Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | AXCELIS TECHNOLOGIES INC | |
Entity Central Index Key | 1,113,232 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,368,142 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue: | ||||
Product | $ 59,302 | $ 73,795 | $ 180,336 | $ 214,073 |
Services | 6,348 | 5,522 | 17,286 | 16,964 |
Total revenue | 65,650 | 79,317 | 197,622 | 231,037 |
Cost of revenue: | ||||
Product | 36,360 | 45,698 | 111,262 | 137,443 |
Services | 5,186 | 4,440 | 13,709 | 13,861 |
Total cost of revenue | 41,546 | 50,138 | 124,971 | 151,304 |
Gross profit | 24,104 | 29,179 | 72,651 | 79,733 |
Operating expenses: | ||||
Research and development | 8,493 | 8,581 | 25,607 | 24,679 |
Sales and marketing | 5,992 | 6,322 | 17,742 | 17,808 |
General and administrative | 5,988 | 6,584 | 18,262 | 18,916 |
Restructuring charges | 282 | 18 | ||
Total operating expenses | 20,473 | 21,487 | 61,893 | 61,421 |
Income from operations | 3,631 | 7,692 | 10,758 | 18,312 |
Other (expense) income: | ||||
Interest income | 53 | 7 | 161 | 16 |
Interest expense | (1,342) | (1,274) | (3,727) | (3,627) |
Other, net | (55) | (167) | (352) | (551) |
Total other (expense) income | (1,344) | (1,434) | (3,918) | (4,162) |
Income before income taxes | 2,287 | 6,258 | 6,840 | 14,150 |
Income tax provision (benefit) | 136 | 157 | (196) | 298 |
Net income | $ 2,151 | $ 6,101 | $ 7,036 | $ 13,852 |
Net income per share | ||||
Basic (in dollars per share) | $ 0.07 | $ 0.21 | $ 0.24 | $ 0.49 |
Diluted (in dollars per share) | $ 0.07 | $ 0.20 | $ 0.23 | $ 0.46 |
Shares used in computing net income per share: | ||||
Basic weighted average common shares | 29,221 | 28,700 | 29,118 | 28,480 |
Diluted weighted average common shares | 31,037 | 30,466 | 30,760 | 30,155 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Consolidated Statements of Comprehensive Income | ||||
Net income | $ 2,151 | $ 6,101 | $ 7,036 | $ 13,852 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 936 | (1,672) | 1,529 | (2,353) |
Amortization of actuarial gains from pension plan | 26 | 18 | 78 | 56 |
Total other comprehensive income (loss) | 962 | (1,654) | 1,607 | (2,297) |
Comprehensive income | $ 3,113 | $ 4,447 | $ 8,643 | $ 11,555 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 65,623 | $ 78,889 |
Accounts receivable, net | 44,993 | 36,868 |
Inventories, net | 117,001 | 109,408 |
Prepaid expenses and other current assets | 4,701 | 4,792 |
Total current assets | 232,318 | 229,957 |
Property, plant and equipment, net | 30,804 | 30,031 |
Long-term restricted cash | 6,865 | 6,936 |
Other assets | 21,163 | 14,860 |
Total assets | 291,150 | 281,784 |
Current liabilities | ||
Accounts payable | 20,241 | 19,849 |
Accrued compensation | 4,508 | 9,059 |
Warranty | 2,597 | 3,363 |
Income taxes | 235 | 143 |
Deferred revenue | 7,074 | 7,863 |
Other current liabilities | 5,057 | 4,091 |
Total current liabilities | 39,712 | 44,368 |
Sale leaseback obligation | 47,586 | 47,586 |
Long-term deferred revenue | 788 | 679 |
Other long-term liabilities | 5,136 | 5,387 |
Total liabilities | 93,222 | 98,020 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity | ||
Common stock, $0.001 par value, 75,000 shares authorized; 29,347 shares issued and outstanding at September 30, 2016; 29,025 shares issued and 28,995 shares outstanding at December 31, 2015 | 29 | 29 |
Additional paid-in capital | 533,392 | 529,089 |
Treasury stock, at cost, no shares at September 30, 2016 and 30 shares at December 31, 2015 | (1,218) | |
Accumulated deficit | (335,669) | (342,705) |
Accumulated other comprehensive income (loss) | 176 | (1,431) |
Total stockholders' equity | 197,928 | 183,764 |
Total liabilities and stockholders' equity | $ 291,150 | $ 281,784 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 30,000 | 30,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000 | 75,000 |
Common stock, shares issued | 29,347 | 29,025 |
Common stock, shares outstanding | 29,347 | 28,995 |
Treasury stock, shares | 0 | 30 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities | ||
Net income | $ 7,036 | $ 13,852 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 3,193 | 3,608 |
Gain on sale of equipment | (162) | |
Deferred taxes | 465 | 84 |
Stock-based compensation expense | 3,930 | 4,467 |
Provision for doubtful accounts | 106 | |
Provision for excess and obsolete inventory | 1,142 | 835 |
Changes in operating assets & liabilities: | ||
Accounts receivable | (7,898) | 3,541 |
Inventories | (7,534) | (19,096) |
Prepaid expenses and other current assets | (58) | (3,637) |
Accounts payable and other current liabilities | (4,122) | 9,849 |
Deferred revenue | (704) | 2,967 |
Income taxes | 85 | 73 |
Other assets and liabilities | (8,494) | (4,120) |
Net cash (used in) provided by operating activities | (13,015) | 12,423 |
Cash flows from investing activities | ||
Proceeds from sale of equipment | 162 | |
Expenditures for property, plant, and equipment | (2,261) | (1,329) |
Net cash used in investing activities | (2,099) | (1,329) |
Cash flows from financing activities | ||
Decrease in restricted cash | 71 | 764 |
Financing fees and other expenses | (146) | (847) |
Principal payments on term loan | (14,530) | |
Principal payments on sale leaseback obligation | (392) | |
Proceeds from sale leaseback obligation | 48,940 | |
Proceeds from exercise of stock options | 1,737 | 3,537 |
Proceeds from Employee Stock Purchase Plan | 213 | |
Net cash provided by financing activities | 1,662 | 37,685 |
Effect of exchange rate changes on cash and cash equivalents | 186 | 339 |
Net (decrease) increase in cash and cash equivalents | (13,266) | 49,118 |
Cash and cash equivalents at beginning of period | 78,889 | 30,753 |
Cash and cash equivalents at end of period | 65,623 | 79,871 |
Supplemental disclosure of total cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents at end of period | 65,623 | 79,871 |
Restricted cash at end of period | 6,865 | 61 |
Total cash, cash equivalents and restricted cash at end of period | $ 72,488 | $ 79,932 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2016 | |
Nature of Business | |
Nature of Business | Note 1. Nature of Business Axcelis Technologies, Inc. (“Axcelis” or the “Company”) was incorporated in Delaware in 1995, and is a worldwide producer of ion implantation and other processing equipment used in the fabrication of semiconductor chips in the United States, Europe and Asia. In addition, the Company provides extensive aftermarket service and support, including spare parts, equipment upgrades, used equipment and maintenance services to the semiconductor industry. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments which are of a normal recurring nature and considered necessary for a fair presentation of these financial statements have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for other interim periods or for the year as a whole. The balance sheet at December 31, 2015 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Axcelis Technologies, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015. |
Correction of Accounting Error
Correction of Accounting Error in Prior Period | 9 Months Ended |
Sep. 30, 2016 | |
Correction of Accounting Error in Prior Period | |
Correction of Accounting Error in Prior Period | Note 2. Correction of Accounting Error in Prior Period Subsequent to March 31, 2016, but prior to filing the Form 10-Q for the quarter ended June 30, 2016, the Company discovered a cumulative error associated with the elimination of profits on sales of inventory to its subsidiaries. This error had no impact upon the Company’s consolidated statement of operations or consolidated statement of cash flows subsequent to the year ended December 31, 2010. The following financial statement line items reported in the Company’s consolidated balance sheets for the years ended December 31, 2015 and 2014 were affected by the correction of this accounting error: (in thousands) Previously Reported December 31, 2015 Adjusted December 31, 2015 Effect Inventory, net $ $ $ Total current assets Total assets Accumulated deficit Total stockholders' equity Total liabilities and stockholders' equity $ $ $ (in thousands) Previously Reported December 31, 2014 Adjusted December 31, 2014 Effect Inventory, net $ $ $ Total current assets Total assets Accumulated deficit Total stockholders' equity Total liabilities and stockholders' equity $ $ $ This error was associated with transactions occurring prior to September 2010, at which time the Company revised its methodology to compute and eliminate intercompany profits. However, the Company failed to identify and record an entry to eliminate the cumulative error resulting from the prior methodology. This $6.5 million error resulted in an overstatement of inventory and a cumulative understatement of cost of product revenue as of September 2010. Thereafter, the effect was an overstatement of inventory and understatement of accumulative deficit for each subsequent reporting period. The consolidated balance sheets as of December 31, 2015 and 2014 have been revised to reflect the correction of the error through a decrease in inventory and an increase in accumulated deficit of $6.5 million. In the opinion of management, the effect is not material to the consolidated financial position or results of operations for any previously reported period. However, prior year amounts will be revised, as reflected above, in future filings. |
1-for-4 Reverse Stock Split
1-for-4 Reverse Stock Split | 9 Months Ended |
Sep. 30, 2016 | |
1-for-4 Reverse Stock Split | |
1-for-4 Reverse Stock Split | Note 3. 1-for-4 Reverse Stock Split As of 6:00 PM Eastern Time on June 30, 2016, the Company effected a 1-for-4 reverse stock split of its common stock. The Company continues to be traded under its unchanged symbol “ACLS.” All previously reported common stock share amounts in the accompanying financial statements and related notes have been retroactively adjusted to reflect the reverse stock split. As a result of the reduced number of shares outstanding after the reverse stock split, the stated capital attributable to common stock on the Company’s balance sheet (which consists of the unchanged $0.001 par value per share multiplied by the aggregate number of shares issued and outstanding), has been reduced. Correspondingly, the Company’s additional paid-in capital account, which consists of the difference between its stated capital and the aggregate amount paid to the Company upon issuance of all currently outstanding shares of its common stock, has been credited with the amount by which the stated capital was reduced. The Company’s stockholders’ equity, in the aggregate, remains unchanged. Immediately prior to the effectiveness of the reverse stock split, the Company retired 120,000 shares of common stock held in treasury to the status of authorized and unissued. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 4. Stock-Based Compensation The Company maintains the Axcelis Technologies, Inc. 2012 Equity Incentive Plan (the “2012 Equity Plan”), which became effective on May 2, 2012, and permits the issuance of options, restricted stock, restricted stock units and performance awards to selected employees, directors and consultants of the Company. The Company’s 2000 Stock Plan (the “2000 Stock Plan”), expired on May 1, 2012 and no new grants may be made under that plan after that date. However, unexpired awards granted under the 2000 Stock Plan remain outstanding and subject to the terms of the 2000 Stock Plan. The Company also maintains the Axcelis Technologies, Inc. Employee Stock Purchase Plan (the “ESPP”), an Internal Revenue Code Section 423 plan. The 2012 Equity Plan and the ESPP are more fully described in Note 14 to the consolidated financial statements in the Company’s 2015 Annual Report on Form 10-K. The Company recognized stock-based compensation expense of $1.9 million and $1.4 million for the three month periods ended September 30, 2016 and 2015, respectively. The Company recognized stock-based compensation expense of $3.9 million and $4.5 million for the nine month periods ended September 30, 2016 and 2015, respectively. These amounts include compensation expense related to restricted stock units, non-qualified stock options and stock to be issued to participants under the ESPP. In the three month and nine month periods ended September 30, 2016, the Company issued 0.2 million and 0.4 million shares of common stock, respectively, in connection with the exercise of stock options, resulting in proceeds of $1.2 million and $1.7 million, respectively. |
Computation of Net Earnings per
Computation of Net Earnings per Share | 9 Months Ended |
Sep. 30, 2016 | |
Computation of Net Earnings per Share | |
Computation of Net Earnings per Share | Note 5. Computation of Net Earnings per Share Basic earnings per share is computed by dividing income available to common stockholders (the numerator) by the weighted‑average number of common shares outstanding (the denominator) for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased by the number of additional common shares that would have been outstanding if the potentially dilutive common shares issuable for stock options, restricted stock units and employee stock purchase plan accounts had been issued, calculated using the treasury stock method. The earnings per share amounts presented within our financial statements and related notes and the related basic and diluted weighted average share amounts stated below have been revised to reflect the 1-for-4 reserve stock split described in Note 3 above. The components of net earnings per share are as follows: Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 (in thousands, except per share data) Net income available to common stockholders $ $ $ $ Weighted average common shares outstanding used in computing basic earnings per share Incremental options and RSUs Weighted average common shares outstanding used in computing diluted net earnings per share Net earnings per share Basic $ $ $ $ Diluted $ $ $ $ Diluted weighted average common shares outstanding does not include options and restricted stock units outstanding to purchase 0.9 million and 0.9 million common equivalent shares for the three month periods ended September 30, 2016 and 2015, respectively, and does not include options and restricted stock units outstanding to purchase 0.9 million and 1.0 million common equivalent shares for the nine month periods ended September 30, 2016 and 2015, respectively, as their effect would have been anti-dilutive. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | Note 6. Accumulated Other Comprehensive Income (Loss) The following table presents the changes in accumulated other comprehensive income (loss), net of tax, by component for the nine months ended September 30, 2016: Foreign Defined benefit currency pension plan Total (in thousands) Balance at December 31, 2015 $ $ $ Other comprehensive income and pension reclassification (1) Balance at September 30, 2016 $ $ $ (1) The tax effect for pension reclassification was not material to the consolidated financial statements. |
Inventories, net
Inventories, net | 9 Months Ended |
Sep. 30, 2016 | |
Inventories, net | |
Inventories, net | Note 7. Inventories, net The components of inventories are as follows: September 30, December 31, 2016 2015 (in thousands) Raw materials $ $ Work in process Finished goods (completed systems) $ $ The value of raw materials shown for December 31, 2015, reflects the correction of an immaterial error discussed in Note. 2. When recorded, inventory reserves are intended to reduce the carrying value of inventories to their net realizable value. The Company establishes inventory reserves when conditions exist that indicate inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand for the Company’s products or market conditions. The Company regularly evaluates the ability to realize the value of inventories based on a combination of factors including the following: forecasted sales or usage, estimated product end of life dates, estimated current and future market value and new product introductions. Purchasing and usage alternatives are also explored to mitigate inventory exposure. As of September 30, 2016 and December 31, 2015, inventories are stated net of inventory reserves of $9.4 million and $10.5 million, respectively. |
Product Warranty
Product Warranty | 9 Months Ended |
Sep. 30, 2016 | |
Product Warranty | |
Product Warranty | Note 8. Product Warranty The Company generally offers a one year warranty for all of its systems, the terms and conditions of which vary depending upon the product sold. For all systems sold, the Company accrues a liability for the estimated cost of standard warranty at the time of system shipment and defers the portion of systems revenue attributable to the fair value of non-standard warranty. Costs for non-standard warranty are expensed as incurred. Factors that affect the Company’s warranty liability include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs. The Company periodically assesses the adequacy of its recorded liability and adjusts the amount as necessary. The changes in the Company’s standard product warranty liability are as follows: Nine months ended September 30, 2016 2015 (in thousands) Balance at January 1 (beginning of year) $ $ Warranties issued during the period Settlements made during the period Changes in estimate of liability for pre-existing warranties during the period Balance at September 30 (end of period) $ $ Amount classified as current $ $ Amount classified as long-term Total warranty liability $ $ |
Restructuring Charges
Restructuring Charges | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring Charges. | |
Restructuring Charges | Note 9. Restructuring Charges In the first quarter of 2016, due to changes in customer service contracts resulting from a consolidation in our customer base, the Company had severance and other costs related to a reduction in force. Changes in the Company’s restructuring liability, which consist primarily of payments made on obligations of severance and related costs (which obligations are included in amounts reported as other current liabilities), are as follows: (in thousands) Balance at December 31, 2015 $ — Severance and, related costs Cash payments Balance at September 30, 2016 $ |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | Note 10. Fair Value Measurements Certain of the assets and liabilities on the Company’s balance sheets are reported at their “fair value.” Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. (a) Fair Value Hierarchy The accounting guidance for fair value measurement requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: Level 1 - applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 - applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. (b) Fair Value Measurements The Company’s money market funds are included in cash and cash equivalents in the consolidated balance sheets and are considered a level 1 investment as they are valued at quoted market prices in active markets. The Company’s sale leaseback obligation relating to the sale of our corporate headquarters is carried at amortized cost, which approximates fair value based on an implied borrowing rate of 10.65%. The underlying cash flow associated with our lease payments is being applied to both an interest and principal component using the effective interest method over the associated lease term. The liability is categorized as level 3 within the fair value hierarchy. The following table sets forth the Company’s assets and liabilities by level within the fair value hierarchy: September 30, 2016 Fair Value Measurements Level 1 Level 2 Level 3 Total (in thousands) Assets Cash equivalents: Money market funds $ $ — $ — $ Liabilities Sale leaseback obligation $ — $ — $ $ December 31, 2015 Fair Value Measurements Level 1 Level 2 Level 3 Total (in thousands) Assets Cash equivalents: Money market funds $ $ — $ — $ Liabilities Sale leaseback obligation $ — $ — $ $ (c) Other Financial Instruments The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents ( which are comprised primarily of deposit and investment accounts) , accounts receivable, prepaid expenses and other current and non-current assets, accounts payable and accrued expenses approximate fair value due to their short-term maturities. |
Financing Arrangements
Financing Arrangements | 9 Months Ended |
Sep. 30, 2016 | |
Financing Arrangements | |
Financing Arrangements | Note 11. Financing Arrangements Sale Leaseback Obligation On January 30, 2015, the Company sold its corporate headquarters facility to Beverly Property Owner LLC, an affiliate of Middleton Partners, based in Northbrook, Illinois, for the purchase price of $48.9 million. As part of the sale, the Company also entered into a 22-year lease agreement with Beverly Property Owner LLC. The sale leaseback is accounted for as a financing arrangement for financial reporting and, as such, the Company has recorded a financing obligation of $47.6 million as of September 30, 2016. The associated lease payments are deemed to include both an interest component and payment of principal, with the underlying liability being extinguished at the end of the original lease term. The Company posted a collateralized security deposit of $5.9 million in the form of an irrevocable letter of credit at the time of the closing. This letter of credit is cash collateralized and is classified as restricted cash as of September 30, 2016. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes | |
Income Taxes | Note 12. Income Taxes Income tax expense relates principally to operating results of foreign entities in jurisdictions, primarily in Europe and Asia, where the Company earns taxable income. The Company has significant net operating losses in the United States and certain other tax jurisdictions and, as a result, does not pay significant income taxes in those jurisdictions. At December 31, 2015, the Company had $124.2 million of deferred tax assets worldwide relating to net operating loss carryforwards, tax credit carryforwards and other temporary differences, which are available to reduce income taxes in future years. The Company maintains a 100% domestic valuation allowance, reducing the carrying value of the deferred tax assets in the United States to zero. The Company will continue to maintain a full valuation allowance for those tax assets until accounting principles require the release of the allowance based on expectations of continuing profitability. During the first quarter of 2016, the statute of limitations associated with a tax position previously taken by the Company expired. The related tax reserve of $0.6 million and accrued interest of $0.3 million that had been recorded were reversed during the nine months ended September 30, 2016. See Note 15 for the effect of the adoption of Accounting Standards Update No. 2015-17. |
Concentration of Risk
Concentration of Risk | 9 Months Ended |
Sep. 30, 2016 | |
Concentration of Risk | |
Concentration of Risk | Note 13. Concentration of Risk For the three months ended September 30, 2016, three customers accounted for 16.0%, 12.0% and 11.7% of consolidated revenue, respectively. For the nine months ended September 30, 2016, two customers accounted for 12.3% and 10.1% of total revenue, respectively. For the three months ended September 30, 2015, two customers accounted for 32.8% and 16.1%, of consolidated revenue, respectively. For the nine months ended September 30, 2015, one customer accounted for 33.0% of consolidated revenue. At September 30, 2016, two customers accounted for 27.0% and 16.0% consolidated accounts receivable, respectively. At December 31, 2015, three customers accounted for 22.9%, 12.7% and 11.6% of accounts receivable, respectively. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Contingencies | |
Contingencies | Note 14. Contingencies (a) Litigation The Company is, from time to time, a party to litigation that arises in the normal course of its business operations. The Company is not presently a party to any litigation that it believes might have a material adverse effect on its business operations. (b) Indemnifications The Company’s system sales agreements typically include provisions under which the Company agrees to take certain actions, provide certain remedies and defend its customers against third-party claims of intellectual property infringement under specified conditions and to indemnify customers against any damage and costs awarded in connection with such claims. The Company has not incurred any material costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements. |
Recent Accounting Guidance
Recent Accounting Guidance | 9 Months Ended |
Sep. 30, 2016 | |
Recent Accounting Guidance | |
Recent Accounting Guidance | Note 15. Recent Accounting Guidance Accounting Standards or Updates Recently Adopted In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, “ Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” The amendments in this ASU require entities that present classified statements of financial position to classify deferred tax liabilities and assets as noncurrent. They apply to all entities that present a classified statement of financial position. For public business entities, the amendments in this ASU are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company adopted ASU No. 2015-17 early, effective June 30, 2016, on a prospective basis. As a result, we have presented all deferred tax assets and liabilities as noncurrent on our consolidated balance sheet as of September 30, 2016, reducing current deferred tax assets by $0.2 million, long-term deferred tax assets by $0.3 million and short-term deferred tax liabilities by $0.5 million. The current deferred tax assets and liabilities on our consolidated balance sheet as of December 31, 2015, have not been reclassified. Accounting Standards or Updates Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers” (Topic 606 ): Identifying Performance Obligations and Licensing , which further clarifies performance obligations in a contract with a customer. In May 2016, the FASB issued ASU 2016-12, “ Revenue from Contracts with Customers” (Topic 606): Narrow-Scope Improvements and Practical Expedients , which provides a more narrow interpretation of ASU No. 2014-09. These ASUs are effective for annual reporting periods beginning after December 15, 2017 and interim periods within those annual periods. We are currently assessing the potential impact the adoption of these standards will have on our financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory,” which changes the inventory measurement principles for entities using the first-in, first-out (FIFO) or average cost methods. For entities utilizing one of these methods, the inventory measurement principle will change from lower of cost or market to the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the reasonably predictable costs of completion, disposal and transportation. The amendments are effective for annual and interim periods beginning after December 15, 2016. The adoption of this ASU will not have a material impact on our financial statements and disclosures. In February 2016, the FASB issued ASU No. 2016-02 “Leases.” The ASU requires lessees to recognize the rights and obligations created by most leases as assets and liabilities on their balance sheet and continue to recognize expenses on their income statement over the lease term. It will also require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. We are currently evaluating the impact of ASU 2016-02 on the consolidated financial statements and disclosures. In March 2016, the FASB issued ASU No. 2016-09 “Compensation — Stock Compensation,” which changes the accounting for stock-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, the amendments in this ASU are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for all entities and any entity that elects early adoption must adopt all of the amendments in the same period. The adoption of this ASU will not have a material impact on our financial statements and disclosures. |
Correction of Accounting Erro22
Correction of Accounting Error in Prior Period (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Correction of Accounting Error in Prior Period | |
Schedule of Effect of Error Corrections and Prior Period Adjustments | (in thousands) Previously Reported December 31, 2015 Adjusted December 31, 2015 Effect Inventory, net $ $ $ Total current assets Total assets Accumulated deficit Total stockholders' equity Total liabilities and stockholders' equity $ $ $ (in thousands) Previously Reported December 31, 2014 Adjusted December 31, 2014 Effect Inventory, net $ $ $ Total current assets Total assets Accumulated deficit Total stockholders' equity Total liabilities and stockholders' equity $ $ $ |
Computation of Net Earnings p23
Computation of Net Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Computation of Net Earnings per Share | |
Schedule of components of net (loss) per share | Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 (in thousands, except per share data) Net income available to common stockholders $ $ $ $ Weighted average common shares outstanding used in computing basic earnings per share Incremental options and RSUs Weighted average common shares outstanding used in computing diluted net earnings per share Net earnings per share Basic $ $ $ $ Diluted $ $ $ $ |
Accumulated Other Comprehensi24
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) | |
Schedule of changes in accumulated other comprehensive income (loss), net of tax | Foreign Defined benefit currency pension plan Total (in thousands) Balance at December 31, 2015 $ $ $ Other comprehensive income and pension reclassification (1) Balance at September 30, 2016 $ $ $ (1) The tax effect for pension reclassification was not material to the consolidated financial statements. |
Inventories, net (Tables)
Inventories, net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventories, net | |
Schedule of components of inventories | September 30, December 31, 2016 2015 (in thousands) Raw materials $ $ Work in process Finished goods (completed systems) $ $ |
Product Warranty (Tables)
Product Warranty (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Product Warranty | |
Schedule of standard product warranty liability | Nine months ended September 30, 2016 2015 (in thousands) Balance at January 1 (beginning of year) $ $ Warranties issued during the period Settlements made during the period Changes in estimate of liability for pre-existing warranties during the period Balance at September 30 (end of period) $ $ Amount classified as current $ $ Amount classified as long-term Total warranty liability $ $ |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring Charges. | |
Schedule of changes in restructuring liability | (in thousands) Balance at December 31, 2015 $ — Severance and, related costs Cash payments Balance at September 30, 2016 $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Schedule of Company's assets and liabilities by level within the fair value hierarchy | September 30, 2016 Fair Value Measurements Level 1 Level 2 Level 3 Total (in thousands) Assets Cash equivalents: Money market funds $ $ — $ — $ Liabilities Sale leaseback obligation $ — $ — $ $ December 31, 2015 Fair Value Measurements Level 1 Level 2 Level 3 Total (in thousands) Assets Cash equivalents: Money market funds $ $ — $ — $ Liabilities Sale leaseback obligation $ — $ — $ $ |
Correction of Accounting Erro29
Correction of Accounting Error in Prior Period - (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Error Corrections and Prior Period Adjustments Restatement | |||
Inventory, Net | $ 117,001 | $ 109,408 | |
Total current assets | 232,318 | 229,957 | |
Total assets | 291,150 | 281,784 | |
Accumulated deficit | (335,669) | (342,705) | |
Total stockholders' equity | 197,928 | 183,764 | |
Total liabilities and stockholders' equity | $ 291,150 | 281,784 | |
Previously Reported | |||
Error Corrections and Prior Period Adjustments Restatement | |||
Inventory, Net | 115,904 | $ 104,063 | |
Total current assets | 236,453 | 185,135 | |
Total assets | 288,280 | 227,654 | |
Accumulated deficit | (336,209) | (350,887) | |
Total stockholders' equity | 190,260 | 168,352 | |
Total liabilities and stockholders' equity | 288,280 | 227,654 | |
Adjusted | |||
Error Corrections and Prior Period Adjustments Restatement | |||
Inventory, Net | 109,408 | 97,567 | |
Total current assets | 229,957 | 178,639 | |
Total assets | 281,784 | 221,158 | |
Accumulated deficit | (342,705) | (357,383) | |
Total stockholders' equity | 183,764 | 161,856 | |
Total liabilities and stockholders' equity | 281,784 | 221,158 | |
Effect of Change | |||
Error Corrections and Prior Period Adjustments Restatement | |||
Inventory, Net | (6,496) | (6,496) | |
Total current assets | (6,496) | (6,496) | |
Total assets | (6,496) | (6,496) | |
Accumulated deficit | (6,496) | (6,496) | |
Total stockholders' equity | (6,496) | (6,496) | |
Total liabilities and stockholders' equity | $ (6,496) | $ (6,496) |
1-for-4 Reverse Stock Split -(D
1-for-4 Reverse Stock Split -(Details) | 9 Months Ended | |
Sep. 30, 2016$ / sharesshares | Dec. 31, 2015$ / shares | |
Class of Stock [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Treasury Stock, Shares, Retired | shares | 120,000 | |
Common Stock | ||
Class of Stock [Line Items] | ||
Reverse stock split conversion ratio | 0.25 | |
Common stock, par value (in dollars per share) | $ 0.001 |
Stock-Based Compensation - (Det
Stock-Based Compensation - (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock-based compensation | ||||
Stock-based compensation expense | $ 1,900 | $ 1,400 | $ 3,900 | $ 4,500 |
Proceeds from exercise of stock options | $ 1,737 | $ 3,537 | ||
Common Stock | ||||
Stock-based compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 200,000 | 400,000 | ||
Proceeds from exercise of stock options | $ 1,200 | $ 1,700 | ||
2000 Stock Plan | ||||
Stock-based compensation | ||||
Number of shares of common stock available for future grant | 0 | 0 |
Computation of Net Earnings p32
Computation of Net Earnings per Share (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | |
Computation of Net Earnings per Share | ||||
Net income available to common stockholders | $ | $ 2,151 | $ 6,101 | $ 7,036 | $ 13,852 |
Weighted average common shares outstanding used in computing basic earnings per share | 29,221 | 28,700 | 29,118 | 28,480 |
Incremental options and RSUs | 1,816 | 1,766 | 1,642 | 1,675 |
Weighted average common shares outstanding used in computing diluted net earnings per share | 31,037 | 30,466 | 30,760 | 30,155 |
Net earnings per share | ||||
Basic | $ / shares | $ 0.07 | $ 0.21 | $ 0.24 | $ 0.49 |
Diluted | $ / shares | $ 0.07 | $ 0.20 | $ 0.23 | $ 0.46 |
Weighted Average Number Diluted Shares Outstanding Adjustment, Total | 900 | 900 | 900 | 1,000 |
Common Stock | ||||
Computation of Net Earnings per Share | ||||
Reverse stock split conversion ratio | 0.25 |
Accumulated Other Comprehensi33
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Changes in accumulated other comprehensive income, net of tax | ||||
Balance at the beginning of period | $ (1,431) | |||
Other comprehensive income and pension reclassification | $ 962 | $ (1,654) | 1,607 | $ (2,297) |
Balance at the end of period | 176 | 176 | ||
Foreign currency | ||||
Changes in accumulated other comprehensive income, net of tax | ||||
Balance at the beginning of period | (744) | |||
Other comprehensive income and pension reclassification | 1,529 | |||
Balance at the end of period | 785 | 785 | ||
Defined benefit pension plan | ||||
Changes in accumulated other comprehensive income, net of tax | ||||
Balance at the beginning of period | (687) | |||
Other comprehensive income and pension reclassification | 78 | |||
Balance at the end of period | $ (609) | $ (609) |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Inventories, net | ||
Raw materials | $ 77,498 | $ 72,070 |
Work in process | 30,903 | 29,219 |
Finished goods (completed systems) | 8,600 | 8,119 |
Inventories, net | 117,001 | 109,408 |
Inventory reserves | $ 9,400 | $ 10,500 |
Product Warranty (Details)
Product Warranty (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | |
Product Warranty | |||||
Product warranty period | 1 year | ||||
Changes in standard product warranty liability | |||||
Balance at the beginning of the period | $ 3,555 | $ 1,526 | |||
Warranties issued during the period | 2,286 | 3,543 | |||
Settlements made during the period | (3,570) | (1,611) | |||
Changes in estimate of liability for pre-existing warranties during the period | 551 | 345 | |||
Balance at the end of the period | 2,822 | 3,803 | |||
Product warranty classification | |||||
Amount classified as current | $ 2,597 | $ 3,363 | $ 3,532 | ||
Amount classified as long-term | 225 | 271 | |||
Total warranty liability | $ 3,555 | $ 1,526 | $ 2,822 | $ 3,555 | $ 3,803 |
Restructuring Charges (Details)
Restructuring Charges (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Changes in restructuring liability | ||
Severance and, related costs | $ 282 | $ 18 |
Severance | ||
Changes in restructuring liability | ||
Severance and, related costs | 282 | |
Cash payments | (267) | |
Balance at the end of the period | $ 15 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Sale leaseback obligation | ||
Fair Value Measurements | ||
Implicit interest rate on associated cash flows | 10.65% | |
Recurring | Total | Sale leaseback obligation | ||
Fair Value Measurements | ||
Sale leaseback obligation | $ 47,586 | $ 47,586 |
Recurring | Money market accounts | Total | ||
Fair Value Measurements | ||
Money market funds | 54,722 | 65,327 |
Recurring | Level 1 | Money market accounts | ||
Fair Value Measurements | ||
Money market funds | 54,722 | 65,327 |
Recurring | Level 3 | Sale leaseback obligation | ||
Fair Value Measurements | ||
Sale leaseback obligation | $ 47,586 | $ 47,586 |
Financing Arrangements (Details
Financing Arrangements (Details) - USD ($) $ in Thousands | Jan. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 |
Financing Arrangements | |||
Sale leaseback obligation | $ 47,586 | $ 47,586 | |
Beverly Property Owner LLC | Sale leaseback obligation | Buildings | |||
Financing Arrangements | |||
Purchase price | $ 48,900 | ||
Lease term | 22 years | ||
Sale leaseback obligation | 47,600 | ||
Security deposit | $ 5,900 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Income Taxes | |||
Deferred tax assets valuation allowance | $ 124.2 | ||
Percentage of valuation allowance | 100.00% | ||
Deferred tax assets, net of valuation allowance | $ 0 | ||
Reversal of tax reserve | $ 0.6 | ||
Reversal of accrued interest | $ 0.3 |
Concentration of Risk (Details)
Concentration of Risk (Details) - customer | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Revenue | Customer concentration risk | One customer | |||||
Concentration of risk | |||||
Number of customers | 3 | 2 | 2 | 1 | |
Percentage of concentration risk | 32.80% | 12.30% | 33.00% | ||
Revenue | Customer concentration risk | Second customer | |||||
Concentration of risk | |||||
Number of customers | 3 | 2 | 2 | ||
Percentage of concentration risk | 16.10% | 10.10% | |||
Revenue | Customer concentration risk | Third customer | |||||
Concentration of risk | |||||
Number of customers | 3 | ||||
Consolidated accounts receivable | Customer concentration risk | One customer | |||||
Concentration of risk | |||||
Number of customers | 2 | 3 | |||
Consolidated accounts receivable | Customer concentration risk | Second customer | |||||
Concentration of risk | |||||
Number of customers | 2 | 3 | |||
Consolidated accounts receivable | Customer concentration risk | Third customer | |||||
Concentration of risk | |||||
Number of customers | 3 | ||||
Consolidated accounts receivable | Credit concentration risk | One customer | |||||
Concentration of risk | |||||
Percentage of concentration risk | 16.00% | 27.00% | 22.90% | ||
Consolidated accounts receivable | Credit concentration risk | Second customer | |||||
Concentration of risk | |||||
Percentage of concentration risk | 12.00% | 12.70% | |||
Consolidated accounts receivable | Credit concentration risk | Third customer | |||||
Concentration of risk | |||||
Percentage of concentration risk | 11.70% | 16.00% | 11.60% |
Recent Accounting Guidance (Det
Recent Accounting Guidance (Details) - ASU No. 2015-17 - Adjusted $ in Millions | Sep. 30, 2016USD ($) |
Recent Accounting Guidance | |
Current deferred tax assets | $ (0.2) |
Long-term deferred tax assets | (0.3) |
Short-term deferred tax liabilities | $ (0.5) |