Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Feb. 28, 2014 | Jun. 28, 2013 |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'CUTERA INC | ' | ' |
Entity Central Index Key | '0001162461 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $99 |
Entity Common Stock, Shares Outstanding | ' | 14,040,107 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $16,242 | $23,546 |
Marketable securities | 66,831 | 62,026 |
Accounts receivable, net of allowance for doubtful accounts of $19 and $0, respectively | 9,679 | 8,841 |
Inventories | 9,006 | 11,114 |
Deferred tax assets | 31 | 40 |
Other current assets and prepaid expenses | 1,507 | 1,439 |
Total current assets | 103,296 | 107,006 |
Property and equipment, net | 1,362 | 933 |
Deferred tax assets, net of current portion | 329 | 553 |
Intangibles, net | 2,019 | 2,566 |
Goodwill | 1,339 | 1,339 |
Other long-term assets | 324 | 397 |
Total assets | 108,669 | 112,794 |
Current liabilities: | ' | ' |
Accounts payable | 1,820 | 2,107 |
Accrued liabilities | 9,328 | 9,493 |
Deferred revenue | 7,494 | 6,618 |
Total current liabilities | 18,642 | 18,218 |
Deferred revenue, net of current portion | 4,340 | 2,102 |
Income tax liability | 108 | 412 |
Other long-term liabilities | 1,314 | 1,288 |
Total liabilities | 24,404 | 22,020 |
Commitments and contingencies (Note 11) | ' | ' |
Stockholders' equity: | ' | ' |
Convertible preferred stock, $0.001 par value: Authorized: 5,000,000 shares; Issued and outstanding: none | 0 | 0 |
Common stock, $0.001 par value: Authorized: 50,000,000 shares; Issued and outstanding: 13,931,833 and 14,233,476 shares at December 31, 2013 and 2012, respectively | 14 | 14 |
Additional paid-in capital | 98,820 | 100,552 |
Accumulated deficit | -14,620 | -9,873 |
Accumulated other comprehensive income (loss) | 51 | 81 |
Total stockholders' equity | 84,265 | 90,774 |
Total liabilities and stockholders' equity | $108,669 | $112,794 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Current assets: | ' | ' |
Accounts receivable, allowance for doubtful accounts | $19 | $0 |
Stockholders' equity: | ' | ' |
Convertible preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Convertible preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Convertible preferred stock, issued (in shares) | 0 | 0 |
Convertible preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, issued (in shares) | 13,931,833 | 14,233,476 |
Common stock, outstanding (in shares) | 13,931,833 | 14,233,476 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net revenue: | ' | ' | ' |
Products | $56,905 | $60,057 | $46,879 |
Service | 17,689 | 17,220 | 13,411 |
Total net revenue | 74,594 | 77,277 | 60,290 |
Cost of Revenue: | ' | ' | ' |
Products | 24,179 | 26,911 | 17,545 |
Service | 8,533 | 8,826 | 8,433 |
Total cost of revenue | 32,712 | 35,737 | 25,978 |
Gross profit | 41,882 | 41,540 | 34,312 |
Operating expenses: | ' | ' | ' |
Sales and marketing | 27,984 | 28,664 | 25,499 |
Research and development | 9,216 | 8,427 | 9,141 |
General and administrative | 9,938 | 11,276 | 10,104 |
Total operating expenses | 47,138 | 48,367 | 44,744 |
Loss from operations | -5,256 | -6,827 | -10,432 |
Interest and other income, net | 455 | 497 | 614 |
Loss before income taxes | -4,801 | -6,330 | -9,818 |
Income tax (benefit) provision | -54 | 218 | 243 |
Net Loss | ($4,747) | ($6,548) | ($10,061) |
Net loss per share: | ' | ' | ' |
Basic and diluted (in dollars per share) | ($0.33) | ($0.46) | ($0.73) |
Weighted-average number of shares used in per share calculations: | ' | ' | ' |
Basic and diluted (in shares) | 14,421 | 14,089 | 13,807 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | ' | ' | ' |
Net loss | ($4,747) | ($6,548) | ($10,061) |
Available-for-sale investments | ' | ' | ' |
Net change in unrealized (loss) gain on available-for-sale investments | -21 | 959 | 723 |
Less: Reclassification adjustment for net gains on investments recognized during the year | -9 | -19 | -5 |
Net change in unrealized (loss) gain on available-for-sale investments | -30 | 940 | 718 |
Tax provision (benefit) | 0 | 18 | -197 |
Other comprehensive income (loss), net of tax | -30 | 922 | 915 |
Comprehensive loss | ($4,777) | ($5,626) | ($9,146) |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Accumulated Other Comprehensive Income (loss) [Member] | Total |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2010 | $14 | $90,423 | $6,736 | ($1,756) | $95,417 |
Balance (in shares) at Dec. 31, 2010 | 13,629,713 | ' | ' | ' | 13,629,713 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Issuance of common stock for employee purchase plan | 0 | 276 | 0 | 0 | 276 |
Issuance of common stock for employee purchase plan (in shares) | 45,161 | ' | ' | ' | ' |
Exercise of stock options | 0 | 1,230 | 0 | 0 | 1,230 |
Exercise of stock options (in shares) | 207,624 | ' | ' | ' | ' |
Issuance of common stock in settlement of restricted stock units, net of shares withheld for employee taxes, and stock awards | 0 | -146 | 0 | 0 | -146 |
Issuance of common stock in settlement of restricted stock units, net of shares withheld for employee taxes, and stock awards (in shares) | 65,897 | ' | ' | ' | ' |
Stock-based compensation expense | 0 | 3,907 | 0 | 0 | 3,907 |
Tax benefit from exercises of stock-based payment awards | 0 | 29 | 0 | 0 | 29 |
Components of other comprehensive loss: | ' | ' | ' | ' | ' |
Net loss | 0 | 0 | -10,061 | 0 | -10,061 |
Net change in unrealized gain (loss) on available-for-sale investments | 0 | 0 | 0 | 915 | 915 |
Balance at Dec. 31, 2011 | 14 | 95,719 | -3,325 | -841 | 91,567 |
Balance (in shares) at Dec. 31, 2011 | 13,948,395 | ' | ' | ' | 13,948,395 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Issuance of common stock for employee purchase plan | 0 | 289 | 0 | 0 | 289 |
Issuance of common stock for employee purchase plan (in shares) | 46,982 | ' | ' | ' | ' |
Exercise of stock options | 0 | 1,480 | 0 | 0 | 1,480 |
Exercise of stock options (in shares) | 211,551 | ' | ' | ' | ' |
Issuance of common stock in settlement of restricted stock units, net of shares withheld for employee taxes, and stock awards | 0 | -101 | 0 | 0 | -101 |
Issuance of common stock in settlement of restricted stock units, net of shares withheld for employee taxes, and stock awards (in shares) | 26,548 | ' | ' | ' | ' |
Stock-based compensation expense | 0 | 3,159 | 0 | 0 | 3,159 |
Tax benefit from exercises of stock-based payment awards | 0 | 6 | 0 | 0 | 6 |
Components of other comprehensive loss: | ' | ' | ' | ' | ' |
Net loss | 0 | 0 | -6,548 | 0 | -6,548 |
Net change in unrealized gain (loss) on available-for-sale investments | 0 | 0 | 0 | 922 | 922 |
Balance at Dec. 31, 2012 | 14 | 100,552 | -9,873 | 81 | 90,774 |
Balance (in shares) at Dec. 31, 2012 | 14,233,476 | ' | ' | ' | 14,233,476 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Issuance of common stock for employee purchase plan | 0 | 362 | 0 | 0 | 362 |
Issuance of common stock for employee purchase plan (in shares) | 51,338 | ' | ' | ' | ' |
Exercise of stock options | 1 | 5,048 | 0 | 0 | 5,049 |
Exercise of stock options (in shares) | 612,210 | ' | ' | ' | ' |
Issuance of common stock in settlement of restricted stock units, net of shares withheld for employee taxes, and stock awards | 0 | -222 | 0 | 0 | -222 |
Issuance of common stock in settlement of restricted stock units, net of shares withheld for employee taxes, and stock awards (in shares) | 95,256 | ' | ' | ' | ' |
Repurchase of common stock | -1 | -10,030 | 0 | ' | -10,031 |
Repurchase of common stock (in shares) | -1,060,447 | ' | ' | ' | ' |
Stock-based compensation expense | 0 | 3,110 | 0 | 0 | 3,110 |
Components of other comprehensive loss: | ' | ' | ' | ' | ' |
Net loss | 0 | 0 | -4,747 | 0 | -4,747 |
Net change in unrealized gain (loss) on available-for-sale investments | 0 | 0 | 0 | -30 | -30 |
Balance at Dec. 31, 2013 | $14 | $98,820 | ($14,620) | $51 | $84,265 |
Balance (in shares) at Dec. 31, 2013 | 13,931,833 | ' | ' | ' | 13,931,833 |
CONSOLIDATED_STATEMENTS_OF_STO1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components of other comprehensive loss: | ' | ' | ' |
Other comprehensive income (loss), tax | $0 | $18 | ($197) |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net loss | ($4,747) | ($6,548) | ($10,061) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
Stock-based compensation | 3,110 | 3,160 | 3,907 |
Tax benefit (deficit) from stock-based compensation | 0 | 6 | 29 |
Excess tax benefit related to stock-based compensation | 0 | -6 | -22 |
Depreciation and amortization | 1,304 | 1,606 | 637 |
Other | 243 | -87 | 107 |
Changes in assets and liabilities: | ' | ' | ' |
Accounts receivable | -857 | -3,690 | -1,000 |
Inventories | 2,108 | 1,167 | -4,281 |
Other current assets and prepaid expenses | 345 | 859 | 2,604 |
Other long-term assets | 73 | 89 | -486 |
Accounts payable | -287 | -466 | 1,277 |
Accrued liabilities | -371 | -177 | 2,970 |
Other long-term liabilities | -218 | -62 | 45 |
Deferred revenue | 3,114 | 1,915 | -895 |
Income tax liability | -304 | -66 | 1 |
Net cash provided by (used in) operating activities | 3,513 | -2,300 | -5,168 |
Cash flows from investing activities: | ' | ' | ' |
Acquisition of property, equipment and software | -517 | -516 | -751 |
Acquisition of intangible asset | -155 | 0 | 0 |
Business acquisition | 0 | -5,091 | 0 |
Disposal of property and equipment | 63 | 0 | 36 |
Proceeds from sales of marketable and long-term investments | 15,578 | 31,564 | 21,198 |
Proceeds from maturities of marketable investments | 36,030 | 43,009 | 47,935 |
Purchase of marketable investments | -56,847 | -58,813 | -63,131 |
Net cash (used in) provided by investing activities | -5,848 | 10,153 | 5,287 |
Cash flows from financing activities: | ' | ' | ' |
Repurchase of common stock | -10,031 | 0 | 0 |
Proceeds from exercise of stock options and employee stock purchase plan | 5,189 | 1,667 | 1,360 |
Payments on capital lease obligation | -127 | 0 | 0 |
Excess tax benefit related to stock-based compensation | 0 | 6 | 22 |
Net cash provided by financing activities | -4,969 | 1,673 | 1,382 |
Net (decrease) increase in cash and cash equivalents | -7,304 | 9,526 | 1,501 |
Cash and cash equivalents at beginning of year | 23,546 | 14,020 | 12,519 |
Cash and cash equivalents at end of year | 16,242 | 23,546 | 14,020 |
Supplemental cash flow information: | ' | ' | ' |
Cash paid for interest | 19 | 0 | 0 |
Cash paid (received) for income taxes | 337 | 307 | -1,345 |
Supplemental non-cash investing and financing activites: | ' | ' | ' |
Assets acquired under capital lease | $577 | $0 | $0 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||
Dec. 31, 2013 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Description of Operations and Principles of Consolidation | |||
Cutera, Inc. (“Cutera” or the “Company”) is a global provider of laser and other energy based aesthetic systems for practitioners worldwide. The Company designs, develops, manufactures, and markets the Xeo, GenesisPlus, ExcelV, and truSculpt for use by physicians and other qualified practitioners to allow its customers to offer safe and effective aesthetic treatments to their customers. In addition to the Company’s four primary platforms, the Company offers other products, including CoolGlide, Solera, VariLite and Japan specific products such as myQ. The Xeo and Solera platforms offer multiple hand pieces and applications, which allow customers to upgrade their systems (“Upgrade” revenue). In addition to systems and upgrade revenue, the Company generates revenue from the sale of post warranty service contracts, providing services for products that are out of warranty, Titan and truSculpt hand piece refills, and distributing third party manufactured dermal fillers and cosmeceuticals. | |||
Headquartered in Brisbane, California, the Company has wholly-owned subsidiaries in Australia, Belgium, Canada, France and Japan, that market, sell and service its products outside of the United States. The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated. | |||
Use of Estimates | |||
The preparation of Consolidated Financial Statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires the Company’s management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates their estimates, including those related to warranty obligation, sales commission, accounts receivable and sales allowances, fair values of long-term investments, fair values of acquired intangible assets, useful lives of intangible assets and property and equipment, fair values of options to purchase the Company’s common stock, recoverability of deferred tax assets, and effective income tax rates, among others. Management bases their estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. | |||
Cash, Cash Equivalents, and Marketable Investments | |||
The Company invests its cash primarily in money market funds and in highly liquid debt instruments of U.S. federal and municipal governments and their agencies, commercial paper and corporate debt securities. All highly liquid investments with stated maturities of three months or less from date of purchase are classified as cash equivalents; all highly liquid investments with stated maturities of greater than three months are classified as marketable investments. The majority of the Company’s cash and investments are held in U.S. banks and its foreign subsidiaries maintain a limited amount of cash in their local banks to cover their short term operating expenses. | |||
The Company determines the appropriate classification of its investments in marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. The Company’s marketable securities have been classified and accounted for as available-for-sale. Investments with remaining maturities more than one year are viewed by the Company as available to support current operations, and are classified as current assets under the caption marketable investments in the accompanying Consolidated Balance Sheets. Investments in marketable securities are carried at fair value, with the unrealized gains and losses reported as a component of stockholders’ equity. Any realized gains or losses on the sale of marketable securities are determined on a specific identification method, and such gains and losses are reflected as a component of interest and other income, net. | |||
Fair Value Measurements | |||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. Carrying amounts of the Company’s financial instruments, including cash equivalents, marketable investments, accounts receivable, accounts payable and accrued liabilities, approximate their fair values as of the balance sheet dates because of their generally short maturities. | |||
The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: | |||
· | Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. | ||
· | Level 2: Directly or indirectly observable inputs as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument. | ||
· | Level 3: Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. | ||
Impairment of Marketable Investments | |||
After determining the fair value of available-for-sales debt instruments, gains or losses on these securities are recorded to other comprehensive income, until either the security is sold or the Company determines that the decline in value is other-than-temporary. The primary differentiating factors that the Company considers in classifying impairments as either temporary or other-than-temporary impairments is the intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value, the length of the time and the extent to which the market value of the investment has been less than cost, the financial condition and near-term prospects of the issuer. There were no other-than-temporary impairments in the years ended December 31, 2013, 2012, and 2011. | |||
Allowance for Sales Returns and Doubtful Accounts | |||
The allowance for sales returns is based on the Company’s estimates of potential future product returns and other allowances related to current period product revenue. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of our products. | |||
The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. | |||
Concentration of Credit Risk and Other Risks and Uncertainties | |||
Financial instruments that potentially subject the Company to concentrations of risk consist principally of cash, cash equivalents, marketable investments and accounts receivable. The Company’s cash and cash equivalents are primarily invested in deposits and money market accounts with three major financial institutions in the United States. In addition, the Company has operating cash balances in banks in each of the international locations in which it operates. Deposits in these banks may exceed the amount of insurance provided on such deposits, if any. Management believes that these financial institutions are financially sound and, accordingly, believes that minimal credit risk exists. The Company has not experienced any losses on its deposits of cash and cash equivalents. | |||
The Company invests in debt instruments, including bonds of the U.S. Government, its agencies and municipalities. The Company has also invested in other high grade investments such as commercial paper and corporate bonds. By policy, the Company restricts its exposure to any single issuer by imposing concentration limits. To minimize the exposure due to adverse shifts in interest rates, the Company maintains investments at an average maturity (interest reset date for auction-rate securities and variable rate demand notes) of generally less than eighteen months. | |||
Accounts receivable are typically unsecured and are derived from revenue earned from worldwide customers. The Company performs credit evaluations of its customers and maintains reserves for potential credit losses. No single customer represented more than 10% of net accounts receivable as of either December 31, 2013 or 2012. | |||
During the years ended December 31, 2013, 2012, and 2011, domestic revenue accounted for 42%, 41%, and 39%, respectively, of total revenue, while international revenue accounted for 58%, 59%, and 61%, respectively, of total revenue, for each of the years. No single customer represented more than 10% of total revenue for any of the years ended December 31, 2013, 2012, and 2011. | |||
The Company is also subject to risks common to companies in the medical device industry, including, but not limited to, new technology innovations, dependence on key personnel, dependence on key suppliers, protection of proprietary technology, product liability, Food and Drug Administration and/ or international regulatory approvals required for new products and compliance with government regulations. | |||
Inventories | |||
Inventories are stated at the lower of cost or market, cost being determined on a standard cost basis (which approximates actual cost on a first-in, first-out basis) and market being determined as the lower of replacement cost or net realizable value. | |||
The Company includes demonstration units within inventories. Demonstration units are carried at cost and amortized over an estimated economic life of two years Amortization expense related to demonstration units is recorded in cost of revenue or in the respective operating expense line based on which function and purpose for which it is being used for. Proceeds from the sale of demonstration units are recorded as revenue and all costs incurred to refurbish the systems prior to sale are charged to cost of revenue. | |||
Property and Equipment | |||
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is on a straight-line basis over the estimated useful lives of the assets, generally as follows: | |||
Useful Lives | |||
Leasehold improvements | Lesser of useful life or term of lease | ||
Office equipment and furniture | 3 years | ||
Machinery and equipment | 3 years | ||
Upon sale or retirement of assets, the costs and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operating expenses. Maintenance and repairs are charged to operations as incurred. | |||
Depreciation expense related to property, equipment and leasehold improvements was $602,000, $436,000 and $446,000 in 2013, 2012, and 2011 respectively. Amortization expense for vehicles leased under capital leases is included in depreciation expense. | |||
Goodwill and Intangible Assets | |||
Goodwill, which represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets, is not subject to amortization, but is subject to at least an annual assessment for impairment, applying a fair-value based test. | |||
The Company’s intangible assets are comprised of purchased technology sub-licenses, acquired customer relationships, and those assets acquired in conjunction with an asset acquisition in February 2012 including, existing customer relationships, product portfolio and a manufacturing process for the products acquired. All identifiable intangibles have finite lives and are carried at cost, net of accumulated amortization. Amortization is recorded using the straight-line method, over their respective useful lives, which range from approximately 11 months to 10 years. | |||
Impairment of Long-lived Assets | |||
Goodwill is not amortized, but is tested for impairment at least annually or as circumstances indicate their value may no longer be recoverable. The goodwill impairment test is generally performed annually during the fourth fiscal quarter (or earlier if impairment indicators arise). The Company continues to operate in one segment, which is considered to be the sole reporting unit and therefore, goodwill was tested for impairment at the enterprise level. As of December 31, 2013, there has been no impairment of goodwill. | |||
The Company evaluates the recoverability of its long-lived assets, which include amortizable intangible and tangible assets. Acquired intangible assets with definite useful lives are amortized over their useful lives. The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable. The Company recognizes such impairment in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. No impairment losses were incurred in the periods presented. | |||
Warranty Obligations | |||
The Company provides a one-year standard warranty on all systems. Warranty coverage provided is for labor and parts necessary to repair the systems during the warranty period. | |||
The Company accounts for the estimated warranty cost of the standard warranty coverage as a charge to costs of revenue when revenue is recognized. The estimated warranty cost is based on historical product performance. To determine the estimated warranty reserve, the Company utilizes actual service records to calculate the average service expense per system and applies this to the equivalent number of units exposed under warranty. The Company updates these estimated charges every quarter. | |||
Revenue Recognition | |||
Product, Upgrade, Titan hand piece refill, and Dermal filler and cosmeceutical revenue is recognized when title and risk of ownership has been transferred, provided that: | |||
· | Persuasive evidence of an arrangement exists; | ||
· | The price is fixed or determinable; | ||
· | Delivery has occurred or services have been rendered; and | ||
· | Collectability is probable. | ||
Transfer of title and risk of ownership occurs when the product is shipped to the customer or when the customer receives the product, depending on the nature of the arrangement. Revenue is recorded net of customer and distributor discounts. For sales transactions when collectability is not reasonably assured, the Company recognizes revenue upon receipt of cash payment. Sales to customers and distributors do not include any return or exchange rights. In addition, the Company’s distributor agreements obligate the distributor to pay the Company for the sale regardless of whether the distributor is able to resell the product. Shipping and handling charges are invoiced to customers based on the amount of products sold. Shipping and handling fees are recorded as revenue and the related expense as a component of cost of revenue. | |||
Multiple-element arrangements | |||
A multiple-element arrangement includes the sale of one or more tangible product offerings with one or more associated services offerings, each of which are individually considered separate units of accounting. The Company determined that its multiple-element arrangements are generally comprised of the following elements that are recognized as separate units of accounting: system and upgrade sales; and service contracts. | |||
For multiple-element arrangements revenue is allocated to each element based on their relative selling prices. Relative selling prices would be based first on vendor specified objective evidence (“VSOE”), then on third-party evidence of selling price (“TPE”) when VSOE does not exist, and then on best estimate of selling price (“BESP”) when VSOE and TPE do not exist. Because the Company has neither VSOE nor TPE for its systems, the allocation of revenue has been based on the Company’s BESPs. The objective of BESP is to determine the price at which the Company would transact a sale if the product was sold on a stand-alone basis. The Company determines BESP for its systems by considering multiple factors including, but not limited to, prices charged for stand-alone sales, features and functionality of the system, geographies, type of customer, and market conditions. Revenue allocated to each element is then recognized when the other revenue recognition criteria are met for each element. | |||
In the first and second quarter of 2013, with respect to the sale of its truSculpt product, the Company provided promotions that included an unlimited number of “free” hand piece replacements during a stated trial period of 3 months or 12 months. These free refills were treated as an undelivered element under FASB ASC 605-25 in the original revenue transaction. The Company deferred the relative fair value related to the estimated number of hand piece replacements to be delivered during the promotional period and recognized that deferred revenue over the free refills promotion period. Commencing with the third quarter of 2013, the Company included unlimited refills as part of the truSculpt standard warranty and determined that this was no longer a separate deliverable under the multiple-element arrangement revenue guidance. Following this change, the Company recognized the revenue under the warranty model, in which the revenue for the system sale was recognized up-front along with an estimate of the costs which will be incurred under the warranty obligation recorded in cost of revenue. | |||
The Company also offers customers extended service contracts. Revenue under service contracts is recognized on a straight-line basis over the period of the applicable service contract. Service revenue, from customers whose systems are not under a service contact, is recognized as the services are provided. Service revenue for the years ended December 31, 2013, 2012, and 2011 was $17.7 million, $17.2 million, and $13.4 million, respectively. | |||
Cost of Revenue | |||
Cost of revenue consists primarily of material, finished and semi-finished products purchased from third-party manufacturers, labor, stock-based compensation expenses, overhead involved in our internal manufacturing processes, technology license amortization and royalties, and costs associated with product warranties. | |||
The Company's system sales includes a control console, universal graphic user interface, control system software, high voltage electronics and a combination of applications (referred to as hand pieces). Hand pieces are programmed to have a limited number of uses to ensure the safety of the device to patients. The Company sells refurbished hand pieces, or "refills", of its Titan product and provides for refurbishment of other hand pieces under warranty or service contracts. When customers purchase a replacement hand piece (or “refill”) or are provided a replacement hand piece under a warranty or service contract, Cutera ships a previously refurbished unit. Upon the receipt of the expended hand piece from the customer the Company capitalizes the expended hand piece as inventory at the estimated fair value. Cost of revenue includes the costs incurred to refurbish hand pieces. | |||
Research and Development Expenditures | |||
Costs related to research, design, development and testing of products are charged to research and development expense as incurred. Expenses incurred primarily relate to employees, facilities, material, third party contractors and clinical and regulatory fees. | |||
Advertising Costs | |||
Advertising costs are included as part of sales and marketing expense and are expensed as incurred. Advertising expenses were $1.6 million in 2013 and $1.3 million in both 2012 and 2011. | |||
Stock-based Compensation | |||
The Company accounts for stock-based employee compensation plans under the fair value recognition and measurement provisions under U.S. GAAP. The Company’s stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite service period. The Company elected to use the Black-Scholes-Merton (“BSM”) pricing model to determine the fair value of stock options on the dates of grant. Restricted stock units (“RSUs”), performance stock units (“PSUs”) and stock awards are measured based on the fair market values of the underlying stock on the dates of grant. Shares are issued on the vesting dates, net of the tax withholding requirements to be paid by the Company on behalf of its employees. As a result, the actual number of shares issued will be fewer than the actual number of RSUs outstanding. Furthermore, the Company records the liability for withholding amounts to be paid by us as a reduction to additional paid-in capital when the shares are issued. Also, the Company recognizes stock-based compensation using the straight-line method. | |||
U.S. GAAP requires the cash flows resulting from the tax benefits due to tax deductions in excess of the compensation cost recognized for stock-based awards for options exercised and RSUs vested during the period (excess tax benefits) to be classified as financing cash flows. | |||
Income Taxes | |||
The Company recognizes income taxes under the liability method. The Company recognizes deferred income taxes for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which differences are expected to reverse. The Company recognizes the effect on deferred taxes of a change in tax rates in income in the period that includes the enactment date. For deferred tax assets which are not subject to a valuation allowance, the Company has determined that its future taxable income will be sufficient to recover all of the deferred tax assets. However, should there be a change in their ability to recover the deferred tax assets, the Company could be required to record a valuation allowance against the net carrying value of its deferred tax assets. This would result in an increase to the Company’s tax provision in the period in which they determined that the recovery was not probable. | |||
The measurement of deferred taxes often involves an exercise of judgment related to the computation and realization of tax basis. The deferred tax assets and liabilities reflect management’s assessment that tax positions taken, and the resulting tax basis, are more likely than not to be sustained if they are audited by taxing authorities. Also, assessing tax rates that the Company expects to apply and determining the years when the temporary differences are expected to affect taxable income requires judgment about the future apportionment of our income among the states in which the Company operates. These matters, and others, involve the exercise of significant judgment. Any changes in our practices or judgments involved in the measurement of deferred tax assets and liabilities could materially impact our financial condition or results of operations. | |||
Valuation allowances are established when necessary to reduce deferred income tax assets to amounts that the Company believes are more likely than not to be recovered. The Company evaluates its deferred tax assets quarterly to determine whether adjustments to our valuation allowance are appropriate. In making this evaluation, the Company relies on its recent history of pre-tax earnings, estimated timing of future deductions and benefits represented by the deferred tax assets, and its forecasts of future earnings, the latter two of which involve the exercise of significant judgment. The Company maintains a full valuation allowance against its U.S. federal and state deferred tax asset due to a history of operating losses. | |||
The Company establishes reserves for uncertain tax positions in accordance with the Income Taxes subtopic of the ASC. The subtopic prescribes the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. Additionally, the subtopic provides guidance on derecognition, measurement, classification, interest and penalties, and transition of uncertain tax positions. The impact of an uncertain income tax position on income tax expense must be recognized at the largest amount that is more-likely-than-not to be sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company has provided taxes and related interest and penalties due for potential adjustments that may result from examinations of open U.S. Federal, state and foreign tax years. The Company will reverse the liability and recognize a tax benefit during the period in which the Company makes the determination that the tax position is effectively settled through examination, negotiation, or litigation, or the statute of limitations for the relevant taxing authority to examine and challenge the tax position has expired. The Company will record an additional charge in the Company’s provision for taxes in the period in which the Company determines that the recorded tax liability is less than the Company expects the ultimate assessment to be. | |||
Computation of Net Loss per Share | |||
Basic net income per share is computed using the weighted-average number of shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of shares and dilutive potential shares outstanding during the period. Dilutive potential shares primarily consist of employee stock options. Dilute earnings per share is the same as basic earnings per share for the periods presented because the inclusion of outstanding common stock equivalents would be anti-dilutive. | |||
U.S. GAAP requires that employee equity share options, non-vested shares and similar equity instruments granted by the Company be treated as potential common shares outstanding in computing diluted earnings per share. In periods of net income, diluted shares outstanding include the dilutive effect of in-the-money options, which is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional-paid-in-capital (“APIC”) when the award becomes deductible are all assumed to be used to repurchase shares. | |||
Comprehensive Loss | |||
Comprehensive loss includes all changes in stockholders’ equity except those resulting from investments or contributions by stockholders. For the periods presented, the accumulated other comprehensive income consisted solely of the unrealized gains or losses on the Company's available-for-sale investments, net of tax. | |||
Foreign Currency | |||
The U.S. dollar is the functional currency of the Company’s subsidiaries. Monetary and non-monetary assets and liabilities are remeasured into U.S. dollars at the applicable period end exchange rate. Sales and operating expenses are remeasured at average exchange rates in effect during each period, except for those expenses related to non-monetary assets which are remeasured at historical exchange rates. Gains or losses resulting from foreign currency transactions are included in net income (loss) and are insignificant for each of the three years ended December 31, 2013. The effect of exchange rate changes on cash and cash equivalents was insignificant for each of the three years presented in the period ended December 31, 2013. | |||
Segments | |||
The Company operates in one segment. Management uses one measurement of profitability and does not segregate its business for internal reporting. As of December 31, 2013 and 2012, 83% and 85%, respectively, of all long-lived assets were maintained in the United States. See Note 10 for details relating to revenue by geography. |
INVESTMENT_SECURITIES
INVESTMENT SECURITIES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
INVESTMENT SECURITIES [Abstract] | ' | ||||||||||||||||
INVESTMENT SECURITIES | ' | ||||||||||||||||
NOTE 2—INVESTMENT SECURITIES | |||||||||||||||||
The following tables summarize cash, cash equivalents and marketable securities (in thousands): | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Cash | $ | 3,816 | $ | 2,198 | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | 9,926 | 17,348 | |||||||||||||||
Commercial paper | 2,500 | 4,000 | |||||||||||||||
Total cash and cash equivalents | 16,242 | 23,546 | |||||||||||||||
Marketable securities: | |||||||||||||||||
U.S. government notes | 10,522 | 4,009 | |||||||||||||||
U.S. government agencies | 25,858 | 24,958 | |||||||||||||||
Municipal securities | 2,039 | 4,206 | |||||||||||||||
Commercial paper | 10,242 | 10,519 | |||||||||||||||
Corporate debt securities | 18,170 | 18,334 | |||||||||||||||
Total marketable securities | 66,831 | 62,026 | |||||||||||||||
Total cash, cash equivalents and marketable securities | $ | 83,073 | $ | 85,572 | |||||||||||||
The following table summarizes unrealized gains and losses related to our marketable investments (in thousands): | |||||||||||||||||
31-Dec-13 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | |||||||||||||
Cash and cash equivalents | $ | 16,242 | $ | — | $ | — | $ | 16,242 | |||||||||
Marketable investments | |||||||||||||||||
U.S. government notes | 10,516 | 11 | (5 | ) | 10,522 | ||||||||||||
U.S. government agencies | 25,823 | 38 | (3 | ) | 25,858 | ||||||||||||
Municipal securities | 2,043 | 1 | (5 | ) | 2,039 | ||||||||||||
Commercial paper | 10,239 | 3 | — | 10,242 | |||||||||||||
Corporate debt securities | 18,109 | 61 | — | 18,170 | |||||||||||||
Total marketable securities | 66,730 | 114 | (13 | ) | 66,831 | ||||||||||||
Total cash, cash equivalents and marketable securities | $ | 82,972 | $ | 114 | $ | (13 | ) | $ | 83,073 | ||||||||
31-Dec-12 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | |||||||||||||
Cash and cash equivalents | $ | 23,546 | $ | — | $ | — | $ | 23,546 | |||||||||
Marketable investments | |||||||||||||||||
U.S. government notes | 4,005 | 4 | — | 4,009 | |||||||||||||
U.S. government agencies | 24,910 | 48 | — | 24,958 | |||||||||||||
Municipal securities | 4,184 | 23 | (1 | ) | 4,206 | ||||||||||||
Commercial paper | 10,515 | 4 | — | 10,519 | |||||||||||||
Corporate debt securities | 18,281 | 59 | (6 | ) | 18,334 | ||||||||||||
Total marketable securities | 61,895 | 138 | (7 | ) | 62,026 | ||||||||||||
Total cash, cash equivalents and marketable securities | $ | 85,441 | $ | 138 | $ | (7 | ) | $ | 85,572 | ||||||||
No investments were in a continuous unrealized loss position for longer than 12 months. | |||||||||||||||||
The following table summarizes the estimated fair value of our marketable investments classified by the contractual maturity date of the security as of December 31, 2013 (in thousands): | |||||||||||||||||
Amount | |||||||||||||||||
Due in less than one year (fiscal year 2014) | $ | 26,685 | |||||||||||||||
Due in 1 to 3 years (fiscal year 2015 - 2016) | 40,146 | ||||||||||||||||
$ | 66,831 | ||||||||||||||||
Fair Value Measurements | |||||||||||||||||
The following table summarizes financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above (in thousands): | |||||||||||||||||
31-Dec-13 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 9,926 | $ | — | $ | — | $ | 9,926 | |||||||||
Commercial paper | — | 2,500 | — | 2,500 | |||||||||||||
Short term marketable investments: | |||||||||||||||||
Available-for-sale securities | — | 66,831 | — | 66,831 | |||||||||||||
Total assets at fair value | $ | 9,926 | $ | 69,331 | $ | — | $ | 79,257 | |||||||||
31-Dec-12 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 17,348 | $ | — | $ | — | $ | 17,348 | |||||||||
Commercial paper | — | 4,000 | — | 4,000 | |||||||||||||
Short term marketable investments: | |||||||||||||||||
Available-for-sale securities | — | 62,026 | — | 62,026 | |||||||||||||
Total assets at fair value | $ | 17,348 | $ | 66,026 | $ | — | $ | 83,374 | |||||||||
The Company’s Level 1 financial assets are money market funds with fair values are based on quoted market prices The Company’s Level 2 investments include U.S. government-backed securities and corporate securities that are valued based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. The average remaining maturity of the Company’s Level 2 investments as of December 31, 2013 is less than 36 months and all of these investments are rated by S&P and Moody’s at A or better. | |||||||||||||||||
The table presented below summarizes the change in carrying value associated with Level 3 financial assets, which represents the Company’s investment in long term Auction Rate Securities, for the year ended December 31, 2012 (in thousands): | |||||||||||||||||
Amount | |||||||||||||||||
Balance at December 31, 2011 | $ | 3,027 | |||||||||||||||
Total gains or losses (realized or unrealized) | |||||||||||||||||
Included in other comprehensive income (loss) | 262 | ||||||||||||||||
Settlements | (3,289 | ) | |||||||||||||||
Balance at December 31, 2012 and 2013 | $ | — |
ACQUISITION
ACQUISITION | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
ACQUISITION [Abstract] | ' | ||||
ACQUISITION | ' | ||||
NOTE 3—ACQUISITION | |||||
On February 2, 2012, Cutera acquired certain assets and liabilities of Iridex’s global aesthetics business unit for $5.1 million in cash. This business is engaged in developing, manufacturing, marketing and servicing laser-based medical systems and delivery devices. The business purpose of this transaction was to acquire access to an expanded installed base of customers, add to Cutera’s product offerings and acquire a recurring stream of service revenue. This acquisition was considered a business combination for accounting purposes, and as such, in addition to valuing all the assets, the Company recorded goodwill associated with the expected synergies from leveraging the customer relationships and integrating new product offerings into the Company’s business. | |||||
The fair values of the assets acquired were determined to be $4.8 million of net tangible and intangible assets and $1.3 million of goodwill. The customer relationship intangible assets are being amortized over 5 years on a straight-line basis. Other intangible assets are being amortized over 11 months to 5 years from the date of acquisition on a straight-line basis. | |||||
The following table summarizes the fair value as of February 2, 2012 of the net assets acquired (in thousands): | |||||
Purchase price paid | $ | 5,091 | |||
Assets (liabilities acquired): | |||||
Inventory | 1,552 | ||||
Customer relationship intangible assets | 2,510 | ||||
Other identified intangible assets | 780 | ||||
Goodwill | 1,339 | ||||
Deferred service revenue | (780 | ) | |||
Accrued warranty liability | (310 | ) | |||
Total | $ | 5,091 | |||
The identifiable intangible assets and goodwill identified above shall be deductible for income taxes over a useful economic life of 15 years. | |||||
The Company acquired the Iridex aesthetics business unit on February 2, 2012. Disclosure of the amounts of revenue and earnings of the assets and liabilities of the acquired Iridex aesthetics business, separately from the Company’s, is not practicable because the acquired business was immediately integrated into the Company's operations. Based on Iridex’s Form 10-K for the year ended December 2011, the revenue of the aesthetics business unit was reported to be $10.8 million and the earnings were $469,000 for the fiscal year ended December 31, 2011. |
BALANCE_SHEET_DETAIL
BALANCE SHEET DETAIL | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
BALANCE SHEET DETAIL [Abstract] | ' | ||||||||||||
BALANCE SHEET DETAIL | ' | ||||||||||||
NOTE 4—BALANCE SHEET DETAIL | |||||||||||||
Inventories | |||||||||||||
Inventories consist of the following (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Raw materials | $ | 5,989 | $ | 7,221 | |||||||||
Finished goods | 3,017 | 3,893 | |||||||||||
Total | $ | 9,006 | $ | 11,114 | |||||||||
Property and Equipment, net | |||||||||||||
Property and equipment, net consists of the following (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Leasehold improvements | $ | 625 | $ | 620 | |||||||||
Office equipment and furniture | 3,285 | 2,888 | |||||||||||
Machinery and equipment | 3,876 | 3,252 | |||||||||||
7,786 | 6,760 | ||||||||||||
Less: Accumulated depreciation | (6,424 | ) | (5,827 | ) | |||||||||
Property and equipment, net | $ | 1,362 | $ | 933 | |||||||||
During 2013, the Company financed vehicles for some of its sales employees in North America. As of December 31, 2013 the gross capitalized value of the leased vehicles was $577,000 and the related accumulated depreciation was $98,000. | |||||||||||||
Goodwill and Other Intangible Assets | |||||||||||||
Goodwill and other intangible assets comprise a patent sublicense acquired from Palomar in 2006; a technology sublicense acquired in 2002 (fully amortized as of December 31, 2012 and removed from the balance sheet in 2013); intangible assets and goodwill related to the acquisition of Iridex’s aesthetic business unit; and, customer relationships in the Benelux countries acquired from a former distributor in 2013). The components of intangible assets at December 31, 2013 and 2012 were as follows (in thousands): | |||||||||||||
Gross | Accumulated | Net | |||||||||||
Carrying | Amortization | Amount | |||||||||||
Amount | Amount | ||||||||||||
31-Dec-13 | |||||||||||||
Patent sublicense | $ | 1,218 | $ | 1,068 | $ | 150 | |||||||
Customer relationship intangible related to acquisition | 2,510 | 962 | 1,548 | ||||||||||
Other identified intangible assets related to acquisition | 780 | 607 | 173 | ||||||||||
Other intangible | 155 | 6 | 149 | ||||||||||
Goodwill | 1,339 | — | 1,339 | ||||||||||
Total | $ | 6,002 | $ | 2,643 | $ | 3,359 | |||||||
31-Dec-12 | |||||||||||||
Patent sublicense | $ | 1,218 | $ | 931 | $ | 287 | |||||||
Technology sublicense | 538 | 538 | — | ||||||||||
Customer relationship intangible related to acquisition | 2,510 | 460 | 2,050 | ||||||||||
Other identified intangible assets related to acquisition | 780 | 551 | 229 | ||||||||||
Goodwill | 1,339 | — | 1,339 | ||||||||||
Total | $ | 6,385 | $ | 2,480 | $ | 3,905 | |||||||
Amortization expense for intangible assets was $702,000 in 2013, $1.2 million in 2012, and $191,000 in 2011. | |||||||||||||
Based on intangible assets recorded at December 31, 2013, and assuming no subsequent additions to, or impairment of the underlying assets, the remaining estimated annual amortization expense is expected to be as follows (in thousands): | |||||||||||||
Year ending December 31, | Amount | ||||||||||||
2014 | $ | 773 | |||||||||||
2015 | 641 | ||||||||||||
2016 | 558 | ||||||||||||
2017 | 47 | ||||||||||||
Total | $ | 2,019 | |||||||||||
Accrued Liabilities | |||||||||||||
Accrued liabilities consist of the following (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Payroll and related expenses | $ | 4,753 | $ | 4,721 | |||||||||
Sales tax | 1,307 | 1,085 | |||||||||||
Warranty | 1,202 | 1,212 | |||||||||||
Other | 2,066 | 2,475 | |||||||||||
Total | $ | 9,328 | $ | 9,493 |
WARRANTY_AND_SERVICE_CONTRACTS
WARRANTY AND SERVICE CONTRACTS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
WARRANTY AND SERVICE CONTRACTS [Abstract] | ' | ||||||||
WARRANTY AND SERVICE CONTRACTS | ' | ||||||||
NOTE 5—WARRANTY AND SERVICE CONTRACTS | |||||||||
The Company has a direct field service organization in the United States. Internationally, the Company provides direct service support through its wholly-owned subsidiaries in Australia, Canada, France and Japan as well as through a network of distributors and third-party service providers in several other countries where it does not have a direct presence. The Company provides a warranty with its products, depending on the type of product. After the original warranty period, maintenance and support are offered on a service contract basis or on a time and materials basis. The Company currently provides for the estimated cost to repair or replace products under warranty at the time of sale. | |||||||||
Warranty Accrual (in thousands) | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Balance at beginning of year | $ | 1,212 | $ | 1,121 | |||||
Add: Accruals for warranties issued during the year | 3,420 | 3,525 | |||||||
Less: Settlements made during the year | (3,430 | ) | (3,434 | ) | |||||
Balance at end of year | $ | 1,202 | $ | 1,212 | |||||
Deferred Service Contract Revenue (in thousands) | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Balance at beginning of year | $ | 8,539 | $ | 5,838 | |||||
Add: Payments received | 15,026 | 14,112 | |||||||
Less: Revenue recognized | (11,928 | ) | (11,411 | ) | |||||
Balance at end of year | $ | 11,637 | $ | 8,539 | |||||
Costs incurred under service contracts amounted to $6.9 million in 2013, $7.2 million in 2012, and $4.6 million in 2011, and are recognized as incurred. |
STOCKHOLDERS_EQUITY_STOCK_PLAN
STOCKHOLDERS' EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
STOCKHOLDERS' EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE [Abstract] | ' | ||||||||||||||||||||||||
STOCKHOLDERS' EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE | ' | ||||||||||||||||||||||||
NOTE 6—STOCKHOLDERS’ EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE | |||||||||||||||||||||||||
As of December 31, 2013, the Company had the following stock-based employee compensation plans: | |||||||||||||||||||||||||
2004 Equity Incentive Plan and 1998 Stock Plan | |||||||||||||||||||||||||
In 1998, the Company adopted the 1998 Stock Plan, or 1998 Plan, under which 4,650,000 shares of the Company’s common stock were reserved for issuance to employees, directors and consultants. | |||||||||||||||||||||||||
On January 12, 2004, the Board of Directors adopted the 2004 Equity Incentive Plan. A total of 1,750,000 shares of common stock were originally reserved for issuance pursuant to the 2004 Equity Incentive Plan. In addition, the shares reserved for issuance under the 2004 Equity Incentive Plan included shares reserved but un-issued under the 1998 Plan and shares returned to the 1998 Plan as the result of termination of options or the repurchase of shares. | |||||||||||||||||||||||||
Options granted under the 1998 Plan and 2004 Equity Incentive Plan may be incentive stock options or non-statutory stock options. Stock purchase rights may also be granted under the 2004 Equity Incentive Plan. Incentive stock options may only be granted to employees. The Board of Directors determines the period over which options become exercisable. Options granted under the Plan to employees generally vest over a four year term from the vesting commencement date and become exercisable 25% on the first anniversary of the vesting commencement date and an additional 1/48th on the last day of each calendar month until all of the shares have become exercisable. During 2013, 2012 and 2011 the officers of the Company were granted options that vest over a three year term at the rate of 1/3rd on the one year anniversary of the vesting commencement date and 1/36th thereafter. The contractual term of the options granted in 2013, 2012 and 2011 was seven years. | |||||||||||||||||||||||||
In accordance with the 2004 Equity Incentive Plan, prior to 2012, the Company’s non-employee directors were granted $60,000 of grant date fair value, fully vested, stock awards annually on the date of the Company’s Annual Meeting of stockholders. Commencing with 2012, the Company’s non-employee directors get $60,000 of RSUs annually that cliff-vest on the one year anniversary of the grant date. In the years ended December 31, 2013, 2012and 2011, the Company issued 40,674, 52,938 and 37,925 shares of stock, respectively. | |||||||||||||||||||||||||
In addition, in the years ended December 31, 2013 and 2012, the Company’s Board of Directors granted 148,004 and 95,250, respectively, of RSUs to certain members of the Company’s management. These RSUs vest at the rate of one-third on June 1of the year of grant, and one-third in each of the subsequent two years. The Company measured the fair market values of the underlying stock on the dates of grant and recognizes the stock-based compensation expense using the straight-line method over the vesting period. | |||||||||||||||||||||||||
2004 Employee Stock Purchase Plan | |||||||||||||||||||||||||
On January 12, 2004, the Board of Directors adopted the 2004 Employee Stock Purchase Plan. Under the 2004 Employee Stock Purchase Plan, or 2004 ESPP, eligible employees are permitted to purchase common stock at a discount through payroll deductions. The 2004 ESPP offering and purchase periods are for approximately six months. The 2004 ESPP has an evergreen provision based on which shares of common stock eligible for purchase are increased on the first day of each fiscal year by an amount equal to the lesser of: | |||||||||||||||||||||||||
i. | 600,000 shares; | ||||||||||||||||||||||||
ii. | 2.0% of the outstanding shares of common stock on such date; or | ||||||||||||||||||||||||
iii. | an amount as determined by the Board of Directors. | ||||||||||||||||||||||||
The Company’s Board of Directors did not increase the shares available for future grant on January 1, 2014, 2013, 2012 and 2011. The price of the common stock purchased is the lower of 85% of the fair market value of the common stock at the beginning or end of a six month offering period. Under the 2004 ESPP the Company issued 51,338 shares in 2013 and 46,982 shares in 2012. At December 31, 2013, 958,616 shares remained available for future issuance. | |||||||||||||||||||||||||
Option Activity | |||||||||||||||||||||||||
Activity under the 1998 Plan and 2004 Equity Incentive Plan is summarized as follows: | |||||||||||||||||||||||||
Options Outstanding | |||||||||||||||||||||||||
Shares | Number of | Weighted- | Weighted-Average | Aggregate | |||||||||||||||||||||
Available | Shares | Average | RemainingContractualLife | Intrinsic | |||||||||||||||||||||
For Grant | Exercise | (in years) | Value | ||||||||||||||||||||||
Price | (in $ millions)(1) | ||||||||||||||||||||||||
Balances as of December 31, 2010 | 1,005,447 | 3,296,419 | $ | 10.93 | 4.4 | 1.1 | |||||||||||||||||||
Options granted | (1,206,500 | ) | 1,206,500 | $ | 8.61 | ||||||||||||||||||||
Options exercised | — | (207,624 | ) | $ | 5.92 | ||||||||||||||||||||
Options cancelled (expired or forfeited) | 746,273 | (746,273 | ) | $ | 13.4 | ||||||||||||||||||||
Stock awards granted | (77,225 | ) | — | — | |||||||||||||||||||||
Restricted stock units cancelled (expired or forfeited) | 6,542 | — | — | ||||||||||||||||||||||
Balances as of December 31, 2011 | 474,537 | 3,549,022 | $ | 9.92 | 4.6 | $ | 0.4 | ||||||||||||||||||
Additional shares reserved (2) | 1,910,000 | — | — | ||||||||||||||||||||||
Options granted | (921,500 | ) | 921,500 | $ | 7.04 | ||||||||||||||||||||
Options exercised | — | (211,551 | ) | $ | 7 | ||||||||||||||||||||
Options cancelled (expired or forfeited) | 470,732 | (470,732 | ) | $ | 9.45 | ||||||||||||||||||||
Stock awards granted | (314,159 | ) | — | — | |||||||||||||||||||||
Restricted stock units cancelled (expired or forfeited) | 24,746 | — | — | ||||||||||||||||||||||
Balances as of December 31, 2012 | 1,644,356 | 3,788,239 | $ | 9.44 | 4.3 | $ | 2.6 | ||||||||||||||||||
Options granted | (1,007,166 | ) | 1,007,166 | $ | 8.97 | ||||||||||||||||||||
Options exercised | — | (612,210 | ) | $ | 8.16 | ||||||||||||||||||||
Options cancelled (expired or forfeited) | 391,033 | (391,033 | ) | 10.37 | |||||||||||||||||||||
Stock awards granted | (399,997 | ) | — | — | |||||||||||||||||||||
Restricted stock units cancelled (expired or forfeited) | 81,257 | — | — | ||||||||||||||||||||||
Balances as of December 31, 2013 | 709,483 | 3,792,162 | $ | 9.42 | 4.2 | $ | 5.1 | ||||||||||||||||||
Exercisable as of December 31, 2013 | 2,221,657 | $ | 10.14 | 3 | $ | 2.3 | |||||||||||||||||||
-1 | Based on the closing stock price of the Company’s stock of $10.18 on December 31, 2013, $9.00 on December 31, 2012, $7.45 on December 30, 2011, and $8.29 on December 31, 2010. | ||||||||||||||||||||||||
-2 | Approved by stock holders in 2012. | ||||||||||||||||||||||||
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the Company’s closing stock price on the last trading day of the fiscal year and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2013. The aggregate intrinsic amount changes based on the fair market value of the Company’s common stock. Total intrinsic value of options exercised was $2.1 million in 2013, $397,000 in 2012, and $521,000 in 2011. The options outstanding and exercisable at December 31, 2013 were in the following exercise price ranges: | |||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||
Range of Exercise Prices | Number | Weighted-Average | Number | Weighted-Average | |||||||||||||||||||||
Outstanding | Remaining | Outstanding | Exercise | ||||||||||||||||||||||
Contractual Life | Price | ||||||||||||||||||||||||
(in years) | |||||||||||||||||||||||||
$ | 6.54 | 19,292 | 2.3 | 19,292 | $ | 6.54 | |||||||||||||||||||
$ | 6.88 | 628,329 | 5.54 | 239,088 | 6.88 | ||||||||||||||||||||
$ | 7.11–$ 8.52 | 191,548 | 2.91 | 145,738 | 8.29 | ||||||||||||||||||||
$ | 8.66 | 397,231 | 2.43 | 397,231 | 8.66 | ||||||||||||||||||||
$ | 8.72 | 564,751 | 4.37 | 376,169 | 8.72 | ||||||||||||||||||||
$ | 8.8 | 688,000 | 6.46 | — | — | ||||||||||||||||||||
$ | 8.81–$9.74 | 231,978 | 5.46 | 56,522 | 9.39 | ||||||||||||||||||||
$ | 10.24 | 491,137 | 3.36 | 446,826 | 10.24 | ||||||||||||||||||||
$ | 10.43–$14.14 | 402,708 | 1.65 | 363,603 | 11.57 | ||||||||||||||||||||
$ | 14.78–$25.73 | 177,188 | 1.61 | 177,188 | 19.85 | ||||||||||||||||||||
$ | 6.54–$25.73 | 3,792,162 | 4.18 | 2,221,657 | $ | 10.14 | |||||||||||||||||||
As of December 31, 2012 there were 2,224,660 options that were exercisable at a weighted average exercise price of $10.50. | |||||||||||||||||||||||||
RSU and Stock Awards Activity Table | |||||||||||||||||||||||||
Information with respect to restricted stock units’ activity is as follows (in thousands): | |||||||||||||||||||||||||
Number | Weighted-Average | Aggregate | Aggregate | ||||||||||||||||||||||
of | Grant- | Fair Value(1) | Intrinsic Value(2) | ||||||||||||||||||||||
Shares | Date Fair | (in thousands) | (in thousands) | ||||||||||||||||||||||
Value | |||||||||||||||||||||||||
Outstanding at December 31, 2010 | 67,096 | $ | 10.24 | $ | 556 | ||||||||||||||||||||
Granted | 77,225 | $ | 8.32 | ||||||||||||||||||||||
Vested (3) | (82,526 | ) | $ | 8.93 | $ | 691 | (4) | ||||||||||||||||||
Forfeited | (6,542 | ) | $ | 9.99 | |||||||||||||||||||||
Outstanding at December 31, 2011 | 55,253 | $ | 9.55 | $ | 412 | ||||||||||||||||||||
Granted | 148,188 | $ | 6.85 | ||||||||||||||||||||||
Vested (3) | (41,522 | ) | $ | 9.79 | $ | 279 | (5) | ||||||||||||||||||
Forfeited | (13,210 | ) | $ | 7.39 | |||||||||||||||||||||
Outstanding at December 31, 2012 | 148,709 | $ | 6.99 | $ | 1,338 | ||||||||||||||||||||
Granted | 188,678 | $ | 8.94 | ||||||||||||||||||||||
Vested (3) | (119,505 | ) | $ | 7.68 | $ | 1,091 | (6) | ||||||||||||||||||
Forfeited | (38,417 | ) | $ | 8.11 | |||||||||||||||||||||
Outstanding at December 31, 2013 | 179,465 | $ | 8.34 | $ | 1,827 | ||||||||||||||||||||
-1 | Represents the value of the Company’s stock on the date that the restricted stock units vest. | ||||||||||||||||||||||||
-2 | Based on the closing stock price of the Company’s stock of $10.18 on December 31, 2013, $9.00 on December 31, 2012, $7.45 on December 30, 2011, and $8.29 on December 31, 2010. | ||||||||||||||||||||||||
-3 | The number of restricted stock units vested includes shares that the Company withheld on behalf of the employees to satisfy the statutory tax withholding requirements. | ||||||||||||||||||||||||
-4 | On the grant date, the fair value for these vested awards was $737,000. | ||||||||||||||||||||||||
-5 | On the grant date, the fair value for these vested awards was $407,000. | ||||||||||||||||||||||||
-6 | On the grant date, the fair value for these vested awards was $917,000. | ||||||||||||||||||||||||
Performance Stock Units | |||||||||||||||||||||||||
In 2013 and 2012, the Company granted its executive officers 33,751 and 42,250 PSUs that vest on June 1, 2014 and 2013, respectively, subject to the recipient’s continued service through that date. At the vest date, the Company issues fully-paid up common stock based on the percentage achievement of each performance goal. For the June 1, 2013 to 2014 PSUs, there are three performance goals. For the June 1, 2012 to 2013 PSUs, there were also three performance goals, related to Company revenue and profitability targets, based on which the Company issued 35,154 shares of common stock on June 1, 2013. | |||||||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||||||
Stock-based compensation expense for stock options, restricted stock units, stock awards and ESPP shares for the year ended December 31, 2013, 2012 and 2011 was as follows (in thousands): | |||||||||||||||||||||||||
Year EndedDecember 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Stock options | $ | 2,201 | $ | 2,421 | $ | 3,047 | |||||||||||||||||||
RSUs | 631 | 501 | 775 | ||||||||||||||||||||||
PSUs | 162 | 138 | — | ||||||||||||||||||||||
ESPP | 116 | 100 | 85 | ||||||||||||||||||||||
Total stock-based compensation expense | $ | 3,110 | $ | 3,160 | $ | 3,907 | |||||||||||||||||||
As of December 31, 2013, the unrecognized compensation cost, net of expected forfeitures, was $4.3 million for stock options and stock awards, which will be recognized using the straight-line attribution method over an estimated weighted-average remaining amortization period of 2.56 years. For the ESPP, the unrecognized compensation cost, net of expected forfeitures, was $38,000, which will be recognized using the straight- line attribution method over an estimated weighted-average amortization period 0.33 years. | |||||||||||||||||||||||||
The amount of cash received from the exercise of stock options and employee stock purchases, net of taxes withheld and paid was $5.2 million in 2013, $1.7 million in 2012, and $1.4 million in 2011, and the total direct tax benefit (deficit) realized, including the excess tax benefit (deficit), from stock-based award activity was $6,000 in 2012, and $29,000 in 2011. There was no direct tax benefit (deficit) in 2013. The Company elected to account for the indirect effects of stock-based awards—primarily the research and development tax credit—through the Statement of Operations. | |||||||||||||||||||||||||
Total stock-based compensation expense recorded by department during the year ended December 31, 2013, 2012 and 2011 was as follows (in thousands): | |||||||||||||||||||||||||
Year EndedDecember 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Cost of revenue | $ | 638 | $ | 658 | $ | 659 | |||||||||||||||||||
Sales and marketing | 744 | 657 | 788 | ||||||||||||||||||||||
Research and development | 397 | 514 | 698 | ||||||||||||||||||||||
General and administrative | 1,331 | 1,331 | 1,762 | ||||||||||||||||||||||
Total stock-based compensation expense | $ | 3,110 | $ | 3,160 | $ | 3,907 | |||||||||||||||||||
Valuation Assumptions and Fair Value of Stock Options and ESPP Grants | |||||||||||||||||||||||||
The Company uses the Black-Scholes option pricing model to estimate the fair value of options granted under its equity incentive plans and rights to acquire stock granted under its employee stock purchase plan. The Company based the weighted average estimated values of employee stock option grants and rights granted under the employee stock purchase plan, as well as the weighted average assumptions used in calculating these values, on estimates at the date of grant, as follows: | |||||||||||||||||||||||||
Stock Options | Stock Purchase Plan | ||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||||
Estimated fair value of grants during the year | $ | 3.22 | $ | 2.47 | $ | 3.1 | $ | 2.84 | $ | 2.16 | $ | 2.06 | |||||||||||||
Expected term (in years)(1) | 4.3 | 4.17 | 4.15 | 0.5 | 0.5 | 0.5 | |||||||||||||||||||
Risk-free interest rate(2) | 1.13 | % | 0.45 | % | 1.41 | % | 0.08 | % | 0.15 | % | 0.08 | % | |||||||||||||
Volatility(3) | 43 | % | 44 | % | 43 | % | 44 | % | 43 | % | 39 | % | |||||||||||||
Dividend yield(4) | — | % | — | % | — | % | — | % | — | % | — | % | |||||||||||||
-1 | The expected term represents the period during which the Company’s stock-based awards are expected to be outstanding. The estimated term is based on historical experience of similar awards, giving consideration to the contractual terms of the awards, vesting requirements, and expectation of future employee behavior, including post-vesting terminations. | ||||||||||||||||||||||||
-2 | The risk-free interest rate is based on U.S. Treasury debt securities with maturities close to the expected term of the option as of the date of grant. | ||||||||||||||||||||||||
-3 | Estimated volatility is based on historical volatility. The Company also considers implied volatility when there is sufficient volume of freely traded options with comparable terms and exercise prices in the open market. | ||||||||||||||||||||||||
-4 | The Company has not historically issued any dividends and does not expect to do so in the foreseeable future. | ||||||||||||||||||||||||
The Company periodically estimates forfeiture rates based on its historical experience within separate groups of employees and adjusts the stock-based payment expense accordingly. | |||||||||||||||||||||||||
RSU Withholdings | |||||||||||||||||||||||||
For RSU’s granted to employees, the number of shares issued on the date the RSUs vest is net of the tax withholding requirements paid on behalf of the employees. The Company withheld 24,249 in 2013, 14,974 in 2012, and 16,629 in 2011, shares of common stock to satisfy its employees’ tax obligations of $222,000 in 2013, $101,000 in 2012, and $146,000 in 2011. The Company paid this amount in cash to the appropriate taxing authorities. Although shares withheld are not issued, they are treated as common stock repurchases for accounting and disclosure purposes, as they reduce the number of shares that would have been issued upon vesting. | |||||||||||||||||||||||||
Share Repurchase Program | |||||||||||||||||||||||||
On August 5, 2013, the Company’s Board of Directors modified Cutera, Inc.’s stock buyback program, originally adopted in November 2012, to permit an additional $10 million of its issued and outstanding common shares to be repurchased. As modified, the stock buyback program permits the Company to purchase an aggregate of $20 million of its common stock through a 10b5-1 program based on predetermined pricing and volume as well as open-market purchases that are subject to management discretion and regulatory restrictions | |||||||||||||||||||||||||
In the year ended December 31, 2013, the Company repurchased 1,060,447 shares of its common stock at an average price of $9.43 per share, for approximately $10.0 million. As of December 31, 2013, there remained an additional $10.0 million of the Company's common stock to be purchased under the modified stock buyback program. The number of shares to be repurchased and the timing of such repurchases will be based on several factors, including the price of the Company's common stock, regulatory restrictions, and general market and business conditions. | |||||||||||||||||||||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
INCOME TAXES [Abstract] | ' | ||||||||||||
INCOME TAXES | ' | ||||||||||||
NOTE 7—INCOME TAXES | |||||||||||||
The Company files income tax returns in the U.S. federal and various state and local jurisdictions and foreign jurisdictions. The Company’s loss before provision for income taxes consisted of the following (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
U.S. | $ | (4,919 | ) | $ | (6,767 | ) | $ | (10,458 | ) | ||||
Foreign | 118 | 437 | 640 | ||||||||||
Loss before income taxes | $ | (4,801 | ) | $ | (6,330 | ) | $ | (9,818 | ) | ||||
The components of the provision for income taxes are as follows (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
Federal | $ | (329 | ) | $ | (13 | ) | $ | (52 | ) | ||||
State | 7 | (56 | ) | 69 | |||||||||
Foreign | 159 | 366 | 208 | ||||||||||
(163 | ) | 297 | 225 | ||||||||||
Deferred: | |||||||||||||
Federal | 33 | (12 | ) | (13 | ) | ||||||||
State | — | — | 13 | ||||||||||
Foreign | 76 | (67 | ) | 18 | |||||||||
109 | (79 | ) | 18 | ||||||||||
Tax (benefit) provision | $ | (54 | ) | $ | 218 | $ | 243 | ||||||
The Company’s deferred tax asset consists of the following (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012(1) | ||||||||||||
Net operating loss | $ | 11,014 | $ | 9,828 | |||||||||
Stock-based compensation | 3,806 | 5,561 | |||||||||||
Other accruals and reserves | 3,686 | 3,259 | |||||||||||
Credits | 3,121 | 2,261 | |||||||||||
Capital loss | — | 796 | |||||||||||
Foreign | 360 | 436 | |||||||||||
Accrued warranty | 441 | 466 | |||||||||||
Depreciation and amortization | 224 | 180 | |||||||||||
Other | 470 | (450 | ) | ||||||||||
Deferred tax asset before valuation allowance | 23,122 | 22,337 | |||||||||||
Valuation allowance | (22,762 | ) | (21,907 | ) | |||||||||
Deferred tax asset after valuation allowance | 360 | 430 | |||||||||||
Deferred tax liability on indefinite-lived tangible assets | (39 | ) | — | ||||||||||
Net deferred tax asset | $ | 321 | $ | 430 | |||||||||
(1) The Company revised its 2012 deferred tax asset balances relating to its net operating loss, stock-based compensation, other assets and valuation allowance. These changes had no impact to the balance sheet, statement of operations, earnings per share, statement of cash flows, or statement of equity for any period presented. | |||||||||||||
The Company’s deferred tax asset balance is reported in the following captions in the Consolidated Balance Sheets (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax asset (current portion) | $ | 31 | $ | 40 | |||||||||
Deferred tax asset, net of current portion | 329 | 553 | |||||||||||
Accrued liabilities (current deferred tax liability) | — | (163 | ) | ||||||||||
Accrued liabilities (non-current deferred tax liability) | (39 | ) | — | ||||||||||
Net deferred tax asset after valuation allowance | $ | 321 | $ | 430 | |||||||||
The differences between the U.S. federal statutory income tax rates to the Company’s effective tax rate are as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012* | 2011* | |||||||||||
U.S. federal statutory income tax rate | 35 | % | 35 | % | 35 | % | |||||||
State tax rate, net of federal benefit | 1.57 | 3.28 | 2.56 | ||||||||||
Benefit for research and development credit | 19.91 | 3.4 | 6.02 | ||||||||||
Foreign rate differential | (4.53 | ) | (1.49 | ) | — | ||||||||
Changes in unrecognized tax benefits | 2.6 | 1.06 | (0.02 | ) | |||||||||
Foreign income inclusion | — | (0.05 | ) | (2.15 | ) | ||||||||
Income tax refund | 0.19 | 1.07 | 2.33 | ||||||||||
Stock-based compensation | (34.33 | ) | (21.31 | ) | (15.82 | ) | |||||||
Meals and entertainment | (2.10 | ) | (1.68 | ) | (0.88 | ) | |||||||
Tax effect of other comprehensive income | — | 0.28 | (2.01 | ) | |||||||||
Valuation allowance | (17.82 | ) | (21.15 | ) | (28.51 | ) | |||||||
Other | 0.63 | (1.86 | ) | 1 | |||||||||
Effective tax rate | 1.12 | % | (3.45 | )% | (2.48 | )% | |||||||
*The Company revised its 2012 stock-based compensation and valuation allowance. These changes had no impact to the balance sheet, statement of operations, earnings per share, statement of cash flows, or statement of equity for any period presented. | |||||||||||||
The Company recognizes deferred tax assets for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. The Company records a valuation allowance to reduce the deferred tax assets to their estimated realizable value, when it is more likely than not that it will not be able to generate sufficient future taxable income to realize the net carrying value. The Company has recorded a full valuation allowance against its U.S. federal and state deferred tax assets due to its history of operating losses. There was a net increase in the valuation allowance of $0.9 million, $1.4 million, and $2.8 million in the years ended December 31, 2013, 2012 and 2011, respectively | |||||||||||||
As of December 31, 2013, the Company had cumulative net operating loss carry-forwards for federal and state income tax reporting purposes of approximately $30.0 million and $10.0 million, respectively. The federal net operating loss carry-forwards expire through the year 2033 and the state net operating loss carry-forwards expire at various dates through the year 2032. The Company maintained a valuation allowance against these net operating loss carry-forwards as of December 31, 2013. | |||||||||||||
As of December 31, 2013, the Company had research and development tax credits for federal and state income tax purposes of approximately $3.6 million and $4.5 million, respectively. The federal research and development tax credits expire through the year 2033. The state research and development credits can be carried forward indefinitely, except for $284,000, which will expire at various dates through the year 2020. The Company maintained a valuation allowance against these tax credits as of December 31, 2013. | |||||||||||||
Included in the net operating loss and research and development tax credit carryforwards are approximately $3.9 million of excess tax benefits from employee stock option exercises, for which the Company has not recorded a deferred tax asset. When such excess tax benefits are ultimately realized, the Company will record the deferred tax asset and the credit to additional paid in capital. | |||||||||||||
The Tax Reform Act of 1986 and similar state provisions limit the use of net operating loss and research and development credit carry-forwards in certain situations where equity transactions result in a change of ownership as defined by Internal Revenue Code Section 382. In the event the Company should experience an ownership change, as defined, utilization of its federal and state net operating loss carry-forwards and credits could be limited and may expire unutilized. | |||||||||||||
Undistributed earnings of the Company’s foreign subsidiaries of approximately $2.6 million at December 31, 2013, are considered to be indefinitely reinvested and, accordingly, no provision for federal and state income taxes has been provided thereon. If these foreign earnings were to be repatriated in the future, the related U.S. tax liability would be reduced by any foreign income taxes previously paid on these earnings. | |||||||||||||
Uncertain Tax Positions | |||||||||||||
The Company establishes reserves for uncertain tax positions based on the largest amount that is more-likely-than-not to be sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company has provided taxes and related interest and penalties due for potential adjustments that may result from examinations of open U.S. Federal, state and foreign tax years. If the Company ultimately determines that payment of these amounts are not more-likely-than-not, the Company will reverse the liability and recognize a tax benefit during the period in which the Company makes the determination. The Company will record an additional charge in the Company’s provision for taxes in the period in which the Company determines that the recorded tax liability is less than the Company expects the ultimate assessment to be. The Company’s policy is to include interest and penalties related to gross unrecognized tax benefits within the provision for income taxes. | |||||||||||||
The Company files U.S., state, and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2004 through 2013 tax years generally remain subject to examination by U.S., federal and California state tax authorities due to the Company’s net operating loss and credit carryforwards. For significant foreign jurisdictions, the 2008 through 2013 tax years generally remain subject to examination by their respective tax authorities. | |||||||||||||
The following table summarizes the activity related to the Company’s gross unrecognized tax benefits in December 31, 2011 to December 31, 2013 (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance at beginning of year | $ | 536 | $ | 583 | $ | 555 | |||||||
Increases related to prior year tax positions | 36 | — | — | ||||||||||
Increases related to current year tax positions | 116 | 29 | 44 | ||||||||||
Decreases related to lapsing of statute of limitations | (153 | ) | (76 | ) | (16 | ) | |||||||
Balance at end of year | $ | 535 | $ | 536 | $ | 583 | |||||||
The Company’s total unrecognized tax benefits that, if recognized, would affect its effective tax rate were approximately $33,000 and $325,000 as of December 31, 2013 and 2012, respectively. The Company had accrued approximately $37,000 and $86,000 for payment of interest as of December 31, 2013 and 2012, respectively. Interest included in the provision for income taxes was not significant in all the periods presented. The Company has not accrued any penalties related to its uncertain tax positions as it believes that it is more likely than not that there will not be any assessment of penalties. The Company expects that the amount of unrecognized tax benefits will not materially change within the next 12 months. |
NET_LOSS_PER_SHARE
NET LOSS PER SHARE | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
NET LOSS PER SHARE [Abstract] | ' | ||||||||||||
NET LOSS PER SHARE | ' | ||||||||||||
NOTE 8—NET LOSS PER SHARE | |||||||||||||
Diluted earnings per share is the same as basic earnings per share for the periods presented because the inclusion of outstanding common stock equivalents would be anti-dilutive. The following number of weighted shares outstanding, prior to the application of the treasury stock method, were excluded from the computation of diluted net loss per common share for the years presented because including them would have had an anti-dilutive effect (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Options to purchase common stock | 3,830 | 3,746 | 3,667 | ||||||||||
Restricted stock units | 173 | 97 | 61 | ||||||||||
Employee stock purchase plan shares | 72 | 78 | 70 | ||||||||||
Performance stock units | 34 | 8 | — | ||||||||||
Total | 4,109 | 3,929 | 3,798 |
DEFINED_CONTRIBUTION_PLAN
DEFINED CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2013 | |
DEFINED CONTRIBUTION PLAN [Abstract] | ' |
DEFINED CONTRIBUTION PLAN | ' |
NOTE 9—DEFINED CONTRIBUTION PLAN | |
In the United States, the Company has an employee savings plan (401(k) Plan) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Eligible employees may make voluntary contributions to the 401(k) Plan up to 100% of their annual compensation, subject to statutory annual limitations. The Company made no discretionary contributions in 2011 under the 401(k) Plan, however in 2012 and 2013, the Company made discretionary contributions of $146,000 and $184,000 respectively. | |
For the Company’s Japanese subsidiary, it has established an employee retirement plan at its discretion. In addition, for some of the Company’s other foreign subsidiaries, the Company deposits funds with insurance companies, third-party trustees, or into government-managed accounts consistent with the requirements of local laws. The Company has fully funded or accrued for its obligations as of December 31, 2013, and the related expense for each of the three years then ended was not significant. |
SEGMENT_INFORMATION_AND_REVENU
SEGMENT INFORMATION AND REVENUE BY GEOGRAPHY AND PRODUCTS | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SEGMENT INFORMATION AND REVENUE BY GEOGRAPHY AND PRODUCTS | ' | ||||||||||||
SEGMENT INFORMATION AND REVENUE BY GEOGRAPHY AND PRODUCTS | ' | ||||||||||||
NOTE 10—SEGMENT INFORMATION AND REVENUE BY GEOGRAPY AND PRODUCTS | |||||||||||||
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The Company’s chief decision maker, as defined under the FASB’s ASC 280 guidance, is a combination of the Chief Executive Officer and the Executive Vice President and Chief Financial Officer. To date, the Company has viewed its operations, managed its business, and used one measurement of profitability for the one operating segment – the sale of aesthetic medical equipment and services, and distribution of cosmeceutical and dermal filler products, to qualified medical practitioners. In addition, substantially all of the Company’s long-lived assets are located in the United States. | |||||||||||||
The following table summarizes revenue by geographic region, which is based on the shipping location of where the product is delivered, and product category (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Revenue mix by geography: | |||||||||||||
United States | $ | 31,487 | $ | 31,949 | $ | 23,313 | |||||||
Japan | 14,205 | 17,826 | 15,019 | ||||||||||
Asia, excluding Japan | 11,263 | 8,902 | 4,984 | ||||||||||
Europe | 7,358 | 4,958 | 3,571 | ||||||||||
Rest of the world | 10,281 | 13,642 | 13,403 | ||||||||||
Consolidated total | $ | 74,594 | $ | 77,277 | $ | 60,290 | |||||||
Revenue mix by product category: | |||||||||||||
Products and upgrades | $ | 48,374 | $ | 49,605 | $ | 37,208 | |||||||
Titan and truSculpt hand piece refills | 4,267 | 4,807 | 4,686 | ||||||||||
Dermal filler and cosmeceuticals | 4,264 | 5,645 | 4,985 | ||||||||||
Total product revenue | 56,905 | 60,057 | 46,879 | ||||||||||
Service | 17,689 | 17,220 | 13,411 | ||||||||||
Consolidated total | $ | 74,594 | $ | 77,277 | $ | 60,290 |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
NOTE 11—COMMITMENTS AND CONTINGENCIES | |||||
Facility Leases | |||||
As of December 31, 2013, the Company was committed to minimum lease payments for facilities and other leased assets under long-term non-cancelable operating leases as follows (in thousands): | |||||
Year Ending December 31, | Amount | ||||
2014 | $ | 1,793 | |||
2015 | 1,516 | ||||
2016 | 1,341 | ||||
2017 | 1,346 | ||||
Future minimum rental payments | $ | 5,996 | |||
Gross rent expense was $1.6 million in 2013, $1.6 million in 2012 and $1.9 million in 2011. | |||||
Vehicle Leases | |||||
As of December 31, 2013, the Company was committed to minimum lease payments for leased vehicles under long-term non-cancelable capital leases as follows (in thousands): | |||||
Year Ending December 31, | Amount | ||||
2014 | $ | 155 | |||
2015 | 155 | ||||
2016 | 183 | ||||
Future minimum lease payments | $ | 493 | |||
Purchase Commitments | |||||
The Company maintains certain open inventory purchase commitments with its suppliers to ensure a smooth and continuous supply for key components. The Company’s liability in these purchase commitments is generally restricted to a forecasted time-horizon as agreed between the parties. These forecasted time-horizons can vary among different suppliers. The Company’s open inventory purchase commitments with its suppliers were not significant at December 31, 2013 or 2012. | |||||
Indemnifications | |||||
In the normal course of business, the Company enters into agreements that contain a variety of representations, warranties, and indemnification obligations. For example, the Company has entered into indemnification agreements with each of its directors and executive officers and one other key employee. The Company’s exposure under its various indemnification obligations is unknown and not reasonably estimable as they involve future claims that may be made against the Company. As such, the Company has not accrued any amounts for such obligations. | |||||
Litigation and Litigation Settlements | |||||
The Company is named from time to time as a party to product liability and contractual lawsuits in the normal course of business. The Company routinely assesses the likelihood of any adverse judgments or outcomes related to legal matters and claims, as well as ranges of probable losses. A determination of the amount of the reserves required, if any, for these contingencies is made after analysis of each known issue, historical experience, whether it is more likely than not that the Company shall incur a loss, and whether the loss is estimable. As of December, 2013, the Company had accrued $72,000 related to pending product liability and contractual lawsuits. |
SUPPLEMENTARY_FINANCIAL_DATA_U
SUPPLEMENTARY FINANCIAL DATA (UNAUDITED) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
SUPPLEMENTARY FINANCIAL DATA (UNAUDITED) [Abstract] | ' | ||||||||||||||||||||||||||||||||
SUPPLEMENTARY FINANCIAL DATA (UNAUDITED) | ' | ||||||||||||||||||||||||||||||||
SUPPLEMENTARY FINANCIAL DATA (UNAUDITED) | |||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||
Quarter ended: | Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | |||||||||||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | 2012 | ||||||||||||||||||||||||||
Net revenue | $ | 22,239 | $ | 16,828 | $ | 19,560 | $ | 15, 967 | $ | 22,533 | $ | 19,426 | $ | 19,591 | $ | 15,727 | |||||||||||||||||
Cost of revenue | 9,202 | 7,651 | 8,442 | 7,417 | 9,790 | 8,828 | 9,274 | 7,845 | |||||||||||||||||||||||||
Gross profit | 13,037 | 9,177 | 11,118 | 8,550 | 12,743 | 10,598 | 10,317 | 7,882 | |||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||
Sales and marketing | 7,804 | 6,554 | 7,170 | 6,456 | 7,101 | 7,014 | 7,112 | 7,437 | |||||||||||||||||||||||||
Research and development | 2,438 | 2,440 | 2,217 | 2,121 | 2,122 | 2,217 | 1,872 | 2,216 | |||||||||||||||||||||||||
General and administrative | 3,135 | 2,160 | 2,354 | 2,289 | 2,452 | 2,475 | 2,854 | 3,495 | |||||||||||||||||||||||||
Total operating expenses | 13,377 | 11,154 | 11,741 | 10,866 | 11,675 | 11,706 | 11,838 | 13,148 | |||||||||||||||||||||||||
Income (loss) from operations | (340 | ) | (1,977 | ) | (623 | ) | (2,316 | ) | 1,068 | (1,108 | ) | (1,521 | ) | (5,266 | ) | ||||||||||||||||||
Interest and other income, net | 105 | 140 | 75 | 135 | 105 | 152 | 144 | 96 | |||||||||||||||||||||||||
Income (loss) before income taxes | (235 | ) | (1,837 | ) | (548 | ) | (2,181 | ) | 1,173 | (956 | ) | (1,377 | ) | (5,170 | ) | ||||||||||||||||||
Income tax provision (benefit) | 43 | (169 | ) | 90 | (18 | ) | 96 | (64 | ) | 89 | 97 | ||||||||||||||||||||||
Net income (loss) | $ | (278 | ) | $ | (1,668 | ) | $ | (638 | ) | $ | (2,163 | ) | $ | 1,077 | $ | (892 | ) | $ | (1,466 | ) | $ | (5,267 | ) | ||||||||||
Net income (loss) per share—basic | $ | (0.02 | ) | $ | (0.11 | ) | $ | (0.04 | ) | $ | (0.15 | ) | $ | 0.08 | $ | (0.06 | ) | $ | (0.10 | ) | $ | (0.38 | ) | ||||||||||
Net income (loss) per share—diluted | $ | (0.02 | ) | $ | (0.11 | ) | $ | (0.04 | ) | $ | (0.15 | ) | $ | 0.08 | $ | (0.06 | ) | $ | (0.10 | ) | $ | (0.38 | ) | ||||||||||
Weighted average number of shares used in per share calculations: | |||||||||||||||||||||||||||||||||
Basic | 14,016 | 14,541 | 14,723 | 14,408 | 14,173 | 14,127 | 14,095 | 13,960 | |||||||||||||||||||||||||
Diluted | 14,016 | 14,541 | 14,723 | 14,408 | 14,272 | 14,127 | 14,095 | 13,960 |
SCHEDULE_II_VALUATION_AND_QUAL
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS [Abstract] | ' | ||||||||||||||||
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | ' | ||||||||||||||||
SCHEDULE II | |||||||||||||||||
CUTERA, INC. | |||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||
(in thousands) | |||||||||||||||||
For the Years Ended December 31, 2013, 2012 and 2011 | |||||||||||||||||
Balance at | Additions | Deductions | Balance | ||||||||||||||
Beginning | at End of | ||||||||||||||||
of Year | Year | ||||||||||||||||
Deferred tax assets valuation allowance | |||||||||||||||||
Year ended December 31, 2013 | $ | 21,907 | $ | 3,437 | $ | 2,582 | $ | 22,762 | |||||||||
Year ended December 31, 2012(1) | $ | 20,551 | $ | 1,773 | $ | 417 | $ | 21,907 | |||||||||
Year ended December 31, 2011(1) | $ | 17,752 | $ | 3,869 | $ | 1,070 | $ | 20,551 | |||||||||
Balance at | Additions | Deductions | Balance | ||||||||||||||
Beginning | at End of | ||||||||||||||||
of Year | Year | ||||||||||||||||
Allowance for doubtful accounts receivable | |||||||||||||||||
Year ended December 31, 2013 | $ | — | $ | 19 | $ | — | $ | 19 | |||||||||
Year ended December 31, 2012 | $ | 8 | $ | 66 | $ | 74 | $ | — | |||||||||
Year ended December 31, 2011 | $ | 20 | $ | 39 | $ | 51 | $ | 8 | |||||||||
-1 | The Company revised its 2011 beginning balance and its 2011 and 2012 deferred tax assets related to stock-based compensation, which was offset by a corresponding reduction in the valuation allowance and reflected in the table. These adjustments had no impact to the balance sheet, statement of operations, earnings per share, statement of cash flows, or statement of equity for any period presented. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||
Dec. 31, 2013 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||
Description of Operations and Principles of Consolidation | ' | ||
Description of Operations and Principles of Consolidation | |||
Cutera, Inc. (“Cutera” or the “Company”) is a global provider of laser and other energy based aesthetic systems for practitioners worldwide. The Company designs, develops, manufactures, and markets the Xeo, GenesisPlus, ExcelV, and truSculpt for use by physicians and other qualified practitioners to allow its customers to offer safe and effective aesthetic treatments to their customers. In addition to the Company’s four primary platforms, the Company offers other products, including CoolGlide, Solera, VariLite and Japan specific products such as myQ. The Xeo and Solera platforms offer multiple hand pieces and applications, which allow customers to upgrade their systems (“Upgrade” revenue). In addition to systems and upgrade revenue, the Company generates revenue from the sale of post warranty service contracts, providing services for products that are out of warranty, Titan and truSculpt hand piece refills, and distributing third party manufactured dermal fillers and cosmeceuticals. | |||
Headquartered in Brisbane, California, the Company has wholly-owned subsidiaries in Australia, Belgium, Canada, France and Japan, that market, sell and service its products outside of the United States. The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated. | |||
Use of Estimates | ' | ||
Use of Estimates | |||
The preparation of Consolidated Financial Statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires the Company’s management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates their estimates, including those related to warranty obligation, sales commission, accounts receivable and sales allowances, fair values of long-term investments, fair values of acquired intangible assets, useful lives of intangible assets and property and equipment, fair values of options to purchase the Company’s common stock, recoverability of deferred tax assets, and effective income tax rates, among others. Management bases their estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. | |||
Cash, Cash Equivalents, and Marketable Investments | ' | ||
Cash, Cash Equivalents, and Marketable Investments | |||
The Company invests its cash primarily in money market funds and in highly liquid debt instruments of U.S. federal and municipal governments and their agencies, commercial paper and corporate debt securities. All highly liquid investments with stated maturities of three months or less from date of purchase are classified as cash equivalents; all highly liquid investments with stated maturities of greater than three months are classified as marketable investments. The majority of the Company’s cash and investments are held in U.S. banks and its foreign subsidiaries maintain a limited amount of cash in their local banks to cover their short term operating expenses. | |||
The Company determines the appropriate classification of its investments in marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. The Company’s marketable securities have been classified and accounted for as available-for-sale. Investments with remaining maturities more than one year are viewed by the Company as available to support current operations, and are classified as current assets under the caption marketable investments in the accompanying Consolidated Balance Sheets. Investments in marketable securities are carried at fair value, with the unrealized gains and losses reported as a component of stockholders’ equity. Any realized gains or losses on the sale of marketable securities are determined on a specific identification method, and such gains and losses are reflected as a component of interest and other income, net. | |||
Fair Value Measurements | ' | ||
Fair Value Measurements | |||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. Carrying amounts of the Company’s financial instruments, including cash equivalents, marketable investments, accounts receivable, accounts payable and accrued liabilities, approximate their fair values as of the balance sheet dates because of their generally short maturities. | |||
The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: | |||
· | Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. | ||
· | Level 2: Directly or indirectly observable inputs as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument. | ||
· | Level 3: Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. | ||
Impairment of Marketable Investments | ' | ||
Impairment of Marketable Investments | |||
After determining the fair value of available-for-sales debt instruments, gains or losses on these securities are recorded to other comprehensive income, until either the security is sold or the Company determines that the decline in value is other-than-temporary. The primary differentiating factors that the Company considers in classifying impairments as either temporary or other-than-temporary impairments is the intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value, the length of the time and the extent to which the market value of the investment has been less than cost, the financial condition and near-term prospects of the issuer. There were no other-than-temporary impairments in the years ended December 31, 2013, 2012, and 2011. | |||
Allowances for Sales Returns and Doubtful Accounts | ' | ||
Allowance for Sales Returns and Doubtful Accounts | |||
The allowance for sales returns is based on the Company’s estimates of potential future product returns and other allowances related to current period product revenue. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of our products. | |||
The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. | |||
Concentration of Credit Risk and Other Risks and Uncertainties | ' | ||
Concentration of Credit Risk and Other Risks and Uncertainties | |||
Financial instruments that potentially subject the Company to concentrations of risk consist principally of cash, cash equivalents, marketable investments and accounts receivable. The Company’s cash and cash equivalents are primarily invested in deposits and money market accounts with three major financial institutions in the United States. In addition, the Company has operating cash balances in banks in each of the international locations in which it operates. Deposits in these banks may exceed the amount of insurance provided on such deposits, if any. Management believes that these financial institutions are financially sound and, accordingly, believes that minimal credit risk exists. The Company has not experienced any losses on its deposits of cash and cash equivalents. | |||
The Company invests in debt instruments, including bonds of the U.S. Government, its agencies and municipalities. The Company has also invested in other high grade investments such as commercial paper and corporate bonds. By policy, the Company restricts its exposure to any single issuer by imposing concentration limits. To minimize the exposure due to adverse shifts in interest rates, the Company maintains investments at an average maturity (interest reset date for auction-rate securities and variable rate demand notes) of generally less than eighteen months. | |||
Accounts receivable are typically unsecured and are derived from revenue earned from worldwide customers. The Company performs credit evaluations of its customers and maintains reserves for potential credit losses. No single customer represented more than 10% of net accounts receivable as of either December 31, 2013 or 2012. | |||
During the years ended December 31, 2013, 2012, and 2011, domestic revenue accounted for 42%, 41%, and 39%, respectively, of total revenue, while international revenue accounted for 58%, 59%, and 61%, respectively, of total revenue, for each of the years. No single customer represented more than 10% of total revenue for any of the years ended December 31, 2013, 2012, and 2011. | |||
The Company is also subject to risks common to companies in the medical device industry, including, but not limited to, new technology innovations, dependence on key personnel, dependence on key suppliers, protection of proprietary technology, product liability, Food and Drug Administration and/ or international regulatory approvals required for new products and compliance with government regulations. | |||
Inventories | ' | ||
Inventories | |||
Inventories are stated at the lower of cost or market, cost being determined on a standard cost basis (which approximates actual cost on a first-in, first-out basis) and market being determined as the lower of replacement cost or net realizable value. | |||
The Company includes demonstration units within inventories. Demonstration units are carried at cost and amortized over an estimated economic life of two years Amortization expense related to demonstration units is recorded in cost of revenue or in the respective operating expense line based on which function and purpose for which it is being used for. Proceeds from the sale of demonstration units are recorded as revenue and all costs incurred to refurbish the systems prior to sale are charged to cost of revenue. | |||
Property and Equipment | ' | ||
Property and Equipment | |||
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is on a straight-line basis over the estimated useful lives of the assets, generally as follows: | |||
Useful Lives | |||
Leasehold improvements | Lesser of useful life or term of lease | ||
Office equipment and furniture | 3 years | ||
Machinery and equipment | 3 years | ||
Upon sale or retirement of assets, the costs and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operating expenses. Maintenance and repairs are charged to operations as incurred. | |||
Depreciation expense related to property, equipment and leasehold improvements was $602,000, $436,000 and $446,000 in 2013, 2012, and 2011 respectively. Amortization expense for vehicles leased under capital leases is included in depreciation expense. | |||
Goodwill and Intangible Assets | ' | ||
Goodwill and Intangible Assets | |||
Goodwill, which represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets, is not subject to amortization, but is subject to at least an annual assessment for impairment, applying a fair-value based test. | |||
The Company’s intangible assets are comprised of purchased technology sub-licenses, acquired customer relationships, and those assets acquired in conjunction with an asset acquisition in February 2012 including, existing customer relationships, product portfolio and a manufacturing process for the products acquired. All identifiable intangibles have finite lives and are carried at cost, net of accumulated amortization. Amortization is recorded using the straight-line method, over their respective useful lives, which range from approximately 11 months to 10 years. | |||
Impairment of Long-lived Assets | ' | ||
Impairment of Long-lived Assets | |||
Goodwill is not amortized, but is tested for impairment at least annually or as circumstances indicate their value may no longer be recoverable. The goodwill impairment test is generally performed annually during the fourth fiscal quarter (or earlier if impairment indicators arise). The Company continues to operate in one segment, which is considered to be the sole reporting unit and therefore, goodwill was tested for impairment at the enterprise level. As of December 31, 2013, there has been no impairment of goodwill. | |||
The Company evaluates the recoverability of its long-lived assets, which include amortizable intangible and tangible assets. Acquired intangible assets with definite useful lives are amortized over their useful lives. The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable. The Company recognizes such impairment in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. No impairment losses were incurred in the periods presented. | |||
Warranty Obligations | ' | ||
Warranty Obligations | |||
The Company provides a one-year standard warranty on all systems. Warranty coverage provided is for labor and parts necessary to repair the systems during the warranty period. | |||
The Company accounts for the estimated warranty cost of the standard warranty coverage as a charge to costs of revenue when revenue is recognized. The estimated warranty cost is based on historical product performance. To determine the estimated warranty reserve, the Company utilizes actual service records to calculate the average service expense per system and applies this to the equivalent number of units exposed under warranty. The Company updates these estimated charges every quarter. | |||
Revenue Recognition | ' | ||
Revenue Recognition | |||
Product, Upgrade, Titan hand piece refill, and Dermal filler and cosmeceutical revenue is recognized when title and risk of ownership has been transferred, provided that: | |||
· | Persuasive evidence of an arrangement exists; | ||
· | The price is fixed or determinable; | ||
· | Delivery has occurred or services have been rendered; and | ||
· | Collectability is probable. | ||
Transfer of title and risk of ownership occurs when the product is shipped to the customer or when the customer receives the product, depending on the nature of the arrangement. Revenue is recorded net of customer and distributor discounts. For sales transactions when collectability is not reasonably assured, the Company recognizes revenue upon receipt of cash payment. Sales to customers and distributors do not include any return or exchange rights. In addition, the Company’s distributor agreements obligate the distributor to pay the Company for the sale regardless of whether the distributor is able to resell the product. Shipping and handling charges are invoiced to customers based on the amount of products sold. Shipping and handling fees are recorded as revenue and the related expense as a component of cost of revenue. | |||
Multiple-element arrangements | |||
A multiple-element arrangement includes the sale of one or more tangible product offerings with one or more associated services offerings, each of which are individually considered separate units of accounting. The Company determined that its multiple-element arrangements are generally comprised of the following elements that are recognized as separate units of accounting: system and upgrade sales; and service contracts. | |||
For multiple-element arrangements revenue is allocated to each element based on their relative selling prices. Relative selling prices would be based first on vendor specified objective evidence (“VSOE”), then on third-party evidence of selling price (“TPE”) when VSOE does not exist, and then on best estimate of selling price (“BESP”) when VSOE and TPE do not exist. Because the Company has neither VSOE nor TPE for its systems, the allocation of revenue has been based on the Company’s BESPs. The objective of BESP is to determine the price at which the Company would transact a sale if the product was sold on a stand-alone basis. The Company determines BESP for its systems by considering multiple factors including, but not limited to, prices charged for stand-alone sales, features and functionality of the system, geographies, type of customer, and market conditions. Revenue allocated to each element is then recognized when the other revenue recognition criteria are met for each element. | |||
In the first and second quarter of 2013, with respect to the sale of its truSculpt product, the Company provided promotions that included an unlimited number of “free” hand piece replacements during a stated trial period of 3 months or 12 months. These free refills were treated as an undelivered element under FASB ASC 605-25 in the original revenue transaction. The Company deferred the relative fair value related to the estimated number of hand piece replacements to be delivered during the promotional period and recognized that deferred revenue over the free refills promotion period. Commencing with the third quarter of 2013, the Company included unlimited refills as part of the truSculpt standard warranty and determined that this was no longer a separate deliverable under the multiple-element arrangement revenue guidance. Following this change, the Company recognized the revenue under the warranty model, in which the revenue for the system sale was recognized up-front along with an estimate of the costs which will be incurred under the warranty obligation recorded in cost of revenue. | |||
The Company also offers customers extended service contracts. Revenue under service contracts is recognized on a straight-line basis over the period of the applicable service contract. Service revenue, from customers whose systems are not under a service contact, is recognized as the services are provided. Service revenue for the years ended December 31, 2013, 2012, and 2011 was $17.7 million, $17.2 million, and $13.4 million, respectively. | |||
Cost of Revenue | ' | ||
Cost of Revenue | |||
Cost of revenue consists primarily of material, finished and semi-finished products purchased from third-party manufacturers, labor, stock-based compensation expenses, overhead involved in our internal manufacturing processes, technology license amortization and royalties, and costs associated with product warranties. | |||
The Company's system sales includes a control console, universal graphic user interface, control system software, high voltage electronics and a combination of applications (referred to as hand pieces). Hand pieces are programmed to have a limited number of uses to ensure the safety of the device to patients. The Company sells refurbished hand pieces, or "refills", of its Titan product and provides for refurbishment of other hand pieces under warranty or service contracts. When customers purchase a replacement hand piece (or “refill”) or are provided a replacement hand piece under a warranty or service contract, Cutera ships a previously refurbished unit. Upon the receipt of the expended hand piece from the customer the Company capitalizes the expended hand piece as inventory at the estimated fair value. Cost of revenue includes the costs incurred to refurbish hand pieces. | |||
Research and Development Expenditures | ' | ||
Research and Development Expenditures | |||
Costs related to research, design, development and testing of products are charged to research and development expense as incurred. Expenses incurred primarily relate to employees, facilities, material, third party contractors and clinical and regulatory fees. | |||
Advertising Costs | ' | ||
Advertising Costs | |||
Advertising costs are included as part of sales and marketing expense and are expensed as incurred. Advertising expenses were $1.6 million in 2013 and $1.3 million in both 2012 and 2011. | |||
Stock-based Compensation | ' | ||
Stock-based Compensation | |||
The Company accounts for stock-based employee compensation plans under the fair value recognition and measurement provisions under U.S. GAAP. The Company’s stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite service period. The Company elected to use the Black-Scholes-Merton (“BSM”) pricing model to determine the fair value of stock options on the dates of grant. Restricted stock units (“RSUs”), performance stock units (“PSUs”) and stock awards are measured based on the fair market values of the underlying stock on the dates of grant. Shares are issued on the vesting dates, net of the tax withholding requirements to be paid by the Company on behalf of its employees. As a result, the actual number of shares issued will be fewer than the actual number of RSUs outstanding. Furthermore, the Company records the liability for withholding amounts to be paid by us as a reduction to additional paid-in capital when the shares are issued. Also, the Company recognizes stock-based compensation using the straight-line method. | |||
U.S. GAAP requires the cash flows resulting from the tax benefits due to tax deductions in excess of the compensation cost recognized for stock-based awards for options exercised and RSUs vested during the period (excess tax benefits) to be classified as financing cash flows. | |||
Income Taxes | ' | ||
Income Taxes | |||
The Company recognizes income taxes under the liability method. The Company recognizes deferred income taxes for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which differences are expected to reverse. The Company recognizes the effect on deferred taxes of a change in tax rates in income in the period that includes the enactment date. For deferred tax assets which are not subject to a valuation allowance, the Company has determined that its future taxable income will be sufficient to recover all of the deferred tax assets. However, should there be a change in their ability to recover the deferred tax assets, the Company could be required to record a valuation allowance against the net carrying value of its deferred tax assets. This would result in an increase to the Company’s tax provision in the period in which they determined that the recovery was not probable. | |||
The measurement of deferred taxes often involves an exercise of judgment related to the computation and realization of tax basis. The deferred tax assets and liabilities reflect management’s assessment that tax positions taken, and the resulting tax basis, are more likely than not to be sustained if they are audited by taxing authorities. Also, assessing tax rates that the Company expects to apply and determining the years when the temporary differences are expected to affect taxable income requires judgment about the future apportionment of our income among the states in which the Company operates. These matters, and others, involve the exercise of significant judgment. Any changes in our practices or judgments involved in the measurement of deferred tax assets and liabilities could materially impact our financial condition or results of operations. | |||
Valuation allowances are established when necessary to reduce deferred income tax assets to amounts that the Company believes are more likely than not to be recovered. The Company evaluates its deferred tax assets quarterly to determine whether adjustments to our valuation allowance are appropriate. In making this evaluation, the Company relies on its recent history of pre-tax earnings, estimated timing of future deductions and benefits represented by the deferred tax assets, and its forecasts of future earnings, the latter two of which involve the exercise of significant judgment. The Company maintains a full valuation allowance against its U.S. federal and state deferred tax asset due to a history of operating losses. | |||
The Company establishes reserves for uncertain tax positions in accordance with the Income Taxes subtopic of the ASC. The subtopic prescribes the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. Additionally, the subtopic provides guidance on derecognition, measurement, classification, interest and penalties, and transition of uncertain tax positions. The impact of an uncertain income tax position on income tax expense must be recognized at the largest amount that is more-likely-than-not to be sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company has provided taxes and related interest and penalties due for potential adjustments that may result from examinations of open U.S. Federal, state and foreign tax years. The Company will reverse the liability and recognize a tax benefit during the period in which the Company makes the determination that the tax position is effectively settled through examination, negotiation, or litigation, or the statute of limitations for the relevant taxing authority to examine and challenge the tax position has expired. The Company will record an additional charge in the Company’s provision for taxes in the period in which the Company determines that the recorded tax liability is less than the Company expects the ultimate assessment to be. | |||
Computation of Net Loss per Share | ' | ||
Computation of Net Loss per Share | |||
Basic net income per share is computed using the weighted-average number of shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of shares and dilutive potential shares outstanding during the period. Dilutive potential shares primarily consist of employee stock options. Dilute earnings per share is the same as basic earnings per share for the periods presented because the inclusion of outstanding common stock equivalents would be anti-dilutive. | |||
U.S. GAAP requires that employee equity share options, non-vested shares and similar equity instruments granted by the Company be treated as potential common shares outstanding in computing diluted earnings per share. In periods of net income, diluted shares outstanding include the dilutive effect of in-the-money options, which is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional-paid-in-capital (“APIC”) when the award becomes deductible are all assumed to be used to repurchase shares. | |||
Comprehensive Loss | ' | ||
Comprehensive Loss | |||
Comprehensive loss includes all changes in stockholders’ equity except those resulting from investments or contributions by stockholders. For the periods presented, the accumulated other comprehensive income consisted solely of the unrealized gains or losses on the Company's available-for-sale investments, net of tax. | |||
Foreign Currency | ' | ||
Foreign Currency | |||
The U.S. dollar is the functional currency of the Company’s subsidiaries. Monetary and non-monetary assets and liabilities are remeasured into U.S. dollars at the applicable period end exchange rate. Sales and operating expenses are remeasured at average exchange rates in effect during each period, except for those expenses related to non-monetary assets which are remeasured at historical exchange rates. Gains or losses resulting from foreign currency transactions are included in net income (loss) and are insignificant for each of the three years ended December 31, 2013. The effect of exchange rate changes on cash and cash equivalents was insignificant for each of the three years presented in the period ended December 31, 2013. | |||
Segments | ' | ||
Segments | |||
The Company operates in one segment. Management uses one measurement of profitability and does not segregate its business for internal reporting. As of December 31, 2013 and 2012, 83% and 85%, respectively, of all long-lived assets were maintained in the United States. See Note 10 for details relating to revenue by geography. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||
Property and Equipment, Useful Lives | ' | ||
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is on a straight-line basis over the estimated useful lives of the assets, generally as follows: | |||
Useful Lives | |||
Leasehold improvements | Lesser of useful life or term of lease | ||
Office equipment and furniture | 3 years | ||
Machinery and equipment | 3 years |
INVESTMENT_SECURITIES_Tables
INVESTMENT SECURITIES (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
INVESTMENT SECURITIES [Abstract] | ' | ||||||||||||||||
Cash, Cash Equivalents, Marketable Securities and Long Term Investments | ' | ||||||||||||||||
The following tables summarize cash, cash equivalents and marketable securities (in thousands): | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Cash | $ | 3,816 | $ | 2,198 | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | 9,926 | 17,348 | |||||||||||||||
Commercial paper | 2,500 | 4,000 | |||||||||||||||
Total cash and cash equivalents | 16,242 | 23,546 | |||||||||||||||
Marketable securities: | |||||||||||||||||
U.S. government notes | 10,522 | 4,009 | |||||||||||||||
U.S. government agencies | 25,858 | 24,958 | |||||||||||||||
Municipal securities | 2,039 | 4,206 | |||||||||||||||
Commercial paper | 10,242 | 10,519 | |||||||||||||||
Corporate debt securities | 18,170 | 18,334 | |||||||||||||||
Total marketable securities | 66,831 | 62,026 | |||||||||||||||
Total cash, cash equivalents and marketable securities | $ | 83,073 | $ | 85,572 | |||||||||||||
Unrealized Gains and Losses Related to Marketable Investments and Long-term Investments | ' | ||||||||||||||||
The following table summarizes unrealized gains and losses related to our marketable investments (in thousands): | |||||||||||||||||
31-Dec-13 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | |||||||||||||
Cash and cash equivalents | $ | 16,242 | $ | — | $ | — | $ | 16,242 | |||||||||
Marketable investments | |||||||||||||||||
U.S. government notes | 10,516 | 11 | (5 | ) | 10,522 | ||||||||||||
U.S. government agencies | 25,823 | 38 | (3 | ) | 25,858 | ||||||||||||
Municipal securities | 2,043 | 1 | (5 | ) | 2,039 | ||||||||||||
Commercial paper | 10,239 | 3 | — | 10,242 | |||||||||||||
Corporate debt securities | 18,109 | 61 | — | 18,170 | |||||||||||||
Total marketable securities | 66,730 | 114 | (13 | ) | 66,831 | ||||||||||||
Total cash, cash equivalents and marketable securities | $ | 82,972 | $ | 114 | $ | (13 | ) | $ | 83,073 | ||||||||
31-Dec-12 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | |||||||||||||
Cash and cash equivalents | $ | 23,546 | $ | — | $ | — | $ | 23,546 | |||||||||
Marketable investments | |||||||||||||||||
U.S. government notes | 4,005 | 4 | — | 4,009 | |||||||||||||
U.S. government agencies | 24,910 | 48 | — | 24,958 | |||||||||||||
Municipal securities | 4,184 | 23 | (1 | ) | 4,206 | ||||||||||||
Commercial paper | 10,515 | 4 | — | 10,519 | |||||||||||||
Corporate debt securities | 18,281 | 59 | (6 | ) | 18,334 | ||||||||||||
Total marketable securities | 61,895 | 138 | (7 | ) | 62,026 | ||||||||||||
Total cash, cash equivalents and marketable securities | $ | 85,441 | $ | 138 | $ | (7 | ) | $ | 85,572 | ||||||||
Estimated Fair Value of Marketable Investments and Long-term Investments | ' | ||||||||||||||||
The following table summarizes the estimated fair value of our marketable investments classified by the contractual maturity date of the security as of December 31, 2013 (in thousands): | |||||||||||||||||
Amount | |||||||||||||||||
Due in less than one year (fiscal year 2014) | $ | 26,685 | |||||||||||||||
Due in 1 to 3 years (fiscal year 2015 - 2016) | 40,146 | ||||||||||||||||
$ | 66,831 | ||||||||||||||||
Financial Assets Measured at Fair Value on a Recurring Basis | ' | ||||||||||||||||
The following table summarizes financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above (in thousands): | |||||||||||||||||
31-Dec-13 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 9,926 | $ | — | $ | — | $ | 9,926 | |||||||||
Commercial paper | — | 2,500 | — | 2,500 | |||||||||||||
Short term marketable investments: | |||||||||||||||||
Available-for-sale securities | — | 66,831 | — | 66,831 | |||||||||||||
Total assets at fair value | $ | 9,926 | $ | 69,331 | $ | — | $ | 79,257 | |||||||||
31-Dec-12 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 17,348 | $ | — | $ | — | $ | 17,348 | |||||||||
Commercial paper | — | 4,000 | — | 4,000 | |||||||||||||
Short term marketable investments: | |||||||||||||||||
Available-for-sale securities | — | 62,026 | — | 62,026 | |||||||||||||
Total assets at fair value | $ | 17,348 | $ | 66,026 | $ | — | $ | 83,374 | |||||||||
Carrying Value Associated with Level 3 Financial Assets | ' | ||||||||||||||||
The table presented below summarizes the change in carrying value associated with Level 3 financial assets, which represents the Company’s investment in long term Auction Rate Securities, for the year ended December 31, 2012 (in thousands): | |||||||||||||||||
Amount | |||||||||||||||||
Balance at December 31, 2011 | $ | 3,027 | |||||||||||||||
Total gains or losses (realized or unrealized) | |||||||||||||||||
Included in other comprehensive income (loss) | 262 | ||||||||||||||||
Settlements | (3,289 | ) | |||||||||||||||
Balance at December 31, 2012 and 2013 | $ | — |
ACQUISITION_Tables
ACQUISITION (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
ACQUISITION [Abstract] | ' | ||||
Fair value of net assets acquired | ' | ||||
The following table summarizes the fair value as of February 2, 2012 of the net assets acquired (in thousands): | |||||
Purchase price paid | $ | 5,091 | |||
Assets (liabilities acquired): | |||||
Inventory | 1,552 | ||||
Customer relationship intangible assets | 2,510 | ||||
Other identified intangible assets | 780 | ||||
Goodwill | 1,339 | ||||
Deferred service revenue | (780 | ) | |||
Accrued warranty liability | (310 | ) | |||
Total | $ | 5,091 |
BALANCE_SHEET_DETAIL_Tables
BALANCE SHEET DETAIL (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
BALANCE SHEET DETAIL [Abstract] | ' | ||||||||||||
Inventories | ' | ||||||||||||
Inventories consist of the following (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Raw materials | $ | 5,989 | $ | 7,221 | |||||||||
Finished goods | 3,017 | 3,893 | |||||||||||
Total | $ | 9,006 | $ | 11,114 | |||||||||
Property and Equipment | ' | ||||||||||||
Property and equipment, net consists of the following (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Leasehold improvements | $ | 625 | $ | 620 | |||||||||
Office equipment and furniture | 3,285 | 2,888 | |||||||||||
Machinery and equipment | 3,876 | 3,252 | |||||||||||
7,786 | 6,760 | ||||||||||||
Less: Accumulated depreciation | (6,424 | ) | (5,827 | ) | |||||||||
Property and equipment, net | $ | 1,362 | $ | 933 | |||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||
Goodwill and other intangible assets comprise a patent sublicense acquired from Palomar in 2006; a technology sublicense acquired in 2002 (fully amortized as of December 31, 2012 and removed from the balance sheet in 2013); intangible assets and goodwill related to the acquisition of Iridex’s aesthetic business unit; and, customer relationships in the Benelux countries acquired from a former distributor in 2013). The components of intangible assets at December 31, 2013 and 2012 were as follows (in thousands): | |||||||||||||
Gross | Accumulated | Net | |||||||||||
Carrying | Amortization | Amount | |||||||||||
Amount | Amount | ||||||||||||
31-Dec-13 | |||||||||||||
Patent sublicense | $ | 1,218 | $ | 1,068 | $ | 150 | |||||||
Customer relationship intangible related to acquisition | 2,510 | 962 | 1,548 | ||||||||||
Other identified intangible assets related to acquisition | 780 | 607 | 173 | ||||||||||
Other intangible | 155 | 6 | 149 | ||||||||||
Goodwill | 1,339 | — | 1,339 | ||||||||||
Total | $ | 6,002 | $ | 2,643 | $ | 3,359 | |||||||
31-Dec-12 | |||||||||||||
Patent sublicense | $ | 1,218 | $ | 931 | $ | 287 | |||||||
Technology sublicense | 538 | 538 | — | ||||||||||
Customer relationship intangible related to acquisition | 2,510 | 460 | 2,050 | ||||||||||
Other identified intangible assets related to acquisition | 780 | 551 | 229 | ||||||||||
Goodwill | 1,339 | — | 1,339 | ||||||||||
Total | $ | 6,385 | $ | 2,480 | $ | 3,905 | |||||||
Estimated Annual Amortized Expense | ' | ||||||||||||
Based on intangible assets recorded at December 31, 2013, and assuming no subsequent additions to, or impairment of the underlying assets, the remaining estimated annual amortization expense is expected to be as follows (in thousands): | |||||||||||||
Year ending December 31, | Amount | ||||||||||||
2014 | $ | 773 | |||||||||||
2015 | 641 | ||||||||||||
2016 | 558 | ||||||||||||
2017 | 47 | ||||||||||||
Total | $ | 2,019 | |||||||||||
Accrued Liabilities | ' | ||||||||||||
Accrued liabilities consist of the following (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Payroll and related expenses | $ | 4,753 | $ | 4,721 | |||||||||
Sales tax | 1,307 | 1,085 | |||||||||||
Warranty | 1,202 | 1,212 | |||||||||||
Other | 2,066 | 2,475 | |||||||||||
Total | $ | 9,328 | $ | 9,493 |
WARRANTY_AND_SERVICE_CONTRACTS1
WARRANTY AND SERVICE CONTRACTS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
WARRANTY AND SERVICE CONTRACTS [Abstract] | ' | ||||||||
Product Warranty Accrual | ' | ||||||||
Warranty Accrual (in thousands) | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Balance at beginning of year | $ | 1,212 | $ | 1,121 | |||||
Add: Accruals for warranties issued during the year | 3,420 | 3,525 | |||||||
Less: Settlements made during the year | (3,430 | ) | (3,434 | ) | |||||
Balance at end of year | $ | 1,202 | $ | 1,212 | |||||
Deferred Service Contract Revenue | ' | ||||||||
Deferred Service Contract Revenue (in thousands) | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Balance at beginning of year | $ | 8,539 | $ | 5,838 | |||||
Add: Payments received | 15,026 | 14,112 | |||||||
Less: Revenue recognized | (11,928 | ) | (11,411 | ) | |||||
Balance at end of year | $ | 11,637 | $ | 8,539 |
STOCKHOLDERS_EQUITY_STOCK_PLAN1
STOCKHOLDERS' EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
STOCKHOLDERS' EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE [Abstract] | ' | ||||||||||||||||||||||||
Equity Incentive Plan | ' | ||||||||||||||||||||||||
Activity under the 1998 Plan and 2004 Equity Incentive Plan is summarized as follows: | |||||||||||||||||||||||||
Options Outstanding | |||||||||||||||||||||||||
Shares | Number of | Weighted- | Weighted-Average | Aggregate | |||||||||||||||||||||
Available | Shares | Average | RemainingContractualLife | Intrinsic | |||||||||||||||||||||
For Grant | Exercise | (in years) | Value | ||||||||||||||||||||||
Price | (in $ millions)(1) | ||||||||||||||||||||||||
Balances as of December 31, 2010 | 1,005,447 | 3,296,419 | $ | 10.93 | 4.4 | 1.1 | |||||||||||||||||||
Options granted | (1,206,500 | ) | 1,206,500 | $ | 8.61 | ||||||||||||||||||||
Options exercised | — | (207,624 | ) | $ | 5.92 | ||||||||||||||||||||
Options cancelled (expired or forfeited) | 746,273 | (746,273 | ) | $ | 13.4 | ||||||||||||||||||||
Stock awards granted | (77,225 | ) | — | — | |||||||||||||||||||||
Restricted stock units cancelled (expired or forfeited) | 6,542 | — | — | ||||||||||||||||||||||
Balances as of December 31, 2011 | 474,537 | 3,549,022 | $ | 9.92 | 4.6 | $ | 0.4 | ||||||||||||||||||
Additional shares reserved (2) | 1,910,000 | — | — | ||||||||||||||||||||||
Options granted | (921,500 | ) | 921,500 | $ | 7.04 | ||||||||||||||||||||
Options exercised | — | (211,551 | ) | $ | 7 | ||||||||||||||||||||
Options cancelled (expired or forfeited) | 470,732 | (470,732 | ) | $ | 9.45 | ||||||||||||||||||||
Stock awards granted | (314,159 | ) | — | — | |||||||||||||||||||||
Restricted stock units cancelled (expired or forfeited) | 24,746 | — | — | ||||||||||||||||||||||
Balances as of December 31, 2012 | 1,644,356 | 3,788,239 | $ | 9.44 | 4.3 | $ | 2.6 | ||||||||||||||||||
Options granted | (1,007,166 | ) | 1,007,166 | $ | 8.97 | ||||||||||||||||||||
Options exercised | — | (612,210 | ) | $ | 8.16 | ||||||||||||||||||||
Options cancelled (expired or forfeited) | 391,033 | (391,033 | ) | 10.37 | |||||||||||||||||||||
Stock awards granted | (399,997 | ) | — | — | |||||||||||||||||||||
Restricted stock units cancelled (expired or forfeited) | 81,257 | — | — | ||||||||||||||||||||||
Balances as of December 31, 2013 | 709,483 | 3,792,162 | $ | 9.42 | 4.2 | $ | 5.1 | ||||||||||||||||||
Exercisable as of December 31, 2013 | 2,221,657 | $ | 10.14 | 3 | $ | 2.3 | |||||||||||||||||||
-1 | Based on the closing stock price of the Company’s stock of $10.18 on December 31, 2013, $9.00 on December 31, 2012, $7.45 on December 30, 2011, and $8.29 on December 31, 2010. | ||||||||||||||||||||||||
-2 | Approved by stock holders in 2012. | ||||||||||||||||||||||||
Options Outstanding and Exercisable Price Ranges | ' | ||||||||||||||||||||||||
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the Company’s closing stock price on the last trading day of the fiscal year and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2013. The aggregate intrinsic amount changes based on the fair market value of the Company’s common stock. Total intrinsic value of options exercised was $2.1 million in 2013, $397,000 in 2012, and $521,000 in 2011. The options outstanding and exercisable at December 31, 2013 were in the following exercise price ranges: | |||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||
Range of Exercise Prices | Number | Weighted-Average | Number | Weighted-Average | |||||||||||||||||||||
Outstanding | Remaining | Outstanding | Exercise | ||||||||||||||||||||||
Contractual Life | Price | ||||||||||||||||||||||||
(in years) | |||||||||||||||||||||||||
$ | 6.54 | 19,292 | 2.3 | 19,292 | $ | 6.54 | |||||||||||||||||||
$ | 6.88 | 628,329 | 5.54 | 239,088 | 6.88 | ||||||||||||||||||||
$ | 7.11–$ 8.52 | 191,548 | 2.91 | 145,738 | 8.29 | ||||||||||||||||||||
$ | 8.66 | 397,231 | 2.43 | 397,231 | 8.66 | ||||||||||||||||||||
$ | 8.72 | 564,751 | 4.37 | 376,169 | 8.72 | ||||||||||||||||||||
$ | 8.8 | 688,000 | 6.46 | — | — | ||||||||||||||||||||
$ | 8.81–$9.74 | 231,978 | 5.46 | 56,522 | 9.39 | ||||||||||||||||||||
$ | 10.24 | 491,137 | 3.36 | 446,826 | 10.24 | ||||||||||||||||||||
$ | 10.43–$14.14 | 402,708 | 1.65 | 363,603 | 11.57 | ||||||||||||||||||||
$ | 14.78–$25.73 | 177,188 | 1.61 | 177,188 | 19.85 | ||||||||||||||||||||
$ | 6.54–$25.73 | 3,792,162 | 4.18 | 2,221,657 | $ | 10.14 | |||||||||||||||||||
Restricted Stock Units Activity | ' | ||||||||||||||||||||||||
Information with respect to restricted stock units’ activity is as follows (in thousands): | |||||||||||||||||||||||||
Number | Weighted-Average | Aggregate | Aggregate | ||||||||||||||||||||||
of | Grant- | Fair Value(1) | Intrinsic Value(2) | ||||||||||||||||||||||
Shares | Date Fair | (in thousands) | (in thousands) | ||||||||||||||||||||||
Value | |||||||||||||||||||||||||
Outstanding at December 31, 2010 | 67,096 | $ | 10.24 | $ | 556 | ||||||||||||||||||||
Granted | 77,225 | $ | 8.32 | ||||||||||||||||||||||
Vested (3) | (82,526 | ) | $ | 8.93 | $ | 691 | (4) | ||||||||||||||||||
Forfeited | (6,542 | ) | $ | 9.99 | |||||||||||||||||||||
Outstanding at December 31, 2011 | 55,253 | $ | 9.55 | $ | 412 | ||||||||||||||||||||
Granted | 148,188 | $ | 6.85 | ||||||||||||||||||||||
Vested (3) | (41,522 | ) | $ | 9.79 | $ | 279 | (5) | ||||||||||||||||||
Forfeited | (13,210 | ) | $ | 7.39 | |||||||||||||||||||||
Outstanding at December 31, 2012 | 148,709 | $ | 6.99 | $ | 1,338 | ||||||||||||||||||||
Granted | 188,678 | $ | 8.94 | ||||||||||||||||||||||
Vested (3) | (119,505 | ) | $ | 7.68 | $ | 1,091 | (6) | ||||||||||||||||||
Forfeited | (38,417 | ) | $ | 8.11 | |||||||||||||||||||||
Outstanding at December 31, 2013 | 179,465 | $ | 8.34 | $ | 1,827 | ||||||||||||||||||||
-1 | Represents the value of the Company’s stock on the date that the restricted stock units vest. | ||||||||||||||||||||||||
-2 | Based on the closing stock price of the Company’s stock of $10.18 on December 31, 2013, $9.00 on December 31, 2012, $7.45 on December 30, 2011, and $8.29 on December 31, 2010. | ||||||||||||||||||||||||
-3 | The number of restricted stock units vested includes shares that the Company withheld on behalf of the employees to satisfy the statutory tax withholding requirements. | ||||||||||||||||||||||||
-4 | On the grant date, the fair value for these vested awards was $737,000. | ||||||||||||||||||||||||
-5 | On the grant date, the fair value for these vested awards was $407,000. | ||||||||||||||||||||||||
-6 | On the grant date, the fair value for these vested awards was $917,000. | ||||||||||||||||||||||||
Stock-based Compensation Expense | ' | ||||||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||||||
Stock-based compensation expense for stock options, restricted stock units, stock awards and ESPP shares for the year ended December 31, 2013, 2012 and 2011 was as follows (in thousands): | |||||||||||||||||||||||||
Year EndedDecember 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Stock options | $ | 2,201 | $ | 2,421 | $ | 3,047 | |||||||||||||||||||
RSUs | 631 | 501 | 775 | ||||||||||||||||||||||
PSUs | 162 | 138 | — | ||||||||||||||||||||||
ESPP | 116 | 100 | 85 | ||||||||||||||||||||||
Total stock-based compensation expense | $ | 3,110 | $ | 3,160 | $ | 3,907 | |||||||||||||||||||
Stock-based Compensation Expense by Department | ' | ||||||||||||||||||||||||
Total stock-based compensation expense recorded by department during the year ended December 31, 2013, 2012 and 2011 was as follows (in thousands): | |||||||||||||||||||||||||
Year EndedDecember 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Cost of revenue | $ | 638 | $ | 658 | $ | 659 | |||||||||||||||||||
Sales and marketing | 744 | 657 | 788 | ||||||||||||||||||||||
Research and development | 397 | 514 | 698 | ||||||||||||||||||||||
General and administrative | 1,331 | 1,331 | 1,762 | ||||||||||||||||||||||
Total stock-based compensation expense | $ | 3,110 | $ | 3,160 | $ | 3,907 | |||||||||||||||||||
Valuation Assumptions and Fair Value of Stock Option and ESPP Grants | ' | ||||||||||||||||||||||||
The Company uses the Black-Scholes option pricing model to estimate the fair value of options granted under its equity incentive plans and rights to acquire stock granted under its employee stock purchase plan. The Company based the weighted average estimated values of employee stock option grants and rights granted under the employee stock purchase plan, as well as the weighted average assumptions used in calculating these values, on estimates at the date of grant, as follows: | |||||||||||||||||||||||||
Stock Options | Stock Purchase Plan | ||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||||
Estimated fair value of grants during the year | $ | 3.22 | $ | 2.47 | $ | 3.1 | $ | 2.84 | $ | 2.16 | $ | 2.06 | |||||||||||||
Expected term (in years)(1) | 4.3 | 4.17 | 4.15 | 0.5 | 0.5 | 0.5 | |||||||||||||||||||
Risk-free interest rate(2) | 1.13 | % | 0.45 | % | 1.41 | % | 0.08 | % | 0.15 | % | 0.08 | % | |||||||||||||
Volatility(3) | 43 | % | 44 | % | 43 | % | 44 | % | 43 | % | 39 | % | |||||||||||||
Dividend yield(4) | — | % | — | % | — | % | — | % | — | % | — | % | |||||||||||||
-1 | The expected term represents the period during which the Company’s stock-based awards are expected to be outstanding. The estimated term is based on historical experience of similar awards, giving consideration to the contractual terms of the awards, vesting requirements, and expectation of future employee behavior, including post-vesting terminations. | ||||||||||||||||||||||||
-2 | The risk-free interest rate is based on U.S. Treasury debt securities with maturities close to the expected term of the option as of the date of grant. | ||||||||||||||||||||||||
-3 | Estimated volatility is based on historical volatility. The Company also considers implied volatility when there is sufficient volume of freely traded options with comparable terms and exercise prices in the open market. | ||||||||||||||||||||||||
-4 | The Company has not historically issued any dividends and does not expect to do so in the foreseeable future. |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
INCOME TAXES [Abstract] | ' | ||||||||||||
Loss Before Provision for Income Taxes | ' | ||||||||||||
The Company files income tax returns in the U.S. federal and various state and local jurisdictions and foreign jurisdictions. The Company’s loss before provision for income taxes consisted of the following (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
U.S. | $ | (4,919 | ) | $ | (6,767 | ) | $ | (10,458 | ) | ||||
Foreign | 118 | 437 | 640 | ||||||||||
Loss before income taxes | $ | (4,801 | ) | $ | (6,330 | ) | $ | (9,818 | ) | ||||
Income Tax Provision | ' | ||||||||||||
The components of the provision for income taxes are as follows (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
Federal | $ | (329 | ) | $ | (13 | ) | $ | (52 | ) | ||||
State | 7 | (56 | ) | 69 | |||||||||
Foreign | 159 | 366 | 208 | ||||||||||
(163 | ) | 297 | 225 | ||||||||||
Deferred: | |||||||||||||
Federal | 33 | (12 | ) | (13 | ) | ||||||||
State | — | — | 13 | ||||||||||
Foreign | 76 | (67 | ) | 18 | |||||||||
109 | (79 | ) | 18 | ||||||||||
Tax (benefit) provision | $ | (54 | ) | $ | 218 | $ | 243 | ||||||
Deferred Tax Assets | ' | ||||||||||||
The Company’s deferred tax asset consists of the following (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Net operating loss | $ | 11,014 | $ | 9,828 | |||||||||
Stock-based compensation | 3,806 | 5,561 | |||||||||||
Other accruals and reserves | 3,686 | 3,259 | |||||||||||
Credits | 3,121 | 2,261 | |||||||||||
Capital loss | — | 796 | |||||||||||
Foreign | 360 | 436 | |||||||||||
Accrued warranty | 441 | 466 | |||||||||||
Depreciation and amortization | 224 | 180 | |||||||||||
Other | 470 | (450 | ) | ||||||||||
Deferred tax asset before valuation allowance | 23,122 | 22,337 | |||||||||||
Valuation allowance | (22,762 | ) | (21,907 | ) | |||||||||
Deferred tax asset after valuation allowance | 360 | 430 | |||||||||||
Deferred tax liability on indefinite-lived tangible asset | (39 | ) | — | ||||||||||
Net deferred tax asset | $ | 321 | $ | 430 | |||||||||
(1) The Company revised its 2012 deferred tax asset balances relating to its net operating loss, stock-based compensation, other assets and valuation allowance. These changes had no impact to the balance sheet, statement of operations, earnings per share, statement of cash flows, or statement of equity for any period presented. | |||||||||||||
Deferred Tax Asset Balance | ' | ||||||||||||
The Company’s deferred tax asset balance is reported in the following captions in the Consolidated Balance Sheets (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax asset (current portion) | $ | 31 | $ | 40 | |||||||||
Deferred tax asset, net of current portion | 329 | 553 | |||||||||||
Accrued liabilities (current deferred tax liability) | — | (163 | ) | ||||||||||
Accrued liabilities (non-current deferred tax liability) | (39 | ) | — | ||||||||||
Net deferred tax asset after valuation allowance | $ | 321 | $ | 430 | |||||||||
Reconciliation of Effective Tax Rate | ' | ||||||||||||
The differences between the U.S. federal statutory income tax rates to the Company’s effective tax rate are as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012* | 2011* | |||||||||||
U.S. federal statutory income tax rate | 35 | % | 35 | % | 35 | % | |||||||
State tax rate, net of federal benefit | 1.57 | 3.28 | 2.56 | ||||||||||
Benefit for research and development credit | 19.91 | 3.4 | 6.02 | ||||||||||
Foreign rate differential | (4.53 | ) | (1.49 | ) | — | ||||||||
Changes in unrecognized tax benefits | 2.6 | 1.06 | (0.02 | ) | |||||||||
Foreign income inclusion | — | (0.05 | ) | (2.15 | ) | ||||||||
Income tax refund | 0.19 | 1.07 | 2.33 | ||||||||||
Stock-based compensation | (34.33 | ) | (21.31 | ) | (15.82 | ) | |||||||
Meals and entertainment | (2.10 | ) | (1.68 | ) | (0.88 | ) | |||||||
Tax effect of other comprehensive income | — | 0.28 | (2.01 | ) | |||||||||
Valuation allowance | (17.82 | ) | (21.15 | ) | (28.51 | ) | |||||||
Other | 0.63 | (1.86 | ) | 1 | |||||||||
Effective tax rate | 1.12 | % | (3.45 | )% | (2.48 | )% | |||||||
*The Company revised its 2012 stock-based compensation and valuation allowance. These changes had no impact to the balance sheet, statement of operations, earnings per share, statement of cash flows, or statement of equity for any period presented. | |||||||||||||
Unrecognized Tax Benefits | ' | ||||||||||||
The following table summarizes the activity related to the Company’s gross unrecognized tax benefits in December 31, 2011 to December 31, 2013 (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance at beginning of year | $ | 536 | $ | 583 | $ | 555 | |||||||
Increases related to prior year tax positions | 36 | — | — | ||||||||||
Increases related to current year tax positions | 116 | 29 | 44 | ||||||||||
Decreases related to lapsing of statute of limitations | (153 | ) | (76 | ) | (16 | ) | |||||||
Balance at end of year | $ | 535 | $ | 536 | $ | 583 |
NET_LOSS_PER_SHARE_Tables
NET LOSS PER SHARE (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
NET LOSS PER SHARE [Abstract] | ' | ||||||||||||
Antidilutive Securities Excluded | ' | ||||||||||||
Diluted earnings per share is the same as basic earnings per share for the periods presented because the inclusion of outstanding common stock equivalents would be anti-dilutive. The following number of weighted shares outstanding, prior to the application of the treasury stock method, were excluded from the computation of diluted net loss per common share for the years presented because including them would have had an anti-dilutive effect (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Options to purchase common stock | 3,830 | 3,746 | 3,667 | ||||||||||
Restricted stock units | 173 | 97 | 61 | ||||||||||
Employee stock purchase plan shares | 72 | 78 | 70 | ||||||||||
Performance stock units | 34 | 8 | — | ||||||||||
Total | 4,109 | 3,929 | 3,798 |
SEGMENT_INFORMATION_AND_REVENU1
SEGMENT INFORMATION AND REVENUE BY GEOGRAPHY AND PRODUCTS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SEGMENT INFORMATION AND REVENUE BY GEOGRAPHY AND PRODUCTS | ' | ||||||||||||
Revenue by Geographic Region | ' | ||||||||||||
The following table summarizes revenue by geographic region, which is based on the shipping location of where the product is delivered, and product category (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Revenue mix by geography: | |||||||||||||
United States | $ | 31,487 | $ | 31,949 | $ | 23,313 | |||||||
Japan | 14,205 | 17,826 | 15,019 | ||||||||||
Asia, excluding Japan | 11,263 | 8,902 | 4,984 | ||||||||||
Europe | 7,358 | 4,958 | 3,571 | ||||||||||
Rest of the world | 10,281 | 13,642 | 13,403 | ||||||||||
Consolidated total | $ | 74,594 | $ | 77,277 | $ | 60,290 | |||||||
Revenue mix by product category: | |||||||||||||
Products and upgrades | $ | 48,374 | $ | 49,605 | $ | 37,208 | |||||||
Titan and truSculpt hand piece refills | 4,267 | 4,807 | 4,686 | ||||||||||
Dermal filler and cosmeceuticals | 4,264 | 5,645 | 4,985 | ||||||||||
Total product revenue | 56,905 | 60,057 | 46,879 | ||||||||||
Service | 17,689 | 17,220 | 13,411 | ||||||||||
Consolidated total | $ | 74,594 | $ | 77,277 | $ | 60,290 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ||||
Minimum Lease and Other Leased Assets under Long-term Non-cancellable Operating Leases | ' | ||||
As of December 31, 2013, the Company was committed to minimum lease payments for facilities and other leased assets under long-term non-cancelable operating leases as follows (in thousands): | |||||
Year Ending December 31, | Amount | ||||
2014 | $ | 1,793 | |||
2015 | 1,516 | ||||
2016 | 1,341 | ||||
2017 | 1,346 | ||||
Future minimum rental payments | $ | 5,996 | |||
Minimum Lease Payments for Leased Vehicles under Long-term Non-cancellable Capital Leases | ' | ||||
As of December 31, 2013, the Company was committed to minimum lease payments for leased vehicles under long-term non-cancelable capital leases as follows (in thousands): | |||||
Year Ending December 31, | Amount | ||||
2014 | $ | 155 | |||
2015 | 155 | ||||
2016 | 183 | ||||
Future minimum lease payments | $ | 493 |
SUPPLEMENTARY_FINANCIAL_DATA_U1
SUPPLEMENTARY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
SUPPLEMENTARY FINANCIAL DATA (UNAUDITED) [Abstract] | ' | ||||||||||||||||||||||||||||||||
Supplementary Financial Data | ' | ||||||||||||||||||||||||||||||||
SUPPLEMENTARY FINANCIAL DATA (UNAUDITED) | |||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||
Quarter ended: | Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | |||||||||||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | 2012 | ||||||||||||||||||||||||||
Net revenue | $ | 22,239 | $ | 16,828 | $ | 19,560 | $ | 15, 967 | $ | 22,533 | $ | 19,426 | $ | 19,591 | $ | 15,727 | |||||||||||||||||
Cost of revenue | 9,202 | 7,651 | 8,442 | 7,417 | 9,790 | 8,828 | 9,274 | 7,845 | |||||||||||||||||||||||||
Gross profit | 13,037 | 9,177 | 11,118 | 8,550 | 12,743 | 10,598 | 10,317 | 7,882 | |||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||
Sales and marketing | 7,804 | 6,554 | 7,170 | 6,456 | 7,101 | 7,014 | 7,112 | 7,437 | |||||||||||||||||||||||||
Research and development | 2,438 | 2,440 | 2,217 | 2,121 | 2,122 | 2,217 | 1,872 | 2,216 | |||||||||||||||||||||||||
General and administrative | 3,135 | 2,160 | 2,354 | 2,289 | 2,452 | 2,475 | 2,854 | 3,495 | |||||||||||||||||||||||||
Total operating expenses | 13,377 | 11,154 | 11,741 | 10,866 | 11,675 | 11,706 | 11,838 | 13,148 | |||||||||||||||||||||||||
Income (loss) from operations | (340 | ) | (1,977 | ) | (623 | ) | (2,316 | ) | 1,068 | (1,108 | ) | (1,521 | ) | (5,266 | ) | ||||||||||||||||||
Interest and other income, net | 105 | 140 | 75 | 135 | 105 | 152 | 144 | 96 | |||||||||||||||||||||||||
Income (loss) before income taxes | (235 | ) | (1,837 | ) | (548 | ) | (2,181 | ) | 1,173 | (956 | ) | (1,377 | ) | (5,170 | ) | ||||||||||||||||||
Income tax provision (benefit) | 43 | (169 | ) | 90 | (18 | ) | 96 | (64 | ) | 89 | 97 | ||||||||||||||||||||||
Net income (loss) | $ | (278 | ) | $ | (1,668 | ) | $ | (638 | ) | $ | (2,163 | ) | $ | 1,077 | $ | (892 | ) | $ | (1,466 | ) | $ | (5,267 | ) | ||||||||||
Net income (loss) per share—basic | $ | (0.02 | ) | $ | (0.11 | ) | $ | (0.04 | ) | $ | (0.15 | ) | $ | 0.08 | $ | (0.06 | ) | $ | (0.10 | ) | $ | (0.38 | ) | ||||||||||
Net income (loss) per share—diluted | $ | (0.02 | ) | $ | (0.11 | ) | $ | (0.04 | ) | $ | (0.15 | ) | $ | 0.08 | $ | (0.06 | ) | $ | (0.10 | ) | $ | (0.38 | ) | ||||||||||
Weighted average number of shares used in per share calculations: | |||||||||||||||||||||||||||||||||
Basic | 14,016 | 14,541 | 14,723 | 14,408 | 14,173 | 14,127 | 14,095 | 13,960 | |||||||||||||||||||||||||
Diluted | 14,016 | 14,541 | 14,723 | 14,408 | 14,272 | 14,127 | 14,095 | 13,960 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Bank | |||
Cash, Cash Equivalents, Marketable Investments, and Long-Term Investments [Abstract] | ' | ' | ' |
Long term investment marketable period | '1 year | ' | ' |
Impairment of Marketable Investments [Abstract] | ' | ' | ' |
Other than temporary impairment losses | $0 | $0 | $0 |
Concentration of Credit Risk and Other Risks and Uncertainties [Abstract] | ' | ' | ' |
Number of major banks used by entity | 3 | ' | ' |
Average maturity period of interest rate of auction securities | '18 months | ' | ' |
Revenue from external customers, domestic | 42.00% | 41.00% | 39.00% |
Revenue from external customers, international | 58.00% | 59.00% | 61.00% |
Inventory [Abstract] | ' | ' | ' |
Inventories estimated useful lives | '2 years | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Depreciation expense | 602,000 | 436,000 | 446,000 |
Goodwill and Intangible Assets [Line Items] | ' | ' | ' |
Impairment charge | ' | 0 | ' |
Warranty Obligations [Abstract] | ' | ' | ' |
Standard warranty period | '1 year | ' | ' |
Revenue Recognition [Abstract] | ' | ' | ' |
Service revenue | 17,689,000 | 17,220,000 | 13,411,000 |
Advertising Costs [Abstract] | ' | ' | ' |
Advertising Expense | $1,600,000 | $1,300,000 | $1,300,000 |
Income Taxes [Abstract] | ' | ' | ' |
Uncertain income tax position minimum rate (in hundredths) | 50.00% | ' | ' |
Segments [Abstract] | ' | ' | ' |
Long-lived assets maintained in United States (in hundredths) | 83.00% | 85.00% | ' |
Minimum [Member] | ' | ' | ' |
Goodwill and Intangible Assets [Line Items] | ' | ' | ' |
Intangible asset, useful life | '11 months | ' | ' |
Maximum [Member] | ' | ' | ' |
Goodwill and Intangible Assets [Line Items] | ' | ' | ' |
Intangible asset, useful life | '10 years | ' | ' |
Leasehold Improvements [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment estimated useful lives | 'Lesser of useful life or term of lease | ' | ' |
Office Equipment and Furniture [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment estimated useful lives | '3 years | ' | ' |
Machinery and Equipment [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment estimated useful lives | '3 years | ' | ' |
INVESTMENT_SECURITIES_Details
INVESTMENT SECURITIES (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Level 1 [Member] | Level 1 [Member] | Level 2 [Member] | Level 2 [Member] | Level 3 [Member] | Level 3 [Member] | U.S. government notes [Member] | U.S. government notes [Member] | U.S. government agencies [Member] | U.S. government agencies [Member] | Municipal securities [Member] | Municipal securities [Member] | Commercial paper [Member] | Commercial paper [Member] | Corporate debt securities [Member] | Corporate debt securities [Member] | Money Market Funds [Member] | Money Market Funds [Member] | Money Market Funds [Member] | Money Market Funds [Member] | Money Market Funds [Member] | Money Market Funds [Member] | Money Market Funds [Member] | Money Market Funds [Member] | Commercial Paper [Member] | Commercial Paper [Member] | Commercial Paper [Member] | Commercial Paper [Member] | Commercial Paper [Member] | Commercial Paper [Member] | Commercial Paper [Member] | Commercial Paper [Member] | Cash and Cash Equivalents [Member] | Cash and Cash Equivalents [Member] | Marketable Securities [Member] | Marketable Securities [Member] | Marketable Securities [Member] | Marketable Securities [Member] | Marketable Securities [Member] | Marketable Securities [Member] | Marketable Securities [Member] | Marketable Securities [Member] | |||||
Level 1 [Member] | Level 1 [Member] | Level 2 [Member] | Level 2 [Member] | Level 3 [Member] | Level 3 [Member] | Level 1 [Member] | Level 1 [Member] | Level 2 [Member] | Level 2 [Member] | Level 3 [Member] | Level 3 [Member] | Level 1 [Member] | Level 1 [Member] | Level 2 [Member] | Level 2 [Member] | Level 3 [Member] | Level 3 [Member] | |||||||||||||||||||||||||||||
Investment Owned [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash | $2,198 | $3,816 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash equivalents | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,926 | 17,348 | ' | ' | ' | ' | ' | ' | 2,500 | 4,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | 23,546 | 16,242 | 14,020 | 12,519 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Marketable securities | 62,026 | 66,831 | ' | ' | ' | ' | ' | ' | ' | ' | 10,522 | 4,009 | 25,858 | 24,958 | 2,039 | 4,206 | 10,242 | 10,519 | 18,170 | 18,334 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total cash, cash equivalents and marketable securities | 85,572 | 83,073 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Available-for-sale Securities [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortized Cost | 85,441 | 82,972 | ' | ' | ' | ' | ' | ' | ' | ' | 10,516 | 4,005 | 25,823 | 24,910 | 2,043 | 4,184 | 10,239 | 10,515 | 18,109 | 18,281 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,242 | 23,546 | 66,730 | 61,895 | ' | ' | ' | ' | ' | ' |
Gross Unrealized Gains | 138 | 114 | ' | ' | ' | ' | ' | ' | ' | ' | 11 | 4 | 38 | 48 | 1 | 23 | 3 | 4 | 61 | 59 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 114 | 138 | ' | ' | ' | ' | ' | ' |
Gross Unrealized Losses | -7 | -13 | ' | ' | ' | ' | ' | ' | ' | ' | -5 | 0 | -3 | 0 | -5 | -1 | 0 | 0 | 0 | -6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | -13 | -7 | ' | ' | ' | ' | ' | ' |
Fair Market Value | 85,572 | 83,073 | ' | ' | ' | ' | ' | ' | ' | ' | 10,522 | 4,009 | 25,858 | 24,958 | 2,039 | 4,206 | 10,242 | 10,519 | 18,170 | 18,334 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,242 | 23,546 | 66,831 | 62,026 | 0 | 0 | 66,831 | 62,026 | 0 | 0 |
Estimated fair value of marketable investments and long-term investments classified by contractual maturity date [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Due in less than one year (fiscal year 2014) | ' | 26,685 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Due in 1 to 3 years (fiscal year 2015- 2016) | ' | 40,146 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | ' | 66,831 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash Equivalents [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Money market funds | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,926 | 17,348 | 9,926 | 17,348 | 0 | 0 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commercial paper | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500 | 4,000 | 0 | 0 | 2,500 | 4,000 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Short-term Marketable Investments [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Available-for-sale securities | 85,572 | 83,073 | ' | ' | ' | ' | ' | ' | ' | ' | 10,522 | 4,009 | 25,858 | 24,958 | 2,039 | 4,206 | 10,242 | 10,519 | 18,170 | 18,334 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,242 | 23,546 | 66,831 | 62,026 | 0 | 0 | 66,831 | 62,026 | 0 | 0 |
Total assets at fair value | 83,374 | 79,257 | ' | ' | 9,926 | 17,348 | 69,331 | 66,026 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity of money market fund | ' | ' | ' | ' | '3 months | ' | '36 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance, beginning of period | 3,027 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total gains or losses (realized or unrealized) Included in other comprehensive loss | 262 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Settlements | -3,289 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance, end of period | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
ACQUISITION_Details
ACQUISITION (Details) (USD $) | Dec. 31, 2013 | Feb. 02, 2012 | Feb. 02, 2012 | Feb. 02, 2012 |
Iridexs global aesthetics business unit [Member] | Iridexs global aesthetics business unit [Member] | Iridexs global aesthetics business unit [Member] | ||
Customer Relationships [Member] | Other Intangible Assets [Member] | |||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Net tangible and intangible assets acquired | $4,800,000 | ' | ' | ' |
Purchase price paid | ' | 5,091,000 | ' | ' |
Assets (liabilities acquired) | ' | ' | ' | ' |
Inventory | ' | 1,552,000 | ' | ' |
Intangible assets | ' | ' | 2,510,000 | 780,000 |
Goodwill | ' | 1,339,000 | ' | ' |
Deferred service revenue | ' | -780,000 | ' | ' |
Accrued warranty liability | ' | -310,000 | ' | ' |
Total | ' | $5,091,000 | ' | ' |
ACQUISITION_1_Details
ACQUISITION (1) (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Iridexs global aesthetics business unit [Member] | Iridexs global aesthetics business unit [Member] | Iridexs global aesthetics business unit [Member] | Iridexs global aesthetics business unit [Member] | Iridexs global aesthetics business unit [Member] | ||
Customer Relationships [Member] | Other Intangible Assets [Member] | Other Intangible Assets [Member] | Other Intangible Assets [Member] | Goodwill [Member] | ||
Minimum [Member] | Maximum [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' |
Useful life of acquired intangible assets | ' | '5 years | ' | '11 months | '5 years | ' |
Tax life of acquired intangible assets | ' | ' | '15 years | ' | ' | '15 years |
Revenue prior to acquisition | $10,800,000 | ' | ' | ' | ' | ' |
Income prior to acquisition | $469,000 | ' | ' | ' | ' | ' |
BALANCE_SHEET_DETAIL_Details
BALANCE SHEET DETAIL (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Inventories [Abstract] | ' | ' | ' |
Raw materials | $5,989,000 | $7,221,000 | ' |
Finished goods | 3,017,000 | 3,893,000 | ' |
Total | 9,006,000 | 11,114,000 | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property plant and equipment, gross | 7,786,000 | 6,760,000 | ' |
Less: Accumulated depreciation | -6,424,000 | -5,827,000 | ' |
Property and equipment, net | 1,362,000 | 933,000 | ' |
Gross capitalized value of leased vehicle | 577,000 | ' | ' |
Accumulated depreciation | 98,000 | ' | ' |
Intangible Assets, Net | ' | ' | ' |
Gross Carrying Amount | 6,002,000 | 6,385,000 | ' |
Accumulated Amortization Amount | 2,643,000 | 2,480,000 | ' |
Gross Carrying Amount, Goodwill | 1,339,000 | 1,339,000 | ' |
Accumulated Amortization Amount, Goodwill | 0 | 0 | ' |
Net Amount, Goodwill | 1,339,000 | 1,339,000 | ' |
Intangible Assets, Net (Including Goodwill) | 3,359,000 | 3,905,000 | ' |
Amortization expenses | 702,000 | 1,200,000 | 191,000 |
Remaining estimated annual amortization expenses | ' | ' | ' |
2014 | 773,000 | ' | ' |
2015 | 641,000 | ' | ' |
2016 | 558,000 | ' | ' |
2017 | 47,000 | ' | ' |
Total | 2,019,000 | ' | ' |
Accrued Liabilities | ' | ' | ' |
Payroll and related expenses | 4,753,000 | 4,721,000 | ' |
Sales tax | 1,307,000 | 1,085,000 | ' |
Warranty | 1,202,000 | 1,212,000 | ' |
Other | 2,066,000 | 2,475,000 | ' |
Total | 9,328,000 | 9,493,000 | ' |
Patent sublicense [Member] | ' | ' | ' |
Intangible Assets, Net | ' | ' | ' |
Gross Carrying Amount | 1,218,000 | 1,218,000 | ' |
Accumulated Amortization Amount | 1,068,000 | 931,000 | ' |
Total | 150,000 | 287,000 | ' |
Technology sublicense [Member] | ' | ' | ' |
Intangible Assets, Net | ' | ' | ' |
Gross Carrying Amount | ' | 538,000 | ' |
Accumulated Amortization Amount | ' | 538,000 | ' |
Total | ' | 0 | ' |
Customer Relationships [Member] | ' | ' | ' |
Intangible Assets, Net | ' | ' | ' |
Gross Carrying Amount | 2,510,000 | 2,510,000 | ' |
Accumulated Amortization Amount | 962,000 | 460,000 | ' |
Total | 1,548,000 | 2,050,000 | ' |
Other Intangible Assets [Member] | ' | ' | ' |
Intangible Assets, Net | ' | ' | ' |
Gross Carrying Amount | 780,000 | 780,000 | ' |
Accumulated Amortization Amount | 607,000 | 551,000 | ' |
Total | 173,000 | 229,000 | ' |
Other Intangible [Member] | ' | ' | ' |
Intangible Assets, Net | ' | ' | ' |
Gross Carrying Amount | 155,000 | ' | ' |
Accumulated Amortization Amount | 6,000 | ' | ' |
Total | 149,000 | ' | ' |
Leasehold Improvements [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property plant and equipment, gross | 625,000 | 620,000 | ' |
Office Equipment and Furniture [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property plant and equipment, gross | 3,285,000 | 2,888,000 | ' |
Machinery and Equipment [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property plant and equipment, gross | $3,876,000 | $3,252,000 | ' |
WARRANTY_AND_SERVICE_CONTRACTS2
WARRANTY AND SERVICE CONTRACTS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Changes in product warranty accrual [Roll Forward] | ' | ' | ' |
Balance at beginning of year | $1,212,000 | $1,121,000 | ' |
Add: Accruals for warranties issued during the year | 3,420,000 | 3,525,000 | ' |
Less: Settlements made during the year | -3,430,000 | -3,434,000 | ' |
Balance at end of year | 1,202,000 | 1,212,000 | ' |
Service Contract [Member] | ' | ' | ' |
Changes in deferred service contract revenue [Roll Forward] | ' | ' | ' |
Balance at beginning of year | 8,539,000 | 5,838,000 | ' |
Add: Payments received | 15,026,000 | 14,112,000 | ' |
Less: Revenue recognized | -11,928,000 | -11,411,000 | ' |
Balance at end of year | 11,637,000 | 8,539,000 | 5,838,000 |
Costs incurred under service contracts | $6,900,000 | $7,200,000 | $4,600,000 |
STOCKHOLDERS_EQUITY_STOCK_PLAN2
STOCKHOLDERS' EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE (Details) (USD $) | 12 Months Ended | ||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 30, 2011 | |||||
Stock Options [Member] | ' | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' | ' | ' | ' | ||||
Option granted to employee vested period | '3 years | '3 years | '3 years | ' | ' | ||||
Option granted contractual term | '7 years | '7 years | '7 years | ' | ' | ||||
Shares Available for Grant [Roll Forward] | ' | ' | ' | ' | ' | ||||
Beginning Balance (in shares) | 1,644,356 | 474,537 | 1,005,447 | ' | ' | ||||
Additional shares reserved (in shares) | ' | 1,910,000 | [1] | ' | ' | ' | |||
Options granted (in shares) | -1,007,166 | -921,500 | -1,206,500 | ' | ' | ||||
Options cancelled (expired or forfeited) (in shares) | 391,033 | 470,732 | 746,273 | ' | ' | ||||
Stock awards granted (in shares) | -399,997 | -314,159 | -77,225 | ' | ' | ||||
Restricted stock units cancelled (expired or forfeited) (in shares) | 81,257 | 24,746 | 6,542 | ' | ' | ||||
Ending Balance (in shares) | 709,483 | 1,644,356 | 474,537 | 1,005,447 | ' | ||||
Options Outstanding [Roll Forward] | ' | ' | ' | ' | ' | ||||
Beginning Balance (in shares) | 3,788,239 | 3,549,022 | 3,296,419 | ' | ' | ||||
Options granted (in shares) | 1,007,166 | 921,500 | 1,206,500 | ' | ' | ||||
Options exercised (in shares) | -612,210 | -211,551 | -207,624 | ' | ' | ||||
Options cancelled (expired or forfeited) (in shares) | -391,033 | -470,732 | -746,273 | ' | ' | ||||
Ending Balance (in shares) | 3,792,162 | 3,788,239 | 3,549,022 | 3,296,419 | ' | ||||
Number of shares exercisable (in shares) | 2,221,657 | ' | ' | ' | ' | ||||
Weighted Average Exercise Price [Roll Forward] | ' | ' | ' | ' | ' | ||||
Beginning Balance (in dollars per share) | $9.44 | $9.92 | $10.93 | ' | ' | ||||
Options granted (in dollars per share) | $8.97 | $7.04 | $8.61 | ' | ' | ||||
Options exercised (in dollars per share) | $8.16 | $7 | $5.92 | ' | ' | ||||
Options cancelled (expired or forfeited) (in dollars per share) | $10.37 | $9.45 | $13.40 | ' | ' | ||||
Ending Balance (in dollars per share) | $9.42 | $9.44 | $9.92 | $10.93 | ' | ||||
Weighted-Average Exercisable (in dollars per share) | $10.14 | ' | ' | ' | ' | ||||
Weighted-Average Remaining Contractual life | '4 years 2 months 12 days | '4 years 3 months 18 days | '4 years 7 months 6 days | '4 years 4 months 24 days | ' | ||||
Weighted-Average Remaining Contractual life exercisable | '3 years | ' | ' | ' | ' | ||||
Aggregate Intrinsic Value | $5,100,000 | [2] | $2,600,000 | [2] | $400,000 | [2] | $1,100,000 | [2] | ' |
Aggregate Intrinsic Value | 2,300,000 | [2] | ' | ' | ' | ' | |||
Closing price of company stock (in dollars per share) | $10.18 | $9 | ' | $8.29 | $7.45 | ||||
Total intrinsic value | 2,100,000 | 397,000 | 521,000 | ' | ' | ||||
Restricted stock units [Member] | ' | ' | ' | ' | ' | ||||
Weighted Average Exercise Price [Roll Forward] | ' | ' | ' | ' | ' | ||||
Closing price of company stock (in dollars per share) | $10.18 | $9 | $7.45 | ' | ' | ||||
ESPP [Member] | ' | ' | ' | ' | ' | ||||
Employee Stock Purchase Plan [Abstract] | ' | ' | ' | ' | ' | ||||
ESPP offering and purchase period | '6 months | ' | ' | ' | ' | ||||
2004 Equity Incentive Plan [Member] | ' | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' | ' | ' | ' | ||||
Share based compensation by share based payment fully vested stock awards grant date fair value | 60,000 | ' | ' | ' | ' | ||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 40,674 | 52,938 | 37,925 | ' | ' | ||||
Employee Stock Purchase Plan [Abstract] | ' | ' | ' | ' | ' | ||||
Shares of common stock reserved for issuance for employee purchase plan (in shares) | 1,750,000 | ' | ' | ' | ' | ||||
2004 Equity Incentive Plan [Member] | Stock Options [Member] | ' | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' | ' | ' | ' | ||||
Terms of award | 'Options granted under the 1998 Plan and 2004 Equity Incentive Plan may be incentive stock options or non-statutory stock options. Stock purchase rights may also be granted under the 2004 Equity Incentive Plan. Incentive stock options may only be granted to employees. The Board of Directors determines the period over which options become exercisable. Options granted under the Plan to employees generally vest over a four year term from the vesting commencement date and become exercisable 25% on the first anniversary of the vesting commencement date and an additional 1/48th on the last day of each calendar month until all of the shares have become exercisable. During 2013, 2012 and 2011 the officers of the Company were granted options that vest over a three year term at the rate of 1/3rd on the one year anniversary of the vesting commencement date and 1/36th thereafter. The contractual term of the options granted in 2013, 2012 and 2011 was seven years. | ' | ' | ' | ' | ||||
Option granted to employee vested period | '4 years | ' | ' | ' | ' | ||||
Option exercisable in hundredths | 25.00% | ' | ' | ' | ' | ||||
2004 Equity Incentive Plan [Member] | Restricted stock units [Member] | ' | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' | ' | ' | ' | ||||
Terms of award | 'In accordance with the 2004 Equity Incentive Plan, prior to 2012, the Companybs non-employee directors were granted $60,000 of grant date fair value, fully vested, stock awards annually on the date of the Companybs Annual Meeting of stockholders. Commencing with 2012, the Companybs non-employee directors get $60,000 of restricted stock units (RSUs) annually that cliff-vest on the one year anniversary of the grant date. In the year ended December 31, 2013 and 2012, the Company issued 40,674 and 52,938 shares of stock, respectively. In addition, in the year ended December 31, 2013 and 2013, the Companybs Board of Directors granted 148,004 and 95,250, respectively, of RSUs to certain members of the Companybs management. These RSUs vest at the rate of one-third on June 1of the year of grant, and one-third in each of the subsequent two years. The Company measured the fair market values of the underlying stock on the dates of grant and recognizes the stock-based compensation expense using the straight-line method over the vesting period. | ' | ' | ' | ' | ||||
Share based compensation by share based payment fully vested stock awards grant date fair value | $60,000 | ' | ' | ' | ' | ||||
Additional restricted stock issued | 148,004 | 95,250 | ' | ' | ' | ||||
2004 Employee Stock Purchase Plan [Member] | ' | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' | ' | ' | ' | ||||
Common stock shares issued (in shares) | 51,338 | 46,982 | ' | ' | ' | ||||
Common stock capital shares reserved for future issuance (in shares) | 985,616 | ' | ' | ' | ' | ||||
Employee Stock Purchase Plan [Abstract] | ' | ' | ' | ' | ' | ||||
Shares of common stock | 600,000 | ' | ' | ' | ' | ||||
Percentage of outstanding shares of common stock (in hundredths) | 2.00% | ' | ' | ' | ' | ||||
Purchase price of common stock (in hundredths) | 85.00% | ' | ' | ' | ' | ||||
1998 Stock Plan [Member] | ' | ' | ' | ' | ' | ||||
Employee Stock Purchase Plan [Abstract] | ' | ' | ' | ' | ' | ||||
Shares of common stock reserved for issuance for employee purchase plan (in shares) | 4,650,000 | ' | ' | ' | ' | ||||
1998 Stock Plan [Member] | Stock Options [Member] | ' | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' | ' | ' | ' | ||||
Terms of award | 'Options granted under the 1998 Plan and 2004 Equity Incentive Plan may be incentive stock options or non-statutory stock options. Stock purchase rights may also be granted under the 2004 Equity Incentive Plan. Incentive stock options may only be granted to employees. The Board of Directors determines the period over which options become exercisable. Options granted under the Plan to employees generally vest over a four year term from the vesting commencement date and become exercisable 25% on the first anniversary of the vesting commencement date and an additional 1/48th on the last day of each calendar month until all of the shares have become exercisable. During 2013, 2012 and 2011 the officers of the Company were granted options that vest over a three year term at the rate of 1/3rd on the one year anniversary of the vesting commencement date and 1/36th thereafter. The contractual term of the options granted in 2013, 2012 and 2011 was seven years. | ' | ' | ' | ' | ||||
Option granted to employee vested period | '4 years | ' | ' | ' | ' | ||||
Option exercisable in hundredths | 25.00% | ' | ' | ' | ' | ||||
[1] | Approved by stock holders in 2012. | ||||||||
[2] | Based on the closing stock price of the Companybs stock of $10.18 on December 31, 2013, $9.00 on December 31, 2012, $7.45 on December 30, 2011, and $8.29 on December 31, 2010. |
STOCKHOLDERS_EQUITY_STOCK_PLAN3
STOCKHOLDERS' EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE, 2 (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 30, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||||
$6.54 [Member] | $ 6.88 [Member] | $7.11-$ 8.52 [Member] | $ 8.66 [Member] | $ 8.72 [Member] | $8.80 [Member] | $8.81-$9.74 [Member] | $10.24 [Member] | $10.43-$14.14 [Member] | $14.78-$25.73 [Member] | $6.54-$25.73 [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Restricted stock units [Member] | Restricted stock units [Member] | Restricted stock units [Member] | Restricted stock units [Member] | ESPP [Member] | ESPP [Member] | ESPP [Member] | Performance Shares [Member] | Performance Shares [Member] | Performance Shares [Member] | Performance Shares [Member] | ||||||||
Goals | ||||||||||||||||||||||||||||||||||
Share-based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Range of Exercise Prices, lower limit (in dollars per share) | ' | ' | ' | $6.54 | ' | $7.11 | ' | ' | ' | $8.81 | ' | $10.43 | $14.78 | $6.54 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Range of Exercise Prices, upper limit (in dollars per share) | ' | ' | ' | ' | $6.88 | $8.52 | $8.66 | $8.72 | $8.80 | $9.74 | $10.24 | $14.14 | $25.73 | $25.73 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Option Outstanding, Number of Outstanding (in shares) | ' | ' | ' | 19,292 | 628,329 | 191,548 | 397,231 | 564,751 | 688,000 | 231,978 | 491,137 | 402,708 | 177,188 | 3,792,162 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Option Outstanding, Weighted Average Remaining Contractual Life | ' | ' | ' | '2 years 3 months 18 days | '5 years 6 months 14 days | '2 years 10 months 28 days | '2 years 5 months 5 days | '4 years 4 months 13 days | '6 years 5 months 16 days | '5 years 5 months 16 days | '3 years 4 months 10 days | '1 year 7 months 24 days | '1 year 7 months 10 days | '4 years 2 months 5 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Number of Exercisable Options (in shares) | 2,224,660 | ' | ' | 19,292 | 239,088 | 145,738 | 397,231 | 376,169 | 0 | 56,522 | 446,826 | 363,603 | 177,188 | 2,221,657 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Weighted Average Exercise Price (in dollars per share) | $10.50 | ' | ' | $6.54 | $6.88 | $8.29 | $8.66 | $8.72 | $0 | $9.39 | $10.24 | $11.57 | $19.85 | $10.14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Number of Shares [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Beginning Balance (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 148,709 | 55,253 | 67,096 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Granted (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 188,678 | 148,188 | 77,225 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Vested (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -119,505 | [1] | -41,522 | [1] | -82,526 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | |
Forfeited (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -38,417 | -13,210 | -6,542 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Ending Balance (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 179,465 | 148,709 | 55,253 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Weighted Average Grant Date Fair Value [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Beginning Balance (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6.99 | $9.55 | $10.24 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Granted (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8.94 | $6.85 | $8.32 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Vested (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7.68 | [1] | $9.79 | [1] | $8.93 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | |
Forfeited (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8.11 | $7.39 | $9.99 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Ending Balance (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8.34 | $6.99 | $9.55 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Aggregate Fair Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,091,000 | [1],[2],[3] | $279,000 | [1],[2],[4] | $691,000 | [1],[2],[5] | ' | ' | ' | ' | ' | ' | ' | ' | |
Aggregate Intrinsic Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,827,000 | [6] | 1,338,000 | [6] | 412,000 | [6] | 556,000 | [6] | ' | ' | ' | ' | ' | ' | ' |
Closing price of company stock (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10.18 | $9 | ' | $7.45 | $8.29 | $10.18 | $9 | $7.45 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Fair value vested awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 917,000 | 407,000 | 737,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Performance Stock Units [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Performance stock units granted (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,154 | 33,751 | 42,250 | ' | ||||
Performance stock units or PSUs vesting date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1-Jun-14 | 1-Jun-13 | ' | ||||
Number of performance goals | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ||||
Stock-based Compensation [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Allocated Share-based Compensation Expense | 3,110,000 | 3,160,000 | 3,907,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,201,000 | 2,421,000 | 3,047,000 | ' | ' | 631,000 | 501,000 | 775,000 | ' | 116,000 | 100,000 | 85,000 | ' | 162,000 | 138,000 | 0 | ||||
Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Including Stock Options | 5,189,000 | 1,667,000 | 1,360,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Excess Tax Benefit (Tax Deficiency) from Share-based Compensation, Financing Activities | $0 | $6,000 | $22,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
[1] | The number of restricted stock units vested includes shares that the Company withheld on behalf of the employees to satisfy the statutory tax withholding requirements. | |||||||||||||||||||||||||||||||||
[2] | Represents the value of the Companybs stock on the date that the restricted stock units vest. | |||||||||||||||||||||||||||||||||
[3] | On the grant date, the fair value for these vested awards was $917,000. | |||||||||||||||||||||||||||||||||
[4] | On the grant date, the fair value for these vested awards was $407,000. | |||||||||||||||||||||||||||||||||
[5] | On the grant date, the fair value for these vested awards was $737,000. | |||||||||||||||||||||||||||||||||
[6] | Based on the closing stock price of the Companybs stock of $10.18 on December 31, 2013, $9.00 on December 31, 2012, $7.45 on December 30, 2011, and $8.29 on December 31, 2010. |
STOCKHOLDERS_EQUITY_STOCK_PLAN4
STOCKHOLDERS' EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE, 3 (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Stock-based compensation expense by department | ' | ' | ' | |||
Stock-based compensation expense | $3,110,000 | $3,160,000 | $3,907,000 | |||
Valuation Assumptions and Fair Value of Stock Option and ESPP Grants [Abstract] | ' | ' | ' | |||
Number of shares withheld for employees tax obligations (in shares) | 24,249 | 14,974 | 16,629 | |||
Amount withheld for employees' tax obligations | 222,000 | 101,000 | 146,000 | |||
Average price (in dollars per share) | $10.50 | ' | ' | |||
Value of common stock repurchased | -10,031,000 | ' | ' | |||
Original stock buyback program [Member] | ' | ' | ' | |||
Valuation Assumptions and Fair Value of Stock Option and ESPP Grants [Abstract] | ' | ' | ' | |||
Increase in the authorized amount under the stock repurchase plan | 10,000,000 | ' | ' | |||
Modified stock buyback program [Member] | ' | ' | ' | |||
Valuation Assumptions and Fair Value of Stock Option and ESPP Grants [Abstract] | ' | ' | ' | |||
Amount authorized by the Board of Directors for stock repurchase program | 20,000,000 | ' | ' | |||
Average price (in dollars per share) | $9.43 | ' | ' | |||
Shares of common stock repurchased (in shares) | 1,060,447 | ' | ' | |||
Value of common stock repurchased | 10,000,000 | ' | ' | |||
Remaining amount available for the stock repurchase program | 10,000,000 | ' | ' | |||
Cost of revenue [Member] | ' | ' | ' | |||
Stock-based compensation expense by department | ' | ' | ' | |||
Stock-based compensation expense | 638,000 | 658,000 | 659,000 | |||
Sales and marketing [Member] | ' | ' | ' | |||
Stock-based compensation expense by department | ' | ' | ' | |||
Stock-based compensation expense | 744,000 | 657,000 | 788,000 | |||
Research and development [Member] | ' | ' | ' | |||
Stock-based compensation expense by department | ' | ' | ' | |||
Stock-based compensation expense | 397,000 | 514,000 | 698,000 | |||
General and administrative [Member] | ' | ' | ' | |||
Stock-based compensation expense by department | ' | ' | ' | |||
Stock-based compensation expense | 1,331,000 | 1,331,000 | 1,762,000 | |||
Stock Options [Member] | ' | ' | ' | |||
Stock-based compensation expense by department | ' | ' | ' | |||
Unrecognized compensation cost | 4,300,000 | ' | ' | |||
Weighted-average amortization period | '2 years 6 months 22 days | ' | ' | |||
Valuation Assumptions and Fair Value of Stock Option and ESPP Grants [Abstract] | ' | ' | ' | |||
Estimated fair value of grants during the year | $3.22 | $2.47 | $3.10 | |||
Expected term | '4 years 3 months 18 days | [1] | '4 years 2 months 1 day | [1] | '4 years 1 month 24 days | [1] |
Risk-free interest rate (in hundredths) | 1.13% | [2] | 0.45% | [2] | 1.41% | [2] |
Volatility (in hundredths) | 43.00% | [3] | 44.00% | [3] | 43.00% | [3] |
Dividend yield (in hundredths) | 0.00% | [4] | 0.00% | [4] | 0.00% | [4] |
ESPP [Member] | ' | ' | ' | |||
Stock-based compensation expense by department | ' | ' | ' | |||
Unrecognized compensation cost | $38,000 | ' | ' | |||
Weighted-average amortization period | '0 years 3 months 29 days | ' | ' | |||
Stock Purchase Plan [Member] | ' | ' | ' | |||
Valuation Assumptions and Fair Value of Stock Option and ESPP Grants [Abstract] | ' | ' | ' | |||
Estimated fair value of grants during the year | $2.84 | $2.16 | $2.06 | |||
Expected term | '0 years 6 months | [1] | '0 years 6 months | [1] | '0 years 6 months | [1] |
Risk-free interest rate (in hundredths) | 0.08% | [2] | 0.15% | [2] | 0.08% | [2] |
Volatility (in hundredths) | 44.00% | [3] | 43.00% | [3] | 39.00% | [3] |
Dividend yield (in hundredths) | 0.00% | [4] | 0.00% | [4] | 0.00% | [4] |
[1] | The expected term represents the period during which the Companybs stock-based awards are expected to be outstanding. The estimated term is based on historical experience of similar awards, giving consideration to the contractual terms of the awards, vesting requirements, and expectation of future employee behavior, including post-vesting terminations. | |||||
[2] | The risk-free interest rate is based on U.S. Treasury debt securities with maturities close to the expected term of the option as of the date of grant. | |||||
[3] | Estimated volatility is based on historical volatility. The Company also considers implied volatility when there is sufficient volume of freely traded options with comparable terms and exercise prices in the open market. | |||||
[4] | The Company has not historically issued any dividends and does not expect to do so in the foreseeable future. |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Loss before provision for income taxes [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
U.S. | ' | ' | ' | ' | ' | ' | ' | ' | ($4,919,000) | ($6,767,000) | ($10,458,000) | |||
Foreign | ' | ' | ' | ' | ' | ' | ' | ' | 118,000 | 437,000 | 640,000 | |||
Loss before income taxes | -235,000 | -1,837,000 | -548,000 | -2,181,000 | 1,173,000 | -956,000 | -1,377,000 | -5,170,000 | -4,801,000 | -6,330,000 | -9,818,000 | |||
Current [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Federal | ' | ' | ' | ' | ' | ' | ' | ' | -329,000 | -13,000 | -52,000 | |||
State | ' | ' | ' | ' | ' | ' | ' | ' | 7,000 | -56,000 | 69,000 | |||
Foreign | ' | ' | ' | ' | ' | ' | ' | ' | 159,000 | 366,000 | 208,000 | |||
Total Current | ' | ' | ' | ' | ' | ' | ' | ' | -163,000 | 297,000 | 225,000 | |||
Deferred [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Federal | ' | ' | ' | ' | ' | ' | ' | ' | 33,000 | -12,000 | -13,000 | |||
State | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 13,000 | |||
Foreign | ' | ' | ' | ' | ' | ' | ' | ' | 76,000 | -67,000 | 18,000 | |||
Total Deferred | ' | ' | ' | ' | ' | ' | ' | ' | 109,000 | -79,000 | 18,000 | |||
Tax (benefit) provision | 43,000 | -169,000 | 90,000 | -18,000 | 96,000 | -64,000 | 89,000 | 97,000 | -54,000 | 218,000 | 243,000 | |||
Deferred tax assets [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net operating loss | 11,014,000 | ' | ' | ' | 9,828,000 | [1] | ' | ' | ' | 11,014,000 | 9,828,000 | [1] | ' | |
Stock-based compensation | 3,806,000 | ' | ' | ' | 5,561,000 | [1] | ' | ' | ' | 3,806,000 | 5,561,000 | [1] | ' | |
Other accruals and reserves | 3,686,000 | ' | ' | ' | 3,259,000 | [1] | ' | ' | ' | 3,686,000 | 3,259,000 | [1] | ' | |
Credits | 3,121,000 | ' | ' | ' | 2,261,000 | [1] | ' | ' | ' | 3,121,000 | 2,261,000 | [1] | ' | |
Capital loss | 0 | ' | ' | ' | 796,000 | [1] | ' | ' | ' | 0 | 796,000 | [1] | ' | |
Foreign | 360,000 | ' | ' | ' | 436,000 | [1] | ' | ' | ' | 360,000 | 436,000 | [1] | ' | |
Accrued warranty | 441,000 | ' | ' | ' | 466,000 | [1] | ' | ' | ' | 441,000 | 466,000 | [1] | ' | |
Depreciation and amortization | 224,000 | ' | ' | ' | 180,000 | [1] | ' | ' | ' | 224,000 | 180,000 | [1] | ' | |
Other | 470,000 | ' | ' | ' | -450,000 | [1] | ' | ' | ' | 470,000 | -450,000 | [1] | ' | |
Deferred tax asset before valuation allowance | 23,122,000 | ' | ' | ' | 22,337,000 | [1] | ' | ' | ' | 23,122,000 | 22,337,000 | [1] | ' | |
Valuation allowance | -22,762,000 | ' | ' | ' | -21,907,000 | [1] | ' | ' | ' | -22,762,000 | -21,907,000 | [1] | ' | |
Deferred tax asset after valuation allowance | 360,000 | ' | ' | ' | 430,000 | [1] | ' | ' | ' | 360,000 | 430,000 | [1] | ' | |
Deferred tax liability on indefinite-lived tangible asset | -39,000 | ' | ' | ' | 0 | [1] | ' | ' | ' | -39,000 | 0 | [1] | ' | |
Net deferred tax asset after valuation allowance | 321,000 | ' | ' | ' | 430,000 | [1] | ' | ' | ' | 321,000 | 430,000 | [1] | ' | |
Deferred tax asset balance in Consolidated Balance Sheets [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Deferred tax asset (current portion) | 31,000 | ' | ' | ' | 40,000 | ' | ' | ' | 31,000 | 40,000 | ' | |||
Deferred tax asset, net of current portion | 329,000 | ' | ' | ' | 553,000 | ' | ' | ' | 329,000 | 553,000 | ' | |||
Accrued liabilities (current deferred tax liability) | 0 | ' | ' | ' | -163,000 | ' | ' | ' | 0 | -163,000 | ' | |||
Accrued liabilities (non-current deferred tax liability) | -39,000 | ' | ' | ' | 0 | ' | ' | ' | -39,000 | 0 | ' | |||
Net deferred tax asset after valuation allowance | 321,000 | ' | ' | ' | 430,000 | [1] | ' | ' | ' | 321,000 | 430,000 | [1] | ' | |
Differences between the U.S. federal statutory income tax rate to the Company's effective tax [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
U.S. federal statutory income tax rate (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 35.00% | 35.00% | [1],[2] | 35.00% | [1],[2] | |
State tax rate, net of federal benefit (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 1.57% | 3.28% | [1],[2] | 2.56% | [1],[2] | |
Benefit for research and development credit (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 19.91% | 3.40% | [1],[2] | 6.02% | [1],[2] | |
Foreign rate differential (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | -4.53% | -1.49% | [1],[2] | 0.00% | [1],[2] | |
Changes in unrecognized tax benefits (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 2.60% | 1.06% | [1],[2] | -0.02% | [1],[2] | |
Foreign income inclusion (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | -0.05% | [1],[2] | -2.15% | [1],[2] | |
Income tax refund (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 0.19% | 1.07% | [1],[2] | 2.33% | [1],[2] | |
Stock-based compensation (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | -34.33% | -21.31% | [1],[2] | -15.82% | [1],[2] | |
Meals and entertainment (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | -2.10% | -1.68% | [1],[2] | -0.88% | [1],[2] | |
Tax effect of other comprehensive income (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | 0.28% | [1],[2] | -2.01% | [1],[2] | |
Valuation allowance (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | -17.82% | -21.15% | [1],[2] | -28.51% | [1],[2] | |
Other (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 0.63% | -1.86% | [1],[2] | 1.00% | [1],[2] | |
Effective tax rate (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 1.12% | -3.45% | [1],[2] | -2.48% | [1],[2] | |
Net increase in the valuation allowance | ' | ' | ' | ' | ' | ' | ' | ' | 900,000 | 1,400,000 | 2,800,000 | |||
Operating Loss Carryforwards [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Tax credit recorded to additional paid in capital | 3,900,000 | ' | ' | ' | ' | ' | ' | ' | 3,900,000 | ' | ' | |||
Undistributed earnings of foreign subsidiaries | 2,600,000 | ' | ' | ' | ' | ' | ' | ' | 2,600,000 | ' | ' | |||
Gross unrecognized tax benefits [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Balance at beginning of year | ' | ' | ' | 536,000 | ' | ' | ' | 583,000 | 536,000 | 583,000 | 555,000 | |||
Increases related to prior year tax positions | ' | ' | ' | ' | ' | ' | ' | ' | 36,000 | 0 | 0 | |||
Increases related to current year tax positions | ' | ' | ' | ' | ' | ' | ' | ' | 116,000 | 29,000 | 44,000 | |||
Decreases related to lapsing of statute of limitations | ' | ' | ' | ' | ' | ' | ' | ' | -153,000 | -76,000 | -16,000 | |||
Balance at end of year | 535,000 | ' | ' | ' | 536,000 | ' | ' | ' | 535,000 | 536,000 | 583,000 | |||
Unrecognized tax benefits that would impact effective tax rate | 33,000 | ' | ' | ' | 325,000 | ' | ' | ' | 33,000 | 325,000 | ' | |||
Unrecognized tax benefits, interest on income taxes accrued | 37,000 | ' | ' | ' | 86,000 | ' | ' | ' | 37,000 | 86,000 | ' | |||
Estimated period of unrecognized tax benefits remain unchanged | ' | ' | ' | ' | ' | ' | ' | ' | '12 months | ' | ' | |||
Federal [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Operating Loss Carryforwards [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Operating loss carryforwards | 30,000,000 | ' | ' | ' | ' | ' | ' | ' | 30,000,000 | ' | ' | |||
Operating loss carryforwards, expiration dates | ' | ' | ' | ' | ' | ' | ' | ' | '2033 | ' | ' | |||
Research and development tax credits | 3,600,000 | ' | ' | ' | ' | ' | ' | ' | 3,600,000 | ' | ' | |||
Tax credit carryforward, expiration date | ' | ' | ' | ' | ' | ' | ' | ' | 31-Dec-33 | ' | ' | |||
State [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Operating Loss Carryforwards [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Operating loss carryforwards | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | |||
Operating loss carryforwards, expiration dates | ' | ' | ' | ' | ' | ' | ' | ' | '2032 | ' | ' | |||
Research and development tax credits | 4,500,000 | ' | ' | ' | ' | ' | ' | ' | 4,500,000 | ' | ' | |||
Tax credit carryforward, expiration date | ' | ' | ' | ' | ' | ' | ' | ' | 31-Dec-20 | ' | ' | |||
Research and development tax credits expiring in 2020 | $284,000 | ' | ' | ' | ' | ' | ' | ' | $284,000 | ' | ' | |||
[1] | The Company revised its 2012 deferred tax asset balances relating to its net operating loss, stock-based compensation, other assets and valuation allowance. These changes had no impact to the balance sheet, statement of operations, earnings per share, statement of cash flows, or statement of equity for any period presented. | |||||||||||||
[2] | Certain amounts have been reclassified to conform to current period presentation. |
NET_LOSS_PER_SHARE_Details
NET LOSS PER SHARE (Details) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Antidilutive securities excluded from computation of diluted net loss per common share (in shares) | 4,109 | 3,929 | 3,798 |
Options to purchase common stock [Member] | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Antidilutive securities excluded from computation of diluted net loss per common share (in shares) | 3,830 | 3,746 | 3,667 |
Restricted stock units [Member] | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Antidilutive securities excluded from computation of diluted net loss per common share (in shares) | 173 | 97 | 61 |
Employee stock purchase plan shares [Member] | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Antidilutive securities excluded from computation of diluted net loss per common share (in shares) | 72 | 78 | 70 |
Performance stock units [Member] | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Antidilutive securities excluded from computation of diluted net loss per common share (in shares) | 34 | 8 | 0 |
DEFINED_CONTRIBUTION_PLAN_Deta
DEFINED CONTRIBUTION PLAN (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Employer discretionary contribution | $184,000 | $146,000 | $0 |
Maximum [Member] | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Employee voluntary contribution (in hundredths) | 100.00% | ' | ' |
SEGMENT_INFORMATION_AND_REVENU2
SEGMENT INFORMATION AND REVENUE BY GEOGRAPHY AND PRODUCTS (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment | |||||||||||
Revenues from External Customers [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of operating segments | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Revenue mix | $22,239 | $16,828 | $19,560 | $15,967 | $22,533 | $19,426 | $19,591 | $15,727 | $74,594 | $77,277 | $60,290 |
Products and upgrades [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue mix | ' | ' | ' | ' | ' | ' | ' | ' | 48,374 | 49,605 | 37,208 |
Titan and truSculpt hand piece refills [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue mix | ' | ' | ' | ' | ' | ' | ' | ' | 4,267 | 4,807 | 4,686 |
Dermal filler and cosmeceuticals [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue mix | ' | ' | ' | ' | ' | ' | ' | ' | 4,264 | 5,645 | 4,985 |
Total product revenue [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue mix | ' | ' | ' | ' | ' | ' | ' | ' | 56,905 | 60,057 | 46,879 |
Service [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue mix | ' | ' | ' | ' | ' | ' | ' | ' | 17,689 | 17,220 | 13,411 |
United States [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue mix | ' | ' | ' | ' | ' | ' | ' | ' | 31,487 | 31,949 | 23,313 |
Japan [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue mix | ' | ' | ' | ' | ' | ' | ' | ' | 14,205 | 17,826 | 15,019 |
Asia, excluding Japan [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue mix | ' | ' | ' | ' | ' | ' | ' | ' | 11,263 | 8,902 | 4,984 |
Europe [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue mix | ' | ' | ' | ' | ' | ' | ' | ' | 7,358 | 4,958 | 3,571 |
Rest of the world [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue mix | ' | ' | ' | ' | ' | ' | ' | ' | $10,281 | $13,642 | $13,403 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Minimum lease payments under operating leases [Abstract] | ' | ' | ' |
2014 | $1,793,000 | ' | ' |
2015 | 1,516,000 | ' | ' |
2016 | 1,341,000 | ' | ' |
2017 | 1,346,000 | ' | ' |
Future minimum rental payments | 5,996,000 | ' | ' |
Gross rent expense | 1,600,000 | 1,600,000 | 1,900,000 |
Minimum lease payments under capital leases [Abstract] | ' | ' | ' |
2014 | 155,000 | ' | ' |
2015 | 155,000 | ' | ' |
2016 | 183,000 | ' | ' |
Future minimum lease payments | 493,000 | ' | ' |
Estimated litigation liability | $72,000 | ' | ' |
SUPPLEMENTARY_FINANCIAL_DATA_U2
SUPPLEMENTARY FINANCIAL DATA (UNAUDITED) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
SUPPLEMENTARY FINANCIAL DATA (UNAUDITED) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net revenue | $22,239 | $16,828 | $19,560 | $15,967 | $22,533 | $19,426 | $19,591 | $15,727 | $74,594 | $77,277 | $60,290 |
Cost of revenue | 9,202 | 7,651 | 8,442 | 7,417 | 9,790 | 8,828 | 9,274 | 7,845 | 32,712 | 35,737 | 25,978 |
Gross profit | 13,037 | 9,177 | 11,118 | 8,550 | 12,743 | 10,598 | 10,317 | 7,882 | 41,882 | 41,540 | 34,312 |
Operating expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales and marketing | 7,804 | 6,554 | 7,170 | 6,456 | 7,101 | 7,014 | 7,112 | 7,437 | 27,984 | 28,664 | 25,499 |
Research and development | 2,438 | 2,440 | 2,217 | 2,121 | 2,122 | 2,217 | 1,872 | 2,216 | 9,216 | 8,427 | 9,141 |
General and administrative | 3,135 | 2,160 | 2,354 | 2,289 | 2,452 | 2,475 | 2,854 | 3,495 | 9,938 | 11,276 | 10,104 |
Total operating expenses | 13,377 | 11,154 | 11,741 | 10,866 | 11,675 | 11,706 | 11,838 | 13,148 | 47,138 | 48,367 | 44,744 |
Income (loss) from operations | -340 | -1,977 | -623 | -2,316 | 1,068 | -1,108 | -1,521 | -5,266 | -5,256 | -6,827 | -10,432 |
Interest and other income, net | 105 | 140 | 75 | 135 | 105 | 152 | 144 | 96 | 455 | 497 | 614 |
Loss before income taxes | -235 | -1,837 | -548 | -2,181 | 1,173 | -956 | -1,377 | -5,170 | -4,801 | -6,330 | -9,818 |
Income tax provision (benefit) | 43 | -169 | 90 | -18 | 96 | -64 | 89 | 97 | -54 | 218 | 243 |
Net Loss | ($278) | ($1,668) | ($638) | ($2,163) | $1,077 | ($892) | ($1,466) | ($5,267) | ($4,747) | ($6,548) | ($10,061) |
Net income (loss) per share-basic (in dollars per share) | ($0.02) | ($0.11) | ($0.04) | ($0.15) | $0.08 | ($0.06) | ($0.10) | ($0.38) | ' | ' | ' |
Net income (loss) per share-diluted (in dollars per share) | ($0.02) | ($0.11) | ($0.04) | ($0.15) | $0.08 | ($0.06) | ($0.10) | ($0.38) | ' | ' | ' |
Weighted average number of shares used in per share calculations: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in shares) | 14,016 | 14,541 | 14,723 | 14,408 | 14,173 | 14,127 | 14,095 | 13,960 | ' | ' | ' |
Diluted (in shares) | 14,016 | 14,541 | 14,723 | 14,408 | 14,272 | 14,127 | 14,095 | 13,960 | ' | ' | ' |
SCHEDULE_II_VALUATION_AND_QUAL1
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Deferred tax assets valuation allowance [Member] | ' | ' | ' | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | |||
Balance at Beginning of Year | $21,907 | [1] | $20,551 | [1] | $17,752 | [1] |
Additions | 3,437 | 1,773 | [1] | 3,869 | [1] | |
Deductions | 2,582 | 417 | [1] | 1,070 | [1] | |
Balance at End of Year | 22,762 | 21,907 | [1] | 20,551 | [1] | |
Allowance for doubtful accounts receivable [Member] | ' | ' | ' | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | |||
Balance at Beginning of Year | 0 | 8 | 20 | |||
Additions | 19 | 66 | 39 | |||
Deductions | 0 | 74 | 51 | |||
Balance at End of Year | $19 | $0 | $8 | |||
[1] | The Company revised the 2011 beginning balance and its 2011 and 2012 deferred tax assets related to stock-based compensation, which was offset by a corresponding reduction in the valuation allowance and reflected in the table. These adjustments had no impact to the balance sheet, statement of operations, earnings per share, statement of cash flows, or statement of equity for any period presented. |