Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | NPTN | |
Entity Registrant Name | NEOPHOTONICS CORP | |
Entity Central Index Key | 1,227,025 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 42,324,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 71,625 | $ 76,088 |
Short-term investments | 28,470 | 23,294 |
Restricted cash | 2,813 | 2,660 |
Accounts receivable, net of allowance for doubtful accounts | 95,677 | 83,161 |
Inventories | 60,219 | 65,602 |
Prepaid expenses and other current assets | 14,932 | 12,393 |
Total current assets | 273,736 | 263,198 |
Property, plant and equipment, net | 95,846 | 62,618 |
Purchased intangible assets, net | 6,217 | 9,852 |
Goodwill | 1,115 | 1,115 |
Other long-term assets | 7,672 | 5,095 |
Total assets | 384,586 | 341,878 |
Current liabilities: | ||
Accounts payable | 76,341 | 50,620 |
Notes payable and short-term borrowing | 31,508 | 32,657 |
Current portion of long-term debt | 908 | 760 |
Accrued and other current liabilities | 28,184 | 27,950 |
Total current liabilities | 136,941 | 111,987 |
Long-term debt, net of current portion | 12,116 | 10,759 |
Other noncurrent liabilities | 9,044 | 7,476 |
Total liabilities | 158,101 | 130,222 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity: | ||
Preferred stock, $0.0025 par value, 10,000 shares authorized, no shares issued or outstanding | ||
Common stock, $0.0025 par value, 100,000 shares authorized At September 30, 2016, 42,315 shares issued and outstanding; at December 31, 2015, 40,986 shares issued and outstanding | 106 | 102 |
Additional paid-in capital | 528,451 | 511,750 |
Accumulated other comprehensive loss | (1,398) | (1,723) |
Accumulated deficit | (300,674) | (298,473) |
Total stockholders' equity | 226,485 | 211,656 |
Total liabilities and stockholders' equity | $ 384,586 | $ 341,878 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0025 | $ 0.0025 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0025 | $ 0.0025 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 42,315 | 40,986 |
Common stock, shares outstanding | 42,315 | 40,986 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenue | $ 103,312 | $ 83,560 | $ 301,586 | $ 250,316 |
Cost of goods sold | 75,863 | 59,788 | 215,486 | 176,345 |
Gross profit | 27,449 | 23,772 | 86,100 | 73,971 |
Operating expenses: | ||||
Research and development | 17,474 | 10,763 | 42,206 | 32,702 |
Sales and marketing | 5,936 | 3,789 | 13,674 | 11,439 |
General and administrative | 9,822 | 7,384 | 26,747 | 22,999 |
Amortization of purchased intangible assets | 462 | 447 | 1,375 | 1,344 |
Acquisition-related costs | 148 | 180 | 923 | 467 |
Restructuring charges | 18 | 44 | ||
Asset impairment charge | 368 | 368 | ||
Total operating expenses | 33,842 | 22,949 | 84,925 | 69,363 |
Income (loss) from operations | (6,393) | 823 | 1,175 | 4,608 |
Interest income | 95 | 31 | 227 | 84 |
Interest expense | (103) | (171) | (304) | (1,133) |
Other income (expense), net | 18 | 1,852 | (828) | 2,408 |
Total interest and other income (expense), net | 10 | 1,712 | (905) | 1,359 |
Income (loss) before income taxes | (6,383) | 2,535 | 270 | 5,967 |
Provision for income taxes | (804) | (1,157) | (2,471) | (2,698) |
Net income (loss) | $ (7,187) | $ 1,378 | $ (2,201) | $ 3,269 |
Basic net income (loss) per share | $ (0.17) | $ 0.03 | $ (0.05) | $ 0.09 |
Diluted net income (loss) per share | $ (0.17) | $ 0.03 | $ (0.05) | $ 0.09 |
Weighted average shares used to compute basic net income (loss) per share | 42,038 | 40,367 | 41,589 | 36,303 |
Weighted average shares used to compute diluted net income (loss) per share | 42,038 | 42,217 | 41,589 | 37,537 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (7,187) | $ 1,378 | $ (2,201) | $ 3,269 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments net of zero tax | (22) | (4,687) | 292 | (4,098) |
Unrealized gains (losses) on available-for-sale securities, net of zero tax | (1) | 33 | (5) | |
Total other comprehensive income (loss) | (22) | (4,688) | 325 | (4,103) |
Comprehensive income (loss) | $ (7,209) | $ (3,310) | $ (1,876) | $ (834) |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, tax | $ 0 | $ 0 | $ 0 | $ 0 |
Unrealized gains (losses) on available-for-sale securities, tax | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities | ||
Net income (loss) | $ (2,201) | $ 3,269 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 16,921 | 17,511 |
Stock-based compensation expense | 14,445 | 5,418 |
Deferred taxes | (1,162) | 719 |
Investment, debt and other related, and other amortization | 125 | 248 |
Gain on disposal of property and equipment | (18) | (22) |
Asset impairment charges | 368 | |
Adjustment to fair value of penalty payment derivative | (141) | |
Allowance for doubtful accounts | (415) | 628 |
Write-down of inventories | 1,995 | 3,556 |
Foreign currency remeasurement and other, net | (556) | (1,867) |
Change in assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable | (12,169) | 8,035 |
Inventories | 4,518 | (16,971) |
Prepaid expenses and other assets | (3,439) | 1,962 |
Accounts payable | 12,610 | (1,718) |
Accrued and other liabilities | (3,937) | 117 |
Net cash provided by operating activities | 26,717 | 21,112 |
Cash flows from investing activities | ||
Purchase of property, plant and equipment | (29,962) | (11,051) |
Proceeds from sale of property, plant and equipment and other assets | 139 | 200 |
Purchase of marketable securities | (69,520) | (28,936) |
Proceeds from sale of marketable securities | 48,979 | 12,938 |
Proceeds from maturity of securities | 15,373 | 1,000 |
Change in restricted cash | (226) | 9,784 |
Net cash (used in) provided by investing activities | (35,217) | (16,065) |
Cash flows from financing activities | ||
(Payments for deferred offering costs) Proceeds from public stock offering, net of offering costs | (25) | 45,646 |
Proceeds from exercise of stock options and issuance of stock under ESPP | 5,083 | 1,186 |
Tax withholding on restricted stock units | (570) | (688) |
Proceeds from bank loans | 71,400 | 56,512 |
Repayment of bank and acquisition-related loans | (72,090) | (70,162) |
Proceeds from issuance of notes payable | 13,144 | 16,999 |
Repayment of notes payable | (14,069) | (20,072) |
Proceeds from government grants | 608 | |
Net cash provided by financing activities | 3,481 | 29,421 |
Effect of exchange rates on cash and cash equivalents | 556 | (253) |
Net increase (decrease) in cash and cash equivalents | (4,463) | 34,215 |
Cash and cash equivalents at the beginning of the period | 76,088 | 43,035 |
Cash and cash equivalents at the end of the period | 71,625 | 77,250 |
Supplemental disclosure of noncash investing and financing activities: | ||
Changes in unpaid property, plant and equipment | (12,494) | (768) |
Modification of bank loan with Comerica | 15,786 | |
Issuance of note to seller of acquired business | 15,482 | |
Transfer of restricted investments to short-term investments | $ 8,296 | |
Unpaid public stock offering costs | $ 76 |
Basis of presentation and signi
Basis of presentation and significant accounting policies | 9 Months Ended |
Sep. 30, 2016 | |
Basis of presentation and significant accounting policies | |
Basis of presentation and significant accounting policies | Note 1. Basis of presentation and significant accounting policies Basis of Presentation and Consolidation The condensed consolidated financial statements of NeoPhotonics Corporation (“NeoPhotonics” or the “Company”) as of September 30, 2016 and for the three and nine months ended September 30, 2016 and 2015, have been prepared in accordance with the instructions on Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In accordance with those rules and regulations, the Company has omitted certain information and notes normally provided in the Company’s annual consolidated financial statements. In the opinion of management, the condensed consolidated financial statements contain all adjustments, consisting only of normal recurring items, except as otherwise noted, necessary for the fair presentation of the Company’s financial position and results of operations for the interim periods. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”). These condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results expected for the entire fiscal year. All intercompany accounts and transactions have been eliminated. Certain Significant Risks and Uncertainties The Company operates in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, any of the following areas could have a negative effect on the Company in terms of its future financial position, results of operations or cash flows: the general state of the U.S., China and world economies; the highly cyclical nature of the industries the Company serves; the loss of any of a small number of its larger customers; ability to obtain additional financing; inability to meet certain debt covenants; fundamental changes in the technology underlying the Company’s products; the hiring, training and retention of key employees; successful and timely completion of product design efforts; and new product design introductions by competitors. Reclassification Reclassification has been made to combine deferred income tax liabilities amount into other noncurrent liabilities in the prior year to conform to the current year’s presentation. Concentration In the three months ended September 30, 2016, Huawei Technologies Co. Ltd. and their affiliate HiSilicon Technologies (together with Huawei Technologies Co. Ltd., “Huawei”) and Ciena Corporation (“Ciena”) accounted for approximately 48% and 15% of the Company’s total revenue, respectively, and the Company’s top ten customers represented approximately 91% of the Company’s total revenue. In the three months ended September 30, 2015, Huawei and Ciena accounted for approximately 41% and 26% of the Company’s total revenue, respectively, and the Company’s top ten customers represented approximately 92% of the Company’s total revenue. In the nine months ended September 30, 2016, Huawei and Ciena each accounted for approximately 49% and 15% of the Company’s total revenue, respectively, and the top ten customers represented approximately 91% of its total revenue. In the nine months ended September 30, 2015, Huawei and Ciena accounted for approximately 40% and 24% of the Company’s total revenue, respectively, and the Company’s top ten customers represented approximately 91% of its total revenue. As of September 30, 2016 and December 31, 2015, one customer accounted for approximately 45% and 59%, respectively, of the Company’s total accounts receivable. Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenue and expenses during the reporting period. Significant estimates made by management include: the useful lives of property, plant and equipment and intangible assets as well as future cash flows to be generated by those assets; fair values of identifiable assets acquired and liabilities assumed in business combinations; allowances for doubtful accounts; valuation allowances for deferred tax assets; valuation of excess and obsolete inventories; warranty reserves; litigation accrual and recognition of stock-based compensation, among others. Actual results could differ from these estimates. Summary of Significant Accounting Policies There have been no significant changes in the Company’s significant accounting policies in the three and nine months ended September 30, 2016, as compared to the significant accounting policies described in its Annual Report on Form 10-K for the year ended December 31, 2015. Recent accounting pronouncements In October 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). Under ASU 2016-16, the transferring (selling) entity is required to recognize a current tax expense or benefit upon transfer of the asset. Similarly, the purchasing (receiving) entity is required to recognize a deferred tax asset or deferred tax liability, as well as the related deferred tax benefit or expense, upon receipt of the asset. The resulting deferred tax asset or deferred tax liability is measured by (1) computing the difference between the tax basis of the asset in the buyer’s jurisdiction and its financial reporting carrying value in the consolidated financial statements and (2) multiplying such difference by the enacted tax rate in the buyer’s jurisdiction. ASU 2016-16 is effective for the Company’s interim and annual periods beginning after December 15, 2017 and should be applied on a modified retrospective basis, recognizing the effects in retained earnings as of the beginning of the year of adoption. Early adoption is permitted for the beginning of a fiscal year. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance which will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for the Company’s annual and interim reporting periods beginning after December 15, 2017 and must be applied retrospectively to all periods presented or prospectively from the earliest data practicable if retrospective application is impracticable. Early adoption is permitted. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 amends existing guidance on the impairment of financial assets and adds an impairment model that is based on expected losses rather than incurred losses. Under this guidance, an entity recognizes as an allowance its estimate of expected credit losses for its financial assets. An entity will apply this guidance through a cumulative-effect adjustment to retained earnings upon adoption (a modified-retrospective approach) while a prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. ASU 2016-13 is effective for the Company’s annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for the Company’s annual and interim reporting periods beginning after December 15, 2016. Early adoption is permitted. A retrospective transition method is required for the changes related to the recognition timing of excess tax benefits, minimum statutory withholding requirements, forfeitures and intrinsic value. A retrospective transition method is required for changes related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement. A prospective transition method is required for the recognition of excess tax benefits and tax deficiencies in the income statement for estimating expected term. Changes related to the presentation of excess tax benefits on the statement of cash flows can be applied using either a prospective transition method or a retrospective transition method. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 introduces a lessee model that requires recognition of assets and liabilities arising from qualified leases on the consolidated balance sheets and consolidated statements of operations and to disclose qualitative and quantitative information about lease transactions. This guidance is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition is required with certain optional practical expedients allowed. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. A modified retrospective transition method is required except for the equity securities without readily determinable fair values which will require a prospective transition method. ASU 2016-01 is effective for the Company’s annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted for certain provisions. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). ASU 2015-11 requires entities to measure most inventory “at the lower of cost and net realizable value” but does not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. For the Company, this ASU is effective for annual and interim periods beginning after December 15, 2016. Prospective transition method is required and early adoption is permitted. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In May 2014, the FASB issued ASU N o. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. In August 2015, the FASB issued an accounting standard update for a one-year deferral of the effective date of ASU 2014-09 to annual and interim periods beginning after December 15, 2017 and permits entities to early adopt the standard of ASU 2014-09 for annual and interim reporting periods beginning after December 15, 2016. Companies are permitted to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”), which amends the principal-versus-agent implementation guidance in ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606: Identifying performance obligations and Licensing amending certain aspects of ASU 2014-09 on (1) identifying performance obligations and (2) licensing. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients amending certain aspects of ASU 2016-09 including collectability, presentation of sales tax and other similar taxes collected from customers, noncash transaction, contract modifications and completed contracts at transition and the disclosure requirements for entities that use the full retrospective transition method. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. |
Net income per share
Net income per share | 9 Months Ended |
Sep. 30, 2016 | |
Net income per share | |
Net income per share | Note 2. Net income (loss) per share The following table sets forth the computation of the basic and diluted net income (loss) per share for the periods indicated (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Numerator: Net income (loss) $ $ $ $ Denominator: Weighted average shares used to compute per share amount: Basic Dilutive effect of equity awards - - Diluted Basic net income (loss) per share $ $ $ $ Diluted net income (loss) per share $ $ $ $ The Company has excluded the impact of the following employee stock options, restricted stock units and shares expected to be issued under its employee stock purchase plan from the computation of diluted net income (loss) per share, as their effect would have been antidilutive (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Employee stock options Restricted stock units Employee stock purchase plan — — |
Cash, cash equivalents, short-t
Cash, cash equivalents, short-term investments, and restricted cash and investments | 9 Months Ended |
Sep. 30, 2016 | |
Restricted Cash and Investment | |
Cash, cash equivalents and short-term investments and restricted cash and investments | Note 3. Cash, cash equivalents, short-term investments, and restricted cash The following table summarizes the Company’s cash, cash equivalents, short-term investments, and restricted cash at September 30, 2016 and December 31, 2015 (in thousands): September 30, December 31, 2016 2015 Cash and cash equivalents: Cash $ $ Cash equivalents Cash and cash equivalents $ $ Short-term investments $ $ Restricted cash $ $ The following table summarizes the Company’s unrealized gains and losses related to its cash equivalents and short-term investments in marketable securities designated as available-for-sale (in thousands): As of September 30, 2016 As of December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Marketable securities: Money market accounts $ $ — $ — $ $ $ — $ — $ Money market funds — — — — Corporate bonds — Government-sponsored enterprise obligations — Commercial paper — — — — U.S. government securities — — Sovereign government bonds — — Total $ $ $ $ $ $ — $ $ Reported as: Cash equivalents $ $ — $ — $ $ $ — $ — $ Short-term investments — Total $ $ $ $ $ $ — $ $ As of September 30, 2016 and December 31, 2015, maturities of marketable securities were as follows (in thousands): September 30, December 31, 2016 2015 Less than 1 year $ $ Due in 1 to 2 years Due after 5 years — — Total $ $ Realized gains and losses on the sale of marketable securities during the three and nine months ended September 30, 2016 and 2015 were immaterial. The Company did not recognize any impairment losses on its marketable securities during the three and nine months ended September 30, 2016 or 2015. As of September 30, 2016 and December 31, 2015, the Company did not have any investments in marketable securities that were in an unrealized loss position for a period in excess of 12 months. |
Fair value disclosures
Fair value disclosures | 9 Months Ended |
Sep. 30, 2016 | |
Fair value disclosures | |
Fair value disclosures | Note 4. Fair value disclosures Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the Company's assets that are measured at fair value on a recurring basis (in thousands): As of September 30, 2016 As of December 31, 2015 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash equivalents and short-term investments: Money market funds $ $ — $ — $ $ $ — $ — $ U.S. government securities — — — — Money market accounts — — — — Corporate bonds — — — — Government-sponsored enterprise obligations — — — — Commercial papers — — — — Sovereign government bonds — — — — Variable rate demand notes — — — — — — — — Total $ $ $ — $ $ $ $ — $ Foreign currency forward contracts $ — $ * $ — $ * $ — $ — $ — $ — Mutual funds held in Rabbi Trust, recorded in other long-term assets $ $ — $ — $ $ $ — $ — $ *Fair values of the foreign currency forward contracts were immaterial as of September 30, 2016. The Company offers a Non-Qualified Deferred Compensation Plan (“NQDC Plan”) to a select group of its highly compensated employees. The NQDC Plan provides participants the opportunity to defer payment of certain compensation as defined in the NQDC Plan. A Rabbi Trust has been established to fund the NQDC Plan obligation, which was fully funded at September 30, 2016. The assets held by the Rabbi Trust are substantially in the form of exchange traded mutual funds and are included in the Company’s other long-term assets on its condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015. Effective July 1, 2016, the Company has established a hedging program using forward exchange contracts as economic hedges, to protect against volatility of foreign exchange rate exposure when it is deemed economical to do so, based on a cost-benefit analysis that considers the magnitude of the exposure, the volatility of the exchange rate and the cost of the hedging instrument. The forward contracts are not designated for hedge accounting. Under the hedging program, the Company enters into monthly forward exchange contracts, that have average maturities of one month, to offset the effects of exchange rate exposures for its net intercompany activities denominated in Japanese Yen, or JPY, and Chinese Renminbi, or RMB, by buying and selling foreign currencies in the future at fixed exchange rates, to offset the consequences of changes in foreign exchange on the balance sheet. If the U.S. dollar strengthens relative to the currency of the hedged assets, the increase in the fair value of the forward contracts offsets the decrease in the expected future U.S. dollar cash flows of the hedged foreign currency sales. Conversely, if the U.S. dollar weakens, the decrease in the fair value of the forward contracts offsets the increase in the value of the anticipated foreign currency cash flows. Accordingly, fair value changes in the forward contracts help mitigate the changes in the value of the re-measured assets and liabilities attributable to changes in foreign currency exchange rates, except to the extent of the spot-forward differences. The net effect of fair value changes is reported in other (income) expense, net. As of September 30, 2016, the fair values of the Company’s foreign currency forward contracts were immaterial due to the short-term nature of the contracts, which generally expire at each quarter-end. The total notional value of our foreign currency exchange contracts as of September 30, 2016 were approximately $39.2 million and $2.4 million for RMB and JPY, respectively. The following table presents the Company's liabilities that are measured at fair value on a recurring basis (in thousands): As of September 30, 2016 As of December 31, 2015 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Penalty payment derivative (Note 10) $ — $ — $ $ $ — $ — $ $ Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis There were no assets or liabilities measured at fair value on a nonrecurring basis as of September 30, 2016. In the year ended December 31, 2015, the Company wrote off $0.2 million of property, plant and equipment and $0.2 million of held-for-sale assets. These assets were measured at fair value due to events or circumstances the Company identified as having significant impact on their fair value during the period. To arrive at the valuation of these assets, the Company considered the discounted cash flows to determine fair value using best estimates and unobservable inputs (Level 3). Assets and Liabilities Not Measured at Fair Value The carrying values of accounts receivable, accounts payable, notes payable and short-term borrowings approximate their fair values due to the short-term nature and liquidity of these financial instruments. The fair values of the Company’s long-term debt have been calculated using an estimate of the interest rate the Company would have had to pay on the issuance of liabilities with a similar maturity and discounting the cash flows at that rate which it considers to be a level 2 fair value measurement. The fair values, which approximate the carrying value of the long-term debt, do not necessarily give an indication of the amount that the Company would currently have to pay to extinguish any of this debt. |
Business combination
Business combination | 9 Months Ended |
Sep. 30, 2016 | |
Business combination | |
Business combination | Note 5. Business combination EMCORE Corporation On January 2, 2015, the Company closed an acquisition of the tunable laser product lines of EMCORE Corporation (“EMCORE”) for an original purchase price of $17.5 million, pursuant to the terms of the Asset Purchase Agreement between the parties dated October 22, 2014, under which the Company purchased certain assets and assumed certain liabilities of EMCORE’s tunable laser product lines . Consideration for the transaction consisted of $1.5 million in cash and a promissory note (the “EMCORE Note”) of approximately $16.0 million, which was subject to certain adjustments for inventory, net accounts receivable and pre-closing revenues, and was subsequently adjusted to $15.5 million in connection with a True-Up Confirmation Agreement (the “True-Up Agreement”) executed by and between the Company and EMCORE on April 16, 2015. The True-Up Agreement made several final adjustments to the Asset Purchase Agreement, including, among other things, (i) adjusting the principal amount of the EMCORE Note from approximately $16.0 million to approximately $15.5 million, (ii) agreeing upon final amounts for inventory value adjustment, net accounts receivable adjustment, and revenue purchase price adjustment, and (iii) resolving the treatment of certain accounts receivable for products sold by EMCORE prior to the closing of the transaction. The adjusted purchase price for the acquisition was approximately $17.0 million. The Company accounted for this acquisition as a business combination. With this acquisition, the Company strengthens its narrow line width tunable laser product portfolio. In connection with the acquisition, the Company incurred approximately $0.9 million in total acquisition-related costs related to legal, accounting and other professional services. The acquisition costs were expensed as incurred and included in operating expenses in the Company’s condensed consolidated statement of operations. The Company’s preliminary allocation of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed was based on estimated fair values as of the close of the acquisition. The fair values assigned to intangible assets acquired are based on valuations using estimates and assumptions provided by management, with the assistance of an independent third party appraisal firm. The excess purchase price over those fair values is recorded as goodwill. These estimates were determined through established and generally accepted valuation techniques. While the Company used best estimates and assumptions as part of the purchase price allocation process to value assets acquired and liabilities assumed at the acquisition date, estimates and assumptions were subject to refinement, including the acquired property, plant and equipment, prepaid and other current assets and accounts payable, as the Company was in the process of obtaining further information. As a result, during the preliminary measurement period, which was completed in 2015, the Company recorded adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Subsequent to the initial allocation of the assets acquired and liabilities assumed, the Company adjusted the acquired net accounts receivable, the acquired net inventories, the assumed sales tax accrual and the acquired prepaid expenses and other current assets by immaterial amounts, and decreased goodwill by a corresponding net amount. As of September 30, 2016 and December 31, 2015, goodwill was $1.1 million, which represented the excess of the purchase price over the aggregate net estimated fair values of the assets acquired and liabilities assumed in the acquisition. The following table summarizes the allocation of the assets acquired and liabilities assumed from EMCORE as of the acquisition date and subsequent adjustments (in thousands): Total purchase consideration: Cash paid $ Notes payable Total $ Fair value of assets acquired: Accounts receivable $ Inventories Prepaid expenses and other current assets Property, plant and equipment Intangible assets acquired: Developed technology Customer relationships Total $ Less: fair value of liabilities assumed: Accounts payable $ Accrued liabilities Total $ Goodwill $ Purchased intangibles with finite lives will be amortized on a straight-line basis over their respective estimated useful lives. The following table presents details of the purchase price allocated to the acquired intangible assets at the acquisition date: Useful Purchased Life intangible assets (In years) (In thousands) Developed technology 7 $ Customer relationships 2 Total purchased intangible assets $ The following unaudited supplemental pro forma information presents the combined results of operations of NeoPhotonics Corporation for the three and nine months ended September 30, 2016 and 2015 as though the companies had been combined as of the beginning of 2014. In the three months ended September 30, 2016 and 2015, revenue related to products acquired from EMCORE was $20.2 million and $13.2 million, respectively. In the nine months ended September 30, 2016 and 2015, revenue related to products acquired from EMCORE was $58.3 million and $39.5 million, respectively. The following table reflects the actual results for the 2016 periods and the pro forma financial information for the 2015 periods and includes adjustments related to zero transaction costs in the three months ended September 30, 2016 and 2015 and zero and $0.3 million transactions costs, respectively, in the nine months ended September 30, 2016 and 2015, as well as immaterial employee expense during the 2015 periods. There were no sales between the business acquired from EMCORE and the Company in the three and nine months ended September 30, 2016 and 2015. The unaudited pro forma results do not assume any operating efficiencies as a result of the consolidation of operations (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Revenue $ $ $ $ Net income (loss) $ $ $ $ Basic net income (loss) per share $ $ $ $ Diluted net income (loss) per share $ $ $ $ EigenLight Corporation In November 2015, the Company closed an acquisition of the business and products of EigenLight Corporation for cash consideration of $0.4 million in an asset transaction. The Company accounted for this as a business combination and the majority of the purchase price was allocated to inventory and property, plant and equipment. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2016 | |
Balance Sheet Components [Abstract] | |
Balance sheet components | Note 6. Balance sheet components Accounts receivable, net Accounts receivable, net consists of the following (in thousands): September 30, 2016 December 31, 2015 Accounts receivable $ $ Trade notes receivable Allowance for doubtful accounts $ $ Inventories, net Inventories, net consist of the following (in thousands): September 30, 2016 December 31, 2015 Raw materials $ $ Work in process Finished goods (1) $ $ (1) Finished goods inventory at customer vendor managed inventory locations was $7.7 million and $14.2 million as of September 30, 2016 and December 31, 2015, respectively. Purchased intangible assets Purchased intangible assets consist of the following (in thousands): September 30, 2016 December 31, 2015 Gross Accumulated Net Gross Accumulated Net Assets Amortization Assets Assets Amortization Assets Technology and patents $ $ $ $ $ $ Customer relationships Leasehold interest $ $ $ $ $ $ Amortization expense relating to technology and patents and the leasehold interest intangible assets is included within cost of goods sold and customer relationships within operating expenses. The following table presents details of the amortization expense of the Company’s purchased intangible assets as reported in the condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Cost of goods sold $ $ $ $ Operating expenses Total $ $ $ $ The estimated future amortization expense of purchased intangible assets as of September 30, 2016, is as follows (in thousands): 2016 (remaining three months) $ 2017 2018 2019 2020 Thereafter $ Accrued and other current liabilities Accrued and other current liabilities consist of the following (in thousands): September 30, 2016 December 31, 2015 Employee-related $ $ Income and other taxes payable Accrued warranty Penalty payment derivative Other accrued expenses $ $ Warranty Accrual The table below summarizes the movement in the warranty accrual, which is included in accrued and other current liabilities (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Beginning balance $ $ $ $ Warranty accruals Settlements Ending balance $ $ $ $ Other noncurrent liabilities Other noncurrent liabilities consist of the following (in thousands): September 30, 2016 December 31, 2015 Pension and other employee-related $ $ Deferred income tax liabilities Other $ $ |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring | |
Restructuring | Note 7. Restructuring In 2014, the Company initiated a restructuring plan (the “2014 Restructuring Plan”) to refocus on its strategy execution, optimize its structure, and improve operational efficiencies. The 2014 Restructuring Plan consisted of workforce reductions primarily in the U.S. and in China. The remaining restructuring liability was paid through October 2015. There were no r estructuring ch arges recorded in the three and nine months ended September 30, 2016. There were no restructuring liabilities as of September 30, 2016 or December 31, 2015. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt | |
Debt | Note 8. Debt The table below summarizes the carrying amount and weighted average interest rate of the Company’s debt (in thousands, except percentages): September 30, 2016 December 31, 2015 Carrying Interest Carrying Interest Amount Rate Amount Rate Notes payable $ — $ — Bank borrowings-Comerica Bank % % Total notes payable and short-term borrowing $ $ Long-term debt, current and non-current: Bank borrowings-Mitsubishi Bank $ % $ % Total long-term debt, current and non-current $ $ Unaccreted discount within current portion of long-term debt Unaccreted discount within long-term debt, net of current portion Total long-term debt, net of unaccreted discount $ $ Reported as: Current portion of long-term debt $ $ Long-term debt, net of current portion Total long-term debt, net of unaccreted discount $ $ Notes payable The Company regularly issues notes payable to its suppliers in China. These notes are supported by non-interest bearing bank acceptance drafts issued under the Company’s existing line of credit facilities and are due three to six months after issuance. As a condition of the notes payable arrangements, the Company is required to keep a compensating balance at the issuing banks that is a percentage of the total notes payable balance until the amounts are settled. In July 2016, the Company’s China subsidiary renewed its short-term line of credit facility with a banking institution that expired in June 2016. Under the agreement, the Company could borrow up to RMB 120.0 million ($18.0 million) for short-term loans, which bear interest at varying rates, or up to approximately RMB 171.4 million ($25.8 million) for bank acceptance drafts (with a 30% compensating balance requirement). This short-term line of credit facility was renewed in August 2016 and will expire in July 2019. In September 2015, the Company’s China subsidiary renewed its second short-term line of credit facility with a banking institution, under which the Company can borrow up to RMB 133.0 million ($19.9 million) for short-term loan, which bore interest at varying rates, or up to approximately RMB 190.0 million ($28.5 million) for bank acceptance drafts (with a 30% compensating balance requirement). This line of credit facility expired on September 30, 2016 and was renewed in October 2016. Under the renewed credit line, which will expire in September 2017, the Company can borrow up to RMB 266.0 million (approximately $39.9 million) for short-term loans at varying interest rates or up to approximately RMB 380.0 million (approximately $57.0 million) for bank acceptance drafts (with a 30% compensating balance requirement). In August 2016, the Company’s China subsidiary entered into a third line of credit facility with a banking institution that expires in July 2019. Under this line of credit, the Company can borrow up to RMB 30.0 million ($4.5 million) for short-term loans, which bear interest at varying rates, or up to approximately RMB 42.9 million ($6.4 million) for bank acceptance drafts (with a 30% compensating balance requirement). Under these line of credit facilities, the non-interest bearing bank acceptance drafts issued in connection with the Company’s notes payable to its suppliers in China, had an outstanding balance of $7.7 million and $8.9 million as of September 30, 2016 and December 31, 2015, respectively. In addition to the outstanding notes payable, two letters of credit totaling $1.3 million to its suppliers were issued in August 2016 and September 2016 for future equipment purchases that are expected to be delivered by December 2016. These letters of credit require a 30% compensating balance requirement. As of September 30, 2016 and December 31, 2015, compensating balances relating to these bank acceptance drafts and letters of credit issued to suppliers and the Company’s subsidiaries totaled $2.8 million and $2.7 million, respectively. Compensating balances are classified as restricted cash on the Company’s condensed consolidated balance sheets. Short-term borrowing In April 2015, the Company repaid the interest and principal of its $5.0 million short-term advance financing agreement, dated October 2014, under one of its China subsidiary’s line of credit facilities. This financing agreement bore interest at 4.02% per annum. In May 2015, the Company repaid the interest and principal of its second $5.0 million short-term advance financing agreement, dated November 2014, under one of its China subsidiary’s line of credit facilities. This financing agreement bore interest at 2.33% per annum and service fees at 1.00% per annum. In September 2015, the Company repaid the interest and principal of its $5.0 million advance financing agreement, dated April 2015, under one of its China subsidiary’s line of credit facilities. This financing agreement bore interest at a six-month LIBOR plus 330 basis points, or approximately 3.71% per annum. Acquisition-related In connection with the purchase consideration to acquire the tunable laser products of EMCORE in January 2015 (See Note 5), the Company issued the EMCORE Note, as amended, of $15.5 million, which had a maturity of two years from the closing of the transaction and an interest rate of 5% per annum for the first year and 13% per annum for the second year. The interest was payable semi-annually in cash. The EMCORE Note was subordinated to the Company’s existing bank debt in the U.S. and was repaid in full in April 2015. Bank borrowings The Company has a credit agreement with Comerica Bank as lead bank in the U.S. (the “Comerica Bank Credit Facility”). The Comerica Bank Credit Facility requires the maintenance of a modified EBITDA and certain liquidity covenants. The credit agreement also restricts the Company’s ability to incur certain additional debt or to engage in specified transactions, restricts the payment of dividends and is secured by substantially all of the Company’s U.S. assets, other than intellectual property assets. The Company amended the Comerica Bank Credit Facility in January 2015 to modify the EBITDA and liquidity covenants and eliminate the need to maintain compensating balances (restricted cash). In March 2015, the Company further amended the Comerica Bank Credit Facility to increase borrowing capacity to $30.0 million. In September 2016, the Company amended the Comerica Bank Credit Facility to increase the limitation on the Company’s capital expenditures to $62.0 million for fiscal year 2016 and to provide for an extension of the maturity date to January 31, 2017. As of each of September 30, 2016 and December 31, 2015, the Company was in compliance with the covenants of the credit facility. Borrowings under the Comerica Bank Credit Facility bear interest at an interest rate option of a base rate as defined in the agreement plus 1.75% or LIBOR plus 2.75%. Base rate is based on the greater of (a) the effective prime rate, (b) the Federal Funds effective rate plus one percent, and (c) the daily adjusting LIBOR rate plus one percent. Amounts borrowed, if any, are due on or before January 31, 2017. As of September 30, 2016, the rate on the LIBOR option was 3.28%. As of each of September 30, 2016 and December 31, 2015, there was $23.8 million outstanding. On February 25, 2015, the Company entered into certain loan agreements and related special agreements with the Bank of Tokyo-Mitsubishi UFJ, Ltd. (the “Mitsubishi Bank”) that provided for (i) a term loan in the aggregate principal amount of 500 million JPY ($4.2 million) (the “Term Loan A”) and (ii) a term loan in the aggregate principal amount of one billion JPY ($8.4 million) (the “Term Loan B” and together with the Term Loan A, the “Mitsubishi Bank Loans”). The Mitsubishi Bank Loans are secured by a mortgage on certain real property and buildings owned by our Japanese subsidiary. The full amount of each of the Mitsubishi Bank Loans was drawn on the closing date of February 25, 2015. Interest on the Mitsubishi Bank Loans accrues and is paid monthly based upon the annual rate of the monthly Tokyo Interbank Offer Rate (TIBOR) plus 1.40%. The Term Loan A requires interest only payments until the maturity date of February 23, 2018, with a lump sum payment of the aggregate principal amount on the maturity date. The Term Loan B requires equal monthly payments of principal equal to 8,333,000 JPY until the maturity date of February 25, 2025, with a lump sum payment of the balance of 8,373,000 JPY on the maturity date. Interest on the Term Loan B is accrued based upon monthly TIBOR plus 1.40% and is secured by real estate collateral. In conjunction with the execution of the Bank Loans, the Company paid a loan structuring fee, including consumption tax, of 40,500,000 JPY ($0.3 million) . The Mitsubishi Bank Loans contain customary representations and warranties and customary affirmative and negative covenants applicable to the Company’s Japanese subsidiary, including, among other things, restrictions on cessation in business, management, mergers or acquisitions. The Mitsubishi Bank Loans contain financial covenants relating to minimum net assets, maximum ordinary loss and a dividends covenant. The Mitsubishi Bank Loans also include customary events of default, including but not limited to the nonpayment of principal or interest, violations of covenants, restraint on business, dissolution, bankruptcy, attachment and misrepresentations. In February 2015, the Company used a portion of the proceeds of the Mitsubishi Bank Loans to repay the then-outstanding loan related to the acquisition of NeoPhotonics Semiconductor, which had an outstanding principal and interest amount of approximately 710 million JPY ($6.0 million) and the remaining proceeds will be used for general working capital. Outstanding principal balance under the Mitsubishi Bank Loans was approximately 1.3 billion JPY (approximately $13.3 million), net of unamortized debt issuance costs of 23.7 million JPY (approximately $0.2 million), as of September 30, 2016 and 1.4 billion JPY (approximately $11.5 million), net of unamortized debt issuance costs of 30.1 million JPY (approximately $0.3 million) as of December 31, 2015. The Company was in compliance with the related covenants. At September 30, 2016, maturities of long-term debt were as follows (in thousands): 2016 (remaining three months) $ 2017 2018 2019 2020 Thereafter $ |
Japan pension plans
Japan pension plans | 9 Months Ended |
Sep. 30, 2016 | |
Japan pension plans | |
Japan pension plans | Note 9. Japan pension plans In connection with its acquisition of NeoPhotonics Semiconductor on March 29, 2013 from LAPIS Semiconductor Co., Ltd. (“LAPIS”), the Company assumed responsibility for two defined benefit plans that provide retirement benefits to its NeoPhotonics Semiconductor employees in Japan: the Retirement Allowance Plan (“RAP”) and the Defined Benefit Corporate Pension Plan (“DBCPP”). The RAP is an unfunded plan administered by the Company. Effective February 28, 2014, the DBCPP was converted to a defined contribution plan (“DCP”). In May 2014, in accordance with the acquisition agreements, the seller transferred approximately $2.0 million into the newly formed DCP which is the allowable amount that can be transferred according to the Japanese regulations. LAPIS also paid the Company approximately $0.3 million in connection with the conversion of the plan. Additionally, the Company transferred the net unfunded projected benefit obligation amount from the DBCPP to the RAP and froze the RAP benefit at the February 28, 2014 amount. The pension liability at September 30, 2016 and December 31, 2015 was $5.7 million and $5.1 million, respectively, of which $0.3 million and $0.1 million, respectively, was recorded in accrued and other current liabilities and the remainder in other noncurrent liabilities on the Company’s condensed consolidated balance sheet. As the Company transitioned the DBCPP to the DCP effective February 2014, no further contributions to the DBCPP are required. Net periodic pension cost associated with these plans was immaterial in the three and nine months ended September 30, 2016 and 2015. |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 10. Commitments and contingencies Litigation From time to time, the Company is subject to various claims and legal proceedings, either asserted or unasserted, that arise in the ordinary course of business. The Company accrues for legal contingencies if the Company can estimate the potential liability and if the Company believes it is probable that the case will be ruled against it. If a legal claim for which the Company did not accrue is resolved against it, the Company would record the expense in the period in which the ruling was made. The Company believes that the likelihood of an ultimate amount of liability, if any, for any pending claims of any type (alone or combined) that will materially affect the Company’s financial position, results of operations or cash flows is remote. The ultimate outcome of any litigation is uncertain, however, and unfavorable outcomes could have a material negative impact on the Company’s financial condition and operating results. Regardless of outcome, litigation can have an adverse impact on the Company because of defense costs, negative publicity, diversion of management resources and other factors. On January 5, 2010, Finisar Corporation, or Finisar, filed a complaint in the U.S. District Court for the Northern District of California, or the Court, against Source Photonics, Inc., MRV Communications, Inc., Oplink Communications, Inc. and the Company, or collectively, the co-defendants. In the complaint Finisar alleged infringement of certain of its U.S. patents. In 2010 the Company filed an answer to the complaint and counterclaims, asserting two claims of patent infringement and additional claims. The Court dismissed without prejudice all co-defendants (including the Company) except Source Photonics, Inc., on grounds that such claims should have been asserted in four separate lawsuits, one against each defendant. This dismissal does not prevent Finisar from bringing a new similar lawsuit against the Company. In 2011 the Company and Finisar agreed to suspend their respective claims and in 2012 the Company and Finisar further agreed to toll their respective claims. While there has been no action on this matter since 2012, the Company is currently unable to predict the outcome of this dispute and therefore cannot determine the likelihood of loss nor estimate a range of possible loss. On January 2, 2013, the Company was served with a lawsuit, filed in Belgium by a distributor called Laser 2000 Beneluo SA (“Laser 2000”) claiming unpaid commissions. The distributor agreement was formally terminated as of January 3, 2012. The Company paid $492,000 to Laser 2000 as partial settlement of claims and to avoid penalties from the Belgian Court and submitted a legal brief to court on September 16, 2013. Laser 2000 filed a response on December 16, 2013 and the Company filed the final rebuttal brief on January 30, 2014. On March 23, 2015, the Belgian Court issued a ruling awarding Laser 2000 approximately one million euros in damages (approximately $1,100,000 at current exchange rates). The Company was served with the judgment on September 28, 2015. The Company is appealing this verdict, but is unable to predict the duration or outcome of the appeal or the overall lawsuit at this time. The Company does not believe it will ultimately be liable for the full amount of damage; however, in light of developments in the case, the Company increased its accrual for estimated probable net litigation expense relating to this matter in March 2015. There has been no change in such accrual subsequent to March 2015. Indemnifications In the normal course of business, the Company enters into agreements that contain a variety of representations and warranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. As of September 30, 2016, the Company did not have any material indemnification claims that were probable or reasonably possible. Leases The Company leases various facilities under non-cancelable operating leases expiring through 2027. As of September 30, 2016, future minimum payments under these operating leases totaled approximately $27.8 million and future minimum sublease receipts was approximately $1.1 million. Rent expense was $0.6 million and $1.7 million in the three and nine months ended September 30, 2016, respectively, and $0.5 million and $1.7 million in the three and nine months ended September 30, 2015, respectively. In the nine months ended September 30, 2016, the Company renewed one of its leases for its facility in Fremont, California. In September 2016, the Company entered into an office lease for approximately 64,000 square feet of office and laboratory space located adjacent to the Company’s current headquarters in San Jose (the “Lease”). The term of the Lease is scheduled to commence on January 1, 2017. Upon commencement, the Lease has an initial term of one hundred and twenty-nine (129) months, ending on September 30, 2027 (the “Initial Term”), with a monthly rental rate of $144,000, escalating annually to a maximum monthly rental rate of approximately $194,000 in the last year of the Initial Term. The Landlord has agreed to provide the office and laboratory space to the Company free of charge for the first nine months of the Initial Term through September 30, 2017. Upon termination of the Lease, the Company anticipates a restoration cost of approximately $2.8 million. Penalty Payment Derivative In connection with a private placement transaction with Joint Stock Company “Rusnano” (formerly Open Joint Stock Company “RUSNANO” ), or Rusnano, or in 2012, the Company agreed to certain performance obligations including establishing a wholly-owned subsidiary in Russia and making a $30.0 million investment commitment (the ‘Investment Commitment’) towards the Company’s Russian operations, which could be partially satisfied by cash and/or non-cash investment inside or outside of Russia and/or by way of non-cash asset transfers. In March 2015, the Company extended the Investment Commitment deadline to June 30, 2015 and then further amended the Investment Commitment in July 2015. The latter amendment, or the Rights Agreement, became effective on June 30, 2015 and provides that the maximum amount of penalties, or the Penalty Payment, to be paid by the Company will not exceed $5.0 million in the aggregate. In addition, the amendment also provides for an updated investment plan for the Company’s Russian subsidiaries that includes non-cash transfer of licensing rights to intellectual property, non-cash transfers of existing equipment and commitments to complete the remaining investment milestones through fiscal year 2019. The Company fulfilled its investment commitment required by 2015 and had contributed over $15.4 million in cash and assets to its subsidiaries in Russia as of December 31, 2015. Although the Company met its investment commitment for 2015, certain required equipment was delivered but not fully installed and operational as of the required date to fulfill certain manufacturing milestones under the Rights Agreement. The Company has remediated these issues and, in August 2016, entered into the second amendment to the Rights Agreement with Rusnano (the “Amended Rights Agreement”) to address this matter. The amendment extended the foregoing manufacturing deadlines to June 30, 2016 and confirmed that the Company had completed these milestones as of June 30, 2016. Therefore, the Company will not be held liable for the $5.0 million Penalty Payment as of each of December 31, 2015 and September 30, 2016. In the event the Company’s cumulative investment and spending contributed to its subsidiaries in Russia is less than $18.8 million by December 31, 2016, the Company will be subject to a $1.5 million penalty within 30 days after the end of a 90-day cure period. If certain of the Investment Commitments are not achieved in the indicated time frames in 2016 and 2019, the Company also has the ability to cease the operations of its Russian subsidiaries by paying exit fees of $3.5 million or $2.0 million at the end of 2016 or 2019, respectively. In August 2016, the Company entered into a letter of agreement with Rusnano to agree to transfer a product line and incur expected costs of approximately $0.1 million by July 30, 2017. Rusnano has non-transferable veto rights over the Company’s Russian subsidiaries’ annual budget during the investment period and must approve non-cash asset transfers to be made in satisfaction of the Investment Commitment. Spending and/or commitments to spend for general working capital and research and development do not require approval by Rusnano. There are no legal restrictions on the specific usage of the $39.8 million received in the private placement transaction or on withdrawal from the Company’s bank accounts for use in general corporate purposes. The Company accounted for the Penalty Payment as an embedded derivative instrument, with the underlying being the performance or nonperformance of meeting the Investment Commitment and initially classified $4.9 million of the $5.0 million as additional paid-in capital and the remaining $0.1 million, representing the estimated fair value of the Penalty Payment derivative, in other noncurrent liabilities. The fair value of the Penalty Payment derivative has been estimated at the date of the original common stock sale (April 27, 2012) and at each subsequent balance sheet date using a probability-weighted discounted future cash flow approach using unobservable inputs, which are classified as Level 3 within the fair value hierarchy. The primary inputs for this approach include the probability of achieving the Investment Commitment and a discount rate that approximates the Company’s incremental borrowing rate. After the initial measurement, changes in the fair value of this derivative were recorded in other expense, net. The estimated fair value of this derivative, after taking into consideration the non-compliance regarding the manufacturing milestone and the Amended Rights Agreement, was $0.4 million as of each of September 30, 2016 and December 31, 2015, and reported within accrued and other current liabilities on the Company’s condensed consolidated balance sheets (see Note 4). Separately, in December 2014, the Company entered into a Commitment to File a Registration Statement and Related Waiver of Registration Rights, whereby Rusnano waived certain registration rights in connection with a potential offering by the Company of shares of the Company’s common stock, and the Company committed to file with the U.S. Securities and Exchange Commission a resale registration statement on Form S-1 covering the resale of all shares of the Company’s common stock held by Rusnano, or the 2015 Registration Statement. The Company filed the 2015 Registration Statement in April 2015 (See Note 11). Rusnano also waived its demand registration rights under the original rights agreement and agreed to enter into a lock up agreement with the Company whereby it would agree not to sell any shares of the Company’s common stock, or engage in certain other transactions relating to the Company’s securities, for a period of 60 days from the filing date of the 2015 Registration Statement. Rusnano signed such lock up agreement with the Company on April 2, 2015. In addition, in connection with the Company’s public stock offering completed in the second quarter of 2015, or the 2015 Follow-On Offering, Rusnano entered into a separate lock up agreement with Needham & Company, LLC, the lead underwriter of the 2015 Follow-On Offering, whereby it agreed not to sell any shares of the Company’s common stock, or engage in certain other transactions relating to the Company’s securities, for a period of 180 days from May 21, 2015. Such lock up agreement expired in November 2015. |
Stockholders' equity
Stockholders' equity | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders’ Equity | |
Stockholders’ Equity | Note 11. Stockholders’ equity Common Stock As of September 30, 2016, the Company had reserved 7,220,893 common stock shares for issuance under its stock option plans and 776,613 common stock shares for issuance under its employee stock purchase plan. Resale Registration Statement In April 2015, the Company filed the 2015 Registration Statement, which registered 4,972,905 shares of the Company’s common stock, at a par value of $0.0025 per share, held by Rusnano. The Company does not receive any proceeds from any sales of the Company’s common stock held by Rusnano (See Note 10). Follow-On Public Offering In the second quarter of 2015, the Company completed the 2015 Follow-On Offering, in which the Company sold 6,866,689 shares of its common stock, including 895,655 shares of common stock sold upon the exercise in full of the overallotment option by the underwriters, at a public offering price of $7.25 per share. The Company raised approximately $45.6 million, net of underwriting discounts of $3.0 million and other offering expenses of approximately $1.2 million. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, net of related taxes, were as follows (in thousands): Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Available-For-Sale Securities Defined Benefit Pension Plan Adjustment Total Accumulated Other Comprehensive Loss Balance at December 31, 2015 $ $ $ $ Other comprehensive income, net of taxes of zero and reclassifications — Balance at September 30, 2016 $ $ $ $ No material amounts were reclassified out of accumulated other comprehensive income during the three and nine months ended September 30, 2016 and 2015 for realized gains or losses on available-for-sale securities. Accumulated Deficit Approximately $7.9 million of the Company’s retained earnings within its total accumulated deficit at December 31, 2015 was subject to restriction due to the fact that the Company’s subsidiaries in China are required to set aside at least 10% of their respective accumulated profits each year end to fund statutory common reserves as well as allocate a discretional portion of their after-tax profits to their staff welfare and bonus fund. |
Stock-based compensation
Stock-based compensation | 9 Months Ended |
Sep. 30, 2016 | |
Stock-based compensation | |
Stock-based compensation | Note 12. Stock-based compensation The following table summarizes the stock-based compensation expense recognized in the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Cost of goods sold $ $ $ $ Research and development Sales and marketing General and administrative $ $ $ $ Stock-based compensation expense in the three and nine months ended September 30, 2016 included approximately $5.8 million in stock-based compensation expense, net of approximately $0.8 million capitalized in inventory, associated with the accelerated vesting of stock options covering approximately 1.1 million shares of the Company’s common stock and stock appreciation units (“SAUs”) of approximately 0.2 million shares with a market-based vesting condition. In September 2016, the market-based condition of these stock options and SAUs was satisfied when the average closing price of the Company’s common stock over a period of 20 consecutive trading days equal to or exceeded $15.00 per share and the recipients remained in the continuous service with the Company. Determining Fair Value The Company estimated the fair value of certain stock-based awards using a Black-Scholes-Merton valuation model or a binomial lattice model with the following assumptions: Three Months Ended September 30, Nine Months Ended September 30, Stock options 2016 2015 2016 2015 Weighted-average expected term (years) 5.9 5.6 5.8 5.4 Weighted-average volatility 65% 63% 65% 64% Risk-free interest rate 1.01%-1.15% 1.63% – 1.85% 1.01%-1.76% 1.37% – 1.65% Expected dividends — % — % — % — % Stock appreciation units Weighted-average expected term (years) 2.6 3.5 2.8 3.6 Weighted-average volatility 62% 60% 62% 62% Risk-free interest rate 0.45%-0.71% 0.28% – 1.38% 0.45%-1.47% 0.25% – 1.57% Expected dividends — % — % — % — % ESPP Weighted-average expected term (years) — — 0.7 0.7 Weighted-average volatility — % — % 70% 58% Risk-free interest rate — % — % 0.08%-0.39% 0.03% – 0.14% Expected dividends — % — % — % — % Stock Options and Restricted Stock Units (RSUs) The following table summarizes the Company’s stock option and RSU activity during the nine months ended September 30, 2016 : Stock Options Restricted Stock Units Weighted Weighted Average Average Number of Exercise Number of Grant Date Shares Price Units Fair Value Balance at December 31, 2015 $ $ Granted Exercised/Converted Cancelled/Forfeited Balance at September 30, 2016 $ $ Stock appreciation units SAUs are liability classified share-based awards. The Company did not grant any SAUs during the three and nine months ended September 30, 2016 or 2015. As of September 30, 2016 and December 31, 2015, there were 293,457 and 342,316 SAUs outstanding. Outstanding SAUs are re-measured each reporting period at fair value until settlement. Employee Stock Purchase Plan (“ESPP”) As of September 30, 2016, there was $0.1 million of unrecognized stock-based compensation expense for employee stock purchase rights that will be recognized over the remaining offering period through November 2016. |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income taxes | |
Income taxes | Note 13. Income taxes The provision for income taxes in the periods presented is based upon the income (loss) before income taxes: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2016 2015 2016 2015 Provision for income taxes $ $ $ $ The Company’s income tax provision in the three and nine months ended September 30, 2016 and 2015 was primarily related to income taxes of the Company’s non-U.S. operations. The Company conducts its business globally and its operating income is subject to varying rates of tax in the U.S., China and Japan. Consequently, the Company’s effective tax rate is dependent upon the geographic distribution of its earnings or losses and the tax laws and regulations in each geographical region. Historically, the Company has experienced net losses in the U.S. and in the short term, expects this trend to continue. One of the Company’s subsidiaries in China historically qualified for a preferential 15% tax rate available for high technology enterprises as opposed to the statutory 25% tax rate. In June 2016, the State Administration of Taxation issued a notice to adjust the requirements for high technology enterprise status. As a result, the Company believes that it is more likely than not that the Company’s China subsidiary will not meet the requirements for the tax year 2016 as of September 30, 2016. Therefore, the Company has computed its China subsidiary’s tax provision for 2016 based on a 25% regular corporate income tax rate and remeasured its deferred tax assets accordingly. The preferential tax rate is subject to renewal for periods after 2016. Due to historic losses in the U.S., the Company has a full valuation allowance on its U.S. federal and state deferred tax assets. Management continues to evaluate the realizability of deferred tax assets and the related valuation allowance. If management's assessment of the deferred tax assets or the corresponding valuation allowance were to change, the Company would record the related adjustment to income during the period in which management makes the determination. As of September 30, 2016, there were no material changes to either the nature or the amounts of the uncertain tax positions previously determined for the year ended December 31, 2015. |
Subsequent event
Subsequent event | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Event | |
Subsequent event | Note 14. Subsequent events Subsequent events, through the filing of this report, included the following: Repayment of Comerica Credit Facility In October 2016, the Company repaid the outstanding balance under its Comerica Bank Credit Facility, which was $23.8 million as of September 30, 2016. Shelf Registration In October 2016, the Company filed a shelf registration statement on Form S-3 with the U.S. Securities and Exchange Commission through which it may offer to sell $80.0 million of its common stock from time-to-time. In addition, the registration statement registered 8,261,882 shares of the Company’s common stock held by certain stockholders. The Company will not receive any proceeds from the sales of the Company’s common stock held by its selling stockholders. |
Basis of presentation and sig22
Basis of presentation and significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Basis of presentation and significant accounting policies | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The condensed consolidated financial statements of NeoPhotonics Corporation (“NeoPhotonics” or the “Company”) as of September 30, 2016 and for the three and nine months ended September 30, 2016 and 2015, have been prepared in accordance with the instructions on Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In accordance with those rules and regulations, the Company has omitted certain information and notes normally provided in the Company’s annual consolidated financial statements. In the opinion of management, the condensed consolidated financial statements contain all adjustments, consisting only of normal recurring items, except as otherwise noted, necessary for the fair presentation of the Company’s financial position and results of operations for the interim periods. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”). These condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results expected for the entire fiscal year. All intercompany accounts and transactions have been eliminated. Certain Significant Risks and Uncertainties The Company operates in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, any of the following areas could have a negative effect on the Company in terms of its future financial position, results of operations or cash flows: the general state of the U.S., China and world economies; the highly cyclical nature of the industries the Company serves; the loss of any of a small number of its larger customers; ability to obtain additional financing; inability to meet certain debt covenants; fundamental changes in the technology underlying the Company’s products; the hiring, training and retention of key employees; successful and timely completion of product design efforts; and new product design introductions by competitors. |
Reclassification | Reclassification Reclassification has been made to combine deferred income tax liabilities amount into other noncurrent liabilities in the prior year to conform to the current year’s presentation. |
Concentration | Concentration In the three months ended September 30, 2016, Huawei Technologies Co. Ltd. and their affiliate HiSilicon Technologies (together with Huawei Technologies Co. Ltd., “Huawei”) and Ciena Corporation (“Ciena”) accounted for approximately 48% and 15% of the Company’s total revenue, respectively, and the Company’s top ten customers represented approximately 91% of the Company’s total revenue. In the three months ended September 30, 2015, Huawei and Ciena accounted for approximately 41% and 26% of the Company’s total revenue, respectively, and the Company’s top ten customers represented approximately 92% of the Company’s total revenue. In the nine months ended September 30, 2016, Huawei and Ciena each accounted for approximately 49% and 15% of the Company’s total revenue, respectively, and the top ten customers represented approximately 91% of its total revenue. In the nine months ended September 30, 2015, Huawei and Ciena accounted for approximately 40% and 24% of the Company’s total revenue, respectively, and the Company’s top ten customers represented approximately 91% of its total revenue. As of September 30, 2016 and December 31, 2015, one customer accounted for approximately 45% and 59%, respectively, of the Company’s total accounts receivable. |
Use of estimates | Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenue and expenses during the reporting period. Significant estimates made by management include: the useful lives of property, plant and equipment and intangible assets as well as future cash flows to be generated by those assets; fair values of identifiable assets acquired and liabilities assumed in business combinations; allowances for doubtful accounts; valuation allowances for deferred tax assets; valuation of excess and obsolete inventories; warranty reserves; litigation accrual and recognition of stock-based compensation, among others. Actual results could differ from these estimates. |
Recent accounting pronouncements | Recent accounting pronouncements In October 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). Under ASU 2016-16, the transferring (selling) entity is required to recognize a current tax expense or benefit upon transfer of the asset. Similarly, the purchasing (receiving) entity is required to recognize a deferred tax asset or deferred tax liability, as well as the related deferred tax benefit or expense, upon receipt of the asset. The resulting deferred tax asset or deferred tax liability is measured by (1) computing the difference between the tax basis of the asset in the buyer’s jurisdiction and its financial reporting carrying value in the consolidated financial statements and (2) multiplying such difference by the enacted tax rate in the buyer’s jurisdiction. ASU 2016-16 is effective for the Company’s interim and annual periods beginning after December 15, 2017 and should be applied on a modified retrospective basis, recognizing the effects in retained earnings as of the beginning of the year of adoption. Early adoption is permitted for the beginning of a fiscal year. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance which will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for the Company’s annual and interim reporting periods beginning after December 15, 2017 and must be applied retrospectively to all periods presented or prospectively from the earliest data practicable if retrospective application is impracticable. Early adoption is permitted. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 amends existing guidance on the impairment of financial assets and adds an impairment model that is based on expected losses rather than incurred losses. Under this guidance, an entity recognizes as an allowance its estimate of expected credit losses for its financial assets. An entity will apply this guidance through a cumulative-effect adjustment to retained earnings upon adoption (a modified-retrospective approach) while a prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. ASU 2016-13 is effective for the Company’s annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for the Company’s annual and interim reporting periods beginning after December 15, 2016. Early adoption is permitted. A retrospective transition method is required for the changes related to the recognition timing of excess tax benefits, minimum statutory withholding requirements, forfeitures and intrinsic value. A retrospective transition method is required for changes related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement. A prospective transition method is required for the recognition of excess tax benefits and tax deficiencies in the income statement for estimating expected term. Changes related to the presentation of excess tax benefits on the statement of cash flows can be applied using either a prospective transition method or a retrospective transition method. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 introduces a lessee model that requires recognition of assets and liabilities arising from qualified leases on the consolidated balance sheets and consolidated statements of operations and to disclose qualitative and quantitative information about lease transactions. This guidance is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition is required with certain optional practical expedients allowed. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. A modified retrospective transition method is required except for the equity securities without readily determinable fair values which will require a prospective transition method. ASU 2016-01 is effective for the Company’s annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted for certain provisions. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). ASU 2015-11 requires entities to measure most inventory “at the lower of cost and net realizable value” but does not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. For the Company, this ASU is effective for annual and interim periods beginning after December 15, 2016. Prospective transition method is required and early adoption is permitted. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In May 2014, the FASB issued ASU N o. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. In August 2015, the FASB issued an accounting standard update for a one-year deferral of the effective date of ASU 2014-09 to annual and interim periods beginning after December 15, 2017 and permits entities to early adopt the standard of ASU 2014-09 for annual and interim reporting periods beginning after December 15, 2016. Companies are permitted to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”), which amends the principal-versus-agent implementation guidance in ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606: Identifying performance obligations and Licensing amending certain aspects of ASU 2014-09 on (1) identifying performance obligations and (2) licensing. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients amending certain aspects of ASU 2016-09 including collectability, presentation of sales tax and other similar taxes collected from customers, noncash transaction, contract modifications and completed contracts at transition and the disclosure requirements for entities that use the full retrospective transition method. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. |
Net income per share (Tables)
Net income per share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Net income per share | |
Computation of Basic and Diluted Net Income per Share | The following table sets forth the computation of the basic and diluted net income (loss) per share for the periods indicated (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Numerator: Net income (loss) $ $ $ $ Denominator: Weighted average shares used to compute per share amount: Basic Dilutive effect of equity awards - - Diluted Basic net income (loss) per share $ $ $ $ Diluted net income (loss) per share $ $ $ $ |
Potentially Dilutive Securities Excluded from Computation of Diluted Net Income per Share Attributable to Common Stockholders | The Company has excluded the impact of the following employee stock options, restricted stock units and shares expected to be issued under its employee stock purchase plan from the computation of diluted net income (loss) per share, as their effect would have been antidilutive (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Employee stock options Restricted stock units Employee stock purchase plan — — |
Cash, cash equivalents, short24
Cash, cash equivalents, short-term investments, and restricted cash and investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Restricted Cash and Investment | |
Summary of Cash, Cash Equivalents and Short-Term investments and Restricted Cash and Investments | The following table summarizes the Company’s cash, cash equivalents, short-term investments, and restricted cash at September 30, 2016 and December 31, 2015 (in thousands): September 30, December 31, 2016 2015 Cash and cash equivalents: Cash $ $ Cash equivalents Cash and cash equivalents $ $ Short-term investments $ $ Restricted cash $ $ |
Summary of Unrealized Gains and Losses Related to Cash Equivalents and Investments in Marketable Securities | The following table summarizes the Company’s unrealized gains and losses related to its cash equivalents and short-term investments in marketable securities designated as available-for-sale (in thousands): As of September 30, 2016 As of December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Marketable securities: Money market accounts $ $ — $ — $ $ $ — $ — $ Money market funds — — — — Corporate bonds — Government-sponsored enterprise obligations — Commercial paper — — — — U.S. government securities — — Sovereign government bonds — — Total $ $ $ $ $ $ — $ $ Reported as: Cash equivalents $ $ — $ — $ $ $ — $ — $ Short-term investments — Total $ $ $ $ $ $ — $ $ |
Maturities of Marketable Securities | As of September 30, 2016 and December 31, 2015, maturities of marketable securities were as follows (in thousands): September 30, December 31, 2016 2015 Less than 1 year $ $ Due in 1 to 2 years Due after 5 years — — Total $ $ |
Fair value disclosures (Tables)
Fair value disclosures (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair value disclosures | |
Fair Value of Financial Assets | The following table presents the Company's assets that are measured at fair value on a recurring basis (in thousands): As of September 30, 2016 As of December 31, 2015 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash equivalents and short-term investments: Money market funds $ $ — $ — $ $ $ — $ — $ U.S. government securities — — — — Money market accounts — — — — Corporate bonds — — — — Government-sponsored enterprise obligations — — — — Commercial papers — — — — Sovereign government bonds — — — — Variable rate demand notes — — — — — — — — Total $ $ $ — $ $ $ $ — $ Foreign currency forward contracts $ — $ * $ — $ * $ — $ — $ — $ — Mutual funds held in Rabbi Trust, recorded in other long-term assets $ $ — $ — $ $ $ — $ — $ |
Fair Value of Financial Liabilities | The following table presents the Company's liabilities that are measured at fair value on a recurring basis (in thousands): As of September 30, 2016 As of December 31, 2015 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Penalty payment derivative (Note 10) $ — $ — $ $ $ — $ — $ $ |
Business combination (Tables)
Business combination (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business combination | |
Summary of Purchase Accounting and Tangible and Intangible Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the assets acquired and liabilities assumed from EMCORE as of the acquisition date and subsequent adjustments (in thousands): Total purchase consideration: Cash paid $ Notes payable Total $ Fair value of assets acquired: Accounts receivable $ Inventories Prepaid expenses and other current assets Property, plant and equipment Intangible assets acquired: Developed technology Customer relationships Total $ Less: fair value of liabilities assumed: Accounts payable $ Accrued liabilities Total $ Goodwill $ |
Purchase Price Allocation of Intangible Assets | The following table presents details of the purchase price allocated to the acquired intangible assets at the acquisition date: Useful Purchased Life intangible assets (In years) (In thousands) Developed technology 7 $ Customer relationships 2 Total purchased intangible assets $ |
Pro forma Information for Business Acquisition | The unaudited pro forma results do not assume any operating efficiencies as a result of the consolidation of operations (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Revenue $ $ $ $ Net income (loss) $ $ $ $ Basic net income (loss) per share $ $ $ $ Diluted net income (loss) per share $ $ $ $ |
Balance sheet components (Table
Balance sheet components (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Balance Sheet Components [Abstract] | |
Accounts Receivable, Net | Accounts receivable, net consists of the following (in thousands): September 30, 2016 December 31, 2015 Accounts receivable $ $ Trade notes receivable Allowance for doubtful accounts $ $ |
Inventories, net | Inventories, net consist of the following (in thousands): September 30, 2016 December 31, 2015 Raw materials $ $ Work in process Finished goods (1) $ $ (1) Finished goods inventory at customer vendor managed inventory locations was $7.7 million and $14.2 million as of September 30, 2016 and December 31, 2015, respectively. |
Purchased Intangible Assets | Purchased intangible assets consist of the following (in thousands): September 30, 2016 December 31, 2015 Gross Accumulated Net Gross Accumulated Net Assets Amortization Assets Assets Amortization Assets Technology and patents $ $ $ $ $ $ Customer relationships Leasehold interest $ $ $ $ $ $ |
Amortization Expense of Purchased Intangible Assets | The following table presents details of the amortization expense of the Company’s purchased intangible assets as reported in the condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Cost of goods sold $ $ $ $ Operating expenses Total $ $ $ $ |
Estimated Future Amortization Expense of Purchased Intangible Assets | The estimated future amortization expense of purchased intangible assets as of September 30, 2016, is as follows (in thousands): 2016 (remaining three months) $ 2017 2018 2019 2020 Thereafter $ |
Accrued Expenses and Other Current Liabilities | Accrued and other current liabilities consist of the following (in thousands): September 30, 2016 December 31, 2015 Employee-related $ $ Income and other taxes payable Accrued warranty Penalty payment derivative Other accrued expenses $ $ |
Summary of Movement in Warranty Accrual | The table below summarizes the movement in the warranty accrual, which is included in accrued and other current liabilities (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Beginning balance $ $ $ $ Warranty accruals Settlements Ending balance $ $ $ $ |
Other Noncurrent Liabilities | Other noncurrent liabilities consist of the following (in thousands): September 30, 2016 December 31, 2015 Pension and other employee-related $ $ Deferred income tax liabilities Other $ $ |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt | |
Components of Debt, Obligations, Weighted Average Interest Rate and Additional Fair Value Information Relating to Outstanding Debt Instruments | The table below summarizes the carrying amount and weighted average interest rate of the Company’s debt (in thousands, except percentages): September 30, 2016 December 31, 2015 Carrying Interest Carrying Interest Amount Rate Amount Rate Notes payable $ — $ — Bank borrowings-Comerica Bank % % Total notes payable and short-term borrowing $ $ Long-term debt, current and non-current: Bank borrowings-Mitsubishi Bank $ % $ % Total long-term debt, current and non-current $ $ Unaccreted discount within current portion of long-term debt Unaccreted discount within long-term debt, net of current portion Total long-term debt, net of unaccreted discount $ $ Reported as: Current portion of long-term debt $ $ Long-term debt, net of current portion Total long-term debt, net of unaccreted discount $ $ |
Maturities of Long-term Debt | At September 30, 2016, maturities of long-term debt were as follows (in thousands): 2016 (remaining three months) $ 2017 2018 2019 2020 Thereafter $ |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders’ Equity | |
Schedule of Accumulated Other Comprehensive Income, Net of Related Taxes | The components of accumulated other comprehensive loss, net of related taxes, were as follows (in thousands): Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Available-For-Sale Securities Defined Benefit Pension Plan Adjustment Total Accumulated Other Comprehensive Loss Balance at December 31, 2015 $ $ $ $ Other comprehensive income, net of taxes of zero and reclassifications — Balance at September 30, 2016 $ $ $ $ |
Stock-based compensation (Table
Stock-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stock-based compensation | |
Summary of Stock Based Compensation Expense | The following table summarizes the stock-based compensation expense recognized in the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Cost of goods sold $ $ $ $ Research and development Sales and marketing General and administrative $ $ $ $ |
Estimated Fair Value of Certain Stock-Based Awards Using Black-Scholes-Merton Valuation Model | The Company estimated the fair value of certain stock-based awards using a Black-Scholes-Merton valuation model or a binomial lattice model with the following assumptions: Three Months Ended September 30, Nine Months Ended September 30, Stock options 2016 2015 2016 2015 Weighted-average expected term (years) 5.9 5.6 5.8 5.4 Weighted-average volatility 65% 63% 65% 64% Risk-free interest rate 1.01%-1.15% 1.63% – 1.85% 1.01%-1.76% 1.37% – 1.65% Expected dividends — % — % — % — % Stock appreciation units Weighted-average expected term (years) 2.6 3.5 2.8 3.6 Weighted-average volatility 62% 60% 62% 62% Risk-free interest rate 0.45%-0.71% 0.28% – 1.38% 0.45%-1.47% 0.25% – 1.57% Expected dividends — % — % — % — % ESPP Weighted-average expected term (years) — — 0.7 0.7 Weighted-average volatility — % — % 70% 58% Risk-free interest rate — % — % 0.08%-0.39% 0.03% – 0.14% Expected dividends — % — % — % — % |
Summary of Stock Option and Restricted Stock Unit Activity | The following table summarizes the Company’s stock option and RSU activity during the nine months ended September 30, 2016 : Stock Options Restricted Stock Units Weighted Weighted Average Average Number of Exercise Number of Grant Date Shares Price Units Fair Value Balance at December 31, 2015 $ $ Granted Exercised/Converted Cancelled/Forfeited Balance at September 30, 2016 $ $ |
Income taxes (Tables)
Income taxes (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Income taxes | |
Income (Loss) before Income Taxes | Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2016 2015 2016 2015 Provision for income taxes $ $ $ $ |
Basis of Presentation and Sig32
Basis of Presentation and Significant Accounting Policies - Additional Information (Details) - customer | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Huawei Technologies [Member] | Revenue [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration of credit risk | 48.00% | 41.00% | 49.00% | 40.00% | |
Ciena Corporation [Member] | Revenue [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration of credit risk | 15.00% | 26.00% | 15.00% | 24.00% | |
Company Top Ten Customers [Member] | Revenue [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration of credit risk | 91.00% | 92.00% | 91.00% | 91.00% | |
Number of customers | 10 | 10 | 10 | 10 | |
Customer One [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration of credit risk | 45.00% | 59.00% | |||
Number of customers | 1 | 1 |
Net Income Per Share - Computat
Net Income Per Share - Computation of Basic and Diluted Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator: | ||||
Net income (loss) | $ (7,187) | $ 1,378 | $ (2,201) | $ 3,269 |
Denominator: | ||||
Basic | 42,038 | 40,367 | 41,589 | 36,303 |
Dilutive effect of equity awards | 1,850 | 1,234 | ||
Diluted | 42,038 | 42,217 | 41,589 | 37,537 |
Basic net income (loss) per share | $ (0.17) | $ 0.03 | $ (0.05) | $ 0.09 |
Diluted net income (loss) per share | $ (0.17) | $ 0.03 | $ (0.05) | $ 0.09 |
Net Income Per Share - Potentia
Net Income Per Share - Potentially Dilutive Securities Excluded From Computation of Diluted Net Loss per Share Attributable to Common Stockholders (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Potentially dilutive securities, excluded from computation of diluted net income (loss) per share | 6,539 | 1,282 | 6,539 | 1,696 |
Employee Stock Options | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Potentially dilutive securities, excluded from computation of diluted net income (loss) per share | 4,344 | 1,256 | 4,344 | 1,670 |
Restricted stock units | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Potentially dilutive securities, excluded from computation of diluted net income (loss) per share | 2,044 | 26 | 2,044 | 26 |
Employee Stock Purchase Plan | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Potentially dilutive securities, excluded from computation of diluted net income (loss) per share | 151 | 151 |
Summary of Cash, Cash Equivalen
Summary of Cash, Cash Equivalents, Short-Term investments, and Restricted Cash and Investments - Summary of cash, cash equivalents, short-term investments and restricted cash and investments (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Cash and cash equivalents: | ||||
Cash | $ 47,666 | $ 29,133 | ||
Cash equivalents | 23,959 | 46,955 | ||
Cash and cash equivalents | 71,625 | 76,088 | $ 77,250 | $ 43,035 |
Short-term investments | 28,470 | 23,294 | ||
Restricted cash and investments: | ||||
Restricted cash and investments, current | $ 2,813 | $ 2,660 |
Summary of Cash, Cash Equival36
Summary of Cash, Cash Equivalents, Short-Term investments, and Restricted Cash and Investments - Summary of unrealized gains and losses (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 52,425 | $ 70,278 |
Gross Unrealized Gains | 8 | |
Gross Unrealized Losses | (4) | (29) |
Fair Value | 52,429 | 70,249 |
Cash Equivalents | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 23,959 | 46,955 |
Fair Value | 23,959 | 46,955 |
Short-Term Investments | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 28,466 | 23,323 |
Gross Unrealized Gains | 8 | |
Gross Unrealized Losses | (4) | (29) |
Fair Value | 28,470 | 23,294 |
Money market accounts | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 23,959 | 46,955 |
Fair Value | 23,959 | 46,955 |
Money Market Funds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 4,703 | 11,318 |
Fair Value | 4,703 | 11,318 |
Corporate Bonds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 7,810 | 5,694 |
Gross Unrealized Gains | 4 | |
Gross Unrealized Losses | (3) | (18) |
Fair Value | 7,811 | 5,676 |
Government-sponsored enterprise obligations | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 4,292 | 3,290 |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (1) | (6) |
Fair Value | 4,292 | 3,284 |
Commercial papers | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 6,285 | 1,398 |
Fair Value | 6,285 | 1,398 |
U.S. government securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 4,755 | 1,000 |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (3) | |
Fair Value | 4,757 | 997 |
Sovereign government bonds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 621 | 623 |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (2) | |
Fair Value | $ 622 | $ 621 |
Summary of Cash, Cash Equival37
Summary of Cash, Cash Equivalents, Short-Term investments, and Restricted Cash and Investments - Maturities of marketable securities and additional information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)item | |
Fair value disclosures | |||||
Less than 1 year | $ 46,645 | $ 46,645 | $ 66,974 | ||
Due in 1 to 2 years | 5,784 | 5,784 | 3,275 | ||
Total | 52,429 | 52,429 | $ 70,249 | ||
Impairment losses on its marketable securities | $ 0 | $ 0 | $ 0 | $ 0 | |
Investments in marketable securities in unrealized loss position in excess of 12 months | item | 0 | 0 | 0 |
Fair value disclosures - Assets
Fair value disclosures - Assets and liabilities measured at fair value on recurring basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | $ 52,429 | $ 70,249 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 9,460 | 12,315 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 42,969 | 57,934 |
Money Market Funds | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 4,703 | 11,318 |
Money Market Funds | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 4,703 | 11,318 |
U.S. government securities | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 4,757 | 997 |
U.S. government securities | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 4,757 | 997 |
Money market accounts | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 23,959 | 46,955 |
Money market accounts | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 23,959 | 46,955 |
Corporate Bonds | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 7,811 | 5,676 |
Corporate Bonds | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 7,811 | 5,676 |
Government-sponsored enterprise obligations | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 4,292 | 3,284 |
Government-sponsored enterprise obligations | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 4,292 | 3,284 |
Commercial papers | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 6,285 | 1,398 |
Commercial papers | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 6,285 | 1,398 |
Sovereign government bonds | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 622 | 621 |
Sovereign government bonds | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 622 | 621 |
Mutual Funds Held in Rabbi Trust [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 599 | 435 |
Mutual Funds Held in Rabbi Trust [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets, fair value | 599 | 435 |
Penalty payment derivative | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Liabilities, fair value | 389 | 389 |
Penalty payment derivative | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Liabilities, fair value | $ 389 | $ 389 |
Fair value disclosures - Hedgin
Fair value disclosures - Hedging Program (Details) - Foreign exchange contracts $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Average maturities of monthly foreign exchange contracts | 1 month |
Japan, Yen | |
Notional value of derivatives related to economic hedges | $ 2.4 |
China, Yuan Renminbi | |
Notional value of derivatives related to economic hedges | $ 39.2 |
Fair value disclosures - Additi
Fair value disclosures - Additional information (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Sep. 30, 2016 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets Fair Value Disclosure | $ 0 | |
Liabilities measured at fair value | $ 0 | |
Loss on sale of property, plant and equipment | $ 200,000 | |
Write off of assets held-for-sale | $ 200,000 |
Business Combination (Details)
Business Combination (Details) - USD ($) $ in Thousands | Jan. 02, 2015 | Nov. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Apr. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Business Acquisition [Line Items] | ||||||||
Acquisition-related costs | $ 148 | $ 180 | $ 923 | $ 467 | ||||
Revenue | 103,312 | 83,560 | 301,586 | 250,316 | ||||
Tunable Laser Product Lines From EMCORE Corporation [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Total consideration | $ 17,500 | $ 16,982 | ||||||
Cash consideration paid | 1,500 | 1,500 | ||||||
Issuance of notes to the seller of acquired business | $ 16,000 | $ 15,482 | ||||||
Acquisition-related costs | 900 | |||||||
Tunable Laser Product Lines From EMCORE Corporation [Member] | Pro Forma [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition-related costs | 0 | 0 | 300 | |||||
Revenue | 20,200 | $ 13,200 | 58,300 | 39,500 | ||||
Tunable Laser Product Lines From EMCORE Corporation [Member] | Intersegment Eliminations [Member] | Pro Forma [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 | ||||
EigenLight Corporation | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash consideration paid | $ 400 |
Business Combination - Allocati
Business Combination - Allocation of Assets acquired, liabilites assumed and Purchase price (Details) - USD ($) $ in Thousands | Jan. 02, 2015 | Apr. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 |
Liabilities assumed: | ||||
Goodwill | $ 1,115 | $ 1,115 | ||
Tunable Laser Product Lines From EMCORE Corporation [Member] | ||||
Total purchase consideration: | ||||
Cash paid | $ 1,500 | $ 1,500 | ||
Notes payable | 16,000 | 15,482 | ||
Total consideration | 17,500 | $ 16,982 | ||
Fair value of assets acquired: | ||||
Accounts receivable | 9,274 | |||
Inventories | 1,693 | |||
Prepaid expenses and other current assets | 670 | |||
Property, plant and equipment | 6,917 | |||
Intangible assets acquired: | ||||
Intangible assets acquired | 4,800 | |||
Fair value of assets acquired | 23,354 | |||
Liabilities assumed: | ||||
Accounts payable | (7,427) | |||
Accrued liabilities | (60) | |||
Fair value of liabilities assumed total | (7,487) | |||
Goodwill | 1,115 | $ 1,100 | $ 1,100 | |
Tunable Laser Product Lines From EMCORE Corporation [Member] | Developed Technology [Member] | ||||
Fair value of assets acquired: | ||||
Useful Life (in years) | 7 years | |||
Intangible assets acquired: | ||||
Intangible assets acquired | 4,100 | $ 4,100 | ||
Tunable Laser Product Lines From EMCORE Corporation [Member] | Customer Relationships [Member] | ||||
Fair value of assets acquired: | ||||
Useful Life (in years) | 2 years | |||
Intangible assets acquired: | ||||
Intangible assets acquired | $ 700 | $ 700 |
Business Combination - Pro form
Business Combination - Pro forma results (Details) - Tunable Laser Product Lines From EMCORE Corporation [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Business Acquisition Pro Forma Information Nonrecurring Adjustment [Line Items] | ||||
Revenue | $ 103,312 | $ 83,560 | $ 301,586 | $ 250,316 |
Net income (loss) | $ (7,187) | $ 1,404 | $ (2,201) | $ 3,689 |
Basic net income (loss) per share | $ (0.17) | $ 0.03 | $ (0.05) | $ 0.10 |
Diluted net income (loss) per share | $ (0.17) | $ 0.03 | $ (0.05) | $ 0.10 |
Balance sheet components - Acco
Balance sheet components - Accounts Receivable, net (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Accounts receivable, net | ||
Accounts receivable | $ 93,967 | $ 82,235 |
Trade notes receivable | 2,102 | 1,769 |
Allowance for doubtful accounts | (392) | (843) |
Accounts receivable, Net ,Total | $ 95,677 | $ 83,161 |
Balance sheet components - Inve
Balance sheet components - Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Inventories | ||
Raw materials | $ 22,189 | $ 23,793 |
Work in process | 17,918 | 12,165 |
Finished goods | 20,112 | 29,644 |
Inventories | 60,219 | 65,602 |
Finished goods, at vendor managed inventory locations | $ 7,700 | $ 14,200 |
Balance sheet components - Purc
Balance sheet components - Purchased intangible assets (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Assets | $ 54,055 | $ 53,843 |
Accumulated Amortization | (47,838) | (43,991) |
Net Assets | 6,217 | 9,852 |
Technology and Patents [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Assets | 37,387 | 37,430 |
Accumulated Amortization | (33,463) | (31,061) |
Net Assets | 3,924 | 6,369 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Assets | 15,391 | 15,101 |
Accumulated Amortization | (14,054) | (12,623) |
Net Assets | 1,337 | 2,478 |
Leasehold Interest [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Assets | 1,277 | 1,312 |
Accumulated Amortization | (321) | (307) |
Net Assets | $ 956 | $ 1,005 |
Balance sheet components - Amor
Balance sheet components - Amortization expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Purchased intangible assets | ||||
Cost of goods sold | $ 853 | $ 836 | $ 2,542 | $ 2,512 |
Operating expenses | 462 | 447 | 1,375 | 1,344 |
Total | $ 1,315 | $ 1,283 | $ 3,917 | $ 3,856 |
Balance sheet components - Esti
Balance sheet components - Estimated future amortization expense (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Purchased intangible assets | ||
2016 (remaining three months) | $ 566 | |
2,017 | 1,432 | |
2,018 | 1,226 | |
2,019 | 811 | |
2,020 | 688 | |
Thereafter | 1,494 | |
Net Assets | $ 6,217 | $ 9,852 |
Balance sheet components - Accr
Balance sheet components - Accrued and other current liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Accrued and other current liabilities | ||||||
Employee-related | $ 18,290 | $ 17,420 | ||||
Income and other taxes payable | 4,188 | 3,720 | ||||
Accrued warranty | 685 | $ 669 | 1,175 | $ 1,160 | $ 1,254 | $ 1,751 |
Penalty payment derivative | 389 | 389 | ||||
Other accrued expenses | 4,632 | 5,246 | ||||
Accrued and other current liabilities | $ 28,184 | $ 27,950 |
Balance sheet components - Warr
Balance sheet components - Warranty accrual (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Summary of significant accounting policies | ||||
Beginning balance | $ 669 | $ 1,254 | $ 1,175 | $ 1,751 |
Warranty accruals | 126 | 90 | 25 | |
Warranty accruals | (85) | |||
Settlements | (110) | (184) | (515) | (506) |
Ending balance | $ 685 | $ 1,160 | $ 685 | $ 1,160 |
Balance sheet components - Othe
Balance sheet components - Other noncurrent liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Other Noncurrent liabilites | ||
Pension and other employee-related | $ 6,071 | $ 5,036 |
Deferred income tax liabilities | 40 | 88 |
Other | 2,933 | 2,352 |
Other noncurrent liabilities | $ 9,044 | $ 7,476 |
Restructuring (Details)
Restructuring (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Restructuring | |||
Restructuring liability | $ 0 | $ 0 | $ 0 |
Restructuring costs incurred | $ 0 | $ 0 |
Debt - Components of Debt, Obli
Debt - Components of Debt, Obligations, Weighted Average Interest Rate (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Notes payable | $ 7,708 | $ 8,857 |
Total notes payable and short-term borrowing | 31,508 | 32,657 |
Total long-term debt, current and non-current | 13,258 | 11,769 |
Unaccreted discount within current portion of long-term debt | (80) | (71) |
Unaccreted discount within long-term debt, net of current portion | (154) | (179) |
Total long-term debt, net of unaccreted discount | 13,024 | 11,519 |
Current portion of long-term debt | 908 | 760 |
Long-term debt, net of current portion | 12,116 | 10,759 |
Comerica Bank Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Bank borrowings-Comerica Bank | $ 23,800 | $ 23,800 |
Short-term Debt Weighted Average Interest Rate | 3.28% | 2.99% |
Mitsubishi Bank [Member] | ||
Debt Instrument [Line Items] | ||
Bank borrowings-Mitsubishi Bank | $ 13,258 | $ 11,769 |
Long-term Debt Weighted Average Interest Rate | 1.43% | 1.53% |
Debt - Additional Information (
Debt - Additional Information (Details) $ in Thousands, ¥ in Millions | Feb. 25, 2015JPY (¥) | Feb. 25, 2015USD ($) | Jan. 02, 2015USD ($) | Oct. 31, 2016CNY (¥) | Aug. 31, 2016CNY (¥) | Sep. 30, 2015USD ($) | Jun. 30, 2015CNY (¥) | May 31, 2015USD ($) | Apr. 30, 2015USD ($) | Feb. 28, 2015JPY (¥) | Feb. 28, 2015USD ($) | Jan. 31, 2015USD ($) | Sep. 30, 2016JPY (¥)item | Apr. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Oct. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Aug. 31, 2016USD ($) | Dec. 31, 2015JPY (¥) | Dec. 31, 2015USD ($) | Sep. 30, 2015CNY (¥) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Feb. 25, 2015USD ($) |
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Repayment of notes payable | $ 14,069 | $ 20,072 | ||||||||||||||||||||||||
Mitsubishi Bank [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Short-term line of credit facility | ¥ 1,300,000,000 | $ 13,300 | ¥ 1,400,000,000 | $ 11,500 | ||||||||||||||||||||||
Unamortized debt issuance costs | ¥ 23,700,000 | 200 | ¥ 30,100,000 | 300 | ||||||||||||||||||||||
Tunable Laser Product Lines From EMCORE Corporation [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Issuance of notes to the seller of acquired business | $ 16,000 | $ 15,482 | ||||||||||||||||||||||||
Debt Instrument, Term | 2 years | |||||||||||||||||||||||||
Libor Plus Rate [Member] | Comerica [Member] | Revolving Credit Facility [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Short-term line of credit facility | $ 23,800 | 23,800 | ||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | |||||||||||||||||||||||||
Line of credit facility, interest rate | 3.28% | 3.28% | ||||||||||||||||||||||||
First Year [Member] | Tunable Laser Product Lines From EMCORE Corporation [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Note payable, interest rate | 5.00% | |||||||||||||||||||||||||
Second Year [Member] | Tunable Laser Product Lines From EMCORE Corporation [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Note payable, interest rate | 13.00% | |||||||||||||||||||||||||
Credit Facility Base Rate [Member] | Comerica [Member] | Revolving Credit Facility [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |||||||||||||||||||||||||
Federal Funds Effective Rate [Member] | Comerica [Member] | Revolving Credit Facility [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | |||||||||||||||||||||||||
Daily Adjusting LIBOR Rate [member] | Comerica [Member] | Revolving Credit Facility [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | |||||||||||||||||||||||||
First Credit Facility Expires June 2016 [Member] | China] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Percentage of compensating balance requirement for bank acceptance drafts | 30.00% | |||||||||||||||||||||||||
Second Credit Facility Expires September 2016 [Member] | China] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Percentage of compensating balance requirement for bank acceptance drafts | 30.00% | |||||||||||||||||||||||||
First Short-Term Advance Financing Agreement Expires April 2015 [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt repaid | $ 5,000 | |||||||||||||||||||||||||
Interest rate | 4.02% | 4.02% | ||||||||||||||||||||||||
First Short-Term Advance Financing Agreement Expires April 2015 [Member] | China] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt repaid | $ 5,000 | |||||||||||||||||||||||||
First Short-Term Advance Financing Agreement Expires April 2015 [Member] | China] | Libor Plus Rate [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.30% | |||||||||||||||||||||||||
Obligation bear variable interest | 3.71% | 3.71% | ||||||||||||||||||||||||
Second Short-Term Advance Financing Agreement Expires May 2015 [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt repaid | $ 5,000 | |||||||||||||||||||||||||
Interest rate | 2.33% | |||||||||||||||||||||||||
Service fees interest percentage | 1.00% | |||||||||||||||||||||||||
Term Loan B [Member] | Mitsubishi Bank [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt, aggregate principal amount | ¥ 1,000,000,000 | $ 8,400 | ||||||||||||||||||||||||
Debt, periodic principal payments | ¥ | 8,333,000 | |||||||||||||||||||||||||
Debt, lump sum payment on the maturity date | ¥ | 8,373,000 | |||||||||||||||||||||||||
Loan structuring fee including consumption tax | ¥ 40,500,000 | $ 300 | ||||||||||||||||||||||||
Term Loan B [Member] | Tunable Laser Product Lines From EMCORE Corporation [Member] | Mitsubishi Bank [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Issuance of notes to the seller of acquired business | $ 15,500 | |||||||||||||||||||||||||
Term Loan B [Member] | Tokyo Interbank Offer Rate [Member] | Mitsubishi Bank [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.40% | 1.40% | ||||||||||||||||||||||||
Senior Secured Revolving Credit Facility Expires November 2016 [Member] | Comerica [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 30,000 | |||||||||||||||||||||||||
Term Loan A [Member] | Mitsubishi Bank [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt, aggregate principal amount | ¥ 500,000,000 | $ 4,200 | ||||||||||||||||||||||||
Term Loan A [Member] | Tokyo Interbank Offer Rate [Member] | Mitsubishi Bank [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.40% | 1.40% | ||||||||||||||||||||||||
Capital Expenditures Credit Facility Expires January 31, 2017 Member | Comerica [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases | $ 62,000 | |||||||||||||||||||||||||
Loans Payable | First Credit Facility Expires June 2016 [Member] | China] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | ¥ 120 | $ 18,000 | ||||||||||||||||||||||||
Loans Payable | Second Credit Facility Expires September 2016 [Member] | China] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Short-term line of credit facility | ¥ 133 | $ 19,900 | ||||||||||||||||||||||||
Notes Payable [Member] | NeoPhotonics Semiconductor [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Repayment of notes payable | ¥ 710,000,000 | $ 6,000 | ||||||||||||||||||||||||
Bankers Acceptance | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Restricted cash and investments, current | 2,800 | 2,700 | ||||||||||||||||||||||||
Bankers Acceptance | Minimum [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt Instrument, Term | 3 months | |||||||||||||||||||||||||
Bankers Acceptance | China] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Short-term line of credit facility | 7,700 | $ 8,900 | ||||||||||||||||||||||||
Bankers Acceptance | China] | Maximum [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt Instrument, Term | 6 months | |||||||||||||||||||||||||
Bankers Acceptance | First Credit Facility Expires June 2016 [Member] | China] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | ¥ 171.4 | $ 25,800 | ||||||||||||||||||||||||
Bankers Acceptance | Second Credit Facility Expires September 2016 [Member] | China] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Short-term line of credit facility | ¥ 190 | $ 28,500 | ||||||||||||||||||||||||
Bankers Acceptance | Third Credit Facility Expires July 2019 [Member] | China] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Percentage of compensating balance requirement for bank acceptance drafts | 30.00% | |||||||||||||||||||||||||
Bank Borrowings [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Percentage of compensating balance requirement for bank acceptance drafts | 30.00% | |||||||||||||||||||||||||
Number of letters of credit | item | 2 | |||||||||||||||||||||||||
Short-term line of credit facility | $ 1,300 | |||||||||||||||||||||||||
China | First Short-Term Advance Financing Agreement Expires April 2015 [Member] | Libor Plus Rate [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Adjusted LIBOR variable rate term | 6 months | |||||||||||||||||||||||||
China | Loans Payable | Third Credit Facility Expires July 2019 [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | ¥ 30 | $ 4,500 | ||||||||||||||||||||||||
China | Bank Overdrafts | Third Credit Facility Expires July 2019 [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | ¥ 42.9 | $ 6,400 | ||||||||||||||||||||||||
Subsequent Event [Member] | Loans Payable | Third Credit Facility Expires September 2017 [Member] | China] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | ¥ 266 | $ 39,900 | ||||||||||||||||||||||||
Percentage of compensating balance requirement for bank acceptance drafts | 30.00% | |||||||||||||||||||||||||
Subsequent Event [Member] | Bankers Acceptance | Third Credit Facility Expires September 2017 [Member] | China] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | ¥ 380 | $ 57,000 |
Debt - Maturities of Long -Term
Debt - Maturities of Long -Term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Maturities Of Long Term Debt [Abstract] | ||
2016 (remaining three months) | $ 247 | |
2,017 | 988 | |
2,018 | 5,929 | |
2,019 | 988 | |
2,020 | 988 | |
Thereafter | 4,118 | |
Long Term Debt | $ 13,258 | $ 11,769 |
Japan pension plans (Details)
Japan pension plans (Details) $ in Millions | 1 Months Ended | |||
May 31, 2014USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Mar. 29, 2013item | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of Defined Benefit Pension Plans | item | 2 | |||
Employer contributions | $ 2 | |||
Conversion of plan, proceed from LAPIS | $ 0.3 | |||
Pension liability | $ 5.7 | $ 5.1 | ||
Accrued and other current liabilities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension liability included in accrued and other current liabilities | $ 0.3 | $ 0.1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) ft² in Thousands, € in Millions | Apr. 02, 2015 | Mar. 23, 2015EUR (€) | Mar. 23, 2015USD ($) | Sep. 16, 2013USD ($) | Sep. 30, 2016USD ($)ft² | Aug. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2010defendantitem |
Loss Contingencies [Line Items] | ||||||||||||
Number of defendants | defendant | 4 | |||||||||||
Probable or reasonably possible loss | $ 0 | $ 0 | $ 0 | |||||||||
Operating leases, future minimum payments due | 27,800,000 | 27,800,000 | 27,800,000 | |||||||||
Operating leases, future minimum, sublease receipts | $ 1,100,000 | 1,100,000 | 1,100,000 | |||||||||
Rent expense | 600,000 | $ 500,000 | $ 1,700,000 | $ 1,700,000 | ||||||||
Area of office lease | ft² | 64 | |||||||||||
Office lease term, months | 129 months | |||||||||||
Office lease, monthly rental rate | $ 144,000 | |||||||||||
Office and laboratory lease period free of charge | 9 months | |||||||||||
Amount of contribution | $ 15,400,000 | |||||||||||
Amount of companies cumulative investment and spending | $ 18,800,000 | |||||||||||
Penalty amount | $ 1,500,000 | |||||||||||
Number of days in which penalty needs to be paid | 30 days | |||||||||||
Cure period | 90 days | |||||||||||
Expected Costs to Transfer Product Line | $ 100,000 | |||||||||||
Penalty payment derivative | $ 400,000 | 400,000 | $ 400,000 | $ 400,000 | ||||||||
Proceeds from public stock offering, net of offering costs | 39,800,000 | |||||||||||
Revenue | 103,312,000 | $ 83,560,000 | 301,586,000 | $ 250,316,000 | ||||||||
Securities lock up agreement period | 60 days | 180 days | ||||||||||
Restoration Costs Upon Lease Termination | 2,800,000 | 2,800,000 | 2,800,000 | |||||||||
Finisar Corp Member | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Loss Contingency, Pending Claims, Number | item | 2 | |||||||||||
Maximum [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Office lease, monthly rental rate | 194,000 | |||||||||||
Pending Litigation Member | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Partial settlement of claims | $ 492,000 | |||||||||||
Accrual for estimated net litigation expense | € 1 | $ 1,100,000 | ||||||||||
Embedded Derivative Financial Instruments [Member] | Maximum [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Other non-current liability | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||
RUSSIAN FEDERATION | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Exit fees | 3,500,000 | |||||||||||
Exit fees for future | 2,000,000 | |||||||||||
Private Placement [Member] | Embedded Derivative Financial Instruments [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Penalty payment derivative | 100,000 | 100,000 | 100,000 | |||||||||
Additional paid-in capital | 4,900,000 | 4,900,000 | 4,900,000 | |||||||||
Private Placement [Member] | Performance Guarantee [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Other non-current liability | $ 30,000,000 | $ 30,000,000 | $ 30,000,000 |
Stockholders' equity - Common s
Stockholders' equity - Common stock, resale registration statement, and follow-on public offering (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Apr. 30, 2015 | |
Class Of Stock [Line Items] | |||||||
Common Stock Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||
Common stock, par value | $ 0.0025 | $ 0.0025 | $ 0.0025 | ||||
Issuance of common stock from public stock offering, net of discount and offering costs (in shares) | 6,866,689 | ||||||
Sale of common stock upon the exercise of overallotment option | 895,655 | ||||||
Public offering price | $ 7.25 | ||||||
Consideration raised on transaction | $ 45.6 | ||||||
Underwriting discounts | 3 | ||||||
Other offering expenses | $ 1.2 | ||||||
Reclassified out of accumulated other comprehensive income for realized gains or losses on available for sale securities | $ 0 | $ 0 | $ 0 | $ 0 | |||
Accumulated deficit subject to restriction | $ 7.9 | ||||||
Resale Registration Statement [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Common Stock Shares Authorized | 4,972,905 | ||||||
Common stock, par value | $ 0.0025 | ||||||
Minimum [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Accumulated profits | 10.00% | ||||||
Employee Stock Options | |||||||
Class Of Stock [Line Items] | |||||||
Common stock | 7,220,893 | 7,220,893 | |||||
Sale of common stock upon the exercise of overallotment option | 962,366 | ||||||
Employee Stock Purchase Plan | |||||||
Class Of Stock [Line Items] | |||||||
Common stock | 776,613 | 776,613 |
Stockholders Equity - Accumulat
Stockholders Equity - Accumulated Other Comprehensive Income, Net of Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Balance | $ (1,723) | |||
Other Comprehensive Income Loss Net Of Tax | $ (22) | $ (4,688) | 325 | $ (4,103) |
Balance | (1,398) | (1,398) | ||
Foreign Currency Translation Adjustments | ||||
Balance | (1,595) | |||
Other Comprehensive Income Loss Net Of Tax | 292 | |||
Balance | (1,303) | (1,303) | ||
Unrealized (Loss) Gain on Available-For-Sale Securities | ||||
Balance | (29) | |||
Other Comprehensive Income Loss Net Of Tax | 33 | |||
Balance | 4 | 4 | ||
Defined Benefit Pension Plan Adjustment | ||||
Balance | (99) | |||
Balance | $ (99) | $ (99) |
Stock-based compensation - Stoc
Stock-based compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 8,776 | $ 1,436 | $ 14,445 | $ 5,418 |
Cost of Goods Sold [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 297 | 339 | 1,605 | 1,119 |
Research and Development Expense [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 2,981 | 363 | 4,508 | 1,357 |
Selling and Marketing Expense [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 2,352 | 275 | 3,604 | 1,175 |
General and Administrative Expense [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 3,146 | $ 459 | $ 4,728 | $ 1,767 |
Stock-based compensation - Esti
Stock-based compensation - Estimated fair vale of stock-based awards (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Employee Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Weighted-average expected term (years) | 5 years 10 months 24 days | 5 years 7 months 6 days | 5 years 9 months 18 days | 5 years 4 months 24 days |
Weighted-average volatility | 65.00% | 63.00% | 65.00% | 64.00% |
Risk-free interest rate Minimum | 1.01% | 1.63% | 1.01% | 1.37% |
Risk-free interest rate Maximum | 1.15% | 1.85% | 1.76% | 1.65% |
Expected dividends | 0.00% | 0.00% | 0.00% | 0.00% |
Stock Appreciation Units (SARs) [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Weighted-average expected term (years) | 2 years 7 months 6 days | 3 years 6 months | 2 years 9 months 18 days | 3 years 7 months 6 days |
Weighted-average volatility | 62.00% | 60.00% | 62.00% | 62.00% |
Risk-free interest rate Minimum | 0.45% | 0.28% | 0.45% | 0.25% |
Risk-free interest rate Maximum | 0.71% | 1.38% | 1.47% | 1.57% |
Expected dividends | 0.00% | 0.00% | 0.00% | 0.00% |
Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Weighted-average expected term (years) | 8 months 12 days | 8 months 12 days | ||
Weighted-average volatility | 70.00% | 58.00% | ||
Risk-free interest rate Minimum | 0.08% | 0.03% | ||
Risk-free interest rate Maximum | 0.39% | 0.14% | ||
Expected dividends | 0.00% | 0.00% | 0.00% | 0.00% |
Stock-based compensation - St62
Stock-based compensation - Stock Options and RSUs (Details) - $ / shares | 3 Months Ended | 9 Months Ended |
Jun. 30, 2015 | Sep. 30, 2016 | |
Number of Shares | ||
Exercised/Converted | (895,655) | |
Employee Stock Options | ||
Number of Shares | ||
Beginning Balance | 5,007,797 | |
Granted | 358,186 | |
Exercised/Converted | (962,366) | |
Cancelled/Forfeited | (59,961) | |
Ending Balance | 4,343,656 | |
Weighted Average Exercise Price | ||
Beginning Balance | $ 4.34 | |
Granted | 12.22 | |
Exercised/Converted | 3.62 | |
Cancelled/Forfeited | 4.99 | |
Ending Balance | $ 5.14 | |
Restricted stock units | ||
Number of Units | ||
Beginning Balance | 1,213,686 | |
Granted | 1,071,230 | |
Exercised/Converted | (211,388) | |
Cancelled/Forfeited | (29,694) | |
Ending Balance | 2,043,834 | |
Weighted Average Exercise Price | ||
Beginning Balance | $ 7.46 | |
Granted | 12.18 | |
Exercised/Converted | 7.02 | |
Cancelled/Forfeited | 7.36 | |
Ending Balance | $ 9.99 |
Stock-based compensation - St63
Stock-based compensation - Stock appreciation units (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Stock Appreciation Units (SARs) [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Performance-based stock appreciation units | 0 | 0 | 0 | 0 | |
Shares outstanding | 293,457 | 293,457 | 342,316 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Accelerated Vesting, Number | 1,100,000 | 1,100,000 | |||
Market Based Awards Member | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Accelerated Vesting, Number | 200,000 | ||||
Market Based Awards Vesting, Threshold Consecutive Trading Days | 20 days | 20 days | |||
Share Price | $ 15 | $ 15 | |||
Employee Stock Purchase Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized stock-based compensation expense | $ 0.1 | $ 0.1 | |||
Employee Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award Accelerated Compensation Cost | 5.8 | 5.8 | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | $ 0.8 | $ 0.8 |
Income taxes - Provision for in
Income taxes - Provision for income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income taxes | ||||
Provision for income taxes | $ (804) | $ (1,157) | $ (2,471) | $ (2,698) |
Income taxes - Additional infor
Income taxes - Additional information (Details) - Foreign Country [Member] - China] | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes [Line Items] | |
Preferential rate | 15.00% |
Income tax statutory rate | 25.00% |
Corporate effective income tax rate | 25.00% |
Subsequent event (Details)
Subsequent event (Details) - Subsequent Event [Member] $ in Millions | 1 Months Ended |
Oct. 31, 2016USD ($)shares | |
Shelf Registration Member | |
Subsequent Event [Line Items] | |
Offering amount | $ 80 |
Common Stock Shares Held By Selling Shareholders | shares | 8,261,882 |
Comerica [Member] | |
Subsequent Event [Line Items] | |
Repayments of Lines of Credit | $ 23.8 |