Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 |
Accounting Policies [Abstract] | ' |
Basis of Presentation and Use of Estimates | ' |
a. Basis of Presentation and Use of Estimates |
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. of America (“U.S. GAAP”). The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions in these consolidated financial statements include: |
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| • | | product warranty reserves, | | | | | | | | | | | | | | | | | | | | | |
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| • | | inventory valuation reserves, | | | | | | | | | | | | | | | | | | | | | |
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| • | | revenue recognition allocated in multiple-deliverable revenue recognition, | | | | | | | | | | | | | | | | | | | | | |
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| • | | valuation of goodwill, intangibles and long-lived assets, | | | | | | | | | | | | | | | | | | | | | |
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| • | | recognition, measurement and valuation of current and deferred income taxes, | | | | | | | | | | | | | | | | | | | | | |
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| • | | fair value of stock awards issued, the estimated vesting period for performance-based stock awards and forfeiture rates, and | | | | | | | | | | | | | | | | | | | | | |
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| • | | recognition and measurement of contingencies and accrued litigation expense. | | | | | | | | | | | | | | | | | | | | | |
Actual results could differ materially from those estimates. |
Cash, Cash Equivalents and Investments | ' |
b. Cash, Cash Equivalents and Investments |
Cash, cash equivalents and investments include cash, money market funds, certificates of deposit, state and municipal obligations and corporate bonds. The Company places its cash and cash equivalents with high quality financial institutions. Balances with these institutions regularly exceed FDIC insured limits; however, to manage the related credit exposure, the Company continually monitors the credit worthiness of the financial institutions where it has deposits. |
Cash and cash equivalents include funds on hand and highly liquid investments purchased with initial maturity of three months or less. Short-term investments include securities with an expected maturity date within one year of the balance sheet date that do not meet the definition of a cash equivalent, and long-term investments are securities with an expected maturity date greater than one year. Based on management’s intent and ability, the Company’s investments are classified as held to maturity investments and are recorded at amortized cost. Held-to-maturity investments are reviewed quarterly for impairment to determine if other-than-temporary declines in the carrying value have occurred for any individual investment. Other-than-temporary declines in the value of held-to-maturity investments are recorded as expense in the period the determination is made. |
Inventory | ' |
c. Inventory |
Inventories are stated at the lower of cost or market. Cost is determined using the weighted average cost of raw materials which approximates the first-in, first-out (“FIFO”) method and includes allocations of manufacturing labor and overhead. Provisions are made to reduce potentially excess, obsolete or slow-moving inventories to their net realizable value. These provisions are based on management’s best estimate after considering historical demand, projected future demand, inventory purchase commitments, industry and market trends and conditions and other factors. Management evaluates inventory costs for abnormal costs due to excess production capacity and treats such costs as period costs. |
Property and Equipment | ' |
d. Property and Equipment |
Property and equipment are stated at cost, net of accumulated depreciation and amortization. Additions and improvements are capitalized, while ordinary maintenance and repair expenditures are charged to expense as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. |
Capitalized Software Development Costs | ' |
e. Capitalized Software Development Costs |
The Company capitalizes qualifying computer software costs incurred during the application development stage for internally developed software. Additionally, the Company capitalizes qualifying costs incurred for upgrades and enhancements to existing software that result in additional functionality. Costs related to preliminary project planning activities, post-implementation activities, maintenance and minor modifications are expensed as incurred. Internal-use software is amortized on a straight line basis over its estimated useful life. There were no software development costs capitalized for the years ending December 31, 2013, 2012 or 2011. |
Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. During 2011, the Company recognized an impairment charge related to the development of the TASER Protector Platform that included $0.8 million of capitalized software development costs, following the Company’s decision to abandon this product line. |
Amortization of capitalized software development costs related to the Company’s software as a service (“SaaS”) product, EVIDENCE.com, was $0.6 million, $1.2 million and $1.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. As of December, 31, 2013, no capitalized software development costs remain to be amortized. |
Valuation of Goodwill, Intangibles and Long-lived Assets | ' |
f. Valuation of Goodwill, Intangibles and Long-lived Assets |
In the fourth quarter of 2013, the Company recorded goodwill related to the Familiar business acquisition. The recoverability of goodwill will be evaluated and tested for impairment at least annually during the fourth quarter or more often, if and when circumstances indicate that goodwill may not be recoverable. Finite-lived intangible assets and other long-lived assets are amortized over their useful lives. Management evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets and intangible assets may warrant revision or that the remaining balance of these assets, including intangible assets with indefinite lives, may not be recoverable. |
Circumstances that might indicate long-lived assets might not be recoverable could include, but are not limited to, a change in the product mix, a change in the way products are created, produced or delivered, or a significant change in the way our products are branded and marketed. When performing a review for recoverability, management estimates the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. The amount of the impairment loss, if impairment exists, is calculated based on the excess of the carrying amounts of the assets over their estimated fair value computed using discounted cash flows. |
During 2011, the Company recognized an impairment charge of $1.4 million relative to its Protector product line following the Company’s decision to abandon ongoing operations for this product line. Further, the Company recognized a charge of $2.8 million during 2011, relative to the write-down / disposal of property and equipment. This charge relates to the disposal of surplus equipment for EVIDENCE.com operations, and impairment of production tooling related to the first generation AXON video product line and the TASER X3 CEW product line. No impairment losses were recorded in 2013 or 2012. |
Customer Deposits | ' |
g. Customer Deposits |
The Company requires deposits in advance of shipment for certain customer sales orders. Customer deposits are recorded as a current liability in the accompanying consolidated balance sheets. |
Revenue Recognition, Deferred Revenue and Accounts and Notes Receivable | ' |
h. Revenue Recognition, Deferred Revenue and Accounts and Notes Receivable |
The Company derives revenue from two primary sources: (1) the sale of physical products, including our CEWs, AXON cameras, corresponding extended warranties, and related accessories such as cartridges and batteries, and (2) subscription to our EVIDENCE.com digital evidence management SaaS (including data storage fees and other ancillary services), which includes varying levels of support. To a lesser extent, the Company also recognizes training and other revenue. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, title has transferred, the price is fixed and collectability is reasonably assured. Extended warranty revenue, SaaS revenue and related data storage revenue are recognized ratably over the term of the contract beginning on the commencement date of each contract. |
Revenue arrangements with multiple deliverables are divided into separate units and revenue is allocated using the relative selling price method based upon vendor-specific objective evidence of selling price or third-party evidence of the selling prices if vendor-specific objective evidence of selling prices does not exist. If neither vendor-specific objective evidence nor third-party evidence exists, management uses its best estimate of selling price. |
The Company offers customers the right to purchase extended warranties that include additional services and coverage beyond the limited warranty for certain products. Revenue for extended warranty purchases is deferred at the time of sale and recognized over the warranty period commencing on the date of sale. Extended warranties range from one to five years. |
EVIDENCE.com and AXON cameras are sold separately, but in most instances are sold together. In these instances, customers typically purchase and pay for the equipment and one year of EVIDENCE.com in advance. Additional years of service are generally billed annually over a specified service term, which has typically ranged from one to five years. AXON equipment has stand-alone value and represents a deliverable that is provided to the customer at the time of sale, while EVIDENCE.com services are provided over the specified term of the contract. The Company recognizes revenue for the AXON equipment at the time of the sale consistent with the discussion of multiple deliverable arrangements above. Revenue for EVIDENCE.com is deferred at the time of the sale and recognized over the service period. In certain circumstances, not all requirements are met for the recognition of revenue relative to equipment sold in conjunction with EVIDENCE.com at the time the equipment is provided to customers. In such circumstances, based on limitations associated with the consideration, the revenue may be recognized ratably over the specified term of the contract, or when all conditions for revenue recognition are met, if sooner. |
In 2012, the Company introduced a program, the TASER Assurance Program (“TAP”) whereby a customer purchasing a product and joining the program will have the right to trade-in the original product for a new product of the same or like model in the future. Upon joining TAP, customers also receive an extended warranty for the initial products purchased and spare inventory. Under this program the customer generally pays additional annual installments over the contract period, generally three to five years. The Company records consideration received related to the future purchase as deferred revenue until all revenue recognition criteria are met, which is generally at the end of the contract period. |
Sales tax collected on sales is netted against government remittances and thus, recorded on a net basis. Training revenue is recorded as the service is provided. |
Deferred revenue consists of billings and/or payments received in advance related to products and services for which the criteria for revenue recognition have not yet been met. Deferred revenue that will be recognized during the succeeding twelve month period is recorded as current deferred revenue and the remaining portion is recorded as long-term. Deferred revenue does not include future revenue from multi-year contracts for which no invoice has yet been created. Generally, customers are billed in annual installments. See Note 7 for further discussion of the Company’s deferred revenue. |
Sales are typically made on credit and the Company generally does not require collateral. Management performs ongoing credit evaluations of its customers’ financial condition and maintains an allowance for estimated potential losses. Uncollectable accounts are charged to expense when deemed uncollectible, and accounts and notes receivable are presented net of an allowance for doubtful accounts. This allowance represents management’s best estimate and is based on their judgment after considering a number of factors, including third-party credit reports, actual payment history, cash discounts, customer-specific financial information and broader market and economic trends and conditions. |
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The Company may, from time to time, enter into agreements with its customers to finance their purchases with a note receivable that may range in terms up to five years. Sales are recorded at the fair value of the note, which is generally sold and assigned to a third-party financing company. The terms of the assignments are such that the Company expects to receive payment within 30 days of the original sale. The assignments are non-recourse and the Company has no obligations or continuing involvement with the notes receivable. Prior to entering into an assignment, the Company evaluates the credit quality and financial condition of the third-party financing company. As of December 31, 2013, there was no balance in accounts and notes receivable related to such arrangements. As of December 31, 2012, there was a balance of $3.1 million, which was collected subsequent to year end, included in accounts and notes receivable related to such arrangements. The Company did not record any interest income on notes receivable due to minimal holding periods, nor has the Company recognized gains or losses upon the assignment of the notes. |
Cost of Products Sold and Services Provided | ' |
i. Cost of Products Sold and Services Provided |
Cost of products sold represents manufacturing costs, consisting of materials, labor and overhead related to finished goods and components. Shipping costs incurred related to product delivery are also included in cost of products sold. Cost of services provided includes third party cloud services, and software maintenance costs, including personnel costs, associated with providing EVIDENCE.com. |
Advertising Costs | ' |
j. Advertising Costs |
The Company expenses advertising costs in the period in which they are incurred. The Company incurred advertising costs of $0.2 million, $0.2 million and $0.3 million in the years ended December 31, 2013, 2012 and 2011, respectively. Advertising costs are included in sales, general and administrative expenses in the accompanying statements of operations. |
Standard Warranties | ' |
k. Standard Warranties |
The Company warrants its CEWs, StrikeLight, AXON cameras and ETMs from manufacturing defects on a limited basis for a period of one year after purchase and, thereafter, will replace any defective unit for a fee. Estimated costs for the standard warranty are charged to cost of products sold and services delivered when revenue is recorded for the related product. Future warranty costs are estimated based on historical data related to returns and warranty costs on a quarterly basis and this rate is applied to current product sales. Historically, reserve amounts have been increased if management becomes aware of a component failure that could result in larger than anticipated returns from customers. The accrued warranty liability expense is reviewed quarterly to verify that it sufficiently reflects the remaining warranty obligations based on the anticipated expenditures over the balance of the warranty obligation period, and adjustments are made when actual warranty claim experience differs from estimates. Costs related to extended warranties are charged to cost of products sold and services delivered when incurred. |
The reserve for warranty returns is included in accrued liabilities on the condensed consolidated balance sheet. For the twelve months ended December 31, 2013, the warranty expense increased compared to the same period in the prior year primarily due to a specific reserve for a production run of Smart cartridges that had a higher than expected failure rate. During the third quarter of 2013, the Company recorded an increase in estimate related to the AXON flex on-officer camera, introduced in 2012, based on the analysis of actual return data. The X26P and AXON body were launched during 2013, which attributed to an increase in warranty expense because return estimates are less predictable than for product lines that have been in existence for more than one year. Additionally, during 2013 the Company’s product mix included products with a higher warranty cost as a percent of sales. |
Changes in the Company’s estimated product warranty liabilities are as follows (in thousands): |
Warranty Costs |
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| | 2013 | | | 2012 | | | 2011 | | | | | | | | | | | | | |
Balance, January 1 | | $ | 484 | | | $ | 427 | | | $ | 646 | | | | | | | | | | | | | |
Utilization of accrual | | | (530 | ) | | | (470 | ) | | | (529 | ) | | | | | | | | | | | | |
Warranty expense | | | 1,001 | | | | 527 | | | | 310 | | | | | | | | | | | | | |
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Balance, December 31 | | $ | 955 | | | $ | 484 | | | $ | 427 | | | | | | | | | | | | | |
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Research and Development Expenses | ' |
l. Research and Development Expenses |
The Company expenses as incurred research and development costs that do not meet the qualifications to be capitalized. The Company incurred research and development expense of $9.9 million, $8.1 million and $10.0 million in 2013, 2012 and 2011, respectively. |
Income Taxes | ' |
m. Income Taxes |
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in future years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced through the establishment of a valuation allowance if, based upon available evidence, it is determined that it is more likely than not that the deferred tax assets will not be realized. |
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. Management also assesses whether uncertain tax positions, as filed, could result in the recognition of a liability for possible interest and penalties. The Company’s policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. Refer to Note 10 for additional information regarding the change in unrecognized tax benefits. |
Concentration of Credit Risk and Major Customers / Suppliers | ' |
n. Concentration of Credit Risk and Major Customers / Suppliers |
Financial instruments that potentially subject the Company to concentrations of credit risk consist of accounts and notes receivable and cash. Sales are typically made on credit and the Company generally does not require collateral. Management performs ongoing credit evaluations of its customers’ financial condition and maintains an allowance for estimated losses. Uncollectable accounts are written off when deemed uncollectible, and accounts receivable are presented net of an allowance for doubtful accounts, which totaled $0.2 million as of December 31, 2013 and 2012. Historically, the Company has experienced a low level of write-offs related to doubtful accounts. During the year ended 2011, the Company recorded a reserve for bad debt expense of $0.3 million related to an account receivable from a distributor. Due to a modification of the business relationship between the Company and the distributor, the Company determined the receivable had been impaired and the entire balance should be reserved. During 2012, the balance on the account was collected. As the cash was collected, the Company reversed the allowance, resulting in a net credit to bad debt expense for the year ended December 31, 2012. |
We maintain the majority of our cash, cash equivalents and investment accounts at three depository institutions. As of December 31, 2013, our aggregate balances in such accounts were $63.4 million. The Company’s balances with these institutions regularly exceed FDIC insured limits; however, to manage the related credit exposure, we continually monitor the credit worthiness of the financial institutions where we have deposits. |
The Company sells its products primarily through a network of unaffiliated distributors. The Company also reserves the right to sell directly to the end user to secure the customer’s account. In 2013, 2012 and 2011 one distributor represented 12.2%, 12.8% and 12.7%, respectively, of total net sales with no other customers exceeding 10%. |
At December 31, 2013, the Company had a trade receivable from one unaffiliated customer comprising 17.4% of the aggregate accounts receivable balance. At December 31, 2012, the Company had a trade note receivable from one unaffiliated customer comprising 17.2% of the aggregate accounts receivable balance. These customers are unaffiliated distributors of the Company’s products. |
The Company currently purchases finished circuit boards and injection-molded plastic components from suppliers located in the U.S. Although the Company currently obtains many of these components from single source suppliers, the Company owns the injection molded component tooling used in their production. As a result, management believes it could obtain alternative suppliers in most cases without incurring significant production delays. The Company also purchases small, machined parts from a vendor in Taiwan, custom cartridge assemblies from a proprietary vendor in the U.S., and electronic components from a variety of foreign and domestic distributors. Management believes that there are readily available alternative suppliers in most cases who can consistently meet its needs for these components. The Company acquires most of its components on a purchase order basis and does not have long-term contracts with suppliers. |
Fair Value of Financial Instruments | ' |
o. Fair Value of Financial Instruments |
The Company uses the fair value framework that prioritizes the inputs to valuation techniques for measuring financial assets and liabilities measured on a recurring basis and for non-financial assets and liabilities when these items are re-measured. Fair value is considered to be the exchange price in an orderly transaction between market participants, to sell an asset or transfer a liability at the measurement date. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: |
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| • | | 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. | | | | | | | | | | | | | | | | | | | | | |
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| • | | 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. | | | | | | | | | | | | | | | | | | | | | |
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| • | | 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 our own assumptions about the assumptions that market participants would use in pricing an asset or liability. | | | | | | | | | | | | | | | | | | | | | |
The Company has cash equivalents and investments, which at December 31, 2013 and 2012, were comprised of money market funds, state and municipal obligations, corporate bonds, and certificates of deposits. See additional disclosure regarding the fair value of the Company’s cash equivalents and investments in Note 2. Included in the balance of other assets as of December 31, 2013 is $0.4 million related to corporate-owned life insurance policies which are used to fund the Company’s deferred compensation plan. The Company determines the fair value of its insurance contracts by obtaining the cash surrender value of the contracts from the issuer, a Level 2 valuation technique. |
The Company’s financial instruments also include accounts and notes receivable, accounts payable and accrued liabilities. Due to the short-term nature of these instruments, their fair values approximate their carrying values on the balance sheet. |
Segment and Geographic Information | ' |
p. Segment and Geographic Information |
The Company is comprised of two reportable segments: the sale of CEWs, accessories and other products and services (the “TASER Weapons” segment); and the video business which includes the TASER Cam, AXON Video products and EVIDENCE.com (the “EVIDENCE.com & Video” 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 17. |
For the three years ended December 31, 2013, 2012 and 2011, net sales by geographic area were as follows (in thousands): |
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| | Year Ended December 31, | |
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United States | | $ | 115,674 | | | | 84 | % | | $ | 93,427 | | | | 81 | % | | $ | 72,261 | | | | 80 | % |
Other Countries | | | 22,157 | | | | 16 | | | | 21,326 | | | | 19 | | | | 17,767 | | | | 20 | |
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Total | | $ | 137,831 | | | | 100 | % | | $ | 114,753 | | | | 100 | % | | $ | 90,028 | | | | 100 | % |
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Sales to customers outside of the U.S. are typically denominated in U.S. dollars and are attributed to each country based on the shipping address of the distributor or customer. For the three years ended December 31, 2013, 2012 and 2011, no individual country outside the U.S. represented more than 10% of net sales. Substantially all of the Company’s assets are located in the U.S. |
Stock-Based Compensation | ' |
q. Stock-Based Compensation |
The Company calculates the fair value of stock options using the Black-Scholes-Merton option pricing valuation model, which incorporates various assumptions including volatility, expected life and risk-free interest rates. The fair value of restricted stock units is estimated as the closing price of our common stock on the date of grant. |
No options were awarded during the years ended December 31, 2013 or 2012. The assumptions used for the year ended December 31, 2011 and the resulting estimates of weighted-average fair value per share of options granted during that period, excluding the effects of a prior exchange program, are as follows: |
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| | 2011 | | | | | | | | | | | | | | | | | | | | | |
Weighted average / range of volatility | | | 56 | % | | | | | | | | | | | | | | | | | | | | |
Risk-free interest rate | | | 1.6 | | | | | | | | | | | | | | | | | | | | | |
Dividend rate | | | — | | | | | | | | | | | | | | | | | | | | | |
Expected life of options | | | 4.5 years | | | | | | | | | | | | | | | | | | | | | |
Weighted average fair value of options granted | | $ | 2.16 | | | | | | | | | | | | | | | | | | | | | |
The expected life of the options represents the estimated period of time from grant date until exercise and is based on historical experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. Expected stock price volatility is based on a combination of historical volatility of the Company’s stock and the one-year implied volatility of its publicly traded options for the related vesting periods. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. The Company has not paid dividends in the past and does not plan to pay any dividends in the near future. |
The estimated fair value of stock-based compensation awards is amortized to expense on a straight-line basis over the requisite service periods. As stock-based compensation expense recognized is based on awards ultimately expected to vest, it is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company’s forfeiture rate was calculated based on its historical experience of awards which ultimately vested. See Note 12 for further discussion of the Company’s stock-based compensation. |
Income (Loss) per Common Share | ' |
r. Income (Loss) per Common Share |
Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the periods presented. Diluted income per share reflects the potential dilution that would occur if outstanding stock options were exercised utilizing the treasury stock method. The calculation of the weighted average number of shares outstanding and earnings per share are as follows (in thousands except per share data): |
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| | For the Year Ended December 31, | | | | | | | | | | | | | |
| | 2013 | | | 2012 | | | 2011 | | | | | | | | | | | | | |
Numerator for basic and diluted earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 18,244 | | | $ | 14,738 | | | $ | (7,040 | ) | | | | | | | | | | | | |
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Denominator: | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding—basic | | | 51,880 | | | | 53,827 | | | | 59,436 | | | | | | | | | | | | | |
Dilutive effect of stock-based awards | | | 2,272 | | | | 896 | | | | — | | | | | | | | | | | | | |
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Diluted weighted average shares outstanding | | | 54,152 | | | | 54,723 | | | | 59,436 | | | | | | | | | | | | | |
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Anti-dilutive stock-based awards excluded (1) | | | 507 | | | | 3,205 | | | | 6,972 | | | | | | | | | | | | | |
Net income (loss) per common share: | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 0.35 | | | $ | 0.27 | | | $ | (0.12 | ) | | | | | | | | | | | | |
Diluted | | | 0.34 | | | | 0.27 | | | | (0.12 | ) | | | | | | | | | | | | |
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-1 | For the year ended December 31, 2011, all outstanding awards were excluded from the computation of diluted net loss per common share because inclusion would be anti-dilutive, reducing the net loss per share. These figures also include performance-based options and RSUs for which the performance criteria have not been met. | | | | | | | | | | | | | | | | | | | | | | | |
Recently Issued Accounting Guidance [TBU] | ' |
s. Recently Issued Accounting Guidance |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update (“ASU”) to standardize the balance sheet presentation of unrecognized tax benefits. This update applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The new guidance is effective for fiscal years beginning after December 15, 2013, and early adoption is allowed. The adoption of this guidance will result in a reclassification on the Company’s consolidated balance sheet. Had the company adopted this guidance as of December 31, 2013, the balance of our long-term deferred tax asset would have decreased by approximately $1.5 million and the liability for unrecognized tax benefits would have decreased by the same amount. |
In February 2013, the FASB issued an ASU requiring entities to provide information about the amounts reclassified out of accumulated other comprehensive income (loss) (“OCI”) by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated OCI by the respective line items of net income, but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The new guidance is effective for fiscal years beginning after December 15, 2012. The amendments do not change the current requirements for reporting net income or OCI in financial statements and our adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. |
In July 2012, the FASB issued an ASU to simplify the impairment testing for indefinite-lived intangibles by allowing an entity to first assess qualitative factors, considering the totality of events and circumstances, to determine that it is more likely than not that the carrying amount of a reporting unit is less than its fair value. If it is not, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test. The new guidance was effective for annual and interim impairment tests for fiscal years beginning after September 15, 2012. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. |
Foreign Currency Translation | ' |
t. Foreign Currency Translation |
The Company’s foreign subsidiary uses the local currency as its functional currency. Assets and liabilities are translated at exchange rates in effect at the balance sheet date. Income and expense accounts are translated at the average monthly exchange rates during the year. Resulting translation adjustments are recorded as a component of accumulated OCI on the consolidated balance sheets. |