Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 08, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | DASAN ZHONE SOLUTIONS INC | |
Trading Symbol | DZSI | |
Entity Central Index Key | 1,101,680 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 16,386,955 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 10,145 | $ 17,893 |
Restricted cash | 13,058 | 6,650 |
Short-term investments | 0 | 993 |
Accounts receivable, net of allowances for sales returns and doubtful accounts of $2,095 as of September 30, 2017 and $1,143 as of December 31, 2016: | 43,478 | 38,324 |
Related parties | 12,941 | 13,311 |
Others | 13,851 | 12,068 |
Related parties | 22 | 171 |
Inventories | 31,966 | 31,032 |
Prepaid expenses and other current assets | 3,198 | 4,131 |
Total current assets | 128,659 | 124,573 |
Property and equipment, net | 5,812 | 6,288 |
Goodwill | 3,977 | 3,977 |
Intangible assets, net | 7,174 | 8,767 |
Other assets | 1,536 | 1,842 |
Total assets | 147,158 | 145,447 |
Current liabilities: | ||
Acounts payable, others | 35,224 | 30,681 |
Accounts payable, related parties | 106 | 430 |
Short-term debt, others | 18,382 | 17,599 |
Short-term debt, related parties | 3,544 | 0 |
Other payables, others | 1,691 | 2,040 |
Other payables, related parties | 210 | 6,940 |
Deferred revenue | 2,073 | 1,901 |
Accrued and other liabilities | 10,108 | 8,163 |
Total current liabilities | 71,338 | 67,754 |
Long-term debt - related parties | 5,000 | 6,800 |
Deferred revenue | 1,875 | 1,674 |
Other long-term liabilities | 2,581 | 2,351 |
Total liabilities | 80,794 | 78,579 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity and non-controlling interest: | ||
Common stock, authorized 36,000 shares, 16,387 shares and 16,375 shares outstanding as of September 30, 2017 and December 31, 2016 at $0.001 par value | 16 | 16 |
Additional paid-in capital | 89,873 | 89,174 |
Other comprehensive income (loss) | (1,052) | (2,815) |
Accumulated deficit | (23,080) | (19,923) |
Total stockholders’ equity | 65,757 | 66,452 |
Non-controlling interest | 607 | 416 |
Total stockholders’ equity and non-controlling interest | 66,364 | 66,868 |
Total liabilities, stockholders’ equity and non-controlling interest | $ 147,158 | $ 145,447 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances for sales returns and doubtful accounts | $ 2,095 | $ 1,143 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 36,000,000 | 36,000,000 |
Common stock, outstanding (in shares) | 16,387,000 | 16,375,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Net revenue | $ 60,513 | $ 24,772 | $ 150,834 | $ 68,424 |
Net revenue - related parties | 5,925 | 6,468 | 27,657 | 22,408 |
Total net revenue | 66,438 | 31,240 | 178,491 | 90,832 |
Products and services | 38,643 | 16,483 | 96,127 | 48,750 |
Products and services - related parties | 5,569 | 5,406 | 22,851 | 19,118 |
Amortization of intangible assets | 153 | 51 | 459 | 51 |
Total cost of revenue | 44,365 | 21,940 | 119,437 | 67,919 |
Gross profit | 22,073 | 9,300 | 59,054 | 22,913 |
Operating expenses: | ||||
Research and product development | 8,804 | 5,885 | 27,028 | 15,583 |
Selling, marketing, general and administrative | 11,454 | 8,278 | 32,506 | 16,691 |
Amortization of intangible assets | 154 | 251 | 1,191 | 259 |
Total operating expenses | 20,412 | 14,414 | 60,725 | 32,533 |
Operating income (loss) | 1,661 | (5,114) | (1,671) | (9,620) |
Interest income | 36 | 31 | 82 | 137 |
Interest expense | (263) | (204) | (793) | (600) |
Other income (loss), net | 60 | (112) | 43 | (41) |
Income (loss) before income taxes | 1,494 | (5,399) | (2,339) | (10,124) |
Income tax expense (benefit) | 107 | (610) | 646 | (1,041) |
Net income (loss) | 1,387 | (4,789) | (2,985) | (9,083) |
Net income (loss) attributable to non-controlling interest | (12) | (56) | 172 | (17) |
Net income (loss) attributable to DASAN Zhone Solutions, Inc. | 1,399 | (4,733) | (3,157) | (9,066) |
Foreign currency translation adjustments | (284) | 2,291 | 1,782 | 2,690 |
Comprehensive income (loss) | 1,103 | (2,498) | (1,203) | (6,393) |
Comprehensive income (loss) attributable to non-controlling interest | (14) | (54) | 191 | 48 |
Comprehensive income (loss) attributable to DASAN Zhone Solutions, Inc. | $ 1,117 | $ (2,444) | $ (1,394) | $ (6,441) |
Basic and diluted net loss per share (in USD per share) | $ 0.09 | $ (0.42) | $ (0.19) | $ (0.90) |
Weighted average shares outstanding used to compute basic and diluted net income (loss) per share (in shares) | 16,382 | 11,139 | 16,380 | 10,046 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (2,985) | $ (9,083) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 3,105 | 1,164 |
Stock-based compensation | 670 | 128 |
Unrealized gain (loss) on foreign currency transactions | (185) | 1,655 |
Deferred taxes | 0 | (1,069) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,948) | 14,450 |
Inventories | (578) | (4,107) |
Prepaid expenses and other assets | (101) | 2,320 |
Accounts payable | 6,713 | (5,814) |
Accrued expenses | (4,314) | 13,598 |
Net cash provided by (used in) operating activities | (623) | 13,242 |
Cash flows from investing activities: | ||
Cash increase through Merger | 0 | 7,013 |
Increase in restricted cash | (6,061) | (947) |
Decrease in short-term and long-term loans to others | 0 | 1,891 |
Increase in short-term and long-term loans to others | 0 | (1,386) |
Proceeds from sale of short-term investments | 1,463 | 0 |
Purchase of short-term investments | (430) | 0 |
Proceeds from disposal of property and equipment and other assets | 6 | 98 |
Purchase of property and equipment | (840) | (370) |
Purchase of intangible asset | (72) | (92) |
Net cash provided by (used in) investing activities | (5,934) | 6,207 |
Cash flows from financing activities: | ||
Repayments of borrowings | (15,627) | (23,088) |
Proceeds from short-term borrowings | 13,778 | 19,769 |
Proceeds from long-term borrowings | 0 | 6,800 |
Proceeds from issuance of common stock | 28 | 0 |
Net cash provided by (used in) financing activities | (1,821) | 3,481 |
Effect of exchange rate changes on cash | 630 | 1,538 |
Net increase (decrease) in cash and cash equivalents | (7,748) | 24,468 |
Cash and cash equivalents at beginning of period | 17,893 | 9,095 |
Cash and cash equivalents at end of period | $ 10,145 | $ 33,563 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies (a) Description of Business DASAN Zhone Solutions, Inc. (formerly known as Zhone Technologies, Inc. and referred to, collectively with its subsidiaries, as "DZS" or the "Company") is a global provider of network access solutions and communications equipment for service provider and enterprise networks. The Company provides a wide array of reliable, cost-effective networking technologies, including broadband access, Ethernet switching, mobile backhaul, Passive Optical LAN and software-defined networks, to a diverse customer base that includes more than 1,000 customers in more than 50 countries worldwide. DZS was incorporated under the laws of the state of Delaware in June 1999. On September 9, 2016, the Company acquired Dasan Network Solutions, Inc. ("DNS") through the merger of a wholly owned subsidiary of the Company with and into DNS, with DNS surviving as a wholly owned subsidiary of the Company (the "Merger"). At the effective time of the Merger, all issued and outstanding shares of capital stock of DNS held by DASAN Networks, Inc. ("DNI") were canceled and converted into the right to receive shares of the Company's common stock in an amount equal to 58% of the issued and outstanding shares of the Company's common stock immediately following the Merger. In connection with the Merger, the Company changed its name from Zhone Technologies, Inc. to DASAN Zhone Solutions, Inc. For periods through September 8, 2016, Zhone Technologies, Inc. is referred to as "Legacy Zhone." The Company’s common stock continues to be traded on the Nasdaq Capital Market, and the Company’s ticker symbol was changed from "ZHNE" to "DZSI" effective September 12, 2016. The Company is headquartered in Oakland, California. (b) Going Concern The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States ("U.S. GAAP"), assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Accordingly, the unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. Although the Company generated $1.4 million of net income for the quarter ended September 30, 2017, the Company has incurred significant losses to date and losses from operations may continue. The Company incurred net losses of $3.0 million and $15.3 million for the nine months ended September 30, 2017 and for the year ended December 31, 2016, respectively. The Company had accumulated deficit of $23.1 million and working capital of $57.3 million as of September 30, 2017 . As of September 30, 2017 , the Company had approximately $10.1 million in cash and cash equivalents, which included $3.4 million in cash balances held by the Company's Korean subsidiary, and $26.9 million in aggregate principal amount of outstanding borrowings under the Company's short-term debt obligations and the Company's loans from DNI and its affiliates. In addition, the Company had $7.6 million in aggregate borrowing availability under its revolving credit facilities as of September 30, 2017 . The Company had $8.5 million committed as security for letters of credit under these facilities as of September 30, 2017 . Due to the amount of short-term debt obligations maturing within the next 12 months and the Company's recurring operating losses, the Company's cash resources may not be sufficient to settle these short-term debt obligations. The Company's ability to continue as a “going concern” is dependent on many factors, including, among other things, its ability to comply with the covenants in its existing debt agreements, its ability to cure any defaults that occur under its debt agreements or to obtain waivers or forbearances with respect to any such defaults, and its ability to pay, retire, amend, replace or refinance its indebtedness as defaults occur or as interest and principal payments come due. Although the process of amending, replacing or refinancing the Company’s short-term debt obligations is ongoing and the Company is in active discussions with multiple parties, there is no guarantee that they will result in transactions that are sufficient to provide the Company with the required liquidity to remove the substantial doubt as to its ability to continue as a going concern. If the Company is unable to amend, replace or refinance its short-term debt obligations or raise the capital needed to meet liquidity needs and finance capital expenditures and working capital, the Company may experience material adverse impacts on its business, operating results and financial condition. The Company has continued its focus on cost control and operating efficiency along with restrictions on discretionary spending, however in order to meet the Company's liquidity needs and finance its capital expenditures and working capital needs for its business, the Company may be required to sell assets, issue debt or equity securities, purchase credit insurance or borrow on potentially unfavorable terms. In addition, the Company may be required to reduce the scope of its planned product development, reduce sales and marketing efforts and reduce its operations in low margin regions, including reductions in headcount. Based on the Company's current plans and business conditions, the Company believes that its focused operating expense discipline along with its existing cash, cash equivalents and available credit facilities will be sufficient to satisfy its anticipated cash requirements for at least the next 12 months, however the factors discussed above raise substantial doubt about the Company's ability to continue as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that may result from the outcome of the uncertainties set forth above. (c) Risks and Uncertainties DNI owned approximately 58% of the outstanding shares of the Company's common stock as of September 30, 2017 . For so long as DNI and its affiliates hold shares of the Company's common stock representing at least a majority of the votes, DNI will be able to freely nominate and elect all the members of the Company's board of directors (subject to the restrictions in the Company's bylaws). The directors elected by DNI will have the authority to make decisions affecting the Company's capital structure, including the issuance of additional capital stock or options, the incurrence of additional indebtedness, the implementation of stock repurchase programs, and the declaration of dividends. The interests of DNI may not coincide with the interests of the Company's other stockholders or with holders of the Company's indebtedness. DNI’s ability to control all matters submitted to the Company's stockholders for approval limits the ability of other stockholders to influence corporate matters and, as a result, the Company may take actions that the Company's other stockholders or holders of our indebtedness do not view as beneficial. See Note 2, Note 9 and Note 11 to the unaudited condensed consolidated financial statements for additional information. As discussed above in Note 1(b), there is also substantial doubt about the Company's ability to continue as a going concern. The accompanying unaudited consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. (d) Correction of errors In this Quarterly Report on Form 10-Q, certain prior quarter financial information has been revised due to correction of certain errors. The Company identified errors related to the timing of revenue recognition in the consolidated financial statements for the quarter ended September 30, 2016. Correction of this error resulted in a decrease in total net revenue of $0.8 million , an increase in net loss of $0.1 million for the quarter ended September 30, 2016 as well as a decrease in net revenue of $1.8 million , an increase in net loss of $0.5 million and an increase in basic and diluted net loss per share attributable to DZS of $0.05 for the nine months ended September 30, 2016. The prior quarter financial information has also been revised for the classification of certain related party revenue, related party cost of revenue, and related royalty fees. This correction resulted in the Company reclassifying revenues of $0.2 million to related party revenues and costs of $0.1 million to related party cost of revenue for the quarter ended September 30, 2016. This further resulted in the Company reclassifying revenues of $9.6 million to related party revenues and costs of $7.6 million to related party cost of revenue for the nine months ended September 30, 2016. Finally, an understatement of the cash flows used in investing activities of $1.0 million was corrected in the statement of cash flows for the nine months ended September 30, 2016. The overall impact of these errors on the Company's condensed consolidated financial position and results of operations is not material and as such, previously filed quarterly financial information filed with the SEC on March 10, 2017 affected by the errors has not been amended. (e) Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. All intercompany transactions and balances have been eliminated in consolidation. The results of operations for the current interim period are not necessarily indicative of results to be expected for the current year or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the unaudited condensed consolidated financial statements of the Company and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission. As discussed more fully in Note 2, the Merger is treated as a reverse acquisition for accounting purposes, with DNS as the acquirer of the Company. As such, the consolidated financial results of the Company for the three and nine months ended September 30, 2017 are compared to the financial results for DNS and its consolidated subsidiaries for the prior year period through September 8, 2016 and the financial results of DZS and its consolidated subsidiaries for the period from September 9, 2016 through September 30, 2016 . The balance sheet of the Company reflects the fair value of the assets and liabilities of Legacy Zhone as of the effective date of the Merger. Those assets include the fair value of acquired intangible assets and goodwill. Due to the foregoing, the Company’s financial results for the three and nine months ended September 30, 2017 are not comparable to its financial results for the three and nine months ended September 30, 2016 . Except as otherwise specifically noted herein, all references to the "Company" refer to (i) DNS and its consolidated subsidiaries for periods through September 8, 2016 and (ii) the Company and its consolidated subsidiaries for periods on or after September 9, 2016. (f) Reverse Stock Split On February 28, 2017, the Company filed a Certificate of Amendment with the Delaware Secretary of State to amend the Company's Restated Certificate of Incorporation, which amendment effected a one-for-five reverse stock split of the Company's common stock and reduced the authorized shares of the Company's common stock from 180 million to 36 million . As a result of the reverse stock split, the number of shares of the Company’s common stock then issued and outstanding was reduced from approximately 81.9 million to approximately 16.4 million . References to shares of the Company's common stock, stock options (and associated exercise price) and restricted stock units in this Quarterly Report on Form 10-Q are provided on a post-reverse stock split basis. (g) Concentration of Risk The Company’s customers include competitive and incumbent local exchange carriers, competitive access providers, Internet service providers, wireless carriers and resellers serving these markets. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Allowances are maintained for potential doubtful accounts. For the three months ended September 30, 2017 , two customers represented, 10% and 9% of net revenue, respectively. For the three months ended September 30, 2016 , three customers represented 18% , 16% (a related-party) and 12% of net revenue, respectively. For the nine months ended September 30, 2017 , two customers each represented 9% of net revenue (one of which was a related-party). For the nine months ended September 30, 2016 , three customers represented 23% , 21% (a related-party) and 12% of net revenue, respectively. As of September 30, 2017 , three customers represented 16% (a related-party), 11% and 10% of net accounts receivable, respectively. As of December 31, 2016, two customers represented 13% (a related-party) and 10% of net accounts receivable, respectively. As of September 30, 2017 and December 31, 2016, receivables from customers in countries other than the United States represented 84% and 87% , respectively, of net accounts receivable. (h) Recent Accounting Pronouncements On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of the guidance in ASU No. 2014-09, Revenue from Contracts with Customer, for all entities by one year. With the deferral, the new standard is effective for the Company on January 1, 2018. Early adoption is permitted, but not before the original effective date of January 1, 2017. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients, which provides clarification on how to assess collectibility, present sales tax, treat noncash consideration, and account for completed and modified contracts at the time of transition of ASU 2014-09. The effective date of this updated guidance for the Company is the same as the effective date of ASU 2014-09, which is January 1, 2018. The Company does not plan to early adopt this guidance. The Company is currently assessing the potential impact of adopting this new guidance on its unaudited condensed consolidated financial statements. The Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its unaudited condensed consolidated financial statements at this time. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which requires an entity to measure inventory at the lower of cost and net realizable value. The guidance does not apply to inventory that is measured using last-in, first-out ("LIFO") or the retail inventory method. The guidance applies to all other inventory, which includes inventory that is measured using first-in, first-out ("FIFO") or average cost. The guidance is effective for the Company on January 1, 2017, and will be adopted accordingly. ASU No. 2015-11 should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of this standard will have no impact on the Company's unaudited condensed consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes, Balance Sheet Classification of Deferred Taxes, which simplifies the classification of deferred tax assets and liabilities as non-current in the balance sheet. The updated guidance is effective for the Company on January 1, 2017, and will be adopted accordingly. The adoption of this standard will not have a material impact on the Company's unaudited condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for the Company on January 1, 2019, and early adoption is permitted. The Company does not plan to early adopt this guidance. The Company expects its assets and liabilities to increase as a result of the adoption of this standard. The Company is currently assessing the potential impact of adopting this new guidance on its unaudited condensed consolidated financial statements. The Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its unaudited condensed consolidated financial statements at this time. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which requires entities to simplify several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on statements of cash flows. The guidance is effective for the Company on January 1, 2017, and has been adopted in the first quarter of 2017. The adoption of this standard had no material impact on the Company's unaudited condensed consolidated financial statements. In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows, Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The updated guidance is effective for the Company on January 1, 2018. Early adoption is permitted. The Company continues to assess all the potential impacts of the new standard and anticipates this standard may have a material impact on its unaudited condensed consolidated financial statements. The Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its unaudited condensed consolidated financial statements at this time. In November 2016, FASB issued ASU 2016-18, Statement of Cash Flows, Restricted Cash, which require that a statement of cash flows to explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents. The updated guidance is effective for the Company beginning on January 1, 2018. Early adoption is permitted. Adoption of this ASU is applied using a retrospective approach. As a result, the Company will no longer present transfers between cash and cash equivalents and restricted cash in the consolidated cash flow statements. In January 2017, FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment. The updated guidance is effective for the Company on January 1, 2020, and will be adopted accordingly. Early adoption is permitted. The Company is currently assessing the potential impact of adopting this new guidance on its unaudited condensed consolidated financial statements. The Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its unaudited condensed consolidated financial statements at this time. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of modification accounting. The purpose of the amendment is to clarify which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The updated guidance is effective for the Company beginning on January 1, 2018. The Company is currently assessing the potential impact of adopting this new guidance on its unaudited condensed consolidated financial statements. The Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its unaudited condensed consolidated financial statements at this time. |
Merger
Merger | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Merger | Merger On September 9, 2016, the Company acquired DNS through the Merger of a wholly owned subsidiary of the Company with and into DNS, with DNS surviving as a wholly owned subsidiary of the Company. The Merger combines leading technology platforms with a broadened customer base. At the effective time of the Merger, all issued and outstanding shares of capital stock of DNS held by DNI were canceled and converted into the right to receive shares of the Company's common stock in an amount equal to 58% of the issued and outstanding shares of the Company's common stock immediately following the Merger. Accordingly, at the effective time of the Merger, the Company issued 9,493,016 shares (post reverse stock split) of the Company’s common stock to DNI as consideration in the Merger, of which 949,302 shares (post reverse stock split) are being held in escrow as security for claims for indemnifiable losses in accordance with the merger agreement relating to the Merger. As a result, immediately following the effective time of the Merger, DNI held 58% of the outstanding shares of the Company's common stock and the holders of the Company's common stock immediately prior to the Merger retained, in the aggregate, 42% of the outstanding shares of the Company's common stock. The Company accounted for the Merger as a reverse acquisition under the acquisition method of accounting in accordance with ASC 805, "Business Combination." Consequently, for the purpose of the purchase price allocation, DNS' assets and liabilities have been retained at their carrying values and Legacy Zhone's assets acquired, and liabilities assumed, by DNS (as the accounting acquirer in the Merger) have been recorded at their fair value measured as of September 9, 2016. The total purchase consideration in the Merger was based on the number of shares of Legacy Zhone common stock and Legacy Zhone stock options vested and outstanding immediately prior to the closing of the Merger, and was determined based on the closing price of $5.95 per share (post reverse stock split) of the Company's common stock on the September 9, 2016. The estimated total purchase consideration is calculated as follows (in thousands): Shares Estimated Fair Value Shares of Legacy Zhone stock as of September 8, 2016 6,874 $ 40,902 Legacy Zhone stock options 198 540 Total Purchase Consideration $ 41,442 The following table summarizes the allocation of the fair value consideration transferred as of the acquisition date (in thousands): Cash and cash equivalents $ 7,013 Accounts receivable 18,510 Inventory 16,456 Prepaid expenses and other current assets 2,191 Property and equipment 4,339 Other assets 125 Identifiable intangible assets 10,479 Goodwill 3,284 Accounts payable (11,021 ) Accrued and other liabilities (7,089 ) Other long-term liabilities (2,845 ) Total Indicated Fair Value of Assets $ 41,442 The goodwill was primarily attributed to people, geographic diversification and complementary products. The goodwill arising from the Merger is not tax deductible. The Company considered the deferred tax liabilities caused by the Merger to be a source of income to support recoverability of acquired deferred tax assets, before considering the recoverability of the acquirer's existing deferred tax assets. Accordingly, the valuation allowance on the acquiree's deferred tax assets was reduced by the deferred tax liabilities caused by the Merger and accounted for as part of the purchase price allocation. The following table presents the fair values of the acquired intangible assets at the effective date of the Merger (in thousands, except years): Useful life (in Years) Fair Value Developed technology 5 $ 3,060 Customer relationships 10 5,240 Backlog 1 2,179 $ 10,479 The following unaudited pro forma condensed combined financial information for the three and nine months ended September 30, 2016 gives effect to the Merger as if it had occurred at the beginning of 2015. The unaudited pro forma condensed combined financial information has been included for comparative purposes only and is not necessarily indicative of what the combined Company's financial position or results of operations might have been had the Merger been completed as of the date indicated. September 30, 2016 (in thousands) Three Nine Pro forma total net revenue $ 39,740 $ 142,530 Pro forma net loss (15,569 ) (25,504 ) |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The Company utilizes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels: Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The following financial instruments are not measured at fair value on the Company’s condensed consolidated balance sheet as of September 30, 2017 and December 31, 2016, but require disclosure of their fair values: cash and cash equivalents, short-term investments, accounts receivable, accounts payable and debt. The carrying values of financial instruments such as cash and cash equivalents, short-term investments, accounts receivable and accounts payable approximate their fair values based on their short-term nature. The carrying value of the Company's debt approximates their fair values based on the current rates available to the Company for debt of similar terms and maturities. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories as of September 30, 2017 and December 31, 2016 were as follows (in thousands): September 30, December 31, Raw materials $ 12,812 $ 13,547 Work in process 3,004 3,705 Finished goods 16,150 13,780 Total inventories $ 31,966 $ 31,032 Inventories provided as collateral for borrowings from Export-Import Bank of Korea amounted to $18.9 million and $14.4 million as of September 30, 2017 and December 31, 2016, respectively. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment as of September 30, 2017 and December 31, 2016 were as follows (in thousands): September 30, December 31, Furniture and fixtures $ 21,251 $ 20,040 Machinery and equipment 4,945 4,530 Leasehold improvements 3,386 3,573 Computers and software 567 411 Other 983 922 31,132 29,476 Less accumulated depreciation and amortization (25,109 ) (22,922 ) Less government grants (211 ) (266 ) Total property and equipment, net $ 5,812 $ 6,288 Depreciation and amortization expense associated with property and equipment for the three and nine months ended September 30, 2017 was $0.5 million and $1.4 million , respectively. Depreciation and amortization expense associated with property and equipment for the three and nine months ended September 30, 2016 was $0.4 million and $0.9 million , respectively. The Company receives grants from the government mainly to support capital expenditures. Such grants are deferred and are generally refundable to the extent the Company does not utilize the funds for qualifying expenditures. Once earned, the Company records the grants as a contra amount to the assets and amortizes such amount over the useful lives of the related assets as a reduction to depreciation expense. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill as of September 30, 2017 and December 31, 2016 was as follows (in thousands): September 30, December 31, Beginning balance $ 3,977 $ 693 Addition from Merger — 3,284 Less: accumulated impairment — — Ending balance $ 3,977 $ 3,977 The Company did not recognize impairment loss on goodwill during the three and nine months ended September 30, 2017 and 2016. Intangible assets as of September 30, 2017 and December 31, 2016 were as follows (in thousands): September 30, December 31, Developed technology $ 3,060 $ 3,060 Customer relationships 5,240 5,240 Backlog 2,179 2,179 Other 194 105 Less accumulated amortization (3,499 ) (1,817 ) Intangible assets, net $ 7,174 $ 8,767 Amortization expense associated with intangible assets for the three and nine months ended September 30, 2017 was $0.3 million and $1.7 million , respectively. Amortization expense associated with intangible assets for each of the three and nine months ended September 30, 2016 was $0.3 million . |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Wells Fargo Bank Facility As of September 30, 2017 , the Company had a $25.0 million credit facility (the "WFB Facility") with Wells Fargo Bank ("WFB"). Under the WFB Facility, the Company has the option of borrowing funds at agreed upon interest rates. The amount that the Company is able to borrow under the WFB Facility varies based on eligible accounts receivable and inventory, as defined in the agreement, as long as the aggregate amount outstanding does not exceed $25.0 million less the amount committed as security for letters of credit. To maintain availability of funds under the WFB Facility, the Company pays a commitment fee on the unused portion. The commitment fee is 0.25% per annum and is recorded as interest expense. As of September 30, 2017 , the Company had no outstanding borrowings under its WFB Facility, and $ 2.5 million was committed as security for letters of credit. The Company had $ 6.7 million of borrowing availability under the WFB Facility as of September 30, 2017 . The amounts borrowed under the WFB Facility bear interest, payable monthly, at a floating rate equal to the three-month LIBOR plus a margin based on the Company's average excess availability (as calculated under the WFB Facility). The interest rate on the WFB Facility was 3.8 % at September 30, 2017 . The maturity date under the WFB Facility is March 31, 2019. The Company’s obligations under the WFB Facility are secured by substantially all of its personal property assets and those of its subsidiaries that guarantee the WFB Facility, including their intellectual property. The WFB Facility contains certain financial covenants, and customary affirmative covenants and negative covenants. If the Company defaults under the WFB Facility due to a covenant breach or otherwise, WFB may be entitled to, among other things, require the immediate repayment of all outstanding amounts and sell the Company’s assets to satisfy the obligations under the WFB Facility. As of September 30, 2017 , the Company was in compliance with the covenants under the WFB Facility. Bank and Trade Facilities - Foreign Operations Certain of the Company's foreign subsidiaries have entered into various financing arrangements with foreign banks and other lending institutions consisting primarily of revolving lines of credit, trade facilities, term loans and export development loans. These facilities are renewed on an annual basis and are generally secured by a security interest in certain assets of the applicable foreign subsidiaries. Payments under such facilities are made in accordance with the given lender’s amortization schedules. As of September 30, 2017 and December 31, 2016, the Company had an aggregate outstanding balance of $18.4 million and $17.6 million , respectively, under such financing arrangements, and the interest rates per annum applicable to outstanding borrowings under these financing arrangements were as listed in the tables below. As of September 30, 2017 Interest rate (%) Amount Industrial Bank of Korea Credit facility 2.8 - 3.0 $ 3,235 Industrial Bank of Korea Trade finance 3.9-5.4 2,287 Shinhan Bank General loan 5.89 2,791 Shinhan Bank Trade finance 3.70 1,950 NongHyup Bank Credit facility 1.7 - 3.0 1,841 The Export-Import Bank of Korea Export development loan 3.1 6,278 $ 18,382 As of December 31, 2016 Interest rate (%) Amount Industrial Bank of Korea Credit facility 2.16 - 2.76 $ 1,106 Shinhan Bank General loan 4.08 3,310 Shinhan Bank Trade finance 3.28 - 3.44 1,752 NongHyup Bank Credit facility 1.92 - 2.66 482 KEB Hana Bank Comprehensive credit loan 2.79 3,501 The Export-Import Bank of Korea Export development loan 3.10 7,448 $ 17,599 As of September 30, 2017 , the Company had $5.0 million in outstanding borrowings and $6.0 million committed as security for letters of credit under the Company's $12.0 million credit facility with certain foreign banks. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Related-Party Debt In connection with the Merger, on September 9, 2016, the Company entered into a loan agreement with DNI for a $5.0 million unsecured subordinated term loan facility. Under the loan agreement, the Company was permitted to request drawdowns of one or more term loans in an aggregate principal amount not to exceed $5.0 million . As of September 30, 2017 , $5.0 million in term loans was outstanding under the facility. Such term loans mature in September 2021 and are pre-payable at any time by the Company without premium or penalty. The interest rate as of September 30, 2017 under this facility was 4.6% per annum. In addition, the Company borrowed $1.8 million from DNI for capital investment in February 2016, which amount was outstanding as of September 30, 2017 . This loan matured in March 2017 with an option of renewal by mutual agreement, and bore interest at a rate of 6.9% per annum, payable annually. Effective February 27, 2017, the Company amended the terms of this loan to extend the repayment date from March 2017 to March 2018, and to reduce the interest rate from 6.9% to 4.6% per annum. On June 23, 2017, the Company borrowed $3.5 million from Solueta, an affiliate of DNI. As of September 30, 2017 , the aggregate outstanding balance under this loan agreement was $1.7 million . This loan matures in November 2017 and bears interest at a rate of 4.6% per annum, payable monthly. Other Related-Party Transactions Sales and purchases, cost of revenue, research and product development, selling, marketing, general and administrative and other expenses to and from related parties for the three and nine months ended September 30, 2017 and 2016 were as follows (in thousands): Three Months Ended September 30, 2017 Counterparty DNI Ownership Interest Sales Cost of revenue Manufacturing (Cost of revenue) Research and product development Selling, marketing, general and administrative Other Expenses DNI (Parent Company) N/A $ 3,976 $ 3,604 $ — $ — $ 1,291 $ 51 CHASAN Networks Co., Ltd. 100% — — 257 20 — — DASAN FRANCE 100% 662 576 — — 83 — DASAN INDIA Private Limited 100% — — — — 30 — D-Mobile 100% 1,233 1,077 — — 122 — HANDYSOFT, Inc. 17.64% 54 12 — — 6 4 Tomato Soft Ltd. 100% — — 43 108 — — Tomato Soft (Xi'an) Ltd. 100% — — — 144 — — $ 5,925 $ 5,269 $ 300 $ 272 $ 1,532 $ 55 Three Months Ended September 30, 2016 (As Revised) Counterparty DNI Ownership Interest Sales Cost of revenue Manufacturing (Cost of revenue) Research and product development Selling, marketing, Other Expenses DNI (Parent Company) N/A $ 5,112 $ 4,390 $ — $ — $ 946 $ 89 CHASAN Networks Co., Ltd. 100% — — 130 38 — — DASAN FRANCE 100% 3 3 — — — — D-Mobile 100% 1,267 789 — — 125 — HANDYSOFT, Inc. 17.64% 68 58 — — — — J-Mobile Corporation 90.47% 18 — — — — — Tomato Soft Ltd. 100% — — 36 — — — Tomato Soft (Xi'an) Ltd. 100% — — — 181 — — $ 6,468 $ 5,240 $ 166 $ 219 $ 1,071 $ 89 Nine Months Ended September 30, 2017 Counterparty DNI Ownership Interest Sales Cost of revenue Manufacturing (Cost of revenue) Research and product development Selling, marketing, Other Expenses DNI (Parent Company) N/A $ 16,608 $ 14,020 $ — $ — $ 3,491 $ 171 CHASAN Networks Co., Ltd. 100% — — 578 79 — — DASAN FRANCE 100% 1,612 1,512 — — 383 — DASAN INDIA Private Limited 100% 6,287 4,783 — — 30 — D-Mobile 100% 3,054 1,831 — — 318 — Fine Solution 100% — — — — 4 — HANDYSOFT, Inc. 17.64% 88 23 — — 6 4 J-Mobile Corporation 90.47% 8 — — — 132 — Tomato Soft Ltd. 100% — — 104 108 — — Tomato Soft (Xi'an) Ltd. 100% — — — 448 37 — Solueta 27.21% — — — — — 3 $ 27,657 $ 22,169 $ 682 $ 635 $ 4,401 $ 178 Nine Months Ended September 30, 2016 (As Revised) Counterparty DNI Ownership Interest Sales Cost of revenue Manufacturing (Cost of revenue) Research and product development Selling, marketing, Other Expenses DNI (Parent Company) N/A $ 19,080 $ 16,219 $ — $ — $ 4,255 $ 309 CHASAN Networks Co., Ltd. 100% — — 436 106 — — DASAN FRANCE 100% 3 3 — — — — DASAN INDIA Private Limited 100% — — — — — — D-Mobile 100% 3,135 2,231 — — 318 — DMC, Inc. 27.21% 1 1 — — — — HANDYSOFT, Inc. 17.64% 150 130 — — — — J-Mobile Corporation 90.47% 39 — — — 634 — PANDA Media, Inc. 100% — — — — 2 — Tomato Soft Ltd. 100% — — 98 — — — Tomato Soft (Xi'an) Ltd. 100% — — — 560 — — $ 22,408 $ 18,584 $ 534 $ 666 $ 5,209 $ 309 The Company has entered into certain sales agreements with DNI and certain of its subsidiaries. Sales and cost of revenue to DNI, DASAN France, DASAN INDIA Private Limited, and D-Mobile represent finished goods produced by the Company that are sold to these related parties who sell the Company's products in Korea, France, India and Taiwan, respectively. The Company has entered into agreements with Tomato Soft Ltd. and CHASAN Networks Co., Ltd. to provide manufacturing and research and development services for the Company. Under the agreement with Tomato Soft Ltd. and CHASAN Networks., Ltd., the Company is charged a cost plus 7% fee for the manufacturing and development of certain deliverables. The Company has entered into an agreement with Tomato Soft (Xi'an) Ltd. to provide research and development services for the Company. Under the agreement with Tomato Soft (Xi'an) Ltd., the Company is charged an expected annual fee of $0.8 million for the development of certain deliverables. Prior to the Merger, as DNS was then a wholly owned subsidiary of DNI, DNI had sales agreements with certain customers on DNS' behalf. Since the Merger, due to these prior sales agreements, the Company has entered into an agreement with DNI in which DNI acts as a sales channel to these customers. Selling, marketing, general and administrative expense to DNI includes a fee of 3% of total sales to DNI for sales to these customers. The Company shares office space with DNI and certain of DNI's subsidiaries. Prior to the Merger, DNS, then a wholly owned subsidiary of DNI, shared human resources, treasury and other administrative support with DNI. As such, the Company entered into certain service sharing agreements with DNI and certain of its subsidiaries for the shared office space and shared administrative services. Expenses related to rent and administrative services are allocated to the Company based on square footage occupied and headcount, respectively. The Company has entered into sales agreement with Handysoft, Inc., provider of software and system integration solutions in Korea, to supply networks equipment, research and development and logistics services through DASAN Networks, Inc. The Company has entered into sales agreement with J-Mobile Corporation to supply networks equipment in Japan. J-Mobile Corporation also provides marketing services in Japan. Other expenses to related parties represent expenses to DNI for its payment guarantees relating to the Company's borrowings. The Company pays DNI a guarantee fee which is calculated as 0.9% of the guaranteed amount. Balances of Receivables and Payables with Related Parties Balances of receivables and payables arising from sales and purchases of goods and services with related parties as of September 30, 2017 and December 31, 2016 were as follows (in thousands): As of September 30, 2017 Counterparty DNI Ownership Interest Account receivables Other receivables Deposits for lease* Accounts payable Other payables Loans DNI (Parent Company) N/A $ 9,196 $ — $ 727 $ — $ 125 $ 6,800 ABLE 61.99% 56 — — — — — CHASAN Networks Co., Ltd. 100% — — — 100 — — DASAN France 100% 662 4 — — — — D-Mobile 100% 3,001 16 — — — — HANDYSOFT, Inc. 17.64% 26 — — 6 1 — Solueta 27.21% — 2 — — 2 1,744 Tomato Soft Ltd. 100% — — — — 25 — Tomato Soft (Xi'an) Ltd. 100% — — — — 57 — $ 12,941 $ 22 $ 727 $ 106 $ 210 $ 8,544 As of December 31, 2016 Counterparty DNI Ownership Interest Account receivables Other receivables Deposits for lease* Accounts payable Other payables Loans DNI (Parent Company) N/A $ 6,679 $ 171 $ 690 $ 360 $ 6,861 $ 6,800 ABLE 61.99% 53 — 9 — — — CHASAN Networks Co., Ltd. 100% — — — 70 — — DASAN France 100% 23 — — — — — DASAN INDIA Private Limited 100% 2,606 — — — — — D-Mobile 100% 3,943 — — — — — HANDYSOFT, Inc. 17.64% 2 — — — — — J-Mobile Corporation 68.56% 5 — — — — — Tomato Soft Ltd. 100% — — — — 16 — Tomato Soft (Xi'an) Ltd. 100% — — — — 63 — $ 13,311 $ 171 $ 699 $ 430 $ 6,940 $ 6,800 * Included in other assets related to deposits for lease in the condensed consolidated balance sheet as of September 30, 2017 and the consolidated balance sheet as of December 31, 2016. |
Net Income (Loss) Per Share Att
Net Income (Loss) Per Share Attributable to DASAN Zhone Solutions, Inc. | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share Attributable to DASAN Zhone Solutions, Inc. | Net Income (Loss) Per Share Attributable to DASAN Zhone Solutions, Inc. Basic net income (loss) per share attributable to DASAN Zhone Solutions, Inc. is computed by dividing the net income (loss) attributable to DASAN Zhone Solutions, Inc. for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net income (loss) per share attributable to DASAN Zhone Solutions, Inc. gives effect to common stock equivalents; however, potential common equivalent shares are excluded if their effect is antidilutive. Potential common equivalent shares are composed of incremental shares of common equivalent shares issuable upon the exercise of stock options and the vesting of restricted stock units. Basic net income (loss) per share is the same as diluted net income (loss) per share for the three and nine months ended September 30, 2016 because DNS did not issue the potentially dilutive common stock. Basic net income (loss) per share is the same as diluted net income (loss) per share for the three and nine months ended September 30, 2017 because the effects of stock options and restricted stock units would have been anti-dilutive. The following table is a reconciliation of the numerator and denominator in the basic and diluted net income (loss) per share calculation (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (As Revised) (As Revised) Net income (loss) attributable to DASAN Zhone Solutions, Inc. $ 1,399 $ (4,733 ) $ (3,157 ) $ (9,066 ) Weighted average number of shares outstanding: Basic 16,382 11,139 16,380 10,046 Effect of dilutive securities: Stock options, restricted stock units and share awards — — — — Diluted 16,382 11,139 16,380 10,046 Net income (loss) per share attributable to DASAN Zhone Solutions, Inc.: Basic $ 0.09 $ (0.42 ) $ (0.19 ) $ (0.90 ) Diluted $ 0.09 $ (0.42 ) $ (0.19 ) $ (0.90 ) The outstanding common equivalent shares excluded from the computation of the diluted net income (loss) per share attributable to DASAN Zhone Solutions, Inc. for the periods presented because including them would have been antidilutive are as follows (in thousands): Three and Nine Months Ended September 30, 2017 2016 (As Revised) Stock options 915 795 Restricted stock units 2 9 917 804 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company has entered into operating leases for certain office space and equipment, some of which contain renewal options and escalation clauses. Estimated future lease payments under all non-cancellable operating leases with terms in excess of one year, including taxes and service fees, are as follows (in thousands): Operating Leases Year ending December 31: 2017 (remainder of the year) $ 967 2018 3,359 2019 2,496 2020 2,358 2021 2,264 Thereafter 8,722 Total minimum lease payments $ 20,166 Warranties The Company accrues for warranty costs based on historical trends for the expected material and labor costs to provide warranty services. Warranty periods are generally two to five years from the date of shipment. The following table reconciles changes in the Company’s accrued warranties and related costs for the nine months ended September 30, 2017 and 2016 (in thousands): Nine Months Ended September 30, 2017 2016 Beginning balance $ 878 $ 441 Charged to cost of revenue 126 227 Claims and settlements (195 ) (389 ) Foreign exchange impact 14 78 Ending balance $ 823 $ 357 Performance Bonds In the normal course of operations, from time to time, the Company arranges for the issuance of various types of surety bonds, such as bid and performance bonds, which are agreements under which the surety company guarantees that the Company will perform in accordance with contractual or legal obligations. As of September 30, 2017 , the Company had $1.0 million of performance bonds and $0.4 million of warranty bonds guaranteed by third parties. In addition, the Company has entered into a sales agreement with DNI, that distributes Company's products to a certain customer in Vietnam. Under the agreement with the customer, DNI is required to provides various types of surety bonds which are guaranteed by the bank. As of September 30, 2017, the Company had restricted cash of $1.2 million , $2.1 million and $2.0 million as a collateral for the advance payment bonds, performance bonds and warranty bonds, respectively, issued by DNI. Purchase Commitments The Company has agreements with various contract manufacturers which include non-cancellable inventory purchase commitments. The Company’s inventory purchase commitments typically allow for cancellation of orders 30 days in advance of the required inventory availability date as set by the Company at time of order. The amount of non-cancellable purchase commitments outstanding, net of reserve, was $3.0 million as of September 30, 2017 . Payment Guarantees The following table sets forth third parties that have provided payment guarantees of the Company's indebtedness and other obligations as of September 30, 2017 (in thousands): Guarantor Amount Guaranteed Description of Obligations Guaranteed DNI (Parent Company) $ 3,349 Borrowings from Shinhan Bank DNI (Parent Company) 1,884 Purchasing card from Shinhan Bank DNI (Parent Company) 10,493 Credit facility & purchasing card from Industrial Bank of Korea DNI (Parent Company) 6,000 Credit facility from NongHyup Bank DNI (Parent Company) 523 Purchasing card from NongHyup Bank Industrial Bank of Korea 6,512 Credit facility Industrial Bank of Korea 864 Performance bonds NongHyup Bank 4,567 Credit facility Shinhan Bank 191 Purchasing card KEB Hana Bank 33 Performance bonds State Bank of India 38 Performance bonds Seoul Guarantee Insurance Co. 54 Performance bonds Seoul Guarantee Insurance Co. 373 Warranty bonds $ 34,881 Royalties The Company has certain royalty commitments associated with the shipment and licensing of certain products. Royalty expense is generally based on a dollar amount per unit shipped or a percentage of the underlying revenue and is recorded in cost of revenue. Legal Proceedings The Company is subject to various legal proceedings, claims and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, the Company records an accrual for legal contingencies that it has determined to be probable to the extent the amount of the loss can be reasonably estimated. The Company does not expect that the ultimate costs to resolve these matters will have a material adverse effect on its consolidated financial position or results of operations. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the results of operations of the period in which the ruling occurs, or future periods. |
Enterprise-Wide Information
Enterprise-Wide Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Enterprise-Wide Information | Enterprise-Wide Information The Company is a global provider of network access solutions and communications equipment for service provider and enterprise networks. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the Company unit level. Accordingly, the Company is considered to be in a single reporting segment and operating unit structure. The Company’s chief operating decision makers are the Company’s Co-Chief Executive Officers, who review financial information presented on a consolidated basis accompanied by disaggregated information about revenues by geographic region for purposes of making operating decisions and assessing financial performance. The Company attributes revenue from customers to individual countries based on location shipped. The following summarizes required disclosures about geographic concentrations and revenue by products and services (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (As Revised) (As Revised) Revenue by geography: United States $ 13,068 $ 3,408 $ 37,176 $ 7,432 Canada 1,498 254 4,112 254 Total North America 14,566 3,662 41,288 7,686 Latin America 7,480 1,877 19,425 2,912 Europe, Middle East, Africa 7,378 2,232 19,134 5,209 Korea 20,520 18,372 69,032 60,144 Other Asia Pacific 16,494 5,097 29,612 14,881 Total International 51,872 27,578 137,203 83,146 Total $ 66,438 $ 31,240 $ 178,491 $ 90,832 Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (As Revised) (As Revised) Revenue by products and services: Products $ 63,257 $ 28,891 $ 169,831 $ 84,666 Services 3,181 2,349 8,660 6,166 Total $ 66,438 $ 31,240 $ 178,491 $ 90,832 The Company's property and equipment, net of accumulated depreciation, were located in the following geographical areas as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 December 31, 2016 United States $ 3,611 $ 4,094 Korea 1,449 1,455 Japan and Vietnam 752 739 $ 5,812 $ 6,288 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense for the three and nine months ended September 30, 2017 was $0.1 million and $0.6 million , respectively, on pre-tax income (losses) of $1.5 million and $(2.3) million , respectively. For the three and nine months ended September 30, 2016 , the Company recognized income tax benefit of $0.6 million and $1.0 million , respectively, on pre-tax losses of $5.4 million and $10.1 million , respectively. As of September 30, 2017 , the income tax rate varied from the United States statutory income tax rate primarily due to valuation allowances in the United States and taxable income generated by the Company’s wholly-owned foreign subsidiaries. Management periodically evaluates the realizability of the Company's net deferred tax assets based on all available evidence, both positive and negative. The Company evaluates on a jurisdictional basis and certain jurisdictions could result in a realization of net deferred tax assets sooner than others. The realization of net deferred tax assets is dependent on the Company's ability to generate sufficient future taxable income, on a jurisdictional basis, during periods prior to the expiration of tax attributes to fully utilize these assets. The Company weighed both positive and negative evidence and determined that there is a continued need for a full valuation allowance on its deferred tax assets in certain jurisdictions as of September 30, 2017. The Company currently believes there is not sufficient positive evidence of future profitability to change its judgment regarding the need for a full valuation allowance on its deferred tax assets in these jurisdictions. The continued improvement in the Company's operating results, conditioned on successfully commercializing new business arrangements and managing costs would provide additional positive evidence in determining the need for a valuation allowance in certain jurisdictions and could lead to reversal of substantially all of the Company's valuation allowance on its deferred tax assets. Until such time, consumption of tax attributes to offset profits will reduce the overall level of deferred tax assets subject to valuation allowance. Should the Company determine that it would be able to realize its remaining deferred tax assets in the foreseeable future, on a jurisdictional basis, an adjustment to its remaining deferred tax assets would cause a material increase to income in the period such determination is made. The total amount of unrecognized tax benefits, including interest and penalties, at September 30, 2017 was not material. The amount of tax benefits that would impact the effective income tax rate, if recognized, is not expected to be material. There were no significant changes to unrecognized tax benefits during the quarters ended September 30, 2017 and 2016. The Company does not anticipate any significant changes with respect to unrecognized tax benefits within the next 12 months. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The open tax years for the major jurisdictions are as follows: • Federal 2013 - 2016 • California and Canada 2012 - 2016 • Brazil 2011 - 2016 • Germany 2012 - 2016 • Japan 2011 - 2016 • Korea 2015 - 2016 • United Kingdom 2014 - 2016 • Vietnam 2016 However, due to the fact the Company had net operating losses and credits carried forward in most jurisdictions, certain items attributable to closed years are still subject to adjustment by the relevant taxing authority through an adjustment to tax attributes carried forward to open years. The Company estimates that its foreign income will generally be subject to taxation in the United States on a current basis and that its foreign subsidiaries and representative offices will therefore not have any material untaxed earnings subject to deferred taxes. In addition, to the extent the Company is deemed to have sufficient connection to a particular taxing jurisdiction to enable that jurisdiction to tax the Company but the Company has not filed an income tax return in that jurisdiction for the year(s) at issue, the jurisdiction would typically be able to assert a tax liability for such years without limitation on the number of years it may examine. The Company is not currently under examination for income taxes in any material jurisdiction. |
Non-Controlling Interests
Non-Controlling Interests | 9 Months Ended |
Sep. 30, 2017 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interests | Non-Controlling Interests Non-controlling interests for the nine months ended September 30, 2017 and 2016 were as follows (in thousands): Nine Months Ended September 30, 2017 2016 Beginning non-controlling interests $ 416 $ 138 Acquisition of additional interest in a subsidiary — 277 Net income (loss) attributable to non-controlling interests 172 (17 ) Foreign currency translation adjustments (OCI) 19 66 Ending non-controlling interests $ 607 $ 464 |
Organization and Summary of S19
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. All intercompany transactions and balances have been eliminated in consolidation. The results of operations for the current interim period are not necessarily indicative of results to be expected for the current year or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the unaudited condensed consolidated financial statements of the Company and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission. As discussed more fully in Note 2, the Merger is treated as a reverse acquisition for accounting purposes, with DNS as the acquirer of the Company. As such, the consolidated financial results of the Company for the three and nine months ended September 30, 2017 are compared to the financial results for DNS and its consolidated subsidiaries for the prior year period through September 8, 2016 and the financial results of DZS and its consolidated subsidiaries for the period from September 9, 2016 through September 30, 2016 . The balance sheet of the Company reflects the fair value of the assets and liabilities of Legacy Zhone as of the effective date of the Merger. Those assets include the fair value of acquired intangible assets and goodwill. Due to the foregoing, the Company’s financial results for the three and nine months ended September 30, 2017 are not comparable to its financial results for the three and nine months ended September 30, 2016 . Except as otherwise specifically noted herein, all references to the "Company" refer to (i) DNS and its consolidated subsidiaries for periods through September 8, 2016 and (ii) the Company and its consolidated subsidiaries for periods on or after September 9, 2016. |
Concentration of Risk | Concentration of Risk The Company’s customers include competitive and incumbent local exchange carriers, competitive access providers, Internet service providers, wireless carriers and resellers serving these markets. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Allowances are maintained for potential doubtful accounts. For the three months ended September 30, 2017 , two customers represented, 10% and 9% of net revenue, respectively. For the three months ended September 30, 2016 , three customers represented 18% , 16% (a related-party) and 12% of net revenue, respectively. For the nine months ended September 30, 2017 , two customers each represented 9% of net revenue (one of which was a related-party). For the nine months ended September 30, 2016 , three customers represented 23% , 21% (a related-party) and 12% of net revenue, respectively. As of September 30, 2017 , three customers represented 16% (a related-party), 11% and 10% of net accounts receivable, respectively. As of December 31, 2016, two customers represented 13% (a related-party) and 10% of net accounts receivable, respectively. As of September 30, 2017 and December 31, 2016, receivables from customers in countries other than the United States represented 84% and 87% , respectively, of net accounts receivable. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of the guidance in ASU No. 2014-09, Revenue from Contracts with Customer, for all entities by one year. With the deferral, the new standard is effective for the Company on January 1, 2018. Early adoption is permitted, but not before the original effective date of January 1, 2017. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients, which provides clarification on how to assess collectibility, present sales tax, treat noncash consideration, and account for completed and modified contracts at the time of transition of ASU 2014-09. The effective date of this updated guidance for the Company is the same as the effective date of ASU 2014-09, which is January 1, 2018. The Company does not plan to early adopt this guidance. The Company is currently assessing the potential impact of adopting this new guidance on its unaudited condensed consolidated financial statements. The Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its unaudited condensed consolidated financial statements at this time. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which requires an entity to measure inventory at the lower of cost and net realizable value. The guidance does not apply to inventory that is measured using last-in, first-out ("LIFO") or the retail inventory method. The guidance applies to all other inventory, which includes inventory that is measured using first-in, first-out ("FIFO") or average cost. The guidance is effective for the Company on January 1, 2017, and will be adopted accordingly. ASU No. 2015-11 should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of this standard will have no impact on the Company's unaudited condensed consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes, Balance Sheet Classification of Deferred Taxes, which simplifies the classification of deferred tax assets and liabilities as non-current in the balance sheet. The updated guidance is effective for the Company on January 1, 2017, and will be adopted accordingly. The adoption of this standard will not have a material impact on the Company's unaudited condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for the Company on January 1, 2019, and early adoption is permitted. The Company does not plan to early adopt this guidance. The Company expects its assets and liabilities to increase as a result of the adoption of this standard. The Company is currently assessing the potential impact of adopting this new guidance on its unaudited condensed consolidated financial statements. The Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its unaudited condensed consolidated financial statements at this time. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which requires entities to simplify several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on statements of cash flows. The guidance is effective for the Company on January 1, 2017, and has been adopted in the first quarter of 2017. The adoption of this standard had no material impact on the Company's unaudited condensed consolidated financial statements. In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows, Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The updated guidance is effective for the Company on January 1, 2018. Early adoption is permitted. The Company continues to assess all the potential impacts of the new standard and anticipates this standard may have a material impact on its unaudited condensed consolidated financial statements. The Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its unaudited condensed consolidated financial statements at this time. In November 2016, FASB issued ASU 2016-18, Statement of Cash Flows, Restricted Cash, which require that a statement of cash flows to explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents. The updated guidance is effective for the Company beginning on January 1, 2018. Early adoption is permitted. Adoption of this ASU is applied using a retrospective approach. As a result, the Company will no longer present transfers between cash and cash equivalents and restricted cash in the consolidated cash flow statements. In January 2017, FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment. The updated guidance is effective for the Company on January 1, 2020, and will be adopted accordingly. Early adoption is permitted. The Company is currently assessing the potential impact of adopting this new guidance on its unaudited condensed consolidated financial statements. The Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its unaudited condensed consolidated financial statements at this time. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of modification accounting. The purpose of the amendment is to clarify which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The updated guidance is effective for the Company beginning on January 1, 2018. The Company is currently assessing the potential impact of adopting this new guidance on its unaudited condensed consolidated financial statements. The Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its unaudited condensed consolidated financial statements at this time. |
Merger (Tables)
Merger (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The estimated total purchase consideration is calculated as follows (in thousands): Shares Estimated Fair Value Shares of Legacy Zhone stock as of September 8, 2016 6,874 $ 40,902 Legacy Zhone stock options 198 540 Total Purchase Consideration $ 41,442 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the fair value consideration transferred as of the acquisition date (in thousands): Cash and cash equivalents $ 7,013 Accounts receivable 18,510 Inventory 16,456 Prepaid expenses and other current assets 2,191 Property and equipment 4,339 Other assets 125 Identifiable intangible assets 10,479 Goodwill 3,284 Accounts payable (11,021 ) Accrued and other liabilities (7,089 ) Other long-term liabilities (2,845 ) Total Indicated Fair Value of Assets $ 41,442 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table presents the fair values of the acquired intangible assets at the effective date of the Merger (in thousands, except years): Useful life (in Years) Fair Value Developed technology 5 $ 3,060 Customer relationships 10 5,240 Backlog 1 2,179 $ 10,479 |
Pro forma information | The following unaudited pro forma condensed combined financial information for the three and nine months ended September 30, 2016 gives effect to the Merger as if it had occurred at the beginning of 2015. The unaudited pro forma condensed combined financial information has been included for comparative purposes only and is not necessarily indicative of what the combined Company's financial position or results of operations might have been had the Merger been completed as of the date indicated. September 30, 2016 (in thousands) Three Nine Pro forma total net revenue $ 39,740 $ 142,530 Pro forma net loss (15,569 ) (25,504 ) |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories as of September 30, 2017 and December 31, 2016 were as follows (in thousands): September 30, December 31, Raw materials $ 12,812 $ 13,547 Work in process 3,004 3,705 Finished goods 16,150 13,780 Total inventories $ 31,966 $ 31,032 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment as of September 30, 2017 and December 31, 2016 were as follows (in thousands): September 30, December 31, Furniture and fixtures $ 21,251 $ 20,040 Machinery and equipment 4,945 4,530 Leasehold improvements 3,386 3,573 Computers and software 567 411 Other 983 922 31,132 29,476 Less accumulated depreciation and amortization (25,109 ) (22,922 ) Less government grants (211 ) (266 ) Total property and equipment, net $ 5,812 $ 6,288 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill as of September 30, 2017 and December 31, 2016 was as follows (in thousands): September 30, December 31, Beginning balance $ 3,977 $ 693 Addition from Merger — 3,284 Less: accumulated impairment — — Ending balance $ 3,977 $ 3,977 |
Schedule of Intangible Assets | Intangible assets as of September 30, 2017 and December 31, 2016 were as follows (in thousands): September 30, December 31, Developed technology $ 3,060 $ 3,060 Customer relationships 5,240 5,240 Backlog 2,179 2,179 Other 194 105 Less accumulated amortization (3,499 ) (1,817 ) Intangible assets, net $ 7,174 $ 8,767 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | As of September 30, 2017 and December 31, 2016, the Company had an aggregate outstanding balance of $18.4 million and $17.6 million , respectively, under such financing arrangements, and the interest rates per annum applicable to outstanding borrowings under these financing arrangements were as listed in the tables below. As of September 30, 2017 Interest rate (%) Amount Industrial Bank of Korea Credit facility 2.8 - 3.0 $ 3,235 Industrial Bank of Korea Trade finance 3.9-5.4 2,287 Shinhan Bank General loan 5.89 2,791 Shinhan Bank Trade finance 3.70 1,950 NongHyup Bank Credit facility 1.7 - 3.0 1,841 The Export-Import Bank of Korea Export development loan 3.1 6,278 $ 18,382 As of December 31, 2016 Interest rate (%) Amount Industrial Bank of Korea Credit facility 2.16 - 2.76 $ 1,106 Shinhan Bank General loan 4.08 3,310 Shinhan Bank Trade finance 3.28 - 3.44 1,752 NongHyup Bank Credit facility 1.92 - 2.66 482 KEB Hana Bank Comprehensive credit loan 2.79 3,501 The Export-Import Bank of Korea Export development loan 3.10 7,448 $ 17,599 |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Balances of receivables and payables arising from sales and purchases of goods and services with related parties as of September 30, 2017 and December 31, 2016 were as follows (in thousands): As of September 30, 2017 Counterparty DNI Ownership Interest Account receivables Other receivables Deposits for lease* Accounts payable Other payables Loans DNI (Parent Company) N/A $ 9,196 $ — $ 727 $ — $ 125 $ 6,800 ABLE 61.99% 56 — — — — — CHASAN Networks Co., Ltd. 100% — — — 100 — — DASAN France 100% 662 4 — — — — D-Mobile 100% 3,001 16 — — — — HANDYSOFT, Inc. 17.64% 26 — — 6 1 — Solueta 27.21% — 2 — — 2 1,744 Tomato Soft Ltd. 100% — — — — 25 — Tomato Soft (Xi'an) Ltd. 100% — — — — 57 — $ 12,941 $ 22 $ 727 $ 106 $ 210 $ 8,544 As of December 31, 2016 Counterparty DNI Ownership Interest Account receivables Other receivables Deposits for lease* Accounts payable Other payables Loans DNI (Parent Company) N/A $ 6,679 $ 171 $ 690 $ 360 $ 6,861 $ 6,800 ABLE 61.99% 53 — 9 — — — CHASAN Networks Co., Ltd. 100% — — — 70 — — DASAN France 100% 23 — — — — — DASAN INDIA Private Limited 100% 2,606 — — — — — D-Mobile 100% 3,943 — — — — — HANDYSOFT, Inc. 17.64% 2 — — — — — J-Mobile Corporation 68.56% 5 — — — — — Tomato Soft Ltd. 100% — — — — 16 — Tomato Soft (Xi'an) Ltd. 100% — — — — 63 — $ 13,311 $ 171 $ 699 $ 430 $ 6,940 $ 6,800 * Included in other assets related to deposits for lease in the condensed consolidated balance sheet as of September 30, 2017 and the consolidated balance sheet as of December 31, 2016. Sales and purchases, cost of revenue, research and product development, selling, marketing, general and administrative and other expenses to and from related parties for the three and nine months ended September 30, 2017 and 2016 were as follows (in thousands): Three Months Ended September 30, 2017 Counterparty DNI Ownership Interest Sales Cost of revenue Manufacturing (Cost of revenue) Research and product development Selling, marketing, general and administrative Other Expenses DNI (Parent Company) N/A $ 3,976 $ 3,604 $ — $ — $ 1,291 $ 51 CHASAN Networks Co., Ltd. 100% — — 257 20 — — DASAN FRANCE 100% 662 576 — — 83 — DASAN INDIA Private Limited 100% — — — — 30 — D-Mobile 100% 1,233 1,077 — — 122 — HANDYSOFT, Inc. 17.64% 54 12 — — 6 4 Tomato Soft Ltd. 100% — — 43 108 — — Tomato Soft (Xi'an) Ltd. 100% — — — 144 — — $ 5,925 $ 5,269 $ 300 $ 272 $ 1,532 $ 55 Three Months Ended September 30, 2016 (As Revised) Counterparty DNI Ownership Interest Sales Cost of revenue Manufacturing (Cost of revenue) Research and product development Selling, marketing, Other Expenses DNI (Parent Company) N/A $ 5,112 $ 4,390 $ — $ — $ 946 $ 89 CHASAN Networks Co., Ltd. 100% — — 130 38 — — DASAN FRANCE 100% 3 3 — — — — D-Mobile 100% 1,267 789 — — 125 — HANDYSOFT, Inc. 17.64% 68 58 — — — — J-Mobile Corporation 90.47% 18 — — — — — Tomato Soft Ltd. 100% — — 36 — — — Tomato Soft (Xi'an) Ltd. 100% — — — 181 — — $ 6,468 $ 5,240 $ 166 $ 219 $ 1,071 $ 89 Nine Months Ended September 30, 2017 Counterparty DNI Ownership Interest Sales Cost of revenue Manufacturing (Cost of revenue) Research and product development Selling, marketing, Other Expenses DNI (Parent Company) N/A $ 16,608 $ 14,020 $ — $ — $ 3,491 $ 171 CHASAN Networks Co., Ltd. 100% — — 578 79 — — DASAN FRANCE 100% 1,612 1,512 — — 383 — DASAN INDIA Private Limited 100% 6,287 4,783 — — 30 — D-Mobile 100% 3,054 1,831 — — 318 — Fine Solution 100% — — — — 4 — HANDYSOFT, Inc. 17.64% 88 23 — — 6 4 J-Mobile Corporation 90.47% 8 — — — 132 — Tomato Soft Ltd. 100% — — 104 108 — — Tomato Soft (Xi'an) Ltd. 100% — — — 448 37 — Solueta 27.21% — — — — — 3 $ 27,657 $ 22,169 $ 682 $ 635 $ 4,401 $ 178 Nine Months Ended September 30, 2016 (As Revised) Counterparty DNI Ownership Interest Sales Cost of revenue Manufacturing (Cost of revenue) Research and product development Selling, marketing, Other Expenses DNI (Parent Company) N/A $ 19,080 $ 16,219 $ — $ — $ 4,255 $ 309 CHASAN Networks Co., Ltd. 100% — — 436 106 — — DASAN FRANCE 100% 3 3 — — — — DASAN INDIA Private Limited 100% — — — — — — D-Mobile 100% 3,135 2,231 — — 318 — DMC, Inc. 27.21% 1 1 — — — — HANDYSOFT, Inc. 17.64% 150 130 — — — — J-Mobile Corporation 90.47% 39 — — — 634 — PANDA Media, Inc. 100% — — — — 2 — Tomato Soft Ltd. 100% — — 98 — — — Tomato Soft (Xi'an) Ltd. 100% — — — 560 — — $ 22,408 $ 18,584 $ 534 $ 666 $ 5,209 $ 309 |
Net Income (Loss) Per Share A26
Net Income (Loss) Per Share Attributable to DASAN Zhone Solutions, Inc. (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table is a reconciliation of the numerator and denominator in the basic and diluted net income (loss) per share calculation (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (As Revised) (As Revised) Net income (loss) attributable to DASAN Zhone Solutions, Inc. $ 1,399 $ (4,733 ) $ (3,157 ) $ (9,066 ) Weighted average number of shares outstanding: Basic 16,382 11,139 16,380 10,046 Effect of dilutive securities: Stock options, restricted stock units and share awards — — — — Diluted 16,382 11,139 16,380 10,046 Net income (loss) per share attributable to DASAN Zhone Solutions, Inc.: Basic $ 0.09 $ (0.42 ) $ (0.19 ) $ (0.90 ) Diluted $ 0.09 $ (0.42 ) $ (0.19 ) $ (0.90 ) |
Schedule of antidilutive securities excluded from computation of earnings per share | The outstanding common equivalent shares excluded from the computation of the diluted net income (loss) per share attributable to DASAN Zhone Solutions, Inc. for the periods presented because including them would have been antidilutive are as follows (in thousands): Three and Nine Months Ended September 30, 2017 2016 (As Revised) Stock options 915 795 Restricted stock units 2 9 917 804 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Estimated Future Lease Payments under All Non Cancelable Operating Leases | The Company has entered into operating leases for certain office space and equipment, some of which contain renewal options and escalation clauses. Estimated future lease payments under all non-cancellable operating leases with terms in excess of one year, including taxes and service fees, are as follows (in thousands): Operating Leases Year ending December 31: 2017 (remainder of the year) $ 967 2018 3,359 2019 2,496 2020 2,358 2021 2,264 Thereafter 8,722 Total minimum lease payments $ 20,166 |
Reconciliation of Changes in Accrued Warranties and Related Costs | The following table reconciles changes in the Company’s accrued warranties and related costs for the nine months ended September 30, 2017 and 2016 (in thousands): Nine Months Ended September 30, 2017 2016 Beginning balance $ 878 $ 441 Charged to cost of revenue 126 227 Claims and settlements (195 ) (389 ) Foreign exchange impact 14 78 Ending balance $ 823 $ 357 |
Payment Guarantees Provided by Third Parties | The following table sets forth third parties that have provided payment guarantees of the Company's indebtedness and other obligations as of September 30, 2017 (in thousands): Guarantor Amount Guaranteed Description of Obligations Guaranteed DNI (Parent Company) $ 3,349 Borrowings from Shinhan Bank DNI (Parent Company) 1,884 Purchasing card from Shinhan Bank DNI (Parent Company) 10,493 Credit facility & purchasing card from Industrial Bank of Korea DNI (Parent Company) 6,000 Credit facility from NongHyup Bank DNI (Parent Company) 523 Purchasing card from NongHyup Bank Industrial Bank of Korea 6,512 Credit facility Industrial Bank of Korea 864 Performance bonds NongHyup Bank 4,567 Credit facility Shinhan Bank 191 Purchasing card KEB Hana Bank 33 Performance bonds State Bank of India 38 Performance bonds Seoul Guarantee Insurance Co. 54 Performance bonds Seoul Guarantee Insurance Co. 373 Warranty bonds $ 34,881 |
Enterprise-Wide Information (Ta
Enterprise-Wide Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Revenue by Geography | The following summarizes required disclosures about geographic concentrations and revenue by products and services (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (As Revised) (As Revised) Revenue by geography: United States $ 13,068 $ 3,408 $ 37,176 $ 7,432 Canada 1,498 254 4,112 254 Total North America 14,566 3,662 41,288 7,686 Latin America 7,480 1,877 19,425 2,912 Europe, Middle East, Africa 7,378 2,232 19,134 5,209 Korea 20,520 18,372 69,032 60,144 Other Asia Pacific 16,494 5,097 29,612 14,881 Total International 51,872 27,578 137,203 83,146 Total $ 66,438 $ 31,240 $ 178,491 $ 90,832 |
Revenue by Products and Services | Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (As Revised) (As Revised) Revenue by products and services: Products $ 63,257 $ 28,891 $ 169,831 $ 84,666 Services 3,181 2,349 8,660 6,166 Total $ 66,438 $ 31,240 $ 178,491 $ 90,832 |
Revenue by Geographical Area | The Company's property and equipment, net of accumulated depreciation, were located in the following geographical areas as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 December 31, 2016 United States $ 3,611 $ 4,094 Korea 1,449 1,455 Japan and Vietnam 752 739 $ 5,812 $ 6,288 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Open Tax Years for Major Jurisdictions | The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The open tax years for the major jurisdictions are as follows: • Federal 2013 - 2016 • California and Canada 2012 - 2016 • Brazil 2011 - 2016 • Germany 2012 - 2016 • Japan 2011 - 2016 • Korea 2015 - 2016 • United Kingdom 2014 - 2016 • Vietnam 2016 |
Non-Controlling Interests (Tabl
Non-Controlling Interests (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Noncontrolling Interest [Abstract] | |
Non-controlling interests | Non-controlling interests for the nine months ended September 30, 2017 and 2016 were as follows (in thousands): Nine Months Ended September 30, 2017 2016 Beginning non-controlling interests $ 416 $ 138 Acquisition of additional interest in a subsidiary — 277 Net income (loss) attributable to non-controlling interests 172 (17 ) Foreign currency translation adjustments (OCI) 19 66 Ending non-controlling interests $ 607 $ 464 |
Organization and Summary of S31
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | Feb. 28, 2017 | Sep. 30, 2017USD ($)customercountryshares | Sep. 30, 2016USD ($)customer | Sep. 30, 2017USD ($)customercountryshares | Sep. 30, 2016USD ($)customer | Dec. 31, 2016USD ($)customershares | Sep. 09, 2016 | Dec. 31, 2015USD ($) |
Significant Accounting Policies [Line Items] | ||||||||
Number of Customers | customer | 1,000 | 1,000 | ||||||
Number of Countries in which Entity Operates | country | 50 | 50 | ||||||
Net income (loss) | $ 1,387 | $ (4,789) | $ (2,985) | $ (9,083) | $ 15,300 | |||
Accumulated deficit | (23,080) | (23,080) | (19,923) | |||||
Working Capital | 57,300 | 57,300 | ||||||
Cash and cash equivalents | 10,145 | $ 33,563 | 10,145 | 33,563 | 17,893 | $ 9,095 | ||
Short-term debt | 18,382 | 18,382 | $ 17,599 | |||||
Letters of credit outstanding | 8,500 | 8,500 | ||||||
Credit facility, remaining borrowing capacity | $ 5,000 | 5,000 | ||||||
Net cash provided by (used in) investing activities | $ (5,934) | $ 6,207 | ||||||
Stock split, conversion ratio | 0.2 | |||||||
Common stock, authorized (in shares) | shares | 36,000,000 | 36,000,000 | 36,000,000 | |||||
Common stock, issued (in shares) | shares | 16,400,000 | 16,400,000 | ||||||
Net Revenue | Two major customers | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Number of customers | customer | 2 | 2 | ||||||
Net Revenue | Three major customers | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Number of customers | customer | 3 | 3 | ||||||
Net Revenue | Customer concentration risk | Two major customers, customer one | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 10.00% | 9.00% | ||||||
Net Revenue | Customer concentration risk | Two major customers, customer two | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 9.00% | |||||||
Net Revenue | Customer concentration risk | Three major customers, customer one | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 18.00% | 23.00% | ||||||
Net Revenue | Customer concentration risk | Three major customers, customer two | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 16.00% | 21.00% | ||||||
Net Revenue | Customer concentration risk | Three major customers, customer three | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 12.00% | 12.00% | ||||||
Accounts receivable | Two major customers | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Number of customers | customer | 2 | |||||||
Accounts receivable | Three major customers | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Number of customers | customer | 3 | |||||||
Accounts receivable | Customer concentration risk | Two major customers, customer one | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 13.00% | |||||||
Accounts receivable | Customer concentration risk | Two major customers, customer two | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 10.00% | |||||||
Accounts receivable | Customer concentration risk | Three major customers, customer one | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 16.00% | |||||||
Accounts receivable | Customer concentration risk | Three major customers, customer two | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 11.00% | |||||||
Accounts receivable | Customer concentration risk | Three major customers, customer three | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 10.00% | |||||||
Accounts receivable | Geographic concentration risk | Other than the United States | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 84.00% | 87.00% | ||||||
Merger Agreement with Dragon Acquisition Company | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percent of voting interest acquired | 58.00% | 58.00% | 58.00% | |||||
Dasan Network Solutions, Inc (DNS Korea) [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Cash and cash equivalents | $ 3,400 | $ 3,400 | ||||||
DASAN | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Short-term debt | 26,900 | 26,900 | ||||||
Revolving Credit Facility | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Credit facility, remaining borrowing capacity | $ 7,600 | $ 7,600 | ||||||
Restatement Adjustment [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Net cash provided by (used in) investing activities | $ 1,000 | |||||||
Scenario, Previously Reported [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Common stock, authorized (in shares) | shares | 180,000,000 | 180,000,000 | ||||||
Common stock, issued (in shares) | shares | 81,900,000 | 81,900,000 | ||||||
Revenue, Net [Member] | Restatement Adjustment [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Error correction, amount | $ (800) | (1,800) | ||||||
Net Income (Loss) [Member] | Restatement Adjustment [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Error correction, amount | (100) | (500) | ||||||
Related Party Revenue, Net [Member] | Restatement Adjustment [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Error correction, amount | 200 | 9,600 | ||||||
Cost of Revenue, Products and Services, Related Party [Member] | Restatement Adjustment [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Error correction, amount | $ 0 | $ 7,600 |
Merger (Details)
Merger (Details) | Feb. 28, 2017 | Sep. 09, 2016$ / sharesshares | Sep. 30, 2017 |
Business Acquisition [Line Items] | |||
Stock split, conversion ratio | 0.2 | ||
Merger Agreement with Dragon Acquisition Company | |||
Business Acquisition [Line Items] | |||
Percent of voting interest acquired | 58.00% | 58.00% | |
Shares issued in merger (in shares) | 9,493,016 | ||
Shares issued in merger held in escrow (in shares) | 949,302 | ||
Percent of voting interest retained by existing shareholders | 42.00% | ||
Business acquisition, share price (in dollars per share) | $ / shares | $ 5.95 |
Merger - Estimated Purchase Con
Merger - Estimated Purchase Consideration (Details) - USD ($) shares in Thousands, $ in Thousands | Sep. 09, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 08, 2016 |
Business Acquisition [Line Items] | ||||
Shares issued in merger (in shares) | 16,387 | 16,375 | ||
Merger Agreement with Dragon Acquisition Company | ||||
Business Acquisition [Line Items] | ||||
Shares issued in merger (in shares) | 6,874 | |||
Stock options assumed in merger (in shares) | 198 | |||
Shares issued in merger, fair value | $ 40,902 | |||
Stock options assumed in merger, fair value | 540 | |||
Total Purchase Consideration | $ 41,442 |
Merger - Schedule of Assets Acq
Merger - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 09, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 3,977 | $ 3,977 | $ 693 | |
Merger Agreement with Dragon Acquisition Company | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 7,013 | |||
Accounts receivable | 18,510 | |||
Inventory | 16,456 | |||
Prepaid expenses and other current assets | 2,191 | |||
Property and equipment | 4,339 | |||
Other assets | 125 | |||
Identifiable intangible assets | 10,479 | |||
Goodwill | 3,284 | |||
Accounts payable | (11,021) | |||
Accrued and other liabilities | (7,089) | |||
Other long-term liabilities | (2,845) | |||
Total Indicated Value of Assets | $ 41,442 |
Merger - Fair Value of Intangib
Merger - Fair Value of Intangible Assets Acquired (Details) - Merger Agreement with Dragon Acquisition Company $ in Thousands | Sep. 09, 2016USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 10,479 |
Developed Technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life (in Years) | 5 years |
Fair Value | $ 3,060 |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life (in Years) | 10 years |
Fair Value | $ 5,240 |
Backlog | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life (in Years) | 1 year |
Fair Value | $ 2,179 |
Merger - Pro Forma (Details)
Merger - Pro Forma (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Business Combinations [Abstract] | ||
Pro forma total net revenue | $ 39,740 | $ 142,530 |
Pro forma net loss | $ (15,569) | $ (25,504) |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Raw materials | $ 12,812 | $ 13,547 |
Work in process | 3,004 | 3,705 |
Finished goods | 16,150 | 13,780 |
Inventories | 31,966 | 31,032 |
Collateral pledged | ||
Inventory [Line Items] | ||
Inventories | $ 18,900 | $ 14,400 |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 31,132 | $ 29,476 |
Less accumulated depreciation and amortization | (25,109) | (22,922) |
Less government grants | (211) | (266) |
Property and equipment, net | 5,812 | 6,288 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 21,251 | 20,040 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,945 | 4,530 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,386 | 3,573 |
Computers and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 567 | 411 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 983 | $ 922 |
Property and Equipment - Addit
Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization associated with property and equipment | $ 0.5 | $ 0.4 | $ 1.4 | $ 0.9 |
Goodwill and Intangible Asset40
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | |||||
Beginning balance, Goodwill | $ 3,977 | $ 693 | $ 693 | ||
Addition from Merger | 0 | 3,284 | |||
Addition from Merger | $ 0 | 0 | 0 | ||
Ending balance, Goodwill | 3,977 | 3,977 | 3,977 | ||
Finite-Lived Intangible Assets [Line Items] | |||||
Less accumulated amortization | (3,499) | (3,499) | (1,817) | ||
Intangible assets, net | 7,174 | 7,174 | 8,767 | ||
Amortization of intangible assets | 300 | $ 300 | 1,700 | $ 300 | |
Developed Technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 3,060 | 3,060 | 3,060 | ||
Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 5,240 | 5,240 | 5,240 | ||
Backlog | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 2,179 | 2,179 | 2,179 | ||
Other | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | $ 194 | $ 194 | $ 105 |
Debt - Additional Information
Debt - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Line of Credit Facility [Line Items] | ||
Letters of credit outstanding | $ 8,500,000 | |
Credit facility, remaining borrowing capacity | 5,000,000 | |
Short-term debt | 18,382,000 | $ 17,599,000 |
WFB Facility | ||
Line of Credit Facility [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 25,000,000 | |
Credit facility, commitment fee on unused capacity, percentage | 0.25% | |
Credit facility, outstanding | $ 0 | |
Letters of credit outstanding | 2,500,000 | |
Credit facility, remaining borrowing capacity | $ 6,700,000 | |
Credit facility, interest rate | 380.00% | |
Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of credit outstanding | $ 6,000,000 | |
Foreign Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of credit outstanding | $ 12,000,000 |
Debt - Schedule of Short-Term D
Debt - Schedule of Short-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Short-term Debt [Line Items] | ||
Short-term debt | $ 18,382 | $ 17,599 |
Industrial Bank of Korea, Credit Facility | ||
Short-term Debt [Line Items] | ||
Short-term debt | 3,235 | $ 1,106 |
Industrial Bank of Korean, Trade Finance | ||
Short-term Debt [Line Items] | ||
Short-term debt | $ 2,287 | |
Shinhan Bank, General Loan | ||
Short-term Debt [Line Items] | ||
Stated interest rate | 5.89% | 4.08% |
Short-term debt | $ 2,791 | $ 3,310 |
Shinhan Bank, Trade Finance | ||
Short-term Debt [Line Items] | ||
Stated interest rate | 3.70% | |
Short-term debt | $ 1,950 | 1,752 |
Nonghyup Bank, Credit Facility | ||
Short-term Debt [Line Items] | ||
Short-term debt | $ 1,841 | $ 482 |
KEB Hana Bank, Comprehensive Credit Loan | ||
Short-term Debt [Line Items] | ||
Stated interest rate | 2.79% | |
Short-term debt | $ 3,501 | |
The Export-Import Bank of Korea, Export Development Loan | ||
Short-term Debt [Line Items] | ||
Stated interest rate | 3.10% | 3.10% |
Short-term debt | $ 6,278 | $ 7,448 |
Minimum | Industrial Bank of Korea, Credit Facility | ||
Short-term Debt [Line Items] | ||
Stated interest rate | 2.80% | 2.16% |
Minimum | Industrial Bank of Korean, Trade Finance | ||
Short-term Debt [Line Items] | ||
Stated interest rate | 3.90% | |
Minimum | Shinhan Bank, Trade Finance | ||
Short-term Debt [Line Items] | ||
Stated interest rate | 3.28% | |
Minimum | Nonghyup Bank, Credit Facility | ||
Short-term Debt [Line Items] | ||
Stated interest rate | 1.70% | 1.92% |
Maximum | Industrial Bank of Korea, Credit Facility | ||
Short-term Debt [Line Items] | ||
Stated interest rate | 3.00% | 2.76% |
Maximum | Industrial Bank of Korean, Trade Finance | ||
Short-term Debt [Line Items] | ||
Stated interest rate | 5.40% | |
Maximum | Shinhan Bank, Trade Finance | ||
Short-term Debt [Line Items] | ||
Stated interest rate | 3.44% | |
Maximum | Nonghyup Bank, Credit Facility | ||
Short-term Debt [Line Items] | ||
Stated interest rate | 3.00% | 2.66% |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) | Jun. 23, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Feb. 27, 2017 | Dec. 31, 2016 | Sep. 09, 2016 |
Related Party Transaction [Line Items] | ||||||||
Loans | $ 8,544,000 | $ 8,544,000 | $ 6,800,000 | |||||
Research and product development | 8,804,000 | $ 5,885,000 | $ 27,028,000 | $ 15,583,000 | ||||
DASAN | Majority Shareholder | ||||||||
Related Party Transaction [Line Items] | ||||||||
Guarantee fee, percent | 0.90% | |||||||
DASAN | Majority Shareholder | Receivables And Payables With Related Parties | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loans | 6,800,000 | $ 6,800,000 | 6,800,000 | |||||
Solueta | Affiliated Entity | Receivables And Payables With Related Parties | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loans | 1,744,000 | 1,744,000 | ||||||
CHASAN Networks Co., Ltd. | Affiliated Entity | Receivables And Payables With Related Parties | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loans | 0 | 0 | 0 | |||||
Tomato Soft (Xi'an) Ltd. | ||||||||
Related Party Transaction [Line Items] | ||||||||
Research and product development | 800,000 | |||||||
Tomato Soft (Xi'an) Ltd. | Affiliated Entity | Receivables And Payables With Related Parties | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loans | $ 0 | 0 | $ 0 | |||||
Junior lien | DASAN | Majority Shareholder | Loan Agreement | DNS US | ||||||||
Related Party Transaction [Line Items] | ||||||||
Origination of notes receivable from related parties | $ 1,800,000 | |||||||
Stated interest rate | 6.90% | |||||||
Junior lien | Solueta | Affiliated Entity | Loan Agreement | DNS US | ||||||||
Related Party Transaction [Line Items] | ||||||||
Origination of notes receivable from related parties | $ 3,500,000 | |||||||
Junior lien | CHASAN Networks Co., Ltd. | Affiliated Entity | Loan Agreement | DNS US | ||||||||
Related Party Transaction [Line Items] | ||||||||
Manufacturing and development fee, percent | 7.00% | 7.00% | ||||||
Unsecured debt | Junior lien | DASAN | Term Loan | Majority Shareholder | Loan Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Maximum borrowing amount | $ 5,000,000 | |||||||
Origination of notes receivable from related parties | $ 5,000,000 | |||||||
Stated interest rate | 4.60% | 4.60% | ||||||
Viettel Group [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Royalty fee, percent of total sales | 3.00% |
Related-Party Transactions - Sa
Related-Party Transactions - Sales and Purchases to and from Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Related Party Transaction [Line Items] | ||||
Sales | $ 5,925 | $ 6,468 | $ 27,657 | $ 22,408 |
Products and services - related parties | 5,569 | 5,406 | 22,851 | 19,118 |
Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Sales | 5,925 | 6,468 | 27,657 | 22,408 |
Products and services - related parties | 5,269 | 5,240 | 22,169 | 18,584 |
Manufacturing (Cost of revenue) | 300 | 166 | 682 | 534 |
Research and product development | 272 | 219 | 635 | 666 |
Selling, marketing, general and administrative | 1,532 | 1,071 | 4,401 | 5,209 |
Other Expenses | 55 | 89 | 178 | 309 |
DASAN | Majority Shareholder | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Sales | 3,976 | 5,112 | 16,608 | 19,080 |
Products and services - related parties | 3,604 | 4,390 | 14,020 | 16,219 |
Manufacturing (Cost of revenue) | 0 | 0 | 0 | 0 |
Research and product development | 0 | 0 | 0 | 0 |
Selling, marketing, general and administrative | 1,291 | 946 | 3,491 | 4,255 |
Other Expenses | $ 51 | $ 89 | $ 171 | $ 309 |
CHASAN Networks (Shenzhen) Co., Ltd. | Affiliated Entity | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 100.00% | 100.00% | 100.00% | 100.00% |
Sales | $ 0 | $ 0 | $ 0 | $ 0 |
Products and services - related parties | 0 | 0 | 0 | 0 |
Manufacturing (Cost of revenue) | 257 | 130 | 578 | 436 |
Research and product development | 20 | 38 | 79 | 106 |
Selling, marketing, general and administrative | 0 | 0 | 0 | 0 |
Other Expenses | $ 0 | $ 0 | $ 0 | $ 0 |
DASAN FRANCE | Affiliated Entity | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 100.00% | 100.00% | 100.00% | 100.00% |
Sales | $ 662 | $ 3 | $ 1,612 | $ 3 |
Products and services - related parties | 576 | 3 | 1,512 | 3 |
Manufacturing (Cost of revenue) | 0 | 0 | 0 | 0 |
Research and product development | 0 | 0 | 0 | 0 |
Selling, marketing, general and administrative | 83 | 0 | 383 | 0 |
Other Expenses | $ 0 | $ 0 | $ 0 | $ 0 |
DASAN INDIA Private Limited | Affiliated Entity | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 100.00% | 100.00% | 100.00% | 100.00% |
Sales | $ 0 | $ 6,287 | $ 0 | |
Products and services - related parties | 0 | 4,783 | 0 | |
Manufacturing (Cost of revenue) | 0 | 0 | 0 | |
Research and product development | 0 | 0 | 0 | |
Selling, marketing, general and administrative | 30 | 30 | 0 | |
Other Expenses | $ 0 | $ 0 | $ 0 | |
D-Mobile | Affiliated Entity | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 100.00% | 100.00% | 100.00% | 100.00% |
Sales | $ 1,233 | $ 1,267 | $ 3,054 | $ 3,135 |
Products and services - related parties | 1,077 | 789 | 1,831 | 2,231 |
Manufacturing (Cost of revenue) | 0 | 0 | 0 | 0 |
Research and product development | 0 | 0 | 0 | 0 |
Selling, marketing, general and administrative | 122 | 125 | 318 | 318 |
Other Expenses | $ 0 | $ 0 | $ 0 | $ 0 |
DMC, Inc. | Affiliated Entity | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 27.21% | 27.21% | ||
Sales | $ 1 | |||
Products and services - related parties | 1 | |||
Manufacturing (Cost of revenue) | 0 | |||
Research and product development | 0 | |||
Selling, marketing, general and administrative | 0 | |||
Other Expenses | $ 0 | |||
Fine Solution | Affiliated Entity | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 100.00% | 100.00% | ||
Sales | $ 0 | |||
Products and services - related parties | 0 | |||
Manufacturing (Cost of revenue) | 0 | |||
Research and product development | 0 | |||
Selling, marketing, general and administrative | 4 | |||
Other Expenses | $ 0 | |||
HANDYSOFT, Inc. | Affiliated Entity | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 17.64% | 17.64% | 17.64% | 17.64% |
Sales | $ 54 | $ 68 | $ 88 | $ 150 |
Products and services - related parties | 12 | 58 | 23 | 130 |
Manufacturing (Cost of revenue) | 0 | 0 | 0 | 0 |
Research and product development | 0 | 0 | 0 | 0 |
Selling, marketing, general and administrative | 6 | 0 | 6 | 0 |
Other Expenses | $ 4 | $ 0 | $ 4 | $ 0 |
J-Mobile Corporation | Affiliated Entity | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 90.47% | 90.47% | 90.47% | 90.47% |
Sales | $ 18 | $ 8 | $ 39 | |
Products and services - related parties | 0 | 0 | 0 | |
Manufacturing (Cost of revenue) | 0 | 0 | 0 | |
Research and product development | 0 | 0 | 0 | |
Selling, marketing, general and administrative | 0 | 132 | 634 | |
Other Expenses | $ 0 | $ 0 | $ 0 | |
PANDA Media, Inc. | Affiliated Entity | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 100.00% | 100.00% | ||
Sales | $ 0 | |||
Products and services - related parties | 0 | |||
Manufacturing (Cost of revenue) | 0 | |||
Research and product development | 0 | |||
Selling, marketing, general and administrative | 2 | |||
Other Expenses | $ 0 | |||
Tomato Soft Ltd. | Affiliated Entity | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 100.00% | 100.00% | 100.00% | 100.00% |
Sales | $ 0 | $ 0 | $ 0 | $ 0 |
Products and services - related parties | 0 | 0 | 0 | 0 |
Manufacturing (Cost of revenue) | 43 | 36 | 104 | 98 |
Research and product development | 108 | 0 | 108 | 0 |
Selling, marketing, general and administrative | 0 | 0 | 0 | 0 |
Other Expenses | $ 0 | $ 0 | $ 0 | $ 0 |
Tomato Soft (Xi'an) Ltd. | Affiliated Entity | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 100.00% | 100.00% | 100.00% | 100.00% |
Sales | $ 0 | $ 0 | $ 0 | $ 0 |
Products and services - related parties | 0 | 0 | 0 | 0 |
Manufacturing (Cost of revenue) | 0 | 0 | 0 | 0 |
Research and product development | 144 | 181 | 448 | 560 |
Selling, marketing, general and administrative | 0 | 0 | 37 | 0 |
Other Expenses | $ 0 | $ 0 | $ 0 | $ 0 |
Solueta | Affiliated Entity | Sales And Purchases To And From Related Parties [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 27.21% | 27.21% | ||
Sales | $ 0 | |||
Products and services - related parties | 0 | |||
Manufacturing (Cost of revenue) | 0 | |||
Research and product development | 0 | |||
Selling, marketing, general and administrative | 0 | |||
Other Expenses | $ 3 |
Related-Party Transactions - Ba
Related-Party Transactions - Balances of Receivables and Payables with Related Parties (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Account receivables | $ 12,941 | $ 13,311 |
Other receivables | 22 | 171 |
Deposits for lease | 727 | 699 |
Accounts payable | 106 | 430 |
Other payables | 210 | 6,940 |
Loans | 8,544 | 6,800 |
DASAN | Majority Shareholder | Receivables And Payables With Related Parties | ||
Related Party Transaction [Line Items] | ||
Account receivables | 9,196 | 6,679 |
Other receivables | 0 | 171 |
Deposits for lease | 727 | 690 |
Accounts payable | 0 | 360 |
Other payables | 125 | 6,861 |
Loans | $ 6,800 | $ 6,800 |
ABLE | Affiliated Entity | Receivables And Payables With Related Parties | ||
Related Party Transaction [Line Items] | ||
Ownership interest | 61.99% | 61.99% |
Account receivables | $ 56 | $ 53 |
Other receivables | 0 | 0 |
Deposits for lease | 0 | 9 |
Accounts payable | 0 | 0 |
Other payables | 0 | 0 |
Loans | $ 0 | $ 0 |
CHASAN Networks Co., Ltd. | Affiliated Entity | Receivables And Payables With Related Parties | ||
Related Party Transaction [Line Items] | ||
Ownership interest | 100.00% | 100.00% |
Account receivables | $ 0 | $ 0 |
Other receivables | 0 | 0 |
Deposits for lease | 0 | 0 |
Accounts payable | 100 | 70 |
Other payables | 0 | 0 |
Loans | $ 0 | $ 0 |
DASAN FRANCE | Affiliated Entity | Receivables And Payables With Related Parties | ||
Related Party Transaction [Line Items] | ||
Ownership interest | 100.00% | 100.00% |
Account receivables | $ 662 | $ 23 |
Other receivables | 4 | 0 |
Deposits for lease | 0 | 0 |
Accounts payable | 0 | 0 |
Other payables | 0 | 0 |
Loans | $ 0 | $ 0 |
DASAN INDIA Private Limited | Affiliated Entity | Receivables And Payables With Related Parties | ||
Related Party Transaction [Line Items] | ||
Ownership interest | 100.00% | |
Account receivables | $ 2,606 | |
Other receivables | 0 | |
Deposits for lease | 0 | |
Accounts payable | 0 | |
Other payables | 0 | |
Loans | $ 0 | |
D-Mobile | Affiliated Entity | Receivables And Payables With Related Parties | ||
Related Party Transaction [Line Items] | ||
Ownership interest | 100.00% | 100.00% |
Account receivables | $ 3,001 | $ 3,943 |
Other receivables | 16 | 0 |
Deposits for lease | 0 | 0 |
Accounts payable | 0 | 0 |
Other payables | 0 | 0 |
Loans | $ 0 | $ 0 |
HANDYSOFT, Inc. | Affiliated Entity | Receivables And Payables With Related Parties | ||
Related Party Transaction [Line Items] | ||
Ownership interest | 17.64% | 17.64% |
Account receivables | $ 26 | $ 2 |
Other receivables | 0 | 0 |
Deposits for lease | 0 | 0 |
Accounts payable | 6 | 0 |
Other payables | 1 | 0 |
Loans | $ 0 | $ 0 |
Solueta | Affiliated Entity | Receivables And Payables With Related Parties | ||
Related Party Transaction [Line Items] | ||
Ownership interest | 27.21% | |
Account receivables | $ 0 | |
Other receivables | 2 | |
Deposits for lease | 0 | |
Accounts payable | 0 | |
Other payables | 2 | |
Loans | $ 1,744 | |
J-Mobile Corporation | Affiliated Entity | Receivables And Payables With Related Parties | ||
Related Party Transaction [Line Items] | ||
Ownership interest | 68.56% | |
Account receivables | $ 5 | |
Other receivables | 0 | |
Deposits for lease | 0 | |
Accounts payable | 0 | |
Other payables | 0 | |
Loans | $ 0 | |
Tomato Soft Ltd. | Affiliated Entity | Receivables And Payables With Related Parties | ||
Related Party Transaction [Line Items] | ||
Ownership interest | 100.00% | 100.00% |
Account receivables | $ 0 | $ 0 |
Other receivables | 0 | 0 |
Deposits for lease | 0 | 0 |
Accounts payable | 0 | 0 |
Other payables | 25 | 16 |
Loans | $ 0 | $ 0 |
Tomato Soft (Xi'an) Ltd. | Affiliated Entity | Receivables And Payables With Related Parties | ||
Related Party Transaction [Line Items] | ||
Ownership interest | 100.00% | 100.00% |
Account receivables | $ 0 | $ 0 |
Other receivables | 0 | 0 |
Deposits for lease | 0 | 0 |
Accounts payable | 0 | 0 |
Other payables | 57 | 63 |
Loans | $ 0 | $ 0 |
Net Income (Loss) Per Share A46
Net Income (Loss) Per Share Attributable to DASAN Zhone Solutions, Inc. - Reconciliation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to DASAN Zhone Solutions, Inc. | $ 1,399 | $ (4,733) | $ (3,157) | $ (9,066) |
Basic, weighted average number of shares outstanding (in shares) | 16,382 | 11,139 | 16,380 | 10,046 |
Dilutive effect of stock options and share awards (in shares) | 0 | 0 | 0 | 0 |
Diluted (in shares) | 16,382 | 11,139 | 16,380 | 10,046 |
Basic (in dollars per share) | $ 0.09 | $ (0.42) | $ (0.19) | $ (0.90) |
Diluted (in dollars per share) | $ 0.09 | $ (0.42) | $ (0.19) | $ (0.90) |
Net Income (Loss) Per Share A47
Net Income (Loss) Per Share Attributable to DASAN Zhone Solutions, Inc. - Antidilutive securities (Details) - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 917 | 804 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 915 | 795 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 2 | 9 |
Commitments and Contingencies -
Commitments and Contingencies - Estimated Future Lease Payments under All Non-Cancelable Operating Leases (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Operating leases | |
2017 (remainder of the year) | $ 967 |
2,018 | 3,359 |
2,019 | 2,496 |
2,020 | 2,358 |
2,021 | 2,264 |
Thereafter | 8,722 |
Total minimum lease payments | $ 20,166 |
Commitments and Contingencies
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Guarantor Obligations [Line Items] | |
Product warranty period from the date of shipment | 5 years |
Purchase Commitment | |
Guarantor Obligations [Line Items] | |
Number of notice days required to notice in advance for cancellation of orders | 30 days |
Amount of non-cancellable purchase commitments outstanding | $ 3 |
Performance Bonds [Member] | |
Guarantor Obligations [Line Items] | |
Guarantor obligations | 1 |
Restricted cash, collateral | 2.1 |
Warranty Bonds [Member] | |
Guarantor Obligations [Line Items] | |
Guarantor obligations | 0.4 |
Restricted cash, collateral | 2 |
Surety Bond [Member] | |
Guarantor Obligations [Line Items] | |
Restricted cash, collateral | $ 1.2 |
Commitments and Contingencies50
Commitments and Contingencies - Reconciliation of Changes in Accrued Warranties and Related Costs (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 878 | $ 441 |
Charged to cost of revenue | 126 | 227 |
Claims and settlements | (195) | (389) |
Foreign exchange impact | 14 | 78 |
Ending balance | $ 823 | $ 357 |
Commitments and Contingencies51
Commitments and Contingencies - Payment Guarantees to Third Parties (Details) - Payment Guarantee $ in Thousands | Sep. 30, 2017USD ($) |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | $ 34,881 |
DNS US | Shinhan Bank, General Loan | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 3,349 |
DNS US | Shinhan Bank, Purchasing Card | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 1,884 |
DNS US | Industrial Bank of Korea Facility | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 10,493 |
DNS US | Nonghyp Bank, Letter of Credit | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 6,000 |
DNS US | NongHyup Bank, Purchasing Card | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 523 |
Industrial Bank of Korea, Credit Facility | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 6,512 |
Industrial Bank of Korea, Performance bonds | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 864 |
NongHyup Bank | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 4,567 |
Shinhan Bank | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 191 |
KEB Hana Bank | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 33 |
State Bank of India | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 38 |
Seoul Guarantee Insurance Co., Performance Bonds | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 54 |
Seoul Guarantee Insurance Co., Warranty Bonds | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | $ 373 |
Enterprise-Wide Information - R
Enterprise-Wide Information - Revenue by Geography (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue from External Customer [Line Items] | ||||
Net revenue | $ 66,438 | $ 31,240 | $ 178,491 | $ 90,832 |
United States | ||||
Revenue from External Customer [Line Items] | ||||
Net revenue | 13,068 | 3,408 | 37,176 | 7,432 |
Canada | ||||
Revenue from External Customer [Line Items] | ||||
Net revenue | 1,498 | 254 | 4,112 | 254 |
Total North America | ||||
Revenue from External Customer [Line Items] | ||||
Net revenue | 14,566 | 3,662 | 41,288 | 7,686 |
Latin America | ||||
Revenue from External Customer [Line Items] | ||||
Net revenue | 7,480 | 1,877 | 19,425 | 2,912 |
Europe, Middle East, Africa | ||||
Revenue from External Customer [Line Items] | ||||
Net revenue | 7,378 | 2,232 | 19,134 | 5,209 |
Korea | ||||
Revenue from External Customer [Line Items] | ||||
Net revenue | 20,520 | 18,372 | 69,032 | 60,144 |
Other Asia Pacific | ||||
Revenue from External Customer [Line Items] | ||||
Net revenue | 16,494 | 5,097 | 29,612 | 14,881 |
Total International | ||||
Revenue from External Customer [Line Items] | ||||
Net revenue | $ 51,872 | $ 27,578 | $ 137,203 | $ 83,146 |
Enterprise-Wide Information -
Enterprise-Wide Information - Revenue by Products and Services (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue from External Customer [Line Items] | ||||
Net revenue | $ 66,438 | $ 31,240 | $ 178,491 | $ 90,832 |
Products | ||||
Revenue from External Customer [Line Items] | ||||
Net revenue | 63,257 | 28,891 | 169,831 | 84,666 |
Services | ||||
Revenue from External Customer [Line Items] | ||||
Net revenue | $ 3,181 | $ 2,349 | $ 8,660 | $ 6,166 |
Enterprise-Wide Information - P
Enterprise-Wide Information - Property and Equipment, Net of Accumulated Depreciation (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 5,812 | $ 6,288 |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 3,611 | 4,094 |
Korea | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 1,449 | 1,455 |
Japan and Vietnam | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 752 | $ 739 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Loss Carryforwards [Line Items] | ||||
Income tax expense (benefit) | $ 107 | $ (610) | $ 646 | $ (1,041) |
Income (loss) before income taxes | $ 1,494 | $ (5,399) | $ (2,339) | $ (10,124) |
Vietnam | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,016 | |||
Minimum | Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,013 | |||
Minimum | United States And Canada | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,012 | |||
Minimum | BRAZIL | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,011 | |||
Minimum | Germany | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,012 | |||
Minimum | Japan | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,011 | |||
Minimum | Korea | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,015 | |||
Minimum | United Kingdom | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,014 | |||
Maximum | Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,016 | |||
Maximum | United States And Canada | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,016 | |||
Maximum | BRAZIL | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,016 | |||
Maximum | Germany | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,016 | |||
Maximum | Japan | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,016 | |||
Maximum | Korea | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,016 | |||
Maximum | United Kingdom | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open Tax Year | 2,016 |
Non-Controlling Interests (Deta
Non-Controlling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning balance, non-controlling interest | $ 416 | $ 138 | ||
Acquisition of additional interest in a subsidiary | 0 | 277 | ||
Net income (loss) attributable to non-controlling interest | $ (12) | $ (56) | 172 | (17) |
Foreign currency translation adjustments (OCI) | 19 | 66 | ||
Ending balance, non-controlling interest | $ 607 | $ 464 | $ 607 | $ 464 |