Applied Optoelectronics (AAOI) 10-Q 12 May 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	7-May-14
Document And Entity Information	'	'
Entity Registrant Name	'Applied Optoelectronics, Inc.	'
Entity Central Index Key	'0001158114	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Is Entity a Well-known Seasoned Issuer?	'No	'
Is Entity a Voluntary Filer?	'No	'
Is Entity's Reporting Status Current?	'Yes	'
Entity Filer Category	'Non-accelerated Filer	'
Entity Common Stock, Shares Outstanding	'	14,785,065
Document Fiscal Period Focus	'Q1	'
Document Fiscal Year Focus	'2014	'

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Current Assets	'	'
Cash and cash equivalents	$52,411	$22,006
Restricted cash	841	775
Short-term investments	7,898	7,970
Accounts receivable - trade, net	23,837	22,089
Inventories	23,933	19,608
Prepaid expenses and other current assets	5,483	5,488
Total current assets	114,403	77,936
Property, plant and equipment, net	35,282	31,134
Land use rights, net	942	959
Intangible assets, net	3,848	851
Other assets, net	179	177
TOTAL ASSETS	154,654	111,057
Current liabilities	'	'
Current portion of notes payable and long-term debt	16,054	17,185
Accounts payable	17,105	15,010
Bank acceptance payable	2,691	2,347
Accrued liabilities	4,072	4,515
Total current liabilities	39,922	39,057
Notes payable and long-term debt, less current portion	3,834	8,923
Other long term liabilities	1,750	0
TOTAL LIABILITIES	45,506	47,980
Stockholders' equity (deficit):	'	'
Redeemable Convertible Preferred Stock and Convertible Preferred Stock; 5,000 shares authorized; no shares issued and outstanding at March 31, 2014 and December 31, 2013, $0.001 par value	0	0
Common Stock; 45,000 shares authorized; 14,730 shares issued and outstanding at March 31, 2014, $0.001 par value; 12,644 shares issued and outstanding at December 31, 2013, $0.001 par value	15	13
Additional paid-in capital	190,286	144,023
Accumulated other comprehensive gain	2,085	2,364
Accumulated deficit	-83,238	-83,323
TOTAL STOCKHOLDERS' EQUITY	109,148	63,077
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$154,654	$111,057

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]	'	'
Convertible Preferred Stock par value	$0.00	$0.00
Convertible Preferred Stock shares authorized	5,000,000	5,000,000
Convertible Preferred Stock shares issued	0	0
Convertible Preferred Stock shares outstanding	0	0
Common stock par value	$0.00	$0
Common stock shares authorized	45,000,000	45,000,000
Common stock shares issued	14,730,000	12,644,000
Common stock shares outstanding	14,730,000	12,644,000

Condensed_Consolidated_Stateme

Condensed Consolidated Statements of Operations (USD $)	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Income Statement [Abstract]	'	'
Revenue, net	$24,859	$14,317
Cost of goods sold	16,206	9,732
Gross profit	8,653	4,585
Operating expenses	'	'
Research and development	3,546	2,004
Sales and marketing	1,333	907
General and administrative	3,554	2,374
Total operating expenses	8,433	5,285
Income (loss) from operations	220	-700
Other income (expense)	'	'
Interest income	79	20
Interest expense	-162	-306
Other expense, net	-27	-8
Total other expense	-110	-294
Income (loss) before income taxes	110	-994
Income taxes	-25	0
Net income (loss)	$85	($994)
Net income (loss) per share - basic	$0.01	($3.74)
Net income (loss) per share - diluted	$0.01	($3.74)
Weighted average shares used to compute net income (loss) per share - basic	12,792,322	265,920
Weighted average shares used to compute net income (loss) per share - diluted	13,787,580	265,920

Condensed_Consolidated_Stateme1

Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Statement of Comprehensive Income [Abstract]	'	'
Net income (loss)	$85	($994)
Foreign currency translation adjustment, net of tax	-279	63
Comprehensive loss	($194)	($931)

Condensed_Consolidated_Stateme2

Condensed Consolidated Statements of Cash Flows (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Operating activities:	'	'
Net income (loss)	$85	($994)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:	'	'
Provision for obsolete inventory	272	137
Depreciation and amortization	1,239	770
Loss (Gain) on disposal of assets	-1	1
Share-based compensation and warrant expense	489	111
Changes in operating assets and liabilities:	'	'
Accounts receivable	-1,829	2,293
Bank acceptance receivable	0	1,027
Inventory	-4,822	-52
Other current assets	-46	-867
Accounts payable	4,048	-253
Accrued liabilities	-406	-853
Net cash provided by (used in) operating activities	-971	1,320
Investing activities:	'	'
Purchase of property, plant and equipment	-5,647	-803
Proceeds from disposal of equipment	12	0
Deposits and deferred charges	-8	-125
Purchase of intangible assets	-3,065	-18
Net cash used in investing activities	-8,708	-946
Financing activities:	'	'
Proceeds from issuance of notes payable and long-term debt	3,150	0
Principal payments of long-term debt and notes payable	-26	-64
Proceeds from line of credit borrowings	5,788	7,985
Repayments of line of credit borrowings	-14,954	-11,082
Proceeds from bank acceptance payable	2,307	1,564
Repayments of bank acceptance payable	-1,940	-949
Increase in restricted cash	-73	-263
Exercise of stock options	107	28
Exercise of warrants	0	114
Proceeds from public offering	45,671	'
Net cash provided by (used in) financing activities	40,030	-2,667
Effect of exchange rate changes on cash	54	147
Net increase (decrease) in cash	30,405	-2,146
Cash and cash equivalents at beginning of the period	22,006	10,723
Cash and cash equivalents at end of the period	52,411	8,577
Cash paid for:	'	'
Interest	164	290
Income taxes	$26	$0

1_Description_of_Business

1. Description of Business	3 Months Ended
	Mar. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]	'
1. Description of Business	'
	Business Overview
	Applied Optoelectronics, Inc., or AOI, was originally incorporated in Texas in February of 1997 and then converted to a Delaware corporation in March of 2013. AOI together with its wholly-owned subsidiaries are collectively referred to as the Company. The Company is a leading, vertically integrated provider of fiber-optic networking products, primarily for three networking end-markets: cable television, fiber-to-the-home and internet data centers. The Company designs and manufactures a wide range of optical communications products at varying levels of integration, from components, subassemblies and modules to complete turn-key equipment.
	The Company has manufacturing and research and development facilities in all three of its locations, located in U.S., Taiwan and China. At its corporate headquarters and manufacturing facilities in Sugar Land, Texas, the Company primarily manufactures lasers and laser components and performs research and development activities for the laser component products. The Company operates a division in Taipei, Taiwan that primarily manufactures transceivers and performs research and development activities for the transceiver products. The Company operates in Ningbo, China through its wholly-owned subsidiary Prime World International Holdings, Ltd. (incorporated in the British Virgin Islands), the sole parent of Global Technology, Inc. (incorporated in the People’s Republic of China). Through Global Technology, the Company primarily manufactures Cable TV Broadband (“CATV”) systems and equipment and performs research and development activities for the CATV products.
	Interim Financial Statements
	The condensed consolidated financial statements of the Company, as of March 31, 2014 and December 31, 2013 and for the three months ended March 31, 2014 and 2013, have been prepared in accordance with the instructions on Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In accordance with those rules and regulations, the Company has omitted certain information and notes normally provided in the Company’s annual consolidated financial statements. In the opinion of management, the condensed consolidated financial statements contain all adjustments, except as otherwise noted, necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“GAAP”). These condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K (“Annual Report”) for the fiscal year ended December 31, 2013. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results expected for the entire fiscal year. All significant intercompany accounts and transactions have been eliminated.
	Use of Estimates
	The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates in the consolidated financial statements and accompanying notes. Significant estimates and assumptions that impact these financial statements and the accompanying notes relate to, among other things, allowance for doubtful accounts, valuation allowances for deferred tax assets, inventory reserve, share-based compensation expense, estimated useful lives of property and equipment, and taxes.

2_Significant_Accounting_Polic

2. Significant Accounting Policies	3 Months Ended
	Mar. 31, 2014
Accounting Policies [Abstract]	'
2. Significant Accounting Policies	'
	There have been no changes in the Company’s significant accounting policies for the three months ended March 31, 2014, as compared to the significant accounting policies described in its Annual Report.
	Recent accounting pronouncements
	There have been no recent accounting pronouncements for the three months ended March 31, 2014, as compared to the recent accounting pronouncements described in its Annual Report.

3_Fair_Value_of_Financial_Inst

3. Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2014
Fair Value Disclosures [Abstract]	'
3. Fair Value of Financial Instruments	'
	The following table presents a summary of the Company’s financial instruments measured at fair value on a recurring basis for the periods indicated (in thousands):
		As of March 31, 2014								As of December 31, 2013
		(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
	Assets:
	Cash and cash equivalents	$	52,411	$	–	$	–	$	52,411	$	22,006	$	–	$	–	$	22,006
	Restricted cash		841		–		–		841		775		–		–		775
	Short term investments		7,898		–		–		7,898		7,970		–		–		7,970
	Total assets	$	61,150	$	–	$	–	$	61,150	$	30,751	$	–	$	–	$	30,751
	Liabilities:
	Bank acceptance payable				2,691				2,691				2,347				2,347
	Total liabilities	$	–	$	2,691	$	–	$	2,691	$	–	$	2,347	$	–	$	2,347
	The carrying value amounts of accounts receivable, prepaid expenses and other current assets, borrowings from our credit facility, accounts payable, accrued expenses and other current liabilities approximate fair value because of the short-term maturity of these instruments.

4_Earnings_Per_Share

4. Earnings Per Share	3 Months Ended
	Mar. 31, 2014
Earnings Per Share [Abstract]	'
4. Earnings Per Share	'
	Basic net income (loss) per share has been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share has been computed using the weighted-average number of shares of common stock and dilutive potential common shares from options and warrants outstanding during the period. In periods with net losses, normally dilutive shares become anti-dilutive, and therefore for those periods basic and dilutive earnings per share are the same.
	The following table sets forth the computation of the basic and diluted net loss per share for the periods indicated (in thousands, except per share amounts):
		Three months ended March 31,
		2014		2013
	Numerator:
	Net income (loss)	$	85	$	(994	)
	Denominator:
	Weighted average shares used to compute net income (loss) per share
	Basic		12,792		266
	Effective of dilutive options and warrants		996		–
	Diluted		13,788		266
	Net income (loss) per share
	Basic	$	0.01	$	(3.74	)
	Diluted	$	0.01	$	(3.74	)
	The following potentially dilutive securities were excluded from the computation of diluted net income (loss) per share as their effect would have been anti-dilutive (in thousands):
		Three months ended March 31,
		2014		2013
	Employee stock options		–		741
	Preferred stock warrants		–		80
	Restricted stock units		–		–
			–		821

5_Inventory

5. Inventory	3 Months Ended
	Mar. 31, 2014
Inventory Disclosure [Abstract]	'
5. Inventory	'
	Inventories consist of the following for the periods indicated (in thousands):
		31-Mar-14		31-Dec-13
	Raw materials	$	10,491	$	8,832
	Work in process		10,755		8,708
	Finished goods		2,687		2,068
		$	23,933	$	19,608
	The lower of cost or market adjustment expensed for inventory for the three months ended March 31, 2014 and 2013 was $0.2 million and $0.1 million, respectively.

6_Property_Plant_and_Equipment

6. Property, Plant and Equipment	3 Months Ended
	Mar. 31, 2014
Property, Plant and Equipment [Abstract]	'
6. Property, Plant and Equipment	'
	Property, plant and equipment consisted of the following for the periods indicated (in thousands):
		31-Mar-14			31-Dec-13
	Land improvements	$	103		$	103
	Building and improvements		15,933			16,016
	Machinery and equipment		41,618			37,490
	Furniture and fixtures		1,256			1,047
	Computer equipment and software		3,918			3,563
	Transportation equipment		187			188
			63,015			58,407
	Less accumulated depreciation and amortization		(29,118	)		(28,145	)
			33,897			30,262
	Construction in progress		284			139
	Land		1,101			733
	Property, plant and equipment, net	$	35,282		$	31,134
	For the three months ended March 31, 2014, depreciation expense of property, plant and equipment was $1.2 million.

7_Notes_Payable_and_LongTerm_D

7. Notes Payable and Long-Term Debt	3 Months Ended
	Mar. 31, 2014
Debt Disclosure [Abstract]	'
7. Notes Payable and Long-Term Debt	'
	Notes payable and long-term debt consisted of the following for the periods indicated (in thousands):
		31-Mar-14		31-Dec-13
	Long-Term and Short-Term Debt
	Term loan with a U.S. bank with monthly payments of principal and interest at prime plus 0.75% (floor rate: 4%), maturing November 15, 2014		3,050		3,076
	Revolving line of credit with a U.S. bank up to $7,000 with interest at prime plus 0.5% (floor rate: 3.75%), maturing November 15, 2015		–		7,000
	Term loan with a U.S. bank with monthly payments of principal and interest at prime plus 0.75% (floor rate: 4.00%), maturing September 10, 2017		5,000		1,850
	Revolving line of credit with a China bank up to $12,000 with interest at 108% of China Prime rate which was 6.48% in 2013 with various maturity dates from April 2014 and August 2014		1,626		7,053
	Revolving line of credit with a China bank up to $3,250 with interest ranged from 2.55% to 3.63% with various maturity dates from May 2014 to June 2014		1,751		2,413
	Revolving line of credit with a Taiwan bank up to $4,000 with interest at Taiwan Time Deposit Interest Rate Index plus 0.41% maturing June 2014		3,718		3,795
	Revolving line of credit with a Taiwan bank up to $4,000 with interest at Taiwan Time Deposit Interest Rate Index plus 0.41% maturing July-August 2014		3,890		–
	Note payable to a finance company due in monthly installments with 4.95% interest, maturing July 30, 2015		853		921
	Total		19,888		26,108
	Less current portion		16,054		17,185
	Long term portion	$	3,834	$	8,923
	Bank Acceptance Payable
	Bank acceptance notes issued to vendors with a zero percent interest rate, a 30% guarantee deposit of $807, and maturity dates ranging from April 2014 to September 2014	$	2,691	$	2,347
	The current portion of long-term debt is the amount payable within one year of the balance sheet date of March 31, 2014. The prime rate of interest was 3.25% on March 31, 2014 and December 31, 2013, respectively.
	The U.S. bank loans and line of credit agreement require the Company to meet certain financial covenants including a minimum current ratio, debt service coverage and maximum debt over tangible net worth ratio requirements. Collateral for the U.S. bank loans and line of credit includes substantially all of the assets of the Company. As of March 31, 2014, the Company was in compliance with all of its financial and operational covenants associated with these loans. As of March 31, 2014, the Company had $7 million of unused borrowing capacity.
	In December 2013, the Company renewed its U.S. revolving line of credit of $7.0 million with the same U.S. bank with a maturity date of November 15, 2015. The interest rate on this line of credit is the prime rate plus 0.50% or a floor rate of 3.75%, whichever is higher.
	The Company issued warrants to the same U.S. bank in connection with the renewals of the loan in 2009, 2010 and 2012. The Company estimated the fair value of these warrants at the date of the grant using the Black-Scholes option-pricing model and records the expense over the life of the warrants. As of March 31, 2014, 32,665 warrants related to these loans are outstanding. As of March 31, 2014, $14,000 remains to be expensed for these warrants and this expense is expected to be recognized during the current year.
	The Company, through its China subsidiary, established RMB and USD currency lines of credit for $12.0 million and $3.3 million, respectively, with a China Bank as of March 31, 2014. The interest rate for the RMB line of credit is 108% of the China prime rate. The interest rate for the USD line of credit ranged from 2.55% to 3.63%. These credit lines are revolving lines that are renewable by its anniversary. Collateral for the loans includes the land use rights, building and equipment located in China.
	The Company extended its equipment financing agreement of $1.0 million with a Taiwan bank in 2013. The financing agreement required equipment collateral. The agreement requires monthly installment payments over 24 months and ends in July 2015. The financing agreement bears interest at the rate of 4.95%.
	The Company, through its Taiwan branch, established an $8.0 million revolving line of credit with Taiwan banks in 2013. The financing agreements require collateral of its time deposits of $8.0 million that is included in short-term investment. The interest rate for the revolving lines of credit is a variable rate determined every six months at Taiwan Time Deposit Interest Rate Index plus 0.41% maturing and renewable every six-month period, which is 1.78% as of March 31, 2014.

8_Accrued_Liabilites

8. Accrued Liabilites	3 Months Ended
	Mar. 31, 2014
Payables and Accruals [Abstract]	'
8. Accrued Liabilites	'
	Accrued liabilities consisted of the following for the periods indicated (in thousands):
		31-Mar-14		31-Dec-13
	Accrued payroll	$	2,226	$	2,279
	Accrued employee benefits		272		489
	Accrued taxes		82		270
	Accrued interest		23		34
	Accrued payments		160		128
	Accrued commission		126		148
	Accrued other		1,183		1,167
		$	4,072	$	4,515

9_Other_Income_and_Expense

9. Other Income and Expense	3 Months Ended
	Mar. 31, 2014
Other income (expense)	'
9. Other Income and Expense	'
	Other income and expense consisted of the following for the periods indicated (in thousands):
		Three months ended March 31,
		2014			2013
	Unrealized foreign exchange gain (loss)		(185	)		(161	)
	Realized foreign exchange gain (loss)		66			16
	Government subsidy income		80			134
	Other non-operating gain (loss)		11			4
	Gain (loss) on disposal of assets		1			(1	)
		$	(27	)	$	(8	)

10_ShareBased_Compensation

10. Share-Based Compensation	3 Months Ended
	Mar. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]	'
10. Share-Based Compensation	'
	The Company’s board of directors and stockholders previously approved the 1998 Share Incentive Plan, the 2000 Share Incentive Plan, the 2004 Share Incentive Plan and the 2006 Share Incentive Plan, (collectively the “Prior Plans”). As of March 31, 2014, the Company had options outstanding to purchase 631,383 shares of common stock under its Prior Plans with a weighted average exercise price of $6.76. Following the Company’s initial public offering, no further awards will be granted under the Prior Plans. However, all outstanding awards under the Prior Plans will continue to exist and will continue to be governed by their existing terms.
	On April 12, 2013, the Company’s board of directors adopted and approved the Company’s 2013 Equity Incentive Plan, (the “2013 Plan”), and it was subsequently approved by the Company’s stockholders on May 21, 2013. As of March 31, 2014, the Company had options outstanding to purchase 864,989 shares of common stock under the 2013 Plan with a weighted average exercise price of $10.449.
	The Company issues stock options to employees, consultants and non-employee directors. Stock option awards for the Prior Plans and the 2013 Plan generally vest over a four year period and have a maximum term of ten years. Stock options under these plans have been granted with an exercise price equal to the fair market value on the date of the grant. Nonqualified and incentive stock options and restrictive stock units (“RSUs”) may be granted from these plans. Prior to the Company’s initial public offering, the fair market value of the Company’s stock had been historically determined by the board of directors and from time to time with the assistance of third party valuation specialists.
	Under the 2013 Plan, participants may be granted RSUs, representing an unfunded, unsecured right to receive common stock on the date specified in the recipient’s award. The RSUs granted under the plan generally vest over one year at a rate of 1/12th per month. The Company recognizes compensation expense on a straight-line basis over the applicable vesting term of the award.
	During the year ended December 31, 2013, the Company granted 33,000 RSUs with a total grant-date fair market value of $0.3 million. The resulting compensation expense recorded in the three months ended March 31, 2014 was approximately $0.1 million. As of March 31, 2014, there was $18,000 of unrecognized compensation cost related to RSUs.
	As there had been no market for the Company’s common stock prior to its initial public offering, the expected volatility for options granted to date was derived from an analysis of reported data based on a peer group of companies that issued options with similar terms. The expected volatility has been determined by using an average of the expected volatility reported by this peer group of companies. The Company uses a risk free interest rate based on the 10-year Treasury as reported during the period. The expected term of the options has been determined utilizing the simplified method which calculates a simple average based on vesting period and option life. The Company does not anticipate paying dividends in the near future. Estimated forfeitures are based on historical experience and future work force projections.
	Employee share-based compensation expenses recognized for the three months ended March 31, were as follows (in thousands):
		Three months ended March 31,
		2014			2013
	Cost of sales	$	25		$	12
	Research and development		25			11
	Sales and marketing		23			10
	General and administrative		416			78
		$	489		$	111
	The following is a summary of option activity during the three month period ending March 31, 2014 (in thousands, except price data):
		Number of shares			Exercise price		Weighted average exercise price
	Outstanding, December 31, 2013		1,468			3.00 - 12.90		8.379
	Granted		108			13.84		13.84
	Exercised		(70	)		3.00 - 7.50		5.904
	Forfeited		(9	)		6.00 - 13.84		7.762
	Expired		(1	)		6		6
	Outstanding, March 31, 2014		1,496			3.00 - 13.84		8.893
	Exercisable, March 31, 2014		307			3.00 - 9.00		6.346
	Vested and expected to vest		1,357			3.00 - 13.84		8.798
	As of March 31, 2014, total compensation cost related to unvested stock options not yet recognized was $5.4 million, which is expected to be expensed over a weighted-average period of 3.27 years. The aggregated intrinsic value of options outstanding and options exercisable as of March 31, 2014 was $23.6 million and $5.6 million, respectively.

11_Stockholders_Equity

11. Stockholders' Equity	3 Months Ended
	Mar. 31, 2014
Equity [Abstract]	'
11. Stockholders' Equity	'
		1	Common Stock
	The Company has authorized the issuance of up to 45,000,000 shares of common stock, all of which have been designated voting common stock, under its Amended and Restated Certificate of Incorporation.
		2	Convertible Preferred Stock
	The Company has authorized the issuance of up to 5,000,000 shares of preferred stock under the Company’s Amended and Restated Certificate of Incorporation.
		3	Warrants
	As of March 31, 2014, the Company had outstanding warrants to purchase:
	•     15,999 shares of common stock at an exercise price of $6.25 per share.
	•     9,999 shares of common stock at an exercise price of $15.00 per share.
	•     6,667 shares of common stock at an exercise price of $10.50 per share.
	For the three months ended March 31, 2014, $2,000 of expense was recorded related to these warrants. As of March 31, 2014, $14,000 of deferred compensation remains to be expensed for these warrants.
		4	Public Offering of Common Stock
	On September 25, 2013, the Company sold 3.6 million shares of its common stock in its initial public offering at a price of $10.00 per share, providing proceeds of $31.5 million, net of expenses and underwriting discounts and commissions. The Company’s initial public offering closed on October 1, 2013.
		5	Secondary Offering of Common Stock
	On March 19, 2014, the Company sold 2.0 million shares of its common stock in a secondary offering at a price of $24.25 per share, providing proceeds of $45.7 million net of expenses and underwriting discounts and commissions. The Company’s secondary offering closed on March 25, 2014.

12_Segment_and_Geographic_Info

12. Segment and Geographic Information	3 Months Ended
	Mar. 31, 2014
Segment Reporting [Abstract]	'
12. Segment and Geographic Information	'
	The Company operates in one reportable segment. The Company’s Chief Executive Officer, who is considered to be the chief operating decision maker, manages the Company’s operations as a whole and reviews financial information presented on a consolidated basis, accompanied by information about product revenue, for purposes of evaluating financial performance and allocating resources.
	The following tables set forth the Company’s revenue and asset information by geographic region. Revenue is classified based on the location of the Company’s product manufacturing plants. Long-lived assets in the tables below comprise only property, plant, equipment and intangible assets (in thousands):
		Three months ended March 31,
		2014		2013
	Revenues:
	United States		5,137		2,401
	Taiwan		14,340		5,935
	China		5,382		5,981
		$	24,859	$	14,317
		For the period ending
		March 31,		December 31,
		2014		2013
	Long-lived assets:
	United States		12,964		9,415
	Taiwan		10,597		7,192
	China		16,511		16,337
		$	40,072	$	32,944

13_Subsequent_Events

13. Subsequent Events	3 Months Ended
	Mar. 31, 2014
Subsequent Events [Abstract]	'
13. Subsequent Events	'
	Repayment of Debt
	On April 1, 2014, the Company paid $8.1 million to East West Bank from the net proceeds received in its secondary offering to extinguish its entire debt balances. Also in April 2014, the Company repaid $1.3 million of its credit line with a China bank.
	On April 1, 2014, the Company’s Taiwan facility entered into a new lease agreement for office and manufacturing space in New Taipei City, Taiwan. The lease has a term of 15 years commencing on June 1, 2014.

2_Significant_Accounting_Polic1

2. Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2014
Accounting Policies [Abstract]	'
Recent accounting pronouncements	'
	Recent accounting pronouncements
	There have been no recent accounting pronouncements for the three months ended March 31, 2014, as compared to the recent accounting pronouncements described in its Annual Report.
Use of Estimates	'
	Use of Estimates
	The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates in the consolidated financial statements and accompanying notes. Significant estimates and assumptions that impact these financial statements and the accompanying notes relate to, among other things, allowance for doubtful accounts, valuation allowances for deferred tax assets, inventory reserve, share-based compensation expense, estimated useful lives of property and equipment, and taxes.

3_Fair_Value_of_Financial_Inst1

3. Fair Value of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2014
Fair Value Disclosures [Abstract]	'
Schedule of assets and liabilities at fair value	'
		As of March 31, 2014								As of December 31, 2013
		(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
	Assets:
	Cash and cash equivalents	$	52,411	$	–	$	–	$	52,411	$	22,006	$	–	$	–	$	22,006
	Restricted cash		841		–		–		841		775		–		–		775
	Short term investments		7,898		–		–		7,898		7,970		–		–		7,970
	Total assets	$	61,150	$	–	$	–	$	61,150	$	30,751	$	–	$	–	$	30,751
	Liabilities:
	Bank acceptance payable				2,691				2,691				2,347				2,347
	Total liabilities	$	–	$	2,691	$	–	$	2,691	$	–	$	2,347	$	–	$	2,347

4_Earnings_Per_Share_Tables

4. Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2014
Earnings Per Share [Abstract]	'
Computation of basic and diluted net loss per share	'
		Three months ended March 31,
		2014		2013
	Numerator:
	Net income (loss)	$	85	$	(994	)
	Denominator:
	Weighted average shares used to compute net income (loss) per share
	Basic		12,792		266
	Effective of dilutive options and warrants		996		–
	Diluted		13,788		266
	Net income (loss) per share
	Basic	$	0.01	$	(3.74	)
	Diluted	$	0.01	$	(3.74	)
Schedule of potentially dilutive securites	'
		Three months ended March 31,
		2014		2013
	Employee stock options		–		741
	Preferred stock warrants		–		80
	Restricted stock units		–		–
			–		821

5_Inventory_Tables

5. Inventory (Tables)	3 Months Ended
	Mar. 31, 2014
Inventory Disclosure [Abstract]	'
Schedule of inventories	'
		31-Mar-14		31-Dec-13
	Raw materials	$	10,491	$	8,832
	Work in process		10,755		8,708
	Finished goods		2,687		2,068
		$	23,933	$	19,608

6_Property_Plant_and_Equipment1

6. Property, Plant and Equipment (Tables)	3 Months Ended
	Mar. 31, 2014
Property, Plant and Equipment [Abstract]	'
Schedule of property, plant and equipment	'
		31-Mar-14			31-Dec-13
	Land improvements	$	103		$	103
	Building and improvements		15,933			16,016
	Machinery and equipment		41,618			37,490
	Furniture and fixtures		1,256			1,047
	Computer equipment and software		3,918			3,563
	Transportation equipment		187			188
			63,015			58,407
	Less accumulated depreciation and amortization		(29,118	)		(28,145	)
			33,897			30,262
	Construction in progress		284			139
	Land		1,101			733
	Property, plant and equipment, net	$	35,282		$	31,134

7_Notes_Payable_and_LongTerm_D1

7. Notes Payable and Long-Term Debt (Tables)	3 Months Ended
	Mar. 31, 2014
Debt Disclosure [Abstract]	'
Schedule of notes payable and long-term debt	'
		31-Mar-14		31-Dec-13
	Long-Term and Short-Term Debt
	Term loan with a U.S. bank with monthly payments of principal and interest at prime plus 0.75% (floor rate: 4%), maturing November 15, 2014		3,050		3,076
	Revolving line of credit with a U.S. bank up to $7,000 with interest at prime plus 0.5% (floor rate: 3.75%), maturing November 15, 2015		–		7,000
	Term loan with a U.S. bank with monthly payments of principal and interest at prime plus 0.75% (floor rate: 4.00%), maturing September 10, 2017		5,000		1,850
	Revolving line of credit with a China bank up to $12,000 with interest at 108% of China Prime rate which was 6.48% in 2013 with various maturity dates from April 2014 and August 2014		1,626		7,053
	Revolving line of credit with a China bank up to $3,250 with interest ranged from 2.55% to 3.63% with various maturity dates from May 2014 to June 2014		1,751		2,413
	Revolving line of credit with a Taiwan bank up to $4,000 with interest at Taiwan Time Deposit Interest Rate Index plus 0.41% maturing June 2014		3,718		3,795
	Revolving line of credit with a Taiwan bank up to $4,000 with interest at Taiwan Time Deposit Interest Rate Index plus 0.41% maturing July-August 2014		3,890		–
	Note payable to a finance company due in monthly installments with 4.95% interest, maturing July 30, 2015		853		921
	Total		19,888		26,108
	Less current portion		16,054		17,185
	Long term portion	$	3,834	$	8,923
	Bank Acceptance Payable
	Bank acceptance notes issued to vendors with a zero percent interest rate, a 30% guarantee deposit of $807, and maturity dates ranging from April 2014 to September 2014	$	2,691	$	2,347

8_Accrued_Liabilites_Tables

8. Accrued Liabilites (Tables)	3 Months Ended
	Mar. 31, 2014
Payables and Accruals [Abstract]	'
Schedule of accrued liabilities	'
		31-Mar-14		31-Dec-13
	Accrued payroll	$	2,226	$	2,279
	Accrued employee benefits		272		489
	Accrued taxes		82		270
	Accrued interest		23		34
	Accrued payments		160		128
	Accrued commission		126		148
	Accrued other		1,183		1,167
		$	4,072	$	4,515

9_Other_Income_and_Expense_Tab

9. Other Income and Expense (Tables)	3 Months Ended
	Mar. 31, 2014
Other income (expense)	'
Schedule of other income and expense	'
		Three months ended March 31,
		2014			2013
	Unrealized foreign exchange gain (loss)		(185	)		(161	)
	Realized foreign exchange gain (loss)		66			16
	Government subsidy income		80			134
	Other non-operating gain (loss)		11			4
	Gain (loss) on disposal of assets		1			(1	)
		$	(27	)	$	(8	)

10_ShareBased_Compensation_Tab

10. Share-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]	'
Schedule of employee stock-based compensation expenses	'
		Three months ended March 31,
		2014			2013
	Cost of sales	$	25		$	12
	Research and development		25			11
	Sales and marketing		23			10
	General and administrative		416			78
		$	489		$	111
Summary of option activity	'
		Number of shares			Exercise price		Weighted average exercise price
	Outstanding, December 31, 2013		1,468			3.00 - 12.90		8.379
	Granted		108			13.84		13.84
	Exercised		(70	)		3.00 - 7.50		5.904
	Forfeited		(9	)		6.00 - 13.84		7.762
	Expired		(1	)		6		6
	Outstanding, March 31, 2014		1,496			3.00 - 13.84		8.893
	Exercisable, March 31, 2014		307			3.00 - 9.00		6.346
	Vested and expected to vest		1,357			3.00 - 13.84		8.798

12_Segment_and_Geographic_Info1

12. Segment and Geographic Information (Tables)	3 Months Ended
	Mar. 31, 2014
Segment Reporting [Abstract]	'
Revenue and asset information by geographic region	'
		Three months ended March 31,
		2014		2013
	Revenues:
	United States		5,137		2,401
	Taiwan		14,340		5,935
	China		5,382		5,981
		$	24,859	$	14,317
		For the period ending
		March 31,		December 31,
		2014		2013
	Long-lived assets:
	United States		12,964		9,415
	Taiwan		10,597		7,192
	China		16,511		16,337
		$	40,072	$	32,944

3_Fair_Value_of_Financial_Inst2

3. Fair Value of Financial Instruments (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Assets:	'	'
Cash and cash equivalents	$52,411	$22,006
Restricted cash	841	775
Short term investments	7,898	7,970
Total assets	61,150	30,751
Liabilities:	'	'
Bank acceptance payable	2,691	2,347
Total liabilities	2,691	2,347
Fair Value, Inputs, Level 1 [Member]	'	'
Assets:	'	'
Cash and cash equivalents	52,411	22,006
Restricted cash	841	775
Short term investments	7,898	7,970
Total assets	61,150	30,751
Liabilities:	'	'
Bank acceptance payable	0	0
Total liabilities	0	0
Fair Value, Inputs, Level 2 [Member]	'	'
Assets:	'	'
Cash and cash equivalents	0	0
Restricted cash	0	0
Short term investments	0	0
Total assets	0	0
Liabilities:	'	'
Bank acceptance payable	2,691	2,347
Total liabilities	2,691	2,347
Fair Value, Inputs, Level 3 [Member]	'	'
Assets:	'	'
Cash and cash equivalents	0	0
Restricted cash	0	0
Short term investments	0	0
Total assets	0	0
Liabilities:	'	'
Bank acceptance payable	0	0
Total liabilities	$0	$0

4_Earnings_Per_Share_DetailsEP

4. Earnings Per Share (Details-EPS calculation) (USD $)	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share [Abstract]	'	'
Net income (loss)	$85	($994)
Basic	12,792,322	265,920
Effective of dilutive options and warrants	996	0
Diluted	13,787,580	265,920
Net income (loss) per share	'	'
Basic	$0.01	($3.74)
Diluted	$0.01	($3.74)

4_Earnings_Per_Share_DetailsAn

4. Earnings Per Share (Details-Antidilutive shares)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Potentially dilutive securires excluded from computation of diluted net income (loss) per share	0	821,000
Employee Stock Option [Member]	'	'
Potentially dilutive securires excluded from computation of diluted net income (loss) per share	0	741,000
Warrant [Member]	'	'
Potentially dilutive securires excluded from computation of diluted net income (loss) per share	0	80,000
Restricted Stock [Member]	'	'
Potentially dilutive securires excluded from computation of diluted net income (loss) per share	0	0

5_Inventory_Details

5. Inventory (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Inventory Details	'	'
Raw materials	$10,491	$8,832
Work in process	10,755	8,708
Finished goods	2,687	2,068
Inventories	$23,933	$19,608

5_Inventory_Details_Narrative

5. Inventory (Details Narrative) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Inventory Details Narrative	'	'
Lower of cost or market adjustment for inventory	$200	$100

6_Property_Plant_and_Equipment2

6. Property, Plant and Equipment (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Property, plant and equipment, gross	$63,015	$58,407
Less accumulated depreciation and amortization	-29,118	-28,145
Property, plant and equipment	33,897	30,262
Land	284	139
Property, plant and equipment, net	35,282	31,134
Land Improvements [Member]	'	'
Property, plant and equipment, gross	103	103
Building and Building Improvements [Member]	'	'
Property, plant and equipment, gross	15,933	16,016
Machinery and Equipment [Member]	'	'
Property, plant and equipment, gross	41,618	37,490
Furniture and Fixtures [Member]	'	'
Property, plant and equipment, gross	1,256	1,047
Computer Equipment and software [Member]	'	'
Property, plant and equipment, gross	3,918	3,563
Transportation Equipment [Member]	'	'
Property, plant and equipment, gross	$187	$188

6_Property_Plant_and_Equipment3

6. Property, Plant and Equipment (Details Narrative) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014
Property Plant And Equipment Details Narrative	'
Depreciation expense	$1,200

7_Notes_Payable_and_LongTerm_D2

7. Notes Payable and Long-Term Debt (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Notes payable and long-term debt total	$19,888	$26,108
Current portion of notes payable and long-term debt	16,054	17,185
Long term portion of notes payable and long-term debt	3,834	8,923
Bank acceptance notes	2,691	2,347
Term loan 1	'	'
Notes payable and long-term debt total	3,050	3,076
Debt maturity date	15-Nov-14	'
Interest rate	'prime plus 0.75%	'
Line of Credit	'	'
Notes payable and long-term debt total	0	7,000
Debt maturity date	15-Nov-15	'
Interest rate	'prime plus 0.5%	'
Term loan 2	'	'
Notes payable and long-term debt total	5,000	1,850
Debt maturity date	10-Sep-17	'
Interest rate	'prime plus 0.75%	'
Line of Credit 2	'	'
Notes payable and long-term debt total	1,626	7,053
Debt maturity date	30-Aug-14	'
Interest rate	'108% of China Prime rate	'
Line of Credit 3	'	'
Notes payable and long-term debt total	1,751	2,413
Debt maturity date	30-Jun-14	'
Interest rate	'2.55% to 3.63% with China bank	'
Line of Credit 4	'	'
Notes payable and long-term debt total	3,718	3,795
Debt maturity date	30-Jun-14	'
Interest rate	'Taiwan Time Deposit Interest plus 0.41%	'
Line of Credit 5	'	'
Notes payable and long-term debt total	3,890	0
Debt maturity date	31-Aug-14	'
Interest rate	'Taiwan Time Deposit Interest plus 0.41%	'
Note payable 1	'	'
Notes payable and long-term debt total	$853	$921
Debt maturity date	30-Jul-15	'
Interest rate	'4.95%	'

7_Notes_Payable_and_LongTerm_D3

7. Notes Payable and Long-Term Debt (Details Narrative) (USD $)	3 Months Ended	12 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Unused borrowing capacity	$7,000	'
Warrants outstanding	32,665	'
UNITED STATES	'	'
Revolving line of credit maximum borrowing capacity	'	7,000
Revolving line of credit, maturity date	'	15-Nov-15
Interest rate on line of credit	'	'Prime rate plus 0.50% or the floor rate 3.75%, whichever is higher.
Warrants outstanding	32,665	'
Amount remains to be expensed for warrants	'14	'
CHINA | China, Yuan Renminbi	'	'
Revolving line of credit maximum borrowing capacity	12,000	'
Interest rate on line of credit	'108% of the China prime rate	'
CHINA | United States of America, Dollars	'	'
Revolving line of credit maximum borrowing capacity	3,300	'
Interest rate on line of credit	'2.55% to 3.63%	'
TAIWAN	'	'
Revolving line of credit maximum borrowing capacity	$8,000	'
Revolving line of credit, maturity date	31-Jul-15	'
Interest rate on line of credit	'Taiwan Time Deposit Interest Rate Index plus 0.41%	'

8_Accrued_Liabilities_Details

8. Accrued Liabilities (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Accrued Liabilities Details	'	'
Accrued payroll	$2,226	$2,279
Accrued employee benefits	272	489
Accrued taxes	125	167
Accrued interest	23	34
Accrued payments	160	128
Accrued commission	126	148
Accrued other	1,183	1,167
Total accrued liabilities	$4,072	$4,515

9_Other_Income_and_Expense_Det

9. Other Income and Expense (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Other Income And Expense Details	'	'
Unrealized foreign exchange gain (loss)	($185)	($161)
Realized foreign exchange gain (loss)	66	16
Government subsidy income	80	134
Other non-operating gain (loss)	11	4
Gain (loss) on disposal of assets	1	-1
Total other income and expense	($27)	($8)

10_ShareBased_Compensation_Det

10. Share-Based Compensation (Details-Share based compensation expense) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Employee stock-based compensation expense	$489	$111
Cost of Sales [Member]	'	'
Employee stock-based compensation expense	25	12
Research and Development Expense [Member]	'	'
Employee stock-based compensation expense	25	11
Selling and Marketing Expense [Member]	'	'
Employee stock-based compensation expense	23	10
General and Administrative Expense [Member]	'	'
Employee stock-based compensation expense	$416	$76

10_ShareBased_Compensation_Det1

10. Share-Based Compensation (Details-Option activity) (USD $)	3 Months Ended
	Mar. 31, 2014
Number of Shares	'
Outstanding, beginning balance	1,468,000
Granted	108,000
Exercised	-70,000
Forfeited	-9,000
Expired	-1,000
Outstanding, ending balance	1,496,000
Exericsable, ending balance	307,000
Vested and expected to vest	1,357,000
Weighted Average Exercise Price	'
Outstanding, beginning balance	$8.38
Granted	$13.84
Exercised	$5.90
Forfeited	$7.76
Expired	$6
Outstanding, ending balance	$8.89
Exericsable, ending balance	$6.35
Vested and expected to vest	$8.80

10_ShareBased_Compensation_Det2

10. Share-Based Compensation (Details Narrative) (USD $)	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014
Compensation cost on unvested options not yet recognized	$5,400
Compensation cost unrecognized weighted average period	'3 years 3 months 7 days
Aggregate intrinsic value of options outstanding	23,600
Aggregate intrinsic value of options exercisable	$5,600
2013 Plan	'
Common stock shares available to purchase	864,989
Weighted average exercise price of option outstanding	$10.45
Prior Plans	'
Common stock shares available to purchase	631,383

11_Stockholders_Equity_Details

11. Stockholders Equity (Details Narrative) (USD $)	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Warrants outstanding	32,665	'
Share based compensation	$489	$111
Deferred compensation expense	14	'
Stock sold in public offering, shares	2,000,000	'
Stock sold in public offering, proceeds	45,671	'
Warrant [Member]	'	'
Share based compensation	$2	'

12_Segment_and_Geographic_Info2

12. Segment and Geographic Information (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Revenues	$24,859	$14,317	'
Long-lived assets	40,072	'	32,944
UNITED STATES	'	'	'
Revenues	5,137	2,401	'
Long-lived assets	12,964	'	9,415
TAIWAN	'	'	'
Revenues	14,340	5,935	'
Long-lived assets	10,597	'	7,192
CHINA	'	'	'
Revenues	5,382	5,981	'
Long-lived assets	$16,511	'	$16,337