Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 31, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | TASER INTERNATIONAL INC | |
Entity Central Index Key | 1,069,183 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 52,193,385 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 37,306 | $ 59,526 |
Short-term investments | 49,711 | 50,254 |
Accounts and notes receivable, net of allowance of $292 and $322 as of June 30, 2016 and December 31, 2015, respectively | 30,499 | 27,701 |
Inventory, net | 21,936 | 15,763 |
Prepaid expenses and other current assets | 14,323 | 8,165 |
Total current assets | 153,775 | 161,409 |
Property and equipment, net of accumulated depreciation of $37,266 and $36,020 as of June 30, 2016 and December 31, 2015, respectively | 22,249 | 21,848 |
Deferred income tax assets, net | 15,577 | 13,719 |
Intangible assets, net | 7,228 | 7,588 |
Goodwill | 9,100 | 9,596 |
Long-term investments | 4,594 | 8,525 |
Other assets | 16,172 | 7,196 |
Total assets | 228,695 | 229,881 |
Current liabilities: | ||
Accounts payable | 8,083 | 7,333 |
Accrued liabilities | 10,382 | 8,643 |
Current portion of deferred revenue | 31,668 | 20,851 |
Customer deposits | 1,998 | 1,226 |
Current portion of notes payable and capital lease payable | 62 | 87 |
Total current liabilities | 52,193 | 38,140 |
Deferred revenue, net of current portion | 35,098 | 30,190 |
Liability for unrecognized tax benefits | 1,508 | 1,315 |
Long-term deferred compensation | 2,759 | 2,199 |
Long-term business acquisition contingent consideration | 0 | 952 |
Other long-term liabilities | 2,707 | 81 |
Total liabilities | 94,265 | 72,877 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.00001 par value; 25,000,000 shares authorized; no shares issued and outstanding as of June 30, 2016 and December 31, 2015 | 0 | 0 |
Common stock, $0.00001 par value; 200,000,000 shares authorized; 52,172,547 and 53,692,192 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively | 1 | 1 |
Additional paid-in capital | 181,943 | 178,143 |
Treasury stock at cost, 20,220,227 and 18,432,158 shares as of June 30, 2016 and December 31, 2015, respectively | (155,947) | (122,201) |
Retained earnings | 108,091 | 100,978 |
Accumulated other comprehensive income | 342 | 83 |
Total stockholders’ equity | 134,430 | 157,004 |
Total liabilities and stockholders’ equity | $ 228,695 | $ 229,881 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance on accounts receivable | $ 292 | $ 322 |
Accumulated depreciation | $ 37,266 | $ 36,020 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
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 (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 52,172,547 | 53,692,192 |
Common stock, shares outstanding | 52,172,547 | 53,692,192 |
Treasury stock, shares | 20,220,227 | 18,432,158 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 58,756 | $ 46,713 | $ 114,286 | $ 91,475 |
Cost of products sold and services delivered | 21,457 | 15,990 | 40,085 | 30,884 |
Gross margin | 37,299 | 30,723 | 74,201 | 60,591 |
Operating expenses: | ||||
Sales, general and administrative | 24,379 | 15,443 | 49,212 | 30,008 |
Research and development | 6,710 | 5,906 | 13,637 | 10,464 |
Total operating expenses | 31,089 | 21,349 | 62,849 | 40,472 |
Income from operations | 6,210 | 9,374 | 11,352 | 20,119 |
Interest income and other (expense) income, net | (123) | 99 | (5) | 34 |
Income before provision for income taxes | 6,087 | 9,473 | 11,347 | 20,153 |
Provision for income taxes | 2,437 | 3,370 | 4,234 | 6,845 |
Net income | $ 3,650 | $ 6,103 | $ 7,113 | $ 13,308 |
Net income per common and common equivalent shares: | ||||
Basic (in dollars per share) | $ 0.07 | $ 0.11 | $ 0.13 | $ 0.25 |
Diluted (in dollars per share) | $ 0.07 | $ 0.11 | $ 0.13 | $ 0.24 |
Weighted average number of common and common equivalent shares outstanding: | ||||
Basic (in shares) | 52,480 | 53,644 | 53,087 | 53,407 |
Diluted (in shares) | 53,289 | 54,800 | 53,890 | 54,662 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 3,650 | $ 6,103 | $ 7,113 | $ 13,308 |
Foreign currency translation adjustments | 25 | 8 | 259 | 97 |
Comprehensive income | $ 3,675 | $ 6,111 | $ 7,372 | $ 13,405 |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 7,113 | $ 13,308 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,843 | 1,362 |
Purchase accounting adjustments to goodwill | 349 | |
Loss on inventory nonmonetary exchanges | 90 | |
Gain on disposal of property and equipment, net | (17) | 0 |
Loss on disposal of intangible assets | 14 | 165 |
Bond premium amortization | 712 | 826 |
Stock-based compensation | 4,526 | 3,223 |
Deferred income taxes | (1,445) | (511) |
Unrecognized tax benefits | 193 | (319) |
Tax benefit from stock-based compensation | (88) | (6,245) |
Change in assets and liabilities: | ||
Accounts and notes receivable | (3,211) | 5,569 |
Inventory | (6,748) | (5,329) |
Prepaid expenses and other assets | (14,657) | (8,174) |
Accounts payable, accrued and other liabilities | 5,078 | 3,627 |
Deferred revenue | 15,812 | 3,133 |
Customer deposits | 772 | 334 |
Net cash provided by operating activities | 10,336 | 10,969 |
Cash flows from investing activities: | ||
Purchases of investments | (28,667) | (38,750) |
Proceeds from call / maturity of investments | 32,429 | 21,365 |
Purchases of property and equipment | (1,964) | (1,770) |
Proceeds from disposal of property and equipment | 33 | 0 |
Purchases of intangible assets | (185) | (201) |
Business acquisitions, net of cash acquired | 0 | (7,840) |
Net cash provided by (used in) investing activities | 1,646 | (27,196) |
Cash flows from financing activities: | ||
Repurchase of common stock | (33,746) | 0 |
Proceeds from options exercised | 222 | 2,553 |
Payroll tax payments for net-settled stock awards | (1,036) | (647) |
Payments on capital lease obligation | (19) | (18) |
Payments on notes payable | (29) | 0 |
Tax benefit from stock-based compensation | 88 | 6,245 |
Net cash (used in) provided by financing activities | (34,520) | 8,133 |
Effect of exchange rate changes on cash and cash equivalents | 318 | 81 |
Net decrease in cash and cash equivalents | (22,220) | (8,013) |
Cash and cash equivalents, beginning of period | 59,526 | 48,367 |
Cash and cash equivalents, end of period | 37,306 | 40,354 |
Supplemental disclosure: | ||
Cash paid for income taxes, net of refunds | 8,271 | 4,848 |
Non-cash transactions | ||
Property and equipment purchases in accounts payable and accrued liabilities | $ 90 | $ 205 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [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 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. TASER International BV, a wholly owned subsidiary of the Company, serves as the Company's international headquarters, and is located in Amsterdam, Netherlands. TASER International BV wholly owns two subsidiaries, Axon Public Safety U.K. LTD and Axon Public Safety AU, that serve as direct sales operations in the United Kingdom and Australia, respectively. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company. All material intercompany accounts, transactions, and profits have been eliminated. a. Basis of Presentation and Use of Estimates These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information related to the Company’s organization, significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) has been condensed or omitted. The accounting policies followed in the preparation of these unaudited condensed consolidated financial statements are consistent with those followed in the Company’s annual consolidated financial statements for the year ended December 31, 2015 , as filed on Form 10-K. In the opinion of management, these unaudited condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary to fairly state the Company’s financial position, results of operations and cash flows for the periods presented and the presentations and disclosures herein are adequate when read in conjunction with the Company’s Form 10-K for the year ended December 31, 2015 . The results of operations for the three and six months ended June 30, 2016 and 2015 are not necessarily indicative of the results to be expected for the full year (or any other period). Significant estimates and assumptions in these unaudited condensed consolidated financial statements include: • product warranty reserves, • inventory valuation, • 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. Segment Information The Company is comprised of two reportable segments: the manufacture and sale of CEWs, accessories and other products and services (the “TASER Weapons” segment); and the video business which includes the TASER Cam, Axon cameras and related accessories, Evidence.com and MediaSolv (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 13. c. Geographic Information and Major Customers For the three and six months ended June 30, 2016 and 2015 , net sales by geographic area were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 United States $ 52,219 88.9 % $ 38,695 82.8 % $ 94,687 82.9 % $ 74,196 81.1 % Other Countries 6,537 11.1 8,018 17.2 19,599 17.1 17,279 18.9 Total $ 58,756 100.0 % $ 46,713 100.0 % $ 114,286 100.0 % $ 91,475 100.0 % 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 and six months ended June 30, 2016 and 2015 , no individual country outside the U.S. represented more than 10% of net sales. Sales in the international market are generally larger and occur more intermittently than in the domestic market due to the profile of the Company's customers. For the three and six months ended June 30, 2016 and 2015 , no customer represented more than 10% of total net sales. At June 30, 2016 there was one outstanding customer balance from one unaffiliated customer that comprised 16.3% of the aggregate accounts receivable balance. At December 31, 2015 , the Company had a trade receivable from one unaffiliated customer comprising 12.5% of the aggregate accounts receivable balance. d. 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. Potentially dilutive securities include outstanding stock options and unvested restricted stock units. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities. The calculation of the weighted average number of shares outstanding and earnings per share are as follows (in thousands except per share data): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Numerator for basic and diluted earnings per share: Net income $ 3,650 $ 6,103 $ 7,113 $ 13,308 Denominator: Weighted average shares outstanding - basic 52,480 53,644 53,087 53,407 Dilutive effect of stock-based awards 809 1,156 803 1,255 Diluted weighted average shares outstanding 53,289 54,800 53,890 54,662 Anti-dilutive stock-based awards excluded 369 153 520 173 Net income per common share: Basic $ 0.07 $ 0.11 $ 0.13 $ 0.25 Diluted $ 0.07 $ 0.11 $ 0.13 $ 0.24 e. Revenue Recognition, Deferred Revenue and Accounts and Notes Receivable The Company derives revenue from two primary sources: (1) the sale of physical products, including CEWs, Axon cameras, corresponding extended warranties, and related accessories such as E-docks, cartridges and batteries, among others, and (2) subscription to the Company's Evidence.com software as a service ("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 professional services 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. Contractual arrangements may contain explicit customer acceptance provisions, and under such arrangements, the Company defers recognition of revenue until formal customer acceptance is received. 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 majority of the Company’s allocations of arrangement consideration under multiple element arrangements are performed using vendor-specific objective evidence by utilizing prices charged to customers for deliverables when sold separately. The Company’s multiple element arrangements may include future CEWs and/or Axon devices to be delivered at defined points within a multi-year contract, and in those arrangements, the Company allocates total arrangement consideration over the life of the multi-year contract to future deliverables using management’s best estimate of selling price. The Company has not utilized third party evidence of selling price. The Company offers the right to purchase extended warranties that include additional services and coverage beyond the standard 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 and related accessories have stand-alone value to the customer and 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. Generally, 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. At times the Company subsidizes the cost of Axon devices provided to customers to secure long-term Evidence.com service contracts. In such circumstances, revenue related to the Axon devices recognized at the time of delivery is limited to the amount collected from the customer that is not contingent upon the delivery of future Evidence.com services. The Company recognizes the remaining allocated revenue related to subsidized Axon devices over the remaining period it provides the contracted Evidence.com services. 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 when the new product is delivered. Consideration related to future product purchases is determined at the inception of the arrangement using management’s best estimate of selling price. Management’s estimate is principally based on the current selling price for such products, with due evaluation of the impact of any expected product and pricing changes, which have historically had an immaterial influence on management’s best estimate of selling price. In 2015, The Company introduced the Officer Safety Plan (“OSP”) whereby a customer enters into a five year Evidence.com subscription that includes all of its standard advanced features along with unlimited storage. The OSP also includes a service plan that includes upgrades of (i) the Axon devices every 2.5 years and (ii) a TASER CEW at any point within the contract period. Upon entering into the OSP, customers also receive extended warranties on the Axon and CEW devices upon delivery to cover the contract periods as well as spare inventory units. Under this program the customer generally makes an initial purchase of Axon cameras and related accessories, and CEWs at inception along with annual installments for services and future hardware deliverables over the contract period. The Company records consideration received related to the future purchase as deferred revenue until all revenue recognition criteria are met, which is generally when the products or services are delivered. In 2016, the Company introduced the TASER 60 Plan ("TASER 60") whereby a customer typically enters into a five year CEW installment purchase arrangement. The TASER 60 plan also includes extended warranties on the CEW devices upon delivery covering the contract periods. Generally, the Company recognizes revenue for the amount allocated to the CEW at the time of sale for the amount of the customer receivable, net of imputed interest, and the amount allocated to the extended warranty is recognized over five years. Sales tax collected on sales is netted against government remittances and thus, recorded on a net basis. Training and professional service revenues are recorded as the services are 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 5 for further disclosures about 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 use of estimates, and is based on 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. f. Standard Warranties The Company warranties its CEWs, Axon cameras and certain related accessories 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 or other issue 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 condensed consolidated balance sheets. Changes in the Company’s estimated product warranty liabilities are as follows (in thousands): Six Months Ended June 30, 2016 2015 Balance, beginning of period $ 314 $ 675 Utilization of accrual (49 ) (200 ) Warranty expense 520 (19 ) Balance, end of period $ 785 $ 456 g. 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 June 30, 2016 and December 31, 2015 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 June 30, 2016 and December 31, 2015 was $2.7 million and $2.2 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, notes payable and accrued liabilities. Due to the short-term nature of these instruments, their fair values approximate their carrying values on the accompanying condensed consolidated balance sheets. h. Valuation of Goodwill, Intangibles and Long-lived Assets Management evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets and identifiable intangible assets may warrant revision or that the remaining balance of these assets may not be recoverable. Such circumstances 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 products are branded and marketed. In performing the 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. The Company recorded losses on disposal of intangible assets of $14,000 and $0.2 million during the six months ended June 30, 2016 and 2015 , respectively. i. Recently Issued Accounting Guidance In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). Subsequently, the FASB issued the following accounting standard updates related to Topic 606, Revenue Contracts with Customers: • ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) in May 2014. ASU 2014-09 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations. • ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ("ASU 2016-08") in March 2016. ASU 2016-08 does not change the core principle of revenue recognition in Topic 606 but clarifies the implementation guidance on principal versus agent considerations. • ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ("ASU 2016-10") in April 2016. ASU 2016-10 does not change the core principle of revenue recognition in Topic 606 but clarifies the implementation guidance on identifying performance obligations and the licensing • ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ("ASU 2016-12") in May 2016. ASU 2016-12 does not change the core principle of revenue recognition in Topic 606 but clarifies the implementation guidance on a few narrow areas and adds some practical expedients to the guidance. The amendments are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is still evaluating the methods of adoption as well as the impact the adoption of this guidance will have on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330) ("ASU 2016-02"). The amendments require that an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments are effective for the fiscal year beginning after December 15, 2016, including interim periods within that fiscal year. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company does not expect the adoption of this guidance to have any impact on its financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02") in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for the fiscal year beginning after December 15, 2018 (including interim periods within that year) using a modified retrospective approach and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of ASU 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends Accounting Standards Codification ("ASC") Topic 718, Compensation – Stock Compensation. ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within that fiscal year and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses ("ASU 2016-13"), which amends ASC 326. The new guidance differs from existing GAAP wherein previous objectives generally delayed recognition of credit losses until the loss was probable. ASU 2016-13 eliminates the probable initial recognition threshold and, instead, reflect an entity’s current estimate of all expected credit losses. The use of forecasted information is intended to incorporate more timely information in the estimate of expected credit loss. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2019, and interim periods within that fiscal year and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of ASU 2016-13 on its consolidated financial statements. j. Out-of-Period Adjustments During the preparation of the condensed consolidated financial statements for the quarter ended March 31, 2016, the Company identified certain transactions that were recorded in the first quarter of fiscal 2016 that should have been recorded in the fourth quarter of 2015. The transactions would have resulted in a reduction in income from operations for the year and quarter ended December 31, 2015 of $0.8 million . Of the $0.8 million , $0.4 million was for variable selling costs related to certain international sales contracts that were recorded and earned during the fourth quarter, $0.2 million related to a correction of the calculation related to bonus expense that should have been recorded during fiscal 2015, and the remainder was primarily attributable to operating expenses that were incurred but not accrued for as of December 31, 2015. The Company performed various quantitative and qualitative analyses and determined that these errors were not material to the results reported for the year and quarter ended December 31, 2015. The Company also determined that recording these entries as an out-of-period adjustment during the first quarter of 2016 is not expected to be material to the projected results for the full year ended December 31, 2016. |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 6 Months Ended |
Jun. 30, 2016 | |
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 June 30, 2016 and December 31, 2015 (in thousands): As of June 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short-Term Investments Long-Term Investments Cash $ 35,451 $ — $ — $ 35,451 $ 35,451 $ — $ — Level 1: Money market funds 260 — — 260 260 — — Corporate bonds 34,564 7 (15 ) 34,556 765 29,975 3,824 Subtotal 34,824 7 (15 ) 34,816 1,025 29,975 3,824 Level 2: State and municipal obligations 19,201 10 — 19,211 830 17,601 770 Certificates of deposit 2,135 — — 2,135 — 2,135 — Subtotal 21,336 10 — 21,346 830 19,736 770 Total $ 91,611 $ 17 $ (15 ) $ 91,613 $ 37,306 $ 49,711 $ 4,594 As of December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short-Term Investments Long-Term Investments Cash $ 57,137 $ — $ — $ 57,137 $ 57,137 $ — $ — Level 1: Money market funds 2,389 — — 2,389 2,389 — — Corporate bonds 36,406 — (70 ) 36,336 — 35,677 729 Subtotal 38,795 — (70 ) 38,725 2,389 35,677 729 Level 2: State and municipal obligations 19,002 11 (9 ) 19,004 — 12,000 7,002 Certificates of deposit 3,371 — — 3,371 — 2,577 794 Subtotal 22,373 11 (9 ) 22,375 — 14,577 7,796 Total $ 118,305 $ 11 $ (79 ) $ 118,237 $ 59,526 $ 50,254 $ 8,525 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 June 30, 2016 . The following table summarizes the amortized cost and fair value of the short-term and long-term investments held by the Company at June 30, 2016 by contractual maturity (in thousands): Amortized Cost Fair Value Due in less than one year $ 49,711 $ 49,709 Due after one year, through two years 4,594 4,598 Due after two years — — Total short-term and long-term investments $ 54,305 $ 54,307 |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
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 excess, obsolete or slow-moving inventories to their net realizable value. Inventories consisted of the following at June 30, 2016 and December 31, 2015 (in thousands): 2016 2015 Raw materials $ 11,124 $ 8,748 Work-in-process 74 105 Finished goods 10,738 6,910 Total inventory $ 21,936 $ 15,763 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the six months ended June 30, 2016 were as follows (in thousands): Balance, beginning of period $ 9,596 Purchase accounting adjustments (a) (349 ) Foreign currency translation adjustment (147 ) Balance, end of period $ 9,100 (a) Purchase accounting adjustments related to deferred tax liabilities for MediaSolv and Axon Public Safety U.K. LTD. There was no impact to the condensed consolidated statements of operations for these adjustments as a result of the adoption of ASU 2015-16, which was effective for the Company on January 1, 2016. Intangible assets (other than goodwill) consisted of the following (in thousands): June 30, 2016 December 31, 2015 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortized: Domain names 5 years $ 125 $ (120 ) $ 5 $ 125 $ (120 ) $ 5 Issued patents 4-15 years 1,882 (719 ) 1,163 1,866 (659 ) 1,207 Issued trademarks 3-11 years 616 (284 ) 332 603 (255 ) 348 Customer relationships 4-8 years 966 (168 ) 798 1,035 (93 ) 942 Non-compete agreements 3-4 years 454 (198 ) 256 464 (164 ) 300 Developed technology 7 years 3,470 (573 ) 2,897 3,470 (326 ) 3,144 Total amortized 7,513 (2,062 ) 5,451 7,563 (1,617 ) 5,946 Not amortized: TASER trademark 900 900 900 900 Patents and trademarks pending 877 877 742 742 Total not amortized 1,777 1,777 1,642 1,642 Total intangible assets $ 9,290 $ (2,062 ) $ 7,228 $ 9,205 $ (1,617 ) $ 7,588 Amortization expense relative to intangible assets for the three months ended June 30, 2016 and 2015 was approximately $0.2 million and $0.2 million , respectively. Estimated amortization for intangible assets with definitive lives for the remaining nine months of 2016 , the next five years ended December 31, and thereafter, is as follows (in thousands): 2016 (remaining six months) $ 468 2017 932 2018 920 2019 799 2020 735 2021 728 Thereafter 869 Total $ 5,451 |
Deferred Revenue
Deferred Revenue | 6 Months Ended |
Jun. 30, 2016 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenue | Deferred Revenue Deferred revenue consisted of the following (in thousands): June 30, 2016 December 31, 2015 Current Long-Term Total Current Long-Term Total Warranty: TASER Weapons $ 9,185 $ 14,991 $ 24,176 $ 7,278 $ 13,982 $ 21,260 Axon 3,031 2,623 5,654 2,332 2,344 4,676 12,216 17,614 29,830 9,610 16,326 25,936 Hardware: TASER Weapons 1,101 3,316 4,417 952 2,459 3,411 Axon 6,602 10,657 17,259 786 7,382 8,168 7,703 13,973 21,676 1,738 9,841 11,579 Axon Services 11,373 3,511 14,884 9,303 4,023 13,326 Other 376 — 376 200 — 200 Total $ 31,668 $ 35,098 $ 66,766 $ 20,851 $ 30,190 $ 51,041 June 30, 2016 December 31, 2015 Current Long-Term Total Current Long-Term Total TASER Weapons $ 10,662 $ 18,307 $ 28,969 $ 8,430 $ 16,441 $ 24,871 Axon 21,006 16,791 37,797 12,421 13,749 26,170 Total $ 31,668 $ 35,098 $ 66,766 $ 20,851 $ 30,190 $ 51,041 |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following at June 30, 2016 and December 31, 2015 (in thousands): 2016 2015 Accrued salaries and benefits $ 5,445 $ 3,637 Accrued judgments and settlements — 65 Accrued professional fees 286 718 Accrued warranty expense 785 314 Accrued income and other taxes 670 1,215 Other accrued liabilities 3,196 2,694 Accrued liabilities $ 10,382 $ 8,643 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Deferred Tax Assets Net deferred income tax assets at June 30, 2016 , include capitalized research and development costs, research and development tax credits, non-qualified stock-based compensation expense, deferred warranty revenue, warranty and inventory reserves, accrued vacation, and other items, partially offset by accelerated depreciation expense and intangible amortization that is not tax deductible. The Company’s total net deferred tax assets at June 30, 2016 were $15.6 million . In preparing the Company’s condensed consolidated financial statements, management assesses the likelihood that its deferred tax assets will be realized from future taxable income. In evaluating the Company’s ability to recover its deferred income tax assets, management considers all available positive and negative evidence, including its 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 tax assets will not be realized. Management exercises significant judgment in determining its provisions for income taxes, its deferred tax assets and liabilities, and its future taxable income for purposes of assessing its ability to utilize any future tax benefit from its deferred 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 June 30, 2016 , the Company continues to demonstrate three-year cumulative pre-tax income in the U.S. federal and Arizona tax jurisdictions; however, the Company's Arizona R&D Tax Credits start to expire in 2018 with a significant tranche with a gross value of $1.2 million expiring if not used by the end of 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 and has established a valuation allowance. The Company has completed research and development (“R&D”) tax credit studies which identified approximately $12.9 million in tax credits for federal, Arizona and California income tax purposes related to the 2003 through 2016 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 $3.5 million as of June 30, 2016 . In addition, management accrued approximately $0.1 million for estimated uncertain tax positions related to certain state income tax liabilities as of June 30, 2016 . The Company does not expect a significant increase or decrease in the total amount of unrecognized tax benefits within 12 months. Should the total unrecognized tax benefit of $3.6 million be recognized, the Company’s effective tax rate would be favorably impacted. Approximately $1.5 million of the unrecognized tax benefit associated with research and development credits has been netted against the research and development credit deferred tax asset. Effective Tax Rate The Company’s overall effective tax rate for the six months ended June 30, 2016 , after discrete period adjustments, was 37.3% . Before discrete adjustments the tax rate was 37.4% , which is less than the statutory rate primarily due to the impact of income projected in certain foreign jurisdictions and the domestic production activities deduction, partially offset by state taxes and non-deductible expenses for items such as ISO stock option expense, meals and entertainment, and lobbying fees. The Company has completed the full implementation of its new international structure, which began in 2015. In accounting for the income tax effects of this new structure, the Company has recognized income tax expense in the current quarter based on the results it expects for the full year. Actual results could be different, impacting the Company’s income tax expense in future quarters. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity In May 2016, the Company’s stockholders approved a new stock incentive plan authorizing an additional 2.0 million shares, plus remaining available shares under a prior plan for issuance under the new plan. Combined with the legacy stock incentive plans, there are approximately 2.9 million shares available for grant as of June 30, 2016 . Performance-based stock awards The Company has issued performance-based stock options and performance-based restricted stock units ("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-based vesting 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. Restricted Stock Units The following table summarizes RSU activity for the six months ended June 30, 2016 (number of units and aggregate intrinsic value in thousands): Number of Units Weighted Average Grant-Date Fair Value Aggregate Units outstanding, beginning of year 1,139 $ 19.30 Granted 435 16.48 Released (281 ) 15.92 Forfeited (70 ) 21.13 Units outstanding, end of period 1,223 18.97 $ 30,432 Aggregate intrinsic value represents the Company’s closing stock price on the last trading day of the period, which was $24.88 per share, multiplied by the number of RSUs outstanding. As of June 30, 2016 , there was $18.7 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 2.54 years . RSUs are released when vesting requirements are met. During the six months ended June 30, 2016 , the Company granted approximately 0.1 million performance-based RSUs, which are included in the table above. As of June 30, 2016 , the performance criteria had only been met for 2,000 of the 0.2 million performance-based RSUs outstanding. Certain of the performance-based RSUs granted in 2016 and 2015 contain provisions whereby the amount of RSUs that ultimately vest is dependent upon the level of achievement of performance metrics. The amount of RSUs included in the table above related to such grants is the target level, which is the Company's best estimate of the amount of RSUs that will vest. The maximum additional number of performance-based RSUs that could be earned is 0.2 million , which are not included in the table above. Certain RSUs that vested in the six months ended June 30, 2016 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 58,300 and had a value of approximately $1.0 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. Stock Option Activity The following table summarizes stock option activity for the six months ended June 30, 2016 (number of units and aggregate intrinsic value in thousands): Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Options outstanding, beginning of year 1,103 $ 5.37 Granted — — Exercised (45 ) 4.91 Expired / terminated — — Options outstanding, end of period 1,058 5.39 2.79 $ 20,613 Options exercisable, end of period 1,027 5.41 2.80 19,996 Options expected to vest, end of period 25 4.75 2.48 503 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 $24.88 on June 30, 2016 . The intrinsic value of options exercised for the six months ended June 30, 2016 and 2015 was $0.8 million and $13.2 million , respectively. Options expected to vest are presented net of forfeitures. As of June 30, 2016 , total options outstanding includes approximately 0.2 million performance-based stock options, of which approximately 30,600 were unvested and 25,000 expected to vest. Stock-based Compensation Expense The estimated fair value of stock-based awards is amortized to expense on a straight-line basis over the 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. The following table summarizes the composition of stock stock-based compensation for the three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Cost of products sold and services delivered $ 70 $ 89 $ 170 $ 159 Sales, general and administrative expenses 1,459 925 2,849 1,858 Research and development expenses 777 665 1,507 1,206 Total stock-based compensation $ 2,306 $ 1,679 $ 4,526 $ 3,223 Stock Repurchase Plan In February 2016, the Company announced that TASER’s Board of Directors authorized a stock repurchase program to acquire up to $50.0 million of the Company’s outstanding common stock subject to stock market conditions and corporate considerations. During the three months ended June 30, 2016 , the Company purchased, under a Rule 10b5-1 plan, approximately 1.3 million common shares under the program for a total cost of approximately $24.8 million , or a weighted average cost of $18.92 per share. The weighted average cost includes the average price paid per share of $18.89 , plus applicable administrative costs for the transaction. During the six months ended June 30, 2016 , the Company purchased, under the Rule 10b5-1 plan, approximately 1.8 million common shares for a total cost of approximately $33.8 million , or a weighted average cost of $18.90 per share. The weighted average cost includes the average price paid per share of $18.87 , plus applicable administrative costs for the transaction. No such purchases were made during the six months ended June 31, 2015. As of June 30, 2016 , $16.2 million remains available under the plan for future purchases. |
Line of Credit
Line of Credit | 6 Months Ended |
Jun. 30, 2016 | |
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 both June 30, 2016 and December 31, 2015 , there were no borrowings under the line. As of June 30, 2016 , the Company had letters of credit outstanding of approximately $3.0 million under the facility and available borrowing of approximately $7.0 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, 2017 , 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 maximum leverage ratio and minimum 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 June 30, 2016 , the Company’s leverage ratio was 0.80 :1 and its fixed charge coverage ratio was 2.24 :1. Accordingly, the Company was in compliance with these covenants. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Product Litigation The Company is currently named as a defendant in nine 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. 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. One recent lawsuit alleges fraud and misrepresentation and is seeking punitive damages in addition to compensatory damages. The information throughout this note is current through the date of these financial statements. 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 the Company's litigation strategy and the confidentiality agreements that are executed in the event of a settlement, it 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 second quarter of 2016 , product liability cases have been reduced from 55 active to nine active cases. 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 Served Jurisdiction Claim Type Status Derbyshire Nov-09 Ontario, Canada Superior Court of Justice Officer Injury Discovery Phase Thompson Mar-10 11th Judicial Circuit Court, Miami-Dade County, FL Wrongful Death Discovery Phase Doan Apr-10 The Queen's Bench Alberta, Red Deer Judicial Dist. Wrongful Death Discovery Phase Shymko Dec-10 The Queen's Bench, Winnipeg Centre, Manitoba Wrongful Death Pleading Phase Ramsey Jan-12 12th Judicial Circuit Court, Broward County, FL Wrongful Death Discovery Phase Firman Apr-12 Ontario, Canada Superior Court of Justice Wrongful Death Pleading Phase Schrock Sep-14 San Bernardino County Superior Court, CA Wrongful Death Motion of Summary Judgment Granted on all claims except negligent design and manufacture, subject to repleading by Plaintiff. Plaintiff filed an amended complaint for negligent design claims as well as a Petition for Writ of Mandate or Prohibition Petition from the Court; which writ was summarily denied. Llach Sep-15 11th Judicial Circuit Court, Miami-Dade County, FL Wrongful Death Discovery Phase Bennett Sep-15 11th Judicial Circuit Court, Miami-Dade County, FL Wrongful Death Discovery Phase There are no product litigation matters in which the Company is involved that are currently on appeal. There were no cases dismissed or judgment entered during the second quarter of 2016 and through the date of these financial statements. 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 Start Date Policy End Date Insurance Coverage Deductible Amount Defense Costs Covered Remaining Insurance Coverage Active Cases and Cases on Appeal 2004 12/1/2003 12/1/2004 $ 2.0 $ 0.1 N $ 2.0 n/a 2005 12/1/2004 12/1/2005 10.0 0.3 Y 7.0 n/a 2006 12/1/2005 12/1/2006 10.0 0.3 Y 3.7 n/a 2007 12/1/2006 12/1/2007 10.0 0.3 Y 8.0 n/a 2008 12/1/2007 12/15/2008 10.0 0.5 Y — n/a 2009 12/15/2008 12/15/2009 10.0 1.0 N 10.0 Derbyshire 2010 12/15/2009 12/15/2010 10.0 1.0 N 10.0 Thompson, Shymko, Doan 2011 12/15/2010 12/15/2011 10.0 1.0 N 10.0 n/a Jan-Jun 2012 12/15/2011 6/25/2012 7.0 1.0 N 7.0 Ramsey, Firman Jul-Dec 2012 6/25/2012 12/15/2012 12.0 1.0 N 12.0 n/a 2013 12/15/2012 12/15/2013 12.0 1.0 N 12.0 n/a 2014 12/15/2013 12/15/2014 11.0 4.0 N 11.0 Schrock 2015 12/15/2014 12/15/2015 10.0 5.0 N 10.0 Llach, Bennett 2016 12/15/2015 12/15/2016 10.0 5.0 N 10.0 n/a Other Litigation In November, 2015 the Company filed a complaint against Phazzer Electronics Inc. and Sang Min International Co. Ltd. for patent infringement, trademark infringement and false advertising. Defendant Phazzer has filed a motion to dismiss. This litigation is in the motion/discovery phase. In February, 2016 the Company was served with a first amended complaint filed by Digital Ally in the Federal District Court for the District of Kansas alleging patent infringement, commercial bribery, contracts, combinations and conspiracies in restraint of trade and unfair or anti-competitive acts and practices. In March 2016 the Company was served with a second amended complaint with similar allegations. The second amended complaint seeks a judgment of infringement, monetary damages, a permanent injunction, punitive damages and attorneys’ fees and costs. The Company believes the second amended complaint is frivolous and the Company will vigorously defend this litigation. The Company has filed a motion to dismiss the claims involving commercial bribery, contracts, combinations and conspiracies in restraint of trade and unfair or anti-competitive acts and practices. This litigation is in the discovery phase. In April, 2016 the Company was served with a notice of arbitration claim filed by Antoine di Zazzo, the Company’s former distributor in France, for commissions allegedly owed Mr. di Zazzo. The arbitration claim was filed with the International Court of Arbitration of the International Chamber of Commerce in Paris, France, and the amount that is claimed in controversy is approximately $0.6 million . The Company’s records reflect that all commissions that were due Mr. di Zazzo under his contract were paid or offered to him and the Company will vigorously defend this arbitration claim. 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 the Company determines that it is not at fault or it disagrees with the damages or relief demanded, the Company vigorously defends any lawsuit filed against the Company. In certain legal matters, the Company records a liability when losses are deemed probable and reasonably estimable. In evaluating matters for accrual and disclosure purposes, the Company takes 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, the availability of insurance, and the severity of any potential loss. the Company reevaluates and updates our accruals as matters progress over time. Based on the Company's assessment of outstanding litigation and claims as of June 30, 2016 , the Company has determined that it is not reasonably possible that these lawsuits will individually, or in the aggregate, materially affect its 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 its 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. Off-Balance Sheet Arrangements Under certain circumstances, the Company uses letters of credit and surety bonds to guarantee its performance under various contracts, principally in connection with the installation and integration of its Axon cameras and related technologies. Certain of the Company's letters of credit contracts and surety bonds have stated expiration dates with others being released as the contractual performance terms are completed. At June 30, 2016 , the Company had outstanding letters of credit of approximately $3.0 million . Of that amount, $2.7 million is expected to expire in May 2017 and $0.3 million is expected to expire in January 2017. Additionally, the Company had approximately $4.7 million of outstanding surety bonds at June 30, 2016 , with $2.3 million expiring in April 2021, $2.2 million expiring in July 2018 and the remaining $0.2 million expected to be released in August 2016. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company engages Dr. Mark Kroll, a member of the Board of Directors, to provide consulting services. The expenses related to these services were approximately $69,000 and $65,000 for the three months ended June 30, 2016 and 2015 , respectively, and $97,000 and $112,000 for the six months ended June 30, 2016 and 2015 , respectively. At June 30, 2016 and December 31, 2015 , the Company had liabilities of approximately $21,000 and $31,000 , respectively, related to these services. The Company subscribes to a mobile collaboration software suite co-founded and managed by Bret Taylor, a member of the Company's Board of Directors. For the period of July 1, 2015 through June 30, 2016, the Company licensed this software for a fee of approximately $20,000 per quarter. As of June 30, 2016 the Company had no prepaid costs related to the annual subscription, and as of December 31, 2015 had prepaid costs of approximately $36,000 . On July 1, 2016, the Company entered into an annual subscription, paid in advance, for approximately $120,000 . In connection with the acquisition of Tactical Safety Responses Limited (Note 14), the Company assumed two long-term non-cancellable operating leases for business premises with the former owners, one of whom is an employee of the Company. The leases have an average remaining contractual term of approximately 11 years and require aggregate annual rental payments of approximately $45,000 . Prepaid rental payments as of June 30, 2016 were negligible. |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | 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 condensed 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 to the 401(k) plan are based on the level of employee contributions and are immediately vested. The Company’s matching contributions to the 401(k) plan for each of the three months ended June 30, 2016 and 2015 , were approximately $0.4 million and $0.3 million , respectively. The Company expects to make contributions to the non-qualified deferred compensation plan related to the three months ended June 30, 2016 , of approximately $6,000 . Future matching or profit sharing contributions to the plans are at the Company’s sole discretion. |
Segment Data
Segment Data | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Data | Segment Data The Company’s operations are comprised of two reportable segments: the manufacture and sale of CEWs, accessories and other products and services (the “TASER Weapons” segment); and the video business, which includes the TASER Cam, Axon products, Evidence.com, and MediaSolv (the “Axon” segment). The Company includes only revenues and costs 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 Axon sales team, Axon product management expenses, 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, only limited asset information is provided in the following tables. Information relative to the Company’s reportable segments is as follows (in thousands): Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 TASER Weapons Axon Total TASER Weapons Axon Total Product sales $ 45,536 $ 8,331 $ 53,867 $ 37,825 $ 5,930 $ 43,755 Service revenue — 4,889 4,889 — 2,958 2,958 Net sales 45,536 13,220 58,756 37,825 8,888 46,713 Cost of products sold 14,489 5,565 20,054 11,278 3,716 14,994 Cost of services delivered — 1,403 1,403 — 996 996 Gross margin 31,047 6,252 37,299 26,547 4,176 30,723 Sales, general and administrative 14,684 9,695 24,379 10,823 4,620 15,443 Research and development 1,245 5,465 6,710 1,077 4,829 5,906 Income (loss) from operations $ 15,118 $ (8,908 ) $ 6,210 $ 14,647 $ (5,273 ) $ 9,374 Purchase of property and equipment $ 594 $ 90 $ 684 $ 188 $ 1,158 $ 1,346 Purchase of intangible assets 51 36 87 35 116 151 Purchase of property and equipment and intangible assets in connection with business acquisition — — — — 9,694 9,694 Depreciation and amortization 560 382 942 556 189 745 Six Months Ended June 30, 2016 Six Months Ended June 30, 2015 TASER Axon Total TASER Axon Total Product sales $ 91,370 $ 13,172 $ 104,542 $ 76,166 $ 10,432 $ 86,598 Service revenue — 9,744 9,744 — 4,877 4,877 Net sales 91,370 22,916 114,286 76,166 15,309 91,475 Cost of products sold 28,566 8,943 37,509 22,359 6,864 29,223 Cost of services delivered — 2,576 2,576 — 1,661 1,661 Gross margin 62,804 11,397 74,201 53,807 6,784 60,591 Sales, general and administrative 29,956 19,256 49,212 21,528 8,480 30,008 Research and development 2,365 11,272 13,637 2,267 8,197 10,464 Income (loss) from operations $ 30,483 $ (19,131 ) $ 11,352 $ 30,012 $ (9,893 ) $ 20,119 Purchase of property and equipment $ 1,665 $ 299 $ 1,964 $ 535 $ 1,235 $ 1,770 Purchase of intangible assets 113 72 185 81 120 201 Purchase of property and equipment and intangible assets in connection with business acquisition — — — — 9,694 9,694 Depreciation and amortization 1,132 711 1,843 1,086 276 1,362 |
Business Acquisitions
Business Acquisitions | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions MediaSolv Solutions Corporation On May 5, 2015, the Company acquired all of the outstanding capital stock of MediaSolv Solutions Corporation, a Delaware corporation for a total purchase price of $8.8 million , net of $0.1 million of cash acquired. MediaSolv primarily provides solutions for interview room video, closed-circuit television ("CCTV") and on-premise digital evidence management. These products connect with the Company's Axon on-officer cameras and, in some cases, its Evidence.com cloud platform, further enabling law enforcement to unify existing silos of digital media and evidence into a seamless workflow from capture to the courtroom. The Company believes the acquisition will continue to allow the Company to leverage MediaSolv’s existing network and relationships to further strengthen its position in the market. The purchase price consisted primarily of cash, net of cash acquired and working capital adjustments, of $7.8 million and contingent consideration of $1.0 million representing potential earn-outs to former stockholders based on predetermined future financial metrics. The Company also agreed to additional earn-out provisions and compensation adjustments totaling approximately $4.0 million based, in part, on predefined future financial metrics. The additional earn-outs were not included as part of the purchase price and will be expensed as compensation in the period earned. During the first quarter of 2016, the $1.0 million of earn-outs to former stockholders were earned in full and were paid during the second quarter of 2016. During the three and six months ended June 30, 2016, the Company recorded $0.1 million and $1.0 million , respectively, of earn-outs that were recorded as commission expense, and as of June 30, 2016 , $0.8 million of earn-outs were recorded as accrued liabilities within the accompanying condensed consolidated financial statements. The major classes of assets and liabilities to which the Company allocated the purchase price were as follows (in thousands): Accounts receivable and other current assets $ 590 Inventory 35 Property and equipment 53 Intangible assets 4,145 Goodwill 5,496 Accounts payable and accrued liabilities (697 ) Deferred revenue (111 ) Deferred income tax liabilities, net (688 ) Total purchase price $ 8,823 The Company has assigned the goodwill to the Axon segment. Other identifiable definite lived intangible assets were assigned a total weighted average amortization period of 6.5 years . MediaSolv has been included in the Company's consolidated results of operations subsequent to the acquisition date. Pro forma results of operations for MediaSolv have not been presented because they are not material to the consolidated results of operations. In connection with the acquisition, the Company incurred and expensed costs of approximately $0.2 million , which included legal, accounting and other third-party expenses related to the transaction. Tactical Safety Responses Limited On July 16, 2015, TASER International B.V., a wholly owned subsidiary of the Company, acquired all of the outstanding capital stock of Tactical Safety Responses Limited ("TSR"), a United Kingdom ("UK") corporation. TSR was the Company's licensed distributor of TASER CEWs and Axon cameras and related accessories in the UK. The acquired entity operates under the name Axon Public Safety UK. The acquisition is intended to help expand the Company's growth across the UK by growing its in-country sales and support team. The total purchase was $3.3 million consisting of $4.0 million cash at close, net of $0.7 million of cash acquired. The Company also agreed to additional amounts in the form of earn-outs, subject to the achievement of predefined performance metrics. The earn-outs were not included as part of the purchase price and will be expensed as compensation in the period earned. During the six months ended June 30, 2016, no amounts were earned under these earn-out provisions. The Company's purchase price allocation is preliminary and subject to revision as more detailed analyses are completed and additional information about fair value of assets and liabilities become available, including additional information relating to tax matters and finalization of the valuation of identifiable intangible assets. The major classes of assets and liabilities to which the Company has allocated the purchase price, on a preliminary basis, are as follows (in thousands): Accounts receivable $ 726 Inventory 497 Property and equipment 583 Other Assets 20 Intangible assets 881 Goodwill 1,612 Accounts payable and accrued liabilities (207 ) Notes payable (169 ) Income tax liabilities (609 ) Total purchase price $ 3,334 The Company has assigned the goodwill to the consolidated entity. Other identifiable definite lived intangible assets were assigned a total weighted average amortization period of 7.0 years. TSR has been included in the Company's consolidated results of operations subsequent to the acquisition date. Pro forma results of operations for TSR have not been presented because they are not material to the consolidated results of operations. In connection with the acquisition, the Company incurred and expensed costs of approximately $0.1 million , which included legal, accounting and other third-party expenses related to the transaction. |
Organization and Summary of S20
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information related to the Company’s organization, significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) has been condensed or omitted. The accounting policies followed in the preparation of these unaudited condensed consolidated financial statements are consistent with those followed in the Company’s annual consolidated financial statements for the year ended December 31, 2015 , as filed on Form 10-K. In the opinion of management, these unaudited condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary to fairly state the Company’s financial position, results of operations and cash flows for the periods presented and the presentations and disclosures herein are adequate when read in conjunction with the Company’s Form 10-K for the year ended December 31, 2015 . The results of operations for the three and six months ended June 30, 2016 and 2015 are not necessarily indicative of the results to be expected for the full year (or any other period). Significant estimates and assumptions in these unaudited condensed consolidated financial statements include: • product warranty reserves, • inventory valuation, • 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. |
Segment Information | Segment Information The Company is comprised of two reportable segments: the manufacture and sale of CEWs, accessories and other products and services (the “TASER Weapons” segment); and the video business which includes the TASER Cam, Axon cameras and related accessories, Evidence.com and MediaSolv (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 13. |
Geographic Information and Major Customers | 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. |
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. |
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 CEWs, Axon cameras, corresponding extended warranties, and related accessories such as E-docks, cartridges and batteries, among others, and (2) subscription to the Company's Evidence.com software as a service ("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 professional services 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. Contractual arrangements may contain explicit customer acceptance provisions, and under such arrangements, the Company defers recognition of revenue until formal customer acceptance is received. 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 majority of the Company’s allocations of arrangement consideration under multiple element arrangements are performed using vendor-specific objective evidence by utilizing prices charged to customers for deliverables when sold separately. The Company’s multiple element arrangements may include future CEWs and/or Axon devices to be delivered at defined points within a multi-year contract, and in those arrangements, the Company allocates total arrangement consideration over the life of the multi-year contract to future deliverables using management’s best estimate of selling price. The Company has not utilized third party evidence of selling price. The Company offers the right to purchase extended warranties that include additional services and coverage beyond the standard 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 and related accessories have stand-alone value to the customer and 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. Generally, 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. At times the Company subsidizes the cost of Axon devices provided to customers to secure long-term Evidence.com service contracts. In such circumstances, revenue related to the Axon devices recognized at the time of delivery is limited to the amount collected from the customer that is not contingent upon the delivery of future Evidence.com services. The Company recognizes the remaining allocated revenue related to subsidized Axon devices over the remaining period it provides the contracted Evidence.com services. 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 when the new product is delivered. Consideration related to future product purchases is determined at the inception of the arrangement using management’s best estimate of selling price. Management’s estimate is principally based on the current selling price for such products, with due evaluation of the impact of any expected product and pricing changes, which have historically had an immaterial influence on management’s best estimate of selling price. In 2015, The Company introduced the Officer Safety Plan (“OSP”) whereby a customer enters into a five year Evidence.com subscription that includes all of its standard advanced features along with unlimited storage. The OSP also includes a service plan that includes upgrades of (i) the Axon devices every 2.5 years and (ii) a TASER CEW at any point within the contract period. Upon entering into the OSP, customers also receive extended warranties on the Axon and CEW devices upon delivery to cover the contract periods as well as spare inventory units. Under this program the customer generally makes an initial purchase of Axon cameras and related accessories, and CEWs at inception along with annual installments for services and future hardware deliverables over the contract period. The Company records consideration received related to the future purchase as deferred revenue until all revenue recognition criteria are met, which is generally when the products or services are delivered. In 2016, the Company introduced the TASER 60 Plan ("TASER 60") whereby a customer typically enters into a five year CEW installment purchase arrangement. The TASER 60 plan also includes extended warranties on the CEW devices upon delivery covering the contract periods. Generally, the Company recognizes revenue for the amount allocated to the CEW at the time of sale for the amount of the customer receivable, net of imputed interest, and the amount allocated to the extended warranty is recognized over five years. Sales tax collected on sales is netted against government remittances and thus, recorded on a net basis. Training and professional service revenues are recorded as the services are 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 5 for further disclosures about 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 use of estimates, and is based on 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. |
Standard Warranties | Standard Warranties The Company warranties its CEWs, Axon cameras and certain related accessories 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 or other issue 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 condensed consolidated balance sheets. |
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 June 30, 2016 and December 31, 2015 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 June 30, 2016 and December 31, 2015 was $2.7 million and $2.2 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, notes payable and accrued liabilities. Due to the short-term nature of these instruments, their fair values approximate their carrying values on the accompanying condensed consolidated balance sheets. |
Valuation of Goodwill, Intangibles and Long-lived Assets | Valuation of Goodwill, Intangibles and Long-lived Assets Management evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets and identifiable intangible assets may warrant revision or that the remaining balance of these assets may not be recoverable. Such circumstances 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 products are branded and marketed. In performing the 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. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). Subsequently, the FASB issued the following accounting standard updates related to Topic 606, Revenue Contracts with Customers: • ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) in May 2014. ASU 2014-09 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations. • ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ("ASU 2016-08") in March 2016. ASU 2016-08 does not change the core principle of revenue recognition in Topic 606 but clarifies the implementation guidance on principal versus agent considerations. • ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ("ASU 2016-10") in April 2016. ASU 2016-10 does not change the core principle of revenue recognition in Topic 606 but clarifies the implementation guidance on identifying performance obligations and the licensing • ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ("ASU 2016-12") in May 2016. ASU 2016-12 does not change the core principle of revenue recognition in Topic 606 but clarifies the implementation guidance on a few narrow areas and adds some practical expedients to the guidance. The amendments are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is still evaluating the methods of adoption as well as the impact the adoption of this guidance will have on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330) ("ASU 2016-02"). The amendments require that an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments are effective for the fiscal year beginning after December 15, 2016, including interim periods within that fiscal year. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company does not expect the adoption of this guidance to have any impact on its financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02") in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for the fiscal year beginning after December 15, 2018 (including interim periods within that year) using a modified retrospective approach and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of ASU 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends Accounting Standards Codification ("ASC") Topic 718, Compensation – Stock Compensation. ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within that fiscal year and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses ("ASU 2016-13"), which amends ASC 326. The new guidance differs from existing GAAP wherein previous objectives generally delayed recognition of credit losses until the loss was probable. ASU 2016-13 eliminates the probable initial recognition threshold and, instead, reflect an entity’s current estimate of all expected credit losses. The use of forecasted information is intended to incorporate more timely information in the estimate of expected credit loss. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2019, and interim periods within that fiscal year and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of ASU 2016-13 on its consolidated financial statements. |
Organization and Summary of S21
Organization and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Net Sales by Geographic Area | For the three and six months ended June 30, 2016 and 2015 , net sales by geographic area were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 United States $ 52,219 88.9 % $ 38,695 82.8 % $ 94,687 82.9 % $ 74,196 81.1 % Other Countries 6,537 11.1 8,018 17.2 19,599 17.1 17,279 18.9 Total $ 58,756 100.0 % $ 46,713 100.0 % $ 114,286 100.0 % $ 91,475 100.0 % |
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): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Numerator for basic and diluted earnings per share: Net income $ 3,650 $ 6,103 $ 7,113 $ 13,308 Denominator: Weighted average shares outstanding - basic 52,480 53,644 53,087 53,407 Dilutive effect of stock-based awards 809 1,156 803 1,255 Diluted weighted average shares outstanding 53,289 54,800 53,890 54,662 Anti-dilutive stock-based awards excluded 369 153 520 173 Net income per common share: Basic $ 0.07 $ 0.11 $ 0.13 $ 0.25 Diluted $ 0.07 $ 0.11 $ 0.13 $ 0.24 |
Summary of Changes in Estimated Product Warranty Liabilities | Changes in the Company’s estimated product warranty liabilities are as follows (in thousands): Six Months Ended June 30, 2016 2015 Balance, beginning of period $ 314 $ 675 Utilization of accrual (49 ) (200 ) Warranty expense 520 (19 ) Balance, end of period $ 785 $ 456 |
Cash, Cash Equivalents and In22
Cash, Cash Equivalents and Investments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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 June 30, 2016 and December 31, 2015 (in thousands): As of June 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short-Term Investments Long-Term Investments Cash $ 35,451 $ — $ — $ 35,451 $ 35,451 $ — $ — Level 1: Money market funds 260 — — 260 260 — — Corporate bonds 34,564 7 (15 ) 34,556 765 29,975 3,824 Subtotal 34,824 7 (15 ) 34,816 1,025 29,975 3,824 Level 2: State and municipal obligations 19,201 10 — 19,211 830 17,601 770 Certificates of deposit 2,135 — — 2,135 — 2,135 — Subtotal 21,336 10 — 21,346 830 19,736 770 Total $ 91,611 $ 17 $ (15 ) $ 91,613 $ 37,306 $ 49,711 $ 4,594 As of December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short-Term Investments Long-Term Investments Cash $ 57,137 $ — $ — $ 57,137 $ 57,137 $ — $ — Level 1: Money market funds 2,389 — — 2,389 2,389 — — Corporate bonds 36,406 — (70 ) 36,336 — 35,677 729 Subtotal 38,795 — (70 ) 38,725 2,389 35,677 729 Level 2: State and municipal obligations 19,002 11 (9 ) 19,004 — 12,000 7,002 Certificates of deposit 3,371 — — 3,371 — 2,577 794 Subtotal 22,373 11 (9 ) 22,375 — 14,577 7,796 Total $ 118,305 $ 11 $ (79 ) $ 118,237 $ 59,526 $ 50,254 $ 8,525 |
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 June 30, 2016 by contractual maturity (in thousands): Amortized Cost Fair Value Due in less than one year $ 49,711 $ 49,709 Due after one year, through two years 4,594 4,598 Due after two years — — Total short-term and long-term investments $ 54,305 $ 54,307 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventories consisted of the following at June 30, 2016 and December 31, 2015 (in thousands): 2016 2015 Raw materials $ 11,124 $ 8,748 Work-in-process 74 105 Finished goods 10,738 6,910 Total inventory $ 21,936 $ 15,763 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the six months ended June 30, 2016 were as follows (in thousands): Balance, beginning of period $ 9,596 Purchase accounting adjustments (a) (349 ) Foreign currency translation adjustment (147 ) Balance, end of period $ 9,100 (a) Purchase accounting adjustments related to deferred tax liabilities for MediaSolv and Axon Public Safety U.K. LTD. There was no impact to the condensed consolidated statements of operations for these adjustments as a result of the adoption of ASU 2015-16, which was effective for the Company on January 1, 2016. |
Intangible Assets Other than goodwill | Intangible assets (other than goodwill) consisted of the following (in thousands): June 30, 2016 December 31, 2015 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortized: Domain names 5 years $ 125 $ (120 ) $ 5 $ 125 $ (120 ) $ 5 Issued patents 4-15 years 1,882 (719 ) 1,163 1,866 (659 ) 1,207 Issued trademarks 3-11 years 616 (284 ) 332 603 (255 ) 348 Customer relationships 4-8 years 966 (168 ) 798 1,035 (93 ) 942 Non-compete agreements 3-4 years 454 (198 ) 256 464 (164 ) 300 Developed technology 7 years 3,470 (573 ) 2,897 3,470 (326 ) 3,144 Total amortized 7,513 (2,062 ) 5,451 7,563 (1,617 ) 5,946 Not amortized: TASER trademark 900 900 900 900 Patents and trademarks pending 877 877 742 742 Total not amortized 1,777 1,777 1,642 1,642 Total intangible assets $ 9,290 $ (2,062 ) $ 7,228 $ 9,205 $ (1,617 ) $ 7,588 |
Estimated Amortization Expense of Intangible Assets | Estimated amortization for intangible assets with definitive lives for the remaining nine months of 2016 , the next five years ended December 31, and thereafter, is as follows (in thousands): 2016 (remaining six months) $ 468 2017 932 2018 920 2019 799 2020 735 2021 728 Thereafter 869 Total $ 5,451 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Deferred Revenue Disclosure [Abstract] | |
Summary of Deferred Revenue | Deferred revenue consisted of the following (in thousands): June 30, 2016 December 31, 2015 Current Long-Term Total Current Long-Term Total Warranty: TASER Weapons $ 9,185 $ 14,991 $ 24,176 $ 7,278 $ 13,982 $ 21,260 Axon 3,031 2,623 5,654 2,332 2,344 4,676 12,216 17,614 29,830 9,610 16,326 25,936 Hardware: TASER Weapons 1,101 3,316 4,417 952 2,459 3,411 Axon 6,602 10,657 17,259 786 7,382 8,168 7,703 13,973 21,676 1,738 9,841 11,579 Axon Services 11,373 3,511 14,884 9,303 4,023 13,326 Other 376 — 376 200 — 200 Total $ 31,668 $ 35,098 $ 66,766 $ 20,851 $ 30,190 $ 51,041 June 30, 2016 December 31, 2015 Current Long-Term Total Current Long-Term Total TASER Weapons $ 10,662 $ 18,307 $ 28,969 $ 8,430 $ 16,441 $ 24,871 Axon 21,006 16,791 37,797 12,421 13,749 26,170 Total $ 31,668 $ 35,098 $ 66,766 $ 20,851 $ 30,190 $ 51,041 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued liabilities consisted of the following at June 30, 2016 and December 31, 2015 (in thousands): 2016 2015 Accrued salaries and benefits $ 5,445 $ 3,637 Accrued judgments and settlements — 65 Accrued professional fees 286 718 Accrued warranty expense 785 314 Accrued income and other taxes 670 1,215 Other accrued liabilities 3,196 2,694 Accrued liabilities $ 10,382 $ 8,643 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Summary of Restricted Stock Unit Activity | The following table summarizes RSU activity for the six months ended June 30, 2016 (number of units and aggregate intrinsic value in thousands): Number of Units Weighted Average Grant-Date Fair Value Aggregate Units outstanding, beginning of year 1,139 $ 19.30 Granted 435 16.48 Released (281 ) 15.92 Forfeited (70 ) 21.13 Units outstanding, end of period 1,223 18.97 $ 30,432 |
Summary of the Company's Stock Options Activity | The following table summarizes stock option activity for the six months ended June 30, 2016 (number of units and aggregate intrinsic value in thousands): Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Options outstanding, beginning of year 1,103 $ 5.37 Granted — — Exercised (45 ) 4.91 Expired / terminated — — Options outstanding, end of period 1,058 5.39 2.79 $ 20,613 Options exercisable, end of period 1,027 5.41 2.80 19,996 Options expected to vest, end of period 25 4.75 2.48 503 |
Reported Share-Based Compensation | The following table summarizes the composition of stock stock-based compensation for the three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Cost of products sold and services delivered $ 70 $ 89 $ 170 $ 159 Sales, general and administrative expenses 1,459 925 2,849 1,858 Research and development expenses 777 665 1,507 1,206 Total stock-based compensation $ 2,306 $ 1,679 $ 4,526 $ 3,223 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
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 Served Jurisdiction Claim Type Status Derbyshire Nov-09 Ontario, Canada Superior Court of Justice Officer Injury Discovery Phase Thompson Mar-10 11th Judicial Circuit Court, Miami-Dade County, FL Wrongful Death Discovery Phase Doan Apr-10 The Queen's Bench Alberta, Red Deer Judicial Dist. Wrongful Death Discovery Phase Shymko Dec-10 The Queen's Bench, Winnipeg Centre, Manitoba Wrongful Death Pleading Phase Ramsey Jan-12 12th Judicial Circuit Court, Broward County, FL Wrongful Death Discovery Phase Firman Apr-12 Ontario, Canada Superior Court of Justice Wrongful Death Pleading Phase Schrock Sep-14 San Bernardino County Superior Court, CA Wrongful Death Motion of Summary Judgment Granted on all claims except negligent design and manufacture, subject to repleading by Plaintiff. Plaintiff filed an amended complaint for negligent design claims as well as a Petition for Writ of Mandate or Prohibition Petition from the Court; which writ was summarily denied. Llach Sep-15 11th Judicial Circuit Court, Miami-Dade County, FL Wrongful Death Discovery Phase Bennett Sep-15 11th Judicial Circuit Court, Miami-Dade County, FL Wrongful Death Discovery Phase |
Information Regarding the Company's Insurance Coverage | 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 Start Date Policy End Date Insurance Coverage Deductible Amount Defense Costs Covered Remaining Insurance Coverage Active Cases and Cases on Appeal 2004 12/1/2003 12/1/2004 $ 2.0 $ 0.1 N $ 2.0 n/a 2005 12/1/2004 12/1/2005 10.0 0.3 Y 7.0 n/a 2006 12/1/2005 12/1/2006 10.0 0.3 Y 3.7 n/a 2007 12/1/2006 12/1/2007 10.0 0.3 Y 8.0 n/a 2008 12/1/2007 12/15/2008 10.0 0.5 Y — n/a 2009 12/15/2008 12/15/2009 10.0 1.0 N 10.0 Derbyshire 2010 12/15/2009 12/15/2010 10.0 1.0 N 10.0 Thompson, Shymko, Doan 2011 12/15/2010 12/15/2011 10.0 1.0 N 10.0 n/a Jan-Jun 2012 12/15/2011 6/25/2012 7.0 1.0 N 7.0 Ramsey, Firman Jul-Dec 2012 6/25/2012 12/15/2012 12.0 1.0 N 12.0 n/a 2013 12/15/2012 12/15/2013 12.0 1.0 N 12.0 n/a 2014 12/15/2013 12/15/2014 11.0 4.0 N 11.0 Schrock 2015 12/15/2014 12/15/2015 10.0 5.0 N 10.0 Llach, Bennett 2016 12/15/2015 12/15/2016 10.0 5.0 N 10.0 n/a |
Segment Data (Tables)
Segment Data (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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): Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 TASER Weapons Axon Total TASER Weapons Axon Total Product sales $ 45,536 $ 8,331 $ 53,867 $ 37,825 $ 5,930 $ 43,755 Service revenue — 4,889 4,889 — 2,958 2,958 Net sales 45,536 13,220 58,756 37,825 8,888 46,713 Cost of products sold 14,489 5,565 20,054 11,278 3,716 14,994 Cost of services delivered — 1,403 1,403 — 996 996 Gross margin 31,047 6,252 37,299 26,547 4,176 30,723 Sales, general and administrative 14,684 9,695 24,379 10,823 4,620 15,443 Research and development 1,245 5,465 6,710 1,077 4,829 5,906 Income (loss) from operations $ 15,118 $ (8,908 ) $ 6,210 $ 14,647 $ (5,273 ) $ 9,374 Purchase of property and equipment $ 594 $ 90 $ 684 $ 188 $ 1,158 $ 1,346 Purchase of intangible assets 51 36 87 35 116 151 Purchase of property and equipment and intangible assets in connection with business acquisition — — — — 9,694 9,694 Depreciation and amortization 560 382 942 556 189 745 Six Months Ended June 30, 2016 Six Months Ended June 30, 2015 TASER Axon Total TASER Axon Total Product sales $ 91,370 $ 13,172 $ 104,542 $ 76,166 $ 10,432 $ 86,598 Service revenue — 9,744 9,744 — 4,877 4,877 Net sales 91,370 22,916 114,286 76,166 15,309 91,475 Cost of products sold 28,566 8,943 37,509 22,359 6,864 29,223 Cost of services delivered — 2,576 2,576 — 1,661 1,661 Gross margin 62,804 11,397 74,201 53,807 6,784 60,591 Sales, general and administrative 29,956 19,256 49,212 21,528 8,480 30,008 Research and development 2,365 11,272 13,637 2,267 8,197 10,464 Income (loss) from operations $ 30,483 $ (19,131 ) $ 11,352 $ 30,012 $ (9,893 ) $ 20,119 Purchase of property and equipment $ 1,665 $ 299 $ 1,964 $ 535 $ 1,235 $ 1,770 Purchase of intangible assets 113 72 185 81 120 201 Purchase of property and equipment and intangible assets in connection with business acquisition — — — — 9,694 9,694 Depreciation and amortization 1,132 711 1,843 1,086 276 1,362 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The major classes of assets and liabilities to which the Company allocated the purchase price were as follows (in thousands): Accounts receivable and other current assets $ 590 Inventory 35 Property and equipment 53 Intangible assets 4,145 Goodwill 5,496 Accounts payable and accrued liabilities (697 ) Deferred revenue (111 ) Deferred income tax liabilities, net (688 ) Total purchase price $ 8,823 The major classes of assets and liabilities to which the Company has allocated the purchase price, on a preliminary basis, are as follows (in thousands): Accounts receivable $ 726 Inventory 497 Property and equipment 583 Other Assets 20 Intangible assets 881 Goodwill 1,612 Accounts payable and accrued liabilities (207 ) Notes payable (169 ) Income tax liabilities (609 ) Total purchase price $ 3,334 |
Organization and Summary of S31
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016USD ($)subsidiarycountry | Dec. 31, 2015USD ($) | Jun. 30, 2015USD ($)country | Jun. 30, 2016USD ($)SegmentsubsidiarySourceCustomercountry | Jun. 30, 2015USD ($)Customercountry | Dec. 31, 2015USD ($)Customer | |
Summary Of Significant Accounting Policy [Line Items] | ||||||
Number of wholly owned subsidiaries | subsidiary | 2 | 2 | ||||
Number of reportable segments | Segment | 2 | |||||
Number of revenue sources | Source | 2 | |||||
Warranty period | 1 year | |||||
Corporate owned life insurance policies fair value | $ 2,700 | $ 2,200 | $ 2,700 | $ 2,200 | ||
Loss on disposal of intangible assets | (14) | $ (200) | (14) | $ (165) | ||
Net income | 3,650 | 6,103 | 7,113 | 13,308 | ||
Cost of products sold and services delivered | 21,457 | 15,990 | 40,085 | 30,884 | ||
Sales, general and administrative | $ 24,379 | $ 15,443 | $ 49,212 | $ 30,008 | ||
Recognition of Transaction | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Net income | (800) | (800) | ||||
Cost of products sold and services delivered | $ 400 | |||||
Sales, general and administrative | $ 200 | |||||
Minimum | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Service term for services purchased | 3 years | |||||
Maximum | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Service term for services purchased | 5 years | |||||
Extended Product Warranty | Minimum | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Extended warranty period | 1 year | |||||
Service term for services purchased | 1 year | |||||
Extended Product Warranty | Maximum | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Extended warranty period | 5 years | |||||
Service term for services purchased | 5 years | |||||
Evidence. Com | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Subscription period | 5 years | |||||
Device upgrade period | 2 years 6 months | |||||
Geographic Concentration Risk | Sales Revenue, Net | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Number of foreign countries | country | 0 | 0 | 0 | 0 | ||
Customer Concentration Risk | Sales Revenue, Net | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Number of customers | Customer | 0 | 0 | ||||
Customer Concentration Risk | Accounts Receivable | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Number of customers | Customer | 1 | 1 | ||||
Concentration risk, percentage | 16.30% | 12.50% |
Organization and Summary of S32
Organization and Summary of Significant Accounting Policies - Net Sales by Geographic Area (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Net sales by geographic area | $ 58,756 | $ 46,713 | $ 114,286 | $ 91,475 |
Percentage of net sales by geographic area | 100.00% | 100.00% | 100.00% | 100.00% |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Net sales by geographic area | $ 52,219 | $ 38,695 | $ 94,687 | $ 74,196 |
Percentage of net sales by geographic area | 88.90% | 82.80% | 82.90% | 81.10% |
Other Countries | ||||
Segment Reporting Information [Line Items] | ||||
Net sales by geographic area | $ 6,537 | $ 8,018 | $ 19,599 | $ 17,279 |
Percentage of net sales by geographic area | 11.10% | 17.20% | 17.10% | 18.90% |
Organization and Summary of S33
Organization and Summary of Significant Accounting Policies - Weighted Average Number of Shares Outstanding and Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Numerator for basic and diluted earnings per share: | ||||
Net income | $ 3,650 | $ 6,103 | $ 7,113 | $ 13,308 |
Denominator: | ||||
Weighted average shares outstanding—basic | 52,480 | 53,644 | 53,087 | 53,407 |
Dilutive effect of stock-based awards (in shares) | 809 | 1,156 | 803 | 1,255 |
Diluted weighted average shares outstanding | 53,289 | 54,800 | 53,890 | 54,662 |
Anti-dilutive stock-based awards excluded | 369 | 153 | 520 | 173 |
Net income (loss) per common share: | ||||
Basic (in dollars per share) | $ 0.07 | $ 0.11 | $ 0.13 | $ 0.25 |
Diluted (in dollars per share) | $ 0.07 | $ 0.11 | $ 0.13 | $ 0.24 |
Organization and Summary of S34
Organization and Summary of Significant Accounting Policies - Summary of Changes in Estimated Product Warranty Liabilities (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Balance, beginning of period | $ 314 | $ 675 |
Utilization of accrual | (49) | (200) |
Warranty expense | 520 | (19) |
Balance, end of period | $ 785 | $ 456 |
Cash, Cash Equivalents, and Inv
Cash, Cash Equivalents, and Investments - Summary of Cash, Cash Equivalents and Held-to-Maturity Investments by Type (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | $ 91,611 | $ 118,305 |
Gross Unrealized Gains | 17 | 11 |
Gross Unrealized Losses | (15) | (79) |
Fair Value | 91,613 | 118,237 |
Cash and Cash Equivalents | 37,306 | 59,526 |
Short-term investments | 49,711 | 50,254 |
Long-term investments | 4,594 | 8,525 |
Fair Value, Inputs, Level 1 | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 34,824 | 38,795 |
Gross Unrealized Gains | 7 | 0 |
Gross Unrealized Losses | (15) | (70) |
Fair Value | 34,816 | 38,725 |
Cash and Cash Equivalents | 1,025 | 2,389 |
Short-term investments | 29,975 | 35,677 |
Long-term investments | 3,824 | 729 |
Fair Value, Inputs, Level 2 | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 21,336 | 22,373 |
Gross Unrealized Gains | 10 | 11 |
Gross Unrealized Losses | 0 | (9) |
Fair Value | 21,346 | 22,375 |
Cash and Cash Equivalents | 830 | 0 |
Short-term investments | 19,736 | 14,577 |
Long-term investments | 770 | 7,796 |
Fair Value, Inputs, Level 2 | State and Municipal Obligations | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 19,201 | 19,002 |
Gross Unrealized Gains | 10 | 11 |
Gross Unrealized Losses | 0 | (9) |
Fair Value | 19,211 | 19,004 |
Cash and Cash Equivalents | 830 | 0 |
Short-term investments | 17,601 | 12,000 |
Long-term investments | 770 | 7,002 |
Fair Value, Inputs, Level 2 | Certificates of Deposit | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 2,135 | 3,371 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 2,135 | 3,371 |
Cash and Cash Equivalents | 0 | 0 |
Short-term investments | 2,135 | 2,577 |
Long-term investments | 0 | 794 |
Cash | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 35,451 | 57,137 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 35,451 | 57,137 |
Cash and Cash Equivalents | 35,451 | 57,137 |
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Money Market Funds | Fair Value, Inputs, Level 1 | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 260 | 2,389 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 260 | 2,389 |
Cash and Cash Equivalents | 260 | 2,389 |
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Corporate Bonds | Fair Value, Inputs, Level 1 | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 34,564 | 36,406 |
Gross Unrealized Gains | 7 | 0 |
Gross Unrealized Losses | (15) | (70) |
Fair Value | 34,556 | 36,336 |
Cash and Cash Equivalents | 765 | 0 |
Short-term investments | 29,975 | 35,677 |
Long-term investments | $ 3,824 | $ 729 |
Cash, Cash Equivalents, and I36
Cash, Cash Equivalents, and Investments - Summary of Amortized Cost and Fair Value of Short-term and Long-term Investments (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Due in less than one year | $ 49,711 | $ 50,254 |
Due after one year, through two years | 4,594 | $ 8,525 |
Amortized Cost | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Due in less than one year | 49,711 | |
Due after one year, through two years | 4,594 | |
Due after two years | 0 | |
Total short-term and long-term investments | 54,305 | |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Due in less than one year | 49,709 | |
Due after one year, through two years | 4,598 | |
Due after two years | 0 | |
Total short-term and long-term investments | $ 54,307 |
Inventory (Detail)
Inventory (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 11,124 | $ 8,748 |
Work-in-process | 74 | 105 |
Finished goods | 10,738 | 6,910 |
Total inventory | $ 21,936 | $ 15,763 |
Goodwill and Intangible Asset38
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Goodwill [Roll Forward] | |
Balance, beginning of period | $ 9,596 |
Purchase accounting adjustments | (349) |
Foreign currency translation adjustment | (147) |
Balance, end of period | $ 9,100 |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets - Intangible Assets Other than Goodwill (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | $ 7,513 | $ 7,563 |
Accumulated Amortization | (2,062) | (1,617) |
Total | 5,451 | 5,946 |
Not amortized intangible assets, Carrying Amount | 1,777 | 1,642 |
Intangible assets, Gross Carrying Amount | 9,290 | 9,205 |
Intangible assets, Net Carrying Amount | 7,228 | 7,588 |
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 | $ 877 | 742 |
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 | (120) | (120) |
Total | 5 | 5 |
Issued patents | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | 1,882 | 1,866 |
Accumulated Amortization | (719) | (659) |
Total | $ 1,163 | 1,207 |
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 | $ 616 | 603 |
Accumulated Amortization | (284) | (255) |
Total | $ 332 | 348 |
Issued trademarks | Minimum | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Useful Life | 3 years | |
Issued trademarks | Maximum | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Useful Life | 11 years | |
Customer relationships | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | $ 966 | 1,035 |
Accumulated Amortization | (168) | (93) |
Total | $ 798 | 942 |
Customer relationships | Minimum | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Useful Life | 4 years | |
Customer relationships | Maximum | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Useful Life | 8 years | |
Non-compete agreements | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | $ 454 | 464 |
Accumulated Amortization | (198) | (164) |
Total | $ 256 | 300 |
Non-compete agreements | Minimum | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Useful Life | 3 years | |
Non-compete agreements | Maximum | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Useful Life | 4 years | |
Developed technology | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Useful Life | 7 years | |
Amortized intangible assets, Gross Carrying Amount | $ 3,470 | 3,470 |
Accumulated Amortization | (573) | (326) |
Total | $ 2,897 | $ 3,144 |
Goodwill and Intangible asset40
Goodwill and Intangible assets - Estimated Amortization Expense of Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 200 | $ 200 | |
2016 (remaining six months) | 468 | ||
2,017 | 932 | ||
2,018 | 920 | ||
2,019 | 799 | ||
2,020 | 735 | ||
2,021 | 728 | ||
Thereafter | 869 | ||
Total | $ 5,451 | $ 5,946 |
Deferred Revenue - Summary of D
Deferred Revenue - Summary of Deferred Revenue (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, Current | $ 31,668 | $ 20,851 |
Deferred revenue, Long-Term | 35,098 | 30,190 |
Total deferred revenue | 66,766 | 51,041 |
Warranty | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, Current | 12,216 | 9,610 |
Deferred revenue, Long-Term | 17,614 | 16,326 |
Total deferred revenue | 29,830 | 25,936 |
Hardware | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, Current | 7,703 | 1,738 |
Deferred revenue, Long-Term | 13,973 | 9,841 |
Total deferred revenue | 21,676 | 11,579 |
AXON services | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, Current | 11,373 | 9,303 |
Deferred revenue, Long-Term | 3,511 | 4,023 |
Total deferred revenue | 14,884 | 13,326 |
Other | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, Current | 376 | 200 |
Deferred revenue, Long-Term | 0 | 0 |
Total deferred revenue | 376 | 200 |
TASER Weapons | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, Current | 10,662 | 8,430 |
Deferred revenue, Long-Term | 18,307 | 16,441 |
Total deferred revenue | 28,969 | 24,871 |
TASER Weapons | Warranty | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, Current | 9,185 | 7,278 |
Deferred revenue, Long-Term | 14,991 | 13,982 |
Total deferred revenue | 24,176 | 21,260 |
TASER Weapons | Hardware | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, Current | 1,101 | 952 |
Deferred revenue, Long-Term | 3,316 | 2,459 |
Total deferred revenue | 4,417 | 3,411 |
Axon | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, Current | 21,006 | 12,421 |
Deferred revenue, Long-Term | 16,791 | 13,749 |
Total deferred revenue | 37,797 | 26,170 |
Axon | Warranty | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, Current | 3,031 | 2,332 |
Deferred revenue, Long-Term | 2,623 | 2,344 |
Total deferred revenue | 5,654 | 4,676 |
Axon | Hardware | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, Current | 6,602 | 786 |
Deferred revenue, Long-Term | 10,657 | 7,382 |
Total deferred revenue | $ 17,259 | $ 8,168 |
Accrued Liabilities (Detail)
Accrued Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||||
Accrued salaries and benefits | $ 5,445 | $ 3,637 | ||
Accrued judgments and settlements | 0 | 65 | ||
Accrued professional fees | 286 | 718 | ||
Accrued warranty expense | 785 | 314 | $ 456 | $ 675 |
Accrued income and other taxes | 670 | 1,215 | ||
Other accrued liabilities | 3,196 | 2,694 | ||
Accrued liabilities | $ 10,382 | $ 8,643 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Tax Credit Carryforward [Line Items] | |
Deferred tax assets, net | $ 15.6 |
Research and development tax credit studies | 12.9 |
Unrecognized tax benefits | $ 3.6 |
Overall effective tax rate, after discrete period adjustments | 37.30% |
Effective tax rate, before discrete period adjustment | 37.40% |
Federal | |
Tax Credit Carryforward [Line Items] | |
Unrecognized tax benefits | $ 3.5 |
State | |
Tax Credit Carryforward [Line Items] | |
Unrecognized tax benefits | 0.1 |
Expiring in 2019 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward, amount | 1.2 |
Research and Development Credits | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward, valuation allowance | $ 1.5 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May 31, 2016 | Jun. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Feb. 29, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Option available for future grants (in shares) | 2,900,000 | 2,900,000 | ||||
Tax payments, for net share settlement of share based award | $ 1,036,000 | $ 647,000 | ||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized stock-based compensation expense related to non-vested stock options | $ 18,700,000 | $ 18,700,000 | ||||
Weighted average period over which costs are recognized | 2 years 6 months 15 days | |||||
Units meeting performance criteria (in shares) | 281,000 | |||||
Approximate units outstanding (in shares) | 1,223,000 | 1,223,000 | 1,139,000 | |||
Performance Based Restricted Stock Unit | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Approximate units of performance restricted stock granted (in shares) | 100,000 | |||||
Units meeting performance criteria (in shares) | 2,000 | |||||
Approximate units outstanding (in shares) | 200,000 | 200,000 | ||||
Maximum additional shares to be issued | 200,000 | 200,000 | ||||
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 | 58,300 | |||||
Tax payments, for net share settlement of share based award | $ 1,000,000 | |||||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate intrinsic value price per share (in dollars per share) | $ 24.88 | $ 24.88 | ||||
Total intrinsic value of options exercised | $ 800,000 | 13,200,000 | ||||
Number of options outstanding (in shares) | 1,058,000 | 1,058,000 | 1,103,000 | |||
Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options outstanding (in shares) | 200,000 | 200,000 | ||||
Unvested performance options (in shares) | 30,600 | 30,600 | ||||
Unvested shares, expected to vest | 25,000 | 25,000 | ||||
2013 Stock Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Additional shares authorized | 2,000,000 | |||||
2014 Stock Repurchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Outstanding common stock repurchase program authorized amount (up to) | $ 50,000,000 | |||||
Shares repurchased during period | 1,300,000 | 1,800,000 | ||||
Cost of shares repurchased | $ 24,800,000 | $ 33,800,000 | $ 0 | |||
Average cost of shares repurchased (in dollars per share) | $ 18.92 | $ 18.90 | ||||
Average price of shares repurchased (in dollars per share) | $ 18.89 | $ 18.87 | ||||
Remaining authorized repurchase amount | $ 16,200,000 | $ 16,200,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Detail) - Restricted Stock $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Number of Units outstanding, beginning of year (in shares) | shares | 1,139 |
Number of Units, Granted (in shares) | shares | 435 |
Number of Units, Released (in shares) | shares | (281) |
Number of Units, Forfeited (in shares) | shares | (70) |
Number of Units outstanding, end of period (in shares) | shares | 1,223 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Weighted Average Grant Date Fair Value, Units outstanding, beginning of year (in dollars per share) | $ / shares | $ 19.30 |
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 16.48 |
Weighted Average Grant Date Fair Value, Released (in dollars per share) | $ / shares | 15.92 |
Weighted Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares | 21.13 |
Weighted Average Grant Date Fair Value, Units outstanding, end of period (in dollars per share) | $ / shares | $ 18.97 |
Aggregate intrinsic value at end of period | $ | $ 30,432 |
Stockholders' Equity - Summar46
Stockholders' Equity - Summary of the Company's Stock Options Activity (Detail) - Stock Options $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Number of options, Options outstanding, beginning of year (in shares) | shares | 1,103 |
Number of options, Granted (in shares) | shares | 0 |
Number of options, Exercised (in shares) | shares | (45) |
Number of options, Expired / terminated (in shares) | shares | 0 |
Number of options, Options outstanding, end of year (in shares) | shares | 1,058 |
Number of options, Options exercisable, end of period (in shares) | shares | 1,027 |
Number of options, Options expected to vest, end of period (in shares) | shares | 25 |
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 (in dollars per share) | $ / shares | $ 5.37 |
Weighted average exercise price, Granted (in dollars per share) | $ / shares | 0 |
Weighted average exercise price, Exercised (in dollars per share) | $ / shares | 4.91 |
Weighted average exercise price, Expired / terminated (in dollars per share) | $ / shares | 0 |
Weighted average exercise price, Options outstanding, end of period (in dollars per share) | $ / shares | 5.39 |
Weighted average exercise price, Options exercisable, end of period (in dollars per share) | $ / shares | 5.41 |
Weighted average exercise price, Options expected to vest, end of period (in dollars per share) | $ / shares | $ 4.75 |
Weighted average remaining contractual life, Options outstanding, end of period | 2 years 9 months 15 days |
Weighted average remaining contractual life, Options exercisable, end of period | 2 years 9 months 18 days |
Weighted average remaining contractual life, Options expected to vest, end of period | 2 years 5 months 23 days |
Aggregate intrinsic value, Options outstanding, end of period | $ | $ 20,613 |
Aggregate intrinsic value, Options exercisable, end of period | $ | 19,996 |
Aggregate intrinsic value, Options expected to vest, end of period | $ | $ 503 |
Stockholders' Equity - Reported
Stockholders' Equity - Reported Share-Based Compensation (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 2,306 | $ 1,679 | $ 4,526 | $ 3,223 |
Cost of products sold and services delivered | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 70 | 89 | 170 | 159 |
Sales, general and administrative expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 1,459 | 925 | 2,849 | 1,858 |
Research and development expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 777 | $ 665 | $ 1,507 | $ 1,206 |
Line of Credit - Additional Inf
Line of Credit - Additional Information (Detail) | 6 Months Ended | |
Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Debt Instrument [Line Items] | ||
Total availability under line of credit agreement | $ 10,000,000 | |
Line of credit borrowings | 0 | $ 0 |
Letters of credit outstanding amount | 3,000,000 | |
Available borrowing under letter of credit | $ 7,000,000 | |
Varying interest on line of credit agreement | LIBOR plus 1.5% or Prime less 0.75% | |
Maturity date of line of credit | Jul. 31, 2017 | |
Maximum ratio of total liabilities to tangible net worth | 1 | |
Minimum required fixed coverage charge ratio | 1.25 | |
Trailing period used for calculating ratios | 12 months | |
Company's leverage ratio | 0.80 | |
Fixed coverage charge ratio | 2.24 | |
Line of Credit | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Line of credit interest rate | 1.50% | |
Line of Credit | Prime Rate | ||
Debt Instrument [Line Items] | ||
Line of credit interest rate | 0.75% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 3 Months Ended | 4 Months Ended | ||
Jun. 30, 2016USD ($)LawsuitCase | Sep. 30, 2011Case | Aug. 09, 2016Case | Apr. 30, 2016USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Number of lawsuits against Company | Lawsuit | 9 | |||
Number of lawsuits against Company seeking punitive damages in addition to compensatory damages | Lawsuit | 1 | |||
Number of active product liability cases | Case | 9 | 55 | ||
Loss Contingencies [Line Items] | ||||
Letters of credit outstanding amount | $ 3 | |||
Surety Bond | ||||
Loss Contingencies [Line Items] | ||||
Bonds outstanding | 4.7 | |||
Expiring May 2017 | ||||
Loss Contingencies [Line Items] | ||||
Letters of credit outstanding amount | 2.7 | |||
Expiring January 2017 | ||||
Loss Contingencies [Line Items] | ||||
Letters of credit outstanding amount | 0.3 | |||
Expiring in April 2021 | Surety Bond | ||||
Loss Contingencies [Line Items] | ||||
Bonds outstanding | 2.3 | |||
Expiring in July 2018 | Surety Bond | ||||
Loss Contingencies [Line Items] | ||||
Bonds outstanding | 2.2 | |||
Expected to be Released in August 2016 | Surety Bond | ||||
Loss Contingencies [Line Items] | ||||
Outstanding surety bonds expected to be released during period | $ 0.2 | |||
Paris, France | International Chamber of Commerce | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, estimate of possible loss | $ 0.6 | |||
Subsequent Event | ||||
Loss Contingencies [Line Items] | ||||
Number of cases dismissed or judgment entered | Case | 0 |
Commitments and Contingencies50
Commitments and Contingencies - Information Regarding the Company's Insurance Coverage (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
2,004 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | $ 2 |
Deductible Amount | 0.1 |
Remaining Insurance Coverage | 2 |
2,005 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 0.3 |
Remaining Insurance Coverage | 7 |
2,006 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 0.3 |
Remaining Insurance Coverage | 3.7 |
2,007 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 0.3 |
Remaining Insurance Coverage | 8 |
2,008 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 0.5 |
Remaining Insurance Coverage | 0 |
2,009 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 10 |
2,010 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 10 |
2,011 | |
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 |
2,013 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 12 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 12 |
2,014 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 11 |
Deductible Amount | 4 |
Remaining Insurance Coverage | 11 |
2,015 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 5 |
Remaining Insurance Coverage | 10 |
2,016 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 5 |
Remaining Insurance Coverage | $ 10 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jul. 01, 2016USD ($) | Dec. 31, 2015USD ($) | Jul. 16, 2015USD ($)contractowner | |
Consulting | Officer | |||||||
Related Party Transaction [Line Items] | |||||||
Transaction expenses incurred by parent company | $ 69,000 | $ 65,000 | $ 97,000 | $ 112,000 | |||
Outstanding payables due to related party | 21,000 | 21,000 | $ 31,000 | ||||
Software Licensing and Subscription | Officer | |||||||
Related Party Transaction [Line Items] | |||||||
Quarterly software licensing fee | 20,000 | ||||||
Deferred costs related to annual software subscription | $ 0 | $ 0 | $ 36,000 | ||||
Software Licensing and Subscription | Officer | Subsequent Event | |||||||
Related Party Transaction [Line Items] | |||||||
Annual subscription, paid in advance | $ 120,000 | ||||||
Non-cancellable Operating Leases | Employee | |||||||
Related Party Transaction [Line Items] | |||||||
Number of contracts | contract | 2 | ||||||
Number of former owners | owner | 1 | ||||||
Term of contract | 11 years | ||||||
Aggregate annual rental payments | $ 45,000 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employee deferrals deemed vested percentage upon contribution | 100.00% | ||
Company's contributions to the plan | $ 400 | $ 300 | |
Company's expected contributions to the plan | $ 6 | ||
Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Deferral percentage of base salary | 80.00% | ||
Deferral percentage of other compensation | 100.00% |
Segment Data - Additional Infor
Segment Data - Additional Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)Segment | Jun. 30, 2015USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments of company | Segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Product sales | $ 53,867 | $ 43,755 | $ 104,542 | $ 86,598 |
Service revenue | 4,889 | 2,958 | 9,744 | 4,877 |
Net sales | 58,756 | 46,713 | 114,286 | 91,475 |
Cost of products sold | 20,054 | 14,994 | 37,509 | 29,223 |
Cost of services delivered | 1,403 | 996 | 2,576 | 1,661 |
Gross margin | 37,299 | 30,723 | 74,201 | 60,591 |
Sales, general and administrative | 24,379 | 15,443 | 49,212 | 30,008 |
Research and development | 6,710 | 5,906 | 13,637 | 10,464 |
Income from operations | 6,210 | 9,374 | 11,352 | 20,119 |
Purchase of property and equipment | 684 | 1,346 | 1,964 | 1,770 |
Purchase of intangible assets | 87 | 151 | 185 | 201 |
Purchase of property and equipment and intangible assets in connection with business acquisition | 0 | 9,694 | 0 | 9,694 |
Depreciation and amortization | 942 | 745 | 1,843 | 1,362 |
Operating Segments | TASER Weapons | ||||
Segment Reporting Information [Line Items] | ||||
Product sales | 45,536 | 37,825 | 91,370 | 76,166 |
Service revenue | 0 | 0 | 0 | 0 |
Net sales | 45,536 | 37,825 | 91,370 | 76,166 |
Cost of products sold | 14,489 | 11,278 | 28,566 | 22,359 |
Cost of services delivered | 0 | 0 | 0 | 0 |
Gross margin | 31,047 | 26,547 | 62,804 | 53,807 |
Sales, general and administrative | 14,684 | 10,823 | 29,956 | 21,528 |
Research and development | 1,245 | 1,077 | 2,365 | 2,267 |
Income from operations | 15,118 | 14,647 | 30,483 | 30,012 |
Purchase of property and equipment | 594 | 188 | 1,665 | 535 |
Purchase of intangible assets | 51 | 35 | 113 | 81 |
Purchase of property and equipment and intangible assets in connection with business acquisition | 0 | 0 | 0 | 0 |
Depreciation and amortization | 560 | 556 | 1,132 | 1,086 |
Operating Segments | Axon | ||||
Segment Reporting Information [Line Items] | ||||
Product sales | 8,331 | 5,930 | 13,172 | 10,432 |
Service revenue | 4,889 | 2,958 | 9,744 | 4,877 |
Net sales | 13,220 | 8,888 | 22,916 | 15,309 |
Cost of products sold | 5,565 | 3,716 | 8,943 | 6,864 |
Cost of services delivered | 1,403 | 996 | 2,576 | 1,661 |
Gross margin | 6,252 | 4,176 | 11,397 | 6,784 |
Sales, general and administrative | 9,695 | 4,620 | 19,256 | 8,480 |
Research and development | 5,465 | 4,829 | 11,272 | 8,197 |
Income from operations | (8,908) | (5,273) | (19,131) | (9,893) |
Purchase of property and equipment | 90 | 1,158 | 299 | 1,235 |
Purchase of intangible assets | 36 | 116 | 72 | 120 |
Purchase of property and equipment and intangible assets in connection with business acquisition | 0 | 9,694 | 0 | 9,694 |
Depreciation and amortization | $ 382 | $ 189 | $ 711 | $ 276 |
Business Acquisitions (Details)
Business Acquisitions (Details) - USD ($) $ in Thousands | Jul. 16, 2015 | May 05, 2015 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||
Goodwill | $ 9,100 | $ 9,100 | $ 9,596 | |||
MediaSolv Solutions Corporation | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 8,800 | 100 | $ 1,000 | 1,000 | ||
Cash acquired | 100 | |||||
Payments to acquire businesses, net | 7,800 | |||||
Contingent liability | 1,000 | |||||
Additional earn-out provisions and compensation adjustments | $ 4,000 | |||||
Intangible assets, weighted average useful life | 6 years 6 months | |||||
Acquisition transaction costs | $ 200 | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||
Accounts receivable and other current assets | 590 | |||||
Inventory | 35 | |||||
Property and equipment | 53 | |||||
Intangible assets | 4,145 | |||||
Goodwill | 5,496 | |||||
Accounts payable and accrued liabilities | (697) | |||||
Deferred revenue | (111) | |||||
Deferred income tax liabilities, net | (688) | |||||
Total purchase price | $ 8,823 | |||||
MediaSolv Solutions Corporation | Commission Expenses | Accrued Liabilities | ||||||
Business Acquisition [Line Items] | ||||||
Contingent liability | $ 800 | |||||
Tactical Safety Responses Limited | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 3,300 | |||||
Cash acquired | $ 700 | |||||
Intangible assets, weighted average useful life | 7 years | |||||
Acquisition transaction costs | $ 100 | |||||
Cash payments to acquire business | 4,000 | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||
Accounts receivable and other current assets | 726 | |||||
Inventory | 497 | |||||
Property and equipment | 583 | |||||
Intangible assets | 881 | |||||
Other Assets | 20 | |||||
Goodwill | 1,612 | |||||
Accounts payable and accrued liabilities | (207) | |||||
Notes payable | (169) | |||||
Deferred income tax liabilities, net | (609) | |||||
Total purchase price | $ 3,334 | |||||
Tactical Safety Responses Limited | Commission Expenses | Accrued Liabilities | ||||||
Business Acquisition [Line Items] | ||||||
Contingent liability | $ 0 | $ 0 |