Applied Optoelectronics (AAOI) 10-Q 8 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 03, 2018
Document And Entity Information
Entity Registrant Name	APPLIED OPTOELECTRONICS, INC.
Entity Central Index Key	1,158,114
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		19,579,013
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current Assets
Cash and cash equivalents	$ 82,251	$ 82,936
Restricted cash	1,048	1,012
Short-term investments		36
Accounts receivable - trade, net of allowance of $31 and $33, respectively	53,655	59,850
Inventories	92,624	75,768
Prepaid income tax	1,326	1,394
Prepaid expenses and other current assets	10,921	8,701
Total current assets	241,825	229,697
Property, plant and equipment, net	204,644	197,943
Land use rights, net	6,448	804
Intangible assets, net	4,015	4,007
Deferred income tax assets	13,935	12,801
Other assets, net	4,750	7,732
TOTAL ASSETS	475,617	452,984
Current liabilities
Current portion of notes payable and long-term debt	2,690	559
Accounts payable	46,223	43,624
Accrued income taxes	7,588	7,422
Accrued liabilities	13,358	19,103
Total current liabilities	69,859	70,708
Notes payable and long-term debt, less current portion	62,464	49,000
TOTAL LIABILITIES	132,323	119,708
Stockholders' equity:
Preferred Stock; 5,000 shares authorized at $0.001 par value; no shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively
Common Stock; 45,000 shares authorized at $0.001 par value; 19,538 and 19,451 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively	20	19
Additional paid-in capital	286,938	285,376
Accumulated other comprehensive income	16,078	9,743
Retained earnings	40,258	38,138
TOTAL STOCKHOLDERS' EQUITY	343,294	333,276
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 475,617	$ 452,984

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 31	$ 33
Preferred Stock par value	$ 0.001	$ 0.001
Preferred Stock shares authorized	5,000	5,000
Preferred Stock shares issued	0	0
Preferred Stock shares outstanding	0	0
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	45,000	45,000
Common stock shares issued	19,538	19,451
Common stock shares outstanding	19,538	19,451

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Revenue, net	$ 65,239	$ 96,224
Cost of goods sold	39,403	54,752
Gross profit	25,836	41,472
Operating expenses
Research and development	11,736	7,432
Sales and marketing	2,474	1,903
General and administrative	9,456	7,822
Total operating expenses	23,666	17,157
Income from operations	2,170	24,315
Other income (expense)
Interest income	52	35
Interest expense	(71)	(299)
Other expense, net	(1,027)	(608)
Total other expense	(1,046)	(872)
Income before income taxes	1,124	23,443
Income tax (expense) benefit	996	(3,654)
Net income	$ 2,120	$ 19,789
Net income per share basic	$ 0.11	$ 1.06
Net income per share diluted	$ 0.11	$ 1
Weighted average shares used to compute net income per share: basic	19,492,251	18,597,607
Weighted average shares used to compute net income per share: Diluted	19,988,575	19,702,047

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 2,120	$ 19,789
Gain on foreign currency translation adjustment	6,335	4,457
Comprehensive income	$ 8,455	$ 24,246

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2018 - USD ($) shares in Thousands, $ in Thousands	Common stock	Additional paid-in capital	Accumulated other comprehensive gain (loss)	Retained earnings	Total
Beginning balance, shares at Dec. 31, 2017	19,451
Beginning balance, value at Dec. 31, 2017	$ 19	$ 285,376	$ 9,743	$ 38,138	$ 333,276
Stock options exercised, net of shares withheld for employee tax, in shares	38
Stock options exercised, net of shares withheld for employee tax, value		(609)			(609)
Issuance of restricted stock, net of shares withheld for employee tax, in shares	49
Issuance of restricted stock, net of shares withheld for employee tax, value	$ 1	(398)			(397)
Share based compensation		2,569			2,569
Foreign currency translation adjustment			6,335		6,335
Net income				2,120	2,120
Ending balance, shares at Mar. 31, 2018	19,538
Ending balance, value at Mar. 31, 2018	$ 20	$ 286,938	$ 16,078	$ 40,258	$ 343,294

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating activities:
Net income	$ 2,120	$ 19,789
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Lower of cost or market reserve adjustment to inventory	877	476
Depreciation and amortization	6,964	4,302
Deferred income taxes, net	(1,103)	612
Loss (gain) on disposal of assets	(1)	49
Share-based compensation	2,569	1,507
Unrealized foreign exchange gain	(710)	(110)
Changes in operating assets and liabilities:
Accounts receivable, trade	6,195	(16,599)
Prepaid income tax	109
Inventories	(15,761)	(4,294)
Other current assets	(1,870)	(5,118)
Accounts payable	2,599	10,241
Accrued income taxes		3,042
Accrued liabilities	(6,052)	(4,221)
Net cash provided by (used in) operating activities	(4,064)	9,676
Investing activities:
Maturities of short-term investments	36	2
Purchase of property, plant and equipment	(9,659)	(7,554)
Purchase of land use rights	(5,591)
Proceeds from disposal of equipment		165
Deposits and prepaid for equipment	3,128	(1,434)
Purchase of intangible assets	(134)	(108)
Net cash used in investing activities	(12,220)	(8,929)
Financing activities:
Proceeds from issuance of notes payable and long-term debt	26,556
Principal payments of long-term debt and notes payable	(341)	(14,743)
Proceeds from line of credit borrowings	44,953
Repayments of line of credit borrowings	(55,583)
Repayments of bank acceptance payable		(307)
Exercise of stock options	52	623
Payments of tax withholding on behalf of employees related to share-based compensation	(1,061)	(366)
Proceeds from common stock offering, net		21,572
Net cash provided by financing activities	14,576	6,779
Effect of exchange rate changes on cash	1,059	1,043
Net increase (decrease) in cash, cash equivalents and restricted cash	(649)	8,569
Cash, cash equivalents and restricted cash at beginning of period	83,948	51,964
Cash, cash equivalents and restricted cash at end of period	83,299	60,533
Cash paid for:
Interest	$ 58	$ 225

Description of Business

Description of Business	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Note 1. Description of Business Business Overview Applied Optoelectronics, Inc. (“AOI” or the “Company”) is a Delaware corporation. The Company is a leading, vertically integrated provider of fiber-optic networking products, primarily for four networking end-markets: internet data center, cable television, telecommunications and fiber-to-the-home. 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 located in the U.S., Taiwan and China. In the U.S., 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 laser component and optical module products. In addition, the Company also has a research and development facility in Duluth, Georgia. The Company operates in Taipei, Taiwan and Ningbo, China through its wholly-owned subsidiary Prime World International Holdings, Ltd. (“Prime World”, incorporated in the British Virgin Islands). Prime World is the parent of Global Technology, Inc. (“Global”, incorporated in the People’s Republic of China). Through Global, the Company primarily manufactures certain of our data center transceiver products, including subassemblies, as well as Cable TV Broadband (“CATV”) systems and equipment, and performs research and development activities for the CATV products. Prime World also operates a branch in Taiwan, which primarily manufactures transceivers. Interim Financial Statements The unaudited condensed consolidated financial statements of the Company as of March 31, 2018 and December 31, 2017 and for the three months ended March 31, 2018 and March 31, 2017, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim information and with the instructions on Form 10-Q and Rule 10-01 of Regulation S-X 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 required by GAAP for 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. 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, 2017. The results of operations for the three months ended March 31, 2018 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, inventory reserve, product warranty costs, share-based compensation expense, estimated useful lives of property and equipment, and taxes.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Significant Accounting Policies	Note 2. Significant Accounting Policies There have been no changes in the Company’s significant accounting policies for the three months ended March 31, 2018, as compared to the significant accounting policies described in its 2017 Annual Report, except as described below. Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted in 2018 In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition guidance establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. The Company evaluated its revenues and the new guidance had immaterial impacts to recognition practices upon adoption on January 1, 2018. As part of the adoption, the Company elected to apply the new guidance on a modified retrospective basis. The Company did not record a cumulative effect adjustment to retained earnings for initially applying the new guidance as no revenue recognition differences were identified in the timing or amount of revenue. See Note 3, " Revenue Recognition" for additional information on the required disclosures related to the impact of adopting this standard. The FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities with further clarifications made in February 2018 with the issuance of ASU 2018-03. The amended guidance requires certain equity investments that are not consolidated and not accounted for under the equity method to be measured at fair value with changes in fair value recognized in net income rather than as a component of accumulated other comprehensive income (loss). It further states that an entity may choose to measure equity investments that do not have readily determinable fair values using a quantitative approach, or measurement alternative, which is equal to its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company adopted this amended guidance on January 1, 2018, with no impact on the financial statements. In March 2018, the FASB issued ASU 2018-05, "Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118." ASU 2018-05, effective 2018, expands income tax accounting and disclosure guidance to include SAB 118 issued by the SEC in December 2017. SAB 118 provides guidance on accounting for the income tax effects of the U.S. Tax Cuts and Jobs Act of 2017 (the “Tax Act”) and among other things allows for a measurement period not to exceed one year for companies to finalize the provisional amounts recorded as of December 31, 2017. See Note 13. “Income Taxes” for additional information on the Company’s accounting for the Tax Act. Recent Accounting Pronouncements Yet to be Adopted On February 25, 2016, the FASB released ASU No. 2016-02, Leases, to complete its project to overhaul lease accounting. The ASU codifies ASC 842, Leases, which will replace the guidance in ASC 840. The guidance will require lessees to recognize most leases on the balance sheet for capital and operating leases. The guidance is effective for public business entities in fiscal years beginning after December 15, 2018. The Company is evaluating the impact of the accounting standard on its financial statements by reviewing the standard itself, as well as reviewing literature about the new standard produced by nationally-recognized accounting firms and other third parties.

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2018
Revenue Recognition
Revenue Recognition	Note 3. Revenue Recognition Revenue from Contracts with Customers On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method. Under the modified retrospective method, the Company did not record a cumulative effect adjustment to retained earnings for initially applying the new guidance as no revenue recognition differences were identified in the timing or amount of revenue. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Revenue Recognition ("Topic 605"). The adoption of Topic 606 represents a change in accounting principle that will provide financial statement readers with enhanced revenue recognition disclosures. In accordance with Topic 606, revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. Certain customers may receive cash and/or non-cash incentives, which are accounted for as variable consideration. To achieve this core principle, the Company applies the following five steps: 1. Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an agreement with a customer that defines each party's rights regarding the products or services to be transferred and identifies the payment terms related to these products or services, (ii) both parties to the contract are committed to perform their respective obligations, (iii) the contract has commercial substance, and (iv) the Company determines that collection of substantially all consideration for products or services that are transferred is probable based on the customer's intent and ability to pay the promised consideration. The Company applies judgment in determining the customer's ability and intention to pay, which is based on a variety of factors including the customer's payment history or, in the case of a new customer, published credit and financial information pertaining to the customer. 2. Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the products or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the products or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised products or services, the Company must apply judgment to determine whether promised products or services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised products or services are accounted for as a combined performance obligation. The Company has elected to account for shipping and handling activities as a fulfillment cost as permitted by the standard. 3. Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. To the extent the transaction price is variable, revenue is recognized at an amount equal the consideration to which the Company expects to be entitled. This estimate includes customer sales incentives which are accounted for as a reduction to revenue and estimated using either the expected value method or the most likely amount method, depending on the nature of the program. The Company will adjust its consideration for any rebates and commissions if it is more likely than not that these conditions will be met. 4. Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless a portion of the variable consideration related to the contract is allocated entirely to a performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. 5. Recognize revenue when or as the Company satisfies a performance obligation The Company generally satisfies performance obligations at a point in time. Revenue is recognized based on the transaction price at the time the related performance obligation is satisfied by transferring a promised product or service to a customer. Disaggregation of Revenue Revenue is classified based on the location of where the product is manufactured. For additional information on the disaggregated revenues by geographical region, see Note 14, " Geographic Information.”

Cash, Cash Equivalents and Rest

Cash, Cash Equivalents and Restricted Cash	3 Months Ended
	Mar. 31, 2018
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Abstract
Cash, Cash Equivalents and Restricted Cash	Note 4. Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statement of financial position that sum to the total of the same such amounts in the statement of cash flows (in thousands): March 31, December 31, 2018 2017 Cash and cash equivalents $ 82,251 $ 82,936 Restricted cash 1,048 1,012 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 83,299 $ 83,948 Restricted cash includes guarantee deposits for customs duties and compensating balances required for certain credit facilities.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2018
Net income per share
Earnings Per Share	Note 5. Earnings Per Share Basic net income per share has been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share has been computed using the weighted-average number of shares of common stock and dilutive potential common shares from stock options and restricted stock units outstanding during the period. The following table sets forth the computation of the basic and diluted net income per share for the periods indicated (in thousands, except per share amounts): Three months ended March 31, 2018 2017 Numerator: Net income $ 2,120 $ 19,789 Denominator: Weighted average shares used to compute net income per share Basic 19,492 18,598 Effect of dilutive options and restricted stock units 497 1,104 Diluted 19,989 19,702 Net income per share Basic $ 0.11 $ 1.06 Diluted $ 0.11 $ 1.00 There were no securities that were excluded from the computation of diluted net income per share.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2018
Inventory Disclosure [Abstract]
Inventories	Note 6. Inventories Inventories, net of inventory writedowns, consist of the following for the periods indicated (in thousands): March 31, 2018 December 31, 2017 Raw materials $ 32,454 $ 26,648 Work in process and sub-assemblies 42,353 31,060 Finished goods 17,817 18,060 $ 92,624 $ 75,768 The lower of cost or market adjustment expensed for inventory for the three months ended March 31, 2018 and 2017 was $0.9 million and $0.5 million, respectively.

Property, Plant & Equipment

Property, Plant & Equipment	3 Months Ended
	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
Property, Plant & Equipment	Note 7. Property, Plant & Equipment Property, plant and equipment consisted of the following for the periods indicated (in thousands): March 31, 2018 December 31, 2017 Land improvements $ 806 $ 806 Building and improvements 81,638 78,785 Machinery and equipment 179,801 168,993 Furniture and fixtures 4,932 4,663 Computer equipment and software 8,502 8,248 Transportation equipment 741 718 276,420 262,213 Less accumulated depreciation and amortization (78,034) (70,194) 198,386 192,019 Construction in progress 5,157 4,823 Land 1,101 1,101 Property, plant and equipment, net $ 204,644 $ 197,943 For the three months ended March 31, 2018 and 2017, depreciation expense of property, plant and equipment was $6.8 million and $4.2 million, respectively. Included in depreciation expense was $3.8 million and $2.6 million recorded as cost of sales for the three months ended March 31, 2018 and 2017, respectively.

Intangible Assets, net

Intangible Assets, net	3 Months Ended
	Mar. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	Note 8. Intangible Assets, net Intangible assets consisted of the following for the periods indicated (in thousands): March 31, 2018 Gross Accumulated Intangible Amount amortization assets, net Patents $ 6,670 $ (2,657) $ 4,013 Trademarks 14 (12) 2 Total intangible assets $ 6,684 $ (2,669) $ 4,015 December 31, 2017 Gross Accumulated Intangible Amount amortization assets, net Patents $ 6,524 $ (2,519) $ 4,005 Trademarks 14 (12) 2 Total intangible assets $ 6,538 $ (2,531) $ 4,007 For the three months ended March 31, 2018 and 2017, amortization expense for intangible assets, included in general and administrative expenses on the income statement, was each $0.1 million . The remaining weighted average amortization period for intangible assets is approximately 8 years.

Notes Payable and Long-Term Deb

Notes Payable and Long-Term Debt	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Note 9. Notes Payable and Long-Term Debt	Note 9. Notes Payable and Long-Term Debt Notes payable and long-term debt consisted of the following for the periods indicated (in thousands): March 31, 2018 December 31, 2017 Revolving line of credit with a U.S. bank up to $60,000 with interest at LIBOR plus 1.4%, maturing September 28, 2020 $ 38,370 $ 49,000 Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.15%, maturing April 1, 2024 21,500 — Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.3%, maturing April 1, 2023 5,056 — Notes payable to a finance company due in monthly installments with 4.5% interest, maturing May 27, 2018 228 559 Total 65,154 49,559 Less current portion (2,690) (559) Non-current portion $ 62,464 $ 49,000 The current portion of long-term debt is the amount payable within one year of the balance sheet date of March 31, 2018. The one-month London Interbank Offered Rate (LIBOR) was 1.88% on March 31, 2018. Maturities of long-term debt are as follows for the future one-year periods ending March 31, (in thousands): 2019 $ 2,690 2020 40,832 2021 2,462 2022 2,462 2023 2,376 2024 and thereafter 14,332 Total outstanding $ 65,154 On June 14, 2016, the Company executed a Change in Terms Agreement, Notice of Final Agreement and Modification of the Construction Loan Agreement (the “Modification Agreement”) in connection with the Construction Loan Agreement with East West Bank for up to $22.0 million dollars to finance the construction of the Company’s campus expansion plan in Sugar Land, Texas, originally dated January 26, 2015 (the “Construction Loan Agreement”). Under the Construction Loan Agreement, the loan bore interest at an annual rate based on the one-month LIBOR Borrowing Rate plus 2.75%, and the interest rate was adjusted to LIBOR Borrowing Rate plus 2.0% under the Modification Agreement. On October 5, 2016, the Company executed a Change in Terms Agreement, Notice of Final Agreement and Second Modification to the Construction Loan Agreement (the “Second Modifications”) to the Construction Loan Agreement with East West Bank. The Second Modifications amended and restated in part the Company’s Promissory Note and Construction Loan Agreement, which was originally executed on January 26, 2015, and the Modification Agreement. The draw down period end date, under the Second Modifications, was amended from July 31, 2016 to September 30, 2016. On September 28, 2017, the Company repaid the outstanding balance of $11.2 million and terminated the loan. On June 24, 2016, the Company entered into a First Amendment to the Credit Agreement with East West Bank and Comerica Bank (“First Amendment”), a second lien deed of trust, multiple security agreements and promissory notes evidencing two credit facilities and a term loan originally entered into on June 30, 2015. The First Amendment increased the Company’s revolving lines of credit from $25 million to $40 million, which would have matured on June 30, 2018, and retained a $10.0 million term loan which would have matured on June 30, 2020. The First Amendment also provided for an additional $10.0 million equipment term loan with a one year drawdown period commencing on April 1, 2016 and maturing five years from the closing date of the First Amendment. The interest rate on these loans was adjusted by the First Amendment from the LIBOR Borrowing Rate plus 2.75% or 3.0% to LIBOR Borrowing Rate plus 2.0%. On September 28, 2017, the Company terminated the Credit Agreement and all outstanding balances of the loans had been repaid. The Company also had a term loan with East West Bank of $5.0 million with monthly payments of principal and interest that was originally scheduled to mature on July 31, 2019. On February 27, 2017, the Company repaid the outstanding balance of $2.8 million and terminated the loan. On September 28, 2017, the Company entered into a Loan Agreement, a Promissory Note, an Addendum to the Promissory Note, a BB&T Security Agreement, a Trademark Security Agreement, and a Patent Security Agreement (together the “Credit Facility”) with Branch Banking and Trust Company (“BB&T”). The Credit Facility provides the Company with a three year, $50 million, revolving line of credit. Borrowings under the Credit Facility will be used for general corporate purposes. The Company will make monthly payments of accrued interest with the final monthly payment being for all principal and all accrued interest not yet paid. The Company’s obligations under the Credit Facility will be secured by the Company’s accounts receivable, inventory, intellectual property, all business assets with the exception of real estate and equipment. Borrowings under the Credit Facility will bear interest at a rate equal to the one-month LIBOR plus 1.50%. The Credit Facility requires the Company to maintain certain financial covenants and also contains representations and warranties, and events of default applicable to the Company that are customary for agreements of this type. On March 30, 2018, the Company executed a First Amendment to Loan Agreement, a Note Modification Agreement and Addendum to Promissory Note for $60 million, a Promissory Note and Addendum to Promissory Note for $26 million, a Promissory Note and Addendum to Promissory Note for $21.5 million, a Texas Deed of Trust and Security Agreement, an Assignment of Lease and Rent, and an Environmental Certification and Indemnity Agreement, (collectively, the “Amended Credit Facility”), with BB&T. The Amended Credit Facility amends the Company’s three-year $50 million line of credit with BB&T, originally executed on September 28, 2017 (the “Existing Loan”). The Amended Credit Facility (1) increases the principal amount of the three-year line of credit from $50 million to $60 million (the “Line of Credit”); (2) allows the Company to borrow an additional $26 million from BB&T in the form of a five-year capital expenditure loan (the “CapEx Loan”) and (3) allows the Company to borrow an additional $21.5 million in the form of a seventy-month real estate term loan (the “Term Loan”) to refinance the Company’s plant and facilities in Sugar Land, Texas. Borrowings under the Line of Credit will bear interest at a rate equal to the one-month LIBOR plus a Line of Credit margin ranging between 1.40% and 2.0%. Borrowings under the CapEx Loan will bear interest at a rate equal to the one-month LIBOR plus a CapEx Loan margin ranging between 1.30% and 2.0%. Borrowings under the Term Loan will bear interest at a rate equal to the one-month LIBOR plus a Term Loan margin ranging between 1.15% and 2.0%. The Company will make monthly payments of principal and accrued interest with the final monthly payments being for all principal and accrued interest not yet paid. The Company’s obligations under the Amended Credit Facility will be secured by the Company’s accounts receivable, inventory, equipment, intellectual property, real property, and virtually all business assets. As of March 31, 2018, the Company was in compliance with all covenants under the Amended Credit Facility. As of March 31, 2018, $38.4 million was outstanding under the Line of Credit, $21.5 million was outstanding under the Term Loan and $5.1 million was outstanding under the CapEx Loan. On May 27, 2015, the Company’s Taiwan branch entered into a Purchase and Sale Contract and a Finance Lease Agreement with Chailease Finance Co, Ltd. (“Chailease”) in connection with certain equipment, structured as a sale lease-back transaction. Pursuant to the Purchase and Sale contract, the Company’s Taiwan branch sold certain equipment to Chailease for a purchase price of 180,148,532 New Taiwan dollars, approximately $6 million, and simultaneously leased the equipment back from Chailease pursuant to the Finance Lease Agreement. The monthly lease payments ranging from 3,784,000 New Taiwan dollars, approximately $0.1 million, to 3,322,413 New Taiwan dollars, approximately $0.1 million, during the term of the Finance Lease Agreement, including an initial payment in an amount of 60,148,532 New Taiwan dollars, approximately $2.0 million. The Finance Lease Agreement has a three-year term, with monthly payments, maturing on May 27, 2018. The title to the equipment will be transferred to the Company’s Taiwan branch upon the expiration of the Finance Lease Agreement. As of March 31, 2018, $0.2 million was outstanding under this Finance Lease Agreement. On March 31, 2016, the Company’s Taiwan branch entered into a Purchase and Sale Contract and a Finance Lease Agreement with Chailease in connection with certain equipment, structured as a sale lease-back transaction. Pursuant to the Purchase and Sale Contract, the Company’s Taiwan branch sold certain equipment to Chailease for a purchase price of 312,927,180 New Taiwan dollars, approximately $10.1 million, and simultaneously leased the equipment back from Chailease pursuant to the Finance Lease Agreement. The Finance Lease Agreement had a three-year term with monthly lease payments ranging from 6,772,500 New Taiwan dollars, approximately $0.2 million, to 7,788,333 New Taiwan dollars, approximately $0.3 million, during the term of the Finance Lease Agreement, including an initial payment in an amount of 62,927,180 New Taiwan dollars, approximately $2.0 million. Based on the payments made under the Finance Lease Agreement, the annual interest rate was calculated to be 4.0%. The title to the equipment was to be transferred to the Company’s Taiwan branch upon the expiration of the Finance Lease Agreement. On October 6, 2017, the Company repaid the outstanding balance and terminated the loan, and title to the equipment was transferred to its Taiwan branch. The Company’s Chinese subsidiary had credit facilities with China Construction Bank totaling $13.2 million, which could be drawn in U.S. currency, RMB currency, issuing bank acceptance notes to vendors with different interest rates or issuing standby letters of credit. The Company pledged the land use rights and buildings of its Chinese subsidiary as collateral for the credit facility. The Company’s Chinese subsidiary used $10.0 million of its credit facility to issue standby letters of credit as collateral for the Company’s Taiwan branch line of credit with China Construction Bank. On March 29, 2017, the Company repaid the outstanding balance and terminated the loan. As of March 31, 2018 and December 31, 2017, the Company had $42.6 million and $1.0 million of unused borrowing capacity, respectively. As of March 31, 2018 and December 31, 2017, there were no restricted cash, investments or security deposit associated with the loan facilities, respectively.

Accrued Liabilities

Accrued Liabilities	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
Accrued Liabilities	Note 10. Accrued Liabilities Accrued liabilities consisted of the following for the periods indicated (in thousands): March 31, 2018 December 31, 2017 Accrued payroll $ 7,921 $ 11,693 Accrued rent 1,234 1,180 Accrued employee benefits 919 2,035 Accrued state and local taxes 218 951 Advance payments 371 441 Accrued product warranty 1,237 1,118 Accrued commission expenses 246 425 Accrued professional fees 174 181 Accrued other 1,038 1,079 $ 13,358 $ 19,103

Other Income and Expense

Other Income and Expense	3 Months Ended
	Mar. 31, 2018
Other income (expense)
Other Income and Expense	Note 11. Other Income and Expense Other income and (expense) consisted of the following for the periods indicated (in thousands): Three months ended March 31, 2018 2017 Foreign exchange transaction loss (1,040) (572) Other non-operating gain 12 13 Gain (loss) on disposal of assets 1 (49) $ (1,027) $ (608)

Share-Based Compensation

Share-Based Compensation	3 Months Ended
	Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Compensation	Note 12. Share-Based Compensation Equity Plans The Company’s board of directors and stockholders approved the following equity plans: · the 1998 Share Incentive Plan · the 2000 Share Incentive Plan · the 2004 Share Incentive Plan · the 2006 Share Incentive Plan · the 2013 Equity Incentive Plan (“2013 Plan”) The Company issued stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) to employees, consultants and non-employee directors. Stock option awards 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, RSAs and RSUs may be granted from these plans. Prior to the Company’s initial public offering in September 2013, 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. Stock Options Options have been granted to the Company’s employees under the five incentive plans and generally become exercisable as to 25% of the shares on the first anniversary date following the date of grant and 12.5% on a semi-annual basis thereafter. All options expire ten years after the date of grant. The following is a summary of option activity (in thousands, except per share data): Weighted Weighted Weighted Average Average Average Share Price Weighted Remaining Aggregate Number of Exercise on Date of Average Contractual Intrinsic shares Price Exercise Fair Value Life Value (in thousands, except price data) Outstanding, January 1, 2018 536 $ 10.04 $ 5.19 $ 14,888 Exercised (38) 9.95 $ 31.12 5.14 808 Forfeited (47) 9.96 5.10 711 Outstanding, March 31, 2018 451 $ 10.05 $ 5.20 5.36 $ 6,762 Exercisable, March 31, 2018 451 $ 10.05 5.36 $ 6,762 Vested and expected to vest 451 $ 10.05 5.36 $ 6,762 As of March 31, 2018, there was no unrecognized stock option expense. Restricted Stock Units/Awards The following is a summary of RSU/RSA activity (in thousands, except per share data): Weighted Average Share Weighted Aggregate Number of Price on Date Average Fair Intrinsic shares of Release Value Value (in thousands, except price data) Outstanding at January 1, 2018 707 $ 29.23 $ 26,732 Granted 499 33.42 16,685 Released (77) $ 33.72 25.86 2,596 Cancelled/Forfeited (14) 32.78 355 Outstanding, March 31, 2018 1,115 $ 31.29 $ 27,940 Exercisable, March 31, 2018 6 $ 141 Vested and expected to vest 1,115 $ 27,940 As of March 31, 2018, there was $32.5 million of unrecognized compensation expense related to these RSUs and RSAs. This expense is expected to be recognized over 3.2 years. Share-Based Compensation Employee share-based compensation expenses recognized for the periods indicated (in thousands): Three months ended March 31, 2018 2017 Share-based compensation - by expense type Cost of goods sold $ 178 $ 78 Research and development 576 265 Sales and marketing 227 80 General and administrative 1,588 1,084 Total share-based compensation expense $ 2,569 $ 1,507 Three months ended March 31, 2018 2017 Share-based compensation - by award type Employee stock options $ 12 $ 278 Restricted stock units 2,557 1,229 Total share-based compensation expense $ 2,569 $ 1,507

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Income Taxes	Note 13. Income Taxes The Company’s tax provision or benefit from income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. The Company’s quarterly tax provision, and its quarterly estimate of our annual effective tax rate, is subject to significant variation due to several factors, including variability in accurately predicting its pre-tax income and loss and the mix of jurisdictions to which they relate, tax law developments, and relative changes in permanent tax benefits or expenses The Company’s effective tax rate for the three months ended March 31, 2018 and 2017 was (88.63%) and 15.59%, respectively. For the three months ended March 31, 2018, the effective tax rate varied from the federal statutory rate of 21% primarily due to the level and mix of earnings among tax jurisdictions, share-based compensation, and recognition of the U.S. global intangible low-taxed income ("GILTI") which is partially offset by foreign tax credits. For the three months ended March 31, 2017, the effective tax rate varied from the federal statutory rate of 35% primarily due to the level and mix of earnings among tax jurisdictions. On December 22, 2017, the President of the United Stated signed Public Law No. 115-97, commonly referred to as the Tax Cut and Jobs Act of 2017 (the “Tax Act”). The Tax Act makes significant change to the U.S. tax code, which include, but are not limited to, a U.S federal corporate tax rate decrease from 35% to 21% effective January 1, 2018, a shift to a modified territorial tax regime, which requires companies to pay a one-time transition tax on the mandatory deemed repatriation of the cumulative earnings of certain foreign subsidiaries as of December 31, 2017, a new provision designed to tax GILTI of foreign subsidiaries, a limitation of the deduction for net operating losses, elimination of net operating loss carrybacks, immediate deductions for depreciation expense for certain qualified property, additional limitations on the deductibility of executive compensation, and limitations on the deductibility of interest. The Company was able to reasonably estimate the transition tax and recorded an initial provisional transition tax obligation of $5.0 million, with a corresponding adjustment of $5.0 million to income tax expense for the year ended December 31, 2017. As a result of new interpretive guidance issued by the Treasury and the IRS, the Company recognized an additional measurement-period adjustment of ($0.8 million), with a corresponding adjustment of $0.8 million to income tax benefit during the period. The effect of the measurement-period adjustment on the first quarter 2018 effective tax rate was approximately (71.6)%. However, the Company is continuing to gather additional information to more precisely compute the amount of the transition tax, and its accounting for this item is not yet complete because the final foreign earnings and profits calculations have not been completed. The Company expects to complete its accounting within the prescribed measurement period. The Company will continue to refine its estimates related to the impact of the Tax Act during the one year measurement period allowed under Staff Accounting Bulletin 118 (“SAB 118”). Additionally, the Company previously considered the earnings in its non-U.S. subsidiaries to be indefinitely reinvested and, accordingly, recorded no deferred income taxes. The Company is currently analyzing its global working capital and cash requirements and the potential tax liabilities attributable to a repatriation, but the Company has yet to determine whether it plans to change its prior assertion and repatriate earnings. While the transition tax resulted in the reduction of the excess of the amount for financial reporting over the tax basis in our foreign subsidiaries, an actual repatriation from its non-U.S. subsidiaries could be subject to additional foreign and U.S. state income taxes. Accordingly, the Company has not recorded any deferred taxes attributable to our investments in its foreign subsidiaries. The Company will record the tax effects of any change in its prior assertion in the period that it completes its analysis and are able to make a reasonable estimate, and disclose any unrecognized deferred tax liability for temporary differences related to our foreign investments, if practicable.

Geographic Information

Geographic Information	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Geographic Information	Note 14. 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 where the product is manufactured. Long-lived assets in the tables below comprise only property, plant, equipment and intangible assets (in thousands): Three months ended March 31, 2018 2017 Revenues: United States $ 3,563 $ 4,519 Taiwan 33,202 51,624 China 28,474 40,081 $ 65,239 $ 96,224 As of the period ended March 31, December 31, 2018 2017 Long-lived assets: United States $ 75,404 $ 75,446 Taiwan 68,479 67,379 China 71,224 59,929 $ 215,107 $ 202,754

Contingencies

Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	Note 15. Contingencies Litigation Overview From time to time, the Company may be subject to legal proceedings and litigation arising in the ordinary course of business, including, but not limited to, inquiries, investigations, audits and other regulatory proceedings, such as described below. The Company records a loss provision when it believes it is both probable that a liability has been incurred and the amount can be reasonably estimated. Unless otherwise disclosed, the Company is unable to estimate the possible loss or range of loss for the legal proceeding described below. Except for the lawsuit described below, the Company believes that there are no claims or actions pending or threatened against it, the ultimate disposition of which would have a material adverse effect on it. Class Action and Shareholder Derivative Litigation On August 5, 2017, a lawsuit was filed in the U.S. District Court for the Southern District of Texas against the Company and two of its officers in Mona Abouzied v. Applied Optoelectronics, Inc., Chih-Hsiang (Thompson) Lin, and Stefan J. Murry, et al. , Case No. 4:17-cv-02399. The complaint in this matter seeks class action status on behalf of the Company’s shareholders, alleging violations of Sections 10(b) and 20(a) of the Exchange Act against the Company, its chief executive officer, and its chief financial officer, arising out of its announcement on August 3, 2017 that “we see softer than expected demand for our 40G solutions with one of our large customers that will offset the sequential growth and increased demand we expect in 100G.” A second, related action was filed by Plaintiff Chad Ludwig on August 16, 2017 (Case No. 4:17-cv-02512) in the Southern District of Texas. The two cases were consolidated before Judge Vanessa D. Gilmore. On January 22, 2018, the court appointed Lawrence Rougier as Lead Plaintiff and Levi & Korinsky LLP as Lead Counsel. Lead Plaintiff filed an amended consolidated class action complain on March 6, 2018. The amended complaint requests unspecified damages and other relief. The Company disputes the allegations and intends to vigorously contest the matter. We filed a motion to dismiss on April 4, 2018. Briefing on the motion to disimiss is expected to be completed on May 16, 2018.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2018
Subsequent Events [Abstract]
Subsequent Events	Note 16. Subsequent Events The Company has evaluated subsequent events through the date the financial statements were available to be issued.

Significant Accounting Polici24

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Business Overview	Business Overview Applied Optoelectronics, Inc. (“AOI” or the “Company”) is a Delaware corporation. The Company is a leading, vertically integrated provider of fiber-optic networking products, primarily for four networking end-markets: internet data center, cable television, telecommunications and fiber-to-the-home. 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 located in the U.S., Taiwan and China. In the U.S., 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 laser component and optical module products. In addition, the Company also has a research and development facility in Duluth, Georgia. The Company operates in Taipei, Taiwan and Ningbo, China through its wholly-owned subsidiary Prime World International Holdings, Ltd. (“Prime World”, incorporated in the British Virgin Islands). Prime World is the parent of Global Technology, Inc. (“Global”, incorporated in the People’s Republic of China). Through Global, the Company primarily manufactures certain of our data center transceiver products, including subassemblies, as well as Cable TV Broadband (“CATV”) systems and equipment, and performs research and development activities for the CATV products. Prime World also operates a branch in Taiwan, which primarily manufactures transceivers.
Interim Financial Statements	Interim Financial Statements The unaudited condensed consolidated financial statements of the Company as of March 31, 2018 and December 31, 2017 and for the three months ended March 31, 2018 and March 31, 2017, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim information and with the instructions on Form 10-Q and Rule 10-01 of Regulation S-X 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 required by GAAP for 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. 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, 2017. The results of operations for the three months ended March 31, 2018 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	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, inventory reserve, product warranty costs, share-based compensation expense, estimated useful lives of property and equipment, and taxes.
Recent Accounting Pronouncements	Note 2. Significant Accounting Policies There have been no changes in the Company’s significant accounting policies for the three months ended March 31, 2018, as compared to the significant accounting policies described in its 2017 Annual Report, except as described below. Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted in 2018 In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition guidance establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. The Company evaluated its revenues and the new guidance had immaterial impacts to recognition practices upon adoption on January 1, 2018. As part of the adoption, the Company elected to apply the new guidance on a modified retrospective basis. The Company did not record a cumulative effect adjustment to retained earnings for initially applying the new guidance as no revenue recognition differences were identified in the timing or amount of revenue. See Note 3, " Revenue Recognition" for additional information on the required disclosures related to the impact of adopting this standard. The FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities with further clarifications made in February 2018 with the issuance of ASU 2018-03. The amended guidance requires certain equity investments that are not consolidated and not accounted for under the equity method to be measured at fair value with changes in fair value recognized in net income rather than as a component of accumulated other comprehensive income (loss). It further states that an entity may choose to measure equity investments that do not have readily determinable fair values using a quantitative approach, or measurement alternative, which is equal to its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company adopted this amended guidance on January 1, 2018, with no impact on the financial statements. In March 2018, the FASB issued ASU 2018-05, "Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118." ASU 2018-05, effective 2018, expands income tax accounting and disclosure guidance to include SAB 118 issued by the SEC in December 2017. SAB 118 provides guidance on accounting for the income tax effects of the U.S. Tax Cuts and Jobs Act of 2017 (the “Tax Act”) and among other things allows for a measurement period not to exceed one year for companies to finalize the provisional amounts recorded as of December 31, 2017. See Note 13. “Income Taxes” for additional information on the Company’s accounting for the Tax Act. Recent Accounting Pronouncements Yet to be Adopted On February 25, 2016, the FASB released ASU No. 2016-02, Leases, to complete its project to overhaul lease accounting. The ASU codifies ASC 842, Leases, which will replace the guidance in ASC 840. The guidance will require lessees to recognize most leases on the balance sheet for capital and operating leases. The guidance is effective for public business entities in fiscal years beginning after December 15, 2018. The Company is evaluating the impact of the accounting standard on its financial statements by reviewing the standard itself, as well as reviewing literature about the new standard produced by nationally-recognized accounting firms and other third parties.

Cash, Cash Equivalents and Re25

Cash, Cash Equivalents and Restricted (Tables)	3 Months Ended
	Mar. 31, 2018
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Abstract
Schedule of cash and cash equivalents	The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statement of financial position that sum to the total of the same such amounts in the statement of cash flows (in thousands): March 31, December 31, 2018 2017 Cash and cash equivalents $ 82,251 $ 82,936 Restricted cash 1,048 1,012 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 83,299 $ 83,948

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2018
Net income per share
Schedule of Computation basic and diluted net loss per share	The following table sets forth the computation of the basic and diluted net income per share for the periods indicated (in thousands, except per share amounts): Three months ended March 31, 2018 2017 Numerator: Net income $ 2,120 $ 19,789 Denominator: Weighted average shares used to compute net income per share Basic 19,492 18,598 Effect of dilutive options and restricted stock units 497 1,104 Diluted 19,989 19,702 Net income per share Basic $ 0.11 $ 1.06 Diluted $ 0.11 $ 1.00

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2018
Inventory Disclosure [Abstract]
Schedule of inventories	Inventories, net of inventory writedowns, consist of the following for the periods indicated (in thousands): March 31, 2018 December 31, 2017 Raw materials $ 32,454 $ 26,648 Work in process and sub-assemblies 42,353 31,060 Finished goods 17,817 18,060 $ 92,624 $ 75,768

Property, Plant & Equipment (Ta

Property, Plant & Equipment (Tables)	3 Months Ended
	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
Schedule of property, plant and equipment	Property, plant and equipment consisted of the following for the periods indicated (in thousands): March 31, 2018 December 31, 2017 Land improvements $ 806 $ 806 Building and improvements 81,638 78,785 Machinery and equipment 179,801 168,993 Furniture and fixtures 4,932 4,663 Computer equipment and software 8,502 8,248 Transportation equipment 741 718 276,420 262,213 Less accumulated depreciation and amortization (78,034) (70,194) 198,386 192,019 Construction in progress 5,157 4,823 Land 1,101 1,101 Property, plant and equipment, net $ 204,644 $ 197,943

Intangible Assets, net (Tables)

Intangible Assets, net (Tables)	3 Months Ended
	Mar. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible assets	Intangible assets consisted of the following for the periods indicated (in thousands): March 31, 2018 Gross Accumulated Intangible Amount amortization assets, net Patents $ 6,670 $ (2,657) $ 4,013 Trademarks 14 (12) 2 Total intangible assets $ 6,684 $ (2,669) $ 4,015 December 31, 2017 Gross Accumulated Intangible Amount amortization assets, net Patents $ 6,524 $ (2,519) $ 4,005 Trademarks 14 (12) 2 Total intangible assets $ 6,538 $ (2,531) $ 4,007

Notes Payable and Long-Term D30

Notes Payable and Long-Term Debt (Tables)	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Schedule of notes payable and long-term debt	Notes payable and long-term debt consisted of the following for the periods indicated (in thousands): March 31, 2018 December 31, 2017 Revolving line of credit with a U.S. bank up to $60,000 with interest at LIBOR plus 1.4%, maturing September 28, 2020 $ 38,370 $ 49,000 Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.15%, maturing April 1, 2024 21,500 — Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.3%, maturing April 1, 2023 5,056 — Notes payable to a finance company due in monthly installments with 4.5% interest, maturing May 27, 2018 228 559 Total 65,154 49,559 Less current portion (2,690) (559) Non-current portion $ 62,464 $ 49,000
Maturities of notes payable and long-term debt	Maturities of long-term debt are as follows for the future one-year periods ending March 31, (in thousands): 2019 $ 2,690 2020 40,832 2021 2,462 2022 2,462 2023 2,376 2024 and thereafter 14,332 Total outstanding $ 65,154

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
Schedule of accrued liabilities	Accrued liabilities consisted of the following for the periods indicated (in thousands): March 31, 2018 December 31, 2017 Accrued payroll $ 7,921 $ 11,693 Accrued rent 1,234 1,180 Accrued employee benefits 919 2,035 Accrued state and local taxes 218 951 Advance payments 371 441 Accrued product warranty 1,237 1,118 Accrued commission expenses 246 425 Accrued professional fees 174 181 Accrued other 1,038 1,079 $ 13,358 $ 19,103

Other Income and Expense (Table

Other Income and Expense (Tables)	3 Months Ended
	Mar. 31, 2018
Other income (expense)
Schedule of other income and expense	Other income and (expense) consisted of the following for the periods indicated (in thousands): Three months ended March 31, 2018 2017 Foreign exchange transaction loss (1,040) (572) Other non-operating gain 12 13 Gain (loss) on disposal of assets 1 (49) $ (1,027) $ (608)

Share-Based Compensation (Table

Share-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of option activity	The following is a summary of option activity (in thousands, except per share data): Weighted Weighted Weighted Average Average Average Share Price Weighted Remaining Aggregate Number of Exercise on Date of Average Contractual Intrinsic shares Price Exercise Fair Value Life Value (in thousands, except price data) Outstanding, January 1, 2018 536 $ 10.04 $ 5.19 $ 14,888 Exercised (38) 9.95 $ 31.12 5.14 808 Forfeited (47) 9.96 5.10 711 Outstanding, March 31, 2018 451 $ 10.05 $ 5.20 5.36 $ 6,762 Exercisable, March 31, 2018 451 $ 10.05 5.36 $ 6,762 Vested and expected to vest 451 $ 10.05 5.36 $ 6,762
Summary of RSU/RSA activity	The following is a summary of RSU/RSA activity (in thousands, except per share data): Weighted Average Share Weighted Aggregate Number of Price on Date Average Fair Intrinsic shares of Release Value Value (in thousands, except price data) Outstanding at January 1, 2018 707 $ 29.23 $ 26,732 Granted 499 33.42 16,685 Released (77) $ 33.72 25.86 2,596 Cancelled/Forfeited (14) 32.78 355 Outstanding, March 31, 2018 1,115 $ 31.29 $ 27,940 Exercisable, March 31, 2018 6 $ 141 Vested and expected to vest 1,115 $ 27,940
Schedule of employee stock-based compensation expenses	Employee share-based compensation expenses recognized for the periods indicated (in thousands): Three months ended March 31, 2018 2017 Share-based compensation - by expense type Cost of goods sold $ 178 $ 78 Research and development 576 265 Sales and marketing 227 80 General and administrative 1,588 1,084 Total share-based compensation expense $ 2,569 $ 1,507 Three months ended March 31, 2018 2017 Share-based compensation - by award type Employee stock options $ 12 $ 278 Restricted stock units 2,557 1,229 Total share-based compensation expense $ 2,569 $ 1,507

Geographic Information (Tables)

Geographic Information (Tables)	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Revenue information by geographic region	The following tables set forth the Company’s revenue and asset information by geographic region. Revenue is classified based on the location of where the product is manufactured. Long-lived assets in the tables below comprise only property, plant, equipment and intangible assets (in thousands): Three months ended March 31, 2018 2017 Revenues: United States $ 3,563 $ 4,519 Taiwan 33,202 51,624 China 28,474 40,081 $ 65,239 $ 96,224
Long-lived assets by geographic region	The following tables set forth the Company’s revenue and asset information by geographic region. Revenue is classified based on the location of where the product is manufactured. Long-lived assets in the tables below comprise only property, plant, equipment and intangible assets (in thousands): As of the period ended March 31, December 31, 2018 2017 Long-lived assets: United States $ 75,404 $ 75,446 Taiwan 68,479 67,379 China 71,224 59,929 $ 215,107 $ 202,754

Description of Business (Detail

Description of Business (Details)	Mar. 31, 2018item
Accounting Policies [Abstract]
Number of networking end markets	4

Cash, Cash Equivalents and Re36

Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Abstract
Cash and cash equivalents	$ 82,251	$ 82,936
Restricted Cash	1,048	1,012
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$ 83,299	$ 83,948	$ 60,533	$ 51,964

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Numerator:
Net income	$ 2,120	$ 19,789
Weighted average shares used to compute net income per share
Basic	19,492,251	18,597,607
Effective of dilutive options and restricted stock units	497,000	1,104,000
Diluted	19,988,575	19,702,047
Net income per share
Basic	$ 0.11	$ 1.06
Diluted	$ 0.11	$ 1

Earnings Per Share (Details - P

Earnings Per Share (Details - Potentially Dilutive Shares) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Net income per share
Potentially dilutive securities excluded from EPS	0	0

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 32,454	$ 26,648
Work in process and sub-assemblies	42,353	31,060
Finished goods	17,817	18,060
Inventories	$ 92,624	$ 75,768

Inventories - Narrative (Detail

Inventories - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Inventory Disclosure [Abstract]
Lower of cost or market reserve adjustment for inventory	$ 0.9	$ 0.5

Property, Plant & Equipment (De

Property, Plant & Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Property, plant and equipment, gross	$ 276,420	$ 262,213
Less accumulated depreciation and amortization	(78,034)	(70,194)
Property, plant and equipment after accumulated depreciation and amortization, excluding construction in progress and land	198,386	192,019
Construction in progress	5,157	4,823
Land	1,101	1,101
Property, plant and equipment, net	204,644	197,943
Land improvements
Property, plant and equipment, gross	806	806
Building and improvements
Property, plant and equipment, gross	81,638	78,785
Machinery and equipment
Property, plant and equipment, gross	179,801	168,993
Furniture and fixtures
Property, plant and equipment, gross	4,932	4,663
Computer equipment and software
Property, plant and equipment, gross	8,502	8,248
Transportation equipment
Property, plant and equipment, gross	$ 741	$ 718

Property, Plant & Equipment - N

Property, Plant & Equipment - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 6.8	$ 4.2
Cost of Sales, depreciation	$ 3.8	$ 2.6

Intangible Assets, net (Details

Intangible Assets, net (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Gross Amount	$ 6,684	$ 6,538
Accumulated amortization	(2,669)	(2,531)
Intangible assets, net	4,015	4,007
Patents
Gross Amount	6,670	6,524
Accumulated amortization	(2,657)	(2,519)
Intangible assets, net	4,013	4,005
Trademarks
Gross Amount	14	14
Accumulated amortization	(12)	(12)
Intangible assets, net	$ 2	$ 2

Intangible Assets, net - Narrat

Intangible Assets, net - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Amortization expense for intangible assets	$ 0.1	$ 0.1
License
Weighted average amortization period	8 years

Notes Payable and Long-Term D45

Notes Payable and Long-Term Debt (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Notes payable and long-term debt	$ 65,154	$ 49,559
Current portion of notes payable and long-term debt	(2,690)	(559)
Long term portion of notes payable and long-term debt	62,464	49,000
Term loan 1
Notes payable and long-term debt	$ 21,500
Term loan 1 | London Interbank Offered Rate (LIBOR)
Basis spread on variable rate	1.15%
Term loan 2
Notes payable and long-term debt	$ 5,056
Term loan 2 | London Interbank Offered Rate (LIBOR)
Basis spread on variable rate	1.30%
Note payable 1
Notes payable and long-term debt	$ 228	559
Stated interest rate	4.50%
Revolving Line of Credit | Revolving Line of Credit 1
Notes payable and long-term debt	$ 38,370	$ 49,000
Revolving line of credit maximum borrowing capacity	$ 60,000
Debt maturity date	Sep. 28, 2020
Revolving Line of Credit | Revolving Line of Credit 1 | London Interbank Offered Rate (LIBOR)
Basis spread on variable rate	1.40%

Notes Payable and Long-Term D46

Notes Payable and Long-Term Debt - Debt Maturities (Details) $ in Thousands	Mar. 31, 2018USD ($)
Maturities of notes payable and long-term debt
2,019	$ 2,690
2,020	40,832
2,021	2,462
2,022	2,462
2,023	2,376
2024 and thereafter	14,332
Total outstanding	$ 65,154

Notes Payable and Long-Term D47

Notes Payable and Long-Term Debt - Term Debt - Narrative (Details) $ in Thousands

Mar. 31, 2018USD ($)

Mar. 30, 2018USD ($)

Sep. 28, 2017USD ($)

Feb. 27, 2017USD ($)

Jun. 25, 2016USD ($)

Jun. 24, 2016USD ($)

May 27, 2015TWD ($)

May 27, 2015USD ($)

Mar. 31, 2018USD ($)

Mar. 31, 2016TWD ($)

Mar. 31, 2016USD ($)

Dec. 31, 2017USD ($)

Jun. 14, 2016USD ($)

Repayments of outstanding balance

$ 11,200

$ 55,583

Notes payable and long-term debt

$ 65,154

65,154

$ 49,559

Unused borrowing capacity

42,600

42,600

1,000

Restricted cash, investments or security deposit associated with loan facilities

$ 0

0

$ 0

One Month LIBOR Rate

Interest rate description

LIBOR Borrowing Rate plus 1.88%

Basis spread on variable rate

1.88%

Letter of Credit

Revolving line of credit maximum borrowing capacity

$ 10,000

10,000

East West Bank and Comerica Bank | London Interbank Offered Rate (LIBOR) | Modification Agreement

Interest rate description

LIBOR Borrowing Rate plus 2.0%

Basis spread on variable rate

2.00%

2.00%

East West Bank and Comerica Bank | One Month LIBOR Rate | Modification Agreement

Interest rate description

one-month LIBOR Borrowing Rate plus 2.75%

Basis spread on variable rate

2.75%

East West Bank and Comerica Bank | First Amendment | London Interbank Offered Rate (LIBOR) | Modification Agreement

Interest rate description

LIBOR Borrowing Rate plus 2.0%

East West Bank | Modification Agreement

Revolving line of credit maximum borrowing capacity

$ 22,000

China Construction Bank

Revolving line of credit maximum borrowing capacity

13,200

13,200

Chailease Finance Co. Ltd. | Finance Lease 1

Note payable

200

200

Lease purchase price

$ 180,148,532

$ 6,000

Initial payment amount

$ 60,148,532

$ 2,000

Financial lease term

3 years

3 years

Chailease Finance Co. Ltd. | Finance Lease 1 | Minimum

Lease payment range price

$ 3,322,413

$ 100

Chailease Finance Co. Ltd. | Finance Lease 1 | Maximum

Lease payment range price

$ 3,784,000

$ 100

Chailease Finance Co. Ltd. | Finance Lease 2

Lease purchase price

$ 312,927,180

$ 10,100

Financial lease term

3 years

3 years

Financial lease Interest rate

4.00%

4.00%

Chailease Finance Co. Ltd. | Finance Lease 2 | Minimum

Initial payment amount

$ 62,927,180

Lease payment range price

6,772,500

$ 200

Chailease Finance Co. Ltd. | Finance Lease 2 | Maximum

Initial payment amount

2,000

Lease payment range price

$ 7,788,333

$ 300

Branch Banking and Trust Company | First Credit Facility

Revolving line of credit maximum borrowing capacity

$ 50,000

Term of loan

3 years

Branch Banking and Trust Company | First Credit Facility | One Month LIBOR Rate

Basis spread on variable rate

1.50%

Branch Banking and Trust Company | Line of credit

Revolving line of credit maximum borrowing capacity

$ 60,000

Notes payable and long-term debt

38,400

$ 38,400

Branch Banking and Trust Company | Line of credit | One Month LIBOR Rate

Interest rate description

one-month LIBOR plus

Branch Banking and Trust Company | Line of credit | One Month LIBOR Rate | Minimum

Basis spread on variable rate

1.40%

Branch Banking and Trust Company | Line of credit | One Month LIBOR Rate | Maximum

Basis spread on variable rate

2.00%

Revolving Line of Credit | East West Bank and Comerica Bank | First Amendment

Revolving line of credit maximum borrowing capacity

$ 40,000

$ 25,000

Draw down period

1 year

Term of revolving credit facility

5 years

Revolving Line of Credit | East West Bank and Comerica Bank | First Amendment | London Interbank Offered Rate (LIBOR)

Interest rate description

LIBOR Borrowing Rate plus 2.75% or 3.0%

Revolving Line of Credit | East West Bank and Comerica Bank | First Amendment | London Interbank Offered Rate (LIBOR) | Minimum

Basis spread on variable rate

2.75%

Revolving Line of Credit | East West Bank and Comerica Bank | First Amendment | London Interbank Offered Rate (LIBOR) | Maximum

Basis spread on variable rate

3.00%

Term Loan | East West Bank and Comerica Bank

Revolving line of credit maximum borrowing capacity

5,000

$ 5,000

Repayments of outstanding balance

$ 2,800

Revolving line of credit, maturity date

Jul. 31, 2019

Term Loan | East West Bank and Comerica Bank | First Amendment

Revolving line of credit maximum borrowing capacity

10,000

$ 10,000

Term Loan | Branch Banking and Trust Company

Notes payable and long-term debt

21,500

21,500

Term Loan | Branch Banking and Trust Company | One Month LIBOR Rate

Interest rate description

one-month LIBOR plus

Term Loan | Branch Banking and Trust Company | One Month LIBOR Rate | Minimum

Basis spread on variable rate

1.15%

Term Loan | Branch Banking and Trust Company | One Month LIBOR Rate | Maximum

Basis spread on variable rate

2.00%

Equipment Term Loan | East West Bank and Comerica Bank | First Amendment

Revolving line of credit maximum borrowing capacity

10,000

10,000

Capital expenditure loan | Branch Banking and Trust Company

Revolving line of credit maximum borrowing capacity

$ 26,000

Term of revolving credit facility

5 years

Notes payable and long-term debt

$ 5,100

$ 5,100

Capital expenditure loan | Branch Banking and Trust Company | One Month LIBOR Rate

Interest rate description

one-month LIBOR plus

Capital expenditure loan | Branch Banking and Trust Company | One Month LIBOR Rate | Minimum

Basis spread on variable rate

1.30%

Capital expenditure loan | Branch Banking and Trust Company | One Month LIBOR Rate | Maximum

Basis spread on variable rate

2.00%

Real estate term loan | Branch Banking and Trust Company

Revolving line of credit maximum borrowing capacity

$ 21,500

Term of revolving credit facility

70 months

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Accrued payroll	$ 7,921	$ 11,693
Accrued rent	1,234	1,180
Accrued employee benefits	919	2,035
Accrued state and local taxes	218	951
Advance payments	371	441
Accrued product warranty	1,237	1,118
Accrued commission expenses	246	425
Accrued professional fees	174	181
Accrued other	1,038	1,079
Total accrued liabilities	$ 13,358	$ 19,103

Other Income and Expense (Detai

Other Income and Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Other income (expense)
Foreign exchange transaction loss	$ (1,040)	$ (572)
Other non-operating gain	12	13
Gain (loss) on disposal of assets	1	(49)
Other income and expense, net	$ (1,027)	$ (608)

Share-Based Compensation - Narr

Share-Based Compensation - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)plan	Dec. 31, 2017USD ($)
Minimum
Vesting period	4 years
Restricted stock units
Unrecognized compensation expense	$ 32,500
Unrecognized compensation expense recognized period	3 years 2 months 12 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding	$ 27,940	$ 26,732
Employee stock options
Number of incentive plans | plan	5
Options Expiration Period	10 years
Unrecognized compensation expense	$ 0
Employee stock options | Share-based Compensation Award, Tranche One
Vesting rights (as a percent)	25.00%
Employee stock options | Share-based Compensation Award, Tranche Two
Vesting rights (as a percent)	12.50%
2013 Plan | Restricted stock units
Maximum term	10 years

Share-Based Compensation - Opti

Share-Based Compensation - Option Activity (Details) - Employee stock options $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)$ / sharesshares
Number of Shares
Outstanding, beginning balance | shares	536
Exercised | shares	(38)
Forfeited | shares	(47)
Outstanding, ending balance | shares	451
Exercisable, ending balance | shares	451
Vested and expected to vest | shares	451
Weighted Average Exercise Price
Outstanding, beginning balance	$ 10.04
Exercised	9.95
Forfeited	9.96
Outstanding, ending balance	10.05
Exercisable, ending balance	10.05
Vested and expected to vest	10.05
Weighted Average Share Price on Date of Exercise	31.12
Weighted Average Fair Value [Abstract]
Outstanding, beginning balance	5.19
Exercised	5.14
Forfeited	5.10
Outstanding, ending balance	$ 5.20
Weighted Average Remaining Contractual Life
Outstanding, ending balance	5 years 4 months 10 days
Exercisable, ending balance	5 years 4 months 10 days
Vested and expected to vest	5 years 4 months 10 days
Aggregate Intrinsic Value
Aggregate intrinsic value, beginning balance | $	$ 14,888
Exercised | $	808
Forfeited | $	711
Aggregate intrinsic value, ending balance | $	6,762
Exercisable, ending balance | $	6,762
Vested and expected to vest | $	$ 6,762

Share-Based Compensation - Rest

Share-Based Compensation - Restricted Stock Units (Details) - Restricted stock units $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)$ / sharesshares
Number of shares
Outstanding, beginning balance | shares	707
Granted | shares	499
Released | shares	(77)
Cancelled/Forfeited | shares	(14)
Outstanding, ending balance | shares	1,115
Exercisable, ending balance | shares	6
Vested and expected to vest | shares	1,115
Weighted Average Share Price on Date of Release | $ / shares	$ 33.72
Weighted Average Fair Value
Outstanding, beginning balance | $ / shares	29.23
Granted | $ / shares	33.42
Released | $ / shares	25.86
Cancelled/Forfeited | $ / shares	32.78
Outstanding, ending balance | $ / shares	$ 31.29
Aggregate Intrinsic Value [Abstract]
Aggregate intrinsic value, outstanding | $	$ 26,732
Granted | $	16,685
Released | $	2,596
Cancelled/Forfeited | $	355
Aggregate intrinsic value, outstanding | $	27,940
Exercisable, ending balance | $	141
Vested and expected to vest | $	$ 27,940

Share-Based Compensation - Shar

Share-Based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Total share-based compensation expense	$ 2,569	$ 1,507
Employee stock options
Total share-based compensation expense	12	278
Restricted stock units
Total share-based compensation expense	2,557	1,229
Cost of goods sold
Total share-based compensation expense	178	78
Research and development.
Total share-based compensation expense	576	265
Sales and marketing.
Total share-based compensation expense	227	80
General and administrative.
Total share-based compensation expense	$ 1,588	$ 1,084

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Effective tax rate	(88.63%)	15.59%
Federal statutory rate	21.00%		35.00%
Transition tax			$ 5
Income tax expense (benefit)	$ 0.8		$ 5
Measurement period adjustment	$ (0.8)
Measurement period adjustment, effective tax rate	(71.60%)

Geographic Information - Revenu

Geographic Information - Revenues (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)item	Mar. 31, 2017USD ($)
Number of Reportable segment | item	1
Revenues	$ 65,239
Before Topic 606
Revenues		$ 96,224
United States
Revenues	3,563
United States | Before Topic 606
Revenues		4,519
Taiwan
Revenues	33,202
Taiwan | Before Topic 606
Revenues		51,624
China
Revenues	$ 28,474
China | Before Topic 606
Revenues		$ 40,081

Geographic Information - Long L

Geographic Information - Long Lived Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Long-lived assets	$ 215,107	$ 202,754
United States
Long-lived assets	75,404	75,446
Taiwan
Long-lived assets	68,479	67,379
China
Long-lived assets	$ 71,224	$ 59,929

Contingencies - Narrative (Deta

Contingencies - Narrative (Details)	Aug. 05, 2017itemcustomer
Commitments and Contingencies Disclosure [Abstract]
Number of executive officers | item	2
Number of customers | customer	1

Significant Accounting Polici58

Significant Accounting Policies (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Cash and cash equivalents	$ 82,251	$ 82,936
Restricted cash	1,048	1,012
Accrued product warranty	$ 1,237	$ 1,118