Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | DZS INC | |
Entity Central Index Key | 0001101680 | |
Trading Symbol | DZSI | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 26,917,686 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 000-32743 | |
Entity Tax Identification Number | 22-3509099 | |
Entity Address, Address Line1 | 5700 Tennyson Parkway, Suite 400 | |
Entity Address, City or Town | Plano | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75024 | |
City Area Code | 469 | |
Local Phone Number | 327-1531 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Interactive Data Current | Yes | |
Title of each class | Common stock, $0.001 par value | |
Name of each exchange on which registered | NASDAQ |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 56,818 | $ 45,219 |
Restricted cash | 6,848 | 9,200 |
Accounts receivable - trade, net of allowance for doubtful accounts of $17.9 million as of March 31, 2021 and $4.0 million as of December 31, 2020 | 82,028 | 97,253 |
Other receivables | 10,159 | 9,165 |
Inventories | 41,116 | 39,572 |
Contract assets | 6,233 | 6,182 |
Prepaid expenses and other current assets | 7,603 | 5,332 |
Total current assets | 210,805 | 211,923 |
Property, plant and equipment, net | 7,880 | 7,146 |
Right-of-use assets from operating leases | 14,535 | 18,483 |
Goodwill | 5,675 | 3,977 |
Intangible assets, net | 6,759 | 3,377 |
Deferred tax assets | 1,633 | 1,405 |
Other assets | 5,589 | 5,919 |
Total assets | 252,876 | 252,230 |
Current liabilities: | ||
Accounts payable - trade | 50,955 | 49,250 |
Short-term debt - bank, trade facilities and secured borrowings | 1,764 | 13,787 |
Contract liabilities | 3,997 | 4,400 |
Operating lease liabilities | 4,435 | 4,494 |
Accrued and other liabilities | 18,941 | 16,707 |
Total current liabilities | 80,092 | 88,638 |
Long-term debt, related parties | 29,754 | |
Contract liabilities | 2,495 | 2,471 |
Operating lease liabilities - non-current | 16,154 | 15,959 |
Pension liabilities | 18,936 | 20,052 |
Other long-term liabilities | 3,697 | 1,777 |
Total liabilities | 121,374 | 158,651 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity: | ||
Common stock, authorized 36,000 shares, 26,883 and 21,958 shares outstanding as of March 31, 2021 and December 31, 2020, respectively, at $0.001 par value | 27 | 22 |
Additional paid-in capital | 211,438 | 147,997 |
Accumulated other comprehensive loss | (4,422) | (2,124) |
Accumulated deficit | (75,541) | (52,316) |
Total stockholders’ equity | 131,502 | 93,579 |
Total liabilities and stockholders’ equity | $ 252,876 | $ 252,230 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 17.9 | $ 4 |
Common stock, authorized (in shares) | 36,000 | 36,000 |
Common stock, outstanding (in shares) | 26,883 | 21,958 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Net revenue | $ 81,031 | $ 47,480 |
Cost of revenue | 52,936 | 31,485 |
Gross profit | 28,095 | 15,995 |
Operating expenses: | ||
Research and product development | 11,119 | 9,710 |
Selling, marketing, general and administrative | 31,824 | 13,507 |
Restructuring and other charges | 6,252 | |
Impairment of long-lived assets | 1,735 | |
Amortization of intangible assets | 262 | 372 |
Total operating expenses | 51,192 | 23,589 |
Operating income (loss) | (23,097) | (7,594) |
Interest income | 42 | 70 |
Interest expense | (249) | (643) |
Loss on extinguishment of debt | (1,369) | |
Other income (expense), net | 972 | 760 |
Income (loss) before income taxes | (22,332) | (8,776) |
Income tax provision (benefit) | 893 | (5) |
Net income (loss) | (23,225) | (8,771) |
Foreign currency translation adjustments | (2,270) | (3,435) |
Actuarial gain (loss) | (28) | 1,456 |
Comprehensive income (loss) | $ (25,523) | $ (10,750) |
Net income (loss) per share | ||
Basic | $ (0.92) | $ (0.41) |
Diluted | $ (0.92) | $ (0.41) |
Weighted average shares outstanding used to compute basic net income (loss) per share | 25,252 | 21,474 |
Weighted average shares outstanding used to compute diluted net income (loss) per share | 25,252 | 21,474 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive loss | Accumulated deficit |
Beginning Balance, Stockholders' equity at Dec. 31, 2019 | $ 106,548 | $ 21 | $ 139,700 | $ (3,939) | $ (29,234) |
Beginning Balances, Stockholders' equity (in shares) at Dec. 31, 2019 | 21,419 | ||||
Exercise of stock awards and employee stock plan purchases | 709 | 709 | |||
Exercise of stock awards and employee stock plan purchases (in shares) | 94 | ||||
Stock-based compensation | 782 | 782 | |||
Net income (loss) | (8,771) | (8,771) | |||
Other comprehensive loss | (1,979) | (1,979) | |||
Ending Balances, Stockholders' equity at Mar. 31, 2020 | 97,289 | $ 21 | 141,191 | (5,918) | (38,005) |
Ending Balances, Stockholders' equity (in shares) at Mar. 31, 2020 | 21,513 | ||||
Beginning Balance, Stockholders' equity at Dec. 31, 2020 | $ 93,579 | $ 22 | 147,997 | (2,124) | (52,316) |
Beginning Balances, Stockholders' equity (in shares) at Dec. 31, 2020 | 21,958 | 21,958 | |||
Issuance of common stock in public offering, net of issuance costs | $ 59,525 | $ 5 | 59,520 | ||
Issuance of common stock in public offering, net of issuance costs (in shares) | 4,600 | ||||
Exercise of stock awards and employee stock plan purchases | 2,569 | 2,569 | |||
Exercise of stock awards and employee stock plan purchases (in shares) | 325 | ||||
Stock-based compensation | 1,352 | 1,352 | |||
Net income (loss) | (23,225) | (23,225) | |||
Other comprehensive loss | (2,298) | (2,298) | |||
Ending Balances, Stockholders' equity at Mar. 31, 2021 | $ 131,502 | $ 27 | $ 211,438 | $ (4,422) | $ (75,541) |
Ending Balances, Stockholders' equity (in shares) at Mar. 31, 2021 | 26,883 | 26,883 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (23,225) | $ (8,771) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,265 | 1,256 |
Impairment of long-lived assets | 4,443 | |
Loss on extinguishment of debt | 1,343 | |
Amortization of deferred financing costs | 12 | 141 |
Stock-based compensation | 1,352 | 782 |
Provision for inventory write-down | 666 | 1,421 |
Allowance for doubtful accounts | 14,805 | 24 |
Provision for sales returns | 239 | (231) |
Provision for warranty | 269 | |
Unrealized gain on foreign currency transactions | (883) | (1,983) |
Deferred taxes | (134) | (820) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,423) | 9,109 |
Inventories | (3,239) | 14,129 |
Contract assets | (267) | (7,048) |
Prepaid expenses and other assets | (3,864) | (3,285) |
Accounts payable | 3,539 | (1,261) |
Contract liabilities | 32 | (275) |
Accrued and other liabilities | (523) | (3,937) |
Net cash provided by (used in) operating activities | (6,936) | 594 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (1,266) | (560) |
Acquisition of business, net of cash acquired | (4,258) | |
Net cash used in investing activities | (5,524) | (560) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock in public offerings, net of issuance costs | 59,525 | |
Proceeds from short-term borrowings and line of credit | 1,307 | |
Repayments of short-term borrowings and line of credit | (11,494) | (4,167) |
Repayments of long-term borrowings | (13,125) | |
Proceeds from related party term loan | 18,361 | |
Repayments of related party term loan | (29,298) | |
Proceeds from exercise of stock awards and employee stock plan purchases | 2,569 | 709 |
Net cash provided by financing activities | 21,302 | 3,085 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 404 | (873) |
Net increase in cash, cash equivalents and restricted cash | 9,246 | 2,246 |
Cash, cash equivalents and restricted cash at beginning of period | 54,587 | 33,635 |
Cash, cash equivalents and restricted cash at end of period | 63,833 | 35,881 |
Reconciliation of cash, cash equivalents and restricted cash to statement of financial position | ||
Cash and cash equivalents | 56,818 | 26,437 |
Restricted cash | 6,848 | 9,281 |
Long-term restricted cash | 167 | 163 |
Cash, cash equivalents and restricted cash at end of period | 63,833 | 35,881 |
Cash paid during the period for: | ||
Interest - bank and trade facilities | 83 | 424 |
Interest - related party | 94 | 152 |
Income taxes | $ 1,206 | $ 1,504 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | (1) Organization and Summary of Significant Accounting Policies (a) Description of Business DZS Inc. (referred to, collectively with its subsidiaries, as “DZS” or the “Company”) is a global provider of ultra-broadband network access solutions and communications platforms deployed by advanced Tier 1, national and regional service providers and enterprise customers. 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. DZS was incorporated under the laws of the state of Delaware in June 1999. The Company is headquartered in Plano, Texas with flexible in-house production facilities in Seminole, Florida and Hanover, Germany, and contract manufacturers located in China, India, Korea and Vietnam. The Company also maintains offices to provide sales and customer support at global locations. (b) Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior-year amounts have been reclassified to conform to the current-quarter presentation. 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. 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. (c) Risks and Uncertainties The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, assuming the Company will continue as a going concern. In December 2019, a strain of coronavirus, now known as COVID-19, was reported to have surfaced in Wuhan, China. Since that time, the widespread and sustained transmission of the virus has reached global pandemic status. In response to the pandemic, many national and international health agencies have recommended, and many countries and state, provincial and local governments have implemented, various measures, including travel bans and restrictions, limitations on public and private gatherings, business closures or operating restrictions, social distancing, and shelter-in-place orders. The health effects of the pandemic and the above measures taken in response thereto have had an effect on the global economy in general and have materially impacted and will likely continue to impact the Company’s financial condition, results of operations and cash flows. (d) Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. (e) Disaggregation of Revenue The following table presents revenues by source (in thousands): Three Months Ended March 31, 2021 2020 Revenue by source: Products $ 76,252 $ 42,719 Services 4,779 4,761 Total $ 81,031 $ 47,480 The following table present revenues by geographical concentration (in thousands): Three Months Ended March 31, 2021 2020 Revenue by geography: Americas $ 20,169 $ 11,702 Europe, Middle East, Africa 17,918 11,339 Asia 42,944 24,439 Total $ 81,031 $ 47,480 (f) Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash, accounts receivables, and contract assets. Cash, cash equivalents and restricted cash consist of financial deposits and money market accounts that are principally held with various domestic and international financial institutions with high credit standing. 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 March 31, 2021, two customers accounted for 18% and 10% of net revenue, respectively. For the three months ended March 31, 2020, two customers accounted for 14% and 10% of net revenue, respectively. As of March 31, 2021, one customer represented 19% of net accounts receivable. As of December 31, 2020, two customers represented 17% and 16% of net accounts receivable, respectively. As of March 31, 2021 and December 31, 2020, net accounts receivables from customers in countries other than the United States represented 84% and 89%, respectively. In 2017, the Company entered into an agreement with a customer in India to supply product for a state sponsored broadband project. The Company billed the customer, which is a state government sponsored entity, approximately $59.0 million and collected payments of approximately $41.7 million, leaving a balance of approximately $17.3 million as of December 31, 2020. The Company substantially completed its obligations under the agreement in 2018, and all amounts due were billed under the terms of the agreement by December 31, 2020. The remaining $17.3 million is substantially beyond the customers contractual payment terms, and the Company has been actively working with the customer and third parties in India to arrange payment of the entire remaining balance of $17.3 million. The Company recorded an allowance for doubtful accounts of $3.1 million on December 31, 2020, for a partial payment promised but not received. In late March 2021, the customer’s state government parent experienced difficulty passing a budget further impacting the ability of the customer to make agreed-upon partial payments to us. In light of this recent development in the first quarter of 2021, the Company recognized an additional allowance of $14.2 million to bring the total allowance for the customer to $17.3 million, which is the total balance as of March 31, 2021. The Company will continue to pursue collection of the entire outstanding balance and any amounts collected will be recognized in the period which they are received. In the event the Company’s efforts to collect from this customer prove unsuccessful, DZS may seek payment through other means, including through legal action. (g) Business Combinations The Company allocates the fair value of purchase consideration to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets and certain tangible assets such as inventory. Critical estimates in valuing certain tangible and intangible assets include but are not limited to future expected cash flows from the underlying assets and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (which cannot exceed one year from the acquisition date), or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date. When the consideration transferred by the Company in a business combination includes a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the total consideration transferred in a business combination. Changes in fair value of the contingent consideration that qualify as measurement period adjustments are made retrospectively, with corresponding adjustments against goodwill. Changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments are made in the current period, with corresponding adjustments recognized in earnings. (h) Restructuring and Other Charges Restructuring and other charges primarily consists of severance and other termination benefits and non-cash impairment charges related to right-of-use assets from operating leases related to the restructuring activities in Hanover, Germany. The Company recognizes contractual termination benefits when it is probable that employees will be entitled to benefits and the amount can be reasonably estimated. The Company will recognize one-time employee termination benefits when (i) management commits to a plan of termination, (ii) the plan identifies the number of employees to be terminated, their job classifications or functions and their locations, and the expected completion date, (iii) the plan establishes the terms of the benefit arrangement in sufficient detail to enable employees to determine the type and amount of benefits they will receive, and (iv) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. These charges are included in restructuring and other charges in the unaudited condensed consolidated statement of comprehensive income (loss). Refer to Note 9 Restructuring and Other Charges for further information. (i) In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments - Credit Losses Codification Improvements to Topic 326, Financial Instruments - Credit Losses Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief In March 2020, the FASB issued ASU No. 2020-04 (Topic 848), Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. The standard was effective upon issuance and may generally be applied through December 31, 2022, to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR. The Company is currently evaluating the impact of the transition and disclosure requirements of the standard on its consolidated financial statements. Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12: Simplifying the Accounting for Income Taxes areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company adopted this new accounting standard effective January 1, 2021 which did not have a material impact on the Company's consolidated financial statements or disclosures. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Business Combinations | (2) Business Combinations Optelian Acquisition On February 5, 2021, the Company acquired Optelian Access Networks Corporation (“Optelian”), a corporation incorporated under the laws of Canada and registered extra-provincially in the Province of Ontario, pursuant to an acquisition agreement whereby the Company purchased all the outstanding shares of Optelian (the “Optelian Acquisition”). Following the closing of the Optelian Acquisition, Optelian became the Company’s wholly owned subsidiary. Optelian is a leading optical networking solution provider. This acquisition introduced the “O-Series” to the DZS portfolio of carrier grade optical networking products with 100 gigabits per second (Gig) and above capability, expanding DZS product portfolios by providing environmentally hardened, high capacity, and flexible solutions at the network edge. The purchase price of $7.5 million included cash paid to the shareholders and option holders of Optelian, cash paid to retire Optelian's outstanding debt on the date of acquisition, and contingent payments to shareholders (in thousands): Purchase consideration Retirement of Optelian debt $ 4,929 Payment to shareholders and option holders 664 Contingent payment to shareholders 1,897 Total purchase consideration $ 7,490 The future payments are contingent on certain working capital adjustments and contingent consideration based on a certain percentage of future revenue of certain Optelian products through the end of 2023. Allocation of purchase consideration The acquisition was recorded as a business combination with valuations of the assets acquired and liabilities assumed at their acquisition date fair value using level three inputs, defined as unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Due to the complexity of valuing the consideration paid and the purchase price allocation, and the timing of these activities, certain amounts included in the unaudited condensed consolidated financial statements, including long-lived assets, deferred taxes, and goodwill, are provisional and subject to additional adjustments within the measurement period as permitted by Topic 805. The following summarizes the provisional estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the Optelian Acquisition (in thousands): Provisional allocation of purchase consideration Cash and cash equivalents $ 1,236 Accounts receivable - trade 460 Other receivables 153 Inventories 448 Prepaid expenses and other current assets 49 Property, plant and equipment 718 Intangible assets 3,630 Accounts payable - trade (390 ) Contract liabilities (169 ) Accrued and other liabilities (123 ) Goodwill 1,478 Total purchase consideration $ 7,490 The provisional purchase price allocation resulted in the recognition of goodwill of approximately $1.5 million. The following table represents the preliminary estimated fair value and useful lives of identifiable intangible assets acquired (estimated fair value in thousands): Estimated Estimated fair value useful life Intangible assets acquired Developed technology $ 2,250 5 years Customer relationships 500 5 years In-process research and development 880 5 years Total intangible assets $ 3,630 There were no material differences between total revenue and net loss reported and pro forma total revenues and pro forma net loss that would have been reported for the financial periods presented. RIFT Acquisition On March 3, 2021, the Company acquired substantially all of the assets of RIFT, Inc., a network automation solutions company, and all the outstanding shares of RIFTIO India Private Limited, a wholly owned subsidiary of RIFT, Inc. (collectively “RIFT”). RIFT developed a carrier-grade RIFT.ware software platform that simplifies the deployment of any slice, service, or application on any cloud. The total purchase consideration was $0.5 million, including a $0.2 million holdback that was released in April of 2021 following the fulfillment of certain requirements in the purchase agreement. The Company allocated the purchase price to $0.1 million in net tangible assets, $0.2 million in developed technologies, and $0.2 million in goodwill. As a result of the acquisition, |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | (3) 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 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 unaudited condensed consolidated balance sheet as of March 31, 2021 and December 31, 2020 but require disclosure of their fair values: cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable, accrued liabilities, lease liabilities and debt. The carrying values of financial instruments such as cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable and accrued liabilities approximate their fair values based on their short-term nature. The carrying value of the Company's lease liabilities and debt approximates their fair values based on the current rates available to the Company for debt of similar terms and maturities. |
Cash and Cash Equivalents and R
Cash and Cash Equivalents and Restricted Cash | 3 Months Ended |
Mar. 31, 2021 | |
Cash And Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | (4) Cash, Cash Equivalents and Restricted Cash As of March 31, 2021 and December 31, 2020, the Company's cash, cash equivalents and restricted cash consisted of financial deposits. Cash, cash equivalents and restricted cash held within the U.S. are held at FDIC insured depository institutions. Cash, cash equivalents and restricted cash held outside the U.S. totaled $28.3 million and $32.2 million as of March 31, 2021 and December 31, 2020, respectively. Restricted cash consisted primarily of cash restricted for performance bonds, warranty bonds and collateral for borrowings. Long-term restricted cash was $0.2 million as of March 31, 2021 and December 31, 2020 and is included in other assets on the unaudited condensed consolidated balance sheets. |
Balance Sheet Details
Balance Sheet Details | 3 Months Ended |
Mar. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | (5) Balance Sheet Details Balance sheet detail as of March 31, 2021 and December 31, 2020 is as follows (in thousands) Inventories March 31, 2021 December 31, 2020 Raw materials $ 20,662 $ 16,962 Work in process 1,128 1,486 Finished goods 19,326 21,124 Total inventories $ 41,116 $ 39,572 The Company had no inventories provided as collateral for borrowings from Export-Import Bank of Korea as of March 31, 2021 compared to $9.6 million as of December 31, 2020. Property, plant and equipment March 31, 2021 December 31, 2020 Property, plant and equipment, net: Machinery and equipment $ 13,863 $ 13,656 Leasehold improvements 4,993 4,633 Computers and software 2,835 2,829 Furniture and fixtures 1,538 1,123 Other 934 716 24,163 22,957 Less: accumulated depreciation and amortization (15,973 ) (15,445 ) Less: government grants (310 ) (366 ) Total property, plant and equipment, net $ 7,880 $ 7,146 Depreciation expense associated with property, plant and equipment for the three months ended March 31, 2021 and March 31, 2020 was $0.9 million and $0.5 million, respectively. The Company receives grants from certain foreign government entities mainly to support capital expenditures in the region. 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. Warranties The Company accrues warranty costs based on historical trends for the expected material and labor costs to provide warranty services. The Company's standard warranty period is one year from the date of shipment with the ability for customers to purchase an extended warranty of up to five years from the date of shipment. The following table summarizes the activity related to the product warranty liability: March 31, 2021 2020 Balance at the beginning of the quarter $ 1,522 $ 1,610 Charged to cost of revenue 269 33 Claims and settlements (267 ) (495 ) Foreign exchange impact 56 (37 ) Balance at the end of the quarter $ 1,580 $ 1,111 Contract Balances The Company records contract assets when it has a right to consideration and records accounts receivable when it has an unconditional right to consideration. Contract liabilities consist of cash payments received (or unconditional rights to receive cash) in advance of fulfilling performance obligations. The opening and closing balances of contract assets and contract liabilities related to contracts with customers are as follows: Contract assets Contract liabilities December 31, 2020 $ 6,182 $ 6,871 March 31, 2021 6,233 6,492 Increase (decrease) $ 51 $ (379 ) The increase in contract assets during the three months ended March 31, 2021 was primarily due to revenue recognition criteria being met for items not yet invoiced during the period. The decrease in contract liabilities during the three months ended March 31, 2021 was primarily due to the revenue recognition criteria being met for previously deferred revenue, partially offset by invoiced amounts that did not yet meet the revenue recognition criteria. The amount of revenue recognized in the three months ended March 31, 2021 that was included in the prior period contract liability balance was $2.1 million. This revenue consists of services provided to customers who had been invoiced prior to the current year. The balance of contract cost deferred as of March 31, 2021 and December 31, 2020 was $0.4 million and $0.5 million, respectively. During the three months ended March 31, 2021, the Company recorded $0.4 million in amortization related to contract cost deferred as of December 31, 2020. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | (6) Goodwill and Intangible Assets The following table summarizes the activity related to goodwill (in thousands): March 31, 2021 2020 Balance at the beginning of the quarter $ 3,977 $ 3,977 Goodwill from acquisitions 1,698 — Balance at the end of the quarter $ 5,675 $ 3,977 As of March 31, 2021 and December 31, 2020, the net carrying value of goodwill is all attributable to the Company’s Americas reporting unit. During the three months ended March 31, 2021, the Company recorded goodwill of $1.5 million related to the acquisition of Optelian and $0.2 million related to the acquisition of RIFT. Refer to Note 2 Business Combinations for further information. The accumulated impairment of goodwill was $1.0 million as of March 31, 2021 and 2020, respectively. Intangible assets consisted of the following (in thousands): March 31, 2021 Gross Carrying Amount Accumulated Amortization Net Developed technology $ 5,477 $ (2,885 ) $ 2,592 Customer relationships 5,740 (2,421 ) 3,319 In-process research and development 880 (32 ) 848 Total intangible assets, net $ 12,097 $ (5,338 ) $ 6,759 December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Developed technology $ 3,060 $ (2,652 ) $ 408 Customer relationships 5,240 (2,271 ) 2,969 Total intangible assets, net $ 8,300 $ (4,923 ) $ 3,377 During the three months ended March 31, 2021, the Company recorded $2.4 million, $0.5 million and $0.9 million in developed technology, customer relationships and in-process research and development, respectively, related to the acquisitions of Optelian and RIFT. Refer to Note 2 Business Combinations for further information. The following table summarizes the activity related to intangible assets, net (in thousands): March 31, 2021 2020 Balance at the beginning of the quarter $ 3,377 $ 12,381 Intangible assets from acquisitions 3,797 — Less: amortization expense (415 ) (768 ) Foreign exchange impact — (149 ) Balance at the end of the quarter $ 6,759 $ 11,464 Amortization expense associated with intangible assets for the three months ended March 31, 2021 and 2020 was $0.4 million and $0.8 million, respectively. The following table presents the future amortization expense of the Company’s intangible assets as of March 31, 2021 (in thousands): Remainder of 2021 $ 1,218 2022 1,283 2023 1,283 2024 1,283 2025 1,283 Thereafter 409 Total $ 6,759 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | (7) Debt The following tables summarize the Company’s debt (in thousands): March 31, 2021 Short-term Long-term Total Bank and Trade Facilities - Foreign Operations $ 1,764 $ — $ 1,764 $ 1,764 $ — $ 1,764 December 31, 2020 Short-term Long-term Total Bank and Trade Facilities - Foreign Operations $ 13,787 $ — $ 13,787 Related Party — 29,766 29,766 13,787 29,766 43,553 Less: unamortized deferred financing costs — (12 ) (12 ) $ 13,787 $ 29,754 $ 43,541 The principal balance of the term loan is due to mature in 2021, the Company has no other contractual principal payments due in the next five years. Bank and Trade Facilities - Foreign Operations Certain of the Company's foreign subsidiaries have entered into 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 as they mature and are generally secured by a security interest in certain assets of the applicable foreign subsidiaries and supported by guarantees given by Dasan Networks, Inc. (“DNI”), the Company’s largest stockholder, or third parties. Payments under such facilities are made in accordance with the lender’s amortization schedules, as applicable. As of March 31, 2021 and December 31, 2020, the Company had an aggregate outstanding balance of $1.8 million and $13.8 million, respectively, under such financing arrangements. The weighted average borrowing rates as of March 31, 2021 and December 31, 2020 were 0.0% and 1.8%, respectively. The maturity dates and interest rates per annum applicable to outstanding borrowings under these financing arrangements are listed in the tables below (amount in thousands). March 31, 2021 Maturity Date Denomination Interest rate (%) Amount (in U.S. dollars) LGUPlus General loan 06/17/2021 KRW 0.00 $ 1,764 $ 1,764 December 31, 2020 Maturity Date Denomination Interest rate (%) Amount (in U.S. dollars) The Export-Import Bank of Korea Export development loan 05/24/2021 KRW 1.99 $ 7,353 Korea Development Bank General loan 08/10/2021 KRW 2.28 4,596 LGUPlus General loan 06/17/2021 KRW 0.00 1,838 $ 13,787 As of March 31, 2021 and December 31, 2020, the Company had no outstanding borrowings under the Company's $17.6 million letter of credit facilities with certain foreign banks. As of March 31, 2021 and December 31, 2020, the Company had $17.6 million and $19.0 million, respectively, available to draw under its credit facilities. Related Party Debt In February 2016, the Company borrowed $1.8 million from DNI In March 2018, the Company borrowed KRW 6.5 billion ($5.8 million USD) from DNI of which KRW 5.0 billion ($4.5 million USD) was repaid in August 2018. In February 2021, the remaining outstanding balance on this term loan was repaid. In December 2018, the Company entered into a Loan Agreement with DNI for a $6.0 million term loan with an interest rate of 4.6% per annum. In January 2021, the entire outstanding balance on this term loan was repaid. On March 5, 2020, the Company entered into a loan transaction with DNI in the amount of KRW 22.4 billion ($18.5 million USD) with an interest rate of 4.6% per annum. In February 2021, the entire outstanding balance on this term loan was repaid. Interest expense on related party borrowings was $0.1 million and $0.2 million for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, the Company had no borrowings outstanding from related parties. PNC Credit Facilities On February 27, 2019, the Company entered into a Revolving Credit, Term Loan, Guaranty and Security Agreement with PNC Bank, National Association (“PNC”) and Citibank, N.A. as lenders, and PNC as agent for the lenders (the “PNC Credit Facilities”). On March 26, 2020, the Company paid the outstanding term loan borrowings in full and terminated the PNC Credit Facilities. In association with this debt repayment, the Company recorded a loss on extinguishment of debt of $1.4 million during the three months ended March 31, 2020. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | (8) Employee Benefit Plans Defined Contribution Plans In the U.S., the Company maintains a 401(k) plan for its employees whereby eligible employees may contribute up to a specified percentage of their earnings, on a pretax basis, subject to the maximum amount permitted by the Internal Revenue Code. Under the 401(k) plan, the Company made discretionary contributions to the plan in 2021. For the three months ended March 31, 2021, the Company recorded an expense of $0.1 million compared to no expense for the three months ended March 31, 2020. The Company maintains a defined contribution plan for its employees in Korea. Under the defined contribution plan, the Company contributes the equivalent of 8.3% of an employee's gross salary into the plan. For both the three months ended March 31, 2021 and 2020, the Company recorded an expense of $0.3 million. Defined Benefit Plans The Company sponsors defined benefit plans for its employees in Germany and Japan. Defined benefit plans provide pension benefits based on compensation and years of service. The Germany plans were frozen as of September 30, 2003 and have not been offered to new employees after that date. Periodic benefit costs were as follows (in thousands): Three Months Ended March 31, 2021 2020 Interest costs $ 21 $ 38 Net amortization costs 45 5 Period costs $ 66 $ 43 The Company holds life insurance contracts, with the Company as beneficiary, in the amount of $3.3 million as of March 31, 2021 and $3.5 million as of December 31, 2020, respectively, related to individuals under the pension plans. These insurance contracts are classified as other assets on the Company’s unaudited condensed consolidated balance sheet. The Company intends to use any proceeds from these policies to fund the pension plans. However, since the Company is the beneficiary on these policies, these assets have not been designated pension plan assets. |
Restructuring and Other Charges
Restructuring and Other Charges | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring And Related Activities [Abstract] | |
Restructuring and Other Charges | (9) Restructuring and Other Charges On March 8, 2021, the Company made the strategic decision to transition DZS GmbH to a sales and research and development center by the end of 2021. The Company incurred restructuring and other charges of approximately $6.3 million for the three months ended March 31, 2021, consisting primarily of severance and other termination related benefits of $3.5 million, an impairment charge of $2.5 million related to right-of-use assets from operating leases, and $0.3 million of other charges. Negotiations are being held with the works council in Germany on a reconciliation of interests and a social plan. The Company expects to incur additional severance and other termination benefits when negotiations are finalized. The following table summarizes the activity related to the accrued restructuring costs for the three months ended March 31, 2021 (in thousands): March 31, 2021 Balance at the beginning of the quarter $ — Restructuring charges for the year 3,544 Cash payments — Foreign exchange impact (56 ) Balance at the end of the quarter $ 3,488 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (10) Related Party Transactions Related Party Debt As of March 31, 2021, the Company had no outstanding borrowings from related parties compared to $29.8 million as of December 31, 2020. See Note 7 Debt for further information about the Company’s related party debt. The following table sets forth payment guarantees of the Company's indebtedness and other obligations as of March 31, 2021 that have been provided by DNI. DNI owns approximately 37.5% of the outstanding shares of the Company's common stock. The amount guaranteed exceeds the principal amounts of outstanding obligations due to collateral requirements by the banks. Guarantor Amount Guaranteed (in thousands) Description of Obligations Guaranteed DNI $ 8,400 Credit facility with Industrial Bank of Korea DNI 6,000 Credit facility with NongHyup Bank DNI 8,400 Credit facility with Korea Development Bank DNI 2,206 Payment guarantee to Industrial Bank of Korea DNI 3,000 Payment guarantee to Shinhan Bank $ 28,006 Other Related Party Transactions Sales, cost of revenue, manufacturing (included in cost of revenue), research and product development, selling, marketing, general and administrative, interest expense and other expenses to and from related parties were as follows (in thousands) for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 Counterparty DNI ownership interest Sales Cost of revenue Manufacturing (cost of revenue)** Research and product development Selling, marketing, general and administrative Interest expense Other expenses DNI N/A $ 1,770 $ 1,611 $ — $ — $ 707 $ 132 $ 85 Dasan Invest* N/A — — 10 46 18 — — $ 1,770 $ 1,611 $ 10 $ 46 $ 725 $ 132 $ 85 Three Months Ended March 31, 2020 Counterparty DNI ownership interest Sales Cost of revenue Manufacturing (cost of revenue)** Research and product development Selling, marketing, general and administrative Interest expense Other expenses DNI N/A $ 162 $ 133 $ — $ — $ 571 $ 151 $ 86 Dasan Invest* N/A — — 8 33 38 — — $ 162 $ 133 $ 8 $ 33 $ 609 $ 151 $ 86 * Dasan Invest holds 19.8% of DNI’s shares. ** Manufacturing costs represent product purchases from and manufacturing activities performed by related parties, and are included in cost of revenue on the unaudited condensed consolidated statement of comprehensive income (loss). The Company has entered into sales agreements with DNI and certain of its subsidiaries. Sales and cost of revenue to DNI represent finished goods produced by the Company that are sold to DNI. T he Company has an agreement with DNI in which DNI acts as a sales channel to customers. Sales to DNI are recorded net of royalty fees in related party revenue. DNS California shares 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. DNS Korea entered into two separate sublease agreements with DNI. Operating lease cost related to these leases totaled $0.5 million and $0.4 million, for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, the right of use asset and operating lease liability related to these leases were $7.8 million and $7.8 million, respectively. As of December 31, 2020, the right of use asset and operating lease liability related to these leases were $8.6 million and $8.6 million, respectively. The Company has entered into an agreement with Dasan Invest to provide IT services for the Company. Interest expense represents interest paid to DNI for the related party debt. Refer to Note 7 Debt for further information. 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. Refer to Note 14 Commitments and Contingencies for further information about obligations guaranteed by DNI. 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 March 31, 2021 and December 31, 2020 were included in the following balance sheet captions on the unaudited condensed consolidated balance sheets, as follows (in thousands): As of March 31, 2021 Counterparty DNI ownership interest Account receivables Other receivables Other assets Loans Payable Accounts payable DNI N/A $ 1,912 $ — $ 940 $ — $ 596 Dasan Invest* N/A — — — — 27 $ 1,912 $ — $ 940 $ — $ 623 As of December 31, 2020 Counterparty DNI ownership interest Account receivables Other receivables Other assets Loans Payable Accounts payable DNI N/A $ 2,278 $ 247 $ 755 $ 29,754 $ 1,552 Dasan Invest* N/A — — — — 32 $ 2,278 $ 247 $ 755 $ 29,754 $ 1,584 * Dasan Invest holds 19.8% of DNI’s shares. |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Common Stock | ( 11) Common Stock On January 26, 2021, the Company sold 4.6 million shares of common stock ( 0.6 million shares issued pursuant to the underwriters’ option to purchase additional shares) at a price of $14.00 per share in an underwritten public offering. The equity offering closed on January 29, 2021 and resulted in gross proceeds to the Company of approximately $64.4 million and net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, of approximately $59.5 million. The Company used a portion of the net proceeds from the e quity o ffering to pay off the remaining outstanding balance of debt with related parties. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | (12) Net Income Per Share Basic net income per share is computed by dividing the net income for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net income per share gives effect to common stock equivalents; however, potential common stock equivalents are excluded if their effect is antidilutive. Potential common stock equivalents are composed of incremental shares of common stock issuable upon the exercise of stock options and the vesting of restricted stock units. In periods when a net loss is reported, all common stock equivalents are excluded from the calculation because they would have an anti-dilutive effect, meaning the loss per share would be reduced. Therefore, in periods when a loss is reported, basic and dilutive loss per share are the same. 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) for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 2020 Net income (loss) $ (23,225 ) $ (8,771 ) Weighted average number of shares outstanding: Basic 25,252 21,474 Effect of dilutive securities: Stock options, restricted stock units and share awards — — Diluted 25,252 21,474 Net income (loss) per share: Basic $ (0.92 ) $ (0.41 ) Diluted $ (0.92 ) $ (0.41 ) The following table sets forth potential common stock that is not included in the diluted net income (loss) per share calculation above because their effect would be anti-dilutive for the periods indicated (in thousands): March 31, 2021 March 31, 2020 Outstanding stock options 2,216 1,896 Unvested restricted stock units 744 58 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | (13) Leases The Company leases certain properties and buildings (including manufacturing facilities, warehouses, and office spaces) and equipment under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company’s lease portfolio consists of operating leases which expire at various dates through 2028. In August 2020, the Company completed its relocation of its corporate headquarters from Oakland, California to Plano, Texas and establish a new U.S.-based Engineering Center of Excellence in Plano. In September 2020, the Company entered into a lease agreement for additional office space at its headquarters in Plano, TX. On the commencement date of this lease in March 2021, the Company recognized an aggregate of approximately $1.7 million in right-of-use assets and operating lease liabilities in connection with these leases. During the three months ended March 31, 2021, the Company recorded $4.2 million in impairment charges on ROU assets, including $2.5 million related to the restructuring in Hanover, Germany and $1.7 million related to consolidating certain non-manufacturing facilities into our new headquarters facility in Plano, Texas. See Note 9 Restructuring and Other Charges for further information about the Company's restructuring activities in Hanover, Germany. The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2021 2020 Operating lease cost $ 1,362 $ 1,410 Short-term lease cost 197 36 Total net lease cost $ 1,559 $ 1,446 Variable lease cost was not significant for the three months ended March 31, 2021 and 2020. Supplemental cash flow information related to the Company’s operating leases was as follows (in thousands): Three Months Ended March 31, 2021 2020 Operating cash outflows from operating leases $ 1,391 $ 1,403 ROU assets obtained in exchange for operating lease obligations $ 1,800 $ 26 The following table presents the weighted average remaining lease term and weighted average discount rates related to the Company’s operating leases as of March 31, 2021 and December 31, 2020, respectively: March 31, 2021 December 31, 2020 Lease Assets and Liabilities Assets: Right-of-use assets from operating leases $ 14,535 $ 18,483 Liabilities: Operating lease liabilities - current $ 4,435 $ 4,494 Operating lease liabilities - non-current 16,154 15,959 Total operating lease liabilities $ 20,589 $ 20,453 March 31, 2021 December 31, 2020 Weighted average remaining lease term 4.7 years 4.6 years Weighted average discount rate 5.7 % 5.7 % The following table presents the maturity of the Company’s operating lease liabilities as of March 31, 2021 (in thousands): Remainder of 2021 $ 4,076 2022 5,235 2023 4,814 2024 4,330 2025 2,579 Thereafter 2,457 Total operating lease payments 23,491 Less: imputed interest (2,902 ) Total operating lease liabilities $ 20,589 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (14) Commitments and Contingencies Performance Bonds In the normal course of operations, from time to time, the Company arranges for the issuance of various types of performance bonds, such as performance, warranty, and bid bonds, in the form of bank guarantees or surety bonds. These instruments are arrangements under which the financial institution provides a financial guarantee that the Company will perform in accordance with contractual or legal obligations. As of March 31, 2021, the Company had $10.5 of performance bonds in the form of bank guarantees or surety bonds guaranteed by third parties. Contingent Consideration The Company has, as part of the Optelian purchase agreement, a contingent liability payable to the sellers. The contingent consideration is payable based on the achievement of certain future performance targets during the three-year Litigation From time to time, 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 that 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, results of operations or cash flows. 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 and cash flows of the reporting period in which the ruling occurs, or future periods. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (15) Income Taxes Income tax expense for the three months ended March 31, 2021 was approximately $0.9 million, on pre-tax loss of $22.3 million. There was no income tax expense for the three months ended March 31, 2020 on pre-tax loss of $8.8 million. As of March 31, 2021, the income tax rate varied from the United States statutory income tax rate primarily due to valuation allowances in North America and EMEA and taxable income generated by the Company’s wholly owned foreign subsidiaries in Asia. The total amount of unrecognized tax benefits, including interest and penalties, at March 31, 2021 was $1.3 million. There were no significant changes to unrecognized tax benefits during the three months ended March 31, 2021. The Company does not anticipate any significant changes with respect to unrecognized tax benefits within the next twelve months. |
Enterprise-Wide Information
Enterprise-Wide Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Enterprise-Wide Information | (16) Enterprise-Wide Information The Company is a global provider of ultra-broadband network access solutions and communications platforms deployed by advanced Tier 1, national and regional service providers and enterprise customers. 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 maker is the Company’s Chief Executive Officer, who reviews financial information presented on a consolidated basis accompanied with disaggregated 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. Refer to Note 1(e) Disaggregation of Revenue for the required disclosures on geographical concentrations and revenues by source. The Company's property, plant and equipment, net of accumulated depreciation, were located in the following geographical areas (in thousands) as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 United States $ 3,594 $ 2,878 Korea 2,294 2,472 Japan 870 952 Canada 619 — Germany 412 761 Other 91 83 $ 7,880 $ 7,146 |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | (b) Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior-year amounts have been reclassified to conform to the current-quarter presentation. 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. 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. |
Risks and Uncertainties | (c) Risks and Uncertainties The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, assuming the Company will continue as a going concern. In December 2019, a strain of coronavirus, now known as COVID-19, was reported to have surfaced in Wuhan, China. Since that time, the widespread and sustained transmission of the virus has reached global pandemic status. In response to the pandemic, many national and international health agencies have recommended, and many countries and state, provincial and local governments have implemented, various measures, including travel bans and restrictions, limitations on public and private gatherings, business closures or operating restrictions, social distancing, and shelter-in-place orders. The health effects of the pandemic and the above measures taken in response thereto have had an effect on the global economy in general and have materially impacted and will likely continue to impact the Company’s financial condition, results of operations and cash flows. |
Use of Estimates | (d) Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. |
Disaggregation of Revenue | (e) Disaggregation of Revenue The following table presents revenues by source (in thousands): Three Months Ended March 31, 2021 2020 Revenue by source: Products $ 76,252 $ 42,719 Services 4,779 4,761 Total $ 81,031 $ 47,480 The following table present revenues by geographical concentration (in thousands): Three Months Ended March 31, 2021 2020 Revenue by geography: Americas $ 20,169 $ 11,702 Europe, Middle East, Africa 17,918 11,339 Asia 42,944 24,439 Total $ 81,031 $ 47,480 |
Concentration of Risk | (f) Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash, accounts receivables, and contract assets. Cash, cash equivalents and restricted cash consist of financial deposits and money market accounts that are principally held with various domestic and international financial institutions with high credit standing. 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 March 31, 2021, two customers accounted for 18% and 10% of net revenue, respectively. For the three months ended March 31, 2020, two customers accounted for 14% and 10% of net revenue, respectively. As of March 31, 2021, one customer represented 19% of net accounts receivable. As of December 31, 2020, two customers represented 17% and 16% of net accounts receivable, respectively. As of March 31, 2021 and December 31, 2020, net accounts receivables from customers in countries other than the United States represented 84% and 89%, respectively. In 2017, the Company entered into an agreement with a customer in India to supply product for a state sponsored broadband project. The Company billed the customer, which is a state government sponsored entity, approximately $59.0 million and collected payments of approximately $41.7 million, leaving a balance of approximately $17.3 million as of December 31, 2020. The Company substantially completed its obligations under the agreement in 2018, and all amounts due were billed under the terms of the agreement by December 31, 2020. The remaining $17.3 million is substantially beyond the customers contractual payment terms, and the Company has been actively working with the customer and third parties in India to arrange payment of the entire remaining balance of $17.3 million. The Company recorded an allowance for doubtful accounts of $3.1 million on December 31, 2020, for a partial payment promised but not received. In late March 2021, the customer’s state government parent experienced difficulty passing a budget further impacting the ability of the customer to make agreed-upon partial payments to us. In light of this recent development in the first quarter of 2021, the Company recognized an additional allowance of $14.2 million to bring the total allowance for the customer to $17.3 million, which is the total balance as of March 31, 2021. The Company will continue to pursue collection of the entire outstanding balance and any amounts collected will be recognized in the period which they are received. In the event the Company’s efforts to collect from this customer prove unsuccessful, DZS may seek payment through other means, including through legal action. |
Business Combinations | (g) Business Combinations The Company allocates the fair value of purchase consideration to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets and certain tangible assets such as inventory. Critical estimates in valuing certain tangible and intangible assets include but are not limited to future expected cash flows from the underlying assets and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (which cannot exceed one year from the acquisition date), or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date. When the consideration transferred by the Company in a business combination includes a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the total consideration transferred in a business combination. Changes in fair value of the contingent consideration that qualify as measurement period adjustments are made retrospectively, with corresponding adjustments against goodwill. Changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments are made in the current period, with corresponding adjustments recognized in earnings. |
Restructuring and Other Charges | (h) Restructuring and Other Charges Restructuring and other charges primarily consists of severance and other termination benefits and non-cash impairment charges related to right-of-use assets from operating leases related to the restructuring activities in Hanover, Germany. The Company recognizes contractual termination benefits when it is probable that employees will be entitled to benefits and the amount can be reasonably estimated. The Company will recognize one-time employee termination benefits when (i) management commits to a plan of termination, (ii) the plan identifies the number of employees to be terminated, their job classifications or functions and their locations, and the expected completion date, (iii) the plan establishes the terms of the benefit arrangement in sufficient detail to enable employees to determine the type and amount of benefits they will receive, and (iv) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. These charges are included in restructuring and other charges in the unaudited condensed consolidated statement of comprehensive income (loss). Refer to Note 9 Restructuring and Other Charges for further information. |
Recent Accounting Pronouncements | (i) In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments - Credit Losses Codification Improvements to Topic 326, Financial Instruments - Credit Losses Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief In March 2020, the FASB issued ASU No. 2020-04 (Topic 848), Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. The standard was effective upon issuance and may generally be applied through December 31, 2022, to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR. The Company is currently evaluating the impact of the transition and disclosure requirements of the standard on its consolidated financial statements. Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12: Simplifying the Accounting for Income Taxes areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company adopted this new accounting standard effective January 1, 2021 which did not have a material impact on the Company's consolidated financial statements or disclosures. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Revenues by Source | The following table presents revenues by source (in thousands): Three Months Ended March 31, 2021 2020 Revenue by source: Products $ 76,252 $ 42,719 Services 4,779 4,761 Total $ 81,031 $ 47,480 |
Schedule of Information Revenues by Geographical Concentration | The following table present revenues by geographical concentration (in thousands): Three Months Ended March 31, 2021 2020 Revenue by geography: Americas $ 20,169 $ 11,702 Europe, Middle East, Africa 17,918 11,339 Asia 42,944 24,439 Total $ 81,031 $ 47,480 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Summary of Purchase Consideration | The purchase price of $7.5 million included cash paid to the shareholders and option holders of Optelian, cash paid to retire Optelian's outstanding debt on the date of acquisition, and contingent payments to shareholders (in thousands): Purchase consideration Retirement of Optelian debt $ 4,929 Payment to shareholders and option holders 664 Contingent payment to shareholders 1,897 Total purchase consideration $ 7,490 |
Summary Of Estimated Fair Values Of The Assets Acquired And Liabilities Assumed | The following summarizes the provisional estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the Optelian Acquisition (in thousands): Provisional allocation of purchase consideration Cash and cash equivalents $ 1,236 Accounts receivable - trade 460 Other receivables 153 Inventories 448 Prepaid expenses and other current assets 49 Property, plant and equipment 718 Intangible assets 3,630 Accounts payable - trade (390 ) Contract liabilities (169 ) Accrued and other liabilities (123 ) Goodwill 1,478 Total purchase consideration $ 7,490 |
Schedule of Estimated Fair Value and Useful Lives of Identifiable Intangible Assets | The provisional purchase price allocation resulted in the recognition of goodwill of approximately $1.5 million. The following table represents the preliminary estimated fair value and useful lives of identifiable intangible assets acquired (estimated fair value in thousands): Estimated Estimated fair value useful life Intangible assets acquired Developed technology $ 2,250 5 years Customer relationships 500 5 years In-process research and development 880 5 years Total intangible assets $ 3,630 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventories | Inventories March 31, 2021 December 31, 2020 Raw materials $ 20,662 $ 16,962 Work in process 1,128 1,486 Finished goods 19,326 21,124 Total inventories $ 41,116 $ 39,572 |
Schedule of Property, Plant and Equipment, Net | Property, plant and equipment March 31, 2021 December 31, 2020 Property, plant and equipment, net: Machinery and equipment $ 13,863 $ 13,656 Leasehold improvements 4,993 4,633 Computers and software 2,835 2,829 Furniture and fixtures 1,538 1,123 Other 934 716 24,163 22,957 Less: accumulated depreciation and amortization (15,973 ) (15,445 ) Less: government grants (310 ) (366 ) Total property, plant and equipment, net $ 7,880 $ 7,146 |
Summary of Product Warranty Liability | The Company accrues warranty costs based on historical trends for the expected material and labor costs to provide warranty services. The Company's standard warranty period is one year from the date of shipment with the ability for customers to purchase an extended warranty of up to five years from the date of shipment. The following table summarizes the activity related to the product warranty liability: March 31, 2021 2020 Balance at the beginning of the quarter $ 1,522 $ 1,610 Charged to cost of revenue 269 33 Claims and settlements (267 ) (495 ) Foreign exchange impact 56 (37 ) Balance at the end of the quarter $ 1,580 $ 1,111 |
Summary of Contract Assets and Contract Liabilities Related to Contracts with Customers | The opening and closing balances of contract assets and contract liabilities related to contracts with customers are as follows: Contract assets Contract liabilities December 31, 2020 $ 6,182 $ 6,871 March 31, 2021 6,233 6,492 Increase (decrease) $ 51 $ (379 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes the activity related to goodwill (in thousands): March 31, 2021 2020 Balance at the beginning of the quarter $ 3,977 $ 3,977 Goodwill from acquisitions 1,698 — Balance at the end of the quarter $ 5,675 $ 3,977 |
Schedule of Intangible Assets | Intangible assets consisted of the following (in thousands): March 31, 2021 Gross Carrying Amount Accumulated Amortization Net Developed technology $ 5,477 $ (2,885 ) $ 2,592 Customer relationships 5,740 (2,421 ) 3,319 In-process research and development 880 (32 ) 848 Total intangible assets, net $ 12,097 $ (5,338 ) $ 6,759 December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Developed technology $ 3,060 $ (2,652 ) $ 408 Customer relationships 5,240 (2,271 ) 2,969 Total intangible assets, net $ 8,300 $ (4,923 ) $ 3,377 |
Summary of Activity Related to Intangible Assets, Net | The following table summarizes the activity related to intangible assets, net (in thousands): March 31, 2021 2020 Balance at the beginning of the quarter $ 3,377 $ 12,381 Intangible assets from acquisitions 3,797 — Less: amortization expense (415 ) (768 ) Foreign exchange impact — (149 ) Balance at the end of the quarter $ 6,759 $ 11,464 |
Future Amortization Expense of Intangible Assets | The following table presents the future amortization expense of the Company’s intangible assets as of March 31, 2021 (in thousands): Remainder of 2021 $ 1,218 2022 1,283 2023 1,283 2024 1,283 2025 1,283 Thereafter 409 Total $ 6,759 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Debt | The following tables summarize the Company’s debt (in thousands): March 31, 2021 Short-term Long-term Total Bank and Trade Facilities - Foreign Operations $ 1,764 $ — $ 1,764 $ 1,764 $ — $ 1,764 December 31, 2020 Short-term Long-term Total Bank and Trade Facilities - Foreign Operations $ 13,787 $ — $ 13,787 Related Party — 29,766 29,766 13,787 29,766 43,553 Less: unamortized deferred financing costs — (12 ) (12 ) $ 13,787 $ 29,754 $ 43,541 |
Schedule of Short-term Debt | As of March 31, 2021 and December 31, 2020, the Company had an aggregate outstanding balance of $1.8 million and $13.8 million, respectively, under such financing arrangements. The weighted average borrowing rates as of March 31, 2021 and December 31, 2020 were 0.0% and 1.8%, respectively. The maturity dates and interest rates per annum applicable to outstanding borrowings under these financing arrangements are listed in the tables below (amount in thousands). March 31, 2021 Maturity Date Denomination Interest rate (%) Amount (in U.S. dollars) LGUPlus General loan 06/17/2021 KRW 0.00 $ 1,764 $ 1,764 December 31, 2020 Maturity Date Denomination Interest rate (%) Amount (in U.S. dollars) The Export-Import Bank of Korea Export development loan 05/24/2021 KRW 1.99 $ 7,353 Korea Development Bank General loan 08/10/2021 KRW 2.28 4,596 LGUPlus General loan 06/17/2021 KRW 0.00 1,838 $ 13,787 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Schedule of Periodic Benefit Costs | Periodic benefit costs were as follows (in thousands): Three Months Ended March 31, 2021 2020 Interest costs $ 21 $ 38 Net amortization costs 45 5 Period costs $ 66 $ 43 |
Restructuring and Other Charg_2
Restructuring and Other Charges (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring And Related Activities [Abstract] | |
Activity Related to Accrued Restructuring Costs | The following table summarizes the activity related to the accrued restructuring costs for the three months ended March 31, 2021 (in thousands): March 31, 2021 Balance at the beginning of the quarter $ — Restructuring charges for the year 3,544 Cash payments — Foreign exchange impact (56 ) Balance at the end of the quarter $ 3,488 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | As of March 31, 2021, the Company had no outstanding borrowings from related parties compared to $29.8 million as of December 31, 2020. See Note 7 Debt for further information about the Company’s related party debt. The following table sets forth payment guarantees of the Company's indebtedness and other obligations as of March 31, 2021 that have been provided by DNI. DNI owns approximately 37.5% of the outstanding shares of the Company's common stock. The amount guaranteed exceeds the principal amounts of outstanding obligations due to collateral requirements by the banks. Guarantor Amount Guaranteed (in thousands) Description of Obligations Guaranteed DNI $ 8,400 Credit facility with Industrial Bank of Korea DNI 6,000 Credit facility with NongHyup Bank DNI 8,400 Credit facility with Korea Development Bank DNI 2,206 Payment guarantee to Industrial Bank of Korea DNI 3,000 Payment guarantee to Shinhan Bank $ 28,006 Sales, cost of revenue, manufacturing (included in cost of revenue), research and product development, selling, marketing, general and administrative, interest expense and other expenses to and from related parties were as follows (in thousands) for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 Counterparty DNI ownership interest Sales Cost of revenue Manufacturing (cost of revenue)** Research and product development Selling, marketing, general and administrative Interest expense Other expenses DNI N/A $ 1,770 $ 1,611 $ — $ — $ 707 $ 132 $ 85 Dasan Invest* N/A — — 10 46 18 — — $ 1,770 $ 1,611 $ 10 $ 46 $ 725 $ 132 $ 85 Three Months Ended March 31, 2020 Counterparty DNI ownership interest Sales Cost of revenue Manufacturing (cost of revenue)** Research and product development Selling, marketing, general and administrative Interest expense Other expenses DNI N/A $ 162 $ 133 $ — $ — $ 571 $ 151 $ 86 Dasan Invest* N/A — — 8 33 38 — — $ 162 $ 133 $ 8 $ 33 $ 609 $ 151 $ 86 * Dasan Invest holds 19.8% of DNI’s shares. ** Manufacturing costs represent product purchases from and manufacturing activities performed by related parties, and are included in cost of revenue on the unaudited condensed consolidated statement of comprehensive income (loss). Balances of receivables and payables arising from sales and purchases of goods and services with related parties as of March 31, 2021 and December 31, 2020 were included in the following balance sheet captions on the unaudited condensed consolidated balance sheets, as follows (in thousands): As of March 31, 2021 Counterparty DNI ownership interest Account receivables Other receivables Other assets Loans Payable Accounts payable DNI N/A $ 1,912 $ — $ 940 $ — $ 596 Dasan Invest* N/A — — — — 27 $ 1,912 $ — $ 940 $ — $ 623 As of December 31, 2020 Counterparty DNI ownership interest Account receivables Other receivables Other assets Loans Payable Accounts payable DNI N/A $ 2,278 $ 247 $ 755 $ 29,754 $ 1,552 Dasan Invest* N/A — — — — 32 $ 2,278 $ 247 $ 755 $ 29,754 $ 1,584 * Dasan Invest holds 19.8% of DNI’s shares. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Net Income (Loss) per Share | 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) for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 2020 Net income (loss) $ (23,225 ) $ (8,771 ) Weighted average number of shares outstanding: Basic 25,252 21,474 Effect of dilutive securities: Stock options, restricted stock units and share awards — — Diluted 25,252 21,474 Net income (loss) per share: Basic $ (0.92 ) $ (0.41 ) Diluted $ (0.92 ) $ (0.41 ) |
Potential Common Stock not Included Diluted Net Income (Loss) Per Share Calculation | The following table sets forth potential common stock that is not included in the diluted net income (loss) per share calculation above because their effect would be anti-dilutive for the periods indicated (in thousands): March 31, 2021 March 31, 2020 Outstanding stock options 2,216 1,896 Unvested restricted stock units 744 58 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2021 2020 Operating lease cost $ 1,362 $ 1,410 Short-term lease cost 197 36 Total net lease cost $ 1,559 $ 1,446 |
Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to the Company’s operating leases was as follows (in thousands): Three Months Ended March 31, 2021 2020 Operating cash outflows from operating leases $ 1,391 $ 1,403 ROU assets obtained in exchange for operating lease obligations $ 1,800 $ 26 |
Weighted Average Remaining Lease Term, and Weighted Average Discount Rates Related to Operating Leases | The following table presents the weighted average remaining lease term and weighted average discount rates related to the Company’s operating leases as of March 31, 2021 and December 31, 2020, respectively: March 31, 2021 December 31, 2020 Lease Assets and Liabilities Assets: Right-of-use assets from operating leases $ 14,535 $ 18,483 Liabilities: Operating lease liabilities - current $ 4,435 $ 4,494 Operating lease liabilities - non-current 16,154 15,959 Total operating lease liabilities $ 20,589 $ 20,453 March 31, 2021 December 31, 2020 Weighted average remaining lease term 4.7 years 4.6 years Weighted average discount rate 5.7 % 5.7 % |
Maturity of Operating Lease Liabilities | The following table presents the maturity of the Company’s operating lease liabilities as of March 31, 2021 (in thousands): Remainder of 2021 $ 4,076 2022 5,235 2023 4,814 2024 4,330 2025 2,579 Thereafter 2,457 Total operating lease payments 23,491 Less: imputed interest (2,902 ) Total operating lease liabilities $ 20,589 |
Enterprise-Wide Information (Ta
Enterprise-Wide Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Property, Plant and Equipment, Net of Accumulated Depreciation | The Company's property, plant and equipment, net of accumulated depreciation, were located in the following geographical areas (in thousands) as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 United States $ 3,594 $ 2,878 Korea 2,294 2,472 Japan 870 952 Canada 619 — Germany 412 761 Other 91 83 $ 7,880 $ 7,146 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021USD ($)customer | Mar. 31, 2020customer | Dec. 31, 2020USD ($) | |
Significant Accounting Policies [Line Items] | |||
Entity Incorporation, State or Country Code | DE | ||
Date of entity incorporation | 1999-06 | ||
Billed amount under agreement | $ 59 | $ 17.3 | |
Amount of payments collected | 41.7 | ||
Allowance for doubtful accounts | 17.3 | $ 3.1 | |
Allowance on remaining balance to be recognized | $ 14.2 | ||
ASU 2019-12 | |||
Significant Accounting Policies [Line Items] | |||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | ||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2021 | ||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | ||
Customer One | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 14.00% | ||
Customer Two | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Customer Concentration Risk | Sales Revenue, Net | |||
Significant Accounting Policies [Line Items] | |||
Increase (decrease) in concentration risk, percentage | 70.70% | ||
Number of major customers | customer | 2 | 2 | |
Customer Concentration Risk | Sales Revenue, Net | Customer One | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 18.00% | ||
Customer Concentration Risk | Sales Revenue, Net | Customer Two | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Customer Concentration Risk | Accounts receivable | |||
Significant Accounting Policies [Line Items] | |||
Number of major customers | customer | 1 | 2 | |
Customer Concentration Risk | Accounts receivable | Customer One | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 19.00% | 17.00% | |
Customer Concentration Risk | Accounts receivable | Customer Two | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 16.00% | ||
Geographic Concentration Risk | Accounts receivable | Foreign Countries | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 84.00% | 89.00% |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Schedule of Revenues by Source (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 81,031 | $ 47,480 |
Product | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | 76,252 | 42,719 |
Service | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 4,779 | $ 4,761 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Schedule of Information Revenues by Geographical Concentration (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Significant Accounting Policies [Line Items] | ||
Net revenue | $ 81,031 | $ 47,480 |
Americas | ||
Significant Accounting Policies [Line Items] | ||
Net revenue | 20,169 | 11,702 |
Asia | ||
Significant Accounting Policies [Line Items] | ||
Net revenue | 42,944 | 24,439 |
Europe, Middle East, Africa | ||
Significant Accounting Policies [Line Items] | ||
Net revenue | $ 17,918 | $ 11,339 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - USD ($) $ in Thousands | Mar. 03, 2021 | Feb. 05, 2021 | Apr. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 1,478 | $ 5,675 | $ 3,977 | $ 3,977 | $ 3,977 | ||
Tangible assets, net | 718 | ||||||
Developed technologies | 3,630 | ||||||
Optelian Access Networks Corporation | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | 7,490 | ||||||
Goodwill | $ 1,500 | ||||||
RIFT Inc | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 500 | ||||||
Goodwill | 200 | ||||||
Tangible assets, net | 100 | ||||||
RIFT Inc | Developed Technology | |||||||
Business Acquisition [Line Items] | |||||||
Developed technologies | $ 200 | ||||||
RIFT Inc | Subsequent Event | |||||||
Business Acquisition [Line Items] | |||||||
Held back amount released | $ 200 |
Business Combinations - Summary
Business Combinations - Summary of Purchase Consideration (Details) - Optelian Access Networks Corporation $ in Thousands | Feb. 05, 2021USD ($) |
Purchase consideration | |
Retirement of Optelian debt | $ 4,929 |
Payment to shareholders and option holders | 664 |
Contingent payment to shareholders | 1,897 |
Total purchase consideration | $ 7,490 |
Business Combinations - Summa_2
Business Combinations - Summary Of Estimated Fair Values Of The Assets Acquired And Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Feb. 05, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Provisional allocation of purchase consideration | |||||
Cash and cash equivalents | $ 1,236 | ||||
Accounts receivable - trade | 460 | ||||
Other receivables | 153 | ||||
Inventories | 448 | ||||
Prepaid expenses and other current assets | 49 | ||||
Property, plant and equipment | 718 | ||||
Intangible assets | 3,630 | ||||
Accounts payable - trade | (390) | ||||
Contract liabilities | (169) | ||||
Accrued and other liabilities | (123) | ||||
Goodwill | $ 5,675 | 1,478 | $ 3,977 | $ 3,977 | $ 3,977 |
Total purchase consideration | $ 7,490 |
Business Combinations - Schedul
Business Combinations - Schedule of Estimated Fair Value and Useful Lives of Identifiable Intangible Assets (Details) - Optelian Access Networks Corporation $ in Thousands | Feb. 05, 2021USD ($) |
Business Acquisition [Line Items] | |
Estimated Fair Value | $ 3,630 |
Developed Technology | |
Business Acquisition [Line Items] | |
Estimated Fair Value | $ 2,250 |
Estimated Useful Life | 5 years |
Customer Relationships | |
Business Acquisition [Line Items] | |
Estimated Fair Value | $ 500 |
Estimated Useful Life | 5 years |
In-Process Research And Development | |
Business Acquisition [Line Items] | |
Estimated Fair Value | $ 880 |
Estimated Useful Life | 5 years |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 |
Cash And Cash Equivalents [Line Items] | |||
Cash and cash equivalents | $ 56,818 | $ 45,219 | $ 26,437 |
Long term restricted cash | $ 200 | $ 200 | |
Restricted Cash Equivalents, Noncurrent, Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherNoncurrentAssetsMember | us-gaap:OtherNoncurrentAssetsMember | |
Outside U.S. | |||
Cash And Cash Equivalents [Line Items] | |||
Cash and cash equivalents | $ 28,300 | $ 32,200 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 20,662 | $ 16,962 |
Work in process | 1,128 | 1,486 |
Finished goods | 19,326 | 21,124 |
Total inventories | $ 41,116 | $ 39,572 |
Balance Sheet Details - Additio
Balance Sheet Details - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Balance Sheet Details [Line Items] | |||
Total inventories | $ 41,116,000 | $ 39,572,000 | |
Contract with customer, liability, revenue recognized | 2,100,000 | ||
Contract cost deferred | 400,000 | 500,000 | |
Amortization related to contract cost deferred | 400,000 | ||
Property, Plant and Equipment | |||
Balance Sheet Details [Line Items] | |||
Depreciation and amortization associated with property, plant and equipment | 900,000 | $ 500,000 | |
Collateral pledged | |||
Balance Sheet Details [Line Items] | |||
Total inventories | $ 0 | $ 9,600,000 |
Balance Sheet Details - Sched_2
Balance Sheet Details - Schedule of Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 24,163 | $ 22,957 |
Less: accumulated depreciation and amortization | (15,973) | (15,445) |
Less: government grants | (310) | (366) |
Total property, plant and equipment, net | 7,880 | 7,146 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 13,863 | 13,656 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 4,993 | 4,633 |
Computers and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,835 | 2,829 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,538 | 1,123 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 934 | $ 716 |
Balance Sheet Detail - Summary
Balance Sheet Detail - Summary of Product Warranty Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Payables And Accruals [Abstract] | ||
Balance at the beginning of the quarter | $ 1,522 | $ 1,610 |
Charged to cost of revenue | 269 | 33 |
Claims and settlements | (267) | (495) |
Foreign exchange impact | 56 | (37) |
Balance at the end of the quarter | $ 1,580 | $ 1,111 |
Balance Sheet Detail - Summar_2
Balance Sheet Detail - Summary of Contract Assets and Contract Liabilities Related to Contracts with Customers (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Contract With Customer Asset And Liability [Abstract] | |
Opening, Contract Assets | $ 6,182 |
Closing, Contract Assets | 6,233 |
Increase (decrease) contract assets | 51 |
Opening, Contract Liabilities | 6,871 |
Closing, Contract Liabilities | 6,492 |
Increase (decrease) contract liabilities | $ (379) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Goodwill [Line Items] | ||
Balance at the beginning of the quarter | $ 3,977 | $ 3,977 |
Balance at the end of the quarter | 5,675 | 3,977 |
Optelian and RIFT Acquisitions | ||
Goodwill [Line Items] | ||
Goodwill from acquisitions | $ 1,698 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Goodwill And Intangible Asset [Line Items] | |||
Goodwill, accumulated impairment loss | $ 1,000 | $ 1,000 | |
Intangible assets net excluding goodwill | 6,759 | $ 3,377 | |
Amortization of intangible assets | 415 | 768 | |
Optelian Access Networks Corporation | |||
Goodwill And Intangible Asset [Line Items] | |||
Goodwill from acquisitions | 1,500 | ||
RIFT Inc | |||
Goodwill And Intangible Asset [Line Items] | |||
Goodwill from acquisitions | 200 | ||
Optelian and RIFT Acquisitions | |||
Goodwill And Intangible Asset [Line Items] | |||
Goodwill from acquisitions | 1,698 | ||
Optelian and RIFT Acquisitions | Optelian | |||
Goodwill And Intangible Asset [Line Items] | |||
Intangible assets net excluding goodwill | 2,400 | ||
Optelian and RIFT Acquisitions | Customer Relationships | |||
Goodwill And Intangible Asset [Line Items] | |||
Intangible assets net excluding goodwill | 500 | ||
Optelian and RIFT Acquisitions | In-Process Research And Development | |||
Goodwill And Intangible Asset [Line Items] | |||
Intangible assets net excluding goodwill | $ 900 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, gross | $ 12,097 | $ 8,300 | ||
Accumulated Amortization | (5,338) | (4,923) | ||
Intangible assets, net | 6,759 | 3,377 | $ 11,464 | $ 12,381 |
Developed Technology | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, gross | 5,477 | 3,060 | ||
Accumulated Amortization | (2,885) | (2,652) | ||
Intangible assets, net | 2,592 | 408 | ||
Customer Relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, gross | 5,740 | 5,240 | ||
Accumulated Amortization | (2,421) | (2,271) | ||
Intangible assets, net | 3,319 | $ 2,969 | ||
In-Process Research And Development | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, gross | 880 | |||
Accumulated Amortization | (32) | |||
Intangible assets, net | $ 848 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Summary of Activity Related to Intangible Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Balance at the beginning of the quarter | $ 3,377 | $ 12,381 |
Less: amortization expense | (415) | (768) |
Foreign exchange impact | (149) | |
Balance at the end of the quarter | 6,759 | $ 11,464 |
Optelian and RIFT Acquisitions | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets from acquisitions | $ 3,797 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization expense of intangible assets, remainder of 2021 | $ 1,218 | |||
Amortization expense of intangible assets, 2022 | 1,283 | |||
Amortization expense of intangible assets, 2023 | 1,283 | |||
Amortization expense of intangible assets, 2024 | 1,283 | |||
Amortization expense of intangible assets, 2025 | 1,283 | |||
Amortization expense of intangible assets, thereafter | 409 | |||
Intangible assets, net | $ 6,759 | $ 3,377 | $ 11,464 | $ 12,381 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | $ 1,764 | $ 43,553 |
Short-term | 13,787 | |
Less: unamortized deferred financing costs | (12) | |
Long-term | 29,754 | |
Less: unamortized deferred financing costs | (12) | |
Total | 43,541 | |
Bank and Trade Facilities - Foreign Operations | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | 1,764 | 13,787 |
Related Party | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | 29,766 | |
Short-term Debt | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | 1,764 | 13,787 |
Short-term Debt | Bank and Trade Facilities - Foreign Operations | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | $ 1,764 | 13,787 |
Long-term Debt | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | 29,766 | |
Long-term Debt | Related Party | ||
Debt Instrument [Line Items] | ||
Debt before unamortized deferred financing costs | $ 29,766 |
Debt - Additional Information (
Debt - Additional Information (Details) ₩ in Billions | 1 Months Ended | 3 Months Ended | |||||||||
Aug. 31, 2018USD ($) | Aug. 31, 2018KRW (₩) | Mar. 31, 2018USD ($) | Mar. 31, 2018KRW (₩) | Feb. 29, 2016USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Mar. 05, 2020USD ($) | Mar. 05, 2020KRW (₩) | Dec. 31, 2018USD ($) | |
Line Of Credit Facility [Line Items] | |||||||||||
Debt | $ 1,764,000 | $ 13,787,000 | |||||||||
Weighted average borrowing rates | 0.00% | 1.80% | |||||||||
Interest expense, related party | $ 100,000 | $ 200,000 | |||||||||
Borrowings outstanding from related parties | 0 | ||||||||||
Loss on extinguishment of debt | 1,369,000 | ||||||||||
March 2020 DNI Loan | |||||||||||
Line Of Credit Facility [Line Items] | |||||||||||
Interest rate | 4.60% | 4.60% | |||||||||
Long-term line of credit | $ 18,500,000 | ₩ 22.4 | |||||||||
Loan Agreement | Term Loan | |||||||||||
Line Of Credit Facility [Line Items] | |||||||||||
Interest rate | 4.60% | ||||||||||
Long-term line of credit | $ 6,000,000 | ||||||||||
DNI | Loan Agreement | |||||||||||
Line Of Credit Facility [Line Items] | |||||||||||
Origination of notes receivable from related parties | $ 5,800,000 | ₩ 6.5 | |||||||||
Repayments of borrowings | $ 4,500,000 | ₩ 5 | |||||||||
Dasan Network Solutions, Inc. (DNS) | Junior Lien | DNI | Majority Shareholder | |||||||||||
Line Of Credit Facility [Line Items] | |||||||||||
Origination of notes receivable from related parties | $ 1,800,000 | ||||||||||
Interest rate | 4.60% | ||||||||||
Letter of Credit Facilities with Certain Foreign Banks | |||||||||||
Line Of Credit Facility [Line Items] | |||||||||||
Credit facility outstanding, commitment as security for various letters of credit | 0 | $ 0 | |||||||||
Credit facility, commitment as security for various letters of credit | 17,600,000 | 17,600,000 | |||||||||
Available to draw under credit facilities | $ 17,600,000 | $ 19,000,000 | |||||||||
Revolving Credit Facility | P N C Credit Facilities | |||||||||||
Line Of Credit Facility [Line Items] | |||||||||||
Loss on extinguishment of debt | $ 1,400,000 |
Debt - Schedule of Short-Term D
Debt - Schedule of Short-Term Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Debt | $ 1,764 | $ 13,787 |
LGUPlus, General loan | ||
Debt Instrument [Line Items] | ||
Maturity Date | Jun. 17, 2021 | Jun. 17, 2021 |
Interest rate | 0.00% | 0.00% |
Debt | $ 1,764 | $ 1,838 |
The Export Import Bank of Korea, Export Development Loan | ||
Debt Instrument [Line Items] | ||
Maturity Date | May 24, 2021 | |
Interest rate | 1.99% | |
Debt | $ 7,353 | |
Korea Development Bank, General loan | ||
Debt Instrument [Line Items] | ||
Maturity Date | Aug. 10, 2021 | |
Interest rate | 2.28% | |
Debt | $ 4,596 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution, percent of match | 8.30% | ||
Defined benefit plan, accumulated benefit obligation | $ 18.9 | $ 20.1 | |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, insurance contract amount | 3.3 | $ 3.5 | |
US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan expense | 0.1 | $ 0 | |
Korea | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan expense | $ 0.3 | $ 0.3 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Periodic Benefit Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Pension Benefit Costs | ||
Interest costs | $ 21 | $ 38 |
Net amortization costs | 45 | 5 |
Period costs | $ 66 | $ 43 |
Restructuring and Other Charg_3
Restructuring and Other Charges - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Restructuring and other charges | $ 6.3 |
Severance and other termination cost | 3.5 |
Impairment charge of right-of-use assets | 4.2 |
Other charges | 0.3 |
Restructuring Charges | |
Restructuring Cost And Reserve [Line Items] | |
Impairment charge of right-of-use assets | $ 2.5 |
Restructuring and Other Charg_4
Restructuring and Other Charges - Activity Related to Accrued Restructuring Costs (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Restructuring And Related Activities [Abstract] | |
Restructuring charges for the year | $ 3,544 |
Foreign exchange impact | (56) |
Balance at the end of the quarter | $ 3,488 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Outstanding from related party borrowings | $ 0 | $ 29,800,000 | |
Operating lease cost | 1,362,000 | $ 1,410,000 | |
Right-of-use assets from operating leases | 14,535,000 | 18,483,000 | |
Operating lease liability | $ 20,589,000 | 20,453,000 | |
DASAN | Majority Shareholder | |||
Related Party Transaction [Line Items] | |||
DNI direct ownership interest | 37.50% | ||
Guarantee fee, percent | 0.90% | ||
DNS Korea | |||
Related Party Transaction [Line Items] | |||
Operating lease cost | $ 500,000 | $ 400,000 | |
Right-of-use assets from operating leases | 7,800,000 | 8,600,000 | |
Operating lease liability | $ 7,800,000 | $ 8,600,000 |
Related Party Transactions - In
Related Party Transactions - Indebtedness And Other Obligations Payment Guarantees (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Related Party Transaction [Line Items] | |
Amount Guaranteed | $ 28,006 |
Credit Facility with Industrial Bank of Korea | |
Related Party Transaction [Line Items] | |
Amount Guaranteed | 8,400 |
Credit Facility with NongHyup Bank | |
Related Party Transaction [Line Items] | |
Amount Guaranteed | 6,000 |
Credit Facility with Korea Development Bank | |
Related Party Transaction [Line Items] | |
Amount Guaranteed | 8,400 |
Payment Guarantee to Industrial Bank of Korea | |
Related Party Transaction [Line Items] | |
Amount Guaranteed | 2,206 |
Payment Guarantee to Shinhan Bank | |
Related Party Transaction [Line Items] | |
Amount Guaranteed | $ 3,000 |
Related Party Transactions - Sa
Related Party Transactions - Sales and Purchases To and From Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Related Party Transaction [Line Items] | |||
Interest expense | $ 100 | $ 200 | |
Sales And Purchases To And From Related Parties | |||
Related Party Transaction [Line Items] | |||
Sales | 1,770 | 162 | |
Cost of revenue | 1,611 | 133 | |
Manufacturing (cost of revenue) | 10 | 8 | |
Research and product development | 46 | 33 | |
Selling, marketing, general and administrative | 725 | 609 | |
Interest expense | 132 | 151 | |
Other expenses | $ 85 | 86 | |
DASAN | Majority Shareholder | |||
Related Party Transaction [Line Items] | |||
DNI direct ownership interest | 37.50% | ||
DASAN | Majority Shareholder | Sales And Purchases To And From Related Parties | |||
Related Party Transaction [Line Items] | |||
Sales | $ 1,770 | 162 | |
Cost of revenue | 1,611 | 133 | |
Selling, marketing, general and administrative | 707 | 571 | |
Interest expense | 132 | 151 | |
Other expenses | 85 | 86 | |
DASAN | Affiliated Entity | Sales And Purchases To And From Related Parties | |||
Related Party Transaction [Line Items] | |||
Manufacturing (cost of revenue) | [1] | 10 | 8 |
Research and product development | [1] | 46 | 33 |
Selling, marketing, general and administrative | [1] | $ 18 | $ 38 |
[1] | Dasan Invest holds 19.8% of DNI’s shares. |
Related Party Transactions - _2
Related Party Transactions - Sales and Purchases To and From Related Parties (Parenthetical) (Details) | Mar. 31, 2021 |
DASAN | Sales And Purchases To And From Related Parties | |
Related Party Transaction [Line Items] | |
DNI direct ownership interest | 19.80% |
Related Party Transactions - Ba
Related Party Transactions - Balances of Receivables and Payables with Related Parties (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Other assets | $ 5,589 | $ 5,919 | |
Loans Payable | 43,541 | ||
Receivables And Payables With Related Parties | |||
Related Party Transaction [Line Items] | |||
Account receivables | 1,912 | 2,278 | |
Other receivables | 247 | ||
Other assets | 940 | 755 | |
Loans Payable | 29,754 | ||
Accounts payable | $ 623 | 1,584 | |
DASAN | Receivables And Payables With Related Parties | |||
Related Party Transaction [Line Items] | |||
DNI direct ownership interest | 19.80% | ||
DASAN | Majority Shareholder | |||
Related Party Transaction [Line Items] | |||
DNI direct ownership interest | 37.50% | ||
DASAN | Majority Shareholder | Receivables And Payables With Related Parties | |||
Related Party Transaction [Line Items] | |||
Account receivables | $ 1,912 | 2,278 | |
Other receivables | 247 | ||
Other assets | 940 | 755 | |
Loans Payable | 29,754 | ||
Accounts payable | 596 | 1,552 | |
DASAN | Affiliated Entity | Receivables And Payables With Related Parties | |||
Related Party Transaction [Line Items] | |||
Accounts payable | [1] | $ 27 | $ 32 |
[1] | Dasan Invest holds 19.8% of DNI’s shares. |
Related Party Transactions - _3
Related Party Transactions - Balances of Receivables and Payables with Related Parties (Parenthetical) (Details) | Mar. 31, 2021 |
DASAN | Receivables And Payables With Related Parties | |
Related Party Transaction [Line Items] | |
DNI direct ownership interest | 19.80% |
Common Stock - Additional Infor
Common Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Jan. 26, 2021 | Mar. 31, 2021 |
Class Of Stock [Line Items] | ||
Net proceeds from equity offering after deducting underwriting discounts and commissions and offering expenses | $ 59,525 | |
Underwritten Public Offering | Underwriting Agreement | ||
Class Of Stock [Line Items] | ||
Sale of common stock | 4.6 | |
Common stock, price per share | $ 14 | |
Gross proceeds from equity offering | $ 64,400 | |
Net proceeds from equity offering after deducting underwriting discounts and commissions and offering expenses | $ 59,500 | |
Underwriters’ Option to Purchase Additional Shares | Underwriting Agreement | ||
Class Of Stock [Line Items] | ||
Sale of common stock | 0.6 |
Net Income Per Share - Reconcil
Net Income Per Share - Reconciliation of Basic and Diluted Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net income (loss) | $ (23,225) | $ (8,771) |
Weighted average number of shares outstanding: | ||
Basic (in shares) | 25,252 | 21,474 |
Effect of dilutive securities: | ||
Diluted (in shares) | 25,252 | 21,474 |
Net income (loss) per share: | ||
Basic (in dollar per share) | $ (0.92) | $ (0.41) |
Diluted (in dollar per share) | $ (0.92) | $ (0.41) |
Net Income Per Share - Antidilu
Net Income Per Share - Antidilutive Securities Excluded from Computation of Earning Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Outstanding Stock Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of loss per share calculation, shares | 2,216 | 1,896 |
Unvested Restricted Stock Units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of loss per share calculation, shares | 744 | 58 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Lessee Lease Description [Line Items] | |||
Right-of-use assets from operating leases | $ 14,535 | $ 18,483 | |
Operating lease liability | 20,589 | $ 20,453 | |
Impairment charge of right-of-use assets | 4,200 | ||
Restructuring charges | 3,544 | ||
Variable lease cost | 0 | $ 0 | |
Plano, Texas | |||
Lessee Lease Description [Line Items] | |||
Restructuring charges | 1,700 | ||
Hanover, Germany | |||
Lessee Lease Description [Line Items] | |||
Restructuring charges | 2,500 | ||
Lease Agreement | Plano, Texas | |||
Lessee Lease Description [Line Items] | |||
Right-of-use assets from operating leases | 1,700 | ||
Operating lease liability | $ 1,700 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 1,362 | $ 1,410 |
Short-term lease cost | 197 | 36 |
Total net lease cost | $ 1,559 | $ 1,446 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating cash outflows from operating leases | $ 1,391 | $ 1,403 |
ROU assets obtained in exchange for operating lease obligations | $ 1,800 | $ 26 |
Leases - Weighted Average Remai
Leases - Weighted Average Remaining Lease Term, and Weighted Average Discount Rates Related to Operating Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Right-of-use assets from operating leases | $ 14,535 | $ 18,483 |
Operating lease liabilities | 4,435 | 4,494 |
Operating lease liabilities - non-current | 16,154 | 15,959 |
Total operating lease liabilities | $ 20,589 | $ 20,453 |
Weighted average remaining lease term | 4 years 8 months 12 days | 4 years 7 months 6 days |
Weighted average discount rate | 5.70% | 5.70% |
Leases - Maturity of Operating
Leases - Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Remainder of 2021 | $ 4,076 | |
2022 | 5,235 | |
2023 | 4,814 | |
2024 | 4,330 | |
2025 | 2,579 | |
Thereafter | 2,457 | |
Total operating lease payments | 23,491 | |
Less: imputed interest | (2,902) | |
Total operating lease liabilities | $ 20,589 | $ 20,453 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Optelian Access Networks Corporation | |
Guarantee Obligations [Line Items] | |
Performance targets achievement period for contingent consideration | 3 years |
Performance Guarantee | |
Guarantee Obligations [Line Items] | |
Guarantor obligations | $ 10.5 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 893 | $ (5) |
Income (loss) before income taxes | 22,300 | $ (8,800) |
Unrecognized tax benefits | 1,300 | |
Unrecognized tax benefits, period increase (decrease) | $ 0 |
Enterprise-Wide Information - P
Enterprise-Wide Information - Property, Plant and Equipment, Net of Accumulated Depreciation (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | $ 7,880 | $ 7,146 |
US | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 3,594 | 2,878 |
Korea | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 2,294 | 2,472 |
Japan | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 870 | 952 |
Canada | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 619 | |
Germany | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 412 | 761 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | $ 91 | $ 83 |