.4 | % | $ | 115,674 | 83.9 | % | $ | 93,427 | 81.4 | % | |||||||||
Other Countries | 32,320 | 19.6 | 22,157 | 16.1 | 21,326 | 18.6 | |||||||||||||||
Total | $ | 164,525 | 100 | % | $ | 137,831 | 100 | % | $ | 114,753 | 100 | % | |||||||||
Sales to customers outside of the U.S. are typically denominated in U.S. dollars and are attributed to each country based on the shipping address of the distributor or customer. For the three years ended December 31, 2014, 2013 and 2012, no individual country outside the U.S. represented more than 10% of net sales. Substantially all of the Company’s assets are located in the U.S. | |||||||||||||||||||||
q. Stock-Based Compensation | |||||||||||||||||||||
The Company calculates the fair value of stock options using the Black-Scholes-Merton option pricing valuation model, which incorporates various assumptions including volatility, expected life and risk-free interest rates. The fair value of restricted stock units is estimated as the closing price of our common stock on the date of grant. No options were awarded during the years ended December 31, 2014, 2013 or 2012. | |||||||||||||||||||||
The expected life of the options represents the estimated period of time from grant date until exercise and is based on historical experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. Expected stock price volatility is based on a combination of historical volatility of the Company’s stock and the one-year implied volatility of its publicly traded options for the related vesting periods. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. The Company has not paid dividends in the past and does not plan to pay any dividends in the near future. | |||||||||||||||||||||
The estimated fair value of stock-based compensation awards is amortized to expense on a straight-line basis over the requisite service periods. As stock-based compensation expense recognized is based on awards ultimately expected to vest, it is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company’s forfeiture rate was calculated based on its historical experience of awards which ultimately vested. See Note 12 for further disclosure about of the Company’s stock-based compensation. | |||||||||||||||||||||
r. Income per Common Share | |||||||||||||||||||||
Basic income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the periods presented. Diluted income per share reflects the potential dilution that would occur if outstanding stock options were exercised utilizing the treasury stock method. The calculation of the weighted average number of shares outstanding and earnings per share are as follows (in thousands except per share data): | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Numerator for basic and diluted earnings per share: | |||||||||||||||||||||
Net income | $ | 19,918 | $ | 18,244 | $ | 14,738 | |||||||||||||||
Denominator: | |||||||||||||||||||||
Weighted average shares outstanding—basic | 52,948 | 51,880 | 53,827 | ||||||||||||||||||
Dilutive effect of stock-based awards | 1,552 | 2,272 | 896 | ||||||||||||||||||
Diluted weighted average shares outstanding | 54,500 | 54,152 | 54,723 | ||||||||||||||||||
Anti-dilutive stock-based awards excluded | 177 | 507 | 3,205 | ||||||||||||||||||
Net income per common share: | |||||||||||||||||||||
Basic | $ | 0.38 | $ | 0.35 | $ | 0.27 | |||||||||||||||
Diluted | $ | 0.37 | $ | 0.34 | $ | 0.27 | |||||||||||||||
s. Recently Issued Accounting Guidance | |||||||||||||||||||||
In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”). The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Accounting Standards Codification Topic No. 718, “Compensation—Stock Compensation” (“ASC 718”), as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in ASU 2014-12 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in ASU 2014-12 either: (i) prospectively to all awards granted or modified after the effective date; or (ii) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The Company is currently evaluating the potential impact of the adoption of this guidance on its consolidated financial statements, however does not expect there to be a material impact at this time. | |||||||||||||||||||||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, ASU 2014-09 provides for the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 supersedes the revenue recognition requirements in Accounting Standards Codification Topic No. 605, “Revenue Recognition,” most industry-specific guidance throughout the industry topics of the Accounting Standards Codification, and some cost guidance related to construction-type and production-type contracts. ASU 2014-09 is effective for public entities for annual periods and interim periods within those annual periods beginning after December 15, 2016. Early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company is currently evaluating the potential impact of the adoption of this guidance on its consolidated financial statements. | |||||||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11 to standardize the balance sheet presentation of unrecognized tax benefits. This update applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The new guidance was effective for fiscal years beginning after December 15, 2013. The adoption of this guidance resulted in an immaterial reclassification on the Company’s consolidated balance sheet. | |||||||||||||||||||||
t. Foreign Currency Translation | |||||||||||||||||||||
The Company’s foreign subsidiary uses the local currency as its functional currency. Assets and liabilities are translated at exchange rates in effect at the balance sheet date. Income and expense accounts are translated at the average monthly exchange rates during the year. Resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) on the consolidated balance sheets. | |||||||||||||||||||||
u. Reclassification of Prior Year Presentation | |||||||||||||||||||||
Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. |
Cash_Cash_Equivalents_and_Inve
Cash, Cash Equivalents and Investments | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | ||||||||||||||||||||||||||||
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments | |||||||||||||||||||||||||||
The following tables summarize the Company's cash, cash equivalents, and held-to-maturity investments at December 31 (in thousands): | ||||||||||||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Cash and Cash Equivalents | Short-Term Investments | Long-Term Investments | ||||||||||||||||||||||
Cash | $ | 44,260 | $ | — | $ | — | $ | 44,260 | $ | 44,260 | $ | — | $ | — | ||||||||||||||
Level 1: | ||||||||||||||||||||||||||||
Money market funds | 3,932 | — | — | 3,932 | 3,932 | — | — | |||||||||||||||||||||
Corporate bonds | 20,388 | — | (34 | ) | 20,354 | — | 15,656 | 4,732 | ||||||||||||||||||||
Subtotal | 24,320 | — | (34 | ) | 24,286 | 3,932 | 15,656 | 4,732 | ||||||||||||||||||||
Level 2: | ||||||||||||||||||||||||||||
State and municipal obligations | 19,145 | 18 | — | 19,163 | 175 | 15,891 | 3,079 | |||||||||||||||||||||
Certificates of deposit | 2,712 | — | — | 2,712 | — | 1,227 | 1,485 | |||||||||||||||||||||
Subtotal | 21,857 | 18 | — | 21,875 | 175 | 17,118 | 4,564 | |||||||||||||||||||||
Total | $ | 90,437 | $ | 18 | $ | (34 | ) | $ | 90,421 | $ | 48,367 | $ | 32,774 | $ | 9,296 | |||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Cash and Cash Equivalents | Short-Term Investments | Long-Term Investments | ||||||||||||||||||||||
Cash | $ | 37,196 | $ | — | $ | — | $ | 37,196 | $ | 37,196 | $ | — | $ | — | ||||||||||||||
Level 1: | ||||||||||||||||||||||||||||
Money market funds | 5,030 | — | — | 5,030 | 5,030 | — | — | |||||||||||||||||||||
Corporate bonds | 7,743 | 3 | (14 | ) | 7,732 | — | 1,102 | 6,641 | ||||||||||||||||||||
Subtotal | 12,773 | 3 | (14 | ) | 12,762 | 5,030 | 1,102 | 6,641 | ||||||||||||||||||||
Level 2: | ||||||||||||||||||||||||||||
State and municipal obligations | 10,807 | 14 | — | 10,821 | 45 | 5,626 | 5,136 | |||||||||||||||||||||
Certificates of deposit | 2,619 | — | — | 2,619 | — | 2,373 | 246 | |||||||||||||||||||||
Subtotal | 13,426 | 14 | — | 13,440 | 45 | 7,999 | 5,382 | |||||||||||||||||||||
Total | $ | 63,395 | $ | 17 | $ | (14 | ) | $ | 63,398 | $ | 42,271 | $ | 9,101 | $ | 12,023 | |||||||||||||
The Company believes the unrealized losses on the Company’s investments are due to interest rate fluctuations. As these investments are either short-term in nature, are expected to be redeemed at par value and/or because the Company has the ability and intent to hold these investments to maturity, the Company does not consider these investments to be other than temporarily impaired at December 31, 2014. None of Company’s investments have been in an unrealized loss position for more than one year. | ||||||||||||||||||||||||||||
The following table summarizes the amortized cost and fair value of the short-term and long-term investments held by the Company at December 31, 2014 by contractual maturity (in thousands): | ||||||||||||||||||||||||||||
Amortized Cost | Fair Value | |||||||||||||||||||||||||||
Due in less than one year | $ | 32,774 | $ | 33,773 | ||||||||||||||||||||||||
Due after one year, through two years | 9,048 | 9,032 | ||||||||||||||||||||||||||
Due after two years | 248 | 248 | ||||||||||||||||||||||||||
Total short-term and long-term investments | $ | 42,070 | $ | 43,053 | ||||||||||||||||||||||||
Inventory
Inventory | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Inventory | Inventory | |||||||
Inventories consisted of the following at December 31 (in thousands): | ||||||||
2014 | 2013 | |||||||
Raw materials | $ | 12,229 | $ | 7,376 | ||||
Work-in-process | 111 | 44 | ||||||
Finished goods | 7,337 | 4,688 | ||||||
Reserve for excess and obsolete inventory | (1,354 | ) | (999 | ) | ||||
Total inventory | $ | 18,323 | $ | 11,109 | ||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||
Property and Equipment | Property and Equipment | |||||||||
Property and equipment consisted of the following at December 31 (in thousands): | ||||||||||
Estimated | 2014 | 2013 | ||||||||
Useful Life | ||||||||||
Land | N/A | $ | 2,900 | $ | 2,900 | |||||
Building and leasehold improvements | 39 years | 14,302 | 13,922 | |||||||
Production equipment | 3-7 years | 18,443 | 18,047 | |||||||
Computer equipment | 3-5 years | 7,209 | 7,789 | |||||||
Furniture and office equipment | 5-7 years | 3,066 | 2,646 | |||||||
Vehicles | 5 years | 270 | 270 | |||||||
Website development costs | 3 years | 601 | 601 | |||||||
Capitalized software development costs | 3 years | 3,670 | 3,670 | |||||||
Construction-in-process | N/A | 968 | 576 | |||||||
Total cost | 51,429 | 50,421 | ||||||||
Less: Accumulated depreciation | (33,906 | ) | (31,378 | ) | ||||||
Property and equipment, net | $ | 17,523 | $ | 19,043 | ||||||
During the years ended December 31, 2014, 2013 and 2012 the Company recognized a net (loss) gain of approximately $(17,000), $27,000 and $(0.2) million, respectively, for write-down and disposal of property and equipment. | ||||||||||
Depreciation and amortization expense relative to property and equipment, including equipment under capital lease, was $4.0 million, $4.8 million and $6.3 million for the years ended December 31, 2014, 2013 and 2012, respectively, of which $2.8 million, $3.7 million and $4.7 million is included in cost of products sold and services provided for the respective years. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets | |||||||||||||||||||||||||
In the fourth quarter of 2013, the Company recorded goodwill related to the Familiar business acquisition. Goodwill is calculated as the excess of the purchase price over the fair value of the identifiable tangible and intangible assets. The balance of goodwill at December 31, 2014 and 2013 was $2.2 million. | ||||||||||||||||||||||||||
Intangible assets (other than goodwill) consisted of the following (in thousands): | ||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Useful | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
Life | Carrying | Amortization | Carrying | Carrying | Amortization | Carrying | ||||||||||||||||||||
Amount | Amount | Amount | Amount | |||||||||||||||||||||||
Amortized: | ||||||||||||||||||||||||||
Domain names | 5 years | $ | 125 | $ | (114 | ) | $ | 11 | $ | 125 | $ | (102 | ) | $ | 23 | |||||||||||
Issued patents | 4-15 years | 1,759 | (549 | ) | 1,210 | 1,529 | (441 | ) | 1,088 | |||||||||||||||||
Issued trademarks | 9-11 years | 566 | (205 | ) | 361 | 437 | (147 | ) | 290 | |||||||||||||||||
Total amortized | 2,450 | (868 | ) | 1,582 | 2,091 | (690 | ) | 1,401 | ||||||||||||||||||
Not amortized: | ||||||||||||||||||||||||||
TASER trademark | 900 | 900 | 900 | 900 | ||||||||||||||||||||||
Patents and trademarks pending | 633 | 633 | 1,016 | 1,016 | ||||||||||||||||||||||
Total not amortized | 1,533 | 1,533 | 1,916 | 1,916 | ||||||||||||||||||||||
Total intangible assets | $ | 3,983 | $ | (868 | ) | $ | 3,115 | $ | 4,007 | $ | (690 | ) | $ | 3,317 | ||||||||||||
Amortization expense relative to intangible assets was $0.2 million, $0.2 million and $0.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. Estimated amortization for intangible assets with definitive lives for the next five years is as follows for the year ended December 31 (in thousands): | ||||||||||||||||||||||||||
2015 | $ | 178 | ||||||||||||||||||||||||
2016 | 172 | |||||||||||||||||||||||||
2017 | 167 | |||||||||||||||||||||||||
2018 | 158 | |||||||||||||||||||||||||
2019 | 148 | |||||||||||||||||||||||||
Thereafter | 759 | |||||||||||||||||||||||||
Total | $ | 1,582 | ||||||||||||||||||||||||
Other_LongTerm_Assets
Other Long-Term Assets | 12 Months Ended |
Dec. 31, 2014 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Long-Term Assets | Other Long-Term Assets |
Other long-term assets consisted primarily of approximately $1.1 million related to the cash surrender value of corporate-owned life insurance policies (see Note 1) and approximately $1.1 million of long-term prepaid commissions. The remaining balance includes amounts for long-term prepaid licenses and other deposits. |
Deferred_Revenue
Deferred Revenue | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Deferred Revenue Disclosure [Abstract] | ||||||||
Deferred Revenue | Deferred Revenue | |||||||
Deferred revenue consisted of the following at December 31 (in thousands): | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Warranty | $ | 21,973 | $ | 15,889 | ||||
AXON services | 9,286 | 4,026 | ||||||
Hardware equipment | 4,252 | 304 | ||||||
Other | 177 | — | ||||||
Total deferred revenue | 35,688 | 20,219 | ||||||
Total current portion of deferred revenue | 14,020 | 6,878 | ||||||
Total long-term portion of deferred revenue | $ | 21,668 | $ | 13,341 | ||||
The current portion of deferred revenue consists primarily of approximately $5.7 million related to AXON related services, $7.3 million related to warranties and $0.9 million related to deferred hardware. For more information relating to the Company’s revenue recognition policies please refer to Note 1(h). |
Accrued_Liabilities
Accrued Liabilities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Payables and Accruals [Abstract] | ||||||||
Accrued Liabilities | Accrued Liabilities | |||||||
Accrued liabilities consisted of the following at December 31 (in thousands): | ||||||||
2014 | 2013 | |||||||
Accrued salaries and benefits | $ | 3,699 | $ | 2,328 | ||||
Accrued judgments and settlements | 202 | 3,350 | ||||||
Accrued professional fees | 257 | 286 | ||||||
Accrued warranty expense | 675 | 955 | ||||||
Accrued income and other taxes | 539 | 437 | ||||||
Other accrued expenses | 3,873 | 1,484 | ||||||
Accrued liabilities | $ | 9,245 | $ | 8,840 | ||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies | ||||||||||||||||||||
a. Operating and capital lease obligations | |||||||||||||||||||||
The Company has entered into operating leases for various office space, storage facilities and equipment. Rent expense under all operating leases, including both cancelable and non-cancelable leases, was $0.9 million, $0.8 million and $0.9 million for the years ended December 31, 2014, 2013, and 2012, respectively. | |||||||||||||||||||||
Included in property and equipment in the consolidated balance sheet as of December 31, 2014, is approximately $61,000 of office equipment the Company acquired under a capital lease during 2012. The leased equipment has an original cost of approximately $147,000 and associated accumulated amortization of approximately $86,000 as of December 31, 2014. The Company’s capital lease obligation as of December 31, 2014, was approximately $67,000 and bears an interest rate of 6.2%. | |||||||||||||||||||||
Future minimum lease payments under non-cancelable leases at December 31, 2014, are as follows (in thousands): | |||||||||||||||||||||
Operating | Capital | ||||||||||||||||||||
2015 | $ | 560 | $ | 41 | |||||||||||||||||
2016 | 583 | 30 | |||||||||||||||||||
2017 | 591 | — | |||||||||||||||||||
2018 | 590 | — | |||||||||||||||||||
2019 | 449 | — | |||||||||||||||||||
Thereafter | 1,249 | — | |||||||||||||||||||
Total minimum lease payments | $ | 4,022 | 71 | ||||||||||||||||||
Less: Amount representing interest | (4 | ) | |||||||||||||||||||
Capital lease obligation | $ | 67 | |||||||||||||||||||
b. Purchase commitments | |||||||||||||||||||||
The Company routinely enters into cancelable purchase orders with many of its key vendors. Based on the strategic relationships with many of these vendors, the Company’s ability to cancel these purchase orders and maintain a favorable relationship would be limited. As of December 31, 2014, the Company has $19.1 million of open purchase orders. | |||||||||||||||||||||
c. Litigation | |||||||||||||||||||||
Product Litigation | |||||||||||||||||||||
The Company is currently named as a defendant in 12 lawsuits in which the plaintiffs allege either wrongful death or personal injury in situations in which a TASER CEW was used (or present) by law enforcement officers in connection with arrests or during training exercises. In addition, two other product litigation matters in which the Company is involved are currently on appeal. While the facts vary from case to case, the product liability claims are typically based on an alleged product defect resulting in injury or death, usually involving a failure to warn, and the plaintiffs are seeking monetary damages. | |||||||||||||||||||||
As a general rule, it is the Company’s policy not to settle suspect injury or death cases. Exceptions are sometimes made where the settlement is strategically beneficial to the Company. Also, on occasion, the Company’s insurance company has settled such lawsuits over the Company’s objection where the risk is over the Company’s liability insurance deductibles. Due to the confidentiality of our litigation strategy and the confidentiality agreements that are executed in the event of a settlement, the Company does not identify or comment on which specific lawsuits have been settled or the amount of any settlement. | |||||||||||||||||||||
In 2009, the Company implemented new risk management strategies, including revisions to product warnings and training to better protect both the Company and its customers from litigation based on ‘failure to warn’ theories – which comprise the vast majority of the cases against the Company. These risk management strategies have been highly effective in reducing the rate and exposure from litigation post-2009. From the third quarter of 2011 to the fourth quarter of 2014, product liability cases have been reduced from 55 active to 12 active cases, with two new lawsuits filed in the fourth quarter of 2014. | |||||||||||||||||||||
Management believes that pre-2009 cases have a different risk profile than cases which have occurred since the risk management procedures were introduced in 2009. Therefore, the Company necessarily treats certain pre-2009 cases as exceptions to the Company’s general no settlement policy in order to reduce caseload, legal costs and liability exposure. The Company intends to continue its successful practice of aggressively defending and generally not settling litigation except in very limited and unusual circumstances as described above. | |||||||||||||||||||||
With respect to each of the pending lawsuits, the following table lists the name of plaintiff, the date the Company was served with process, the jurisdiction in which the case is pending, the type of claim and the status of the matter. | |||||||||||||||||||||
Plaintiff | Month | Jurisdiction | Claim Type | Status | |||||||||||||||||
Served | |||||||||||||||||||||
Koon | 8-Dec | 17th Judicial Circuit Court, Broward County, FL | Training Injury | Discovery Phase | |||||||||||||||||
Derbyshire | 9-Nov | Ontario, Canada Superior Court of Justice | Officer Injury | Discovery Phase | |||||||||||||||||
Thompson | 10-Mar | 11th Judicial Circuit Court, Miami-Dade County, FL | Suspect Injury During Arrest | Discovery Phase | |||||||||||||||||
Doan | 10-Apr | The Queen's Bench Alberta, Red Deer Judicial Dist. | Wrongful Death | Discovery Phase | |||||||||||||||||
Shymko | 10-Dec | The Queen's Bench, Winnipeg Centre, Manitoba | Wrongful Death | Pleading Phase | |||||||||||||||||
Ramsey | 12-Jan | 17th Judicial Circuit Court, Broward County, FL | Wrongful Death | Discovery Phase | |||||||||||||||||
Firman | 12-Apr | Ontario, Canada Superior Court of Justice | Wrongful Death | Pleading Phase | |||||||||||||||||
Ricks | 12-May | US District Court, WD LA | Wrongful Death | Motion Phase | |||||||||||||||||
Rascon | 14-Apr | US district Court, AZ | Wrongful Death | Discovery Phase | |||||||||||||||||
Schrock | 14-Sep | San Bernardino County Superior Court, CA | Wrongful Death | Pleading Phase | |||||||||||||||||
Moore | 14-Nov | St. Louis County Circuit Court, MO | Wrongful Death | Pleading Phase | |||||||||||||||||
Jones | 15-Jan | Los Angeles County Superior Court, CA | Suspect Injury | Pleading Phase | |||||||||||||||||
In addition, other product litigation matters in which the Company is involved that are currently on appeal are listed below: | |||||||||||||||||||||
Plaintiff | Month | Jurisdiction | Claim Type | Status | |||||||||||||||||
Served | |||||||||||||||||||||
Mitchell | 12-Apr | US District Court, ED MI | Wrongful Death | Notice of Appeal filed August 2014; Briefing Phase | |||||||||||||||||
Thomas (Pikes) | 8-Oct | US District Court, WD LA | Wrongful Death | Notice of Appeal filed January 2015 | |||||||||||||||||
Cases that were dismissed or judgment entered during the fourth quarter of 2014 and through the filing date of this Annual Report on Form 10-K are listed in the table below. Cases that were dismissed or judgment entered in prior fiscal quarters are not included in this table. | |||||||||||||||||||||
Plaintiff | Month | Jurisdiction | Claim Type | Status | |||||||||||||||||
Served | |||||||||||||||||||||
Grable | 8-Aug | 6th Judicial Circuit Court, Pinellas County, FL | Training Injury | Dismissed | |||||||||||||||||
Juran | 10-Dec | Hennepin County District Court, 4th Judicial District | Officer Injury | Dismissed | |||||||||||||||||
Wilson | 11-May | US District Court, ED MO | Wrongful Death | Dismissed | |||||||||||||||||
Miller | 13-Jan | New Castle County Superior Court, DE | Wrongful Death | Dismissed | |||||||||||||||||
Ward | 14-Oct | Richmond County Superior Court, GA | Officer Fired | Dismissed | |||||||||||||||||
The claims, and in some instances the defense, of each of these lawsuits have been submitted to the Company’s insurance carriers that maintained insurance coverage during the applicable periods. The Company continues to maintain product liability insurance coverage with varying limits and deductibles. The following table provides information regarding the Company’s product liability insurance. Remaining insurance coverage is based on information received from the Company’s insurance provider (in millions). | |||||||||||||||||||||
Policy Year | Policy | Policy | Insurance | Deductible | Defense | Remaining | Active Cases and Cases on | ||||||||||||||
Start | End | Coverage | Amount | Costs | Insurance | Appeal | |||||||||||||||
Date | Date | Covered | Coverage | ||||||||||||||||||
2004 | 12/1/03 | 12/1/04 | $ | 2 | $ | 0.1 | N | $ | 2 | n/a | |||||||||||
2005 | 12/1/04 | 12/1/05 | 10 | 0.3 | Y | 7 | n/a | ||||||||||||||
2006 | 12/1/05 | 12/1/06 | 10 | 0.3 | Y | 3.7 | n/a | ||||||||||||||
2007 | 12/1/06 | 12/1/07 | 10 | 0.3 | Y | 8 | n/a | ||||||||||||||
2008 | 12/1/07 | 12/15/08 | 10 | 0.5 | Y | — | Koon, Thomas (Pikes) | ||||||||||||||
2009 | 12/15/08 | 12/15/09 | 10 | 1 | N | 10 | Derbyshire | ||||||||||||||
2010 | 12/15/09 | 12/15/10 | 10 | 1 | N | 10 | Thompson, Shymko, Doan | ||||||||||||||
2011 | 12/15/10 | 12/15/11 | 10 | 1 | N | 10 | n/a | ||||||||||||||
Jan-Jun 2012 | 12/15/11 | 6/25/12 | 7 | 1 | N | 7 | Ramsey, Mitchell, Firman, Ricks | ||||||||||||||
Jul-Dec 2012 | 6/25/12 | 12/15/12 | 12 | 1 | N | 12 | n/a | ||||||||||||||
2013 | 12/15/12 | 12/15/13 | 12 | 1 | N | 12 | n/a | ||||||||||||||
2014 | 12/15/13 | 12/15/14 | 11 | 4 | N | 11 | Schrock, Moore, Rascon | ||||||||||||||
2015 | 12/15/14 | 12/15/15 | 10 | 5 | N | 10 | Jones | ||||||||||||||
Other Litigation | |||||||||||||||||||||
None | |||||||||||||||||||||
General | |||||||||||||||||||||
From time to time, the Company is notified that it may be a party to a lawsuit or that a claim is being made against it. It is the Company’s policy to not disclose the specifics of any claim or threatened lawsuit until the summons and complaint are actually served on the Company. After carefully assessing the claim, and assuming we determine that we are not at fault or we disagree with the damages or relief demanded, we vigorously defend any lawsuit filed against the Company. In certain legal matters, we record a liability when losses are deemed probable and reasonably estimable. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood of our prevailing, and the severity of any potential loss. We reevaluate and update our accruals as matters progress over time. | |||||||||||||||||||||
Based on our assessment of outstanding litigation and claims as of December 31, 2014, the Company has determined that it is not reasonably possible that these lawsuits will individually, or in the aggregate, materially affect our results of operations, financial condition or cash flows. However, the outcome of any litigation is inherently uncertain and there can be no assurance that any expense, liability or damages that may ultimately result from the resolution of these matters will be covered by our insurance or will not be in excess of amounts recognized or provided by insurance coverage and will not have a material adverse effect on our operating results, financial condition or cash flows. | |||||||||||||||||||||
d. Employment Agreements | |||||||||||||||||||||
The Company has employment agreements with certain key executives. The Company may terminate the agreements with or without cause. Should the Company terminate the agreements without cause, or upon a change of control of the Company or death or disability of the employee, the employee, or family of the employee, are entitled to additional compensation. Under these circumstances, these officers and employees would receive the amounts remaining under their contracts upon termination, which total approximately $1.0 million in the aggregate at December 31, 2014. In March 2015, the Company finalized its severance agreement with a former executive whose position was eliminated in 2014, and accordingly, the Company accrued approximately $0.5 million as of December 31, 2014. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes | Income Taxes | |||||||||||
Significant components of the Company’s deferred income tax assets and liabilities are as follows at December 31 (in thousands): | ||||||||||||
2014 | 2013 | |||||||||||
Deferred income tax assets: | ||||||||||||
Net operating loss carryforward | $ | 343 | $ | 513 | ||||||||
Deferred warranty revenue | 4,141 | 2,837 | ||||||||||
Inventory reserve | 508 | 389 | ||||||||||
Non-qualified and non-employee stock option expense | 3,094 | 3,518 | ||||||||||
Capitalized research and development | 4,847 | 6,588 | ||||||||||
Alternative minimum tax carryforward | 1,081 | 1,466 | ||||||||||
Research and development tax credit carryforward | 2,139 | 3,165 | ||||||||||
Deferred legal settlement | — | 1,294 | ||||||||||
IRC section 481(a) adjustment—tangible property | — | 1,316 | ||||||||||
Reserves, accruals, and other | 2,320 | 2,066 | ||||||||||
Total deferred income tax assets | 18,473 | 23,152 | ||||||||||
Deferred income tax liabilities: | ||||||||||||
Depreciation | (1,674 | ) | (2,136 | ) | ||||||||
Amortization | (236 | ) | (236 | ) | ||||||||
Total deferred income tax liabilities | (1,910 | ) | (2,372 | ) | ||||||||
Net deferred income tax assets before valuation allowance | 16,563 | 20,780 | ||||||||||
Valuation allowance | (500 | ) | — | |||||||||
Net deferred income tax assets | $ | 16,063 | $ | 20,780 | ||||||||
The Company’s net deferred tax assets are presented as follows on the accompanying consolidated balance sheets at December 31 (in thousands): | ||||||||||||
2014 | 2013 | |||||||||||
Current deferred tax assets, net | $ | 5,186 | $ | 7,101 | ||||||||
Long-term deferred tax assets, net | 10,877 | 13,679 | ||||||||||
Total | $ | 16,063 | $ | 20,780 | ||||||||
For the years ended December 31, 2014, 2013 and 2012 the provision for income taxes includes $8.0 million, $6.8 million and $4.7 million, respectively, of tax expense resulting from the fact that stock-based compensation tax benefits have been recorded as increases to additional paid-in capital on the consolidated statement of changes in stockholders’ equity. | ||||||||||||
The Company has deferred tax assets of $0.1 million related to state NOLs which expire at various dates between 2016 and 2031. The Company also has deferred tax assets of approximately $0.2 million related to federal NOLs which expire between 2031 and 2033, and are subject to limitation under IRC Section 382. The Company has Arizona R&D credit carry forwards for financial reporting purposes of $3.2 million, which expire at various dates between 2018 and 2028, and California R&D credit carry forwards for financial reporting purposes of $0.2 million which do not expire. The Company has a minimum tax credit carryover of $1.1 million which does not expire. | ||||||||||||
The Company recognizes the income tax benefits associated with certain stock compensation deductions only when such deductions produce a reduction to the Company’s actual tax liability. Accordingly, in 2014 and 2013, the Company recognized benefits of $8.0 million and $6.8 million, respectively, for the reduction of federal and state taxes payable, which was recorded as a credit to additional paid-in capital. At each of December 31, 2014 and 2013, the Company had income tax receivables of $1.3 million and $2.3 million, respectively. | ||||||||||||
In preparing the Company’s consolidated financial statements, management has assessed the likelihood that deferred income tax assets will be realized from future taxable income. In evaluating the ability to recover its deferred income tax assets, management considers all available evidence, positive and negative; including the Company’s operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction by jurisdiction basis. A valuation allowance is established if it is determined that it is more likely than not that some portion or all of the net deferred income tax assets will not be realized. Management exercises significant judgment in determining the Company’s provisions for income taxes, its deferred income tax assets and liabilities and its future taxable income for purposes of assessing its ability to utilize any future tax benefit from its deferred income tax assets. | ||||||||||||
Although management believes that its tax estimates are reasonable, the ultimate tax determination involves significant judgments that could become subject to audit by tax authorities in the ordinary course of business. As of each reporting date, management considers new evidence, both positive and negative, that could impact management’s view with regards to future realization of deferred tax assets. As of December 31, 2012, in part because in that year the Company achieved three years of cumulative pre-tax income in the U.S. federal and Arizona tax jurisdictions, management determined that sufficient positive evidence existed to conclude that it is more likely than not that additional deferred taxes related to Arizona R&D credits are realizable, and therefore, reversed in full the valuation allowance related to that item. As of December 31, 2014, the Company continues to demonstrate three-year cumulative pre-tax income in the U.S. federal and Arizona tax jurisdictions; however, the Arizona R&D Tax Credits start to expire in 2018 with a significant tranche with a gross value of $1.2 million expiring in 2019. Under the Company’s new tax structure, it appears that long term investments which impact short term profits will likely result in some of the R&D credits expiring before they are utilized. Therefore, management has concluded that it is more likely than not that a portion of the Company’s deferred tax assets will not be realized. | ||||||||||||
Significant components of the provision for income taxes are as follows for the years ended December 31 (in thousands): | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
Federal | $ | 7,793 | $ | 7,963 | $ | 4,605 | ||||||
State | 800 | 987 | 666 | |||||||||
Total current | 8,593 | 8,950 | 5,271 | |||||||||
Deferred: | ||||||||||||
Federal | 2,656 | 764 | 3,168 | |||||||||
State | 942 | (143 | ) | (1,485 | ) | |||||||
Total deferred | 3,598 | 621 | 1,683 | |||||||||
Tax provision recorded as an increase in liability for unrecorded tax benefits | 202 | 219 | 920 | |||||||||
Provision for income taxes | $ | 12,393 | $ | 9,790 | $ | 7,874 | ||||||
The Company is subject to federal, state, local and foreign taxes; however, no separate calculation of the foreign provision for deferred tax assets was calculated for the periods presented due to the minimal amount of book income in the Company’s foreign subsidiary and the comparability of the foreign tax rate to the tax rate in the U.S. A reconciliation of the Company’s effective income tax rate to the federal statutory rate for the years ended December 31, 2014, 2013 and 2012 is as follows (in thousands): | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Federal income tax at the statutory rate | $ | 11,236 | $ | 9,812 | $ | 7,914 | ||||||
State income taxes, net of federal benefit | 1,433 | 1,283 | 969 | |||||||||
Permanent differences (i) | 98 | (96 | ) | 156 | ||||||||
Research and development | (452 | ) | (386 | ) | (327 | ) | ||||||
Return to provision adjustment (ii) | 28 | (361 | ) | (270 | ) | |||||||
Change in liability for unrecognized tax benefits | 202 | 219 | 921 | |||||||||
Incentive stock option detriment/(benefit) | (616 | ) | (538 | ) | 174 | |||||||
Change in valuation allowance | 500 | — | (1,429 | ) | ||||||||
Other | (36 | ) | (143 | ) | (234 | ) | ||||||
Provision for income taxes | $ | 12,393 | $ | 9,790 | $ | 7,874 | ||||||
Effective tax rate | 38.4 | % | 34.9 | % | 34.8 | % | ||||||
(i) | Permanent differences include certain expenses that are not deductible for tax purposes including lobbying fees as well as favorable items including the domestic production activities deduction | |||||||||||
(ii) | The 2012 return to provision adjustment was driven by higher than estimated 2011 R&D tax credits which increased the net tax benefit and therefore, reduced the effective tax rate. The 2013 return to provision adjustment was driven by the domestic production activities deduction which decreased taxable income, and therefore, reduced the effective tax rate. | |||||||||||
The Company has completed research and development tax credit studies which identified approximately $10.4 million in tax credits for federal, Arizona and California income tax purposes related to the 2003 through 2014 tax years. Management has made the determination that it is more likely than not that the full benefit of the R&D tax credit will not be sustained on examination and recorded a liability for unrecognized tax benefits of $3.1 million as of December 31, 2013. In addition, management accrued approximately $0.2 million for estimated uncertain tax positions related to certain state income tax liabilities. The Company is currently under an IRS audit for the tax year 2012. Depending on the outcome of the audit, the uncertain tax positions relating to 2012 may significantly change in the next 12 months. Should the unrecognized tax benefit of $3.3 million be recognized, the Company’s effective tax rate would be favorably impacted. | ||||||||||||
The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying Consolidated Statement of Operations. As of December 31, 2014 and 2013, respectively, the Company had accrued interest of $46,000 and $12,000. | ||||||||||||
The following table presents a roll forward of our liability for unrecognized tax benefits, exclusive of accrued interest, as of December 31 (in thousands): | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Balance, beginning of period | $ | 3,110 | $ | 2,903 | $ | 1,982 | ||||||
Increase in previous year tax positions | — | 57 | 659 | |||||||||
Increase in current year tax positions | 121 | 144 | 151 | |||||||||
Increase (decrease) related to adjustment of previous estimates of activity | 94 | 6 | 111 | |||||||||
Balance, end of period | $ | 3,325 | $ | 3,110 | $ | 2,903 | ||||||
Federal income tax returns for 2004 through 2013 remain open to examination by the U.S. Internal Revenue Service (the “IRS”), while state and local income tax returns for 2004 through 2013 also remain open to examination. The 2004 through 2009 income tax returns are only open to the extent that net operating loss or other tax attributes carrying forward from those years were utilized in 2010 through 2013. The foreign tax returns for 2011 through 2013 also remain open to examination. The Company is currently under examination by the IRS for tax year 2012. As of December 31, 2014 the exam is still ongoing. No adjustments have been proposed to date. The Company has not been notified by any major state tax jurisdiction that it will be subject to examination. |
Line_of_Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
Line of Credit | Line of Credit |
The Company has a $10.0 million revolving line of credit with a domestic bank. At December 31, 2014 and 2013, there were no borrowings under the line. As of December 31, 2014, the Company had letters of credit outstanding of $0.4 million under the facility and available borrowing of $9.6 million. The line is secured by substantially all of the assets of the Company, and bears interest at varying rates (currently LIBOR plus 1.5% or Prime less 0.75%). The line of credit matures on July 31, 2016, and requires monthly payments of interest only. The Company’s agreement with the bank requires it to comply with certain financial and other covenants including maintenance of a minimum leverage ratio and fixed charge coverage ratio. The leverage ratio (ratio of total liabilities to tangible net worth) can be no greater than 1:1, and the fixed charge coverage ratio can be no less than 1.25:1, based upon a trailing twelve-month period. At December 31, 2014, the Company’s tangible net worth ratio was 0.45:1 and its fixed charge coverage ratio was 2.82:1. Accordingly, the Company was in compliance with these covenants. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity | |||||||||||||||||||||
a. Common Stock and Preferred Stock | ||||||||||||||||||||||
The Company has authorized the issuance of two classes of stock designated as “common stock” and “preferred stock,” each having a par value of $0.00001 per share. The Company is authorized to issue 200 million shares of common stock and 25 million shares of preferred stock. | ||||||||||||||||||||||
b. Stock Repurchase | ||||||||||||||||||||||
In May 2014, the Company announced that TASER’s Board of Directors authorized a stock repurchase program to acquire up to $30.0 million of the Company’s outstanding common stock subject to stock market conditions and corporate considerations. Under this program, the Company purchased approximately 1.7 million common shares for a total cost of approximately $22.4 million, or a weighted average cost, including commissions of $12.99 per share. As of December 31, 2014, $7.6 million remains available under the plan for future purchases. | ||||||||||||||||||||||
In February 2013, the Company announced that TASER’s Board of Directors authorized a stock repurchase program to acquire up to $25 million of the Company’s outstanding common stock subject to stock market conditions and corporate considerations. Under this program, which was completed in the second quarter of 2013, the Company purchased approximately 3.0 million common shares for a total cost of approximately $25.0 million, or a weighted average cost, including commissions, of $8.20 per share. | ||||||||||||||||||||||
On April 25, 2012, TASER’s Board of Directors authorized a stock repurchase program to acquire up to $20.0 million of the Company’s outstanding common stock subject to stock market conditions and corporate considerations. The Company purchased approximately 3.8 million common shares under this program for a total cost of $20.0 million, or a weighted average cost, including commissions, of $5.22 per share. The buyback was completed in the third quarter of 2012. | ||||||||||||||||||||||
c. Stock-based Compensation Plans | ||||||||||||||||||||||
The Company has historically utilized stock-based compensation, consisting of restricted stock units (“RSUs”) and stock options, for key employees and non-employee directors as a means of attracting and retaining quality personnel. Service-based grants generally have a vesting period of 3 to 4 years and a contractual maturity of ten years. Performance-based grants generally have vesting periods ranging from 1 to 4 years and a contractual maturity of ten years. | ||||||||||||||||||||||
On February 25, 2013, the Company’s Board of Directors approved the 2013 Stock Incentive Plan (the “2013 Plan) which was subsequently approved by stockholders at the Annual Meeting of Stockholders on May 23, 2013. Under the 2013 Plan, the Company reserved for future grants: (i) 1.6 million shares of common stock, plus (ii) the number of shares of common stock that were authorized but unissued under the Company’s 2009 Stock Incentive Plan (the “2009 Plan”) as of the effective date of the 2013 Plan, and (iii) the number of shares of stock that have been granted under the 2009 Plan that either terminate, expire or lapse for any reason after the effective date of the 2013 Plan. As of December 31, 2014, 1.7 million shares remain available for future grants. Shares issued upon exercise of stock awards from these plans have historically been issued from the Company’s authorized unissued shares. | ||||||||||||||||||||||
d. Performance-based stock awards | ||||||||||||||||||||||
The Company has issued performance-based stock options and performance-based RSUs, the vesting of which is contingent upon the achievement of certain performance criteria related to the operating performance of the Company as well as successful and timely development and market acceptance of future product introductions. In addition, certain of the performance RSUs have additional service requirements subsequent to the achievement of the performance criteria. Compensation expense is recognized over the implicit service period (the longer of the period the performance condition is expected to be achieved or the required service period) based on management’s estimate of the probability of the performance criteria being satisfied, adjusted at each balance sheet date. | ||||||||||||||||||||||
e. Restricted Stock Units | ||||||||||||||||||||||
The following table summarizes RSU activity for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Number | Weighted | Number | Weighted | Number | Weighted | |||||||||||||||||
of | Average | of | Average | of | Average | |||||||||||||||||
Units | Grant-Date | Units | Grant-Date | Units | Grant-Date | |||||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||||
Units outstanding, beginning of year | 1,279,123 | $ | 9.67 | 582,212 | $ | 5.42 | 1,096 | $ | 4.76 | |||||||||||||
Granted | 554,328 | 16.98 | 1,054,293 | 10.72 | 713,148 | 5.4 | ||||||||||||||||
Released | (432,706 | ) | 7.61 | (257,693 | ) | 5.44 | (97,007 | ) | 5.3 | |||||||||||||
Forfeited | (174,657 | ) | 13.08 | (99,689 | ) | 6.86 | (35,025 | ) | 5.29 | |||||||||||||
Units outstanding, end of year | 1,226,088 | 13.23 | 1,279,123 | 9.67 | 582,212 | 5.42 | ||||||||||||||||
Aggregate intrinsic value at year end (in thousands) | $ | 32,467 | ||||||||||||||||||||
Aggregate intrinsic value represents the Company’s closing stock price on the last trading day of the period, which was $26.48 per share, multiplied by the number of restricted stock units. In 2014, 2013 and 2012, the Company granted approximately 0.1 million, 0.3 million and 0.2 million performance-based RSUs, respectively (included in the table above). As of December 31, 2014, the performance criteria has been met for approximately 0.1 million of the 0.2 million performance-based RSUs outstanding. The Company recognized $1.0 million, $1.4 million and $0.7 million of compensation expense related to performance-based RSUs during the years ended December 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||
Certain RSUs that vested in 2014 were net-share settled such that the Company withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. Total shares withheld were approximately 74,000 and had a value of approximately $1.3 million on their respective vesting dates as determined by the Company’s closing stock price. Payments for the employees’ tax obligations are reflected as a financing activity within the statement of cash flows. These net-share settlements had the effect of share repurchases by the Company as they reduced the amount of shares that would have otherwise been issued as a result of the vesting. | ||||||||||||||||||||||
f. Stock Option Activity | ||||||||||||||||||||||
The following table summarizes stock option activity for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Number | Weighted | Number | Weighted | Number | Weighted | |||||||||||||||||
of | Average | of | Average | of | Average | |||||||||||||||||
Options | Exercise | Options | Exercise | Options | Exercise | |||||||||||||||||
Price | Price | Price | ||||||||||||||||||||
Options outstanding, beginning of year | 3,365,692 | $ | 6.15 | 6,321,076 | $ | 6.05 | 7,576,493 | $ | 5.75 | |||||||||||||
Granted | — | — | — | — | — | |||||||||||||||||
Exercised | (1,644,146 | ) | 6.69 | (2,671,058 | ) | 5.75 | (784,383 | ) | 2.46 | |||||||||||||
Expired / terminated | (80,463 | ) | 16.59 | (284,326 | ) | 7.83 | (471,034 | ) | 7.15 | |||||||||||||
Options outstanding, end of year | 1,641,083 | 5.26 | 3,365,692 | 6.15 | 6,321,076 | 6.05 | ||||||||||||||||
Options exercisable, end of year | 1,605,789 | 5.27 | 3,217,146 | 6.22 | 5,278,243 | 6.31 | ||||||||||||||||
Options expected to vest, end of year | 4,443 | 4.66 | ||||||||||||||||||||
No stock options were granted in 2014, 2013 or 2012. Total intrinsic value of options exercised was $20.2 million, $15.7 million and $3.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. The intrinsic value for options exercised was calculated as the difference between the exercise price of the underlying stock option awards and the market price of the Company’s common stock on the date of exercise. | ||||||||||||||||||||||
The following table summarizes information about stock options outstanding and exercisable as of December 31, 2014: | ||||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||||
Range of | Number of | Weighted | Weighted | Number of | Weighted | Weighted | ||||||||||||||||
Exercise Price | Options | Average | Average | Options | Average | Average | ||||||||||||||||
Outstanding | Exercise | Remaining | Exercisable | Price | Remaining | |||||||||||||||||
Price | Contractual | Contractual | ||||||||||||||||||||
Life (Years) | Life (Years) | |||||||||||||||||||||
$3.85 - $5.00 | 1,206,798 | $ | 4.63 | 4.8 | 1,172,329 | $ | 4.63 | 4.8 | ||||||||||||||
$5.01 - $7.00 | 210,663 | 5.58 | 4 | 209,838 | 5.58 | 4 | ||||||||||||||||
$7.01 - $10.00 | 151,761 | 7.38 | 2.9 | 151,761 | 7.38 | 2.9 | ||||||||||||||||
$10.01 - $16.23 | 71,861 | 10.29 | 2.4 | 71,861 | 10.29 | 2.4 | ||||||||||||||||
$3.85 - $16.23 | 1,641,083 | 5.26 | 4.4 | 1,605,789 | 5.27 | 4.4 | ||||||||||||||||
The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2014, was $34.8 million and $34.1 million, respectively. Aggregate intrinsic value represents the difference between the exercise price of the underlying stock option awards and the closing market price of the Company’s common stock of $26.48 on December 31, 2014. | ||||||||||||||||||||||
At December 31, 2014, the Company had 35,294 unvested options outstanding with a weighted average exercise price of $4.74 per share, weighted average fair value of $2.51 per share and weighted average remaining contractual life of 4.3 years. The aggregate intrinsic value of unvested options at December 31, 2014 was $0.8 million. | ||||||||||||||||||||||
The Company granted approximately 1.0 million performance-based stock options (included in the table above) from 2008 through 2011. As of December 31, 2014, approximately 0.3 million performance-based stock options are outstanding, of which approximately 30,600 are unvested and none are expected to vest. The aggregate grant-date fair value of the 0.3 million performance-based stock options vested and expected to vest as of December 31, 2014 is approximately $0.8 million. Performance-based stock options were expensed in full as of December 31, 2013. The Company recognized $0.1 million of stock-based compensation expense related to performance-based stock options during each of 2013 and 2012. | ||||||||||||||||||||||
g. Stock-based Compensation Expense | ||||||||||||||||||||||
The Company accounts for stock-based compensation using the fair-value method. Reported stock-based compensation was classified as follows for the years ended December 31 (in thousands): | ||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Cost of products sold and services delivered | $ | 204 | $ | 175 | $ | 172 | ||||||||||||||||
Sales, general and administrative expenses | 3,555 | 3,158 | 2,647 | |||||||||||||||||||
Research and development expenses | 1,820 | 1,007 | 603 | |||||||||||||||||||
Total stock-based compensation | $ | 5,579 | $ | 4,340 | $ | 3,422 | ||||||||||||||||
Total stock-based compensation expense recognized in the statements of operations for the years ended December 31, 2014, 2013 and 2012 includes $28,000, $0.1 million and $0.5 million, respectively, related to ISOs for which no tax benefit is recognized. The Company recorded a tax benefit in 2014, 2013, and 2012 of $2.5 million, $6.8 million, and $4.7 million, respectively, to offset taxes payable related to the non-qualified disposition of ISOs exercised and sold. The total future tax benefits related to non-qualified and restricted stock units was $3.1 million and $3.5 million as of December 31, 2014 and 2013, respectively. | ||||||||||||||||||||||
As of December 31, 2014, there was $11.1 million in unrecognized compensation costs related to RSUs under the Company's stock plans. The Company expects to recognize the cost related to the RSUs over a weighted average period of 2.5 years. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions |
The Company engages Mark Kroll, a member of the Board of Directors, to provide consulting services. The expenses related to these services were $0.2 million for each of the years ended December 31, 2014, 2013 and 2012. At December 31, 2014 and 2013, the Company had accrued liabilities of approximately $8,000 and $12,000, respectively, related to these services. |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension and Other Postretirement Benefits Disclosure | Employee Benefit Plans |
The Company has a defined contribution profit sharing 401(k) plan for eligible employees, which is qualified under Sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as amended. Employees are entitled to make tax-deferred contributions of up to the maximum allowed by law of their eligible compensation. | |
The Company also has a non-qualified deferred compensation plan for certain executives, key employees and non-employee directors through which participants may elect to postpone the receipt and taxation of a portion of their compensation, including stock-based compensation, received from the Company. The non-qualified deferred compensation plan allows eligible participants to defer up to 80% of their base salary and up to 100% of other types of compensation. The plan also allows for (i) matching and discretionary employer contributions and (ii) the deferral of vested RSU awards. Employee deferrals are deemed 100% vested upon contribution. Distributions from the plan are made upon retirement, death, separation of service, specified date or upon the occurrence of an unforeseeable emergency. Distributions can be paid in a variety of forms from lump sum to installments over a period of years. Participants in the plan are entitled to select from a wide variety of investments available under the plan and are allocated gains or losses based upon the performance of the investments selected by the participant. All gains or losses are allocated fully to plan participants and the Company does not guarantee a rate of return on deferred balances. Assets related to this plan consist of corporate-owned life insurance contracts and are included in other assets in the consolidated balance sheets. Participants have no rights or claims with respect to any plan assets and any such assets are subject to the claims of the Company’s general creditors. | |
Contributions to the plans are made by both the employee and the Company. Company contributions are based on the level of employee contributions and are immediately vested. The Company’s matching contributions to the plan for the years ended December 31, 2014, 2013 and 2012, were approximately $0.9 million, $0.7 million and $0.5 million, respectively. The Company expects to make contributions to the non-qualified deferred compensation plan related to the year ended December 31, 2014, of approximately $27,000. Future matching or profit sharing contributions to the plans are at the Company’s sole discretion. |
Segment_Data
Segment Data | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Segment Data | Segment Data | |||||||||||
The Company’s operations are comprised of two reportable segments: the sale of CEWs, accessories and other products and services (the “TASER Weapons” segment); and the video business, which includes the TASER Cam, AXON video products and EVIDENCE.com (the “AXON” segment). The Company includes only revenues and costs directly attributable to the AXON segment in that segment. Included in AXON segment costs are: costs of sales for both products and services, overhead allocation based on direct labor, selling expense for the video sales team, video product management expenses, video trade shows and related expenses, and research and development for products included in the AXON segment. All other costs are included in the TASER Weapons segment. The CODM does not review assets by segment as part of the financial information provided; therefore, no asset information is provided in the following tables. | ||||||||||||
Information relative to the Company’s reportable segments is as follows (in thousands): | ||||||||||||
For the year ended December 31, 2014 | ||||||||||||
TASER | AXON | Total | ||||||||||
Weapons | ||||||||||||
Product sales | $ | 145,613 | $ | 14,700 | $ | 160,313 | ||||||
Service revenue | — | 4,212 | 4,212 | |||||||||
Net sales | 145,613 | 18,912 | 164,525 | |||||||||
Cost of products sold | 47,680 | 13,233 | 60,913 | |||||||||
Cost of services delivered | — | 2,064 | 2,064 | |||||||||
Gross margin | 97,933 | 3,615 | 101,548 | |||||||||
Sales, general and administrative | 42,989 | 11,169 | 54,158 | |||||||||
Research and development | 3,872 | 11,013 | 14,885 | |||||||||
Income (loss) from operations | $ | 51,072 | $ | (18,567 | ) | $ | 32,505 | |||||
Purchase of property and equipment | $ | 2,233 | $ | 272 | $ | 2,505 | ||||||
Purchase of intangible assets | 180 | 3 | 183 | |||||||||
Depreciation and amortization | 3,936 | 381 | 4,317 | |||||||||
For the year ended December 31, 2013 | ||||||||||||
TASER | AXON | Total | ||||||||||
Weapons | ||||||||||||
Product sales | $ | 127,474 | $ | 8,649 | $ | 136,123 | ||||||
Service revenue | — | 1,708 | 1,708 | |||||||||
Net sales | 127,474 | 10,357 | 137,831 | |||||||||
Cost of products sold | 44,025 | 6,074 | 50,099 | |||||||||
Cost of services delivered | — | 1,889 | 1,889 | |||||||||
Gross margin | 83,449 | 2,394 | 85,843 | |||||||||
Sales, general and administrative | 40,174 | 6,383 | 46,557 | |||||||||
Research and development | 4,311 | 5,577 | 9,888 | |||||||||
Litigation judgment | 1,450 | — | 1,450 | |||||||||
Income (loss) from operations | $ | 37,514 | $ | (9,566 | ) | $ | 27,948 | |||||
Purchase of property and equipment | $ | 1,324 | $ | 459 | $ | 1,783 | ||||||
Purchase of intangible assets | 307 | 16 | 323 | |||||||||
Depreciation and amortization | 4,011 | 1,120 | 5,131 | |||||||||
For the year ended December 31, 2012 | ||||||||||||
TASER | AXON | Total | ||||||||||
Weapons | ||||||||||||
Product sales | $ | 109,055 | $ | 5,071 | $ | 114,126 | ||||||
Service revenue | — | 627 | 627 | |||||||||
Net sales | 109,055 | 5,698 | 114,753 | |||||||||
Cost of products sold | 39,350 | 3,773 | 43,123 | |||||||||
Cost of services delivered | — | 3,915 | 3,915 | |||||||||
Gross margin | 69,705 | (1,990 | ) | 67,715 | ||||||||
Sales, general and administrative | 35,737 | 3,510 | 39,247 | |||||||||
Research and development | 3,938 | 4,201 | 8,139 | |||||||||
Litigation recovery | (2,200 | ) | — | (2,200 | ) | |||||||
Income (loss) from operations | $ | 32,230 | $ | (9,701 | ) | $ | 22,529 | |||||
Purchase of property and equipment | $ | 922 | $ | 412 | $ | 1,334 | ||||||
Purchase of intangible assets | 429 | — | 429 | |||||||||
Depreciation and amortization | 4,327 | 2,192 | 6,519 | |||||||||
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (unaudited) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Selected Quarterly Financial Data (unaudited) | Selected Quarterly Financial Data (unaudited) | |||||||||||||||
Selected quarterly financial data for years ended December 31, 2014 and 2013 follows (in thousands, except per share data): | ||||||||||||||||
Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
2014 | 2014 | 2014 | 2014 | |||||||||||||
Net sales | $ | 36,185 | $ | 37,175 | $ | 44,349 | $ | 46,816 | ||||||||
Gross margin | 22,208 | 23,214 | 28,713 | 27,413 | ||||||||||||
Net income | 3,391 | 3,883 | 7,558 | 5,086 | ||||||||||||
Earnings per share (1): | ||||||||||||||||
Basic | $ | 0.06 | $ | 0.07 | $ | 0.14 | $ | 0.1 | ||||||||
Diluted | $ | 0.06 | $ | 0.07 | $ | 0.14 | $ | 0.09 | ||||||||
Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
2013 | 2013 | 2013 | 2013 | |||||||||||||
Net sales | $ | 30,434 | $ | 32,175 | $ | 35,197 | $ | 40,025 | ||||||||
Gross margin | 18,451 | 19,742 | 22,096 | 25,554 | ||||||||||||
Net income | 3,298 | 4,457 | 5,114 | 5,375 | ||||||||||||
Earnings per share (1): | ||||||||||||||||
Basic | $ | 0.06 | $ | 0.09 | $ | 0.1 | $ | 0.1 | ||||||||
Diluted | $ | 0.06 | $ | 0.08 | $ | 0.1 | $ | 0.1 | ||||||||
(1) Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share. |
Supplemental_Disclosure_to_Cas
Supplemental Disclosure to Cash Flows | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||||||
Supplemental Disclosure to Cash Flows | Supplemental Disclosure to Cash Flows | |||||||||||
Supplemental non-cash and other cash flow information are as follows for the years ended December 31 (in thousands), | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Cash paid for income taxes—net | $ | 386 | $ | 3,625 | $ | 1,079 | ||||||
Non Cash Transactions: | ||||||||||||
Stock issued for business acquisition | $ | — | $ | 1,578 | $ | — | ||||||
Property and equipment purchases in accounts payable | 270 | 279 | 113 | |||||||||
Purchase of assets under capital lease obligations | — | — | 147 | |||||||||
Schedule_II_Valuation_and_Qual
Schedule II- Valuation and Qualifying Accounts | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||
Schedule II- Valuation and Qualifying Accounts | SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||||
Description | Balance at | Charged to | Charged to | Deductions | Balance at | |||||||||||||||
Beginning | Costs and | Other | End of | |||||||||||||||||
of Period | Expenses | Accounts | Period | |||||||||||||||||
Allowance for doubtful accounts: | ||||||||||||||||||||
Year ended December 31, 2014 | $ | 200 | $ | 142 | $ | — | $ | (91 | ) | $ | 251 | |||||||||
Year ended December 31, 2013 | 200 | 24 | — | (24 | ) | 200 | ||||||||||||||
Year ended December 31, 2012 | 450 | (242 | ) | — | (8 | ) | 200 | |||||||||||||
Allowance for excess and obsolete inventory: | ||||||||||||||||||||
Year ended December 31, 2014 | $ | 999 | $ | 2,157 | $ | — | $ | (1,802 | ) | $ | 1,354 | |||||||||
Year ended December 31, 2013 | 2,320 | 595 | — | (1,916 | ) | 999 | ||||||||||||||
Year ended December 31, 2012 | 4,431 | 554 | — | (2,665 | ) | 2,320 | ||||||||||||||
Warranty reserve: | ||||||||||||||||||||
Year ended December 31, 2014 | $ | 955 | $ | 396 | $ | — | $ | (676 | ) | $ | 675 | |||||||||
Year ended December 31, 2013 | 484 | 1,001 | — | (530 | ) | 955 | ||||||||||||||
Year ended December 31, 2012 | 427 | 527 | — | (470 | ) | 484 | ||||||||||||||
Organization_and_Summary_of_Si1
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates | ||||||||||||||||||||
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. of America (“U.S. GAAP”). The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions in these consolidated financial statements include: | |||||||||||||||||||||
• | product warranty reserves, | ||||||||||||||||||||
• | inventory valuation reserves, | ||||||||||||||||||||
• | revenue recognition allocated in multiple-deliverable contracts or arrangements, | ||||||||||||||||||||
• | valuation of goodwill, intangibles and long-lived assets, | ||||||||||||||||||||
• | recognition, measurement and valuation of current and deferred income taxes, | ||||||||||||||||||||
• | fair value of stock awards issued, the estimated vesting period for performance-based stock awards and forfeiture rates, and | ||||||||||||||||||||
• | recognition and measurement of contingencies and accrued litigation expense. | ||||||||||||||||||||
Actual results could differ materially from those estimates. | |||||||||||||||||||||
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments | ||||||||||||||||||||
Cash, cash equivalents and investments include cash, money market funds, certificates of deposit, state and municipal obligations and corporate bonds. The Company places its cash and cash equivalents with high quality financial institutions. Balances with these institutions regularly exceed FDIC insured limits; however, to manage the related credit exposure, the Company continually monitors the creditworthiness of the financial institutions where it has deposits. | |||||||||||||||||||||
Cash and cash equivalents include funds on hand and highly liquid investments purchased with initial maturity of three months or less. Short-term investments include securities with an expected maturity date within one year of the balance sheet date that do not meet the definition of a cash equivalent, and long-term investments are securities with an expected maturity date greater than one year. Based on management’s intent and ability, the Company’s investments are classified as held to maturity investments and are recorded at amortized cost. Held-to-maturity investments are reviewed quarterly for impairment to determine if other-than-temporary declines in the carrying value have occurred for any individual investment. Other-than-temporary declines in the value of held-to-maturity investments are recorded as expense in the period the determination is made. | |||||||||||||||||||||
Inventory | Inventory | ||||||||||||||||||||
Inventories are stated at the lower of cost or market. Cost is determined using the weighted average cost of raw materials which approximates the first-in, first-out (“FIFO”) method and includes allocations of manufacturing labor and overhead. Provisions are made to reduce potentially excess, obsolete or slow-moving inventories to their net realizable value. These provisions are based on management’s best estimate after considering historical demand, projected future demand, inventory purchase commitments, industry and market trends and conditions and other factors. Management evaluates inventory costs for abnormal costs due to excess production capacity and treats such costs as period costs. | |||||||||||||||||||||
Property and Equipment | Property and Equipment | ||||||||||||||||||||
Property and equipment are stated at cost, net of accumulated depreciation and amortization. Additions and improvements are capitalized, while ordinary maintenance and repair expenditures are charged to expense as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. | |||||||||||||||||||||
Software Development Costs | Software Development Costs | ||||||||||||||||||||
The Company expenses software development costs, including costs to develop software products or the software component of products to be marketed to external users, before technological feasibility of such products is reached. The Company has determined that technological feasibility is reached shortly before the release of those products and as a result, the development costs incurred after the establishment of technological feasibility and before the release of those products are not material. | |||||||||||||||||||||
Software development costs also include costs to develop software programs to be used solely to meet the Company's internal needs and cloud based applications used to deliver its services. The Company capitalizes development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the intended function. Additionally, the Company capitalizes qualifying costs incurred for upgrades and enhancements to existing software that result in additional functionality. Costs related to preliminary project planning activities, post-implementation activities, maintenance and minor modifications are expensed as incurred. Internal-use software is amortized on a straight line basis over its estimated useful life. There were no software development costs capitalized for the years ending December 31, 2014, 2013 or 2012. The capitalized development costs related to the Company’s software-as-a-service (“SaaS”) product, EVIDENCE.com, were fully amortized as of December 31, 2013. Amortization of capitalized software development costs was $0.6 million and $1.2 million for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. | |||||||||||||||||||||
Valuation of Goodwill, Intangibles and Long-lived Assets | Valuation of Goodwill, Intangibles and Long-lived Assets | ||||||||||||||||||||
In the fourth quarter of 2013, the Company recorded goodwill related to the acquisition of Familiar, Inc. ("Familiar"). The recoverability of goodwill is evaluated and tested for impairment at least annually during the fourth quarter or more often, if and when circumstances indicate that goodwill may not be recoverable. Finite-lived intangible assets and other long-lived assets are amortized over their useful lives. Management evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets and intangible assets may warrant revision or that the remaining balance of these assets, including intangible assets with indefinite lives, may not be recoverable. | |||||||||||||||||||||
Circumstances that might indicate long-lived assets might not be recoverable could include, but are not limited to, a change in the product mix, a change in the way products are created, produced or delivered, or a significant change in the way the Company's products are branded and marketed. When performing a review for recoverability, management estimates the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. The amount of the impairment loss, if impairment exists, is calculated based on the excess of the carrying amounts of the assets over their estimated fair value computed using discounted cash flows. | |||||||||||||||||||||
Customer Deposits | Customer Deposits | ||||||||||||||||||||
The Company requires deposits in advance of shipment for certain customer sales orders. Customer deposits are recorded as a current liability in the accompanying consolidated balance sheets. | |||||||||||||||||||||
Revenue Recognition, Deferred Revenue and Accounts and Notes Receivable | Revenue Recognition, Deferred Revenue and Accounts and Notes Receivable | ||||||||||||||||||||
The Company derives revenue from two primary sources: (1) the sale of physical products, including our CEWs, AXON cameras, corresponding extended warranties, and related accessories such as cartridges and batteries, and (2) subscription to the Company's EVIDENCE.com SaaS (including data storage fees and other ancillary services), which includes varying levels of support. To a lesser extent, the Company also recognizes training and other revenue. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, title has transferred, the price is fixed and collectability is reasonably assured. Extended warranty revenue, SaaS revenue and related data storage revenue are recognized ratably over the term of the contract beginning on the commencement date of each contract. | |||||||||||||||||||||
Revenue arrangements with multiple deliverables are divided into separate units and revenue is allocated using the relative selling price method based upon vendor-specific objective evidence of selling price or third-party evidence of the selling prices if vendor-specific objective evidence of selling prices does not exist. If neither vendor-specific objective evidence nor third-party evidence exists, management uses its best estimate of selling price. | |||||||||||||||||||||
The Company offers the right to purchase extended warranties that include additional services and coverage beyond the limited warranty for certain products. Revenue for extended warranty purchases is deferred at the time of sale and recognized over the warranty period commencing on the date of sale. Extended warranties range from one to five years. | |||||||||||||||||||||
EVIDENCE.com and AXON cameras are sometimes sold separately, but in most instances are sold together. In these instances, customers typically purchase and pay for the equipment and one year of EVIDENCE.com in advance. Additional years of service are generally billed annually over a specified service term, which has typically ranged from one to five years. AXON equipment has stand-alone value and represents a deliverable that is provided to the customer at the time of sale, while EVIDENCE.com services are provided over the specified term of the contract. The Company recognizes revenue for the AXON equipment at the time of the sale consistent with the discussion of multiple deliverable arrangements above. Revenue for EVIDENCE.com is deferred at the time of the sale and recognized over the service period. In certain circumstances, not all requirements are met for the recognition of revenue relative to equipment sold in conjunction with EVIDENCE.com at the time the equipment is provided to customers. In such circumstances, based on limitations associated with the allocation of arrangement consideration, part of the revenue may be recognized ratably over the specified term of the contract, or when all conditions for revenue recognition are met, if sooner. | |||||||||||||||||||||
In 2012, the Company introduced a program, the TASER Assurance Program (“TAP”) whereby a customer purchasing a product and joining the program will have the right to trade-in the original product for a new product of the same or like model in the future. Upon joining TAP, customers also receive an extended warranty for the initial products purchased and spare inventory. Under this program the customer generally pays additional annual installments over the contract period, generally three to five years. The Company records consideration received related to the future product purchase as deferred revenue until all revenue recognition criteria are met, which is generally at the end of the contract period. | |||||||||||||||||||||
Sales tax collected on sales is netted against government remittances and thus, recorded on a net basis. Training revenue is recorded as the service is provided. | |||||||||||||||||||||
Deferred revenue consists of payments received in advance related to products and services for which the criteria for revenue recognition have not yet been met. Deferred revenue that will be recognized during the succeeding twelve month period is recorded as current deferred revenue and the remaining portion is recorded as long-term. Deferred revenue does not include future revenue from multi-year contracts for which no invoice has yet been created. Generally, customers are billed in annual installments. See Note 7 for further disclosures about of the Company’s deferred revenue. | |||||||||||||||||||||
Sales are typically made on credit and the Company generally does not require collateral. Management performs ongoing credit evaluations of its customers’ financial condition and maintains an allowance for estimated potential losses. Uncollectible accounts are charged to expense when deemed uncollectible, and accounts and notes receivable are presented net of an allowance for doubtful accounts. This allowance represents management’s best estimate and is based on their judgment after considering a number of factors, including third-party credit reports, actual payment history, cash discounts, customer-specific financial information and broader market and economic trends and conditions. | |||||||||||||||||||||
The Company may, from time to time, enter into agreements with its customers to finance their purchases with a note receivable that may range in terms up to five years. Sales are recorded at the fair value of the note, which is generally sold and assigned to a third-party financing company. The terms of the assignments are such that the Company expects to receive payment within 30 days of the original sale. The assignments are non-recourse and the Company has no obligations or continuing involvement with the notes receivable. Prior to entering into an assignment, the Company evaluates the credit quality and financial condition of the third-party financing company. The Company does not generally record interest income on notes receivable due to minimal holding periods, nor has the Company recognized gains or losses upon the assignment of the notes. As of December 31, 2014 and 2013, there was no balance in accounts and notes receivable related to such arrangements. | |||||||||||||||||||||
Cost of Products Sold and Services Provided | Cost of Products Sold and Services Provided | ||||||||||||||||||||
Cost of products sold represents manufacturing costs, consisting of materials, labor and overhead related to finished goods and components. Shipping costs incurred related to product delivery are also included in cost of products sold. Cost of services delivered includes third party cloud services, and software maintenance costs, including personnel costs, associated with supporting EVIDENCE.com. | |||||||||||||||||||||
Advertising Costs | Advertising Costs | ||||||||||||||||||||
The Company expenses advertising costs in the period in which they are incurred. The Company incurred advertising costs of $0.3 million, $0.2 million and $0.2 million in the years ended December 31, 2014, 2013 and 2012, respectively. Advertising costs are included in sales, general and administrative expenses in the accompanying statements of operations. | |||||||||||||||||||||
Standard Warranties | Standard Warranties | ||||||||||||||||||||
The Company warranties its CEWs, AXON cameras and E-Docks from manufacturing defects on a limited basis for a period of one year after purchase and, thereafter, will replace any defective unit for a fee. Estimated costs for the standard warranty are charged to cost of products sold and services delivered when revenue is recorded for the related product. Future warranty costs are estimated based on historical data related to returns and warranty costs on a quarterly basis and this rate is applied to current product sales. Historically, reserve amounts have been increased if management becomes aware of a component failure that could result in larger than anticipated returns from customers. The accrued warranty liability expense is reviewed quarterly to verify that it sufficiently reflects the remaining warranty obligations based on the anticipated expenditures over the balance of the warranty obligation period, and adjustments are made when actual warranty claim experience differs from estimates. Costs related to extended warranties are charged to cost of products sold and services delivered when incurred. The reserve for warranty returns is included in accrued liabilities on the accompanying consolidated balance sheets. | |||||||||||||||||||||
Research and Development Expenses | Research and Development Expenses | ||||||||||||||||||||
The Company expenses as incurred research and development costs that do not meet the qualifications to be capitalized. | |||||||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in future years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced through the establishment of a valuation allowance if, based upon available evidence, it is determined that it is more likely than not that the deferred tax assets will not be realized. | |||||||||||||||||||||
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. Management also assesses whether uncertain tax positions, as filed, could result in the recognition of a liability for possible interest and penalties. The Company’s policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. Refer to Note 10 for additional information regarding the change in unrecognized tax benefits. | |||||||||||||||||||||
Concentration of Credit Risk and Major Customers / Suppliers | Concentration of Credit Risk and Major Customers / Suppliers | ||||||||||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist of accounts and notes receivable and cash. Sales are typically made on credit and the Company generally does not require collateral. Management performs ongoing credit evaluations of its customers’ financial condition and maintains an allowance for estimated losses. Uncollectible accounts are written off when deemed uncollectible, and accounts receivable are presented net of an allowance for doubtful accounts, which totaled $0.3 million and $0.2 million as of December 31, 2014 and 2013, respectively. Historically, the Company has experienced a low level of write-offs related to doubtful accounts. | |||||||||||||||||||||
The Company maintains the majority of its cash and cash equivalents accounts at three depository institutions. As of December 31, 2014, the aggregate balances in such accounts were $48.4 million. The Company’s cash balances with these institutions regularly exceed FDIC insured limits; however, to manage the related credit exposure, management continually monitors the creditworthiness of the financial institutions where the Company has deposits. | |||||||||||||||||||||
The Company sells its products primarily through a network of unaffiliated distributors. The Company also reserves the right to sell directly to the end user to secure the customer’s account. In 2014, no customer represented more than 10% of total net sales. In 2013 and 2012 one distributor represented 12.2% and 12.8%, respectively, of total net sales with no other customers exceeding 10%. | |||||||||||||||||||||
At December 31, 2014, the Company had a trade receivable from one unaffiliated customer comprising 13.4% of the aggregate accounts receivable balance. At December 31, 2013, the Company had a trade receivable from one unaffiliated customer comprising 17.4% of the aggregate accounts receivable balance. | |||||||||||||||||||||
The Company currently purchases finished circuit boards and injection-molded plastic components from suppliers located in the U.S. Although the Company currently obtains many of these components from single source suppliers, the Company owns the injection molded component tooling used in their production. As a result, management believes it could obtain alternative suppliers in most cases without incurring significant production delays. The Company also purchases small, machined parts from a vendor in Taiwan, custom cartridge assemblies from a proprietary vendor in the U.S., and electronic components from a variety of foreign and domestic distributors. Management believes that there are readily available alternative suppliers in most cases who can consistently meet the Company's needs for these components. The Company acquires most of its components on a purchase order basis and does not have long-term contracts with suppliers. | |||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||||||||||||||
The Company uses the fair value framework that prioritizes the inputs to valuation techniques for measuring financial assets and liabilities measured on a recurring basis and for non-financial assets and liabilities when these items are re-measured. Fair value is considered to be the exchange price in an orderly transaction between market participants, to sell an asset or transfer a liability at the measurement date. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: | |||||||||||||||||||||
• | Level 1 – Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. | ||||||||||||||||||||
• | Level 2 – Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. | ||||||||||||||||||||
• | Level 3 – Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Company's own assumptions about inputs that market participants would use in pricing an asset or liability. | ||||||||||||||||||||
The Company has cash equivalents and investments, which at December 31, 2014 and 2013, were comprised of money market funds, state and municipal obligations, corporate bonds, and certificates of deposits. See additional disclosure regarding the fair value of the Company’s cash equivalents and investments in Note 2. Included in the balance of other assets as of December 31, 2014 and 2013 was $1.1 million and $0.4 million, respectively, related to corporate-owned life insurance policies which are used to fund the Company’s deferred compensation plan. The Company determines the fair value of its insurance contracts by obtaining the cash surrender value of the contracts from the issuer, a Level 2 valuation technique. | |||||||||||||||||||||
The Company’s financial instruments also include accounts and notes receivable, accounts payable and accrued liabilities. Due to the short-term nature of these instruments, their fair values approximate their carrying values on the balance sheet. | |||||||||||||||||||||
Segment and Geographic Information | Segment and Geographic Information | ||||||||||||||||||||
The Company is comprised of two reportable segments: the sale of CEWs, accessories and other products and services (the “TASER Weapons” segment); and the video business which includes the TASER Cam, AXON camera products and EVIDENCE.com (the “AXON” segment). Reportable segments are determined based on discrete financial information reviewed by the Company’s Chief Executive Officer who is the Chief Operating Decision Maker (the “CODM”) for the Company. The Company organizes and reviews operations based on products and services, and currently there are no operating segments that are aggregated. The Company performs an annual analysis of its reportable segments. Additional information related to the Company’s business segments is summarized in Note 15. | |||||||||||||||||||||
For the three years ended December 31, 2014, 2013 and 2012, net sales by geographic area were as follows (in thousands): | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
United States | $ | 132,205 | 80.4 | % | $ | 115,674 | 83.9 | % | $ | 93,427 | 81.4 | % | |||||||||
Other Countries | 32,320 | 19.6 | 22,157 | 16.1 | 21,326 | 18.6 | |||||||||||||||
Total | $ | 164,525 | 100 | % | $ | 137,831 | 100 | % | $ | 114,753 | 100 | % | |||||||||
Sales to customers outside of the U.S. are typically denominated in U.S. dollars and are attributed to each country based on the shipping address of the distributor or customer. For the three years ended December 31, 2014, 2013 and 2012, no individual country outside the U.S. represented more than 10% of net sales. Substantially all of the Company’s assets are located in the U.S. | |||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation | ||||||||||||||||||||
The Company calculates the fair value of stock options using the Black-Scholes-Merton option pricing valuation model, which incorporates various assumptions including volatility, expected life and risk-free interest rates. The fair value of restricted stock units is estimated as the closing price of our common stock on the date of grant. No options were awarded during the years ended December 31, 2014, 2013 or 2012. | |||||||||||||||||||||
The expected life of the options represents the estimated period of time from grant date until exercise and is based on historical experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. Expected stock price volatility is based on a combination of historical volatility of the Company’s stock and the one-year implied volatility of its publicly traded options for the related vesting periods. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. The Company has not paid dividends in the past and does not plan to pay any dividends in the near future. | |||||||||||||||||||||
The estimated fair value of stock-based compensation awards is amortized to expense on a straight-line basis over the requisite service periods. As stock-based compensation expense recognized is based on awards ultimately expected to vest, it is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company’s forfeiture rate was calculated based on its historical experience of awards which ultimately vested. See Note 12 for further disclosure about of the Company’s stock-based compensation. | |||||||||||||||||||||
Income per Common Share | Income per Common Share | ||||||||||||||||||||
Basic income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the periods presented. Diluted income per share reflects the potential dilution that would occur if outstanding stock options were exercised utilizing the treasury stock method. | |||||||||||||||||||||
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance | ||||||||||||||||||||
In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”). The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Accounting Standards Codification Topic No. 718, “Compensation—Stock Compensation” (“ASC 718”), as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in ASU 2014-12 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in ASU 2014-12 either: (i) prospectively to all awards granted or modified after the effective date; or (ii) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The Company is currently evaluating the potential impact of the adoption of this guidance on its consolidated financial statements, however does not expect there to be a material impact at this time. | |||||||||||||||||||||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, ASU 2014-09 provides for the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 supersedes the revenue recognition requirements in Accounting Standards Codification Topic No. 605, “Revenue Recognition,” most industry-specific guidance throughout the industry topics of the Accounting Standards Codification, and some cost guidance related to construction-type and production-type contracts. ASU 2014-09 is effective for public entities for annual periods and interim periods within those annual periods beginning after December 15, 2016. Early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company is currently evaluating the potential impact of the adoption of this guidance on its consolidated financial statements. | |||||||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11 to standardize the balance sheet presentation of unrecognized tax benefits. This update applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The new guidance was effective for fiscal years beginning after December 15, 2013. The adoption of this guidance resulted in an immaterial reclassification on the Company’s consolidated balance sheet. | |||||||||||||||||||||
Foreign Currency Translation | Foreign Currency Translation | ||||||||||||||||||||
The Company’s foreign subsidiary uses the local currency as its functional currency. Assets and liabilities are translated at exchange rates in effect at the balance sheet date. Income and expense accounts are translated at the average monthly exchange rates during the year. Resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) on the consolidated balance sheets. | |||||||||||||||||||||
Reclassification of Prior Year Presentation | Reclassification of Prior Year Presentation | ||||||||||||||||||||
Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. |
Organization_and_Summary_of_Si2
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||
Summary of Changes in Estimated Product Warranty Liabilities | Changes in the Company’s estimated product warranty liabilities are as follows (in thousands): | ||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Balance, January 1 | $ | 955 | $ | 484 | $ | 427 | |||||||||||||||
Utilization of accrual | (676 | ) | (530 | ) | (470 | ) | |||||||||||||||
Warranty expense | 396 | 1,001 | 527 | ||||||||||||||||||
Balance, December 31 | $ | 675 | $ | 955 | $ | 484 | |||||||||||||||
Net Sales by Geographic Area | For the three years ended December 31, 2014, 2013 and 2012, net sales by geographic area were as follows (in thousands): | ||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
United States | $ | 132,205 | 80.4 | % | $ | 115,674 | 83.9 | % | $ | 93,427 | 81.4 | % | |||||||||
Other Countries | 32,320 | 19.6 | 22,157 | 16.1 | 21,326 | 18.6 | |||||||||||||||
Total | $ | 164,525 | 100 | % | $ | 137,831 | 100 | % | $ | 114,753 | 100 | % | |||||||||
Weighted Average Number of Shares Outstanding and Income Per Share | The calculation of the weighted average number of shares outstanding and earnings per share are as follows (in thousands except per share data): | ||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Numerator for basic and diluted earnings per share: | |||||||||||||||||||||
Net income | $ | 19,918 | $ | 18,244 | $ | 14,738 | |||||||||||||||
Denominator: | |||||||||||||||||||||
Weighted average shares outstanding—basic | 52,948 | 51,880 | 53,827 | ||||||||||||||||||
Dilutive effect of stock-based awards | 1,552 | 2,272 | 896 | ||||||||||||||||||
Diluted weighted average shares outstanding | 54,500 | 54,152 | 54,723 | ||||||||||||||||||
Anti-dilutive stock-based awards excluded | 177 | 507 | 3,205 | ||||||||||||||||||
Net income per common share: | |||||||||||||||||||||
Basic | $ | 0.38 | $ | 0.35 | $ | 0.27 | |||||||||||||||
Diluted | $ | 0.37 | $ | 0.34 | $ | 0.27 | |||||||||||||||
Cash_Cash_Equivalents_and_Inve1
Cash, Cash Equivalents and Investments (Tables) | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | ||||||||||||||||||||||||||||
Summary of Cash, Cash Equivalents and Held-to-Maturity Investments by Type | The following tables summarize the Company's cash, cash equivalents, and held-to-maturity investments at December 31 (in thousands): | |||||||||||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Cash and Cash Equivalents | Short-Term Investments | Long-Term Investments | ||||||||||||||||||||||
Cash | $ | 44,260 | $ | — | $ | — | $ | 44,260 | $ | 44,260 | $ | — | $ | — | ||||||||||||||
Level 1: | ||||||||||||||||||||||||||||
Money market funds | 3,932 | — | — | 3,932 | 3,932 | — | — | |||||||||||||||||||||
Corporate bonds | 20,388 | — | (34 | ) | 20,354 | — | 15,656 | 4,732 | ||||||||||||||||||||
Subtotal | 24,320 | — | (34 | ) | 24,286 | 3,932 | 15,656 | 4,732 | ||||||||||||||||||||
Level 2: | ||||||||||||||||||||||||||||
State and municipal obligations | 19,145 | 18 | — | 19,163 | 175 | 15,891 | 3,079 | |||||||||||||||||||||
Certificates of deposit | 2,712 | — | — | 2,712 | — | 1,227 | 1,485 | |||||||||||||||||||||
Subtotal | 21,857 | 18 | — | 21,875 | 175 | 17,118 | 4,564 | |||||||||||||||||||||
Total | $ | 90,437 | $ | 18 | $ | (34 | ) | $ | 90,421 | $ | 48,367 | $ | 32,774 | $ | 9,296 | |||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Cash and Cash Equivalents | Short-Term Investments | Long-Term Investments | ||||||||||||||||||||||
Cash | $ | 37,196 | $ | — | $ | — | $ | 37,196 | $ | 37,196 | $ | — | $ | — | ||||||||||||||
Level 1: | ||||||||||||||||||||||||||||
Money market funds | 5,030 | — | — | 5,030 | 5,030 | — | — | |||||||||||||||||||||
Corporate bonds | 7,743 | 3 | (14 | ) | 7,732 | — | 1,102 | 6,641 | ||||||||||||||||||||
Subtotal | 12,773 | 3 | (14 | ) | 12,762 | 5,030 | 1,102 | 6,641 | ||||||||||||||||||||
Level 2: | ||||||||||||||||||||||||||||
State and municipal obligations | 10,807 | 14 | — | 10,821 | 45 | 5,626 | 5,136 | |||||||||||||||||||||
Certificates of deposit | 2,619 | — | — | 2,619 | — | 2,373 | 246 | |||||||||||||||||||||
Subtotal | 13,426 | 14 | — | 13,440 | 45 | 7,999 | 5,382 | |||||||||||||||||||||
Total | $ | 63,395 | $ | 17 | $ | (14 | ) | $ | 63,398 | $ | 42,271 | $ | 9,101 | $ | 12,023 | |||||||||||||
Summary of Amortized Cost and Fair Value of Short-term and Long-term Investments | The following table summarizes the amortized cost and fair value of the short-term and long-term investments held by the Company at December 31, 2014 by contractual maturity (in thousands): | |||||||||||||||||||||||||||
Amortized Cost | Fair Value | |||||||||||||||||||||||||||
Due in less than one year | $ | 32,774 | $ | 33,773 | ||||||||||||||||||||||||
Due after one year, through two years | 9,048 | 9,032 | ||||||||||||||||||||||||||
Due after two years | 248 | 248 | ||||||||||||||||||||||||||
Total short-term and long-term investments | $ | 42,070 | $ | 43,053 | ||||||||||||||||||||||||
Inventory_Tables
Inventory (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Inventory | Inventories consisted of the following at December 31 (in thousands): | |||||||
2014 | 2013 | |||||||
Raw materials | $ | 12,229 | $ | 7,376 | ||||
Work-in-process | 111 | 44 | ||||||
Finished goods | 7,337 | 4,688 | ||||||
Reserve for excess and obsolete inventory | (1,354 | ) | (999 | ) | ||||
Total inventory | $ | 18,323 | $ | 11,109 | ||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||
Summary of Property and Equipment | Property and equipment consisted of the following at December 31 (in thousands): | |||||||||
Estimated | 2014 | 2013 | ||||||||
Useful Life | ||||||||||
Land | N/A | $ | 2,900 | $ | 2,900 | |||||
Building and leasehold improvements | 39 years | 14,302 | 13,922 | |||||||
Production equipment | 3-7 years | 18,443 | 18,047 | |||||||
Computer equipment | 3-5 years | 7,209 | 7,789 | |||||||
Furniture and office equipment | 5-7 years | 3,066 | 2,646 | |||||||
Vehicles | 5 years | 270 | 270 | |||||||
Website development costs | 3 years | 601 | 601 | |||||||
Capitalized software development costs | 3 years | 3,670 | 3,670 | |||||||
Construction-in-process | N/A | 968 | 576 | |||||||
Total cost | 51,429 | 50,421 | ||||||||
Less: Accumulated depreciation | (33,906 | ) | (31,378 | ) | ||||||
Property and equipment, net | $ | 17,523 | $ | 19,043 | ||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||
Intangible Assets Other than goodwill | Intangible assets (other than goodwill) consisted of the following (in thousands): | |||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Useful | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
Life | Carrying | Amortization | Carrying | Carrying | Amortization | Carrying | ||||||||||||||||||||
Amount | Amount | Amount | Amount | |||||||||||||||||||||||
Amortized: | ||||||||||||||||||||||||||
Domain names | 5 years | $ | 125 | $ | (114 | ) | $ | 11 | $ | 125 | $ | (102 | ) | $ | 23 | |||||||||||
Issued patents | 4-15 years | 1,759 | (549 | ) | 1,210 | 1,529 | (441 | ) | 1,088 | |||||||||||||||||
Issued trademarks | 9-11 years | 566 | (205 | ) | 361 | 437 | (147 | ) | 290 | |||||||||||||||||
Total amortized | 2,450 | (868 | ) | 1,582 | 2,091 | (690 | ) | 1,401 | ||||||||||||||||||
Not amortized: | ||||||||||||||||||||||||||
TASER trademark | 900 | 900 | 900 | 900 | ||||||||||||||||||||||
Patents and trademarks pending | 633 | 633 | 1,016 | 1,016 | ||||||||||||||||||||||
Total not amortized | 1,533 | 1,533 | 1,916 | 1,916 | ||||||||||||||||||||||
Total intangible assets | $ | 3,983 | $ | (868 | ) | $ | 3,115 | $ | 4,007 | $ | (690 | ) | $ | 3,317 | ||||||||||||
Estimated Amortization Expense of Intangible Assets | Estimated amortization for intangible assets with definitive lives for the next five years is as follows for the year ended December 31 (in thousands): | |||||||||||||||||||||||||
2015 | $ | 178 | ||||||||||||||||||||||||
2016 | 172 | |||||||||||||||||||||||||
2017 | 167 | |||||||||||||||||||||||||
2018 | 158 | |||||||||||||||||||||||||
2019 | 148 | |||||||||||||||||||||||||
Thereafter | 759 | |||||||||||||||||||||||||
Total | $ | 1,582 | ||||||||||||||||||||||||
Deferred_Revenue_Tables
Deferred Revenue (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Deferred Revenue Disclosure [Abstract] | ||||||||
Summary of Deferred Revenue | Deferred revenue consisted of the following at December 31 (in thousands): | |||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Warranty | $ | 21,973 | $ | 15,889 | ||||
AXON services | 9,286 | 4,026 | ||||||
Hardware equipment | 4,252 | 304 | ||||||
Other | 177 | — | ||||||
Total deferred revenue | 35,688 | 20,219 | ||||||
Total current portion of deferred revenue | 14,020 | 6,878 | ||||||
Total long-term portion of deferred revenue | $ | 21,668 | $ | 13,341 | ||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Payables and Accruals [Abstract] | ||||||||
Accrued Liabilities | Accrued liabilities consisted of the following at December 31 (in thousands): | |||||||
2014 | 2013 | |||||||
Accrued salaries and benefits | $ | 3,699 | $ | 2,328 | ||||
Accrued judgments and settlements | 202 | 3,350 | ||||||
Accrued professional fees | 257 | 286 | ||||||
Accrued warranty expense | 675 | 955 | ||||||
Accrued income and other taxes | 539 | 437 | ||||||
Other accrued expenses | 3,873 | 1,484 | ||||||
Accrued liabilities | $ | 9,245 | $ | 8,840 | ||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Lease Obligations | Future minimum lease payments under non-cancelable leases at December 31, 2014, are as follows (in thousands): | ||||||||||||||||||||
Operating | Capital | ||||||||||||||||||||
2015 | $ | 560 | $ | 41 | |||||||||||||||||
2016 | 583 | 30 | |||||||||||||||||||
2017 | 591 | — | |||||||||||||||||||
2018 | 590 | — | |||||||||||||||||||
2019 | 449 | — | |||||||||||||||||||
Thereafter | 1,249 | — | |||||||||||||||||||
Total minimum lease payments | $ | 4,022 | 71 | ||||||||||||||||||
Less: Amount representing interest | (4 | ) | |||||||||||||||||||
Capital lease obligation | $ | 67 | |||||||||||||||||||
Loss Contingencies | With respect to each of the pending lawsuits, the following table lists the name of plaintiff, the date the Company was served with process, the jurisdiction in which the case is pending, the type of claim and the status of the matter. | ||||||||||||||||||||
Plaintiff | Month | Jurisdiction | Claim Type | Status | |||||||||||||||||
Served | |||||||||||||||||||||
Koon | 8-Dec | 17th Judicial Circuit Court, Broward County, FL | Training Injury | Discovery Phase | |||||||||||||||||
Derbyshire | 9-Nov | Ontario, Canada Superior Court of Justice | Officer Injury | Discovery Phase | |||||||||||||||||
Thompson | 10-Mar | 11th Judicial Circuit Court, Miami-Dade County, FL | Suspect Injury During Arrest | Discovery Phase | |||||||||||||||||
Doan | 10-Apr | The Queen's Bench Alberta, Red Deer Judicial Dist. | Wrongful Death | Discovery Phase | |||||||||||||||||
Shymko | 10-Dec | The Queen's Bench, Winnipeg Centre, Manitoba | Wrongful Death | Pleading Phase | |||||||||||||||||
Ramsey | 12-Jan | 17th Judicial Circuit Court, Broward County, FL | Wrongful Death | Discovery Phase | |||||||||||||||||
Firman | 12-Apr | Ontario, Canada Superior Court of Justice | Wrongful Death | Pleading Phase | |||||||||||||||||
Ricks | 12-May | US District Court, WD LA | Wrongful Death | Motion Phase | |||||||||||||||||
Rascon | 14-Apr | US district Court, AZ | Wrongful Death | Discovery Phase | |||||||||||||||||
Schrock | 14-Sep | San Bernardino County Superior Court, CA | Wrongful Death | Pleading Phase | |||||||||||||||||
Moore | 14-Nov | St. Louis County Circuit Court, MO | Wrongful Death | Pleading Phase | |||||||||||||||||
Jones | 15-Jan | Los Angeles County Superior Court, CA | Suspect Injury | Pleading Phase | |||||||||||||||||
Summary of Other Product Litigation Matters | In addition, other product litigation matters in which the Company is involved that are currently on appeal are listed below: | ||||||||||||||||||||
Plaintiff | Month | Jurisdiction | Claim Type | Status | |||||||||||||||||
Served | |||||||||||||||||||||
Mitchell | 12-Apr | US District Court, ED MI | Wrongful Death | Notice of Appeal filed August 2014; Briefing Phase | |||||||||||||||||
Thomas (Pikes) | 8-Oct | US District Court, WD LA | Wrongful Death | Notice of Appeal filed January 2015 | |||||||||||||||||
Summary of Cases Dismissed or Judgment Entered | Cases that were dismissed or judgment entered in prior fiscal quarters are not included in this table. | ||||||||||||||||||||
Plaintiff | Month | Jurisdiction | Claim Type | Status | |||||||||||||||||
Served | |||||||||||||||||||||
Grable | 8-Aug | 6th Judicial Circuit Court, Pinellas County, FL | Training Injury | Dismissed | |||||||||||||||||
Juran | 10-Dec | Hennepin County District Court, 4th Judicial District | Officer Injury | Dismissed | |||||||||||||||||
Wilson | 11-May | US District Court, ED MO | Wrongful Death | Dismissed | |||||||||||||||||
Miller | 13-Jan | New Castle County Superior Court, DE | Wrongful Death | Dismissed | |||||||||||||||||
Ward | 14-Oct | Richmond County Superior Court, GA | Officer Fired | Dismissed | |||||||||||||||||
Information Regarding the Company's Insurance Coverage | Remaining insurance coverage is based on information received from the Company’s insurance provider (in millions). | ||||||||||||||||||||
Policy Year | Policy | Policy | Insurance | Deductible | Defense | Remaining | Active Cases and Cases on | ||||||||||||||
Start | End | Coverage | Amount | Costs | Insurance | Appeal | |||||||||||||||
Date | Date | Covered | Coverage | ||||||||||||||||||
2004 | 12/1/03 | 12/1/04 | $ | 2 | $ | 0.1 | N | $ | 2 | n/a | |||||||||||
2005 | 12/1/04 | 12/1/05 | 10 | 0.3 | Y | 7 | n/a | ||||||||||||||
2006 | 12/1/05 | 12/1/06 | 10 | 0.3 | Y | 3.7 | n/a | ||||||||||||||
2007 | 12/1/06 | 12/1/07 | 10 | 0.3 | Y | 8 | n/a | ||||||||||||||
2008 | 12/1/07 | 12/15/08 | 10 | 0.5 | Y | — | Koon, Thomas (Pikes) | ||||||||||||||
2009 | 12/15/08 | 12/15/09 | 10 | 1 | N | 10 | Derbyshire | ||||||||||||||
2010 | 12/15/09 | 12/15/10 | 10 | 1 | N | 10 | Thompson, Shymko, Doan | ||||||||||||||
2011 | 12/15/10 | 12/15/11 | 10 | 1 | N | 10 | n/a | ||||||||||||||
Jan-Jun 2012 | 12/15/11 | 6/25/12 | 7 | 1 | N | 7 | Ramsey, Mitchell, Firman, Ricks | ||||||||||||||
Jul-Dec 2012 | 6/25/12 | 12/15/12 | 12 | 1 | N | 12 | n/a | ||||||||||||||
2013 | 12/15/12 | 12/15/13 | 12 | 1 | N | 12 | n/a | ||||||||||||||
2014 | 12/15/13 | 12/15/14 | 11 | 4 | N | 11 | Schrock, Moore, Rascon | ||||||||||||||
2015 | 12/15/14 | 12/15/15 | 10 | 5 | N | 10 | Jones | ||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Components of Deferred Income Tax Assets and Liabilities | Significant components of the Company’s deferred income tax assets and liabilities are as follows at December 31 (in thousands): | |||||||||||
2014 | 2013 | |||||||||||
Deferred income tax assets: | ||||||||||||
Net operating loss carryforward | $ | 343 | $ | 513 | ||||||||
Deferred warranty revenue | 4,141 | 2,837 | ||||||||||
Inventory reserve | 508 | 389 | ||||||||||
Non-qualified and non-employee stock option expense | 3,094 | 3,518 | ||||||||||
Capitalized research and development | 4,847 | 6,588 | ||||||||||
Alternative minimum tax carryforward | 1,081 | 1,466 | ||||||||||
Research and development tax credit carryforward | 2,139 | 3,165 | ||||||||||
Deferred legal settlement | — | 1,294 | ||||||||||
IRC section 481(a) adjustment—tangible property | — | 1,316 | ||||||||||
Reserves, accruals, and other | 2,320 | 2,066 | ||||||||||
Total deferred income tax assets | 18,473 | 23,152 | ||||||||||
Deferred income tax liabilities: | ||||||||||||
Depreciation | (1,674 | ) | (2,136 | ) | ||||||||
Amortization | (236 | ) | (236 | ) | ||||||||
Total deferred income tax liabilities | (1,910 | ) | (2,372 | ) | ||||||||
Net deferred income tax assets before valuation allowance | 16,563 | 20,780 | ||||||||||
Valuation allowance | (500 | ) | — | |||||||||
Net deferred income tax assets | $ | 16,063 | $ | 20,780 | ||||||||
Net Deferred Tax Assets | The Company’s net deferred tax assets are presented as follows on the accompanying consolidated balance sheets at December 31 (in thousands): | |||||||||||
2014 | 2013 | |||||||||||
Current deferred tax assets, net | $ | 5,186 | $ | 7,101 | ||||||||
Long-term deferred tax assets, net | 10,877 | 13,679 | ||||||||||
Total | $ | 16,063 | $ | 20,780 | ||||||||
Significant Components of the Provision (Benefit) for Income Taxes | Significant components of the provision for income taxes are as follows for the years ended December 31 (in thousands): | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
Federal | $ | 7,793 | $ | 7,963 | $ | 4,605 | ||||||
State | 800 | 987 | 666 | |||||||||
Total current | 8,593 | 8,950 | 5,271 | |||||||||
Deferred: | ||||||||||||
Federal | 2,656 | 764 | 3,168 | |||||||||
State | 942 | (143 | ) | (1,485 | ) | |||||||
Total deferred | 3,598 | 621 | 1,683 | |||||||||
Tax provision recorded as an increase in liability for unrecorded tax benefits | 202 | 219 | 920 | |||||||||
Provision for income taxes | $ | 12,393 | $ | 9,790 | $ | 7,874 | ||||||
Reconciliation of the Company's Effective Income Tax Rate to the Federal Statutory Rate | A reconciliation of the Company’s effective income tax rate to the federal statutory rate for the years ended December 31, 2014, 2013 and 2012 is as follows (in thousands): | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Federal income tax at the statutory rate | $ | 11,236 | $ | 9,812 | $ | 7,914 | ||||||
State income taxes, net of federal benefit | 1,433 | 1,283 | 969 | |||||||||
Permanent differences (i) | 98 | (96 | ) | 156 | ||||||||
Research and development | (452 | ) | (386 | ) | (327 | ) | ||||||
Return to provision adjustment (ii) | 28 | (361 | ) | (270 | ) | |||||||
Change in liability for unrecognized tax benefits | 202 | 219 | 921 | |||||||||
Incentive stock option detriment/(benefit) | (616 | ) | (538 | ) | 174 | |||||||
Change in valuation allowance | 500 | — | (1,429 | ) | ||||||||
Other | (36 | ) | (143 | ) | (234 | ) | ||||||
Provision for income taxes | $ | 12,393 | $ | 9,790 | $ | 7,874 | ||||||
Effective tax rate | 38.4 | % | 34.9 | % | 34.8 | % | ||||||
(i) | Permanent differences include certain expenses that are not deductible for tax purposes including lobbying fees as well as favorable items including the domestic production activities deduction | |||||||||||
(ii) | The 2012 return to provision adjustment was driven by higher than estimated 2011 R&D tax credits which increased the net tax benefit and therefore, reduced the effective tax rate. The 2013 return to provision adjustment was driven by the domestic production activities deduction which decreased taxable income, and therefore, reduced the effective tax rate. | |||||||||||
Roll Forward of Liability for Unrecognized Tax Benefits Exclusive of Accrued Interest | The following table presents a roll forward of our liability for unrecognized tax benefits, exclusive of accrued interest, as of December 31 (in thousands): | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Balance, beginning of period | $ | 3,110 | $ | 2,903 | $ | 1,982 | ||||||
Increase in previous year tax positions | — | 57 | 659 | |||||||||
Increase in current year tax positions | 121 | 144 | 151 | |||||||||
Increase (decrease) related to adjustment of previous estimates of activity | 94 | 6 | 111 | |||||||||
Balance, end of period | $ | 3,325 | $ | 3,110 | $ | 2,903 | ||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||
Summary of Restricted Stock Unit Activity | The following table summarizes RSU activity for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Number | Weighted | Number | Weighted | Number | Weighted | |||||||||||||||||
of | Average | of | Average | of | Average | |||||||||||||||||
Units | Grant-Date | Units | Grant-Date | Units | Grant-Date | |||||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||||
Units outstanding, beginning of year | 1,279,123 | $ | 9.67 | 582,212 | $ | 5.42 | 1,096 | $ | 4.76 | |||||||||||||
Granted | 554,328 | 16.98 | 1,054,293 | 10.72 | 713,148 | 5.4 | ||||||||||||||||
Released | (432,706 | ) | 7.61 | (257,693 | ) | 5.44 | (97,007 | ) | 5.3 | |||||||||||||
Forfeited | (174,657 | ) | 13.08 | (99,689 | ) | 6.86 | (35,025 | ) | 5.29 | |||||||||||||
Units outstanding, end of year | 1,226,088 | 13.23 | 1,279,123 | 9.67 | 582,212 | 5.42 | ||||||||||||||||
Aggregate intrinsic value at year end (in thousands) | $ | 32,467 | ||||||||||||||||||||
Summary of the Company's Stock Options Activity | The following table summarizes stock option activity for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Number | Weighted | Number | Weighted | Number | Weighted | |||||||||||||||||
of | Average | of | Average | of | Average | |||||||||||||||||
Options | Exercise | Options | Exercise | Options | Exercise | |||||||||||||||||
Price | Price | Price | ||||||||||||||||||||
Options outstanding, beginning of year | 3,365,692 | $ | 6.15 | 6,321,076 | $ | 6.05 | 7,576,493 | $ | 5.75 | |||||||||||||
Granted | — | — | — | — | — | |||||||||||||||||
Exercised | (1,644,146 | ) | 6.69 | (2,671,058 | ) | 5.75 | (784,383 | ) | 2.46 | |||||||||||||
Expired / terminated | (80,463 | ) | 16.59 | (284,326 | ) | 7.83 | (471,034 | ) | 7.15 | |||||||||||||
Options outstanding, end of year | 1,641,083 | 5.26 | 3,365,692 | 6.15 | 6,321,076 | 6.05 | ||||||||||||||||
Options exercisable, end of year | 1,605,789 | 5.27 | 3,217,146 | 6.22 | 5,278,243 | 6.31 | ||||||||||||||||
Options expected to vest, end of year | 4,443 | 4.66 | ||||||||||||||||||||
Summary of Stock Options Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable as of December 31, 2014: | |||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||||
Range of | Number of | Weighted | Weighted | Number of | Weighted | Weighted | ||||||||||||||||
Exercise Price | Options | Average | Average | Options | Average | Average | ||||||||||||||||
Outstanding | Exercise | Remaining | Exercisable | Price | Remaining | |||||||||||||||||
Price | Contractual | Contractual | ||||||||||||||||||||
Life (Years) | Life (Years) | |||||||||||||||||||||
$3.85 - $5.00 | 1,206,798 | $ | 4.63 | 4.8 | 1,172,329 | $ | 4.63 | 4.8 | ||||||||||||||
$5.01 - $7.00 | 210,663 | 5.58 | 4 | 209,838 | 5.58 | 4 | ||||||||||||||||
$7.01 - $10.00 | 151,761 | 7.38 | 2.9 | 151,761 | 7.38 | 2.9 | ||||||||||||||||
$10.01 - $16.23 | 71,861 | 10.29 | 2.4 | 71,861 | 10.29 | 2.4 | ||||||||||||||||
$3.85 - $16.23 | 1,641,083 | 5.26 | 4.4 | 1,605,789 | 5.27 | 4.4 | ||||||||||||||||
Reported Share-Based Compensation | The Company accounts for stock-based compensation using the fair-value method. Reported stock-based compensation was classified as follows for the years ended December 31 (in thousands): | |||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Cost of products sold and services delivered | $ | 204 | $ | 175 | $ | 172 | ||||||||||||||||
Sales, general and administrative expenses | 3,555 | 3,158 | 2,647 | |||||||||||||||||||
Research and development expenses | 1,820 | 1,007 | 603 | |||||||||||||||||||
Total stock-based compensation | $ | 5,579 | $ | 4,340 | $ | 3,422 | ||||||||||||||||
Segment_Data_Tables
Segment Data (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Summary of Operational Information Relative to the Company's Reportable Segments | Information relative to the Company’s reportable segments is as follows (in thousands): | |||||||||||
For the year ended December 31, 2014 | ||||||||||||
TASER | AXON | Total | ||||||||||
Weapons | ||||||||||||
Product sales | $ | 145,613 | $ | 14,700 | $ | 160,313 | ||||||
Service revenue | — | 4,212 | 4,212 | |||||||||
Net sales | 145,613 | 18,912 | 164,525 | |||||||||
Cost of products sold | 47,680 | 13,233 | 60,913 | |||||||||
Cost of services delivered | — | 2,064 | 2,064 | |||||||||
Gross margin | 97,933 | 3,615 | 101,548 | |||||||||
Sales, general and administrative | 42,989 | 11,169 | 54,158 | |||||||||
Research and development | 3,872 | 11,013 | 14,885 | |||||||||
Income (loss) from operations | $ | 51,072 | $ | (18,567 | ) | $ | 32,505 | |||||
Purchase of property and equipment | $ | 2,233 | $ | 272 | $ | 2,505 | ||||||
Purchase of intangible assets | 180 | 3 | 183 | |||||||||
Depreciation and amortization | 3,936 | 381 | 4,317 | |||||||||
For the year ended December 31, 2013 | ||||||||||||
TASER | AXON | Total | ||||||||||
Weapons | ||||||||||||
Product sales | $ | 127,474 | $ | 8,649 | $ | 136,123 | ||||||
Service revenue | — | 1,708 | 1,708 | |||||||||
Net sales | 127,474 | 10,357 | 137,831 | |||||||||
Cost of products sold | 44,025 | 6,074 | 50,099 | |||||||||
Cost of services delivered | — | 1,889 | 1,889 | |||||||||
Gross margin | 83,449 | 2,394 | 85,843 | |||||||||
Sales, general and administrative | 40,174 | 6,383 | 46,557 | |||||||||
Research and development | 4,311 | 5,577 | 9,888 | |||||||||
Litigation judgment | 1,450 | — | 1,450 | |||||||||
Income (loss) from operations | $ | 37,514 | $ | (9,566 | ) | $ | 27,948 | |||||
Purchase of property and equipment | $ | 1,324 | $ | 459 | $ | 1,783 | ||||||
Purchase of intangible assets | 307 | 16 | 323 | |||||||||
Depreciation and amortization | 4,011 | 1,120 | 5,131 | |||||||||
For the year ended December 31, 2012 | ||||||||||||
TASER | AXON | Total | ||||||||||
Weapons | ||||||||||||
Product sales | $ | 109,055 | $ | 5,071 | $ | 114,126 | ||||||
Service revenue | — | 627 | 627 | |||||||||
Net sales | 109,055 | 5,698 | 114,753 | |||||||||
Cost of products sold | 39,350 | 3,773 | 43,123 | |||||||||
Cost of services delivered | — | 3,915 | 3,915 | |||||||||
Gross margin | 69,705 | (1,990 | ) | 67,715 | ||||||||
Sales, general and administrative | 35,737 | 3,510 | 39,247 | |||||||||
Research and development | 3,938 | 4,201 | 8,139 | |||||||||
Litigation recovery | (2,200 | ) | — | (2,200 | ) | |||||||
Income (loss) from operations | $ | 32,230 | $ | (9,701 | ) | $ | 22,529 | |||||
Purchase of property and equipment | $ | 922 | $ | 412 | $ | 1,334 | ||||||
Purchase of intangible assets | 429 | — | 429 | |||||||||
Depreciation and amortization | 4,327 | 2,192 | 6,519 | |||||||||
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Selected Quarterly Financial Data | Selected quarterly financial data for years ended December 31, 2014 and 2013 follows (in thousands, except per share data): | |||||||||||||||
Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
2014 | 2014 | 2014 | 2014 | |||||||||||||
Net sales | $ | 36,185 | $ | 37,175 | $ | 44,349 | $ | 46,816 | ||||||||
Gross margin | 22,208 | 23,214 | 28,713 | 27,413 | ||||||||||||
Net income | 3,391 | 3,883 | 7,558 | 5,086 | ||||||||||||
Earnings per share (1): | ||||||||||||||||
Basic | $ | 0.06 | $ | 0.07 | $ | 0.14 | $ | 0.1 | ||||||||
Diluted | $ | 0.06 | $ | 0.07 | $ | 0.14 | $ | 0.09 | ||||||||
Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
2013 | 2013 | 2013 | 2013 | |||||||||||||
Net sales | $ | 30,434 | $ | 32,175 | $ | 35,197 | $ | 40,025 | ||||||||
Gross margin | 18,451 | 19,742 | 22,096 | 25,554 | ||||||||||||
Net income | 3,298 | 4,457 | 5,114 | 5,375 | ||||||||||||
Earnings per share (1): | ||||||||||||||||
Basic | $ | 0.06 | $ | 0.09 | $ | 0.1 | $ | 0.1 | ||||||||
Diluted | $ | 0.06 | $ | 0.08 | $ | 0.1 | $ | 0.1 | ||||||||
Supplemental_Disclosure_to_Cas1
Supplemental Disclosure to Cash Flows (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||||||
Summary of Supplemental Non-Cash and Other Cash Flow Information | Supplemental non-cash and other cash flow information are as follows for the years ended December 31 (in thousands), | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Cash paid for income taxes—net | $ | 386 | $ | 3,625 | $ | 1,079 | ||||||
Non Cash Transactions: | ||||||||||||
Stock issued for business acquisition | $ | — | $ | 1,578 | $ | — | ||||||
Property and equipment purchases in accounts payable | 270 | 279 | 113 | |||||||||
Purchase of assets under capital lease obligations | — | — | 147 | |||||||||
Organization_and_Summary_of_Si3
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Customer | Customer | Distributor | |
Depository | Distributor | ||
Distributor | |||
Segment | |||
Source | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Number of revenue sources | 2 | ||
Note receivable in term | 5 years | ||
Company receive payment | 30 days | ||
Accounts and notes receivable related to purchases | $0 | $0 | |
Advertising Cost | 300,000 | 200,000 | 200,000 |
Warranty period | 1 year | ||
Research and development costs | 14,885,000 | 9,888,000 | 8,139,000 |
Allowance for doubtful accounts | 251,000 | 200,000 | |
Reserve for bad debt expense | 142,000 | 24,000 | -242,000 |
Number of depository institutions | 3 | ||
Aggregate balances in accounts | 48,400,000 | ||
Number of customers | 0 | ||
Unaffiliated distributors | 1 | 1 | 1 |
Percentage of total net sales represented | 10.00% | 10.00% | 10.00% |
Accounts and notes receivable by customers one | 13.40% | 17.40% | |
Unaffiliated customers | 1 | 1 | |
Corporate owned life insurance policies fair value | 1,100,000 | 400,000 | |
Number of reportable segments of company | 2 | ||
Implied volatility period of publicly traded options | 1 year | ||
Sales | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Percentage of total net sales represented | 12.20% | 12.80% | |
Minimum | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Service term for services purchased | 1 year | ||
Contractual Period of entities assurance program | 3 years | ||
Maximum | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Service term for services purchased | 5 years | ||
Contractual Period of entities assurance program | 5 years | ||
Evidence. Com | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Amortization of capitalized software development costs | $600,000 | $1,200,000 | |
Extended Product Warranty | Minimum | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Period of extended warranty after expiration of standard warranty | 1 year | ||
Extended Product Warranty | Maximum | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Period of extended warranty after expiration of standard warranty | 5 years |
Organization_and_Summary_of_Si4
Organization and Summary of Significant Accounting Policies - Summary of Changes in Estimated Product Warranty Liabilities (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | |||
Balance, January 1 | $955 | $484 | $427 |
Utilization of accrual | -676 | -530 | -470 |
Warranty expense | 396 | 1,001 | 527 |
Balance, December 31 | $675 | $955 | $484 |
Organization_and_Summary_of_Si5
Organization and Summary of Significant Accounting Policies - Net Sales by Geographic Area (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||
Net sales by Geographic Area | $164,525 | $137,831 | $114,753 |
Percentage of Net sales by Geographic Area | 100.00% | 100.00% | 100.00% |
United States | |||
Segment Reporting Information [Line Items] | |||
Net sales by Geographic Area | 132,205 | 115,674 | 93,427 |
Percentage of Net sales by Geographic Area | 80.00% | 84.00% | 81.00% |
Other Countries | |||
Segment Reporting Information [Line Items] | |||
Net sales by Geographic Area | $32,320 | $22,157 | $21,326 |
Percentage of Net sales by Geographic Area | 20.00% | 16.00% | 19.00% |
Organization_and_Summary_of_Si6
Organization and Summary of Significant Accounting Policies - Weighted Average Number of Shares Outstanding and Income Per Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator for basic and diluted earnings per share: | |||||||||||
Net income | $5,086 | $7,558 | $3,883 | $3,391 | $5,375 | $5,114 | $4,457 | $3,298 | $19,918 | $18,244 | $14,738 |
Denominator: | |||||||||||
Weighted average shares outstanding—basic | 52,948 | 51,880 | 53,827 | ||||||||
Dilutive effect of stock-based awards (in shares) | 1,552 | 2,272 | 896 | ||||||||
Diluted weighted average shares outstanding | 54,500 | 54,152 | 54,723 | ||||||||
Anti-dilutive stock-based awards excluded | 177 | 507 | 3,205 | ||||||||
Net income (loss) per common share: | |||||||||||
Basic (in dollars per share) | $0.10 | $0.14 | $0.07 | $0.06 | $0.10 | $0.10 | $0.09 | $0.06 | $0.38 | $0.35 | $0.27 |
Diluted (in dollars per share) | $0.09 | $0.14 | $0.07 | $0.06 | $0.10 | $0.10 | $0.08 | $0.06 | $0.37 | $0.34 | $0.27 |
Cash_Cash_Equivalents_and_Inve2
Cash, Cash Equivalents, and Investments - Summary of Cash, Cash Equivalents and Held-to-Maturity Investments by Type (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | $90,437 | $63,395 |
Gross Unrealized Gains | 18 | 17 |
Gross Unrealized Losses | -34 | -14 |
Fair Value | 90,421 | 63,398 |
Cash Cash Equivalent And Investments Amortized Cost | 48,367 | 42,271 |
Short-term Investments | 32,774 | 9,101 |
Long-term investments | 9,296 | 12,023 |
State and Municipal Obligations | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 19,145 | 10,807 |
Gross Unrealized Gains | 18 | 14 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 19,163 | 10,821 |
Cash Cash Equivalent And Investments Amortized Cost | 175 | 45 |
Short-term Investments | 15,891 | 5,626 |
Long-term investments | 3,079 | 5,136 |
Certificates of Deposit | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 2,712 | 2,619 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 2,712 | 2,619 |
Cash Cash Equivalent And Investments Amortized Cost | 0 | 0 |
Short-term Investments | 1,227 | 2,373 |
Long-term investments | 1,485 | 246 |
Fair Value, Inputs, Level 1 | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 24,320 | 12,773 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | -34 | -14 |
Fair Value | 24,286 | 12,762 |
Cash Cash Equivalent And Investments Amortized Cost | 3,932 | 5,030 |
Short-term Investments | 15,656 | 1,102 |
Long-term investments | 4,732 | 6,641 |
Fair Value, Inputs, Level 2 | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 21,857 | 13,426 |
Gross Unrealized Gains | 18 | 14 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 21,875 | 13,440 |
Cash Cash Equivalent And Investments Amortized Cost | 175 | 45 |
Short-term Investments | 17,118 | 7,999 |
Long-term investments | 4,564 | 5,382 |
Cash | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 44,260 | 37,196 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 44,260 | 37,196 |
Cash Cash Equivalent And Investments Amortized Cost | 44,260 | 37,196 |
Short-term Investments | 0 | 0 |
Long-term investments | 0 | 0 |
Money Market Funds | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 3,932 | 5,030 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 3,932 | 5,030 |
Cash Cash Equivalent And Investments Amortized Cost | 3,932 | 5,030 |
Short-term Investments | 0 | 0 |
Long-term investments | 0 | 0 |
Corporate Bonds | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 20,388 | 7,743 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | -34 | -14 |
Fair Value | 20,354 | 7,732 |
Cash Cash Equivalent And Investments Amortized Cost | 0 | 0 |
Short-term Investments | 15,656 | 1,102 |
Long-term investments | $4,732 | $6,641 |
Cash_Cash_Equivalents_and_Inve3
Cash, Cash Equivalents, and Investments - Summary of Amortized Cost and Fair Value of Short-term and Long-term Investments (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | $32,774 | $9,101 |
Due after one year, through two years | 9,296 | 12,023 |
Amortized Cost | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | 32,774 | |
Due after one year, through two years | 9,048 | |
Due after two years | 248 | |
Total short-term and long-term investments | 42,070 | |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | 33,773 | |
Due after one year, through two years | 9,032 | |
Due after two years | 248 | |
Total short-term and long-term investments | $43,053 |
Inventory_Inventories_Detail
Inventory - Inventories (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw materials | $12,229 | $7,376 |
Work-in-process | 111 | 44 |
Finished goods | 7,337 | 4,688 |
Reserve for excess and obsolete inventory | -1,354 | -999 |
Total inventory | $18,323 | $11,109 |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Abstract] | |||
Write/down and disposal of property and equipment, net | ($17,000) | $27,000 | ($200,000) |
Depreciation and amortization expense relative to property and equipment | 4,000,000 | 4,800,000 | 6,300,000 |
Cost of products sold and services provided | $2,800,000 | $3,700,000 | $4,700,000 |
Property_and_Equipment_Summary
Property and Equipment - Summary of Property and Equipment (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ||
Total cost | $51,429 | $50,421 |
Less: Accumulated depreciation | -33,906 | -31,378 |
Property and equipment, net | 17,523 | 19,043 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 2,900 | 2,900 |
Building and Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 39 years | |
Total cost | 14,302 | 13,922 |
Production Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 18,443 | 18,047 |
Production Equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Production Equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Computer Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 7,209 | 7,789 |
Computer Equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Computer Equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Furniture and Office Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 3,066 | 2,646 |
Furniture and Office Equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Furniture and Office Equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Total cost | 270 | 270 |
Website Development Costs | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Total cost | 601 | 601 |
Capitalized Software Development Costs | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Total cost | 3,670 | 3,670 |
Construction-in-Process | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | $968 | $576 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 07, 2013 | |
Goodwill [Line Items] | ||||
Goodwill | $2,206,000 | $2,235,000 | ||
Amortization expense | 200,000 | 200,000 | 100,000 | |
Familiar Inc | ||||
Goodwill [Line Items] | ||||
Goodwill | $2,206,000 | $2,206,000 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets - Intangible Assets Other than Goodwill (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, gross carrying amount | $2,450 | $2,091 |
Accumulated amortization | -868 | -690 |
Total | 1,582 | 1,401 |
Not amortized intangible assets, carrying amount | 1,533 | 1,916 |
Intangible assets, gross carrying amount | 3,983 | 4,007 |
Intangible assets, net carrying amount | 3,115 | 3,317 |
TASER trademark | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Not amortized intangible assets, carrying amount | 900 | 900 |
Patents and trademarks pending | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Not amortized intangible assets, carrying amount | 633 | 1,016 |
Domain names | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, useful life | 5 years | |
Amortized intangible assets, gross carrying amount | 125 | 125 |
Accumulated amortization | -114 | -102 |
Total | 11 | 23 |
Issued patents | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, gross carrying amount | 1,759 | 1,529 |
Accumulated amortization | -549 | -441 |
Total | 1,210 | 1,088 |
Issued patents | Minimum | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, useful life | 4 years | |
Issued patents | Maximum | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, useful life | 15 years | |
Issued trademarks | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, gross carrying amount | 566 | 437 |
Accumulated amortization | -205 | -147 |
Total | $361 | $290 |
Issued trademarks | Minimum | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, useful life | 9 years | |
Issued trademarks | Maximum | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, useful life | 11 years |
Recovered_Sheet1
Goodwill and Intangible assets - Estimated Amortization Expense of Intangible Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2015 | $178 | |
2016 | 172 | |
2017 | 167 | |
2018 | 158 | |
2019 | 148 | |
Thereafter | 759 | |
Total | $1,582 | $1,401 |
Other_LongTerm_Assets_Other_Lo
Other Long-Term Assets Other Long-Term Assets - Additional Information (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Corporate owned life insurance policies fair value | $1.10 | $0.40 |
Training equipment | $1.10 |
Deferred_Revenue_Summary_of_De
Deferred Revenue - Summary of Deferred Revenue (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | $35,688 | $20,219 |
Current portion of deferred revenue | 14,020 | 6,878 |
Deferred revenue, net of current portion | 21,668 | 13,341 |
Warranty | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | 21,973 | 15,889 |
Current portion of deferred revenue | 7,300 | |
AXON services | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | 9,286 | 4,026 |
Current portion of deferred revenue | 5,700 | |
Hardware Equipment | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | 4,252 | 304 |
Current portion of deferred revenue | 900 | |
Other | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | $177 | $0 |
Accrued_Liabilities_Accrued_Li
Accrued Liabilities - Accrued Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Payables and Accruals [Abstract] | ||||
Accrued salaries and benefits | $3,699 | $2,328 | ||
Accrued judgments and settlements | 202 | 3,350 | ||
Accrued professional fees, current | 257 | 286 | ||
Accrued warranty expense | 675 | 955 | 484 | 427 |
Accrued income and other taxes | 539 | 437 | ||
Other accrued expenses | 3,873 | 1,484 | ||
Accrued liabilities | $9,245 | $8,840 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Sep. 30, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Case | Case | Lawsuit | Lawsuit | ||
Lawsuit | |||||
Loss Contingencies [Line Items] | |||||
Rent expense under operating lease | $900,000 | $800,000 | $900,000 | ||
Capital lease obligations, noncurrent | 67,000 | 29,000 | 67,000 | ||
Open purchase order | 19,100,000 | ||||
Number of lawsuits against Company | 12 | ||||
Number of active product liability cases | 12 | 55 | |||
Number of new lawsuits | 2 | 2 | |||
Litigation recovery | 0 | -1,450,000 | 2,200,000 | ||
Amount payable on termination of contract | 1,000,000 | ||||
Severance costs | 500,000 | ||||
2008 | |||||
Loss Contingencies [Line Items] | |||||
Remaining Insurance Coverage | 0 | ||||
Office Equipment | |||||
Loss Contingencies [Line Items] | |||||
Capital lease obligation | 61,000 | ||||
Original cost of leased equipment | 147,000 | ||||
Associated accumulated amortization | 86,000 | ||||
Capital lease obligations, noncurrent | $67,000 | ||||
Interest rate | 6.20% |
Commitments_and_Contingencies_2
Commitments and Contingencies - Lease Obligations (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Commitments and Contingencies Disclosure [Abstract] | |
2015 | $560 |
2016 | 583 |
2017 | 591 |
2018 | 590 |
2019 | 449 |
Thereafter | 1,249 |
Total minimum lease payments | 4,022 |
2015 | 41 |
2016 | 30 |
2017 | 0 |
2018 | 0 |
2019 | 0 |
Thereafter | 0 |
Total minimum lease payments | 71 |
Less: Amount representing interest | -4 |
Capital lease obligation | $67 |
Commitments_and_Contingencies_3
Commitments and Contingencies - Information Regarding the Company's Insurance Coverage (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
2004 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | $2 |
Deductible Amount | 0.1 |
Remaining Insurance Coverage | 2 |
2005 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 0.3 |
Remaining Insurance Coverage | 7 |
2006 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 0.3 |
Remaining Insurance Coverage | 3.7 |
2007 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 0.3 |
Remaining Insurance Coverage | 8 |
2008 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 0.5 |
Remaining Insurance Coverage | 0 |
2009 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 10 |
2010 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 10 |
2011 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 10 |
Jan - Jun 2012 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 7 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 7 |
Jul - Dec 2012 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 12 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 12 |
2013 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 12 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 12 |
2014 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 11 |
Deductible Amount | 4 |
Remaining Insurance Coverage | 11 |
2015 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 5 |
Remaining Insurance Coverage | $10 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Line Items] | |||
Excess tax benefit from stock-based compensation | $7,985,000 | $6,797,000 | $4,713,000 |
Deferred tax assets | 100,000 | ||
Deferred tax assets | 200,000 | ||
R&D credit carry forwards carry forwards expiration period | various dates between 2018 and 2028 | ||
Minimum tax credit carryover | 1,100,000 | ||
Credit to additional paid-in capital | 7,985,000 | 6,797,000 | 4,713,000 |
Income tax receivable | 1,300,000 | 2,300,000 | |
Research and development tax credit studies | 10,400,000 | ||
Liability for unrecognized tax benefits | 3,122,000 | ||
Threshold to favorably impact effective tax rate | 3,300,000 | ||
Unrecognized tax benefits, accrued interest | 46,000 | 12,000 | |
Expiring in Two Thousand Ninteen | |||
Income Tax Disclosure [Line Items] | |||
Minimum tax credit carryover | 1,200,000 | ||
State | |||
Income Tax Disclosure [Line Items] | |||
NOL carry forward expiration date | various dates between 2016 and 2031 | ||
Liability for unrecognized tax benefits | 200,000 | ||
State | ARIZONA | |||
Income Tax Disclosure [Line Items] | |||
State research and development credit carry forwards | 3,200,000 | ||
State | CALIFORNIA | |||
Income Tax Disclosure [Line Items] | |||
State research and development credit carry forwards | $200,000 | ||
Federal | CALIFORNIA | |||
Income Tax Disclosure [Line Items] | |||
NOL carry forward expiration date | between 2031 and 2033 |
Income_Taxes_Components_of_Def
Income Taxes - Components of Deferred Income Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred income tax assets: | ||
Net operating loss carryforward | $343,000 | $513,000 |
Deferred warranty revenue | 4,141,000 | 2,837,000 |
Inventory reserve | 508,000 | 389,000 |
Non-qualified and non-employee stock option expense | 3,094,000 | 3,518,000 |
Capitalized research and development | 4,847,000 | 6,588,000 |
Alternative minimum tax carryforward | 1,081,000 | 1,466,000 |
Research and development tax credit carryforward | 2,139,000 | 3,165,000 |
Deferred legal settlement | 0 | 1,294,000 |
IRC section 481(a) adjustment—tangible property | 0 | 1,316,000 |
Reserves, accruals, and other | 2,320,000 | 2,066,000 |
Total deferred income tax assets | 18,473,000 | 23,152,000 |
Deferred income tax liabilities: | ||
Depreciation | -1,674,000 | -2,136,000 |
Amortization | -236,000 | -236,000 |
Total deferred income tax liabilities | -1,910,000 | -2,372,000 |
Net deferred income tax assets before valuation allowance | 16,563,000 | 20,780,000 |
Valuation allowance | -500,000 | 0 |
Net deferred income tax assets | $16,063,000 | $20,780,000 |
Income_Taxes_Net_Deferred_Tax_
Income Taxes - Net Deferred Tax Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ||
Current deferred tax assets, net | $5,186 | $7,101 |
Long-term deferred tax assets, net | 10,877 | 13,679 |
Net deferred income tax assets | $16,063 | $20,780 |
Income_Taxes_Significant_Compo
Income Taxes - Significant Components of the Provision (Benefit) for Income Taxes (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | |||
Federal | $7,793 | $7,963 | $4,605 |
State | 800 | 987 | 666 |
Total current | 8,593 | 8,950 | 5,271 |
Deferred: | |||
Federal | 2,656 | 764 | 3,168 |
State | 942 | -143 | -1,485 |
Total deferred | 3,598 | 621 | 1,683 |
Tax provision recorded as an increase in liability for unrecorded tax benefits | 202 | 219 | 920 |
Provision for income taxes | $12,393 | $9,790 | $7,874 |
Income_Taxes_Reconciliation_of
Income Taxes - Reconciliation of the Company's Effective Income Tax Rate to the Federal Statutory Rate (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Federal income tax at the statutory rate | $11,236 | $9,812 | $7,914 |
State income taxes, net of federal benefit | 1,433 | 1,283 | 969 |
Permanent differences | 98 | -96 | 156 |
Research and development | -452 | -386 | -327 |
Return to provision adjustment | 28 | -361 | -270 |
Change in liability for unrecognized tax benefits | 202 | 219 | 921 |
Incentive stock option detriment/(benefit) | -616 | -538 | 174 |
Change in valuation allowance | 500 | 0 | -1,429 |
Other | -36 | -143 | -234 |
Provision for income taxes | $12,393 | $9,790 | $7,874 |
Effective tax rate | 38.40% | 34.90% | 34.80% |
Income_Taxes_Roll_Forward_of_L
Income Taxes - Roll Forward of Liability for Unrecognized Tax Benefits Exclusive of Accrued Interest (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||||
Balance, beginning of period | $3,110 | $2,903 | $1,982 | |
Increase in previous year tax positions | 0 | 57 | 659 | |
Increase in current year tax positions | 121 | 144 | 151 | |
Increase (decrease) related to adjustment of previous estimates of activity | 94 | 6 | 111 | |
Balance, end of period | $3,325 | $3,110 | $2,903 | $1,982 |
Line_of_Credit_Additional_Info
Line of Credit - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Disclosure [Abstract] | ||
Total availability under line of credit agreement | $10 | $10 |
Letters of credit outstanding amount | 0.4 | |
Available borrowing under letter of credit | $9.60 | |
Varying Interest on Line of credit agreement | LIBOR plus 1.5% or Prime less 0.75% | |
Line of credit interest rate | 1.50% | |
Maturity date of line of credit | 31-Jul-16 | |
Maximum ratio of total liabilities to tangible net worth | 1 | |
Minimum required fixed coverage charge ratio | 1.25 | |
Period used for calculating ratios | 12 months | |
Company's tangible net worth ratio | 0.45 | |
Fixed coverage charge ratio | 2.82 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Apr. 25, 2012 | 31-May-14 | Feb. 28, 2013 | Jun. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | 23-May-13 | |
Number_of_stock_repurchase | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of Repurchase Programs authorized | 2 | ||||||||
Common stock, par value | $0.00 | $0.00 | |||||||
Preferred stock, par value | $0.00 | $0.00 | |||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | |||||||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | |||||||
Outstanding common stock repurchase program authorized amount | $20,000,000 | $30,000,000 | $25,000,000 | ||||||
Shares repurchased | 1,700,000 | 3,000,000 | |||||||
Additional stock repurchase program authorized amount | 22,400,000 | 25,000,000 | 22,442,000 | 25,000,000 | 19,996,000 | ||||
Average cost of repurchase per share | $5.22 | ||||||||
Remaining authorized repurchase amount | 7,600,000 | ||||||||
Shares repurchased by company | -3,800,000 | ||||||||
Tax payments, for net share settlement of share based award | 1,347,000 | 309,000 | |||||||
Total intrinsic value of options exercised | 20,200,000 | 15,700,000 | 3,200,000 | ||||||
Share based compensation arrangement by share based payment award future tax benefit | 3,100,000 | 3,500,000 | |||||||
Service Based Restricted Stock Unit | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Contractual maturity of plan | 10 years | ||||||||
Restricted Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Performance criteria met for approximate units | 432,706 | 257,693 | 97,007 | ||||||
Approximate units outstanding | 1,226,088 | 1,279,123 | 582,212 | 1,096 | |||||
Unrecognized stock-based compensation expense related to non-vested stock options | 11,100,000 | ||||||||
Weighted average period | 2 years 6 months | ||||||||
Performance Based Restricted Stock Unit | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Contractual maturity of plan | 10 years | ||||||||
Approximate units of performance restricted stock granted | 100,000 | 300,000 | 200,000 | ||||||
Performance criteria met for approximate units | 100,000 | ||||||||
Approximate units outstanding | 200,000 | ||||||||
Incremental stock option expense | 1,000,000 | 1,400,000 | 700,000 | ||||||
Restricted Stock Units (RSUs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares withheld, for net share settlement of share based award | 74,000 | ||||||||
Tax payments, for net share settlement of share based award | 1,300,000 | ||||||||
Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Aggregate intrinsic value price per share | $26.48 | ||||||||
New option granted | 0 | ||||||||
Aggregate intrinsic value, option outstanding | 34,800,000 | ||||||||
Aggregate intrinsic value, options exercisable | 34,100,000 | ||||||||
Number of Options Outstanding | 1,641,083 | 3,365,692 | 6,321,076 | 7,576,493 | |||||
Weighted Average Exercise Price | $5.26 | $6.15 | $6.05 | 5.75 | |||||
Options expected to vest, end of year | 4,443 | ||||||||
Non-Vested Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of Options Outstanding | 0 | ||||||||
Weighted Average Exercise Price | $4.74 | ||||||||
Weighted average fair value | $2.51 | ||||||||
Weighted average remaining contractual life | 4 years 3 months 0 days | ||||||||
Aggregate intrinsic value of unvested options | 800,000 | ||||||||
Performance Shares | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Incremental stock option expense | 100,000 | 100,000 | |||||||
Number of Options Outstanding | 300,000 | ||||||||
Unvested performance options | 30,600 | ||||||||
Unvested share, expected to vest | 0 | ||||||||
Options expected to vest, end of year | 300,000 | ||||||||
Fair value of performance-based stock options outstanding and expected to vest | 800,000 | ||||||||
Incentive Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Incremental stock option expense | 0 | 100,000 | 500,000 | ||||||
Non Qualified Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Tax benefit recorded | $2,500,000 | $6,800,000 | $4,700,000 | ||||||
2013 Stock Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares reserved for future grants | 1,600,000 | ||||||||
Option available for future grants | 1,700,000 | ||||||||
Repurchase of Equity | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Average cost of repurchase per share | $12.99 | $8.20 | |||||||
Minimum | Service Based Restricted Stock Unit | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 3 years | ||||||||
Minimum | Performance Based Restricted Stock Unit | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 1 year | ||||||||
Maximum | Service Based Restricted Stock Unit | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 4 years | ||||||||
Maximum | Performance Based Restricted Stock Unit | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 4 years |
Stockholders_Equity_Summary_of
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Detail) (Restricted Stock, USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Number of Units outstanding, beginning of year | 1,279,123 | 582,212 | 1,096 |
Number of Units, Granted | 554,328 | 1,054,293 | 713,148 |
Number of Units, Released | -432,706 | -257,693 | -97,007 |
Number of Units, Forfeited | -174,657 | -99,689 | -35,025 |
Number of Units outstanding, end of year | 1,226,088 | 1,279,123 | 582,212 |
Weighted Average Grant Date Fair Value, Units outstanding, beginning of year | $9.67 | $5.42 | $4.76 |
Weighted Average Grant Date Fair Value, Granted | $16.98 | $10.72 | $5.40 |
Weighted Average Grant Date Fair Value, Released | $7.61 | $5.44 | $5.30 |
Weighted Average Grant Date Fair Value, Forfeited | $13.08 | $6.86 | $5.29 |
Weighted Average Grant Date Fair Value, Units outstanding, end of year | $13.23 | $9.67 | $5.42 |
Aggregate intrinsic value at year end (in thousands) | $32,466,810 |
Stockholders_Equity_Summary_of1
Stockholders' Equity - Summary of the Company's Stock Options Activity (Detail) (Stock Options, USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Number of options, Options outstanding, beginning of year | 3,365,692 | 6,321,076 | 7,576,493 |
Number of options, Granted | 0 | ||
Number of options, Exercised | -1,644,146 | -2,671,058 | -784,383 |
Number of options, Expired / terminated | -80,463 | -284,326 | -471,034 |
Number of options, Options outstanding, end of year | 1,641,083 | 3,365,692 | 6,321,076 |
Number of options, Options exercisable, end of year | 1,605,789 | 3,217,146 | 5,278,243 |
Number of options, Options expected to vest, end of year | 4,443 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Weighted average exercise price, Options outstanding, beginning of year | $6.15 | $6.05 | $5.75 |
Weighted average exercise price, Granted | |||
Weighted average exercise price, Exercised | $6.69 | $5.75 | $2.46 |
Weighted average exercise price, Expired / terminated | $16.59 | $7.83 | $7.15 |
Weighted average exercise price, Options outstanding, end of year | $5.26 | $6.15 | $6.05 |
Weighted average exercise price, Options exercisable, end of year | $5.27 | $6.22 | $6.31 |
Weighted average exercise price, Options expected to vest, end of year | $4.66 |
Stockholders_Equity_Summary_of2
Stockholders' Equity - Summary of Stock Options Outstanding and Exercisable (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Range One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Price, Lower Limit | $3.85 |
Range of Exercise Price, Upper Limit | $5 |
Number of Options Outstanding | 1,206,798 |
Weighted Average Exercise Price | $4.63 |
Weighted Average Remaining Contractual Life (Years) | 4 years 9 months 18 days |
Number of Options Exercisable | 1,172,329 |
Weighted Average Price | $4.63 |
Weighted Average Remaining Contractual Life (Years) | 4 years 9 months 18 days |
Range Two | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Price, Lower Limit | $5.01 |
Range of Exercise Price, Upper Limit | $7 |
Number of Options Outstanding | 210,663 |
Weighted Average Exercise Price | $5.58 |
Weighted Average Remaining Contractual Life (Years) | 4 years |
Number of Options Exercisable | 209,838 |
Weighted Average Price | $5.58 |
Weighted Average Remaining Contractual Life (Years) | 4 years |
Range Three | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Price, Lower Limit | $7.01 |
Range of Exercise Price, Upper Limit | $10 |
Number of Options Outstanding | 151,761 |
Weighted Average Exercise Price | $7.38 |
Weighted Average Remaining Contractual Life (Years) | 2 years 10 months 24 days |
Number of Options Exercisable | 151,761 |
Weighted Average Price | $7.38 |
Weighted Average Remaining Contractual Life (Years) | 2 years 10 months 24 days |
Range Four | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Price, Lower Limit | $10.01 |
Range of Exercise Price, Upper Limit | $16.23 |
Number of Options Outstanding | 71,861 |
Weighted Average Exercise Price | $10.29 |
Weighted Average Remaining Contractual Life (Years) | 2 years 4 months 24 days |
Number of Options Exercisable | 71,861 |
Weighted Average Price | $10.29 |
Weighted Average Remaining Contractual Life (Years) | 2 years 4 months 24 days |
Range Five | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Price, Lower Limit | $3.85 |
Range of Exercise Price, Upper Limit | $16.23 |
Number of Options Outstanding | 1,641,083 |
Weighted Average Exercise Price | $5.26 |
Weighted Average Remaining Contractual Life (Years) | 4 years 4 months 24 days |
Number of Options Exercisable | 1,605,789 |
Weighted Average Price | $5.27 |
Weighted Average Remaining Contractual Life (Years) | 4 years 4 months 24 days |
Stockholders_Equity_Reported_S
Stockholders' Equity - Reported Share-Based Compensation (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $5,579 | $4,340 | $3,422 |
Cost of products sold and services delivered | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 204 | 175 | 172 |
Sales, general and administrative expenses | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 3,555 | 3,158 | 2,647 |
Research and development expenses | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $1,820 | $1,007 | $603 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Related Party Transaction [Line Items] | |||
Outstanding payables due to related party | $8,000 | $12,000 | |
Consulting Services | |||
Related Party Transaction [Line Items] | |||
Transaction expenses incurred by parent company | $200,000 | $200,000 | $200,000 |
Employee_Benefit_Plans_Additio
Employee Benefit Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Compensation and Retirement Disclosure [Abstract] | |||
Deferral percentage of base salary | 80.00% | ||
Deferral percentage of other compensation | 100.00% | ||
Employee deferrals deemed vested percentage upon contribution | 100.00% | ||
Company's contributions to the plan | $900,000 | $700,000 | $500,000 |
Company's expected contributions to the plan | $27,000 |
Segment_Data_Additional_Inform
Segment Data - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments of company | 2 |
Number of operating segments | 0 |
Segment_Data_Summary_of_Operat
Segment Data - Summary of Operational Information Relative to the Company's Reportable Segments (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Product sales | $46,816 | $44,349 | $37,175 | $36,185 | $40,025 | $35,197 | $32,175 | $30,434 | $160,313 | $136,123 | $114,126 |
Service revenue | 4,212 | 1,708 | 627 | ||||||||
Net sales | 164,525 | 137,831 | 114,753 | ||||||||
Cost of products sold | 60,913 | 50,099 | 43,123 | ||||||||
Cost of services delivered | 2,064 | 1,889 | 3,915 | ||||||||
Gross margin | 27,413 | 28,713 | 23,214 | 22,208 | 25,554 | 22,096 | 19,742 | 18,451 | 101,548 | 85,843 | 67,715 |
Sales, general and administrative | 54,158 | 46,557 | 39,247 | ||||||||
Research and development | 14,885 | 9,888 | 8,139 | ||||||||
Litigation recovery | 0 | -1,450 | 2,200 | ||||||||
Income (loss) from operations | 32,505 | 27,948 | 22,529 | ||||||||
Purchase of property and equipment | 2,505 | 1,783 | 1,334 | ||||||||
Purchase of intangible assets | 183 | 323 | 429 | ||||||||
Depreciation and amortization | 4,317 | 5,131 | 6,519 | ||||||||
TASER Weapons | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product sales | 145,613 | 127,474 | 109,055 | ||||||||
Service revenue | 0 | ||||||||||
Net sales | 145,613 | 127,474 | 109,055 | ||||||||
Cost of products sold | 47,680 | 44,025 | 39,350 | ||||||||
Cost of services delivered | 0 | ||||||||||
Gross margin | 97,933 | 83,449 | 69,705 | ||||||||
Sales, general and administrative | 42,989 | 40,174 | 35,737 | ||||||||
Research and development | 3,872 | 4,311 | 3,938 | ||||||||
Litigation recovery | -1,450 | 2,200 | |||||||||
Income (loss) from operations | 51,072 | 37,514 | 32,230 | ||||||||
Purchase of property and equipment | 2,233 | 1,324 | 922 | ||||||||
Purchase of intangible assets | 180 | 307 | 429 | ||||||||
Depreciation and amortization | 3,936 | 4,011 | 4,327 | ||||||||
AXON | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product sales | 14,700 | 8,649 | 5,071 | ||||||||
Service revenue | 4,212 | 1,708 | 627 | ||||||||
Net sales | 18,912 | 10,357 | 5,698 | ||||||||
Cost of products sold | 13,233 | 6,074 | 3,773 | ||||||||
Cost of services delivered | 2,064 | 1,889 | 3,915 | ||||||||
Gross margin | 3,615 | 2,394 | -1,990 | ||||||||
Sales, general and administrative | 11,169 | 6,383 | 3,510 | ||||||||
Research and development | 11,013 | 5,577 | 4,201 | ||||||||
Income (loss) from operations | -18,567 | -9,566 | -9,701 | ||||||||
Purchase of property and equipment | 272 | 459 | 412 | ||||||||
Purchase of intangible assets | 3 | 16 | |||||||||
Depreciation and amortization | $381 | $1,120 | $2,192 |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data (Unaudited) - Selected Quarterly Financial Data (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $46,816 | $44,349 | $37,175 | $36,185 | $40,025 | $35,197 | $32,175 | $30,434 | $160,313 | $136,123 | $114,126 |
Gross margin | 27,413 | 28,713 | 23,214 | 22,208 | 25,554 | 22,096 | 19,742 | 18,451 | 101,548 | 85,843 | 67,715 |
Net income | $5,086 | $7,558 | $3,883 | $3,391 | $5,375 | $5,114 | $4,457 | $3,298 | $19,918 | $18,244 | $14,738 |
Earnings Per Share [Abstract] | |||||||||||
Basic | $0.10 | $0.14 | $0.07 | $0.06 | $0.10 | $0.10 | $0.09 | $0.06 | $0.38 | $0.35 | $0.27 |
Diluted | $0.09 | $0.14 | $0.07 | $0.06 | $0.10 | $0.10 | $0.08 | $0.06 | $0.37 | $0.34 | $0.27 |
Supplemental_Disclosure_to_Cas2
Supplemental Disclosure to Cash Flows - Summary of Supplemental Non-Cash and Other Cash Flow Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Cash Flow Elements [Abstract] | |||
Cash paid for income taxes—net | $386 | $3,625 | $1,079 |
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Value of Shares Issued | 0 | 1,578 | 0 |
Non Cash Transactions: | |||
Property and equipment purchases in accounts payable | 270 | 279 | 113 |
Purchase of assets under capital lease obligations | $0 | $0 | $147 |
Schedule_II_Valuation_and_Qual1
Schedule II - Valuation and Qualifying Accounts (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 |
Allowance for Doubtful Accounts | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Period | $200 | $200 | $450 | |
Charged to Costs and Expenses | 142 | 24 | -242 | |
Deductions | -91 | -24 | -8 | |
Balance at End of Period | 251 | 200 | 200 | 450 |
Allowance for Excess and Obsolete Inventory | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Period | 999 | 2,320 | 4,431 | |
Charged to Costs and Expenses | 2,157 | 595 | 554 | |
Deductions | -1,802 | -1,916 | -2,665 | |
Balance at End of Period | 1,354 | 999 | 2,320 | 4,431 |
Warranty Reserve | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Period | 955 | 484 | 427 | |
Charged to Costs and Expenses | 396 | 1,001 | 527 | |
Deductions | 676 | -530 | -470 | |
Balance at End of Period | $675 | $955 | $484 | $427 |